EXHIBIT 10.1
AMENDED AND RESTATED
CAPACITY PURCHASE AGREEMENT
AMONG
CONTINENTAL AIRLINES, INC.,
EXPRESSJET HOLDINGS, INC.,
XJT HOLDINGS, INC.
AND
EXPRESSJET AIRLINES, INC.
DATED AS OF APRIL [__], 2002
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
CAPACITY PURCHASE, SCHEDULES AND FARES
Section 2.01 Capacity Purchase...............................................................................1
Section 2.02 Withdrawal of Regional Jet Aircraft from this Agreement.........................................2
Section 2.03 Withdrawal of Turboprop Aircraft from this Agreement............................................5
Section 2.04 Withdrawal of Engines...........................................................................6
Section 2.05 Embraer Option Aircraft.........................................................................7
Section 2.06 Flight-Related Revenues.........................................................................7
ARTICLE III
CONTRACTOR COMPENSATION
Section 3.01 Base and Incentive Compensation.................................................................7
Section 3.02 Periodic Adjustment of Base and Incentive Compensation..........................................7
Section 3.03 Contractor Expenses.............................................................................8
Section 3.04 Continental Expenses............................................................................8
Section 3.05 Accounting Provisions and Audit.................................................................8
Section 3.06 Billing and Payment; Reconciliation.............................................................9
ARTICLE IV
CONTRACTOR OPERATIONS AND AGREEMENTS WITH CONTINENTAL
Section 4.01 Crews; Resource Allocation.....................................................................10
Section 4.02 Governmental Regulations.......................................................................11
Section 4.03 Quality of Service.............................................................................11
Section 4.04 Safety Matters.................................................................................12
Section 4.05 Turboprops.....................................................................................12
Section 4.06 Master Facility and Ground Handling Agreement..................................................13
Section 4.07 Codeshare Terms................................................................................13
Section 4.08 Administrative Support and Information Services Provisioning Agreement.........................13
Section 4.09 Fuel Purchasing Agreement......................................................................13
Section 4.10 Slots and Route Authorities....................................................................13
Section 4.11 Use of Continental Marks.......................................................................13
Section 4.12 Use of Contractor Marks........................................................................14
Section 4.13 Catering Standards.............................................................................14
Section 4.14 Ticket Handling Terms..........................................................................14
i
ARTICLE V
FINANCING OF AIRCRAFT
Section 5.01 Financing of Firm and Option Aircraft..........................................................14
Section 5.02 No Financing of Other Aircraft.................................................................15
Section 5.03 Refinancing or Replacement of Uncovered Aircraft...............................................15
Section 5.04 Pre-Delivery Deposits..........................................................................16
Section 5.05 Lease of Owned Aircraft........................................................................16
ARTICLE VI
EXCLUSIVITY AND CERTAIN RIGHTS OF CONTINENTAL
Section 6.01 Exclusivity; Use of Covered Aircraft...........................................................17
Section 6.02 Exclusive Arrangements at Hub Airports.........................................................17
Section 6.03 Most Favored Nations...........................................................................17
Section 6.04 Change of Control..............................................................................18
ARTICLE VII
INSURANCE
Section 7.01 Minimum Insurance Coverages....................................................................18
Section 7.02 Endorsements...................................................................................19
Section 7.03 Evidence of Insurance Coverage.................................................................19
Section 7.04 Insurance Through Combined Placement...........................................................20
ARTICLE VIII
INDEMNIFICATION
Section 8.01 Contractor Indemnification of Continental......................................................20
Section 8.02 Continental Indemnification of Contractor......................................................21
Section 8.03 Indemnification Claims.........................................................................21
Section 8.04 Employer's Liability; Independent Contractors; Waiver of Control...............................22
Section 8.05 Survival.......................................................................................23
ARTICLE IX
TERM, TERMINATION AND DISPOSITION OF AIRCRAFT
Section 9.01 Base Term......................................................................................23
Section 9.02 Extension Terms................................................................................23
Section 9.03 Early Termination..............................................................................24
Section 9.04 Disposition of Aircraft during Wind-Down Period................................................25
Section 9.05 Other Remedies for Breach......................................................................32
ii
ARTICLE X
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 10.01 Representations, Warranties and Covenants of Holdings, XJT and ExpressJet......................34
Section 10.02 Representations and Warranties of Continental..................................................35
ARTICLE XI
MISCELLANEOUS
Section 11.01 Amendment of Certain Contracts.................................................................36
Section 11.02 Notices........................................................................................37
Section 11.03 Binding Effect; Assignment.....................................................................37
Section 11.04 Amendment and Modification.....................................................................37
Section 11.05 Waiver.........................................................................................37
Section 11.06 Interpretation.................................................................................38
Section 11.07 Confidentiality................................................................................38
Section 11.08 Arbitration....................................................................................39
Section 11.09 Counterparts...................................................................................41
Section 11.10 Severability...................................................................................41
Section 11.11 Equitable Remedies.............................................................................41
Section 11.12 Relationship of Parties........................................................................41
Section 11.13 Entire Agreement...............................................................................41
Section 11.14 Governing Law..................................................................................42
Section 11.15 Guarantees.....................................................................................42
Section 11.16 Right of Set-Off...............................................................................42
Section 11.17 Cooperation with Respect to Reporting..........................................................43
SCHEDULE 1: Covered Aircraft
SCHEDULE 2: Continental Increased Lease Rate
SCHEDULE 3: Compensation for Capacity Purchase
EXHIBIT A: Definitions
EXHIBIT B: Form of Aircraft Sublease
EXHIBIT C: Master Facility and Ground Handling Agreement
EXHIBIT D: Terms of Codeshare Arrangements
EXHIBIT E: Administrative Support and Information Services Provisioning Agreement
EXHIBIT F: Fuel Purchasing Agreement
EXHIBIT G: Use of Continental Marks
EXHIBIT H: Use of Contractor Marks
EXHIBIT I: Catering Standards
EXHIBIT J: Ticket Handling Terms
iii
AMENDED AND RESTATED
CAPACITY PURCHASE AGREEMENT
This Amended and Restated
Capacity Purchase Agreement (this
"Agreement"), dated as of April [__], 2002, is among Continental Airlines, Inc.,
a Delaware corporation ("Continental"), ExpressJet Holdings, Inc., a Delaware
corporation ("Holdings"), XJT Holdings, Inc., a Delaware corporation and a
wholly-owned subsidiary of Holdings ("XJT"), and ExpressJet Airlines, Inc., a
Delaware corporation and a subsidiary of XJT ("ExpressJet" and, collectively
with Holdings and XJT, "Contractor").
WHEREAS, Continental, Holdings and XJT (formerly ExpressJet Airlines,
Inc.) entered into that certain
Capacity Purchase Agreement, dated as of January
1, 2001 (the "Original
Capacity Purchase Agreement");
WHEREAS, Continental, Holdings and XJT made certain amendments to the
Original
Capacity Purchase Agreement effective as of January 1, 2002;
WHEREAS, XJT assigned its interests herein to ExpressJet (formerly New
ExpressJet Airlines, Inc.) effective as of the date hereof, with the consent of
Holdings and Continental; and
WHEREAS, as a condition to the consent of Continental to the assignment
to ExpressJet referenced above, XJT has agreed to become a party to this
Agreement with such rights and obligations as are set forth more fully below,
and the other parties hereto desire XJT to become a party hereto with such
rights and obligations;
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and obligations hereinafter contained, the parties agree to
amend the Original Capacity Agreement to reflect the assignment of XJT's
interests herein to ExpressJet, the addition of XJT hereto with certain rights
and obligations, and certain other amendments relating thereto, and to restate
it in its entirety, as so amended and to reflect the amendments effective as of
January 1, 2002, as follows:
ARTICLE I
DEFINITIONS
Capitalized terms used in this Agreement (including, unless otherwise
defined therein, in the Schedules, Appendices and Exhibits to this Agreement)
shall have the meanings set forth in Exhibit A hereto.
ARTICLE II
CAPACITY PURCHASE, SCHEDULES AND FARES
Section 2.01 Capacity Purchase. Continental agrees to purchase the capacity of
the Covered Aircraft for the Term, under the terms and conditions set forth
herein and for the consideration described in Article III. Subject to the terms
and conditions of this
1
Agreement, Contractor shall provide all of the capacity of the Covered Aircraft
solely to Continental and use the Covered Aircraft solely to operate the
Scheduled Flights.
(a) Fares, Rules and Seat Inventory. Continental
shall establish and publish all fares and related tariff rules for all
seats on the Covered Aircraft. Contractor shall not publish any fares,
tariffs, or related information for the Covered Aircraft. In addition,
Continental shall have complete control over all seat inventory and
inventory and revenue management decisions for the Covered Aircraft,
including overbooking levels, discount seat levels and allocation of
seats among various fare buckets.
(b) Flight Schedules. Continental shall, in its sole
discretion, establish and publish all schedules for the Covered
Aircraft, including determining the city-pairs served, frequencies,
utilization and timing of scheduled arrivals and departures and charter
flights; provided that such schedules shall be subject to Reasonable
Operating Constraints. Contractor and Continental shall meet monthly
(but not later than the fourth Friday of each calendar month) to review
the planned flight schedules for the Covered Aircraft for each of the
next 12 months. At such meeting, Continental shall present a planned
flight schedule for the Covered Aircraft for each of the next 12
months, including a proposed Final Monthly Schedule for the next
calendar month. At such meeting, Continental shall review and consider
any changes to the planned flight schedule for the Covered Aircraft,
including the proposed Final Monthly Schedule, suggested by Contractor.
Following such monthly meeting, Continental shall make such adjustments
to the proposed Final Monthly Schedule as it deems appropriate (subject
to Reasonable Operating Constraints), and, not later than three
Business Days prior to the beginning of each calendar month, will
deliver to Contractor the Final Monthly Schedule.
Section 2.02 Withdrawal of Regional Jet Aircraft from this Agreement.
Continental shall be entitled to withdraw jet Covered Aircraft from the capacity
purchase provisions of this Agreement, in accordance with and subject to the
limitations, terms and conditions contained in this Section 2.02, which
limitations, terms and conditions shall be applicable only to jet aircraft.
Subject to the limitations contained below, Continental shall have complete
discretion to select the particular Covered Aircraft and Engines to be withdrawn
pursuant to this Section 2.02.
(a) Continental Notice of and Limitations on Regional
Jet Reduction. At any time and from time to time after July 1, 2003,
Continental may give not more than 18 months and not less than 12
months notice of the withdrawal of Covered Aircraft from the capacity
purchase provisions of this Agreement, which notice shall specify an
Effective Date and the number and type of Covered Aircraft to be
withdrawn, and shall include an Early Withdrawal Schedule for the
withdrawal of such aircraft that delineates the number of each aircraft
type to be withdrawn by month. The number of Covered Aircraft to be
withdrawn pursuant to this Section 2.02 shall be subject to the
following numerical limitations:
2
(i) Continental shall not be entitled to
provide in any notice delivered pursuant to Section 2.02(a)
for the withdrawal of any number of Covered Aircraft greater
than the excess of (i) 25% (rounded to the nearest whole
number) of the sum of the number of Delivered Covered Aircraft
as of the Effective Date set forth in such notice, plus the
number of Delivered Covered Aircraft that have been withdrawn
from the capacity purchase provisions of this Agreement at any
time before such Effective Date in connection with a Labor
Strike pursuant to Section 9.05(c) and the number withdrawn
for any other reason within the three-year period immediately
preceding such Effective Date, over (ii) the number of
Delivered Covered Aircraft that have been withdrawn pursuant
to this Section 2.02 within the three-year period immediately
preceding such Effective Date; provided that the foregoing
limitations shall not limit Continental's right to withdraw
any Undelivered Covered Aircraft.
(ii) Continental shall not be entitled to
withdraw a Covered Aircraft pursuant to this Section 2.02 if,
after such withdrawal, there would be fewer than 25 Covered
Aircraft remaining.
(iii) The Early Withdrawal Schedule may not
provide for the withdrawal of more than 15 Delivered Covered
Aircraft per month, and may not provide for the withdrawal of
any Delivered Covered Aircraft more than 36 months after the
Effective Date; provided that Continental may provide for the
immediate withdrawal of any aircraft that are Undelivered
Covered Aircraft on the applicable Effective Date.
(b) Contractor's Right to Retain Regional Jets.
Except to the extent otherwise provided in this Agreement, Contractor
shall have the right either to retain (as Uncovered Aircraft) any
Covered Aircraft being withdrawn from the capacity purchase provisions
of this Agreement pursuant to this Section 2.02, or to return such
aircraft to Continental (or its designee), in each case as follows:
(i) Contractor shall have nine months after
receipt of the Early Withdrawal Schedule delivered pursuant to
Section 2.02(a) to notify Continental that it elects to retain
any of the Covered Aircraft being withdrawn (whether such
Covered Aircraft constitute Delivered Covered Aircraft or
Undelivered Covered Aircraft). If Contractor elects to keep
any Delivered Covered Aircraft, then its notice must include
an indication by calendar month of the number and type of
aircraft it proposes to retain, such number of any particular
type of aircraft in any particular month to be no greater than
the number of such type of aircraft scheduled to be withdrawn
during such month pursuant to the Early Withdrawal Schedule.
In addition, regardless of whether it intends to retain any
aircraft, Contractor shall include in its notice a reasonably
detailed current summary of the maintenance and repair
condition of each aircraft and Engine and a list detailing the
location of each Engine (by aircraft or, if appropriate,
maintenance facility).
3
(ii) Within 30 days after receipt of
Contractor's notice of its election to retain Covered Aircraft
being withdrawn, Continental shall select the individual
aircraft to be withdrawn, including those aircraft to be
retained by Contractor, and shall notify Contractor of its
selection. Continental shall have complete discretion in the
selection of the particular Covered Aircraft to be withdrawn
and those to be retained by Contractor; provided that
Continental must adhere to the timing, number and type of
aircraft to be retained by Contractor as provided in
Contractor's notice to Continental delivered pursuant to
Section 2.02(b)(i).
(c) Replacement of Sublease. Upon Contractor
retaining a previously Covered Aircraft as an Uncovered Aircraft
pursuant to this Section 2.02, effective on the first day of the month
during which such aircraft becomes an Uncovered Aircraft, the Covered
Aircraft Sublease shall be terminated and replaced with an Uncovered
Aircraft Sublease, and Contractor may fly the aircraft as permitted by
Article VI.
(d) Return Conditions. Upon the withdrawal from the
capacity purchase provisions of this Agreement of a Covered Aircraft
that is being returned to Continental (or its designee) pursuant to
this Section 2.02, the Covered Aircraft Sublease with respect to such
aircraft shall be terminated upon the date of such withdrawal, and
Contractor shall not be required to meet the return conditions
applicable to such aircraft that relate to time or cycles remaining
between maintenance events or to any time- or cycle-controlled part
under clause (v) of Section 4 of the Covered Aircraft Sublease;
provided that Contractor shall remain obligated to comply with all
other provisions of the Covered Aircraft Sublease applicable at the
time, including without limitation provisions generally applicable to
the maintenance, airworthiness, repair and general operating condition
and cleanliness of the aircraft; and provided further, that the general
condition of the Covered Aircraft being returned to Continental shall
not have materially changed relative to the condition of Contractor's
fleet of the same aircraft type since the related notice of withdrawal
was delivered by Continental to Contractor pursuant to Section 2.02(a),
and the withdrawn aircraft being returned to Continental shall not have
been discriminated against or operated, maintained or otherwise treated
differently (including with respect to the removal of any part for
convenience or without cause) than any other Covered Aircraft.
(e) Financial Arrangements. In connection with the
withdrawal of any Covered Aircraft from the capacity purchase
provisions of this Agreement pursuant to this Section 2.02, (i)
Continental shall be responsible for all reasonable and necessary
direct out-of-pocket costs incurred by Contractor as a result of such
withdrawal, including without limitation the reasonable costs of
terminating facility leases and/or employees and disposing of Excess
Inventory caused by such withdrawal and any increased charges per
scheduled block hour for Covered Aircraft under Section 5.4.3 of the
Flight Hour Agreement precipitated by the return of any Covered
Aircraft to Continental, but excluding any lost profits and any other
indirect costs; provided that Contractor shall use its
4
reasonable good faith efforts to mitigate any such costs; (ii)
Continental shall meet and confer with Contractor regarding the impact
of the withdrawal on Contractor's cash flow, and shall negotiate in
good faith regarding the provision by Continental of a credit facility
for Contractor, if needed by Contractor as a result of such withdrawal,
for a term not to exceed two years, a size not to exceed $75 million in
the aggregate and at an interest rate equal to LIBOR plus 200 basis
points; provided, that Continental has no obligation to provide such
credit facility; (iii) for each such withdrawn aircraft being retained
by Contractor, Contractor shall calculate a maintenance reimbursement
equal to the product of (x) Contractor's average cost of a heavy
maintenance visit for such aircraft type during the previous six months
and (y) a fraction, the numerator of which is the number of hours
remaining until the next heavy maintenance visit for such aircraft
minus 1/2 of the total number of hours allowable between heavy
maintenance visits for such aircraft, and the denominator of which is
the total number of hours allowable between heavy maintenance visits
for such aircraft, and at the time of such withdrawal (I) Continental
shall pay Contractor an amount equal to such maintenance reimbursement,
if the numerator of such fraction is less than zero, (II) Contractor
shall pay Continental an amount equal to such maintenance
reimbursement, if the numerator of such fraction is greater than zero,
and (III) there shall be no maintenance reimbursement payable pursuant
to this clause (iii) if the numerator of such fraction is equal to
zero; and (iv) for each such withdrawn aircraft being retained by
Contractor, if Continental shall have previously reimbursed Contractor
for the cost of any engine life-limited component pursuant to Paragraph
B(3) of Schedule 3 which component is installed in such aircraft, then
Contractor shall pay to Continental an amount equal to the cost of such
life-limited component multiplied by a fraction, the numerator of which
is the number of hours remaining in the life of such life-limited part,
and the denominator of which is the total number of hours in the life
of such life-limited part. Contractor may elect, in lieu of making the
payment contemplated by clause (iv) above, to pay such amount plus
accrued interest, which interest shall accrue monthly at the interest
rate used in the Uncovered Aircraft Sublease for such aircraft to
determine the lease payments thereunder, in equal monthly installments
over the remaining term of the Uncovered Aircraft Sublease with respect
to such aircraft.
Section 2.03 Withdrawal of Turboprop Aircraft from this Agreement.
(a) Continental Notice of Turboprop Aircraft
Withdrawal. All Turboprop Aircraft shall be withdrawn from the capacity
purchase provisions of this Agreement on a schedule to be agreed upon
by Continental and Contractor, but in any event not later than December
31, 2004; provided that notwithstanding any such agreed schedule,
Continental may at any time, upon not less than 45 days' notice (or 14
days' notice in the case of a Turboprop Aircraft for which Continental
received notice of a maintenance event pursuant to Section 4.05(a)),
withdraw any Turboprop Aircraft from the capacity purchase provisions
of
5
this Agreement. Without Continental's prior written consent, Contractor
may not retain any Turboprop Aircraft withdrawn from the capacity
purchase provisions of this Agreement. At Continental's request in
connection with any withdrawal of a Turboprop Aircraft, Contractor
shall promptly provide a list detailing the location of each turboprop
engine (by aircraft or, if appropriate, maintenance facility).
(b) Retirement Costs of Turboprop Aircraft.
Continental shall be responsible for any reasonable out-of-pocket
expenses associated with the retirement of each Turboprop Aircraft in
connection with its withdrawal from the capacity purchase provisions of
this Agreement pursuant to this Section 2.03; provided that Contractor
shall conduct its retirement checks for such aircraft in a manner
consistent with its past practices; provided, further, that Contractor
shall not discriminate against or operate, maintain (except as provided
above) or otherwise treat the aircraft differently in contemplation of
its return to Continental (or its designee), including with respect to
the removal of any part or parts for convenience or without cause; and
provided, further, that if the amount which Contractor is compensated
pursuant to Schedule 3 in respect of the reasonable out-of-pocket
expenses incurred by Contractor as determined pursuant to this Section
2.03(b) exceeds the actual aggregate amount of such expenses, then
Contractor shall promptly reimburse to Continental an amount equal to
the quotient of (i) such excess divided by (ii) the Cost Factor set
forth on Appendix 23 to Schedule 3. In connection with each such
retirement, Continental shall also (i) purchase (or arrange for the
purchase) from Contractor, at the time of withdrawal, each such
Turboprop Aircraft that is owned by Contractor at a price equal to the
book value of such aircraft on Contractor's most recent financial
statements, and (ii) purchase the Excess Inventory relating to such
Turboprop Aircraft (as reasonably determined by Contractor) at a price
equal to the book value of such inventory on Contractor's most recent
financial statements.
(c) Impairment Costs of Turboprop Aircraft. Subject
to the provisions of Section 3.05, if Contractor shall incur a charge
for the impairment of a Turboprop Aircraft prior to its withdrawal
pursuant to this Section 2.03, then Continental shall reimburse
Contractor in the amount of such charge; provided that Contractor shall
not discriminate against any Turboprop Aircraft in determining whether
to take such charge or the amount of such charge.
Section 2.04 Withdrawal of Engines. In connection with the withdrawal
of any Covered Aircraft (including any Turboprop Aircraft) from the capacity
purchase provisions of this Agreement pursuant to Section 2.02 or 2.03, whether
such aircraft is being retained by Contractor as an Uncovered Aircraft or
returned to Continental or its designee, Continental shall have complete
discretion in the selection of the particular Engines or Turboprop engines, as
the case may be, to be withdrawn in connection with any particular aircraft and
shall notify Contractor of its selection not less than 10 days after Continental
shall have selected aircraft to be withdrawn pursuant to Section 2.02(b)(ii) or
2.03(a), as applicable. Continental shall bear the cost of any engine swaps
reasonably necessary to accommodate its engine selections, based on the
engine-location list provided to Continental by Contractor; provided that
Contractor use its commercially reasonable efforts to minimize the number and
cost of engine swaps reasonably necessary to accommodate Continental's engine
selections and shall be
6
responsible for the cost of all such swaps, if any, required because of any
inaccuracy in the engine-location list provided to Continental by Contractor.
Section 2.05 Embraer Option Aircraft. With respect to the Embraer
Option Aircraft, Contractor shall give Continental written notice of the
deadline for the exercise of any option for any such Embraer Option Aircraft at
least 60 days (but not more than 180 days) prior to such deadline, and
Continental shall, within 30 days from receipt of such notice, determine and
notify Contractor (i) that such Embraer Option Aircraft shall constitute Covered
Aircraft, (ii) that such Embraer Option Aircraft shall be delivered to
Contractor in exchange for the delivery to Continental of an Uncovered Aircraft
that is subject to an Uncovered Aircraft Sublease, (iii) that Continental
desires to acquire such Embraer Option Aircraft for its own account (or that of
its designee) outside of this Agreement if Contractor does not intend to
exercise such option or (iv) that it does not elect to exercise any of the above
rights, in which case Embraer Option Aircraft obtained by Contractor in respect
of such option shall be Uncovered Aircraft. If Continental shall have elected
clause (i) above, then upon receipt by Contractor of notice from Continental of
its determination, Contractor shall exercise its option to acquire such aircraft
from Embraer, and the provisions of Section 5.01 shall apply. If Continental
shall have elected clause (ii) above, then the provisions of Section 5.03(b)
shall apply. If Continental shall have elected clause (iii) above, then
Contractor shall notify Continental at least 15 days prior to the deadline for
exercise of such option whether Contractor intends to exercise such option on
its own behalf, and Contractor shall timely exercise such option on behalf of
Continental (and take all other actions reasonably appropriate to permit
Continental (or its designee) to acquire such aircraft) if Contractor shall have
determined not to exercise such option on its own behalf.
Section 2.06 Flight-Related Revenues. Contractor acknowledges and
agrees that all revenues resulting from the sale and issuance of passenger
tickets associated with the operation of the Covered Aircraft and all other
sources of revenue associated with the operation of the Covered Aircraft,
including without limitation revenues relating to the transportation of cargo or
mail and revenues associated with food, beverage and duty-free services and
guaranteed or incentive payments from airport, local or municipal authorities in
connection with scheduling flights to such airport or locality, are the sole
property of and shall be retained by Continental (or, if received by Contractor,
shall be promptly remitted to Continental).
ARTICLE III
CONTRACTOR COMPENSATION
Section 3.01 Base and Incentive Compensation. For and in consideration
of the transportation services, facilities and other services to be provided by
Contractor hereunder, Continental shall pay Contractor the base and incentive
compensation as provided in Paragraph A of Schedule 3 hereto, subject to the
terms and conditions set forth in this Article III.
Section 3.02 Periodic Adjustment of Base and Incentive Compensation.
The initial base and incentive compensation rates under this Agreement
(including the initial
7
Block Hour Rates) set forth in Paragraph A of Schedule 3 hereto shall remain in
effect through December 31, 2004, with certain limited adjustments as are
provided in Schedule 3. The Block Hour Rates shall be subject to further
adjustment on January 1, 2005 and each January 1 thereafter during the Term.
Continental and Contractor hereby agree to meet promptly after July 1, 2004,
September 1, 2005 and each September 1 thereafter during the Term in order to
review and revise the Block Hour Rates, as appropriate, for the subsequent year
based on the methodology (including the Cost Factor) for setting the initial
Block Hour Rates as set forth in Schedule 3. Should the parties be unable to
agree on such revised Block Hour Rates by October 1, 2004 for the year beginning
January 1, 2005 or by November 1 in any subsequent year for the year beginning
on the subsequent January 1, then the parties shall submit the disagreement to
arbitration pursuant to Section 11.08.
Section 3.03 Contractor Expenses. Except as provided otherwise in
Section 3.04, Contractor shall discharge in accordance with commercially
reasonable practices all expenses incurred in connection with Contractor's
provision of Regional Airline Services.
Section 3.04 Continental Expenses. In addition to the reconciliation
pursuant to Section 3.06(b) of all or a portion of the actual costs of certain
expenses, the anticipated costs of which are provided for in the Block Hour
Rates:
(a) Certain Revenue-Related Expenses. Continental
shall be responsible for all passenger and cargo revenue-related
expenses relating to the Regional Airlines Services, as described in
Paragraph B(1) of Schedule 3.
(b) Design Changes. Continental shall be responsible
for any reasonable out-of-pocket expenses relating to interior and
exterior design changes to the Covered Aircraft and other
product-related changes required by Continental that occur outside of
Contractor's normal aircraft and facility refurbishment program,
including facility-related design changes and the cost of changes in
uniforms and other livery.
Section 3.05 Accounting Provisions and Audit.
(a) Separate Books and Records. Contractor shall
maintain separate books and records for the provision of Regional
Airlines Services, on the one hand, and Contractor's other operations
(if any) on the other, in each case in the aggregate, and shall include
a reasonable allocation of expenses, including overhead, among such
aircraft such that aircraft-specific costs are assigned among Covered
Aircraft and Uncovered Aircraft based on the specific aircraft type
that generated such cost and all other costs are allocated
proportionately based on block hours flown; provided that in the event
that engine maintenance or other costs arising under the Flight Hour
Agreement change pursuant to the terms thereof as a result of the
inclusion of Uncovered Aircraft under such agreement (including because
of the stage length or other utilization characteristics of the
Uncovered Aircraft), then the engine maintenance and other costs
arising under
8
the Flight Hour Agreement shall be allocated to the Covered Aircraft as
if such Uncovered Aircraft had not been included under such agreement,
regardless of whether such allocation results in higher or lower costs
being allocated to the Covered Aircraft. Contractor's books and records
that relate to the provision of Regional Airlines Services shall be
maintained in accordance with generally accepted accounting principles
consistently applied, and such books and records and all calculations
made pursuant to this Agreement shall be kept and made in accordance
with the accounting policies and procedures used by Continental and
Contractor to develop Block Hour Rates, unless otherwise agreed in
writing by Continental. Without limiting the foregoing in any respect,
Contractor agrees that it shall not depreciate Turboprop Aircraft or
Excess Inventory from and after the date hereof more slowly than it has
historically depreciated such items, unless otherwise agreed in writing
by Continental.
(b) Audit Rights. Contractor shall make available for
inspection by Continental and its outside auditors, within a reasonable
period of time after Continental makes a written request therefor, all
of Contractor's books and records (including all financial and
accounting records and operations reports, and records of other
subsidiaries or affiliates of Contractor, if any, as necessary to audit
the allocations made pursuant to Section 3.05(a)). Continental and its
outside auditors shall be entitled to make copies and notes of such
information as they deem necessary and to discuss such records with
Contractor's Chief Financial Officer or such other employees or agents
of Contractor knowledgeable about such records. Upon the reasonable
written request of Continental or its outside auditors, Contractor will
cooperate with Continental and its outside auditors to permit
Continental and its outside auditors access to Contractor's outside
auditors for purposes of reviewing such records.
Section 3.06 Billing and Payment; Reconciliation.
(a) Billing and Payment. On the next Business Day
after Contractor receives the Final Monthly Schedule from Continental
pursuant to Section 2.01(b), Contractor shall present a reasonably
detailed written invoice for amounts due under this Agreement in
respect of the Base Compensation and per passenger fees (based on the
Forecasted Passengers) for the Scheduled Flights during the month to
which such Final Monthly Schedule pertains. Continental shall pay
Contractor the amount due under such invoice (the "Invoiced Amount"),
subject to Continental's right to dispute any calculations set forth on
such invoice that do not comply with the terms of this Agreement, and,
at Continental's option, net of amounts owed by Contractor to
Continental under the Administrative Support and Information Services
Provisioning Agreement, the Master Facility and Ground Handling
Agreement, the Fuel Purchasing Agreement and/or any Covered Aircraft
Sublease or Uncovered Aircraft Sublease, as follows:
(i) One-quarter of the Invoiced Amount shall
be payable by Continental to Contractor, by electronic
transfer of funds to a bank account designated by Contractor,
available on or before the first day
9
of the month (or if such day is not a Business Day, the next
Business Day) to which such invoice relates;
(ii) One-quarter of the Invoiced Amount
shall be payable by Continental to Contractor, by electronic
transfer of funds to a bank account designated by Contractor,
available on or before the 8th day of the month (or if such
day is not a Business Day, the next Business Day) to which the
invoice relates;
(iii) One-quarter of the Invoiced Amount
shall be payable by Continental to Contractor, by electronic
transfer of funds to a bank account designated by Contractor,
available on or before the 15th day of the month (or if such
day is not a Business Day, the next Business Day) to which the
invoice relates; and
(iv) One-quarter of the Invoiced Amount
shall be payable by Continental to Contractor, by electronic
transfer of funds to a bank account designated by Contractor,
available on or before the 22nd day of the month (or if such
day is not a Business Day, the next Business Day) to which the
invoice relates.
(b) Reconciliation. Not later than 12 days following
the end of each month, Contractor and Continental shall reconcile
actual amounts due in respect of such month with the estimated amounts
included in the Invoiced Amount for such items for such month in
accordance with the terms and conditions set forth in Schedule 3. Such
reconciled amounts for such month shall be paid by Continental to
Contractor together with the next payment to be made pursuant to
Section 3.06(a)(iii) above, or set off by Continental against any other
amounts owing to Contractor, as the case may be. If, subsequent to any
reconciliation payments or set-off, as the case may be, Contractor's
financial statements, maintained as provided in Section 3.05(a), are
restated, amended or otherwise adjusted for any month or Performance
Period, then the reconciled amounts for such period shall be
recalculated in accordance with the terms and conditions set forth in
Schedule 3, and the parties shall make further payments or set off
further amounts as appropriate in respect of such recalculations.
ARTICLE IV
CONTRACTOR OPERATIONS AND AGREEMENTS WITH CONTINENTAL
Section 4.01 Crews; Resource Allocation.
(a) Personnel Employed. Contractor shall be
responsible for providing all crews (flight and cabin) and maintenance
personnel and, at Contractor Airports, gate agents and other ground
personnel, necessary to operate the Scheduled Flights and for all
aspects (personnel and other) of dispatch control.
(b) Resource Allocation. If Contractor is flying any
Uncovered Aircraft, then for so long as either (i) the number of
Scheduled Flights in a
10
calendar month represent at least 50% of the aggregate number of
Contractor's scheduled flights of Covered and Uncovered Aircraft in
such month or (ii) the number of Covered Aircraft is at least 200, then
Contractor crews, maintenance personnel and other resources shall be
allocated on a priority basis to Scheduled Flights above all other
flights and aircraft.
Section 4.02 Governmental Regulations. Contractor has and shall
maintain all FAA, DOT and other certifications, permits, licenses, certificates
and insurance required by governmental authorities to enable Contractor to
perform the services required by this Agreement. All flight operations, dispatch
operations and all other operations undertaken by Contractor pursuant to this
Agreement shall be conducted and operated by Contractor in compliance in all
material respects with all governmental regulations, including, without
limitation, those relating to airport security, the use and transportation of
hazardous materials, crew qualifications, crew training and crew hours. Without
limiting Contractor's obligations under any Covered Aircraft Lease, all Covered
Aircraft shall be operated and maintained by Contractor in compliance in all
material respects with all governmental regulations, Contractor's own operations
manuals and maintenance manuals and procedures, and all applicable equipment
manufacturer's instructions.
Section 4.03 Quality of Service. At all times, Contractor shall provide
Regional Airline Services with appropriate standards of care, but in no event
lower than such standards utilized by Continental as of the date of this
Agreement. Continental procedures, performance standards and means of
measurement thereof concerning the provision of air passenger and air cargo
services shall be applicable to all Regional Airline Services provided by
Contractor. Contractor shall achieve at least the comparable quality of airline
service as provided by Continental, subject to limitations imposed by the type
of aircraft used by Contractor, its route network and the availability of
equipment and facilities, as compared to those of Continental. Contractor shall
comply with all airline customer service commitments or policies of Continental
as of the date hereof, including without limitation the "CustomerFirst"
commitments, and employee conduct, appearance and training policies in place as
of the date hereof, and shall handle customer-related services in a
professional, businesslike and courteous manner. In connection therewith,
Contractor shall maintain aircraft cleaning cycles and policies, and shall
maintain adequate staffing levels, to ensure at least a comparable level of
customer service and operational efficiency that Continental achieves, including
without limitation in respect of customer complaint response, ticketing and
boarding timing, and baggage services. In addition, at the request of
Continental, Contractor shall comply with all such airline customer service
commitments, policies or standards of care of Continental as adopted, amended or
supplemented after the date hereof, provided that Continental shall reimburse
Contractor for the reasonable out-of-pocket costs of Contractor of complying
with such policies in excess of the costs of complying with such policies as in
effect as of the date of this Agreement. Contractor shall provide Continental
with timely communication regarding the status of all Scheduled Flights, and
shall perform closeout procedures at service levels at least as high as those of
Continental at comparably-sized airports. Contractor will use Continental's
standard procedures for processing and adjudicating all claims for which
Contractor is responsible in an effort to avoid such matters becoming the
subject of litigation or insurance claims. Contractor and
11
Continental will periodically meet to discuss and review Contractor's customer
service and handling procedures and policies and its employees' conduct,
appearance and training standards and policies in an effort to ensure compliance
with this Agreement, and to agree to the terms of any necessary corrective
action plan and the timing of its implementation.
Section 4.04 Safety Matters.
(a) Incidents or Accidents. Contractor shall promptly
notify Continental of all irregularities involving a flight operated by
Contractor which result in any damage to persons or property or are
otherwise likely to result in a complaint or claim by passengers or an
investigation by a governmental agency or authority, shall furnish to
Continental as much detail as practicable concerning such
irregularities and shall cooperate with Continental at Contractor's own
expense in any appropriate investigation. Contractor shall adopt
Continental's Emergency Response Plan for aircraft accidents or
incidents, and shall be responsible for Continental's direct costs
resulting from Contractor's participation in such plan. In the event of
an accident or incident involving a Covered Aircraft, Continental will
have the right, but not the obligation, to manage the emergency
response efforts on behalf of Contractor and to approve settlement of
any liability claims resulting from the accident or incident.
(b) Safety Audits. Continental shall have the right,
at its own cost, to inspect, review, and observe Contractor's
operations of Scheduled Flights, and/or to conduct a full safety and/or
service audit of Contractor's operations, manuals and procedures
reasonably related to Scheduled Flights, at such intervals as
Continental reasonably requests. Any such safety review may include an
audit of Contractor's maintenance and operating procedures, crew
planning, passenger and baggage handling, customer service, personnel
records, spare parts, inventory records, training records and manuals,
and flight, flight training and operational personnel records.
Section 4.05 Turboprops.
(a) Maintenance. Contractor shall notify Continental
at least 30 days prior to performing the last scheduled maintenance
event of any type (including airframe checks, and engine, propeller and
landing gear overhauls) on any Turboprop Aircraft prior to the
withdrawal date for such aircraft as agreed pursuant to Section 2.03.
Upon notice from Continental that, prior to such maintenance event,
such Turboprop Aircraft is to be withdrawn from the capacity purchase
provisions of this Agreement pursuant to Section 2.03, then Contractor
shall cancel such maintenance event. The expected cost of such
maintenance event provided for in the Block Hour Rates and theretofore
paid to Contractor, net of any out-of-pocket costs to Contractor of
such cancellation, shall be credited to Continental in connection with
the next reconciliation payment pursuant to Paragraph B(9) of Schedule
3.
12
(b) Post-Withdrawal Management. At the request of
Continental, and at Continental's cost and direction, Contractor shall
make arrangements for the storage and continued maintenance (including
the keeping of active logs) of withdrawn Turboprop Aircraft that have
not yet been returned to Continental or its designee, together with the
Excess Inventory relating thereto.
Section 4.06 Master Facility and Ground Handling Agreement.
Contemporaneous with the execution and delivery of this Agreement, Contractor
and Continental shall enter into a Master Facility and Ground Handling Agreement
in the form attached hereto as Exhibit C.
Section 4.07 Codeshare Terms. Contractor agrees to operate all
Scheduled Flights using the Continental flight code and flight numbers assigned
by Continental, or such other flight codes and flight numbers as may be assigned
by Continental (to accommodate, for example, a Continental alliance partner),
and otherwise under the codeshare terms set forth in Exhibit D.
Section 4.08 Administrative Support and Information Services
Provisioning Agreement. Contemporaneous with the execution and delivery of this
Agreement, Continental and Contractor shall enter into the Administrative
Support and Information Services Provisioning Agreement in the form attached
hereto as Exhibit E.
Section 4.09 Fuel Purchasing Agreement. Contemporaneous with the
execution and delivery of this Agreement, Continental and Contractor shall enter
into the Fuel Purchasing Agreement in the form attached hereto as Exhibit F.
Section 4.10 Slots and Route Authorities. At the request of Continental
made at any time and from time to time, including upon termination of this
Agreement, Contractor shall use its commercially reasonable efforts to transfer
to Continental or its designee, to the extent permitted by law, any airport
takeoff or landing slots, route authorities or other similar regulatory
authorizations held by Contractor and used for Scheduled Flights, in
consideration of the payment to ExpressJet of the net book value, if any, of
such slot, authority or authorization on ExpressJet's books. Contractor's
obligations pursuant to the immediately preceding sentence shall survive the
termination of this Agreement for so long as any transfer requested pursuant to
this Section 4.10 shall not have been completed. Contractor hereby agrees that
all of Contractor's contacts or communications with any applicable regulatory
authority concerning any airport takeoff or landing slots, route authorities or
other similar regulatory authorizations used for Scheduled Flights will be
coordinated through Continental. If any airport takeoff or landing slot, route
authority or other similar regulatory authorization held by Contractor and used
for Scheduled Flights is withdrawn or otherwise forfeited as a result of
Controllable Cancellations or any other reason within Contractor's reasonable
control, then Contractor agrees to pay to Continental promptly upon demand an
amount equal to the market value of such withdrawn or forfeited slot, authority
or authorization.
Section 4.11 Use of Continental Marks. Continental hereby grants to
Contractor the non-exclusive and non-transferable rights to use the Continental
Marks and other
13
Identification as provided in, and Contractor shall use the Continental Marks
and other Identification in accordance with the terms and conditions of, Exhibit
G.
Section 4.12 Use of Contractor Marks. Contractor hereby grants to
Continental the non-exclusive and non-transferable rights to use the Contractor
Marks as provided in, and Continental shall use the Contractor Marks in
accordance with the terms and conditions of, Exhibit H.
Section 4.13 Catering Standards. Continental and Contractor shall
comply with the catering requirements set forth on Exhibit I hereto. The parties
agree that, in the event of a conflict between the provisions of Exhibit I and
the Contractor Ground Handling Agreement, the provisions of Exhibit I shall
control.
Section 4.14 Ticket Handling Terms. Continental and Contractor shall
comply with the ticket handling requirements set forth in Exhibit J hereto. The
parties agree that, in the event of a conflict between the provisions of Exhibit
J and the Contractor Ground Handling Agreement, the provisions of Exhibit J
shall control.
ARTICLE V
FINANCING OF AIRCRAFT
Section 5.01 Financing of Firm and Option Aircraft. Subject to the
terms and conditions of this Agreement, Continental agrees to participate, on
behalf of Contractor, in the financing for the firm-order aircraft under the
Embraer Contract as further set forth on Schedule 1 attached hereto in
accordance with and subject to the terms and conditions of the Embraer Contract
and this Article V. For any such firm-order aircraft that constitute Covered
Aircraft, Continental shall lease such aircraft from Embraer or its equity
designee pursuant to the Embraer Contract and (if applicable with respect to a
particular aircraft) the Funding Agreement and sublease such aircraft to
Contractor under a Covered Aircraft Sublease. For any such firm-order aircraft
that become Uncovered Aircraft (either in connection with the release of Covered
Aircraft pursuant to Section 2.02 or in connection with certain terminations of
this Agreement), Continental shall lease (or continue to lease, as the case may
be) such aircraft from Embraer or its equity designee pursuant to the Embraer
Contract and (if applicable with respect to a particular aircraft) the Funding
Agreement and sublease such aircraft to Contractor under an Uncovered Aircraft
Sublease, subject to the provisions of Section 5.03. In addition, Continental
agrees to participate in the financing for the Embraer Option Aircraft that
constitute Covered Aircraft pursuant to clause (i) of Section 2.05 as if such
aircraft were firm-order aircraft under the Embraer Contract. Notwithstanding
the foregoing, (i) if the other parties to any financing or lease transaction
involving Covered Aircraft or Uncovered Aircraft consent to the release of
Continental from any obligation to participate in such financing or otherwise to
terminate Continental's head lease, in each case without increasing the
obligations of Contractor under such contract, then Contractor agrees to consent
to such release and agrees that the foregoing provisions of this Section 5.01
shall not apply in respect of such aircraft and (ii) Continental shall have no
obligation under this Article V with respect to Undelivered Covered Aircraft
that are deemed Uncovered Aircraft pursuant to Section 2.02 or Article IX.
Contractor further
14
agrees that Continental shall be entitled to assign or otherwise transfer its
interest in any Uncovered Aircraft and/or any financing or lease agreements
relating thereto, and Contractor shall not withhold its required consent, if
any, to such assignment or transfer; provided, that Contractor shall not be
required to agree to such transfer or assignment if such action would cause
Contractor to be in default of such financing or lease agreement (in which event
the Uncovered Aircraft or the financing or lease agreement shall not be assigned
or transferred unless Continental shall have provided indemnification or other
protection sufficient to hold Contractor harmless against any loss, damage,
claim or expense arising out of such default) or if such transfer or assignment
would violate any applicable law; and provided further that Contractor's
expenses in connection with such transaction shall be reimbursed by Continental.
Section 5.02 No Financing of Other Aircraft. Except as provided in
Section 5.01, the parties acknowledge and agree that Continental does not have
any obligation hereunder to finance, arrange financing or participate in the
financing of any aircraft on behalf of Contractor.
Section 5.03 Refinancing or Replacement of Uncovered Aircraft.
(a) Refinancing at Contractor's Option. If Contractor
shall have successfully negotiated a transaction at any time providing
for the refinancing of an Uncovered Aircraft and the termination by
Continental of the head lease relating to such aircraft, then
Continental shall use its reasonable efforts to cooperate with
Contractor to consummate the transaction; provided, that Continental
shall not be required to terminate such head lease if such termination
is not permitted by such head lease or such termination would violate
any applicable law or cause a breach under any other contract to which
Continental is a party, in which event the Uncovered Aircraft Sublease
shall not be terminated; and provided further that Continental's
expenses in connection with such transaction shall be reimbursed by
Contractor.
(b) Replacement at Continental's Option. Continental
shall be entitled at any time and from time to time to terminate the
Uncovered Aircraft Sublease relating to an Uncovered Aircraft, and take
possession of such Uncovered Aircraft, in a transaction providing for
the delivery to Contractor of a Replacement Aircraft.
(i) Replacement Using Embraer Option
Aircraft. If the Replacement Aircraft proposed by Continental
is an Embraer Option Aircraft, then Continental may take
possession of the replaced Uncovered Aircraft on or after the
fifth day after the earlier of the actual delivery date of the
Replacement Aircraft and the scheduled delivery date of the
Replacement Aircraft (regardless of whether such Replacement
Aircraft is actually delivered on such date, whether or not
Contractor has elected to exercise its option with respect to
such Replacement Aircraft and whether or not Contractor is
able to finance the acquisition of such Replacement Aircraft);
provided that Continental shall have given Contractor at least
30
15
days' advance written notice prior to the expiration of
Contractor's option to acquire such Embraer Option Aircraft;
and provided further that such Embraer Option Aircraft does
not constitute a Replacement Aircraft for another Uncovered
Aircraft.
(ii) Replacement Using Other Embraer
Aircraft. If Continental (A) shall obtain the right to acquire
(including by exercise of an option) any Embraer aircraft
other than the Covered Aircraft and the Embraer Option
Aircraft and (B) at least 30 days prior to the expiration of
such right, shall propose in writing delivered to Contractor
to acquire such aircraft or exercise an option for such
aircraft on behalf of Contractor as a Replacement Aircraft for
an Uncovered Aircraft, then Contractor shall be required to
use its commercially reasonable efforts to finance the
acquisition of such Replacement Aircraft prior to the
expiration of such right. If Contractor shall obtain such
financing on terms reasonably satisfactory to it prior to the
expiration of such right, then (x) Continental shall acquire
such Replacement Aircraft or cause it to be acquired, using
such financing obtained by Contractor; (y) Continental shall
be entitled to terminate the Uncovered Aircraft Sublease
relating to such Uncovered Aircraft; and (z) Continental shall
take possession of such Uncovered Aircraft on the fifth day
after the delivery of such Replacement Aircraft to Contractor.
If Contractor shall not obtain such financing on terms
reasonably satisfactory to it prior to the expiration of such
right, then Continental shall not be entitled to use such
Embraer aircraft as a Replacement Aircraft for an Uncovered
Aircraft.
Section 5.04 Pre-Delivery Deposits. Continental shall pay all
pre-delivery deposits required to be paid under the Embraer Contract in respect
of all firm-order aircraft and all Embraer Option Aircraft other than those for
which the option is being exercised in anticipation of such aircraft becoming an
Uncovered Aircraft. If any of such pre-delivery deposits are returned to
Contractor, Contractor shall promptly refund such amounts to Continental.
Contractor shall be responsible for the payment of all other such pre-delivery
deposits under the Embraer Contract.
Section 5.05 Lease of Owned Aircraft. If Continental purchases or
otherwise acquires title to any Covered Aircraft or Uncovered Aircraft, then
Contractor shall cooperate reasonably with Continental to give effect to such
purchase or acquisition, including by amending or otherwise re-executing each
applicable Covered Aircraft Sublease and Uncovered Aircraft Sublease as a lease,
in each case containing substantially the same terms and conditions as the
corresponding sublease. If Continental owns any Covered Aircraft or Uncovered
Aircraft as of the date hereof, then each reference in this document to a
Covered Aircraft Sublease or Uncovered Aircraft Sublease shall be deemed to be a
reference to a lease containing substantially the same terms and conditions as
the corresponding sublease.
16
ARTICLE VI
EXCLUSIVITY AND CERTAIN RIGHTS OF CONTINENTAL
Section 6.01 Exclusivity; Use of Covered Aircraft. Contractor agrees
that, except as otherwise directed or approved in writing by Continental in
Continental's sole discretion, (i) the Covered Aircraft may be used only to
provide the Regional Airline Services contemplated by this Agreement and (ii)
the Covered Aircraft may not be used by Contractor for any other purpose (other
than training flights, ferrying and other non-revenue flights related to the
provision of the Regional Airline Services and consistent with past practices
and Reasonable Operating Constraints), including without limitation flying for
any other airline or on Contractor's own behalf.
Section 6.02 Exclusive Arrangements at Hub Airports.
(a) Contractor Hub Flights. In furtherance of the
capacity purchase arrangements hereunder, Continental and Contractor
agree that Contractor shall operate only Scheduled Flights in or out of
any Hub Airport prior to the Termination Date, except as otherwise
approved in writing by Continental in its sole discretion.
(b) Continental Hub Flights. Subject to Section
9.05(c), Continental agrees that, without Contractor's prior written
consent, Continental shall not fly or contract with a third party to
fly on Continental's behalf any regional jets in or out of any Existing
Hub Airports until the earlier of any Termination Date and December 31,
2005; provided that the foregoing provisions shall not apply with
respect to up to ten flights per day operated by Continental's
codeshare partners in or out of each Existing Hub Airport, which
flights carry Continental's two-letter designator code "CO" or "CO*" as
a secondary code; and provided, further, that (i) if the Embraer
XRJ-145 aircraft does not meet design or performance specifications and
the delivery of one or more Embraer XRJ-145 aircraft is cancelled or
delayed by more than six months, and (ii) Contractor does not offer to
provide to Continental regional airline services utilizing regional jet
aircraft comparable to the Embraer XRJ-145 (assuming that such Embraer
aircraft met its design and performance specifications) at block hour
rates comparable to those provided herein for the XRJ-145 aircraft or,
if higher, at a price at or lower than the price offered to Continental
by any third party offering to provide such services, then the
exclusivity provisions of this Section 6.02(b) shall not apply with
respect to the block hours for which Continental would have utilized
the Embraer XRJ-145 (which in any event may include routes and
frequencies previously served by other Covered Aircraft).
Section 6.03 Most Favored Nations. Notwithstanding any other provision
in this Agreement to the contrary, at any time during which Continental is the
largest customer of Contractor (measured by the percentage of all of
Contractor's available seat miles represented by Scheduled ASMs during the most
recently completed Performance Period), with respect to the purchase of Regional
Airline Services hereunder Continental shall in all events be entitled to the
same or comparable aggregate economic terms and
17
conditions (measured by the net benefit to Contractor on a cost per available
seat mile basis), on a most-favored-nations basis, as are provided, directly or
indirectly, to any other Major Carrier by Contractor in any agreement or series
of agreements for the provision of flight services for such Major Carrier on a
capacity purchase basis (or other arrangements the economics of which replicate
capacity purchase arrangements) with an aggregate of more than 10 aircraft. To
the extent that any such agreement or arrangement is entered into and is not
available for audit by Continental pursuant to Section 3.05(b) because of
contractual confidentiality restrictions in such agreement or arrangement, then
in connection with Contractor's entering into such agreement or arrangement,
each of Contractor and (with respect to financial provisions only) its outside
auditors shall be required to certify whether the net benefit to Contractor of
the economic terms and conditions of such agreement or arrangement is comparable
to or exceeds the net benefit to Contractor of the economic terms and conditions
of this Agreement (in each case on a cost per available seat mile basis).
Section 6.04 Change of Control. Upon the occurrence of a Change of
Control of Holdings, XJT or ExpressJet, at any time during which Continental is
the largest customer of Contractor (measured by the percentage of all of
Contractor's available seat miles represented by Scheduled ASMs during the most
recently completed Performance Period), to which Change of Control Continental
shall not have consented in writing in advance, then without any further action
by any party the Block Hour Rates shall be decreased for the remaining Term by
an amount equal to such Block Hour Rates multiplied by the Cost Factor, and the
provisions of Paragraph B(9)(d) of Schedule 3 shall be of no further force or
effect.
ARTICLE VII
INSURANCE
Section 7.01 Minimum Insurance Coverages. During the Term, in addition
to any insurance required to be maintained by Contractor pursuant to the terms
of any aircraft lease (including without limitation each Covered Aircraft
Sublease and Uncovered Aircraft Sublease), or by any applicable governmental
authority, Contractor shall maintain, or cause to be maintained, in full force
and effect policies of insurance with insurers of recognized reputation and
responsibility, in each case to the extent available on a commercially
reasonable basis, as follows:
(a) Comprehensive aircraft hull and liability
insurance, including aircraft third party, passenger liability
(including passengers' baggage and personal effects), cargo and mail
legal liability, and all-risk ground and flight physical damage, with a
combined single limit of not less than $300 million per occurrence and
a minimum limit in respect of personal injury (per clause AVN 60 or its
equivalent) of $25 million per occurrence and in the aggregate;
(b) Workers' compensation as required by the
appropriate jurisdiction and employer's liability with a limit of not
less than $1,000,000 combined single limit; and
18
(c) Other property and liability insurance coverages
of the types and in the amounts that would be considered reasonably
prudent for a business organization of Contractor's size and nature,
under the insurance market conditions in effect at the time of
placement, but in any event of the type and the amount that Continental
may reasonably require to prevent or minimize a disruption in the
provision of Regional Airline Services resulting from a casualty or
liability incident related to Contractor's operations. All coverages
described in this Section 7.01 shall be placed with deductibles
reasonably prudent for a business organization of Contractor's size and
nature, under the insurance market conditions in effect at the time of
placement.
Section 7.02 Endorsements. Unless Contractor and Continental are participating
in a combined policy placement, Contractor shall cause the policies described in
Section 7.01 to be duly and properly endorsed by Contractor's insurance
underwriters with respect to Contractor's flights and operations as follows:
(a) To provide that the underwriters shall waive
subrogation rights against Continental, its directors, officers,
agents, employees and other authorized representatives, except for
their gross negligence or willful misconduct;
(b) To provide that Continental, its directors,
officers, agents, employees and other authorized representatives shall
be endorsed as additional insured parties, except for their gross
negligence or willful misconduct;
(c) To provide that insurance shall be primary to and
without right of contribution from any other insurance which may be
available to the additional insureds;
(d) To include a breach of warranty provision in
favor of the additional insureds;
(e) To accept and insure Contractor's hold harmless
and indemnity undertakings set forth in this Agreement, but only to the
extent of the coverage afforded by the policy or policies; and
(f) To provide that such policies shall not be
canceled, terminated or materially altered, changed or amended until 30
days (but seven days or such lesser period as may be available in
respect of hull, war and allied perils) after written notice shall have
been sent to Continental.
Section 7.03 Evidence of Insurance Coverage. At the commencement of
this Agreement, and thereafter at Continental's request, Contractor shall
furnish to Continental evidence reasonably satisfactory to Continental of such
insurance coverage and endorsements (other than that obtained pursuant to
Section 7.04 below), including certificates certifying that the such insurance
and endorsements are in full force and effect. Initially, this evidence shall be
a certificate of insurance. If Contractor fails to
19
acquire or maintain insurance as herein provided, Continental may at its option
secure such insurance on Contractor's behalf at Contractor's expense.
Section 7.04 Insurance Through Combined Placement.
(a) Combined Placement. Promptly after the date
hereof, Continental and Contractor shall seek to obtain bids from
insurance providers with respect to airline hull and liability
insurance, based on Continental's and Contractor's combined exposures.
Each party will determine at its own discretion whether it will acquire
this insurance based on the bids received. Any insurance so obtained
will be a combined placement evidenced as appropriate by separate
policies in the names of Continental and Contractor. If either party
determines that it does not want to participate in such combined
placement of insurance it will provide the other party written notice
at least 120 days prior to the date for renewal of any existing
insurance policy that covers both Contractor and Continental.
(b) Allocation of Costs. The parties hereto shall
allocate the costs of any such combined placements as provided in
Paragraph B(7) of Schedule 3.
(c) Adjustment for Major Loss. If there is a Major
Loss under a combined placement insurance policy, Continental and
Contractor will adjust the premium amounts paid by each party in
accordance with the provisions set forth in Paragraph B(7) of Schedule
3.
ARTICLE VIII
INDEMNIFICATION
Section 8.01 Contractor Indemnification of Continental. Contractor
shall be liable for and hereby agrees to fully defend, release, discharge,
indemnify and hold harmless Continental, its directors, officers, employees and
agents from and against any and all claims, demands, damages, liabilities,
suits, judgments, actions, causes of action, losses, costs and expenses of any
kind, character or nature whatsoever (in each case whether groundless or
otherwise), including attorney's fees, costs and expenses in connection
therewith and expenses of investigation and litigation thereof, which may be
suffered by, accrued against, charged to, or recoverable from Continental or its
directors, officers, employees or agents (including any such losses, costs and
expenses involving (i) death or injury (including claims of emotional distress
and other non-physical injury by passengers) to any person including any of
Contractor's or Continental's directors, officers, employees or agents, (ii)
loss of, damage to, or destruction of property (including real, tangible and
intangible property, and specifically including regulatory property such as
route authorities, slots and other landing rights), including any loss of use of
such property, and (iii) damages due to delays) in any manner arising out of,
connected with, or attributable to (w) any act or omission by Contractor or any
of its directors, officers, employees or agents relating to the provision of
Regional Airline Services, (x) the performance, improper performance, or
non-performance of any and all
20
obligations to be undertaken by Contractor or any of its directors, officers,
employees or agents pursuant to this Agreement, (y) the operation,
non-operation, or improper operation of the Covered Aircraft or Contractor's
equipment or facilities at any location or (z) the termination of an Uncovered
Aircraft Sublease and the related head lease pursuant to Section 5.03(a) hereto,
excluding only claims, demands, damages, liabilities, suits, judgments, actions,
causes of action, losses, costs and expenses to the extent resulting from the
negligence or willful misconduct of Continental or its directors, officers,
agents or employees. Contractor will do all things necessary to cause and
assure, and will cause and assure, that Contractor will at all time be and
remain in custody and control of all aircraft, equipment, and facilities of, or
operated by, Contractor, and Continental and its directors, officers, employees
and agents shall not, for any reason, be deemed to be in custody or control, or
a bailee, of such aircraft, equipment or facilities.
Section 8.02 Continental Indemnification of Contractor. Continental
shall be liable for and hereby agrees fully to defend, release, discharge,
indemnify, and hold harmless Contractor, its directors, officers, employees, and
agents from and against any and all claims, demands, damages, liabilities,
suits, judgments, actions, causes of action, losses, costs and expenses of any
kind, character or nature whatsoever (in each case whether groundless or
otherwise), including attorneys' fees, costs and expenses in connection
therewith and expenses of investigation and litigation thereof, which may be
suffered by, accrued against, charged to, or recoverable from Contractor, or its
directors, officers, employees or agents (including any such losses, costs and
expenses involving (i) death or injury (including claims of emotional distress
and other non-physical injury by passengers) to any person including any of
Contractor's or Continental's directors, officers, employees or agents, (ii)
loss of, damage to, or destruction of property (including any loss of use of
such property including real, tangible and intangible property, and specifically
including regulatory property such as route authorities, slots and other landing
rights), and (iii) damages due to delays) in any manner arising out of,
connected with, or attributable to, (x) the performance, improper performance,
or nonperformance of any and all obligations to be undertaken by Continental or
any of its directors, officers, employees or agents pursuant to this Agreement,
or (y) the operation, non-operation or improper operation of Continental's
aircraft, equipment or facilities (excluding, for the avoidance of doubt,
Covered Aircraft, Uncovered Aircraft and any equipment or facilities leased or
subleased by Continental to Contractor) at any location, excluding only claims,
demands, damages, liabilities, suits judgments, actions, causes of action,
losses, costs and expenses to the extent resulting from the negligence or
willful misconduct of Contractor or its directors, officers, agents or
employees. Continental will do all things necessary to cause and assure, and
will cause and assure, that Continental will at all times be and remain in
custody and control of any aircraft, equipment and facilities of, or operated
by, Continental, and Contractor and its directors, officers, employees and
agents shall not, for any reason, be deemed to be in the custody or control, or
a bailee, of such aircraft, equipment or facilities.
Section 8.03 Indemnification Claims. A party (the "Indemnified Party")
entitled to indemnification from another party under the terms of this Agreement
(the "Indemnifying Party") shall provide the Indemnifying Party with prompt
written notice
21
(an "Indemnity Notice") of any third party claim which the Indemnified Party
believes gives rise to a claim for indemnity against the Indemnifying Party
hereunder. The Indemnifying Party shall be entitled, if it accepts financial
responsibility for the third party claim, to control the defense of or to settle
any such third party claim at its own expense and by its own counsel; provided
that the Indemnified Party's prior written consent (which may not be
unreasonably withheld or delayed) must be obtained prior to settling any such
third party claim. If the Indemnifying Party does not accept financial
responsibility for the third party claim or fails to defend against the third
party claim that is the subject of an Indemnity Notice within 30 days of
receiving such notice (or sooner if the nature of the third party claim so
requires), or otherwise contests its obligation to indemnify the Indemnified
Party in connection therewith, the Indemnified Party may, upon providing written
notice to the Indemnifying Party, pay, compromise or defend such third party
claim. The Indemnified Party shall provide the Indemnifying Party with such
information as the Indemnifying Party shall reasonably request to defend any
such third party claim and shall otherwise cooperate with the Indemnifying Party
in the defense of any such third party claim. Except as set forth in this
Section 8.03, the Indemnified Party shall not enter into any settlement or other
compromise or consent to a judgment with respect to a third party claim as to
which the Indemnifying Party has an indemnity obligation hereunder without the
prior written consent of the Indemnifying Party (which may not be unreasonably
withheld or delayed), and the entering into of any settlement or compromise or
the consent to any judgment in violation of the foregoing shall constitute a
waiver by the Indemnified Party of its right to indemnity hereunder to the
extent the Indemnifying Party was prejudiced thereby. Any Indemnifying Party
shall be subrogated to the rights of the Indemnified Party to the extent that
the Indemnifying Party pays for any loss, damage or expense suffered by the
Indemnified Party hereunder.
Section 8.04 Employer's Liability; Independent Contractors; Waiver of
Control.
(a) Employer's Liability and Workers' Compensation.
Each party hereto assumes full responsibility for its employer's
liability and workers' compensation liability to its own officers,
directors, employees or agents on account of injury or death resulting
from or sustained in the performance of their respective service under
this Agreement. Each party, with respect to its own employees, accepts
full and exclusive liability for the payment of workers' compensation
and employer's liability insurance premiums with respect to such
employees, and for the payment of all taxes, contributions or other
payments for unemployment compensation or old age benefits, pensions or
annuities now or hereafter imposed upon employers by the government of
the United States or any other governmental body, including state,
local or foreign, with respect to such employees measured by the wages,
salaries, compensation or other remuneration paid to such employees, or
otherwise, and each party further agrees to make such payments and to
make and file all reports and returns, and to do everything to comply
with the laws imposing such taxes, contributions or other payments.
(b) Independent Contractors. The employees, agents,
and independent contractors of Contractor engaged in performing any of
the services Contractor is to perform pursuant to this Agreement are
employees, agents, and
22
independent contractors of Contractor for all purposes, and under no
circumstances will be deemed to be employees, agents or independent
contractors of Continental. In its performance under this Agreement,
Contractor will act, for all purposes, as an independent contractor and
not as an agent for Continental. Notwithstanding the fact that
Contractor has agreed to follow certain procedures, instructions and
standards of service of Continental pursuant to this Agreement,
Continental will have no supervisory power or control over any
employees, agents or independent contractors engaged by Contractor in
connection with its performance hereunder, and all complaints or
requested changes in procedures made by Continental will, in all
events, be transmitted by Continental to Contractor's designated
representative. Nothing contained in this Agreement is intended to
limit or condition Contractor's control over its operations or the
conduct of its business as an air carrier, and Contractor and its
principals assume all risks of financial losses which may result from
the operation of the air services to be provided by Contractor
hereunder.
(c) Employees. The employees, agents, and independent
contractors of Continental engaged in performing any of the services
Continental is to perform pursuant to this Agreement are employees,
agents, and independent contractors of Continental for all purposes,
and under no circumstances will be deemed to be employees, agents, or
independent contractors of Contractor. Contractor will have no
supervision or control over any such Continental employees, agents and
independent contractors and any complaint or requested change in
procedure made by Contractor will be transmitted by Contractor to
Continental's designated representative. In its performance under this
Agreement, Continental will act, for all purposes, as an independent
contractor and not as an agent for Contractor.
(d) Contractor Flights. The fact that Contractor's
operations are conducted under Continental's Marks and listed under the
CO designator code will not affect their status as flights operated by
Contractor for purposes of this Agreement or any other agreement
between the parties, and Contractor and Continental agree to advise all
third parties, including passengers, of this fact.
Section 8.05 Survival. The provisions of this Article VIII shall
survive the termination of this Agreement for a period of seven years.
ARTICLE IX
TERM, TERMINATION AND DISPOSITION OF AIRCRAFT
Section 9.01 Base Term. This Agreement shall commence on and shall be
effective as of January 1, 2001 and, unless earlier terminated or extended as
provided herein, shall continue until December 31, 2010 (the "Base Term").
Section 9.02 Extension Terms. The term of this Agreement may be
extended at the sole election of Continental for up to four additional five-year
terms (each, an
23
"Extension Term") upon written notice to Contractor delivered at least 24 months
prior to the expiration of the Base Term or the Extension Term, as applicable.
Section 9.03 Early Termination.
(a) By Continental after Five Years. Continental may
terminate this Agreement for any reason or for no reason, at its sole
option, at any time on or after the fifth anniversary of the date
hereof, by providing written notice to Contractor that specifies a
Termination Date of not more than 18 months nor less than 12 months
after the provision of such notice. Such written notice may be
delivered before the fifth anniversary of the date hereof so long as
the Termination Date is on or after the fifth anniversary of the date
hereof.
(b) By Continental for Cause. Continental may
terminate this Agreement, with or without any advance notice, upon the
occurrence and continuation of any event that constitutes Cause.
(c) By Continental for Breach. Continental may
terminate this Agreement, with or without any advance notice, upon the
occurrence of a material breach of this Agreement by Contractor as
described in clause (ii) below. Continental may terminate this
Agreement upon the occurrence of any other material breach of this
Agreement by Contractor, which breach shall not have been cured within
90 days after written notice of such breach is delivered by Continental
to Contractor. The parties hereto agree that, without limiting the
circumstances or events that may constitute a material breach, (i) the
occurrence of a System Flight Disruption, a Labor Strike or any event
constituting Cause shall constitute a material breach of this Agreement
by Contractor, (ii) at any time that Continental makes a reasonable and
good faith determination, using recognized standards of safety, that
there is a material safety concern with the operation of any Scheduled
Flights, Contractor shall be deemed to have materially breached this
Agreement and (iii) the grounding of any of the Embraer Fleets by
regulatory or court order or other governmental action shall constitute
a material breach of this Agreement by Contractor.
(d) By Contractor for Breach. Contractor may
terminate this Agreement upon the occurrence of any material breach of
this Agreement by Continental, which breach shall not have been cured
within 90 days after written notice of such breach is delivered by
Contractor to Continental.
(e) Survival During Wind-Down Period. Upon any
termination hereunder, the Term shall continue, and this Agreement
shall survive in full force and effect, beyond the Termination Date
until the end of the Wind-Down Period, and the rights and obligations
of the parties under this Agreement, including without limitation
remedies available upon the occurrence of events constituting Cause or
material breach, shall continue with respect to the Covered Aircraft
until they become Uncovered Aircraft.
24
Section 9.04 Disposition of Aircraft during Wind-Down Period.
(a) Termination by Continental After Five Years. If
this Agreement is terminated by Continental under Section 9.03(a), then
the Covered Aircraft shall be withdrawn from the capacity purchase
provisions of this Agreement in accordance with the following terms and
conditions:
(i) At the time of delivery of any notice of
termination delivered pursuant to Section 9.03(a), Continental
shall deliver to Contractor a Wind-Down Schedule providing for
the withdrawal of all Covered Aircraft from the capacity
purchase provisions of this Agreement, delineating the number
of each aircraft type to be withdrawn by month.
(ii) The Wind-Down Schedule may not provide
for the withdrawal of more than 15 Delivered Covered Aircraft
per month, and may not provide for the withdrawal of any
Delivered Covered Aircraft more than 60 months after the
Termination Date. Undelivered Covered Aircraft (determined as
of the Termination Date) shall be deemed to be Uncovered
Aircraft on the Termination Date.
(iii) Contractor shall have nine months
after receipt of the proposed Wind-Down Schedule to notify
Continental whether it elects to retain any of the Covered
Aircraft being withdrawn (whether such Covered Aircraft
constitute Delivered Covered Aircraft or Undelivered Covered
Aircraft). If Contractor elects to keep any Delivered Covered
Aircraft, then its notice must set forth by calendar month the
number and type of aircraft it proposes to retain, such number
of any particular type of aircraft in any particular month to
be no greater than the number of such type of aircraft
scheduled to be withdrawn during such month pursuant to the
Wind-Down Schedule. In addition, regardless of whether it
intends to retain any aircraft, Contractor shall include in
its notice a reasonably detailed current summary of the
maintenance and repair condition of each aircraft and Engine
and a list detailing the location of each Engine (by aircraft
or, if appropriate, maintenance facility).
(iv) Within 30 days after receipt of
Contractor's notice of its election to retain Covered Aircraft
being withdrawn, Continental shall select the individual
aircraft to be withdrawn according to the Wind-Down Schedule,
including those aircraft to be retained by Contractor, and
shall notify Contractor of its selection. Continental shall
have complete discretion in the selection of the particular
Covered Aircraft to be withdrawn in any month and those to be
retained by Contractor; provided that Continental must adhere
to the timing, number and type of aircraft to be retained by
Contractor as provided in Contractor's notice to Continental
delivered pursuant to Section 9.04(a)(iii).
25
(v) If any Covered Aircraft is being
retained by Contractor pursuant to this Section 9.04, then
effective on the first day of the month in which such Covered
Aircraft becomes an Uncovered Aircraft pursuant to the
Wind-Down Schedule the Covered Aircraft Sublease with respect
to such aircraft shall be terminated and replaced with an
Uncovered Aircraft Sublease. Upon each such aircraft becoming
an Uncovered Aircraft, Contractor shall calculate a
maintenance reimbursement equal to the product of (x) the
average cost of a heavy maintenance visit for such aircraft
type during the previous six months and (y) a fraction, the
numerator of which is the number of hours remaining until the
next heavy maintenance visit for such aircraft minus 1/2 of
the total number of hours allowable between heavy maintenance
visits for such aircraft, and the denominator of which is the
total number of hours allowable between heavy maintenance
visits for such aircraft. At the time of such withdrawal (I)
Continental shall pay Contractor an amount equal to such
maintenance reimbursement, if the numerator of such fraction
is less than zero, (II) Contractor shall pay Continental an
amount equal to such maintenance reimbursement, if the
numerator of such fraction is greater than zero, and (III)
there shall be no maintenance reimbursement payable pursuant
to this sentence if the numerator of such fraction is equal to
zero. In addition, if Continental shall have previously
reimbursed Contractor for the cost of any engine life-limited
component pursuant to Paragraph B(3) of Schedule 3 which
component is installed in such aircraft, then Contractor shall
pay to Continental an amount equal to the cost of such
life-limited component multiplied by a fraction, the numerator
of which is the number of hours remaining in the life of such
life-limited part, and the denominator of which is the total
number of hours in the life of such life-limited part.
Contractor may elect, in lieu of making the payment
contemplated by the preceding sentence to pay such amount plus
accrued interest, which interest shall accrue monthly at the
interest rate used in the Uncovered Aircraft Sublease for such
aircraft to determine the lease payments thereunder, in equal
monthly installments over the remaining term of the Uncovered
Aircraft Sublease with respect to such aircraft.
(vi) Upon the withdrawal of a Covered
Aircraft that is being returned to Continental (or its
designee) pursuant to this Section 9.04, the Covered Aircraft
Sublease with respect to such aircraft shall be terminated,
and Contractor shall not be required to meet the return
conditions applicable to such aircraft that relate to time or
cycles remaining between maintenance events or to any time- or
cycle- controlled part under clause (v) of Section 4 of the
Covered Aircraft Sublease; provided that Contractor shall
remain obligated to comply with all other provisions of the
Covered Aircraft Sublease applicable at the time, including
without limitation provisions generally applicable to the
maintenance, airworthiness, repair and general operating
condition and cleanliness of the aircraft; and provided
further, that the general condition
26
of the Covered Aircraft being returned shall not have
materially changed relative to the condition of Contractor's
fleet of the same aircraft type since the notice of
termination was delivered by Continental to Contractor, and
the withdrawn aircraft being returned shall have not been
discriminated against or operated, maintained or otherwise
treated differently (including with respect to the removal of
any part for convenience or without cause) than any other
Covered Aircraft
(vii) In connection with the withdrawal of
each Covered Aircraft, whether such aircraft is being retained
by Contractor as an Uncovered Aircraft or returned to
Continental or its designee, Continental shall have complete
discretion in the selection of the particular Engines or
Turboprop engines, as the case may be, to be withdrawn in
connection with any particular aircraft and shall notify
Contractor of its selection not less than 10 days after
Continental shall have selected aircraft to be withdrawn
pursuant to Section 9.04(a)(iv). Continental shall bear the
cost of any engine swaps reasonably necessary to accommodate
its engine selections, based on the engine-location list
provided to Continental by Contractor; provided that
Contractor use its commercially reasonable efforts to minimize
the number and cost of engine swaps reasonably necessary to
accommodate Continental's engine selections and shall be
responsible for the cost of all such swaps, if any, required
because of any inaccuracy in the engine-location list provided
to Continental by Contractor.
(b) Termination by Continental for Cause. If this
Agreement is terminated by Continental under Section 9.03(b), then the
Covered Aircraft shall be withdrawn from the capacity purchase
provisions of this Agreement and Continental shall have the option to
take possession (or direct possession to its designee) of any of such
aircraft in accordance with the following terms and conditions:
(i) Within five Business Days after the
Termination Date, Continental may elect by written notice to
Contractor to withdraw, effective as of the Termination Date,
all of the Covered Aircraft from the capacity provisions of
this Agreement and to terminate all of the Covered Aircraft
Subleases and replace such subleases with Uncovered Aircraft
Subleases (such an election being referred to as an "Immediate
Withdrawal Election"). If Continental makes an Immediate
Withdrawal Election, Continental shall provide to Contractor
within five Business Days after the Termination Date a
Wind-Down Schedule that provides for the return to Continental
(and for the termination of the related Uncovered Aircraft
Sublease) of any of such aircraft that Continental elects to
retain, delineating the date of the return of such aircraft.
Such Wind-Down Schedule will provide for the return to
Continental of all such aircraft within 360 days following the
Termination Date. Contractor shall deliver
27
possession of such aircraft to Continental or its designee in
accordance with the Wind-Down Schedule.
(ii) If Continental determines not to make
an Immediate Withdrawal Election, Continental shall provide to
Contractor within five Business Days after the Termination
Date a Wind-Down Schedule providing for the withdrawal of all
Covered Aircraft from the capacity purchase provisions of this
Agreement, delineating the date of the withdrawal of each
Covered Aircraft. The Wind-Down Schedule will provide for the
withdrawal of all Covered Aircraft within 360 days following
the Termination Date. Continental shall also indicate in the
Wind-Down Schedule which aircraft shall be returned to
Continental (or its designee). Contractor shall deliver
possession of such aircraft to Continental or its designee
upon the withdrawal of such aircraft from the capacity
provisions of this Agreement in accordance with the Wind-Down
Schedule.
(iii) Contractor shall be required to retain
as Uncovered Aircraft all aircraft (including all Turboprop
Aircraft) not determined by Continental to be returned to
Continental pursuant to this Section 9.04(b), and the
provisions of Section 9.04(a)(v) shall apply as if such
aircraft were being retained by Contractor in connection with
a termination under Section 9.03(a). With respect to each such
aircraft being returned to Continental (or its designee), the
provisions of Section 9.04(a)(vi) shall apply as if the
aircraft were being returned to Continental in connection with
a termination under Section 9.03(a) (except that if
Continental makes an Immediate Withdrawal Election, an
Uncovered Aircraft Sublease with respect to a particular
aircraft will not terminate until such aircraft is returned to
Continental in accordance with the Wind-Down Schedule). With
respect to any Turboprop Aircraft owned by Contractor and not
previously retired, if Continental elects to take possession
of such aircraft it shall purchase such aircraft and the
Excess Inventory relating thereto for a price equal to the
book value of such aircraft and such Excess Inventory on
Contractor's most recent financial statements. In connection
with the withdrawal of each Covered Aircraft from the capacity
purchase provisions of this Agreement pursuant to this Section
9.04(b), whether such aircraft is being retained by Contractor
as an Uncovered Aircraft or returned to Continental or its
designee, Continental shall have complete discretion in the
selection of the particular Engines or Turboprop engines, as
the case may be, to be withdrawn in connection with any
particular aircraft and shall notify Contractor of its
selection not less than 10 days after Continental shall have
selected aircraft to be withdrawn pursuant to this Section
9.04(b). At Continental's request, Contractor shall promptly
provide a list detailing the location of each engine (by
aircraft or, if appropriate, maintenance facility).
Continental shall bear the cost of any engine swaps reasonably
necessary to accommodate the engine selections, based on the
engine-location list provided to Continental by Contractor;
28
provided that Contractor shall use its commercially reasonable
efforts to minimize the number and cost of engine swaps
reasonably necessary to accommodate the engine selections and
shall be responsible for the cost of all such swaps, if any,
required because of any inaccuracy in the engine-location list
provided to Continental by Contractor.
(c) Termination by Continental for Breach. If this
Agreement is terminated by Continental under Section 9.03(c), then the
provisions of Section 9.04(a) shall apply as if this Agreement were
terminated under Section 9.03(a), except that (i) Continental shall
have the option to deem such Covered Aircraft withdrawn from the
capacity purchase provisions of this Agreement as of the Termination
Date or according to the Wind-Down Schedule, and each Covered Aircraft
Sublease shall be terminated with the aircraft being returned to
Continental or replaced with an Uncovered Aircraft Sublease as
applicable; (ii) the Wind-Down Schedule may not commence until the
later of the Termination Date and 30 days following Continental's
delivery of the Wind-Down Schedule to Contractor, (iii) Contractor
shall have 15 days after receipt of such Wind-Down Schedule to notify
Continental of its decision to retain any of the Covered Aircraft or
any aircraft that were Covered Aircraft immediately prior to such
Termination Date, (iv) Continental shall have five days after receipt
of such notice from Contractor to select the individual aircraft to be
returned to Continental; (v) Contractor shall be required to retain any
Turboprop Aircraft owned by Contractor and not previously retired,
unless Continental elects to purchase such aircraft and the Excess
Inventory relating thereto for a price equal to the book value of such
aircraft and such Excess Inventory on Contractor's most recent
financial statements; and (vi) in connection with the withdrawal of
each Covered Aircraft, whether such aircraft is being retained by
Contractor as an Uncovered Aircraft or returned to Continental or its
designee, Continental shall have complete discretion in the selection
of the particular Engines or Turboprop engines to be withdrawn in
connection with any particular aircraft and shall notify Contractor of
its selection not less than five days after Continental shall have
selected aircraft to be withdrawn pursuant to this Section 9.04(c). At
Continental's request, Contractor shall promptly provide a list
detailing the location of each such engine (by aircraft or, if
appropriate, maintenance facility). Continental shall bear the cost of
any engine swaps reasonably necessary to accommodate its engine
selections, based on the engine-location list provided to Continental
by Contractor; provided that Contractor shall use its commercially
reasonable efforts to minimize the number and cost of engine swaps
reasonably necessary to accommodate Continental's engine selections and
shall be responsible for the cost of all such swaps, if any, required
because of any inaccuracy in the engine-location list provided to
Continental by Contractor.
(d) Termination by Contractor for Breach. If this
Agreement is terminated by Contractor under Section 9.03(d), then the
Covered Aircraft shall be withdrawn from the capacity purchase
provisions of this Agreement in accordance with the following terms and
conditions:
29
(i) The notice of termination delivered by
Contractor to Continental pursuant to Section 9.03(d) shall
contain a Termination Date that is at least 180 days after the
date of such notice, and a Wind-Down Schedule beginning on
such Termination Date and setting forth the number and type of
Covered Aircraft that Contractor elects to retain as Uncovered
Aircraft. The Wind-Down Schedule may not provide for the
withdrawal of more than 15 Delivered Covered Aircraft per
month, and may not provide for the withdrawal of any Delivered
Covered Aircraft more than 60 months after the Termination
Date. Undelivered Covered Aircraft (determined as of the
Termination Date) shall be deemed to be withdrawn on the
Termination Date (whether or not retained as Uncovered
Aircraft). In addition, regardless of whether it intends to
retain any aircraft, Contractor shall include in its notice a
reasonably detailed current summary of the maintenance and
repair condition of each aircraft and each Engine and
Turboprop engine and a list detailing the location of each
Engine and Turboprop engine (by aircraft or, if appropriate
maintenance facility).
(ii) Continental shall, within 120 days of
receipt of such Wind-Down Schedule from Contractor, propose a
schedule for the withdrawal from the capacity purchase
provisions of this Agreement of the Covered Aircraft not being
retained by Contractor, which aircraft shall be returned to
Continental (or its designee) upon their withdrawal from the
capacity purchase provisions of this Agreement; provided that
such Wind-Down Schedule may not provide for the withdrawal of
more than 15 Delivered Covered Aircraft per month (inclusive
of those aircraft being retained by Contractor), and may not
provide for the withdrawal of any Delivered Covered Aircraft
more than 60 months after the Termination Date. Continental
shall select the individual aircraft to be withdrawn according
to the Wind-Down Schedule, including those aircraft to be
retained by Contractor, and shall notify Contractor of its
selection. Continental shall have complete discretion in the
selection of the particular Covered Aircraft to be withdrawn
in any month and those to be retained by Contractor; provided
that Continental must adhere to the timing, number and type of
aircraft to be retained by Contractor as provided in
Contractor's notice to Continental delivered pursuant to
Section 9.04(d)(i). In addition, in connection with the
withdrawal of each Covered Aircraft, whether such aircraft is
being retained by Contractor as an Uncovered Aircraft or
returned to Continental or its designee, Continental shall
have complete discretion in the selection of the particular
Engines or Turboprop engines to be withdrawn in connection
with any particular aircraft and shall notify Contractor of
its selection not less than 10 days after Continental shall
have selected aircraft to be withdrawn pursuant to this
Section 9.04(d). Continental shall bear the cost of any engine
swaps reasonably necessary to accommodate its engine
selections, based on the engine-location list provided to
Continental by Contractor; provided that Contractor shall use
its commercially reasonable efforts to minimize the
30
number and cost of engine swaps reasonably necessary to
accommodate Continental's engine selections and shall be
responsible for the cost of all such swaps, if any, required
because of any inaccuracy in the engine-location list provided
to Continental by Contractor.
(iii) Within 30 days of receipt of
Continental's Wind-Down Schedule, Contractor may elect in
writing to have all of the Covered Aircraft being returned to
Continental (or its designee) converted to Uncovered Aircraft
and returned to Continental effective as of the Termination
Date. If Contractor does not make such an election, such
Covered Aircraft shall be converted to Uncovered Aircraft and
returned to Continental both in accordance with Continental's
Wind-Down Schedule delivered pursuant to Section 9.04(d)(ii).
(iv) With respect to each aircraft that is
retained by Contractor pursuant to this Section 9.04(d), the
provisions of Section 9.04(a)(v) shall apply as if the
aircraft were being retained by Contractor in connection with
a termination under Section 9.03(a). With respect to each such
aircraft being returned to Continental (or its designee)
pursuant to this Section 9.04(d), the provisions of Section
9.04(a)(vi) shall apply as if the aircraft were being returned
to Continental in connection with a termination under Section
9.03(a).
(e) Termination at End of Term. If the Agreement is
terminated at the end of the Base Term or any Extension Term, then the
provisions of Section 9.04(a) shall apply as if the termination were
pursuant to Section 9.03(a), except that the Termination Date shall be
the end of such Base Term or Extension Term, and Continental's initial
Wind-Down Schedule shall be delivered to Contractor not less than 24
months prior to the Termination Date, and Contractor shall have 12
months after receipt of the proposed Wind-Down Schedule to notify
Continental of any Covered Aircraft that Contractor elects to retain.
(f) Termination of Other Financings. If any Covered
Aircraft are not leased from Continental, but are subject to a security
interest or mortgage in favor of Continental in connection with
Continental's guarantee of Contractor's lease or purchase obligations,
then the foregoing provisions relating to the termination of subleases
shall apply instead to the foreclosure by Continental under such
security interest or mortgage, as the case may be, and the foregoing
provisions relating to increased lease rates shall apply instead to the
payment by Contractor to Continental of a financing fee equal to two
percent per annum of the amount guaranteed for the life of Contractor's
lease or outstanding obligations with respect to the applicable Covered
Aircraft.
(g) Maintenance at Continental's Expense. With
respect to any aircraft being returned to Continental by Contractor, if
pursuant to the provisions of this Agreement Contractor is released
from the obligation to meet
31
any return conditions applicable to such aircraft under the Covered
Aircraft Sublease applicable thereto, Contractor shall, at
Continental's cost, perform such maintenance on such aircraft,
consistent with Contractor's maintenance program, as and when requested
by Continental prior to such return.
(h) Fleet Hour Program. In connection with the return
of any Covered Aircraft to Continental, Contractor shall use its
commercially reasonable efforts to facilitate the participation by
Continental in the fleet hour program of Rolls ▇▇▇▇▇ ▇▇▇▇▇▇▇, and in
connection therewith both Contractor and Continental shall cooperate in
connection with any adjustment of charges pursuant to Section 5.4.3 of
the Flight Hour Agreement precipitated by the return of any Covered
Aircraft to Continental.
(i) Excess Inventory and Improvements.
(i) In connection with the return of any
Covered Aircraft to Continental (whether pursuant to Section
2.02 or this Article IX), Continental shall promptly purchase
from Contractor the Excess Inventory relating thereto at a
price equal to the book value of such Excess Inventory on
Contractor's most recent financial statements.
(ii) In connection with the return of any
Covered Aircraft to Continental (whether pursuant to Section
2.02 or this Article IX) which Covered Aircraft shall contain
improvements that are reflected as an asset on Contractor's
most recent financial statements, then Continental shall
promptly pay to Contractor the book value of such improvements
as reflected in such financial statements.
(iii) In connection with the retention of
any Covered Aircraft by Contractor (whether pursuant to
Section 2.02 or this Article IX) which Covered Aircraft shall
contain improvements that are reflected as an asset on
Continental's most recent financial statements, then
Contractor shall promptly pay to Continental the book value of
such improvements as reflected in such financial statements.
Section 9.05 Other Remedies for Breach.
(a) Material Breach by Contractor. Upon a material
breach of this Agreement by Contractor (including without limitation,
those described in Section 9.03(c)), which breach shall not have been
cured within 60 days after written notice delivered by Continental to
Contractor, then for the period from such 60th day until such breach is
cured or the Agreement is otherwise terminated by Continental pursuant
to Section 9.03, in addition to, and not in limitation of, any recourse
or remedy available to Continental at law or in equity, Contractor
shall pay to Continental on the 1st and 15th of each month during such
period an amount equal to the greater of the Cost Factor and the
Prevailing Margin, multiplied by Contractor's aggregate fixed and
variable operating costs allocable
32
to Scheduled Flights for the semi-monthly period ending one calendar
month prior to the date of such payment; provided, that if the material
breach is in respect of any event constituting Cause, the 60-day cure
period referenced above shall not apply, and Contractor shall pay such
amounts to Continental from the first day of such material breach until
such breach is cured or the Agreement is otherwise terminated by
Continental pursuant to Section 9.03; and provided further, that in no
event shall Contractor be required to pay to Continental under this
Section 9.05(a) in respect of any calendar month an amount that is in
excess of the aggregate amount received by Contractor from Continental
in respect of such calendar month pursuant to Section 3.06 (it being
understood that the aggregate amount received by Contractor from
Continental in respect of any calendar month shall include any amounts
that would have been received but for the set-off of any such amounts
by Continental pursuant to Section 11.16).
(b) Material Breach by Continental. Upon a material
breach of this Agreement by Continental, which breach shall not have
been cured within 60 days after written notice delivered by Contractor
to Continental, then for the period from such 60th day until such
breach is cured or the Agreement is otherwise terminated by Contractor
pursuant to Section 9.03, in addition to, and not in limitation of, any
recourse or remedy available to Contractor at law or in equity,
Contractor shall be entitled to obtain the payments due to it hereunder
directly from Airline Clearing House, Inc. for the duration of such
default.
(c) Labor Strike. In the event of a Labor Strike,
then (i) the provisions of Section 6.02(b) shall no longer apply for
the duration of the Term, (ii) the provisions of Paragraph B(6)(e) of
Schedule 3 and Section 9.05(a) shall apply, (iii) after each of the
2nd, 15th, 30th, 45th, 60th and 75th days of such Labor Strike,
Continental (or its designee) shall be entitled to take immediate
possession of up to 20 Covered Aircraft (up to a total of 120 aircraft
after such 75th day) designated by Continental, which shall
simultaneously be withdrawn from this Agreement and the provisions of
Section 9.04(a)(vi) shall apply as if such aircraft were being returned
to Continental in connection with a termination under Section 9.03(a),
and (iv) if Continental (or its designee) shall take possession of any
aircraft pursuant to clause (iii) above, then for so long as the Labor
Strike shall continue and for 180 days thereafter, Contractor shall
provide Continental or its designee with first-priority access to all
of Contractor's operating and training facilities, including without
limitation, flight simulators and hangars, at the standard rental rate
charged by Contractor to third parties prior to the beginning of the
Labor Strike (or, if Contractor had not rented any such facility, at
non-strike market rates), and to its inventory of spare parts and other
equipment at market rates, in each case for such period of time and to
such extent as is necessary and prudent in Continental's judgment to
operate such aircraft safely and to integrate such aircraft and such
operations into Continental's (or its designee's) fleet and operations.
(d) Punitive Damages. No party to this Agreement or
any of its affiliates shall be liable to any other party hereto or any
of its affiliates for
33
claims for punitive, special or exemplary damages, arising out of or
relating to this Agreement or the transactions contemplated hereby,
regardless of whether a claim is based on contract, tort (including
negligence), strict liability, violation of any applicable deceptive
trade practices act or similar law or any other legal or equitable
principle, and each party releases the others and their respective
affiliates from liability for any such damages. No party shall be
entitled to rescission of this Agreement as a result of breach of any
other party's representations, warranties, covenants or agreements, or
for any other matter.
ARTICLE X
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 10.01 Representations, Warranties and Covenants of Holdings,
XJT and ExpressJet. Holdings, XJT and ExpressJet, jointly and severally,
represent, warrant and covenant to Continental as of the date hereof as follows:
(a) Organization and Qualification. Each of Holdings,
XJT and ExpressJet is a duly organized and validly existing corporation
in good standing under the laws of the State of Delaware and has the
corporate power and authority to own, operate and use its assets and
operate the Regional Airline Services.
(b) Authority Relative to this Agreement. Each of
Holdings, XJT and ExpressJet has the corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby in accordance with the terms hereof. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary
corporate action on the part of each of Holdings, XJT and ExpressJet.
This Agreement has been duly and validly executed and delivered by each
of Holdings, XJT and ExpressJet and is, assuming due execution and
delivery thereof by Continental and that Continental has legal power
and right to enter into this Agreement, a valid and binding obligation
of each of Holdings, XJT and ExpressJet, enforceable against each of
Holdings, XJT and ExpressJet in accordance with its terms, except as
enforcement hereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating
to or affecting the enforcement of creditors' rights generally and
legal principles of general applicability governing the availability of
equitable remedies (whether considered in a proceeding in equity or at
law or otherwise under applicable law).
(c) Conflicts; Defaults. Neither the execution or
delivery of this Agreement nor the performance by each of Holdings, XJT
and ExpressJet of the transactions contemplated hereby will (i)
violate, conflict with, or constitute a default under any of the terms
of either Holdings', XJT's or ExpressJet's certificate of
incorporation, by-laws, or any provision of, or result in the
acceleration of any obligation under, any material contract, sales
commitment, license, purchase order, security agreement, mortgage,
note, deed, lien, lease or
34
other agreement to which Holdings, XJT or ExpressJet is a party, (ii)
result in the creation or imposition of liens in favor of any third
person or entity, (iii) violate any law, statute, judgment, decree,
order, rule or regulation of any governmental authority, or (iv)
constitute any event which, after notice or lapse of time or both,
would result in such violation, conflict, default, acceleration or
creation or imposition of liens.
(d) Broker. None of Holdings, XJT or ExpressJet has
retained or agreed to pay any broker or finder with respect to this
Agreement and the transactions contemplated hereby.
(e) Board Designee. At all times during the Term,
with respect to XJT and ExpressJet, and, with respect only to Holdings,
when Continental has ceased to elect at least one director pursuant to
its ownership of special voting preferred stock of Holdings, each of
Holdings, XJT and ExpressJet agrees that it will endeavor to ensure
that an individual designated from time to time by Continental (who
shall not be a director, officer or employee of Continental) shall be a
member of the board of directors of Holdings, XJT or ExpressJet, as the
case may be. In furtherance of such endeavors, at the time of any
nomination, appointment or election of any board member of Holdings,
XJT or ExpressJet, when no Continental designee is a member of such
board, and, with respect only to Holdings, when Continental has ceased
to elect at least one director pursuant to its ownership of special
voting preferred stock of Holdings, then Holdings, XJT or ExpressJet,
as the case may be, shall nominate or appoint, as the case may be, an
individual designated by Continental at such time and, in the event of
a shareholders vote, shall recommend to shareholders such individual's
election to the board. In addition, at any time when no Continental
designee is a member of its board and at Continental's request,
Holdings, XJT or ExpressJet, as the case may be, shall invite the
individual designated by Continental at such time to attend all board
meetings (including telephonic meetings) and review all actions taken
without a meeting, and shall provide such individual, at the same time
as provided to board members, all materials provided to board members
in connection with such meetings or actions taken without a meeting.
Section 10.02 Representations and Warranties of Continental.
Continental represents and warrants to Holdings, XJT and ExpressJet as of the
date hereof as follows:
(a) Organization and Qualification. Continental is a
duly incorporated and validly existing corporation in good standing
under the laws of the State of Delaware.
(b) Authority Relative to this Agreement. Continental
has the corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby in
accordance with the terms hereof. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part
of Continental. This Agreement has been duly and
35
validly executed and delivered by Continental and is, assuming due
execution and delivery thereof by Holdings, XJT and ExpressJet and that
Holdings, XJT and ExpressJet each has legal power and right to enter
into this Agreement, a valid and binding obligation of Continental,
enforceable against Continental in accordance with its terms, except as
enforcement hereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating
to or affecting the enforcement of creditors' rights generally and
legal principles of general applicability governing the availability of
equitable remedies (whether considered in a proceeding in equity or at
law or otherwise under applicable law).
(c) Conflicts; Defaults. Neither the execution or
delivery of this Agreement nor the performance by Continental of the
transactions contemplated hereby will (i) violate, conflict with, or
constitute a default under any of the terms of Continental's
certificate of incorporation, by-laws, or any provision of, or result
in the acceleration of any obligation under, any material contract,
sales commitment, license, purchase order, security agreement,
mortgage, note, deed, lien, lease or other agreement to which
Continental is a party, (ii) result in the creation or imposition of
any liens in favor of any third person or entity, (iii) violate any
law, statute, judgment, decree, order, rule or regulation of any
governmental authority, or (iv) constitute any event which, after
notice or lapse of time or both, would result in such violation,
conflict, default, acceleration or creation or imposition of liens.
(d) Broker. Continental has not retained or agreed to
pay any broker or finder with respect to this Agreement and the
transactions contemplated hereby.
ARTICLE XI
MISCELLANEOUS
Section 11.01 Amendment of Certain Contracts. Without Continental's
express prior written consent, Contractor shall not amend, supplement, grant a
waiver or extension under, or otherwise modify (i) the Embraer Contract in any
manner that results in changes to the pricing, number or delivery schedule of
firm-order and option aircraft subject to such agreements, the financing or
leasing arrangements contained therein, or any other changes that may be
expected to adversely affect Continental's rights, benefits or obligations under
this Agreement or Contractor's ability to perform hereunder, or (ii) the Flight
Hour Agreement in any manner that adversely affects the engine maintenance costs
of Contractor or Continental in respect of the Covered Aircraft. Contractor
agrees to consent to any amendment of the Embraer Contract that reduces the
financing or other obligations of Continental under the Embraer Contract,
provided that such amendment does not increase the obligations of Contractor
under such contract, it being understood that such amendment shall not discharge
or otherwise reduce Continental's obligations under Article V.
36
Section 11.02 Notices. All notices made pursuant to this Agreement
shall be in writing and shall be deemed given upon (a) a transmitter's
confirmation of a receipt of a facsimile transmission (but only if followed by
confirmed delivery by a standard overnight courier the following Business Day or
if delivered by hand the following Business Day), or (b) confirmed delivery by a
standard overnight courier or delivered by hand, to the parties at the following
addresses:
if to Continental:
Continental Airlines, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Senior Vice President - Corporate Development
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Continental Airlines, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
if to Holdings, XJT or ExpressJet to:
ExpressJet Holdings, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as any party hereto may have furnished to the other
parties by a notice in writing in accordance with this Section 11.02.
Section 11.03 Binding Effect; Assignment. This Agreement and all of the
provisions hereof shall be binding upon the parties hereto and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns. Except with respect to a merger of either party with another Person,
neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by any party hereto without the prior written consent of the
other parties.
Section 11.04 Amendment and Modification. This Agreement may not be
amended or modified in any respect except by a written agreement signed by the
parties hereto.
Section 11.05 Waiver. The observance of any term of this Agreement may
be waived (either generally or in a particular instance and either retroactively
or
37
prospectively) by the party entitled to enforce such term, but such waiver shall
be effective only if it is in writing signed by the party against which such
waiver is to be asserted. Unless otherwise expressly provided in this Agreement,
no delay or omission on the part of any party in exercising any right or
privilege under this Agreement shall operate as a waiver thereof, nor shall any
waiver on the part of any party of any right or privilege under this Agreement
operate as a waiver of any other right or privilege under this Agreement nor
shall any single or partial exercise of any right or privilege preclude any
other or further exercise thereof or the exercise of any other right or
privilege under this Agreement. No failure by any party to take any action or
assert any right or privilege hereunder shall be deemed to be a waiver of such
right or privilege in the event of the continuation or repetition of the
circumstances giving rise to such right unless expressly waived in writing by
each party against whom the existence of such waiver is asserted.
Section 11.06 Interpretation. The table of contents and the section and
other headings and subheadings contained in this Agreement and in the exhibits
and schedules hereto are solely for the purpose of reference, are not part of
the agreement of the parties hereto, and shall not in any way affect the meaning
or interpretation of this Agreement or any exhibit or schedule hereto. All
references to days or months shall be deemed references to calendar days or
months. All references to "$" shall be deemed references to United States
dollars. Unless the context otherwise requires, any reference to an "Article," a
"Section," an "Exhibit," or a "Schedule" shall be deemed to refer to a section
of this Agreement or an exhibit or schedule to this Agreement, as applicable.
The words "hereof," "herein" and "hereunder" and words of similar import
referring to this Agreement refer to this Agreement as a whole and not to any
particular provision of this Agreement. Whenever the words "include," "includes"
or "including" are used in this Agreement, unless otherwise specifically
provided, they shall be deemed to be followed by the words "without limitation."
This Agreement shall be construed without regard to any presumption or rule
requiring construction or interpretation against the party drafting or causing
the document to be drafted.
Section 11.07 Confidentiality. Except as required by law or in any
proceeding to enforce the provisions of this Agreement, Continental, ExpressJet,
XJT and Holdings hereby agree not to publicize or disclose to any third party
the terms or conditions of this Agreement or any of the Ancillary Agreements, or
any exhibit, schedule or appendix hereto or thereto, without the prior written
consent of the other parties thereto. Except as required by law or in any
proceeding to enforce the provisions of this Agreement or any of the Ancillary
Agreements, Continental, ExpressJet, XJT and Holdings hereby agree not to
disclose to any third party any confidential information or data, both oral and
written, received from the other, whether pursuant to or in connection with this
Agreement or any of the Ancillary Agreements, and designated as such by the
other without the prior written consent of the party providing such confidential
information or data. Continental, ExpressJet, XJT and Holdings hereby agree not
to use any such confidential information or data of the other party other than
in connection with performing their respective obligations or enforcing their
respective rights under this Agreement or any of the Ancillary Agreements, or as
otherwise expressly contemplated by this Agreement or any of the Ancillary
Agreements. If any party is served with a subpoena or other process requiring
the production or disclosure of any of such
38
agreements or information, then the party receiving such subpoena or other
process, before complying with such subpoena or other process, shall immediately
notify the other parties of same and permit said other parties a reasonable
period of time to intervene and contest disclosure or production. Upon
termination of this Agreement, each party must return to each other any
confidential information or data received from the other and designated as such
by the party providing such confidential information or data which is still in
the recipient's possession or control. The provisions of this Section 11.07
shall survive the termination of this Agreement for a period of ten years.
Section 11.08 Arbitration.
(a) Agreement to Arbitrate. Subject to Section 11.11,
any and all claims, demands, causes of action, disputes, controversies,
and other matters in question arising out of or primarily relating to
Article III or Schedule 3 to this Agreement, including without
limitation the definition of any term used therein (all of which are
referred to herein as "Claims") shall be resolved by binding
arbitration pursuant to the Federal Arbitration Act. Each of the
parties agrees that arbitration under this Section 11.08 is the
exclusive method for resolving any Claim and that it will not commence
an action or proceeding based on a Claim hereunder, except to enforce
the arbitrators' decisions as provided in this Section 11.08, to compel
any other party to participate in arbitration under this Section 11.08
or as otherwise provided in Section 11.11. The governing law for any
such action or proceeding shall be the law set forth in Section
11.08(f).
(b) Initiation of Arbitration. If any Claim has not
been resolved by mutual agreement on or before the 15th day following
the first notice of the subject matter of the Claim to or from a
disputing party, then the arbitration may be initiated by any party by
providing to the others a written notice of arbitration specifying the
Claim or Claims to be arbitrated. If a party refuses to honor its
obligations under this agreement to arbitrate, any other party may
compel arbitration in either federal or state court.
(c) Place of Arbitration. The arbitration proceeding
shall be conducted in Houston,
Texas, or some other place mutually
agreed upon by the parties.
(d) Selection of Arbitrators. Within thirty days of
the notice initiating the arbitration procedure, each party shall
designate one arbitrator, who shall not be disqualified on the basis of
minimal past or present relationships with the party appointing such
arbitrator. If a party fails to designate an arbitrator, the other
party may have an arbitrator appointed by applying to the senior active
United States District Judge for the Southern District of
Texas. The
two arbitrators so selected shall then select a third arbitrator. If
the two arbitrators chosen by the parties fail to agree on the third
arbitrator, then the parties (or either of them) may apply to the
senior active United States District Judge for the Southern District of
Texas for the appointment of a third arbitrator. The third arbitrator
shall take an oath of neutrality. The three arbitrators shall make all
of
39
their decisions by majority vote. Evident partiality on the part of an
arbitrator exists only where the circumstances are such that a
reasonable person would have to conclude there in fact existed actual
bias and a mere appearance or impression of bias will not constitute
evident partiality or otherwise disqualify an arbitrator. Minimal or
trivial past or present relationships between the neutral arbitrator
and the party selecting such arbitrator or any of the other
arbitrators, or the failure to disclose such minimal or trivial past or
present relationships, will not by themselves constitute evident
partiality or otherwise disqualify any arbitrator.
(e) Choice of Law as to Procedural Matters. The
enforcement of this agreement to arbitrate, the making, validity,
construction, and interpretation of this agreement to arbitrate, and
all procedural aspects of the proceeding pursuant to this agreement to
arbitrate, including but not limited to, the issues subject to
arbitration (i.e., arbitrability), the scope of the arbitrable issues,
allegations of waiver, delay or defenses to arbitrability, and the
rules governing the conduct of the arbitration, shall be governed by
and construed pursuant to the Federal Arbitration Act.
(f) Choice of Law as to Substantive Claims. In
deciding the substance of the parties' Claims, the arbitrators shall
apply the substantive laws of the State of
Texas (excluding
Texas
choice-of-law principles that might call for the application of the law
of another jurisdiction).
(g) Procedure. Except as modified in this Agreement,
the arbitration shall be conducted in accordance with the rules of
arbitration of the Federal Arbitration Act and, to the extent an issue
is not addressed by the federal law of arbitration, by the Commercial
Arbitration Rules of the American Arbitration Association. It is
contemplated that although the arbitration shall be conducted in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association, the arbitration proceeding will be
self-administered by the parties; provided, however, that if a party
believes the process will be enhanced if it is administered by the
American Arbitration Association, such party shall have the right to
cause the process to become administered by the American Arbitration
Association by applying to the American Arbitration Association and,
thereafter, the arbitration shall be conducted pursuant to the
administration of the American Arbitration Association. In determining
the extent of discovery, the number and length of depositions, and all
other pre-hearing matters, the arbitrators shall endeavor to the extent
possible to streamline the proceedings and minimize the time and cost
of the proceedings.
(h) Final Hearing. The final hearing shall be
conducted within 120 days of the selection of the third arbitrator. The
final hearing shall not exceed ten working days, with each party to be
granted one-half of the allocated time to present its case to the
arbitrators.
(i) Damages. Only actual damages may be awarded. It
is expressly agreed that the arbitrators shall have no authority to
award treble,
40
exemplary or punitive damages of any type under any circumstances
regardless of whether such damages may be available under the
applicable law.
(j) Decision of the Arbitration. The arbitrators
shall render their final decision within twenty days of the completion
of the final hearing completely resolving all of the Claims that are
the subject of the arbitration proceeding. The arbitrators' ultimate
decision after final hearing shall be in writing. The arbitrators shall
certify in their decision that no part of their award includes any
amount for treble, exemplary or punitive damages. The arbitrators'
decision shall be final and non-appealable to the maximum extent
permitted by law. Any and all of the arbitrators' orders and decisions
may be enforceable in, and judgment upon any award rendered in the
arbitration proceeding may be confirmed and entered by, any federal or
state court having jurisdiction.
(k) Confidentiality. All proceedings conducted
hereunder and the decision of the arbitrators shall be kept
confidential by the parties.
Section 11.09 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. The Agreement may be
executed by facsimile signature.
Section 11.10 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 11.11 Equitable Remedies. Each of Continental, Holdings, XJT
and ExpressJet acknowledges and agrees that under certain circumstances the
breach by Continental, Holdings, XJT or ExpressJet of a term or provision of
this Agreement will materially and irreparably harm the other party, that money
damages will accordingly not be an adequate remedy for such breach and that the
non-defaulting party, in its sole discretion and in addition to its rights under
this Agreement and any other remedies it may have at law or in equity, may apply
to any court of law or equity of competent jurisdiction (without posting any
bond or deposit) for specific performance and/or other injunctive relief in
order to enforce or prevent any breach of the provisions of this Agreement.
Section 11.12 Relationship of Parties. Nothing in this Agreement shall
be interpreted or construed as establishing between the parties a partnership,
joint venture or other similar arrangement.
Section 11.13 Entire Agreement. This Agreement (including the exhibits
and schedules hereto) and the Ancillary Agreements are intended by the parties
as a complete statement of the entire agreement and understanding of the parties
with respect to the subject matter hereof and all matters between the parties
related to the subject matter herein or therein set forth.
41
Section 11.14 Governing Law. Except with respect to matters referenced
in Section 11.08(e) (which shall be governed by and construed pursuant to the
Federal Arbitration Act), this Agreement shall be governed by and construed in
accordance with the laws of the State of
Texas (excluding
Texas choice-of-law
principles that might call for the application of the law of another
jurisdiction) as to all matters, including matters of validity, construction,
effect, performance and remedies. Except as otherwise provided in Section
11.08(e), any action arising out of this Agreement or the rights and duties of
the parties arising hereunder may be brought, if at all, only in the state or
federal courts located in ▇▇▇▇▇▇ County,
Texas.
Section 11.15 Guarantees.
(a) Holdings Guarantee. Holdings hereby
unconditionally and irrevocably guarantees to Continental the due and
punctual performance by each of XJT and ExpressJet of all of their
obligations arising under this Agreement and the Ancillary Agreements.
If either XJT or ExpressJet shall fail or be unable to perform such
obligations as and when the same shall be required to be performed,
then Holdings shall be obligated to perform or cause to be performed
such obligations in accordance with the terms hereof and thereof. This
guaranty is a guaranty of payment, performance and compliance and not
of collectibility and is in no way conditioned or contingent upon any
attempt to collect from or enforce performance or compliance by
ExpressJet or XJT or upon any other event or condition whatsoever.
(b) XJT Guarantee. XJT hereby unconditionally and
irrevocably guarantees to Continental the due and punctual performance
by ExpressJet of all of its obligations arising under this Agreement
and the Ancillary Agreements. If ExpressJet shall fail or be unable to
perform such obligations as and when the same shall be required to be
performed, then XJT shall be obligated to perform or cause to be
performed such obligations in accordance with the terms hereof and
thereof. This guaranty is a guaranty of payment, performance and
compliance and not of collectibility and is in no way conditioned or
contingent upon any attempt to collect from or enforce performance or
compliance by ExpressJet or upon any other event or condition
whatsoever.
Section 11.16 Right of Set-Off. If (i) any party hereto shall be in
default hereunder to any other party, (ii) Contractor shall be in default under
any Covered Aircraft Sublease or Uncovered Aircraft Sublease, (iii) Contractor
shall be in default under that certain promissory note, dated as of March 31,
2001, payable by Contractor in favor of Continental, or (iv) any party to any
tax agreement among the parties hereto shall be in default to any other party
thereunder, then in any such case the non-defaulting party shall be entitled to
set off from any payment owed by such non-defaulting party to the defaulting
party hereunder any amount owed by the defaulting party to the non-defaulting
party thereunder; provided that contemporaneously with any such set-off, the
42
non-defaulting party shall give written notice of such action to the defaulting
party; provided further that the failure to give such notice shall not affect
the validity of the set-off. It is specifically agreed that (i) for purposes of
the set-off by any non-defaulting party, mutuality shall be deemed to exist
among Continental, Holdings, XJT and ExpressJet; (ii) reciprocity among
Continental, Holdings, XJT and ExpressJet exists with respect to their relative
rights and obligations in respect of any such set-off; and (iii) the right of
set-off is given as additional security to induce the parties to enter into the
transactions contemplated hereby and by the Ancillary Agreements. Upon
completion of any such set-off, the obligation of the defaulting party to the
non-defaulting party shall be extinguished to the extent of the amount so
set-off. Each party hereto further waives any right to assert as a defense to
any attempted set-off the requirements of liquidation or mutuality. This set-off
provision shall be without prejudice, and in addition, to any right of set-off,
combination of accounts, lien or other right to which any non-defaulting party
is at any time otherwise entitled (either by operation of law, contract or
otherwise).
Section 11.17 Cooperation with Respect to Reporting. Each of the
parties hereto agrees to use its commercially reasonable efforts to cooperate
with each other party in providing necessary data, to the extent in the
possession of the first party, required by such other party in order to meet any
reporting requirements to, or otherwise in connection with any filing with or
provision of information to be made to, any regulatory agency or other
governmental authority.
43
IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated
Capacity Purchase Agreement to be duly executed and delivered as of the
date and year first written above.
CONTINENTAL AIRLINES, INC.
By:
--------------------------------------------------
Name:
------------------------------------------------
Title:
-----------------------------------------------
EXPRESSJET HOLDINGS, INC.
By:
--------------------------------------------------
Name:
------------------------------------------------
Title:
-----------------------------------------------
XJT HOLDINGS, INC.
By:
--------------------------------------------------
Name:
------------------------------------------------
Title:
-----------------------------------------------
EXPRESSJET AIRLINES, INC.
By:
--------------------------------------------------
Name:
------------------------------------------------
Title:
-----------------------------------------------
44
SCHEDULE 1
COVERED AIRCRAFT
ERJ-145 AIRCRAFT
ORDER 1/1/01
NUMBER AIRCRAFT TAIL US REG MSN STATUS
====================================================================================================
ERJ-145ER 925 N14925 145004 Delivered
ERJ-145ER 926 N15926 145005 Delivered
ERJ-145ER 927 N16927 145006 Delivered
ERJ-145ER 928 N17928 145007 Delivered
ERJ-145ER 929 N13929 145009 Delivered
ERJ-145ER 930 N14930 145011 Delivered
ERJ-145ER 932 N15932 145015 Delivered
ERJ-145ER 933 N14933 145018 Delivered
ERJ-145ER 934 N12934 145019 Delivered
ERJ-145ER 935 N13935 145022 Delivered
ERJ-145ER 936 N13936 145025 Delivered
ERJ-145ER 937 N14937 145026 Delivered
ERJ-145ER 938 N14938 145029 Delivered
ERJ-145ER 939 N14939 145030 Delivered
ERJ-145ER 940 N14940 145033 Delivered
ERJ-145ER 941 N15941 145035 Delivered
ERJ-145ER 942 N14942 145037 Delivered
ERJ-145ER 943 N14943 145040 Delivered
ERJ-145ER 944 N16944 145045 Delivered
ERJ-145ER 945 N14945 145049 Delivered
ERJ-145ER 946 N12946 145052 Delivered
ERJ-145ER 947 N14947 145054 Delivered
ERJ-145ER 948 N15948 145056 Delivered
ERJ-145LR 949 N13949 145057 Delivered
ERJ-145LR 950 N14950 145061 Delivered
ERJ-145LR 951 N16951 145063 Delivered
ERJ-145LR 952 N14952 145067 Delivered
ERJ-145LR 953 N14953 145071 Delivered
ERJ-145LR 954 N16954 145072 Delivered
ERJ-145LR 955 N13955 145075 Delivered
ERJ-145LR 956 N13956 145078 Delivered
ERJ-145LR 957 N12957 145080 Delivered
ERJ-145LR 958 N13958 145085 Delivered
ERJ-145LR 959 N14959 145091 Delivered
ERJ-145LR 960 N14960 145100 Delivered
ERJ-145LR 961 N16961 145103 Delivered
ERJ-145LR 962 N27962 145110 Delivered
ERJ-145LR 963 N16963 145116 Delivered
ERJ-145LR 964 N13964 145123 Delivered
ERJ-145LR 965 N13965 145125 Delivered
ERJ-145LR 966 N19966 145131 Delivered
ERJ-145LR 967 N12967 145133 Delivered
ERJ-145LR 968 N13968 145138 Delivered
Schedule 1-1
ORDER 1/1/01
NUMBER AIRCRAFT TAIL US REG MSN STATUS
====================================================================================================
ERJ-145LR 969 N13969 145141 Delivered
ERJ-145LR 970 N13970 145146 Delivered
ERJ-145LR 971 N22971 145149 Delivered
ERJ-145LR 972 N14972 145151 Delivered
ERJ-145LR 973 N15973 145159 Delivered
ERJ-145LR 974 N14974 145161 Delivered
ERJ-145LR 975 N13975 145163 Delivered
ERJ-145LR 976 N16976 145171 Delivered
ERJ-145LR 977 N14977 145175 Delivered
ERJ-145LR 978 N13978 145180 Delivered
ERJ-145LR 979 N13979 145181 Delivered
ERJ-145LR 980 N15980 145202 Delivered
ERJ-145LR 981 N16981 145208 Delivered
ERJ-145LR 982 N18982 145223 Delivered
ERJ-145LR 983 N15983 145239 Delivered
ERJ-145LR 984 N17984 145246 Delivered
ERJ-145LR 985 N15985 145248 Delivered
ERJ-145LR 986 N15986 145254 Delivered
ERJ-145LR 987 N16987 145261 Delivered
ERJ-145LR 988 N13988 145265 Delivered
ERJ-145LR 989 N13989 145271 Delivered
ERJ-145LR 990 N13990 145277 Delivered
ERJ-145LR 991 N14991 145278 Delivered
ERJ-145LR 992 N13992 145284 Delivered
ERJ-145LR 993 N14993 145289 Delivered
ERJ-145LR 994 N13994 145291 Delivered
ERJ-145LR 995 N13995 145295 Delivered
ERJ-145LR 996 N12996 145296 Delivered
ERJ-145LR 997 N13997 145298 Delivered
ERJ-145LR 998 N14998 145302 Delivered
ERJ-145LR 999 N16999 145307 Delivered
ERJ-145LR 924 N12924 145311 Delivered
ERJ-145LR 923 N14923 145318 Delivered
ERJ-145LR 922 N12922 145338 Delivered
ERJ-145LR 921 N12921 145354 Delivered
Aircraft 80 ERJ-145LR Firm
Aircraft 81 ERJ-145LR Firm
Aircraft 82 ERJ-145LR Firm
Aircraft 83 ERJ-145LR Firm
Aircraft 84 ERJ-145LR Firm
Aircraft 85 ERJ-145LR Firm
Aircraft 86 ERJ-145LR Firm
Aircraft 87 ERJ-145LR Firm
Aircraft 88 ERJ-145LR Firm
Aircraft 89 ERJ-145LR Firm
Aircraft 90 ERJ-145LR Firm
Aircraft 91 ERJ-145LR Firm
Schedule 1-2
ORDER 1/1/01
NUMBER AIRCRAFT TAIL US REG MSN STATUS
====================================================================================================
Aircraft 92 ERJ-145LR Firm
Aircraft 93 ERJ-145LR Firm
Aircraft 94 ERJ-145LR Firm
Aircraft 95 ERJ-145LR Firm
Aircraft 96 ERJ-145LR Firm
Aircraft 97 ERJ-145LR Firm
Aircraft 98 ERJ-145LR Firm
Aircraft 99 ERJ-145LR Firm
Aircraft 100 ERJ-145LR Firm
Aircraft 101 ERJ-145LR Firm
Aircraft 102 ERJ-145LR Firm
Aircraft 103 ERJ-145LR Firm
Aircraft 104 ERJ-145LR Firm
Aircraft 105 ERJ-145LR Firm
Aircraft 106 ERJ-145LR Firm
Aircraft 107 ERJ-145LR Firm
Aircraft 108 ERJ-145LR Firm
Aircraft 109 ERJ-145LR Firm
Aircraft 110 ERJ-145LR Firm
Aircraft 111 ERJ-145LR Firm
Aircraft 112 ERJ-145LR Firm
Aircraft 113 ERJ-145LR Firm
Aircraft 114 ERJ-145LR Firm
Aircraft 115 ERJ-145LR Firm
Aircraft 116 ERJ-145LR Firm
Aircraft 117 ERJ-145LR Firm
Aircraft 118 ERJ-145LR Firm
Aircraft 119 ERJ-145LR Firm
Aircraft 120 ERJ-145LR Firm
Aircraft 121 ERJ-145LR Firm
Aircraft 122 ERJ-145LR Firm
Aircraft 123 ERJ-145LR Firm
Aircraft 124 ERJ-145LR Firm
Aircraft 125 ERJ-145LR Firm
Aircraft 126 ERJ-145LR Firm
Aircraft 127 ERJ-145LR Firm
Aircraft 128 ERJ-145LR Firm
Aircraft 129 ERJ-145LR Firm
Aircraft 130 ERJ-145LR Firm
Aircraft 131 ERJ-145LR Firm
Aircraft 132 ERJ-145LR Firm
Aircraft 133 ERJ-145LR Firm
Aircraft 134 ERJ-145LR Firm
Aircraft 135 ERJ-145LR Firm
Aircraft 136 ERJ-145LR Firm
Aircraft 137 ERJ-145LR Firm
Aircraft 138 ERJ-145LR Firm
Schedule 1-3
ORDER 1/1/01
NUMBER AIRCRAFT TAIL US REG MSN STATUS
====================================================================================================
Aircraft 139 ERJ-145LR Firm
Aircraft 140 ERJ-145LR Firm
Aircraft 141 ERJ-145LR Firm
Aircraft 142 ERJ-145LR Firm
Aircraft 143 ERJ-145LR Firm
Aircraft 144 ERJ-145LR Firm
Aircraft 145 ERJ-145LR Firm
Aircraft 146 ERJ-145LR Firm
Aircraft 147 ERJ-145LR Firm
Aircraft 148 ERJ-145LR Firm
Aircraft 149 ERJ-145LR Firm
Aircraft 150 ERJ-145LR Firm
Aircraft 151 ERJ-145LR Firm
Aircraft 152 ERJ-145LR Firm
Aircraft 153 ERJ-145LR Firm
Aircraft 154 ERJ-145LR Firm
Aircraft 155 ERJ-145LR Firm
Aircraft 156 ERJ-145LR Firm
Aircraft 157 ERJ-145LR Firm
Aircraft 158 ERJ-145LR Firm
Aircraft 159 ERJ-145LR Firm
Aircraft 1 ERJ-145XR Firm
Aircraft 2 ERJ-145XR Firm
Aircraft 3 ERJ-145XR Firm
Aircraft 4 ERJ-145XR Firm
Aircraft 5 ERJ-145XR Firm
Aircraft 6 ERJ-145XR Firm
Aircraft 7 ERJ-145XR Firm
Aircraft 8 ERJ-145XR Firm
Aircraft 9 ERJ-145XR Firm
Aircraft 10 ERJ-145XR Firm
Aircraft 11 ERJ-145XR Firm
Aircraft 12 ERJ-145XR Firm
Aircraft 13 ERJ-145XR Firm
Aircraft 14 ERJ-145XR Firm
Aircraft 15 ERJ-145XR Firm
Aircraft 16 ERJ-145XR Firm
Aircraft 17 ERJ-145XR Firm
Aircraft 18 ERJ-145XR Firm
Aircraft 19 ERJ-145XR Firm
Aircraft 20 ERJ-145XR Firm
Aircraft 21 ERJ-145XR Firm
Aircraft 22 ERJ-145XR Firm
Aircraft 23 ERJ-145XR Firm
Aircraft 24 ERJ-145XR Firm
Aircraft 25 ERJ-145XR Firm
Schedule 1-4
ORDER 1/1/01
NUMBER AIRCRAFT TAIL US REG MSN STATUS
====================================================================================================
Aircraft 26 ERJ-145XR Firm
Aircraft 27 ERJ-145XR Firm
Aircraft 28 ERJ-145XR Firm
Aircraft 29 ERJ-145XR Firm
Aircraft 30 ERJ-145XR Firm
Aircraft 31 ERJ-145XR Firm
Aircraft 32 ERJ-145XR Firm
Aircraft 33 ERJ-145XR Firm
Aircraft 34 ERJ-145XR Firm
Aircraft 35 ERJ-145XR Firm
Aircraft 36 ERJ-145XR Firm
Aircraft 37 ERJ-145XR Firm
Aircraft 38 ERJ-145XR Firm
Aircraft 39 ERJ-145XR Firm
Aircraft 40 ERJ-145XR Firm
Aircraft 41 ERJ-145XR Firm
Aircraft 42 ERJ-145XR Firm
Aircraft 43 ERJ-145XR Firm
Aircraft 44 ERJ-145XR Firm
Aircraft 45 ERJ-145XR Firm
Aircraft 46 ERJ-145XR Firm
Aircraft 47 ERJ-145XR Firm
Aircraft 48 ERJ-145XR Firm
Aircraft 49 ERJ-145XR Firm
Aircraft 50 ERJ-145XR Firm
Aircraft 51 ERJ-145XR Firm
Aircraft 52 ERJ-145XR Firm
Aircraft 53 ERJ-145XR Firm
Aircraft 54 ERJ-145XR Firm
Aircraft 55 ERJ-145XR Firm
Aircraft 56 ERJ-145XR Firm
Aircraft 57 ERJ-145XR Firm
Aircraft 58 ERJ-145XR Firm
Aircraft 59 ERJ-145XR Firm
Aircraft 60 ERJ-145XR Firm
Aircraft 61 ERJ-145XR Firm
Aircraft 62 ERJ-145XR Firm
Aircraft 63 ERJ-145XR Firm
Aircraft 64 ERJ-145XR Firm
Aircraft 65 ERJ-145XR Firm
Aircraft 66 ERJ-145XR Firm
Aircraft 67 ERJ-145XR Firm
Aircraft 68 ERJ-145XR Firm
Aircraft 69 ERJ-145XR Firm
Aircraft 70 ERJ-145XR Firm
Aircraft 71 ERJ-145XR Firm
Aircraft 72 ERJ-145XR Firm
Schedule 1-5
ORDER 1/1/01
NUMBER AIRCRAFT TAIL US REG MSN STATUS
====================================================================================================
Aircraft 73 ERJ-145XR Firm
Aircraft 74 ERJ-145XR Firm
Aircraft 75 ERJ-145XR Firm
Aircraft 76 ERJ-145XR Firm
Aircraft 77 ERJ-145XR Firm
Aircraft 78 ERJ-145XR Firm
Aircraft 79 ERJ-145XR Firm
Aircraft 80 ERJ-145XR Firm
Aircraft 81 ERJ-145XR Firm
Aircraft 82 ERJ-145XR Firm
Aircraft 83 ERJ-145XR Firm
Aircraft 84 ERJ-145XR Firm
Aircraft 85 ERJ-145XR Firm
Aircraft 86 ERJ-145XR Firm
ERJ-135 AIRCRAFT
ORDER 1/1/01
NUMBER AIRCRAFT TAIL US REG MSN STATUS
====================================================================================================
ERJ-135ER 501 N16501 145145 Delivered
ERJ-135ER 502 N16502 145166 Delivered
ERJ-135ER 503 N19503 145176 Delivered
ERJ-135ER 504 N25504 145186 Delivered
ERJ-135ER 505 N14505 145192 Delivered
ERJ-135ER 506 N27506 145206 Delivered
ERJ-135ER 507 N17507 145215 Delivered
ERJ-135ER 508 N14508 145220 Delivered
ERJ-135ER 509 N15509 145238 Delivered
ERJ-135ER 510 N16510 145251 Delivered
ERJ-135ER 511 N16511 145267 Delivered
ERJ-135ER 512 N27512 145274 Delivered
ERJ-135LR 513 N17513 145292 Delivered
ERJ-135LR 514 N14514 145303 Delivered
ERJ-135LR 515 N29515 145309 Delivered
ERJ-135LR 516 N14516 145323 Delivered
ERJ-135LR 517 N24517 145332 Delivered
ERJ-135LR 518 N28518 145334 Delivered
Aircraft 19 ERJ-135LR Firm
Aircraft 20 ERJ-135LR Firm
Aircraft 21 ERJ-135LR Firm
Aircraft 22 ERJ-135LR Firm
Aircraft 23 ERJ-135LR Firm
Schedule 1-6
ORDER 1/1/01
NUMBER AIRCRAFT TAIL US REG MSN STATUS
====================================================================================================
Aircraft 24 ERJ-135LR Firm
Aircraft 25 ERJ-135LR Firm
Aircraft 26 ERJ-135LR Firm
Aircraft 27 ERJ-135LR Firm
Aircraft 28 ERJ-135LR Firm
Aircraft 29 ERJ-135LR Firm
Aircraft 30 ERJ-135LR Firm
CONVERTED ORDERS NEW ORDER
Aircraft 31 ERJ-135LR 145LR Firm
Aircraft 32 ERJ-135LR 145LR Firm
Aircraft 33 ERJ-135LR 145LR Firm
Aircraft 34 ERJ-135LR 145LR Firm
Aircraft 35 ERJ-135LR 145LR Firm
Aircraft 36 ERJ-135LR 145LR Firm
Aircraft 37 ERJ-135LR 145LR Firm
Aircraft 38 ERJ-135LR 145LR Firm
Aircraft 39 ERJ-135LR 145LR Firm
Aircraft 40 ERJ-135LR 145XR Firm
Aircraft 41 ERJ-135LR 145XR Firm
Aircraft 42 ERJ-135LR 145XR Firm
Aircraft 43 ERJ-135LR 145XR Firm
Aircraft 44 ERJ-135LR 145XR Firm
Aircraft 45 ERJ-135LR 145XR Firm
Aircraft 46 ERJ-135LR 145XR Firm
Aircraft 47 ERJ-135LR 145XR Firm
Aircraft 48 ERJ-135LR 145XR Firm
Aircraft 49 ERJ-135LR 145XR Firm
Aircraft 50 ERJ-135LR 145XR Firm
TURBOPROP AIRCRAFT
TAIL AIRCRAFT US REG
====================================================
811 ATR-42-320 N25811
812 ATR-42-320 N19812
813 ATR-42-320 N14813
814 ATR-42-320 N18814
815 ATR-42-320 N14815
816 ATR-42-320 N15816
817 ATR-42-320 N34817
Schedule 1-7
TAIL AIRCRAFT US REG
====================================================
818 ATR-42-320 N15818
819 ATR-42-320 N14819
820 ATR-42-320 N34820
821 ATR-42-320 N14821
822 ATR-42-320 N14822
823 ATR-42-320 N15823
824 ATR-42-320 N16824
825 ATR-42-320 N14825
826 ATR-42-320 N26826
827 ATR-42-320 N15827
828 ATR-42-320 N14828
829 ATR-42-320 N14829
830 ATR-42-320 N14830
831 ATR-42-320 N17831
832 ATR-42-320 N14832
833 ATR-42-320 N14833
834 ATR-42-320 N14834
835 ATR-42-320 N11835
836 ATR-42-320 N42836
837 ATR-42-320 N21837
838 ATR-42-320 N99838
840 ATR-42-320 N93840
841 ATR-42-320 N97841
842 ATR-42-320 N86842
712 EMB-120ER N34712
713 EMB-120ER N15713
715 EMB-120ER N12715
716 EMB-120ER N27716
717 EMB-120ER N40717
718 EMB-120ER N16718
720 EMB-120ER N17720
722 EMB-120ER N47722
723 EMB-120ER N16723
724 EMB-120ER N16724
725 EMB-120ER N15725
726 EMB-120ER N51726
727 EMB-120ER N22727
728 EMB-120ER N17728
729 EMB-120ER N16729
730 EMB-120ER N15730
Schedule 1-8
TAIL AIRCRAFT US REG
====================================================
731 EMB-120ER N16731
732 EMB-120ER N15732
733 EMB-120ER N58733
734 EMB-120ER N57734
534 B1900-D N17534
538 B1900-D N81538
540 B1900-D N16540
541 B1900-D N17541
542 B1900-D N47542
543 B1900-D N49543
544 B1900-D N48544
546 B1900-D N81546
547 B1900-D N69547
548 B1900-D N69548
549 B1900-D N69549
550 B1900-D N87550
551 B1900-D N87551
552 B1900-D N87552
553 B1900-D N81553
554 B1900-D N87554
555 B1900-D N87555
556 B1900-D N81556
557 B1900-D N87557
Schedule 1-9
SCHEDULE 2
CONTINENTAL INCREASED LEASE RATE
CALCULATIONS FOR UNCOVERED AIRCRAFT SUBLEASES
The interest rate used in a Covered Aircraft Sublease relating to an
aircraft to determine the lease payments thereunder shall be increased by 200
basis points and used to determine the lease payments under the Uncovered
Aircraft Sublease for the same aircraft.
Schedule 2-1
SCHEDULE 3
A. Base and Incentive Compensation. The following provisions shall apply
for all applicable periods through December 31, 2004:
1. Base Compensation. For each calendar month, "Base
Compensation" shall equal the sum of (i) (a) the First
Benchmark Factor multiplied by (b) the aggregate sum of the
following products for each aircraft type set forth in the
Final Monthly Schedule: the First Adjusted Block Hour Rate for
the applicable aircraft type multiplied by the number of block
hours of Scheduled Flights set forth on the Final Monthly
Schedule for such month for such aircraft type and (ii) the
Appendix 1 Expenses set forth in column 1 of Appendix 1 for
such calendar month as may be adjusted pursuant to Paragraph
(A)(3) of this Schedule 3.
The "First Benchmark Factor" for each calendar month equals
one minus the sum of the First Cancellation Rate for such
calendar month and the Second Cancellation Rate for such
calendar month. The First Benchmark Factor for each month in
2001 is set forth in Appendix 2.
The "First Adjusted Block Hour Rate" for a particular aircraft
type and a particular month equals (i) the applicable Appendix
3 Block Hour Rate set forth on Appendix 3 for such aircraft
type and month, minus (ii) the sum of (a) the Appendix 4 Block
Hour Rate set forth on Appendix 4 for such aircraft type and
month, (b) the Appendix 5 Block Hour Rate set forth on
Appendix 5 for such aircraft type and month and (c) the
Appendix 6 Block Hour Rate set forth on Appendix 6 for such
aircraft type and month, plus (iii) the sum of (x) the Second
Adjusted Block Hour Rate for such aircraft type and month, (y)
the Third Adjusted Block Hour Rate for such aircraft type and
month and (z) the Fourth Adjusted Block Hour Rate for such
aircraft type and month.
The "Second Adjusted Block Hour Rate" for a particular
aircraft type and a particular month is obtained by
multiplying the Appendix 4 Block Hour Rate for such aircraft
type and month by the Appendix 7 Block Hours set forth on
Appendix 7 for such aircraft type and dividing such product by
the average scheduled block hours per departure for such
aircraft type as set forth on the Final Monthly Schedule.
The "Third Adjusted Block Hour Rate" for a particular aircraft
type and a particular month equals the quotient of (1) the sum
of (a) the product of (i) the First Forecast Rate-Component 1
for the applicable month as set forth on Appendix 8 multiplied
by (ii) the First Weighted Average Number for such aircraft
type, plus (b) the product of (i) the First Forecast
Rate-Component 2 for the applicable month as set forth on
Appendix 8 multiplied by (ii) the Second Weighted Average
Number for
Schedule 3-1
such aircraft type, divided by (2) the product of (w) the
total number of scheduled block hours for such aircraft type
as set forth in the Final Monthly Schedule, multiplied by (x)
the First Benchmark Factor, multiplied by (y) the Cost
Difference as set forth on Appendix 23.
The "First Weighted Average Number" for a particular aircraft
type equals the product of (1) the number of scheduled
departures of such aircraft type from a Continental airport,
excluding airport codes YHZ, ▇▇▇, and YQB, as set forth in the
Final Monthly Schedule multiplied by (2) the Weighted
Departure Number for such aircraft type.
The "Second Weighted Average Number" for a particular aircraft
type equals the product of (1) the number of scheduled
departures of such aircraft type from a Continental Airport as
set forth in the Final Monthly Schedule multiplied by (2) the
Weighted Departure Number for such aircraft type.
The "Weighted Departure Number" for (1) the Embraer ERJ-145XR
is {CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT}, (2) the Embraer ERJ-145 is
{CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT}, (3) the Embraer ERJ-135 is
{CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT}, (4) the ATR-42-320 is {CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT}, (5) the Embraer 120 is {CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT}
and (6) the Beech 1900-D is {CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT}.
The "Fourth Adjusted Block Hour Rate" for a particular
aircraft type and a particular month equals the quotient of
(i) the product of (a) the Contract Fuel Rate multiplied by
(b) the Appendix 9 Rate Per Block Hour set forth
Schedule 3-2
in Appendix 9 for such aircraft type based on the average
scheduled stage length per departure for such aircraft type as
set forth in the Final Monthly Schedule using the nearest
lower stage length set forth in Appendix 9 divided by (ii) the
Cost Difference set forth on Appendix 23.
2. Incentive Compensation. With respect to each calendar month,
incentive compensation shall be calculated as follows:
a. Headstart Bonus. Contractor shall receive a payment
of {CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT} for each Scheduled Flight that is an
On-time Headstart Flight during a calendar month, if
any, in excess of the product of the number of
Headstart Flights during such calendar month and the
Headstart On-time Benchmark. The Headstart On-time
Benchmark for each month in 2001 is set forth in
Appendix 2.
b. Baggage Handling Bonus. Contractor shall receive a
payment in an amount equal to the product of (i)
{CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT
TO A REQUEST FOR CONFIDENTIAL TREATMENT} and (ii) the
excess, if any, of (a) the quotient of (1) the total
number of Enplanements for Continental and Contractor
during such calendar month at Contractor Airports of
the type described in clause (i) of the definition
thereof, multiplied by the Baggage Handling
Benchmark, divided by (2) 1,000 over (b) each bag
improperly handled (as measured by claims filed for
mishandled baggage) for Continental and Contractor by
Contractor during such calendar month at Contractor
Airports of the type described in clause (i) of the
definition thereof. The Baggage Handling Benchmark
for each month in 2001 is set forth in Appendix 2.
c. Appendix 10 Fee. Contractor will receive a fee equal
to the quotient of (i) the Appendix 10 invoice rate
set forth in Appendix 10 for the applicable month
multiplied by the number of Forecasted Passengers for
the applicable month, which fee represents payment
for interrupted trip expense, passenger liability
insurance, baggage handling, claims, repairs and
delivery (Contractor Airports only), and security and
screening (Contractor Airports only) expenses,
divided by (ii) the Cost Difference set forth in
Appendix 23. This incentive compensation will be
reconciled, in the monthly reconciliation described
in
Schedule 3-3
Section 3.06(b) of the Agreement, to the number of
Actual Passengers for such calendar month multiplied
by the Appendix 10 reconciliation rate set forth in
Appendix 10 for the applicable month, which fee
represents the same categories of expense as
represented by the per passenger invoice rate, other
than passenger liability insurance and third-party
security and screening (Contractor Airports only),
which category of expense is reconciled pursuant to
Paragraph B(9)(a).
3. Fleet Size Adjustments. Upon the withdrawal of one or more
Covered Aircraft (excluding Turboprop Aircraft) from the
capacity purchase provisions of this Agreement, the Appendix 1
Expenses shall be adjusted as follows:
a. Expenses set forth in column 2 of Appendix 1 (after
giving effect to any adjustments thereto pursuant to
this Paragraph A(3)(a)) for each applicable month
shall decrease by the quotient of (i) the actual
expenses of the type reflected in column 2 relating
to the specific aircraft (identified by tail number)
withdrawn from the Agreement, divided by (ii) the
Cost Difference set forth on Appendix 23.
b. Expenses set forth in columns 4, 6, 9, 11, 12 and 13
of Appendix 1 for each applicable month will be
reduced by an amount equal to the product of (i) the
amount of each of such expenses included in Appendix
1 Expenses (after giving effect to any previous
adjustments thereto pursuant to this Paragraph
A(3)(b)) and (ii) the quotient of (1) the number of
aircraft so withdrawn from the Agreement (after
giving effect to any previous adjustments pursuant to
this Paragraph A(3)(b)) and (2) the number of
aircraft constituting Covered Aircraft immediately
prior to such withdrawal.
c. The remainder of the Appendix 1 Expenses will
decrease as follows:
I. For the first {CONFIDENTIAL MATERIAL OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT} aircraft (other
than Turboprop Aircraft) to be withdrawn
from the Agreement (taking into account all
withdrawals under the Agreement), the
remainder of the Appendix 1 Expenses after
giving effect to any other adjustments
provided in this Paragraph A(3) will be
reduced by the product of (a) such remainder
of the Appendix 1 Expenses,
Schedule 3-4
multiplied by (b) {CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT
TO A REQUEST FOR CONFIDENTIAL TREATMENT}
multiplied by (c) the quotient of (1) the
number of aircraft so withdrawn and (2) the
number of aircraft constituting Covered
Aircraft immediately prior to such
withdrawal.
II. For the next {CONFIDENTIAL MATERIAL OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT} aircraft (other
than Turboprop Aircraft) to be withdrawn
from the Agreement (taking into account all
withdrawals from the Agreement), the
remainder of the Appendix 1 Expenses after
giving effect to any other adjustments
provided in this Paragraph A(3) will be
reduced by the product of (a) such remainder
of the Appendix 1 Expenses, multiplied by
(b) {CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT} multiplied by (c)
the quotient of (1) the number of aircraft
so withdrawn and (2) the number of aircraft
constituting Covered Aircraft immediately
prior to such withdrawal.
III. For all other aircraft (other than Turboprop
Aircraft) to be withdrawn from the
Agreement, Continental and Contractor shall
meet and confer to agree on a reasonable
reduction of the remainder of the Appendix 1
Expenses after giving effect to any other
adjustments provided in this Paragraph A(3)
to give effect to the reduction in
Contractor's Appendix 1 Expenses as a result
of such withdrawal.
B. Expenses and Reconciliation.
1. Passenger and Cargo Revenue-Related Expenses. With respect to
Scheduled Flights, passenger and cargo revenue-related
expenses, including without limitation commissions, food and
beverage costs, charges for fare or tariff filings, sales and
advertising costs, computer reservation system fees, credit
card discount fees, reservation costs, revenue accounting
costs, and OnePass participation costs, shall be incurred
directly by Continental.
Schedule 3-5
2. Fuel Reconciliation. If during any calendar month actual
Fuel-Related Expense for Scheduled Flights varies from the
assumed Fuel-Related Expense included in the First Adjusted
Block Hour Rates for each applicable aircraft type (based on
the Second Forecast Rate), then a reconciliation payment for
such calendar month shall be made in accordance with this
Paragraph B(2). The reconciliation set forth below in this
Paragraph B(2) shall be made separately for each Fuel-Related
Component Expense.
a. If Contractor's actual applicable Fuel-Related
Component Expense per gallon during a particular
month for Scheduled Flights is lower than the
Contract Fuel Rate for the applicable Fuel-Related
Component, and Contractor's actual number of gallons
consumed for such month for Scheduled Flights is
lower than the Second Forecast Rate, Contractor shall
reimburse Continental an amount equal to the sum of:
I. the quotient of (1) the product of (a) the
difference between the Contract Fuel Rate
for the applicable Fuel-Related Component
and such actual Fuel-Related Component
Expense per gallon multiplied by (b) the
Second Forecast Rate divided by (2) the Cost
Difference set forth on Appendix 23, plus
II. the quotient of (1) the product of (a) the
difference between the Second Forecast Rate
and such actual number of gallons consumed
and (b) such actual Fuel-Related Component
Expense per gallon divided by (2) the Cost
Difference set forth on Appendix 23.
The "Second Forecast Rate" for any particular month
is equal to the aggregate sum of the following
product for each aircraft type: (i) the Appendix 9
Rate Per Block Hour set forth in Appendix 9 for such
aircraft type based on the average scheduled stage
length per departure for such aircraft type as set
forth in the Final Monthly Schedule using the nearest
lower stage length set forth in Appendix 9 multiplied
by (ii) the number of scheduled block hours for such
aircraft type in the Final Monthly Schedule for such
month multiplied by (iii) the First Benchmark Factor.
b. If Contractor's actual applicable Fuel-Related
Component Expense per gallon during a particular
month for Scheduled Flights is lower than the
Contract Fuel Rate for the applicable Fuel-Related
Component, and Contractor's actual number of gallons
consumed for such month for Scheduled Flights is
higher than the Second Forecast Rate, then:
Schedule 3-6
I. Contractor shall reimburse Continental an
amount equal to the quotient of (1) the
product of (a) the difference between the
Contract Fuel Rate for the applicable
Fuel-Related Component and such actual
Fuel-Related Component Expense per gallon
multiplied by (b) the Second Forecast Rate
divided by (2) the Cost Difference set forth
on Appendix 23, and
II. Continental shall reimburse Contractor an
amount equal to the quotient of (1) the
product of (a) the difference between such
actual number of gallons consumed and the
Second Forecast Rate multiplied by (b) such
actual Fuel-Related Component Expense per
gallon divided by (2) the Cost Difference
set forth on Appendix 23.
c. If Contractor's actual applicable Fuel-Related
Component Expense per gallon during a particular
month for Scheduled Flights equals the Contract Fuel
Rate for the applicable Fuel-Related Component, then:
I. if Contractor's actual number of gallons
consumed for such month for Scheduled
Flights is lower than the Second Forecast
Rate, Contractor shall reimburse Continental
an amount equal to the quotient of (1) the
product of (a) the difference between the
Second Forecast Rate and such actual number
of gallons consumed multiplied by (b) the
Contract Fuel Rate for the applicable
Fuel-Related Component divided by (2) the
Cost Difference set forth on Appendix 23;
and
II. if Contractor's actual number of gallons
consumed for such month for Scheduled
Flights is greater than the Second Forecast
Rate, Continental shall reimburse Contractor
an amount equal to the quotient of (1) the
product of (a) the difference between such
actual number of gallons consumed and the
Second Forecast Rate multiplied by (b) the
Contract Fuel Rate for the applicable
Fuel-Related Component divided by (2) the
Cost Difference set forth on Appendix 23.
d. If Contractor's actual number of gallons consumed
during a particular month for Scheduled Flights
equals the Second Forecast Rate, and if Contractor's
actual applicable Fuel-Related Component Expense per
gallon during a particular month for Scheduled
Flights is lower than the Contract Fuel Rate for the
applicable Fuel-Related Component, Contractor shall
reimburse Continental an amount equal to the quotient
of (1) the product of (a) the difference between the
Contract Fuel Rate for the
Schedule 3-7
applicable Fuel-Related Component and such actual
Fuel-Related Component Expense per gallon multiplied
by (b) the Second Forecast Rate divided by (2) the
Cost Difference set forth on Appendix 23;
3. Certain Parts:
a. Contractor shall be reimbursed for the cost of all
engine life limited components when replaced so long
as, at the time of such replacement of the component,
the applicable aircraft is a Covered Aircraft.
b. If, with Continental's prior written consent,
Contractor amends the Flight Hour Agreement to cover
engine life limited components on Covered Aircraft,
then the Appendix 3 Block Hour Rates shall be
increased for the months following the effectiveness
of such amendment to reimburse Contractor for the
additional expense at cost (without any amount in
respect of the Cost Factor).
4. Administrative and Facilities Expenses.
a. Administrative Costs. The Appendix 3 Block Hour Rates
and the Appendix 1 Expenses include allocations of
administrative compensation costs. The parties hereto
have entered into the Administrative Support and
Information Services Provisioning Agreement, pursuant
to which Continental has agreed to provide Contractor
with certain administrative services. Pursuant to the
Administrative Support and Information Services
Provisioning Agreement, the parties hereto have
agreed to enter into a transition plan, which plan
will provide for the termination of the services
provided by Continental to Contractor thereunder over
a certain period of time. As a result, certain of
such services may be terminated during the term of
this Agreement. Contractor and Continental hereby
agree that in connection with the transition plan
Contractor and Continental shall meet and confer to
adjust the Appendix 3 Block Hour Rates and Appendix 1
Expenses to reasonably reflect any increases or
decreases in Contractor's administrative compensation
costs or other administrative costs and the costs
payable to Continental pursuant to the Administrative
Support and Information Services Provisioning
Agreement as a result of Contractor's having to
replace any of such terminated services.
Schedule 3-8
b. Facility and Ground Handling Costs. In consideration
of the services provided by Continental to Contractor
pursuant to Paragraph 1.1.1 of the Continental Ground
Handling Agreement during a particular month,
Contractor will pay Continental a fee equal to the
product of (i) the First Forecast Rate - Component 1
set forth on Appendix 8 for such month, multiplied by
(ii) the First Weighted Average Number for such
month. In addition, if at any time Contractor shall
relocate its headquarters, the parties agree to meet
and confer pursuant to Paragraph B(11) regarding such
event.
5. Flight Overfly Reconciliation.
a. With respect to Scheduled Flights, for any calendar
month Contractor's actual block hours flown per
departure for any particular aircraft type exceeds
the scheduled block hours per departure for such
aircraft type for such calendar month as set forth in
the Final Monthly Schedule, then the reconciliation
for such period shall include a payment for such
aircraft type by Continental to Contractor in an
amount equal to the product of (i) the First
Incremental Cost Rate set forth on Appendix 11 with
respect to such aircraft type and such month,
multiplied by (ii) the quotient of (1) the difference
between such actual number of block hours per
departure and such number of scheduled block hours
per departure divided by (2) such number of scheduled
block hours per departure, multiplied by (iii) the
number of scheduled block hours for such aircraft
type as set forth on the Final Monthly Schedule
multiplied by (iv) the First Benchmark Factor for
such calendar month.
b. With respect to Scheduled Flights, for any calendar
month the scheduled block hours per departure for any
particular aircraft type as set forth on the Final
Monthly Schedule exceeds Contractor's actual block
hours flown per departure for such aircraft type for
such calendar month, then the reconciliation for such
period shall include a payment for such aircraft type
by Contractor to Continental in an amount equal to
the product of (i) the Second Incremental Cost Rate,
set forth on Appendix 12 with respect to such
aircraft type and month, multiplied by (ii) the
quotient of (1) the difference between such number of
scheduled block hours per departure and such actual
number of block hours per departure, divided by (2)
such number of scheduled block hours per departure,
multiplied by (iii) the number of scheduled block
hours for such aircraft type as set forth on the
Final Monthly Schedule multiplied by (iv) the First
Benchmark Factor for such calendar month.
Schedule 3-9
6. Flight Cancellation Reconciliation.
a. If the product of the total number of Scheduled
Flights for a particular aircraft type during a
calendar month as set forth in the Final Monthly
Schedule multiplied by the First Cancellation Rate
exceeds the actual number of Uncontrollable
Cancellations of such aircraft type in such calendar
month (such excess number of flights of such aircraft
type being the "First Cancellation Number" for such
aircraft type), then the reconciliation for such
period shall include a payment by Continental to
Contractor in an amount equal to the product of (i)
the First Incremental Cost Rate, as set forth on
Appendix 11 for such aircraft type and such month,
multiplied by (ii) the First Cancellation Number for
such aircraft type, multiplied by (iii) the actual
number of block hours per departure for such aircraft
type for such calendar month.
b. If the actual number of Uncontrollable Cancellations
for a particular aircraft type during a calendar
month exceeds the product of the total number of
Scheduled Flights for such aircraft type during such
calendar month multiplied by the First Cancellation
Rate (such excess number of flights of such aircraft
type being the "Second Cancellation Number" for such
aircraft type), then the reconciliation for such
period shall include a payment by Contractor to
Continental in an amount equal to the product of (i)
the Second Incremental Cost Rate, as set forth on
Appendix 12 for such aircraft type and such month,
multiplied by (ii) the Second Cancellation Number for
such aircraft type, multiplied by (iii) the average
number of block hours per Scheduled Flight for such
aircraft type for such calendar month.
c. If the product of the total number of Scheduled
Flights for a particular aircraft type during a
calendar month multiplied by the Second Cancellation
Rate exceeds the actual number of Controllable
Cancellations for such aircraft type in such calendar
month (such excess number of flights of such aircraft
type being the "Third Cancellation Number" for such
aircraft type), then the reconciliation for such
period shall include a payment by Continental to
Contractor in an amount equal to the product of (i)
the Third Incremental Cost Rate multiplied by (ii)
the Third Cancellation Number for such aircraft type,
multiplied by (iii) the actual number of block hours
per flight for such aircraft type for such calendar
month.
The "Third Incremental Cost Rate" for a particular
aircraft type equals the Fourth Incremental Cost Rate
for such aircraft type plus the Fifth Incremental
Cost Rate for such aircraft type.
Schedule 3-10
The "Fourth Incremental Cost Rate" for a particular
aircraft type and for a particular month equals the
product of (i) the sum of (a) the applicable Appendix
13 Incremental Cost Rate set forth on Appendix 13 for
such aircraft type and month, minus the sum of (1)
the ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ Hour Rate set forth on Appendix
14 for such aircraft type and month plus (2) the
Appendix 5 Block Hour Rate set forth on Appendix 5
for such aircraft type and month, plus (b) the
Adjusted Appendix 14 Block Hour Rate for such
aircraft type and month plus (c) the Third Adjusted
Block Hour Rate for such aircraft type and month and
(ii) the First Benchmark Factor for such month.
The "Adjusted Appendix 14 Block Hour Rate" for a
particular aircraft type and a particular month is
obtained by multiplying the ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ Hour
Rate by the Appendix 7 Block Hours set forth on
Appendix 7 for such aircraft type and dividing such
product by the average scheduled block hours per
departure for such aircraft type as set forth on the
Final Monthly Schedule.
The "Fifth Incremental Cost Rate" is obtained by
allocating the Appendix 1 Expenses among the
different aircraft types by each type's allocable
share of statistics from the Final Monthly Schedule
based on the methodology set forth in Appendix 15,
and dividing such allocation to a specific aircraft
type by the scheduled block hours for such aircraft
type set forth in the Final Monthly Schedule, then
multiplying such quotient by the First Benchmark
Factor.
d. If the actual number of Controllable Cancellations
for a particular aircraft type in a calendar month
exceeds the product of the total number of Scheduled
Flights for such aircraft type during such calendar
month multiplied by the Second Cancellation Rate
(such excess number of flights of such aircraft type
being the "Fourth Cancellation Number" for such
aircraft type), then the reconciliation for such
period shall include a payment by Contractor to
Continental in an amount equal to the product of (i)
the Third Incremental Cost Rate for such aircraft
type multiplied by (ii) the Fourth Cancellation
Number, multiplied by (iii) the average number of
block hours per Scheduled Flight for such aircraft
type for such calendar month.
e. For purposes of this Paragraph B(6), for any month
during which a Labor Strike occurs, the Second
Cancellation Rate for such month shall be adjusted to
equal the difference between (a) the Second
Cancellation Rate for such month (before any such
adjustment)
Schedule 3-11
and (b) the product of (1) the quotient of (i) the
Second Cancellation Rate for such month (before any
such adjustment) divided by (ii) the number of days
in the particular month, multiplied by (2) the number
of days in such month (not to exceed the number of
days in the particular month) during which such Labor
Strike was occurring. For purposes of this Paragraph
B(6), for any month during which a Labor Strike
occurs, the First Cancellation Rate for such month
shall be adjusted to equal the difference between (a)
the First Cancellation Rate for such month (before
any such adjustment) and (b) the product of (1) the
quotient of (i) the First Cancellation Rate for such
month (before any such adjustment) divided by (ii)
30, multiplied by (2) the number of days in such
month (not to exceed 30 days) during which such Labor
Strike was occurring.
f. For all purposes of this Agreement, the term
Uncontrollable Cancellations shall include the
following:
I. After presentation of the Final Monthly
Schedule pursuant to Section 2.01(b) of the
Agreement, if Continental makes any changes
to such schedule that result in a
cancellation of a Scheduled Flight, then
such cancellation shall constitute an
Uncontrollable Cancellation.
II. If any proposed Scheduled Flight on a
planned flight schedule involves a flight to
a new airport which will be a Contractor
Airport, and Contractor experiences a delay
in preparing the required facilities and
making all necessary arrangements to
complete a flight to such airport, which
delay either (i) is caused by the
Environmental Protection Agency, airport or
any other governmental authority, or (ii)
occurs after Contractor received less than
90 days' advance notice of such Scheduled
Flight to a new airport and used its
commercially reasonable efforts to prepare
the required facilities and make all
necessary arrangements (all in accordance
with the Master Facility and Ground Handling
Agreement), and in either case such
Scheduled Flight is cancelled, then such
cancellation shall constitute an
Uncontrollable Cancellation.
g. Subject to the provisions of Paragraph B(6)(f),
Contractor hereby agrees that each cancellation of a
Scheduled Flight shall be designated as either a
Controllable Cancellation or an Uncontrollable
Cancellation on a basis consistent with Contractor's
historical experience, including specifically the
methodology used to create the data set forth in
Appendix 2.
Schedule 3-12
7. Insurance Costs.
a. If Contractor elects not to participate in a combined
placement for a particular insurance policy,
Contractor shall not be reimbursed or otherwise
compensated (through adjustments to Block Hour Rates,
reconciliation amounts, amounts in respect of the
Cost Factor or otherwise) for any Excess Insurance
Costs with respect to such policy.
b. If Continental elects not to participate in a
combined placement for a particular insurance policy,
Continental shall pay to Contractor an amount equal
to the Excess Insurance Costs with respect to such
policy, up to the Average Peer Group Rates.
Contractor shall not be reimbursed or otherwise
compensated (through adjustments to Block Hour Rates
or otherwise) to the extent that its insurance costs
exceed the Average Peer Group Rates.
c. Contractor will pay to Continental its proportionate
share of all combined-placement insurance premiums
not later than the date that Continental is required
under the terms of the applicable policy to pay the
policy premiums. The cost allocation for such
combined placements shall be as follows:
▇. ▇▇▇▇ and War Risk Coverage Rate. To be
determined each year; a dollar amount equal
to the combined placement program's
composite whole rate as set forth in the
current group policy, multiplied by
Contractor's average fleet value for the
policy period, as determined by recognized
standard industry methods of valuation
consistent with prior practice.
II. Liability Rates. To be determined each year;
an amount equal to the combined placement
program's composite liability rate as set
forth in the current group policy,
multiplied by revenue passenger miles, as
determined by recognized standard industry
methods consistent with prior practice.
III. Miscellaneous Insurance (Property, Casualty
and D&O, etc.) Rates. The parties agree to
meet annually to determine the cost
allocation for all other insurance coverage
based on Contractor's portion of the "total
exposure base" for such coverage, as
determined by recognized standard industry
methods consistent with prior practice.
Schedule 3-13
d. In the Performance Period subsequent to the next
combined policy insurance renewal following a Major
Loss caused by Continental (or, if such a Major Loss
occurs so close to the combined policy insurance
renewal date that the effects are not reflected in
the next combined policy insurance renewal premium
amount, then in the Performance Period subsequent to
the renewal in which the effects are first included),
Continental and Contractor agree to determine the
amount of increase in the combined policy insurance
premiums, if any, to be attributed to such Major Loss
(as opposed to a general increase in the premiums) as
follows:
I. The parties will compare the combined policy
premium increase to premium increases
experienced by the five Major Carriers
closest to Continental in aggregate revenue
passenger miles at the time of such
determination, excluding any Major Carrier
that experienced a Major Loss within the
previous three years.
II. The average annual increase in insurance
costs for such Major Carriers shall be
calculated by (i) subtracting the expiring
rates of each such Major Carrier from its
new rates, (ii) adding the total of such
differences and (iii) dividing the total by
the number of Major Carriers whose rates
were included in the calculation.
III. The amount that the increase in the combined
premiums for Continental and Contractor
exceeds the average annual increase in
insurance costs calculated pursuant to
clause (II) above shall be deemed to be the
portion of the increase for such year due to
such Major Loss (the "Continental Premium
Surcharge Amount").
IV. The Continental Premium Surcharge Amount for
the subsequent two years shall be
{CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT} and {CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT}, respectively, of the Continental
Premium Surcharge Amount for the first year,
and shall be {CONFIDENTIAL MATERIAL OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT} thereafter.
Schedule 3-14
V. The Continental Premium Surcharge Amount
shall be borne solely by Continental and
that amount shall be deducted from the
aggregate premium amounts included in all
cost-sharing calculations between
Continental and Contractor.
e. In the Performance Period subsequent to the next
combined policy insurance renewal following a Major
Loss caused by Contractor (or, if such a Major Loss
occurs so close to the combined policy insurance
renewal date that the effects are not reflected in
the next combined policy insurance renewal premium
amount, then in the Performance Period subsequent to
the renewal in which the effects are first included),
Continental and Contractor agree to determine the
amount of increase in the combined policy insurance
premiums, if any, to be attributed to such Major Loss
(as opposed to a general increase in the premiums) as
follows:
I. The parties will compare the combined policy
premium increase to premium increases
experienced by the five regional airlines
with annual revenues closest to those of
Contractor, excluding any such regional
airline that experienced a Major Loss within
the previous three years.
II. The average annual increase in insurance
costs for such regional airlines shall be
calculated by (i) subtracting the expiring
rates of each such regional airlines from
its new rates, (ii) adding the total of such
differences and (iii) dividing the total by
the number of such regional airlines whose
rates were included in the calculation.
III. The parties will also calculate the maximum
permitted increase in annual premiums which
would be permitted if the policy coverage
was limited to the insurance limits required
to be maintained by Contractor (the
"Contractor Premium Surcharge Limit").
IV. The amount that the Contractor Premium
Surcharge Limit exceeds the average annual
increase in insurance costs calculated
pursuant to clause (II) above shall be
deemed to be the portion of the increase for
such year due to such Major Loss and payable
by Contractor (the "Contractor Premium
Surcharge Amount").
Schedule 3-15
V. The amount that the increase in the combined
premiums for Continental and Contractor
exceeds the sum of (x) the average annual
increase in insurance costs calculated
pursuant to clause (II) above and (y) the
Contractor Premium Surcharge Amount shall be
deemed to be the portion of the increase for
such year due to such Major Loss and payable
by Continental (the "Contractor Premium
Surcharge Overflow Amount").
VI. The Contractor Premium Surcharge Amount for
the subsequent two years shall be
{CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT} and {CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT}, respectively, of the Contractor
Premium Surcharge Amount for the first year,
and shall be {CONFIDENTIAL MATERIAL OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT} thereafter.
VII. The Contractor Premium Surcharge Overflow
Amount for the subsequent two years shall be
{CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT} and {CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT}, respectively, of the Contractor
Premium Surcharge Overflow Amount for the
first year, and shall be {CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT} thereafter.
Schedule 3-16
VIII. The Contractor Premium Surcharge Amount
shall be borne solely by Contractor and that
amount shall be deducted from the aggregate
premium amounts included in all cost-sharing
calculations between Continental and
Contractor.
IX. The Contractor Premium Surcharge Overflow
Amount shall be borne solely by Continental
and that amount shall be deducted from the
aggregate premium amounts included in all
cost-sharing calculations between
Continental and Contractor.
f. Contractor shall be reimbursed in full for the
aggregate of all insurance deductibles paid in any
calendar year up to an amount equal to the historical
average of such deductibles paid by Contractor during
the last five full calendar years for which such
calculations are available as of such date of
determination.
8. Volume Reconciliation.
a. Hotel Volume Reconciliation. The following expenses
incurred in connection with Scheduled Flights as
allocated pursuant to Section 3.05(a) shall be
reconciled as follows:
I. Pilot Contract Hotel Stays. Included in the
Appendix 3 Block Hour Rates is an assumed
cost associated with an assumed number of
Contract Hotel Stays for pilots per
scheduled block hour set forth in the Final
Monthly Schedule. If the actual number of
Contract Hotel Stays for pilots per
scheduled block hour set forth in the Final
Monthly Schedule for a particular month
exceeds the number of assumed Contract Hotel
Stays for pilots per scheduled block hour
for such month as set forth in Appendix 16a,
then Continental shall pay an amount to
Contractor equal to the quotient of (a) the
product of (i) the difference between (1)
such actual number of Contract Hotel Stays
for pilots per scheduled block hour during
such month and (2) such assumed number of
Contract Hotel Stays for pilots per
scheduled block hour during such month,
multiplied by (ii) the number of scheduled
block hours for such month multiplied by
(iii) the assumed cost per Contract Hotel
Stay for pilots for such month as set forth
in Appendix 16a divided by (b) the Cost
Difference set forth on Appendix 23. If the
actual number of Contract Hotel Stays for
pilots per scheduled block hour set forth in
the Final Monthly Schedule for a particular
month is less than the number of assumed
Contract Hotel Stays for pilots per
scheduled block hour for such month as set
forth in Appendix 16a, then Contractor shall
pay an amount to
Schedule 3-17
Continental equal to the quotient of (a) the
product of (i) the difference between (1)
such assumed number of Contract Hotel Stays
for pilots per scheduled block hour during
such month and (2) such actual number of
Contract Hotel Stays for pilots per
scheduled block hour during such month,
multiplied by (ii) the number of scheduled
block hours for such month, multiplied by
(iii) the assumed cost per Contract Hotel
Stay for pilots for such month as set forth
in Appendix 16a divided by (b) the Cost
Difference set forth on Appendix 23.
II. Flight Attendant Contract Hotel Stays.
Included in the Appendix 3 Block Hour Rates
is an assumed cost associated with an
assumed number of Contract Hotel Stays for
flight attendants per scheduled block hour
set forth in the Final Monthly Schedule. If
the actual number of Contract Hotel Stays
for flight attendants per scheduled block
hour set forth in the Final Monthly Schedule
for a particular month exceeds the number of
assumed Contract Hotel Stays for flight
attendants per scheduled block hour for such
month as set forth in Appendix 16b, then
Continental shall pay an amount to
Contractor equal to the quotient of (a) the
product of (i) the difference between (1)
such actual number of Contract Hotel Stays
for flight attendants per scheduled block
hour during such month and (2) such assumed
number of Contract Hotel Stays for flight
attendants per scheduled block hour during
such month, multiplied by (ii) the number of
scheduled block hours for such month
multiplied by (iii) the assumed cost per
Contract Hotel Stay for flight attendants
for such month as set forth in Appendix 16b
divided by (b) the Cost Difference set forth
on Appendix 23. If the actual number of
Contract Hotel Stays for flight attendants
per scheduled block hour set forth in the
Final Monthly Schedule for a particular
month is less than the number of assumed
Contract Hotel Stays for flight attendants
per scheduled block hour for such month as
set forth in Appendix 16b, then Contractor
shall pay an amount to Continental equal to
the quotient of (a) the product of (i) the
difference between (1) such assumed number
of Contract Hotel Stays for flight
attendants per scheduled block hour during
such month and (2) such actual number of
Contract Hotel Stays for flight attendants
per scheduled block hour during such month,
multiplied by (ii) the number of scheduled
block hours for such month, multiplied by
(iii) the assumed cost per Contract Hotel
Stay for flight attendants for such month as
Schedule 3-18
set forth in Appendix 16b divided by (b) the
Cost Difference set forth on Appendix 23.
b. Pilot Training Volume Reconciliation. The following
expenses incurred in connection with Scheduled
Flights, as allocated pursuant to Section 3.05(a),
shall be reconciled as follows:
I. New Hire Training Cycles. Included in the
Appendix 1 Expenses is an assumed cost
associated with an assumed number of Pilot
New Hire Training Cycles for each aircraft
type. If the actual number of Pilot New Hire
Training Cycles for a particular month and a
particular aircraft type exceeds the number
of assumed Pilot New Hire Training Cycles
for such month and aircraft type as set
forth in Appendix 17b, then Continental
shall pay an amount to Contractor equal to
the quotient of (a) the product of (i) the
difference between (1) such actual number of
Pilot New Hire Training Cycles during such
month for such aircraft type and (2) such
assumed number of Pilot New Hire Training
Cycles during such month for such aircraft
type, multiplied by (ii) the assumed cost of
each Pilot New Hire Training Cycle for such
month and such aircraft type as set forth in
Appendix 17a divided by (b) the Cost
Difference set forth on Appendix 23. If the
actual number of Pilot New Hire Training
Cycles for a particular month and aircraft
type is less than the assumed number of
Pilot New Hire Training Cycles for such
month and aircraft type as set forth in
Appendix 17b, then Contractor shall pay an
amount to Continental equal to the quotient
of (a) the product of (i) the difference
between (1) such assumed number of Pilot New
Hire Training Cycles during such month for
such aircraft type and (2) such actual
number of Pilot New Hire Training Cycles
during such month for such aircraft type,
multiplied by (ii) the assumed cost of each
Pilot New Hire Training Cycle for such month
and such aircraft type as set forth in
Appendix 17a divided by (b) the Cost
Difference set forth on Appendix 23.
II. Pilot Transitional Training Cycles. Included
in the Appendix 1 Expenses is an assumed
cost associated with an assumed number of
Pilot Transitional Training Cycles for each
aircraft type. If the actual number of Pilot
Transitional Training Cycles for a
particular month and a particular aircraft
type exceeds the number of assumed Pilot
Transitional Training Cycles for such month
and aircraft type as set forth in Appendix
17c, then Continental
Schedule 3-19
shall pay an amount to Contractor equal to
the quotient of (a) the product of (i) the
difference between (1) such actual number of
Pilot Transitional Training Cycles during
such month for such aircraft type and (2)
such assumed number of Pilot Transitional
Training Cycles during such month for such
aircraft type, multiplied by (ii) the
assumed cost of each Pilot Transitional
Training Cycle for such month and aircraft
type as set forth in Appendix 17a divided by
(b) the Cost Difference set forth on
Appendix 23. If the actual number of Pilot
Transitional Training Cycles for a
particular month and aircraft type is less
than the number of assumed Pilot
Transitional Training Cycles for such month
and aircraft type as set forth in Appendix
17c, then Contractor shall pay an amount to
Continental equal to the quotient of (a) the
product of (i) the difference between (1)
such assumed number of Pilot Transitional
Training Cycles during such month for such
aircraft type and (2) such actual number of
Pilot Transitional Training Cycles during
such month for such aircraft type,
multiplied by (ii) the assumed cost of each
Pilot Transitional Training Cycle for such
month and aircraft type as set forth in
Appendix 17a divided by (b) the Cost
Difference set forth on Appendix 23.
III. Pilot Upgrade Training Cycles. Included in
the Appendix 1 Expenses is an assumed cost
associated with an assumed number of Pilot
Upgrade Training Cycles for each aircraft
type. If the actual number of Pilot Upgrade
Training Cycles for a particular month and a
particular aircraft type exceeds the number
of assumed Pilot Upgrade Training Cycles for
such month and such aircraft type as set
forth in Appendix 17d, then Continental
shall pay an amount to Contractor equal to
the quotient of (a) the product of (i) the
difference between (1) such actual number of
Pilot Upgrade Training Cycles during such
month for such aircraft type and (2) such
assumed number of Pilot Upgrade Training
Cycles during such month for such aircraft
type, multiplied by (ii) the assumed cost of
each Pilot Upgrade Training Cycle for such
month and such aircraft type as set forth in
Appendix 17a divided by (b) the Cost
Difference set forth on Appendix 23. If the
actual number of Pilot Upgrade Training
Cycles for a particular month and a
particular aircraft type is less than the
number of assumed Pilot Upgrade Training
Cycles for such month and such aircraft type
as set forth in Appendix 17d, then
Contractor shall pay an amount to
Continental equal to the quotient of (a) the
Schedule 3-20
product of (i) the difference between (1)
such assumed number of Pilot Upgrade
Training Cycles during such month for such
aircraft type and (2) such actual number of
Pilot Upgrade Training Cycles during such
month for such aircraft type, multiplied by
(ii) the assumed cost of each Pilot Upgrade
Training Cycles for such month and aircraft
type as set forth in Appendix 17a divided by
(b) the Cost Difference set forth on
Appendix 23.
IV. Pilot Recurrent Flight Training Cycles.
Included in the Appendix 1 Expenses is an
assumed cost associated with an assumed
number of Pilot Recurrent Flight Training
Cycles for each aircraft type. If the actual
number of Pilot Recurrent Flight Training
Cycles for a particular month and a
particular aircraft type exceeds the number
of assumed Pilot Recurrent Flight Training
Cycles for such month and such aircraft type
and as set forth in Appendix 17e, then
Continental shall pay an amount to
Contractor equal to the quotient of (a) the
product of (i) the difference between (1)
such actual number of Pilot Recurrent Flight
Training Cycles during such month and such
aircraft type and (2) such assumed number of
Pilot Recurrent Flight Training Cycles
during such month for such aircraft type,
multiplied by (ii) the assumed cost of each
Pilot Recurrent Flight Training Cycle for
such month and such aircraft type as set
forth in Appendix 17a divided by (b) the
Cost Difference set forth on Appendix 23. If
the actual number of Pilot Recurrent Flight
Training Cycles for a particular month and a
particular aircraft type is less than the
number of assumed Pilot Recurrent Flight
Training Cycles for such month and such
aircraft type as set forth in Appendix 17e,
then Contractor shall pay an amount to
Continental equal to the quotient of (a) the
product of (i) the difference between (1)
such assumed number of Pilot Recurrent
Flight Training Cycles during such month for
such aircraft type and (2) such actual
number of Pilot Recurrent Flight Training
Cycles during such month for such aircraft
type, multiplied by (ii) the assumed cost of
each Pilot Recurrent Flight Training Cycles
for such month and such aircraft type as set
forth in Appendix 17a divided by (b) the
Cost Difference set forth on Appendix 23.
V. Pilot Recurrent Ground Training Cycles.
Included in the Appendix 1 Expenses is an
assumed cost associated with an assumed
number of Pilot Recurrent Ground Training
Cycles for each aircraft type. If the actual
number of Pilot
Schedule 3-21
Recurrent Ground Training Cycles for a
particular month and a particular aircraft
type exceeds the number of assumed Pilot
Recurrent Ground Training Cycles for such
month and such aircraft type and as set
forth in Appendix 17f, then Continental
shall pay an amount to Contractor equal to
the quotient of (a) the product of (i) the
difference between (1) such actual number of
Pilot Recurrent Ground Training Cycles
during such month and such aircraft type and
(2) such assumed number of Pilot Recurrent
Ground Training Cycles during such month for
such aircraft type, multiplied by (ii) the
assumed cost of each Pilot Recurrent Ground
Training Cycle for such month and such
aircraft type as set forth in Appendix 17a
divided by (b) the Cost Difference set forth
on Appendix 23. If the actual number of
Pilot Recurrent Ground Training Cycles for a
particular month and a particular aircraft
type is less than the number of assumed
Pilot Recurrent Ground Training Cycles for
such month and such aircraft type as set
forth in Appendix 17f, then Contractor shall
pay an amount to Continental equal to the
quotient of (a) the product of (i) the
difference between (1) such assumed number
of Pilot Recurrent Ground Training Cycles
during such month for such aircraft type and
(2) such actual number of Pilot Recurrent
Ground Training Cycles during such month for
such aircraft type, multiplied by (ii) the
assumed cost of each Pilot Recurrent Ground
Training Cycles for such month and such
aircraft type as set forth in Appendix 17a
divided by (b) the Cost Difference set forth
on Appendix 23.
c. Pilot and Flight Attendant Per Diem Reconciliation.
I. Pilot Per Diem. Included in the Appendix 3
Block Hour Rates is an assumed cost
associated with an assumed number of Pilot
Per Diem Hours per scheduled block hour. If
the actual number of Pilot Per Diem Hours
per scheduled block hour for a particular
month exceeds the number of assumed Pilot
Per Diem Hours per scheduled block hour in
such month as set forth in Appendix 18a,
then Continental shall pay an amount to
Contractor equal to the quotient of (a) the
product of (i) the difference between (1)
such actual number of Pilot Per Diem Hours
per scheduled block hour during such month
and (2) such assumed number of Pilot Per
Diem Hours per scheduled block hour during
such month, multiplied by (ii) the number of
scheduled block hours for such month,
multiplied by (iii) the assumed
Schedule 3-22
amount payable for each Pilot Per Diem Hour
for such month as set forth in Appendix 18a
divided by (b) the Cost Difference set forth
on Appendix 23. If the actual number of
Pilot Per Diem Hours per scheduled block
hour for a particular month is less than the
number of assumed Pilot Per Diem Hours per
scheduled block hour in such month as set
forth in Appendix 18a, then Contractor shall
pay an amount to Continental equal to the
quotient of (a) the product of (i) the
difference between (1) such assumed number
of Pilot Per Diem Hours per scheduled block
hour during such month and (2) such actual
number of Pilot Per Diem Hours per scheduled
block hour during such month, multiplied by
(ii) the number of scheduled block hours for
such month, multiplied by (iii) the assumed
amount payable for each Pilot Per Diem Hour
for such month as set forth in Appendix 18a
divided by (b) the Cost Difference set forth
on Appendix 23.
II. Flight Attendants Per Diem. Included in the
Appendix 3 Block Hour Rates is an assumed
cost associated with an assumed number of
Flight Attendant Per Diem Hours per
scheduled block hour. If the actual number
of Flight Attendant Per Diem Hours per
scheduled block hour for a particular month
exceeds the number of assumed Flight
Attendant Per Diem Hours per scheduled block
hour in such month as set forth in Appendix
18b, then Continental shall pay an amount to
Contractor equal to the quotient of (a) the
product of (i) the difference between (1)
such actual number of Flight Attendant Per
Diem Hours per scheduled block hour during
such month and (2) such assumed number of
Flight Attendant Per Diem Hours per
scheduled block hour during such month,
multiplied by (ii) the number of scheduled
block hours for such month, multiplied by
(iii) the assumed amount payable for each
Flight Attendant Per Diem Hour for such
month as set forth in Appendix 18b divided
by (b) the Cost Difference set forth on
Appendix 23. If the actual number of Flight
Attendant Per Diem Hours per scheduled block
hour for a particular month is less than the
number of assumed Flight Attendant Per Diem
Hours per scheduled block hour in such month
as set forth in Appendix 18b, then
Contractor shall pay an amount to
Continental equal to the quotient of (a) the
product of (i) the difference between (1)
such assumed number of Flight Attendant Per
Diem Hours per scheduled block hour during
such month and (2) such actual number of
Flight Attendant Per Diem Hours per
Schedule 3-23
scheduled block hour during such month,
multiplied by (ii) the number of scheduled
block hours for such month, multiplied by
(iii) the assumed amount payable for each
Flight Attendant Per Diem Hour for such
month as set forth in Appendix 18b divided
by (b) the Cost Difference set forth on
Appendix 23.
d. Pilot Soft Time Reconciliation. Included in the
Appendix 3 Block Hour Rates is an assumed cost
associated with an assumed number of Pilot Flight
Paid Hours per scheduled Pilot Block Hour. If the
actual number of Pilot Flight Paid Hours per
scheduled Pilot Block Hour for a particular month
exceeds the number of assumed Pilot Flight Paid Hours
per scheduled Pilot Block Hour in such month as set
forth in Appendix 19, then Continental shall pay an
amount to Contractor equal to the quotient of (a) the
product of (i) the difference between (1) such actual
number of Pilot Flight Paid Hours per scheduled Pilot
Block Hour during such month and (2) such assumed
number of Pilot Flight Paid Hours per scheduled Pilot
Block Hour during such month, multiplied by (ii) the
number of scheduled Pilot Block Hours for such month,
multiplied by (iii) the assumed amount payable for
each Pilot Flight Paid Hour as set forth in Appendix
19, divided by (b) the Cost Difference set forth in
Appendix 23. If the actual number of Pilot Flight
Paid Hours per scheduled Pilot Block Hour for a
particular month is less than the number of assumed
Pilot Flight Paid Hours per scheduled Pilot Block
Hour in such month as set forth in Appendix 19, then
Contractor shall pay an amount to Continental equal
to the quotient of (a) the product of (i) the
difference between (1) such assumed number of Pilot
Flight Paid Hours per scheduled Pilot Block Hour
during such month and (2) such actual number of Pilot
Flight Paid Hours per scheduled Pilot Block Hour
during such month, multiplied by (ii) the number of
scheduled Pilot Block Hours for such month,
multiplied by (iii) the assumed amount payable for
each Pilot Flight Paid Hour as set forth in Appendix
19, divided by (b) the Cost Difference set forth in
Appendix 23. The reconciliation described in this
Paragraph 8(d) will cease upon the earlier to occur
of (1) Contractor hiring a New Contractor Pilot and
(2) Contractor no longer employing any Continental
Pilots.
e. Pilot Seniority Reconciliation. Included in the
Appendix 1 Expenses and the Appendix 3 Block Hour
Rates is an assumed cost associated with an assumed
number of Continental Pilots continuing to be
employed by Contractor. If the aggregate number of
Continental Pilots whose employment is actually
terminated by Contractor in a particular month
exceeds the aggregate number of Continental Pilots
whose employment by Contractor is assumed to
Schedule 3-24
be terminated in such particular month as set forth
in Appendix 20, then Contractor shall pay an amount
to Continental equal to the quotient of (a) the
product of (i) the difference between (1) such
aggregate number of Continental Pilots whose
employment is actually terminated by Contractor
during such month and (2) such aggregate number of
Continental Pilots whose employment is assumed to be
terminated by Contractor during such month,
multiplied by (ii) the assumed amount payable per
Continental Pilot being terminated by Contractor as
set forth in Appendix 20, divided by (b) the Cost
Difference set forth on Appendix 23. If the aggregate
number of Continental Pilots whose employment is
assumed to be terminated by Contractor for a
particular month as set forth in Appendix 20 exceeds
the aggregate number of Continental Pilots whose
employment is actually terminated by Contractor
during such month, then Continental shall pay an
amount to Contractor equal to the quotient of (a) the
product of (i) the difference between (1) such
aggregate number of Continental Pilots whose
employment is assumed to be terminated by Contractor
during such month and (2) such aggregate number of
Continental Pilots whose employment is actually
terminated by Contractor during such month,
multiplied by (ii) the assumed amount payable per
Continental Pilot being terminated by Contractor as
set forth in Appendix 20, divided by (b) the Cost
Difference set forth on Appendix 23. The
reconciliation described in this Paragraph 8(e) will
cease when Contractor no longer employs any
Continental Pilots.
f. Airport Agent Volume Reconciliation. Included in the
Appendix 1 Expenses is an assumed cost associated
with an assumed number of Agent Paid Hours. If the
lower of the Staffing Model Agent Paid Hours or
actual number of Agent Paid Hours for a particular
month exceeds the assumed number of Agent Paid Hours
as set forth in Appendix 21, then Continental shall
pay an amount to Contractor equal to the quotient of
(a) the product of (i) the difference between (1) the
lower of such Staffing Model Agent Paid Hours or such
actual number of Agent Paid Hours during such month
and (2) such assumed Agent Paid Hours during such
month, multiplied by (ii) the assumed amount payable
per Agent Paid Hour as set forth in Appendix 21,
multiplied by (iii) 1.1681, divided by (b) the Cost
Difference forth on Appendix 23. If the lower of the
Staffing Model Agent Paid Hours or actual number of
Agent Paid Hours for a particular month is less than
the assumed number of Agent Paid Hours as set forth
in Appendix 21, then Contractor shall pay an amount
to Continental equal to the quotient of (a) the
product of (i) the difference between (1) such
assumed Agent Paid Hours during such month and (2)
the lower of such
Schedule 3-25
Staffing Model Agent Paid Hours or such actual number
of Agent Paid Hours during such month, multiplied by
(ii) the assumed amount payable per Agent Paid Hour
as set forth in Appendix 21, multiplied by (iii)
1.1681, divided by (b) the Cost Difference set forth
on Appendix 23.
9. Reconciliation of Other Expenses.
a. Except to the extent that payments are made by
Contractor to Continental pursuant to Paragraph
B(6)(e) in respect of any of the following expenses
for any Controllable Cancellation resulting solely
from any Labor Strike or from a non-carrier specific
airworthiness directive or other non-carrier specific
regulatory order, the following expenses incurred in
connection with Scheduled Flights, as allocated
pursuant to Section 3.05(a), shall be reconciled
monthly (except as specifically set forth below) to
actual costs: (i) all payments made by Contractor
under any Covered Aircraft Sublease, except for any
Supplemental Rent (as defined therein) payable as a
result of any action or inaction by Contractor, other
than actions taken or not taken specifically at the
direction of Continental; (ii) all payments made by
Contractor for Incremental Passenger-Related
Facilities; (iii) all employer-matching payments made
by Contractor pursuant to any Contractor 401(K)
(provided that, upon Continental owning less than 50%
of the voting power of Holdings (the date upon which
such event occurs being referred to herein as the
"Distribution Date"), Continental shall not be
required to reconcile any such payments made by
Contractor to the extent that such payments are
attributable to a change in the 401(K) or the
company-match on or after the Distribution Date);
(iv) property and ad valorem taxes, other similar
taxes imposed specifically on property or assets,
sales and use taxes and franchise taxes (but
excluding all other taxes, such as income, profits,
withholding, employment, social security, disability,
occupation, severance, excise and fuel taxes); (v)
subject to Paragraph B(7) of this Schedule 3,
passenger liability, hull and war risk insurance
costs; (vi) ARINC/SITA network expenses; (vii)
landing fees; (viii) glycol, de-icing and snow
removal costs; (ix) payments by Contractor to
employees in respect of any profit-sharing and
on-time performance plans of Contractor existing on
or prior to the Distribution Date (provided that
Continental shall not be required to reconcile actual
profit-sharing and on-time performance expenses to
the extent that such additional expenses are
attributable to a change in target benchmarks or
payment rates under such plans on or after the
Distribution Date); (x) administrative fees paid to
Continental under the Administrative Support and
Information Services Provisioning Agreement; (xi)
Schedule 3-26
amounts paid for the provision of ground handling
services pursuant to Paragraph B(4)(b); (xii)
payments made by Contractor for "power-by-the-hour"
services under the Flight Hour Agreement; (xiii) all
expenses of Contractor associated with Extraordinary
Hotel Stays during the Performance Period (provided
that reconciliation for this item (xiii) shall occur
quarterly at the end of each Performance Period);
(xiv) depreciation expense (until December 31, 2004),
excluding any expenditure not specifically approved
by Continental or otherwise contemplated by a capital
expenditure plan agreed to by Contractor and
Continental; and (xv) third-party security and
screening expense at Contractor Airports
(collectively, the "Reconciled Expenses"). The Base
Compensation includes allocations of the Reconciled
Expenses as set forth in Appendix 22 and with respect
to certain Reconciled Expenses, as further provided
in Paragraph B(9)(f) below. If in any month the
Contractor's actual Reconciled Expenses, in the
aggregate, exceed the amount of Reconciled Expenses
included in the Base Compensation in accordance with
Appendix 22 and with respect to certain Reconciled
Expenses as further provided in Paragraph B(9)(f)
below for such month, Continental shall pay to
Contractor an amount equal to the quotient of (i)
such difference divided by (ii) the Cost Difference
set forth on Appendix 23. If in any month the amount
of Reconciled Expenses included in the Base
Compensation in accordance with Appendix 22 and with
respect to certain Reconciled Expenses as further
provided in Paragraph B(9)(f) below for such month
exceeds Contractor's actual Reconciled Expenses,
Contractor shall pay to Continental an amount equal
to the quotient of (i) such difference and (ii) the
Cost Difference set forth on Appendix 23.
b. Reconciliation amounts will include the payment to
Continental, if any, provided in Section 4.05(a) of
the Agreement.
c. Incentive payments are paid as reconciliation
amounts.
d. At any time that Contractor or Continental reasonably
believes the Prevailing Margin for the current or
next Performance Period will be greater than 11.5% or
less than 8.5%, then Continental and Contractor will
meet and will adjust the Base Compensation for such
Performance Period; provided that in no event will
such calculation reduce the Base Compensation below
an amount necessary so as to achieve an 11.5%
Prevailing Margin for such Performance Period or
increase Base Compensation above the rate necessary
so as to achieve an 8.5% Prevailing Margin for such
Performance Period. At the end of each Performance
Period in respect of which adjustments were in
effect, a calculation shall be
Schedule 3-27
made by Contractor not later than the sixth Business
Day of the immediately succeeding month to calculate
the Prevailing Margin for the previous Performance
Period. For adjustments made as a result of a
Prevailing Margin expected to exceed 11.5%: (i) if
the actual resulting Prevailing Margin for such
Performance Period was greater than 11.5%, then the
Base Compensation for such Performance Period will be
further decreased to the extent required to lower the
actual Prevailing Margin for such Performance Period
to 11.5% and Contractor shall make a payment to
Continental in an amount equal to such reduction in
Base Compensation within five Business Days of such
calculation and (ii) if the actual resulting
Prevailing Margin for such Performance Period was
less than 11.5%, then the Base Compensation for such
Performance Period will be increased (but only up to
the Base Compensation in effect prior to its
adjustment pursuant to the first sentence of this
Paragraph B(9)(d) of Schedule 3) to the extent
required to raise the actual Prevailing Margin for
such Performance Period to 11.5% and Continental
shall make a payment to Contractor in an amount equal
to such increase in Base Compensation within five
Business Days of such calculation. For adjustments
made as a result of a Prevailing Margin expected to
be less than 8.5%: (i) if the actual resulting
Prevailing Margin for such Performance Period was
less than 8.5%, then the Base Compensation for such
Performance Period will be further increased to the
extent required to raise the actual Prevailing Margin
for such Performance Period to 8.5% and Continental
shall make a payment to Contractor in an amount equal
to such increase in Base Compensation within five
Business Days of such calculation and (ii) if the
Prevailing Margin for such Performance Period was
greater than 8.5%, then the Base Compensation for
such Performance Period will be decreased (but only
down to the Base Compensation in effect prior to its
adjustment pursuant to the first sentence of this
Paragraph B(9)(d) of Schedule 3) to the extent
required to lower the actual Prevailing Margin for
such Performance Period to 8.5% and Contractor shall
make a payment to Continental in an amount equal to
such reduction in Base Compensation within five
Business Days of such calculation.
e. If any of the provisions set forth herein adjust the
Base Compensation or the Appendix 1 Expenses,
Continental will, within a reasonable period of time
following such adjustment, deliver to Contractor
revised Appendices, to the extent applicable, to this
Schedule 3 to reflect such adjustment; provided that
Contractor shall cooperate with Continental in
providing to Continental any information required to
prepare such Appendices.
Schedule 3-28
f. The Base Compensation, Flight Overfly Reconciliation,
and Flight Cancellation Reconciliation for any
particular month includes allocations of the
following Reconciled Expenses as provided below:
I. The amount of assumed employer-matching
payments referred to in clause (iii) of the
second sentence of Paragraph B(9)(a)
included in the Base Compensation for any
particular month will be equal to the
product of (1) the sum of (a) the aggregate
sum of the following products for each
aircraft type set forth in the Final Monthly
Schedule: (i) the First Implied Rate for
such month for each aircraft type set forth
on Appendix 22a, multiplied by (ii) the
scheduled block hours for such month and
aircraft type as set forth on the Final
Monthly Schedule multiplied by the First
Benchmark Factor for such month, (b) the
aggregate sum of the following products for
each aircraft type set forth in the Final
Monthly Schedule: (i) the Second Implied
Rate for such month for each aircraft type
set forth on Appendix 22a, multiplied by
(ii) the Appendix 7 Block Hours for such
aircraft type set forth on Appendix 7,
multiplied by (iii) the scheduled departures
for such month and aircraft type as set
forth on the Final Monthly Schedule
multiplied by the First Benchmark Factor for
such month, plus (c) the product of (i) the
Third Implied Expenses for such month set
forth in Appendix 22a, multiplied by (ii)
1000, multiplied by (2) {CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT}.
II. The amount of assumed passenger liability
costs referred to in clause (v) of the
second sentence of Paragraph B(9)(a)
included in the Base Compensation for any
particular month will be equal to the
product of (1) the rate for such month as
set forth on Appendix 22 multiplied by (2)
the Forecasted Passengers for such month.
III. The amount of assumed ARINC/SITA network
expenses referred to in clause (vi) of the
second sentence of Paragraph B(9)(a)
included in the Base Compensation for any
particular month will be equal to the
aggregate sum of the following products for
each aircraft type set forth in the Final
Monthly Schedule: (1) the Fourth Implied
Rate for such month for each aircraft type
as set forth on Appendix
Schedule 3-29
22b, multiplied by (2) the Appendix 7 Block
Hours set forth on Appendix 7 for such
aircraft type, multiplied by (3) the
scheduled departures for such month and
aircraft type as set forth on the Final
Monthly Schedule, multiplied by (4) the
First Benchmark Factor for such month.
IV. The amount of assumed landing fees referred
to in clause (vii) of the second sentence of
Paragraph B(9)(a) included in the Base
Compensation for any particular month will
be equal to the aggregate sum of the
following products for each aircraft type
set forth in the Final Monthly Schedule: (1)
the Fifth Implied Rate for such month for
each aircraft type as set forth on Appendix
22c, multiplied by (2) the Appendix 7 Block
Hours set forth on Appendix 7 for such
aircraft type, multiplied by (3) the
scheduled departures for such month and
aircraft type as set forth on the Final
Monthly Schedule multiplied by (4) the First
Benchmark Factor for such month.
V. The amount of assumed variable ground
handling expenses referred to in clause (xi)
of the second sentence of Paragraph B(9)(a)
included in the Base Compensation for any
particular month will be equal to the
aggregate sum of the following products for
each aircraft type set forth in the Final
Monthly Schedule: (1) the Third Adjusted
Block Hour Rate for such aircraft type and
such month, multiplied by (2), the Cost
Difference set forth on Appendix 23,
multiplied by (3) the number of scheduled
block hours for such aircraft type during
such month as set forth in the Final Monthly
Schedule, multiplied by (4) the First
Benchmark Factor for such month.
VI. The amount of assumed expenses associated
with Extraordinary Hotel Stays referred to
in clause (xiii) of the second sentence of
Paragraph B(9)(a) included in the Base
Compensation for any particular month will
be equal to (1) the product of (a) the sum
of the Pilot Hotel Room Rate Per Block Hour
for Extraordinary Hotel Stays set forth on
Appendix 16a for the applicable month and
the Flight Attendant Hotel Room Rate Per
Block Hour for Extraordinary Hotel Stays set
forth on Appendix 16b for the applicable
month, multiplied by (2) the scheduled block
hours for such month as set forth on the
Final Monthly Schedule, multiplied by (3)
the First Benchmark Factor for such month.
Schedule 3-30
VII. The amount of assumed expenses associated
with "power-by-the-hour" services under the
Flight Hour Agreement referred to in clause
(xii) of the second sentence of Paragraph
B(9)(a) included in the Base Compensation
for any particular month will be equal to
the aggregate sum of the following products
for each aircraft type set forth in the
Final Monthly Schedule: (1) the Sixth
Implied Rate for such month for each
aircraft type as set forth on Appendix 22d,
multiplied by (2) the scheduled block hours
for such month and aircraft type, multiplied
by (3) the First Benchmark Factor for such
month.
VIII. The amount of assumed third-party security
and screening costs at Contractor Airports
referred to in clause (xv) of the second
sentence of Paragraph B(9)(a) included in
the Base Compensation for any particular
month will be equal to the product of (1)
the rate for such month as set forth on
Appendix 22 multiplied by (2) the Forecasted
Passengers for such month.
10. No Reconciliation for Fines, Etc. Notwithstanding anything to the
contrary contained in this Paragraph B, Continental shall not be required to
make any reconciliation payment pursuant to this Paragraph B to the extent that
such reconciliation payment is attributable to any costs, expenses or losses
(including fines, penalties and any costs and expenses associated with any
related investigation or defense) incurred by Contractor as a result of any
violation by Contractor of any law, statute, judgment, decree, order, rule or
regulation of any governmental or airport authority.
11. Material Change in Underlying Assumptions. If there is a material
change in the parties' underlying assumptions regarding the cost of providing
Regional Airline Services, the parties hereto shall meet and confer to discuss
such change and whether the Base Compensation, the Appendix 1 Expenses or any of
the provisions of this Schedule 3 shall be adjusted; provided, however, that
this provision shall not obligate the parties hereto to amend any of the
provisions of the Agreement or this Schedule 3 nor shall it obligate the parties
to adjust the Base Compensation or the Appendix 1 Expenses.
Schedule 3-31
Appendix 1 Appendix 1 Expenses
Appendix 2 Benchmark Rates
Appendix 3 Appendix 3 Block Hour Rates
Appendix 4 Appendix 4 Block Hour Rates
Appendix 5 Appendix 5 Block Hour Rates
Appendix 6 Appendix 6 Block Hour Rates
Appendix 7 Appendix 7 Block Hours
Appendix 8 First Forecast Rates
Appendix 9 Appendix 9 Rates Per Block Hour
Appendix 10 Appendix 10 Fees
Appendix 11 First Incremental Cost Rates
Appendix 12 Second Incremental Cost Rates
Appendix 13 Appendix 13 Incremental Cost Rates
Appendix 14 ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ Hour Rates
Appendix 15 Appendix 15 Incremental Cost Allocation
Appendix 16 Hotel Volume
Appendix 17 Pilot Training Volume
Appendix 18 Per Diem
Appendix 19 Pilot Soft Time
Appendix 20 Pilot Seniority
Appendix 21 Agent Volume
Appendix 22 Reconciliation Of Expenses
Appendix 23 Cost Difference
Schedule 3-32
APPENDIX 1
------------------------------------------------------------------------------------------------------------------------------
APPENDIX 1 EXPENSES (000'S)
------------------------------------------------------------------------------------------------------------------------------
COLUMN COLUMN COLUMN COLUMN COLUMN COLUMN COLUMN COLUMN COLUMN COLUMN COLUMN COLUMN COLUMN COLUMN COLUMN
Date 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Jan-01 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Feb-01 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Mar-01 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Apr-01 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
May-01 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Jun-01 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Jul-01 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Aug-01 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Sep-01 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Oct-01 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Nov-01 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Dec-01 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Jan-02 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Feb-02 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Mar-02 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Apr-02 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
May-02 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Jun-02 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Jul-02 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Aug-02 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Sep-02 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Oct-02 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Nov-02 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Dec-02 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Jan-03 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Feb-03 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Mar-03 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Apr-03 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
May-03 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Jun-03 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Jul-03 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Aug-03 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Sep-03 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Oct-03 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Nov-03 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Dec-03 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Jan-04 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Feb-04 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Mar-04 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Apr-04 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
May-04 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Jun-04 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Jul-04 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Aug-04 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Sep-04 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Oct-04 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Nov-04 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Dec-04 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
XXX REPRESENTS CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
APPENDIX 2
----------------------------------------------------------------------------------------------------------------------------------
2002 BENCHMARK RATES
----------------------------------------------------------------------------------------------------------------------------------
FIRST FIRST SECOND HEADSTART ONTIME BAGGAGE HANDLING
DATE BENCHMARK FACTOR CANCELLATION RATE CANCELLATION RATE BENCHMARK BENCHMARK
---- ---------------- ----------------- ----------------- ---------------- ----------------
Jan-02 XXX XXX XXX XXX XXX
Feb-02 XXX XXX XXX XXX XXX
Mar-02 XXX XXX XXX XXX XXX
Apr-02 XXX XXX XXX XXX XXX
May-02 XXX XXX XXX XXX XXX
Jun-02 XXX XXX XXX XXX XXX
Jul-02 XXX XXX XXX XXX XXX
Aug-02 XXX XXX XXX XXX XXX
Sep-02 XXX XXX XXX XXX XXX
Oct-02 XXX XXX XXX XXX XXX
Nov-02 XXX XXX XXX XXX XXX
Dec-02 XXX XXX XXX XXX XXX
----------------------------------------------------------------------------------------------------------------------------------
2001 ACTUAL RATES
----------------------------------------------------------------------------------------------------------------------------------
FIRST FIRST SECOND HEADSTART ONTIME BAGGAGE HANDLING
DATE BENCHMARK FACTOR CANCELLATION RATE CANCELLATION RATE BENCHMARK BENCHMARK
---- ---------------- ----------------- ----------------- ---------------- ----------------
Jan-01 XXX XXX XXX XXX XXX
Feb-01 XXX XXX XXX XXX XXX
Mar-01 XXX XXX XXX XXX XXX
Apr-01 XXX XXX XXX XXX XXX
May-01 XXX XXX XXX XXX XXX
Jun-01 XXX XXX XXX XXX XXX
Jul-01 XXX XXX XXX XXX XXX
Aug-01 XXX XXX XXX XXX XXX
Sep-01 XXX XXX XXX XXX XXX
Oct-01 XXX XXX XXX XXX XXX
Nov-01 XXX XXX XXX XXX XXX
Dec-01 XXX XXX XXX XXX XXX
----------------------------------------------------------------------------------------------------------------------------------
2000 ACTUAL RATES
----------------------------------------------------------------------------------------------------------------------------------
FIRST FIRST SECOND HEADSTART ONTIME BAGGAGE HANDLING
DATE BENCHMARK FACTOR CANCELLATION RATE CANCELLATION RATE BENCHMARK BENCHMARK
---- ---------------- ----------------- ----------------- ---------------- ----------------
Jan-00 XXX XXX XXX XXX XXX
Feb-00 XXX XXX XXX XXX XXX
Mar-00 XXX XXX XXX XXX XXX
Apr-00 XXX XXX XXX XXX XXX
May-00 XXX XXX XXX XXX XXX
Jun-00 XXX XXX XXX XXX XXX
Jul-00 XXX XXX XXX XXX XXX
Aug-00 XXX XXX XXX XXX XXX
Sep-00 XXX XXX XXX XXX XXX
Oct-00 XXX XXX XXX XXX XXX
Nov-00 XXX XXX XXX XXX XXX
Dec-00 XXX XXX XXX XXX XXX
----------------------------------------------------------------------------------------------------------------------------------
1999 ACTUAL RATES
----------------------------------------------------------------------------------------------------------------------------------
FIRST FIRST SECOND HEADSTART ONTIME BAGGAGE HANDLING
DATE BENCHMARK FACTOR CANCELLATION RATE CANCELLATION RATE BENCHMARK BENCHMARK
---- ---------------- ----------------- ----------------- ---------------- ----------------
Jan-99 XXX XXX XXX XXX XXX
Feb-99 XXX XXX XXX XXX XXX
Mar-99 XXX XXX XXX XXX XXX
Apr-99 XXX XXX XXX XXX XXX
May-99 XXX XXX XXX XXX XXX
Jun-99 XXX XXX XXX XXX XXX
Jul-99 XXX XXX XXX XXX XXX
Aug-99 XXX XXX XXX XXX XXX
Sep-99 XXX XXX XXX XXX XXX
Oct-99 XXX XXX XXX XXX XXX
Nov-99 XXX XXX XXX XXX XXX
Dec-99 XXX XXX XXX XXX XXX
----------------------------------------------------------------------------------------------------------------------------------
1998 ACTUAL RATES
----------------------------------------------------------------------------------------------------------------------------------
FIRST FIRST SECOND HEADSTART ONTIME BAGGAGE HANDLING
DATE BENCHMARK FACTOR CANCELLATION RATE CANCELLATION RATE BENCHMARK BENCHMARK
---- ---------------- ----------------- ----------------- ---------------- ----------------
Jan-98 XXX XXX XXX XXX XXX
Feb-98 XXX XXX XXX XXX XXX
Mar-98 XXX XXX XXX XXX XXX
Apr-98 XXX XXX XXX XXX XXX
May-98 XXX XXX XXX XXX XXX
Jun-98 XXX XXX XXX XXX XXX
Jul-98 XXX XXX XXX XXX XXX
Aug-98 XXX XXX XXX XXX XXX
Sep-98 XXX XXX XXX XXX XXX
Oct-98 XXX XXX XXX XXX XXX
Nov-98 XXX XXX XXX XXX XXX
Dec-98 XXX XXX XXX XXX XXX
----------------------------------------------------------------------------------------------------------------------------------
1997 ACTUAL RATES
----------------------------------------------------------------------------------------------------------------------------------
FIRST FIRST SECOND HEADSTART ONTIME BAGGAGE HANDLING
DATE BENCHMARK FACTOR CANCELLATION RATE CANCELLATION RATE BENCHMARK BENCHMARK
---- ---------------- ----------------- ----------------- ---------------- ----------------
Jan-97 XXX XXX XXX XXX XXX
Feb-97 XXX XXX XXX XXX XXX
Mar-97 XXX XXX XXX XXX XXX
Apr-97 XXX XXX XXX XXX XXX
May-97 XXX XXX XXX XXX XXX
Jun-97 XXX XXX XXX XXX XXX
Jul-97 XXX XXX XXX XXX XXX
Aug-97 XXX XXX XXX XXX XXX
Sep-97 XXX XXX XXX XXX XXX
Oct-97 XXX XXX XXX XXX XXX
Nov-97 XXX XXX XXX XXX XXX
Dec-97 XXX XXX XXX XXX XXX
XXX REPRESENTS CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
APPENDIX 3
----------------------------------------------------------------------------------------------
APPENDIX 3 BLOCK HOUR RATES
----------------------------------------------------------------------------------------------
DATE B1900 ATR42 EMB120 RJ135 RJ145
---- ----- ----- ------ ----- -----
BENCHMARK SL XXX XXX XXX XXX XXX
Jan-01 XXX XXX XXX XXX XXX
Feb-01 XXX XXX XXX XXX XXX
Mar-01 XXX XXX XXX XXX XXX
Apr-01 XXX XXX XXX XXX XXX
May-01 XXX XXX XXX XXX XXX
Jun-01 XXX XXX XXX XXX XXX
Jul-01 XXX XXX XXX XXX XXX
Aug-01 XXX XXX XXX XXX XXX
Sep-01 XXX XXX XXX XXX XXX
Oct-01 XXX XXX XXX XXX XXX
Nov-01 XXX XXX XXX XXX XXX
Dec-01 XXX XXX XXX XXX XXX
Jan-02 XXX XXX XXX XXX XXX
Feb-02 XXX XXX XXX XXX XXX
Mar-02 XXX XXX XXX XXX XXX
Apr-02 XXX XXX XXX XXX XXX
May-02 XXX XXX XXX XXX XXX
Jun-02 XXX XXX XXX XXX XXX
Jul-02 XXX XXX XXX XXX XXX
Aug-02 XXX XXX XXX XXX XXX
Sep-02 XXX XXX XXX XXX XXX
Oct-02 XXX XXX XXX XXX XXX
Nov-02 XXX XXX XXX XXX XXX
Dec-02 XXX XXX XXX XXX XXX
Jan-03 XXX XXX XXX XXX XXX
Feb-03 XXX XXX XXX XXX XXX
Mar-03 XXX XXX XXX XXX XXX
Apr-03 XXX XXX XXX XXX XXX
May-03 XXX XXX XXX XXX XXX
Jun-03 XXX XXX XXX XXX XXX
Jul-03 XXX XXX XXX XXX XXX
Aug-03 XXX XXX XXX XXX XXX
Sep-03 XXX XXX XXX XXX XXX
Oct-03 XXX XXX XXX XXX XXX
Nov-03 XXX XXX XXX XXX XXX
Dec-03 XXX XXX XXX XXX XXX
Jan-04 XXX XXX XXX XXX XXX
Feb-04 XXX XXX XXX XXX XXX
Mar-04 XXX XXX XXX XXX XXX
Apr-04 XXX XXX XXX XXX XXX
May-04 XXX XXX XXX XXX XXX
Jun-04 XXX XXX XXX XXX XXX
Jul-04 XXX XXX XXX XXX XXX
Aug-04 XXX XXX XXX XXX XXX
Sep-04 XXX XXX XXX XXX XXX
Oct-04 XXX XXX XXX XXX XXX
Nov-04 XXX XXX XXX XXX XXX
Dec-04 XXX XXX XXX XXX XXX
XXX REPRESENTS CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
APPENDIX 4
----------------------------------------------------------------------------------------
APPENDIX 4 BLOCK HOUR RATES
----------------------------------------------------------------------------------------
DATE B1900 ATR42 EMB120 RJ135 RJ145
---- ----- ----- ------ ----- -----
Jan-01 XXX XXX XXX XXX XXX
Feb-01 XXX XXX XXX XXX XXX
Mar-01 XXX XXX XXX XXX XXX
Apr-01 XXX XXX XXX XXX XXX
May-01 XXX XXX XXX XXX XXX
Jun-01 XXX XXX XXX XXX XXX
Jul-01 XXX XXX XXX XXX XXX
Aug-01 XXX XXX XXX XXX XXX
Sep-01 XXX XXX XXX XXX XXX
Oct-01 XXX XXX XXX XXX XXX
Nov-01 XXX XXX XXX XXX XXX
Dec-01 XXX XXX XXX XXX XXX
Jan-02 XXX XXX XXX XXX XXX
Feb-02 XXX XXX XXX XXX XXX
Mar-02 XXX XXX XXX XXX XXX
Apr-02 XXX XXX XXX XXX XXX
May-02 XXX XXX XXX XXX XXX
Jun-02 XXX XXX XXX XXX XXX
Jul-02 XXX XXX XXX XXX XXX
Aug-02 XXX XXX XXX XXX XXX
Sep-02 XXX XXX XXX XXX XXX
Oct-02 XXX XXX XXX XXX XXX
Nov-02 XXX XXX XXX XXX XXX
Dec-02 XXX XXX XXX XXX XXX
Jan-03 XXX XXX XXX XXX XXX
Feb-03 XXX XXX XXX XXX XXX
Mar-03 XXX XXX XXX XXX XXX
Apr-03 XXX XXX XXX XXX XXX
May-03 XXX XXX XXX XXX XXX
Jun-03 XXX XXX XXX XXX XXX
Jul-03 XXX XXX XXX XXX XXX
Aug-03 XXX XXX XXX XXX XXX
Sep-03 XXX XXX XXX XXX XXX
Oct-03 XXX XXX XXX XXX XXX
Nov-03 XXX XXX XXX XXX XXX
Dec-03 XXX XXX XXX XXX XXX
Jan-04 XXX XXX XXX XXX XXX
Feb-04 XXX XXX XXX XXX XXX
Mar-04 XXX XXX XXX XXX XXX
Apr-04 XXX XXX XXX XXX XXX
May-04 XXX XXX XXX XXX XXX
Jun-04 XXX XXX XXX XXX XXX
Jul-04 XXX XXX XXX XXX XXX
Aug-04 XXX XXX XXX XXX XXX
Sep-04 XXX XXX XXX XXX XXX
Oct-04 XXX XXX XXX XXX XXX
Nov-04 XXX XXX XXX XXX XXX
Dec-04 XXX XXX XXX XXX XXX
XXX REPRESENTS CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
APPENDIX 5
-----------------------------------------------------------------------------------------
APPENDIX 5 BLOCK HOUR RATES
-----------------------------------------------------------------------------------------
DATE B1900 ATR42 EMB120 RJ135 RJ145
---- ----- ----- ------ ----- -----
Jan-01 XXX XXX XXX XXX XXX
Feb-01 XXX XXX XXX XXX XXX
Mar-01 XXX XXX XXX XXX XXX
Apr-01 XXX XXX XXX XXX XXX
May-01 XXX XXX XXX XXX XXX
Jun-01 XXX XXX XXX XXX XXX
Jul-01 XXX XXX XXX XXX XXX
Aug-01 XXX XXX XXX XXX XXX
Sep-01 XXX XXX XXX XXX XXX
Oct-01 XXX XXX XXX XXX XXX
Nov-01 XXX XXX XXX XXX XXX
Dec-01 XXX XXX XXX XXX XXX
Jan-02 XXX XXX XXX XXX XXX
Feb-02 XXX XXX XXX XXX XXX
Mar-02 XXX XXX XXX XXX XXX
Apr-02 XXX XXX XXX XXX XXX
May-02 XXX XXX XXX XXX XXX
Jun-02 XXX XXX XXX XXX XXX
Jul-02 XXX XXX XXX XXX XXX
Aug-02 XXX XXX XXX XXX XXX
Sep-02 XXX XXX XXX XXX XXX
Oct-02 XXX XXX XXX XXX XXX
Nov-02 XXX XXX XXX XXX XXX
Dec-02 XXX XXX XXX XXX XXX
Jan-03 XXX XXX XXX XXX XXX
Feb-03 XXX XXX XXX XXX XXX
Mar-03 XXX XXX XXX XXX XXX
Apr-03 XXX XXX XXX XXX XXX
May-03 XXX XXX XXX XXX XXX
Jun-03 XXX XXX XXX XXX XXX
Jul-03 XXX XXX XXX XXX XXX
Aug-03 XXX XXX XXX XXX XXX
Sep-03 XXX XXX XXX XXX XXX
Oct-03 XXX XXX XXX XXX XXX
Nov-03 XXX XXX XXX XXX XXX
Dec-03 XXX XXX XXX XXX XXX
Jan-04 XXX XXX XXX XXX XXX
Feb-04 XXX XXX XXX XXX XXX
Mar-04 XXX XXX XXX XXX XXX
Apr-04 XXX XXX XXX XXX XXX
May-04 XXX XXX XXX XXX XXX
Jun-04 XXX XXX XXX XXX XXX
Jul-04 XXX XXX XXX XXX XXX
Aug-04 XXX XXX XXX XXX XXX
Sep-04 XXX XXX XXX XXX XXX
Oct-04 XXX XXX XXX XXX XXX
Nov-04 XXX XXX XXX XXX XXX
Dec-04 XXX XXX XXX XXX XXX
XXX REPRESENTS CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
APPENDIX 6
----------------------------------------------------------------------------------------
APPENDIX 6 BLOCK HOUR RATES
----------------------------------------------------------------------------------------
DATE B1900 ATR42 EMB120 RJ135 RJ145
---- ----- ----- ------ ----- -----
Jan-01 XXX XXX XXX XXX XXX
Feb-01 XXX XXX XXX XXX XXX
Mar-01 XXX XXX XXX XXX XXX
Apr-01 XXX XXX XXX XXX XXX
May-01 XXX XXX XXX XXX XXX
Jun-01 XXX XXX XXX XXX XXX
Jul-01 XXX XXX XXX XXX XXX
Aug-01 XXX XXX XXX XXX XXX
Sep-01 XXX XXX XXX XXX XXX
Oct-01 XXX XXX XXX XXX XXX
Nov-01 XXX XXX XXX XXX XXX
Dec-01 XXX XXX XXX XXX XXX
Jan-02 XXX XXX XXX XXX XXX
Feb-02 XXX XXX XXX XXX XXX
Mar-02 XXX XXX XXX XXX XXX
Apr-02 XXX XXX XXX XXX XXX
May-02 XXX XXX XXX XXX XXX
Jun-02 XXX XXX XXX XXX XXX
Jul-02 XXX XXX XXX XXX XXX
Aug-02 XXX XXX XXX XXX XXX
Sep-02 XXX XXX XXX XXX XXX
Oct-02 XXX XXX XXX XXX XXX
Nov-02 XXX XXX XXX XXX XXX
Dec-02 XXX XXX XXX XXX XXX
Jan-03 XXX XXX XXX XXX XXX
Feb-03 XXX XXX XXX XXX XXX
Mar-03 XXX XXX XXX XXX XXX
Apr-03 XXX XXX XXX XXX XXX
May-03 XXX XXX XXX XXX XXX
Jun-03 XXX XXX XXX XXX XXX
Jul-03 XXX XXX XXX XXX XXX
Aug-03 XXX XXX XXX XXX XXX
Sep-03 XXX XXX XXX XXX XXX
Oct-03 XXX XXX XXX XXX XXX
Nov-03 XXX XXX XXX XXX XXX
Dec-03 XXX XXX XXX XXX XXX
Jan-04 XXX XXX XXX XXX XXX
Feb-04 XXX XXX XXX XXX XXX
Mar-04 XXX XXX XXX XXX XXX
Apr-04 XXX XXX XXX XXX XXX
May-04 XXX XXX XXX XXX XXX
Jun-04 XXX XXX XXX XXX XXX
Jul-04 XXX XXX XXX XXX XXX
Aug-04 XXX XXX XXX XXX XXX
Sep-04 XXX XXX XXX XXX XXX
Oct-04 XXX XXX XXX XXX XXX
Nov-04 XXX XXX XXX XXX XXX
Dec-04 XXX XXX XXX XXX XXX
XXX REPRESENTS CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
APPENDIX 7
----------------------------------------------------------------------------------------
APPENDIX 7 BLOCK HOURS
----------------------------------------------------------------------------------------
DATE B1900 ATR42 EMB120 RJ135 RJ145
---- ----- ----- ------ ----- -----
Row 1 XXX XXX XXX XXX XXX
Row 2 XXX XXX XXX XXX XXX
Row 3 XXX XXX XXX XXX XXX
Appendix 7 Block Hours XXX XXX XXX XXX XXX
XXX REPRESENTS CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
APPENDIX 8
---------------------------------------------------------------------------------------
FIRST FORECAST FIRST FORECAST FIRST FORECAST
DATE RATES RATE - COMPONENT 1 RATE - COMPONENT 2
------ -------------- ------------------ ------------------
Jan-01 XXX XXX XXX
Feb-01 XXX XXX XXX
Mar-01 XXX XXX XXX
Apr-01 XXX XXX XXX
May-01 XXX XXX XXX
Jun-01 XXX XXX XXX
Jul-01 XXX XXX XXX
Aug-01 XXX XXX XXX
Sep-01 XXX XXX XXX
Oct-01 XXX XXX XXX
Nov-01 XXX XXX XXX
Dec-01 XXX XXX XXX
Jan-02 XXX XXX XXX
Feb-02 XXX XXX XXX
Mar-02 XXX XXX XXX
Apr-02 XXX XXX XXX
May-02 XXX XXX XXX
Jun-02 XXX XXX XXX
Jul-02 XXX XXX XXX
Aug-02 XXX XXX XXX
Sep-02 XXX XXX XXX
Oct-02 XXX XXX XXX
Nov-02 XXX XXX XXX
Dec-02 XXX XXX XXX
Jan-03 XXX XXX XXX
Feb-03 XXX XXX XXX
Mar-03 XXX XXX XXX
Apr-03 XXX XXX XXX
May-03 XXX XXX XXX
Jun-03 XXX XXX XXX
Jul-03 XXX XXX XXX
Aug-03 XXX XXX XXX
Sep-03 XXX XXX XXX
Oct-03 XXX XXX XXX
Nov-03 XXX XXX XXX
Dec-03 XXX XXX XXX
Jan-04 XXX XXX XXX
Feb-04 XXX XXX XXX
Mar-04 XXX XXX XXX
Apr-04 XXX XXX XXX
May-04 XXX XXX XXX
Jun-04 XXX XXX XXX
Jul-04 XXX XXX XXX
Aug-04 XXX XXX XXX
Sep-04 XXX XXX XXX
Oct-04 XXX XXX XXX
Nov-04 XXX XXX XXX
Dec-04 XXX XXX XXX
XXX REPRESENTS CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
APPENDIX 9
------------------------------------------------------------------------------------------------------------------------
APPENDIX 9 RATES PER BLOCK HOUR
------------------------------------------------------------------------------------------------------------------------
ATR42 B1900 EMB120 EMB135 EMB145
STAGE GALLONS STAGE GALLONS STAGE GALLONS STAGE GALLONS STAGE GALLONS
LENGTH PER BLK HR LENGTH PER BLK HR LENGTH PER BLK HR LENGTH PER BLK HR LENGTH PER BLK HR
------ ---------- ------ ---------- ------ ---------- ------ ---------- ------ ----------
XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
XXX XXX XXX XXX XXX XXX XXX XXX
XXX XXX XXX XXX XXX XXX XXX XXX
XXX XXX XXX XXX XXX XXX XXX XXX
XXX XXX XXX XXX XXX XXX XXX XXX
XXX XXX XXX XXX
XXX XXX XXX XXX
XXX XXX XXX XXX
* On January of each year (beginning January 2002), fuel burn rates increase XXX
on a compounded basis
XXX REPRESENTS CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
APPENDIX 10
----------------------------------------------------------
APPENDIX 10 FEES
----------------------------------------------------------
DATE INVOICE RATE RECONCILIATION RATE
---- ------------ -------------------
Jan-01 XXX XXX
Feb-01 XXX XXX
Mar-01 XXX XXX
Apr-01 XXX XXX
May-01 XXX XXX
Jun-01 XXX XXX
Jul-01 XXX XXX
Aug-01 XXX XXX
Sep-01 XXX XXX
Oct-01 XXX XXX
Nov-01 XXX XXX
Dec-01 XXX XXX
Jan-02 XXX XXX
Feb-02 XXX XXX
Mar-02 XXX XXX
Apr-02 XXX XXX
May-02 XXX XXX
Jun-02 XXX XXX
Jul-02 XXX XXX
Aug-02 XXX XXX
Sep-02 XXX XXX
Oct-02 XXX XXX
Nov-02 XXX XXX
Dec-02 XXX XXX
Jan-03 XXX XXX
Feb-03 XXX XXX
Mar-03 XXX XXX
Apr-03 XXX XXX
May-03 XXX XXX
Jun-03 XXX XXX
Jul-03 XXX XXX
Aug-03 XXX XXX
Sep-03 XXX XXX
Oct-03 XXX XXX
Nov-03 XXX XXX
Dec-03 XXX XXX
Jan-04 XXX XXX
Feb-04 XXX XXX
Mar-04 XXX XXX
Apr-04 XXX XXX
May-04 XXX XXX
Jun-04 XXX XXX
Jul-04 XXX XXX
Aug-04 XXX XXX
Sep-04 XXX XXX
Oct-04 XXX XXX
Nov-04 XXX XXX
Dec-04 XXX XXX
XXX REPRESENTS CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
APPENDIX 11
-----------------------------------------------------------------------------------
FIRST INCREMENTAL COST RATES
-----------------------------------------------------------------------------------
DATE B1900 ATR42 EMB120 RJ135 RJ145
---- ----- ----- ------ ----- -----
Jan-01 XXX XXX XXX XXX XXX
Feb-01 XXX XXX XXX XXX XXX
Mar-01 XXX XXX XXX XXX XXX
Apr-01 XXX XXX XXX XXX XXX
May-01 XXX XXX XXX XXX XXX
Jun-01 XXX XXX XXX XXX XXX
Jul-01 XXX XXX XXX XXX XXX
Aug-01 XXX XXX XXX XXX XXX
Sep-01 XXX XXX XXX XXX XXX
Oct-01 XXX XXX XXX XXX XXX
Nov-01 XXX XXX XXX XXX XXX
Dec-01 XXX XXX XXX XXX XXX
Jan-02 XXX XXX XXX XXX XXX
Feb-02 XXX XXX XXX XXX XXX
Mar-02 XXX XXX XXX XXX XXX
Apr-02 XXX XXX XXX XXX XXX
May-02 XXX XXX XXX XXX XXX
Jun-02 XXX XXX XXX XXX XXX
Jul-02 XXX XXX XXX XXX XXX
Aug-02 XXX XXX XXX XXX XXX
Sep-02 XXX XXX XXX XXX XXX
Oct-02 XXX XXX XXX XXX XXX
Nov-02 XXX XXX XXX XXX XXX
Dec-02 XXX XXX XXX XXX XXX
Jan-03 XXX XXX XXX XXX XXX
Feb-03 XXX XXX XXX XXX XXX
Mar-03 XXX XXX XXX XXX XXX
Apr-03 XXX XXX XXX XXX XXX
May-03 XXX XXX XXX XXX XXX
Jun-03 XXX XXX XXX XXX XXX
Jul-03 XXX XXX XXX XXX XXX
Aug-03 XXX XXX XXX XXX XXX
Sep-03 XXX XXX XXX XXX XXX
Oct-03 XXX XXX XXX XXX XXX
Nov-03 XXX XXX XXX XXX XXX
Dec-03 XXX XXX XXX XXX XXX
Jan-04 XXX XXX XXX XXX XXX
Feb-04 XXX XXX XXX XXX XXX
Mar-04 XXX XXX XXX XXX XXX
Apr-04 XXX XXX XXX XXX XXX
May-04 XXX XXX XXX XXX XXX
Jun-04 XXX XXX XXX XXX XXX
Jul-04 XXX XXX XXX XXX XXX
Aug-04 XXX XXX XXX XXX XXX
Sep-04 XXX XXX XXX XXX XXX
Oct-04 XXX XXX XXX XXX XXX
Nov-04 XXX XXX XXX XXX XXX
Dec-04 XXX XXX XXX XXX XXX
XXX REPRESENTS CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
APPENDIX 12
-------------------------------------------------------------------------------
SECOND INCREMENTAL COST RATES
-------------------------------------------------------------------------------
DATE B1900 ATR42 EMB120 RJ135 RJ145
---- ----- ----- ------ ----- -----
Jan-01 XXX XXX XXX XXX XXX
Feb-01 XXX XXX XXX XXX XXX
Mar-01 XXX XXX XXX XXX XXX
Apr-01 XXX XXX XXX XXX XXX
May-01 XXX XXX XXX XXX XXX
Jun-01 XXX XXX XXX XXX XXX
Jul-01 XXX XXX XXX XXX XXX
Aug-01 XXX XXX XXX XXX XXX
Sep-01 XXX XXX XXX XXX XXX
Oct-01 XXX XXX XXX XXX XXX
Nov-01 XXX XXX XXX XXX XXX
Dec-01 XXX XXX XXX XXX XXX
Jan-02 XXX XXX XXX XXX XXX
Feb-02 XXX XXX XXX XXX XXX
Mar-02 XXX XXX XXX XXX XXX
Apr-02 XXX XXX XXX XXX XXX
May-02 XXX XXX XXX XXX XXX
Jun-02 XXX XXX XXX XXX XXX
Jul-02 XXX XXX XXX XXX XXX
Aug-02 XXX XXX XXX XXX XXX
Sep-02 XXX XXX XXX XXX XXX
Oct-02 XXX XXX XXX XXX XXX
Nov-02 XXX XXX XXX XXX XXX
Dec-02 XXX XXX XXX XXX XXX
Jan-03 XXX XXX XXX XXX XXX
Feb-03 XXX XXX XXX XXX XXX
Mar-03 XXX XXX XXX XXX XXX
Apr-03 XXX XXX XXX XXX XXX
May-03 XXX XXX XXX XXX XXX
Jun-03 XXX XXX XXX XXX XXX
Jul-03 XXX XXX XXX XXX XXX
Aug-03 XXX XXX XXX XXX XXX
Sep-03 XXX XXX XXX XXX XXX
Oct-03 XXX XXX XXX XXX XXX
Nov-03 XXX XXX XXX XXX XXX
Dec-03 XXX XXX XXX XXX XXX
Jan-04 XXX XXX XXX XXX XXX
Feb-04 XXX XXX XXX XXX XXX
Mar-04 XXX XXX XXX XXX XXX
Apr-04 XXX XXX XXX XXX XXX
May-04 XXX XXX XXX XXX XXX
Jun-04 XXX XXX XXX XXX XXX
Jul-04 XXX XXX XXX XXX XXX
Aug-04 XXX XXX XXX XXX XXX
Sep-04 XXX XXX XXX XXX XXX
Oct-04 XXX XXX XXX XXX XXX
Nov-04 XXX XXX XXX XXX XXX
Dec-04 XXX XXX XXX XXX XXX
XXX REPRESENTS CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
APPENDIX 13
-------------------------------------------------------------------------------------------
APPENDIX 13 INCREMENTAL COST RATES
-------------------------------------------------------------------------------------------
DATE B1900 ATR42 EMB120 RJ135 RJ145
---- ----- ----- ------ ----- -----
Jan-01 XXX XXX XXX XXX XXX
Feb-01 XXX XXX XXX XXX XXX
Mar-01 XXX XXX XXX XXX XXX
Apr-01 XXX XXX XXX XXX XXX
May-01 XXX XXX XXX XXX XXX
Jun-01 XXX XXX XXX XXX XXX
Jul-01 XXX XXX XXX XXX XXX
Aug-01 XXX XXX XXX XXX XXX
Sep-01 XXX XXX XXX XXX XXX
Oct-01 XXX XXX XXX XXX XXX
Nov-01 XXX XXX XXX XXX XXX
Dec-01 XXX XXX XXX XXX XXX
Jan-02 XXX XXX XXX XXX XXX
Feb-02 XXX XXX XXX XXX XXX
Mar-02 XXX XXX XXX XXX XXX
Apr-02 XXX XXX XXX XXX XXX
May-02 XXX XXX XXX XXX XXX
Jun-02 XXX XXX XXX XXX XXX
Jul-02 XXX XXX XXX XXX XXX
Aug-02 XXX XXX XXX XXX XXX
Sep-02 XXX XXX XXX XXX XXX
Oct-02 XXX XXX XXX XXX XXX
Nov-02 XXX XXX XXX XXX XXX
Dec-02 XXX XXX XXX XXX XXX
Jan-03 XXX XXX XXX XXX XXX
Feb-03 XXX XXX XXX XXX XXX
Mar-03 XXX XXX XXX XXX XXX
Apr-03 XXX XXX XXX XXX XXX
May-03 XXX XXX XXX XXX XXX
Jun-03 XXX XXX XXX XXX XXX
Jul-03 XXX XXX XXX XXX XXX
Aug-03 XXX XXX XXX XXX XXX
Sep-03 XXX XXX XXX XXX XXX
Oct-03 XXX XXX XXX XXX XXX
Nov-03 XXX XXX XXX XXX XXX
Dec-03 XXX XXX XXX XXX XXX
Jan-04 XXX XXX XXX XXX XXX
Feb-04 XXX XXX XXX XXX XXX
Mar-04 XXX XXX XXX XXX XXX
Apr-04 XXX XXX XXX XXX XXX
May-04 XXX XXX XXX XXX XXX
Jun-04 XXX XXX XXX XXX XXX
Jul-04 XXX XXX XXX XXX XXX
Aug-04 XXX XXX XXX XXX XXX
Sep-04 XXX XXX XXX XXX XXX
Oct-04 XXX XXX XXX XXX XXX
Nov-04 XXX XXX XXX XXX XXX
Dec-04 XXX XXX XXX XXX XXX
XXX REPRESENTS CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
APPENDIX 14
------------------------------------------------------------------------------------
APPENDIX 14 BLOCK HOUR RATES
------------------------------------------------------------------------------------
DATE B1900 ATR42 EMB120 RJ135 RJ145
---- ----- ----- ------ ----- -----
BENCHMARK SL XXX XXX XXX XXX XXX
Jan-01 XXX XXX XXX XXX XXX
Feb-01 XXX XXX XXX XXX XXX
Mar-01 XXX XXX XXX XXX XXX
Apr-01 XXX XXX XXX XXX XXX
May-01 XXX XXX XXX XXX XXX
Jun-01 XXX XXX XXX XXX XXX
Jul-01 XXX XXX XXX XXX XXX
Aug-01 XXX XXX XXX XXX XXX
Sep-01 XXX XXX XXX XXX XXX
Oct-01 XXX XXX XXX XXX XXX
Nov-01 XXX XXX XXX XXX XXX
Dec-01 XXX XXX XXX XXX XXX
Jan-02 XXX XXX XXX XXX XXX
Feb-02 XXX XXX XXX XXX XXX
Mar-02 XXX XXX XXX XXX XXX
Apr-02 XXX XXX XXX XXX XXX
May-02 XXX XXX XXX XXX XXX
Jun-02 XXX XXX XXX XXX XXX
Jul-02 XXX XXX XXX XXX XXX
Aug-02 XXX XXX XXX XXX XXX
Sep-02 XXX XXX XXX XXX XXX
Oct-02 XXX XXX XXX XXX XXX
Nov-02 XXX XXX XXX XXX XXX
Dec-02 XXX XXX XXX XXX XXX
Jan-03 XXX XXX XXX XXX XXX
Feb-03 XXX XXX XXX XXX XXX
Mar-03 XXX XXX XXX XXX XXX
Apr-03 XXX XXX XXX XXX XXX
May-03 XXX XXX XXX XXX XXX
Jun-03 XXX XXX XXX XXX XXX
Jul-03 XXX XXX XXX XXX XXX
Aug-03 XXX XXX XXX XXX XXX
Sep-03 XXX XXX XXX XXX XXX
Oct-03 XXX XXX XXX XXX XXX
Nov-03 XXX XXX XXX XXX XXX
Dec-03 XXX XXX XXX XXX XXX
Jan-04 XXX XXX XXX XXX XXX
Feb-04 XXX XXX XXX XXX XXX
Mar-04 XXX XXX XXX XXX XXX
Apr-04 XXX XXX XXX XXX XXX
May-04 XXX XXX XXX XXX XXX
Jun-04 XXX XXX XXX XXX XXX
Jul-04 XXX XXX XXX XXX XXX
Aug-04 XXX XXX XXX XXX XXX
Sep-04 XXX XXX XXX XXX XXX
Oct-04 XXX XXX XXX XXX XXX
Nov-04 XXX XXX XXX XXX XXX
Dec-04 XXX XXX XXX XXX XXX
XXX REPRESENTS CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
APPENDIX 15
-----------------------------------------------------------------------------
FIFTH INCREMENTAL COST RATE ALLOCATION
-----------------------------------------------------------------------------
EXPENSE ALLOCATION METHODOLOGY
------- ----------------------
Aircraft Rent XXX
Maintenance Overhead XXX
Hull Insurance XXX
Employee Incentives XXX
Property Taxes XXX
Depreciation XXX
Management Fee XXX
General & Administrative XXX
Airport Overhead XXX
CAL Fixed Pool of Expenses XXX
Glycol XXX
Snow Removal XXX
De-icing XXX
Airport Facility Rent XXX
XXX REPRESENTS CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
APPENDIX 16a
------------------------------------------------------------------------------------------------------------------------
PILOT HOTEL VOLUME
------------------------------------------------------------------------------------------------------------------------
COST PER CONTRACT CONTRACT HOTEL STAYS PER RATE PER BLOCK HOUR FOR
DATE HOTEL STAY SCHEDULED BLOCK HOUR EXTRAORDINARY HOTEL STAYS
---- ----------------- ------------------------ -------------------------
Jan-01 XXX XXX XXX
Feb-01 XXX XXX XXX
Mar-01 XXX XXX XXX
Apr-01 XXX XXX XXX
May-01 XXX XXX XXX
Jun-01 XXX XXX XXX
Jul-01 XXX XXX XXX
Aug-01 XXX XXX XXX
Sep-01 XXX XXX XXX
Oct-01 XXX XXX XXX
Nov-01 XXX XXX XXX
Dec-01 XXX XXX XXX
Jan-02 XXX XXX XXX
Feb-02 XXX XXX XXX
Mar-02 XXX XXX XXX
Apr-02 XXX XXX XXX
May-02 XXX XXX XXX
Jun-02 XXX XXX XXX
Jul-02 XXX XXX XXX
Aug-02 XXX XXX XXX
Sep-02 XXX XXX XXX
Oct-02 XXX XXX XXX
Nov-02 XXX XXX XXX
Dec-02 XXX XXX XXX
Jan-03 XXX XXX XXX
Feb-03 XXX XXX XXX
Mar-03 XXX XXX XXX
Apr-03 XXX XXX XXX
May-03 XXX XXX XXX
Jun-03 XXX XXX XXX
Jul-03 XXX XXX XXX
Aug-03 XXX XXX XXX
Sep-03 XXX XXX XXX
Oct-03 XXX XXX XXX
Nov-03 XXX XXX XXX
Dec-03 XXX XXX XXX
Jan-04 XXX XXX XXX
Feb-04 XXX XXX XXX
Mar-04 XXX XXX XXX
Apr-04 XXX XXX XXX
May-04 XXX XXX XXX
Jun-04 XXX XXX XXX
Jul-04 XXX XXX XXX
Aug-04 XXX XXX XXX
Sep-04 XXX XXX XXX
Oct-04 XXX XXX XXX
Nov-04 XXX XXX XXX
Dec-04 XXX XXX XXX
XXX REPRESENTS CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
APPENDIX 16b
-------------------------------------------------------------------------------------------------------------
FLIGHT ATTENDANT HOTEL VOLUME
-------------------------------------------------------------------------------------------------------------
COST PER CONTRACT CONTRACT HOTEL STAYS PER RATE PER BLOCK HOUR FOR
DATE HOTEL STAY SCHEDULED BLOCK HOUR EXTRAORDINARY HOTEL STAYS
---- ----------------- ------------------------ -------------------------
Jan-01 XXX XXX XXX
Feb-01 XXX XXX XXX
Mar-01 XXX XXX XXX
Apr-01 XXX XXX XXX
May-01 XXX XXX XXX
Jun-01 XXX XXX XXX
Jul-01 XXX XXX XXX
Aug-01 XXX XXX XXX
Sep-01 XXX XXX XXX
Oct-01 XXX XXX XXX
Nov-01 XXX XXX XXX
Dec-01 XXX XXX XXX
Jan-02 XXX XXX XXX
Feb-02 XXX XXX XXX
Mar-02 XXX XXX XXX
Apr-02 XXX XXX XXX
May-02 XXX XXX XXX
Jun-02 XXX XXX XXX
Jul-02 XXX XXX XXX
Aug-02 XXX XXX XXX
Sep-02 XXX XXX XXX
Oct-02 XXX XXX XXX
Nov-02 XXX XXX XXX
Dec-02 XXX XXX XXX
Jan-03 XXX XXX XXX
Feb-03 XXX XXX XXX
Mar-03 XXX XXX XXX
Apr-03 XXX XXX XXX
May-03 XXX XXX XXX
Jun-03 XXX XXX XXX
Jul-03 XXX XXX XXX
Aug-03 XXX XXX XXX
Sep-03 XXX XXX XXX
Oct-03 XXX XXX XXX
Nov-03 XXX XXX XXX
Dec-03 XXX XXX XXX
Jan-04 XXX XXX XXX
Feb-04 XXX XXX XXX
Mar-04 XXX XXX XXX
Apr-04 XXX XXX XXX
May-04 XXX XXX XXX
Jun-04 XXX XXX XXX
Jul-04 XXX XXX XXX
Aug-04 XXX XXX XXX
Sep-04 XXX XXX XXX
Oct-04 XXX XXX XXX
Nov-04 XXX XXX XXX
Dec-04 XXX XXX XXX
XXX REPRESENTS CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
APPENDIX 17a
---------------------------------------------------------------------------------------
ASSUMED PILOT TRAINING COST PER CYCLE
---------------------------------------------------------------------------------------
TRAINING CYCLE 2001 2002 2003 2004
-------------- ---- ---- ---- ----
RJ
Transitional XXX XXX XXX XXX
Upgrade XXX XXX XXX XXX
New Hire XXX XXX XXX XXX
Recur Ground XXX XXX XXX XXX
Recur Flight XXX XXX XXX XXX
ATR
Transitional XXX XXX XXX XXX
Upgrade XXX XXX XXX XXX
New Hire XXX XXX XXX XXX
Recur Ground XXX XXX XXX XXX
Recur Flight XXX XXX XXX XXX
120
Transitional XXX XXX XXX XXX
Upgrade XXX XXX XXX XXX
New Hire XXX XXX XXX XXX
Recur Ground XXX XXX XXX XXX
Recur Flight XXX XXX XXX XXX
BEECH
Transitional XXX XXX XXX XXX
Upgrade XXX XXX XXX XXX
New Hire XXX XXX XXX XXX
Recur Ground XXX XXX XXX XXX
Recur Flight XXX XXX XXX XXX
TOTAL
Transitional XXX XXX XXX XXX
Upgrade XXX XXX XXX XXX
New Hire XXX XXX XXX XXX
Recur Ground XXX XXX XXX XXX
Recur Flight XXX XXX XXX XXX
XXX REPRESENTS CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
APPENDIX 17b
----------------------------------------------------------------
PILOT NEW HIRE TRAINING CYCLES
----------------------------------------------------------------
DATE B1900 ATR EMB120 RJ
---- ----- --- ------ ---
Jan-01 XXX XXX XXX XXX
Feb-01 XXX XXX XXX XXX
Mar-01 XXX XXX XXX XXX
Apr-01 XXX XXX XXX XXX
May-01 XXX XXX XXX XXX
Jun-01 XXX XXX XXX XXX
Jul-01 XXX XXX XXX XXX
Aug-01 XXX XXX XXX XXX
Sep-01 XXX XXX XXX XXX
Oct-01 XXX XXX XXX XXX
Nov-01 XXX XXX XXX XXX
Dec-01 XXX XXX XXX XXX
Jan-02 XXX XXX XXX XXX
Feb-02 XXX XXX XXX XXX
Mar-02 XXX XXX XXX XXX
Apr-02 XXX XXX XXX XXX
May-02 XXX XXX XXX XXX
Jun-02 XXX XXX XXX XXX
Jul-02 XXX XXX XXX XXX
Aug-02 XXX XXX XXX XXX
Sep-02 XXX XXX XXX XXX
Oct-02 XXX XXX XXX XXX
Nov-02 XXX XXX XXX XXX
Dec-02 XXX XXX XXX XXX
Jan-03 XXX XXX XXX XXX
Feb-03 XXX XXX XXX XXX
Mar-03 XXX XXX XXX XXX
Apr-03 XXX XXX XXX XXX
May-03 XXX XXX XXX XXX
Jun-03 XXX XXX XXX XXX
Jul-03 XXX XXX XXX XXX
Aug-03 XXX XXX XXX XXX
Sep-03 XXX XXX XXX XXX
Oct-03 XXX XXX XXX XXX
Nov-03 XXX XXX XXX XXX
Dec-03 XXX XXX XXX XXX
Jan-04 XXX XXX XXX XXX
Feb-04 XXX XXX XXX XXX
Mar-04 XXX XXX XXX XXX
Apr-04 XXX XXX XXX XXX
May-04 XXX XXX XXX XXX
Jun-04 XXX XXX XXX XXX
Jul-04 XXX XXX XXX XXX
Aug-04 XXX XXX XXX XXX
Sep-04 XXX XXX XXX XXX
Oct-04 XXX XXX XXX XXX
Nov-04 XXX XXX XXX XXX
Dec-04 XXX XXX XXX XXX
XXX REPRESENTS CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
APPENDIX 17c
----------------------------------------------------------------
PILOT TRANSITIONAL TRAINING CYCLES
----------------------------------------------------------------
DATE B1900 ATR EMB120 RJ
---- ----- --- ------ --
Jan-01 XXX XXX XXX XXX
Feb-01 XXX XXX XXX XXX
Mar-01 XXX XXX XXX XXX
Apr-01 XXX XXX XXX XXX
May-01 XXX XXX XXX XXX
Jun-01 XXX XXX XXX XXX
Jul-01 XXX XXX XXX XXX
Aug-01 XXX XXX XXX XXX
Sep-01 XXX XXX XXX XXX
Oct-01 XXX XXX XXX XXX
Nov-01 XXX XXX XXX XXX
Dec-01 XXX XXX XXX XXX
Jan-02 XXX XXX XXX XXX
Feb-02 XXX XXX XXX XXX
Mar-02 XXX XXX XXX XXX
Apr-02 XXX XXX XXX XXX
May-02 XXX XXX XXX XXX
Jun-02 XXX XXX XXX XXX
Jul-02 XXX XXX XXX XXX
Aug-02 XXX XXX XXX XXX
Sep-02 XXX XXX XXX XXX
Oct-02 XXX XXX XXX XXX
Nov-02 XXX XXX XXX XXX
Dec-02 XXX XXX XXX XXX
Jan-03 XXX XXX XXX XXX
Feb-03 XXX XXX XXX XXX
Mar-03 XXX XXX XXX XXX
Apr-03 XXX XXX XXX XXX
May-03 XXX XXX XXX XXX
Jun-03 XXX XXX XXX XXX
Jul-03 XXX XXX XXX XXX
Aug-03 XXX XXX XXX XXX
Sep-03 XXX XXX XXX XXX
Oct-03 XXX XXX XXX XXX
Nov-03 XXX XXX XXX XXX
Dec-03 XXX XXX XXX XXX
Jan-04 XXX XXX XXX XXX
Feb-04 XXX XXX XXX XXX
Mar-04 XXX XXX XXX XXX
Apr-04 XXX XXX XXX XXX
May-04 XXX XXX XXX XXX
Jun-04 XXX XXX XXX XXX
Jul-04 XXX XXX XXX XXX
Aug-04 XXX XXX XXX XXX
Sep-04 XXX XXX XXX XXX
Oct-04 XXX XXX XXX XXX
Nov-04 XXX XXX XXX XXX
Dec-04 XXX XXX XXX XXX
XXX REPRESENTS CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
APPENDIX 17d
----------------------------------------------------------------
PILOT UPGRADE TRAINING CYCLES
----------------------------------------------------------------
DATE B1900 ATR EMB120 RJ
---- ----- --- ------ --
Jan-01 XXX XXX XXX XXX
Feb-01 XXX XXX XXX XXX
Mar-01 XXX XXX XXX XXX
Apr-01 XXX XXX XXX XXX
May-01 XXX XXX XXX XXX
Jun-01 XXX XXX XXX XXX
Jul-01 XXX XXX XXX XXX
Aug-01 XXX XXX XXX XXX
Sep-01 XXX XXX XXX XXX
Oct-01 XXX XXX XXX XXX
Nov-01 XXX XXX XXX XXX
Dec-01 XXX XXX XXX XXX
Jan-02 XXX XXX XXX XXX
Feb-02 XXX XXX XXX XXX
Mar-02 XXX XXX XXX XXX
Apr-02 XXX XXX XXX XXX
May-02 XXX XXX XXX XXX
Jun-02 XXX XXX XXX XXX
Jul-02 XXX XXX XXX XXX
Aug-02 XXX XXX XXX XXX
Sep-02 XXX XXX XXX XXX
Oct-02 XXX XXX XXX XXX
Nov-02 XXX XXX XXX XXX
Dec-02 XXX XXX XXX XXX
Jan-03 XXX XXX XXX XXX
Feb-03 XXX XXX XXX XXX
Mar-03 XXX XXX XXX XXX
Apr-03 XXX XXX XXX XXX
May-03 XXX XXX XXX XXX
Jun-03 XXX XXX XXX XXX
Jul-03 XXX XXX XXX XXX
Aug-03 XXX XXX XXX XXX
Sep-03 XXX XXX XXX XXX
Oct-03 XXX XXX XXX XXX
Nov-03 XXX XXX XXX XXX
Dec-03 XXX XXX XXX XXX
Jan-04 XXX XXX XXX XXX
Feb-04 XXX XXX XXX XXX
Mar-04 XXX XXX XXX XXX
Apr-04 XXX XXX XXX XXX
May-04 XXX XXX XXX XXX
Jun-04 XXX XXX XXX XXX
Jul-04 XXX XXX XXX XXX
Aug-04 XXX XXX XXX XXX
Sep-04 XXX XXX XXX XXX
Oct-04 XXX XXX XXX XXX
Nov-04 XXX XXX XXX XXX
Dec-04 XXX XXX XXX XXX
XXX REPRESENTS CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
APPENDIX 17e
----------------------------------------------------------------
PILOT RECURRENT FLIGHT TRAINING CYCLES
----------------------------------------------------------------
DATE B1900 ATR EMB120 RJ
---- ----- --- ------ ---
Jan-01 XXX XXX XXX XXX
Feb-01 XXX XXX XXX XXX
Mar-01 XXX XXX XXX XXX
Apr-01 XXX XXX XXX XXX
May-01 XXX XXX XXX XXX
Jun-01 XXX XXX XXX XXX
Jul-01 XXX XXX XXX XXX
Aug-01 XXX XXX XXX XXX
Sep-01 XXX XXX XXX XXX
Oct-01 XXX XXX XXX XXX
Nov-01 XXX XXX XXX XXX
Dec-01 XXX XXX XXX XXX
Jan-02 XXX XXX XXX XXX
Feb-02 XXX XXX XXX XXX
Mar-02 XXX XXX XXX XXX
Apr-02 XXX XXX XXX XXX
May-02 XXX XXX XXX XXX
Jun-02 XXX XXX XXX XXX
Jul-02 XXX XXX XXX XXX
Aug-02 XXX XXX XXX XXX
Sep-02 XXX XXX XXX XXX
Oct-02 XXX XXX XXX XXX
Nov-02 XXX XXX XXX XXX
Dec-02 XXX XXX XXX XXX
Jan-03 XXX XXX XXX XXX
Feb-03 XXX XXX XXX XXX
Mar-03 XXX XXX XXX XXX
Apr-03 XXX XXX XXX XXX
May-03 XXX XXX XXX XXX
Jun-03 XXX XXX XXX XXX
Jul-03 XXX XXX XXX XXX
Aug-03 XXX XXX XXX XXX
Sep-03 XXX XXX XXX XXX
Oct-03 XXX XXX XXX XXX
Nov-03 XXX XXX XXX XXX
Dec-03 XXX XXX XXX XXX
Jan-04 XXX XXX XXX XXX
Feb-04 XXX XXX XXX XXX
Mar-04 XXX XXX XXX XXX
Apr-04 XXX XXX XXX XXX
May-04 XXX XXX XXX XXX
Jun-04 XXX XXX XXX XXX
Jul-04 XXX XXX XXX XXX
Aug-04 XXX XXX XXX XXX
Sep-04 XXX XXX XXX XXX
Oct-04 XXX XXX XXX XXX
Nov-04 XXX XXX XXX XXX
Dec-04 XXX XXX XXX XXX
XXX REPRESENTS CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
APPENDIX 17f
---------------------------------------------------------------
PILOT RECURRENT GROUND TRAINING CYCLES
---------------------------------------------------------------
DATE B1900 ATR EMB120 RJ
---- ----- --- ------ ---
Jan-01 XXX XXX XXX XXX
Feb-01 XXX XXX XXX XXX
Mar-01 XXX XXX XXX XXX
Apr-01 XXX XXX XXX XXX
May-01 XXX XXX XXX XXX
Jun-01 XXX XXX XXX XXX
Jul-01 XXX XXX XXX XXX
Aug-01 XXX XXX XXX XXX
Sep-01 XXX XXX XXX XXX
Oct-01 XXX XXX XXX XXX
Nov-01 XXX XXX XXX XXX
Dec-01 XXX XXX XXX XXX
Jan-02 XXX XXX XXX XXX
Feb-02 XXX XXX XXX XXX
Mar-02 XXX XXX XXX XXX
Apr-02 XXX XXX XXX XXX
May-02 XXX XXX XXX XXX
Jun-02 XXX XXX XXX XXX
Jul-02 XXX XXX XXX XXX
Aug-02 XXX XXX XXX XXX
Sep-02 XXX XXX XXX XXX
Oct-02 XXX XXX XXX XXX
Nov-02 XXX XXX XXX XXX
Dec-02 XXX XXX XXX XXX
Jan-03 XXX XXX XXX XXX
Feb-03 XXX XXX XXX XXX
Mar-03 XXX XXX XXX XXX
Apr-03 XXX XXX XXX XXX
May-03 XXX XXX XXX XXX
Jun-03 XXX XXX XXX XXX
Jul-03 XXX XXX XXX XXX
Aug-03 XXX XXX XXX XXX
Sep-03 XXX XXX XXX XXX
Oct-03 XXX XXX XXX XXX
Nov-03 XXX XXX XXX XXX
Dec-03 XXX XXX XXX XXX
Jan-04 XXX XXX XXX XXX
Feb-04 XXX XXX XXX XXX
Mar-04 XXX XXX XXX XXX
Apr-04 XXX XXX XXX XXX
May-04 XXX XXX XXX XXX
Jun-04 XXX XXX XXX XXX
Jul-04 XXX XXX XXX XXX
Aug-04 XXX XXX XXX XXX
Sep-04 XXX XXX XXX XXX
Oct-04 XXX XXX XXX XXX
Nov-04 XXX XXX XXX XXX
Dec-04 XXX XXX XXX XXX
XXX REPRESENTS CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
APPENDIX 18a
-------------------------------------------------------------------
PILOT PER DIEM
-------------------------------------------------------------------
AMOUNT PAYABLE PER DIEM HOURS PER
DATE PER DIEM HOUR SCHEDULED BLOCK HOUR
---- -------------- --------------------
Jan-01 XXX XXX
Feb-01 XXX XXX
Mar-01 XXX XXX
Apr-01 XXX XXX
May-01 XXX XXX
Jun-01 XXX XXX
Jul-01 XXX XXX
Aug-01 XXX XXX
Sep-01 XXX XXX
Oct-01 XXX XXX
Nov-01 XXX XXX
Dec-01 XXX XXX
Jan-02 XXX XXX
Feb-02 XXX XXX
Mar-02 XXX XXX
Apr-02 XXX XXX
May-02 XXX XXX
Jun-02 XXX XXX
Jul-02 XXX XXX
Aug-02 XXX XXX
Sep-02 XXX XXX
Oct-02 XXX XXX
Nov-02 XXX XXX
Dec-02 XXX XXX
Jan-03 XXX XXX
Feb-03 XXX XXX
Mar-03 XXX XXX
Apr-03 XXX XXX
May-03 XXX XXX
Jun-03 XXX XXX
Jul-03 XXX XXX
Aug-03 XXX XXX
Sep-03 XXX XXX
Oct-03 XXX XXX
Nov-03 XXX XXX
Dec-03 XXX XXX
Jan-04 XXX XXX
Feb-04 XXX XXX
Mar-04 XXX XXX
Apr-04 XXX XXX
May-04 XXX XXX
Jun-04 XXX XXX
Jul-04 XXX XXX
Aug-04 XXX XXX
Sep-04 XXX XXX
Oct-04 XXX XXX
Nov-04 XXX XXX
Dec-04 XXX XXX
XXX REPRESENTS CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
APPENDIX 18b
------------------------------------------------------------------------------
FLIGHT ATTENDANT PER DIEM
------------------------------------------------------------------------------
AMOUNT PAYABLE PER DIEM HOURS PER
DATE PER DIEM HOUR SCHEDULED BLOCK HOUR
---- ------------- --------------------
Jan-01 XXX XXX
Feb-01 XXX XXX
Mar-01 XXX XXX
Apr-01 XXX XXX
May-01 XXX XXX
Jun-01 XXX XXX
Jul-01 XXX XXX
Aug-01 XXX XXX
Sep-01 XXX XXX
Oct-01 XXX XXX
Nov-01 XXX XXX
Dec-01 XXX XXX
Jan-02 XXX XXX
Feb-02 XXX XXX
Mar-02 XXX XXX
Apr-02 XXX XXX
May-02 XXX XXX
Jun-02 XXX XXX
Jul-02 XXX XXX
Aug-02 XXX XXX
Sep-02 XXX XXX
Oct-02 XXX XXX
Nov-02 XXX XXX
Dec-02 XXX XXX
Jan-03 XXX XXX
Feb-03 XXX XXX
Mar-03 XXX XXX
Apr-03 XXX XXX
May-03 XXX XXX
Jun-03 XXX XXX
Jul-03 XXX XXX
Aug-03 XXX XXX
Sep-03 XXX XXX
Oct-03 XXX XXX
Nov-03 XXX XXX
Dec-03 XXX XXX
Jan-04 XXX XXX
Feb-04 XXX XXX
Mar-04 XXX XXX
Apr-04 XXX XXX
May-04 XXX XXX
Jun-04 XXX XXX
Jul-04 XXX XXX
Aug-04 XXX XXX
Sep-04 XXX XXX
Oct-04 XXX XXX
Nov-04 XXX XXX
Dec-04 XXX XXX
XXX REPRESENTS CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
APPENDIX 19
------------------------------------------------------------------------------
PILOT SOFT TIME RECONCILIATION
------------------------------------------------------------------------------
AMOUNT PAYABLE PER FLIGHT PAID HOURS PER SCHEDULED
DATE FLIGHT PAID HOUR PILOT BLOCK HOUR
---- ------------------ -------------------------------
Jan-01 XXX XXX
Feb-01 XXX XXX
Mar-01 XXX XXX
Apr-01 XXX XXX
May-01 XXX XXX
Jun-01 XXX XXX
Jul-01 XXX XXX
Aug-01 XXX XXX
Sep-01 XXX XXX
Oct-01 XXX XXX
Nov-01 XXX XXX
Dec-01 XXX XXX
Jan-02 XXX XXX
Feb-02 XXX XXX
Mar-02 XXX XXX
Apr-02 XXX XXX
May-02 XXX XXX
Jun-02 XXX XXX
Jul-02 XXX XXX
Aug-02 XXX XXX
Sep-02 XXX XXX
Oct-02 XXX XXX
Nov-02 XXX XXX
Dec-02 XXX XXX
Jan-03 XXX XXX
Feb-03 XXX XXX
Mar-03 XXX XXX
Apr-03 XXX XXX
May-03 XXX XXX
Jun-03 XXX XXX
Jul-03 XXX XXX
Aug-03 XXX XXX
Sep-03 XXX XXX
Oct-03 XXX XXX
Nov-03 XXX XXX
Dec-03 XXX XXX
Jan-04 XXX XXX
Feb-04 XXX XXX
Mar-04 XXX XXX
Apr-04 XXX XXX
May-04 XXX XXX
Jun-04 XXX XXX
Jul-04 XXX XXX
Aug-04 XXX XXX
Sep-04 XXX XXX
Oct-04 XXX XXX
Nov-04 XXX XXX
Dec-04 XXX XXX
XXX REPRESENTS CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
APPENDIX 20
---------------------------------------------------------------------------------------
PILOT SENIORITY RECONCILIATION
---------------------------------------------------------------------------------------
AGGREGATE CONTINENTAL PILOTS AMOUNT PAYABLE PER AGGREGATE
DATE TERMINATED BY CONTRACTOR CONTINENTAL PILOT TERMINATED
------- ---------------------------- ----------------------------
Jan-01 XXX XXX
Feb-01 XXX XXX
Mar-01 XXX XXX
Apr-01 XXX XXX
May-01 XXX XXX
Jun-01 XXX XXX
Jul-01 XXX XXX
Aug-01 XXX XXX
Sep-01 XXX XXX
Oct-01 XXX XXX
Nov-01 XXX XXX
Dec-01 XXX XXX
Jan-02 XXX XXX
Feb-02 XXX XXX
Mar-02 XXX XXX
Apr-02 XXX XXX
May-02 XXX XXX
Jun-02 XXX XXX
Jul-02 XXX XXX
Aug-02 XXX XXX
Sep-02 XXX XXX
Oct-02 XXX XXX
Nov-02 XXX XXX
Dec-02 XXX XXX
Jan-03 XXX XXX
Feb-03 XXX XXX
Mar-03 XXX XXX
Apr-03 XXX XXX
May-03 XXX XXX
Jun-03 XXX XXX
Jul-03 XXX XXX
Aug-03 XXX XXX
Sep-03 XXX XXX
Oct-03 XXX XXX
Nov-03 XXX XXX
Dec-03 XXX XXX
Jan-04 XXX XXX
Feb-04 XXX XXX
Mar-04 XXX XXX
Apr-04 XXX XXX
May-04 XXX XXX
Jun-04 XXX XXX
Jul-04 XXX XXX
Aug-04 XXX XXX
Sep-04 XXX XXX
Oct-04 XXX XXX
Nov-04 XXX XXX
Dec-04 XXX XXX
XXX REPRESENTS CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
APPENDIX 21
------------------------------------------------------------------------------------------------------------------------
AIRPORT AGENT VOLUME RECONCILIATION
------------------------------------------------------------------------------------------------------------------------
AMOUNT PAYABLE PER AGENT IMPLIED IMPLIED IMPLIED IMPLIED
DATE AGENT PAID HOUR PAID HOURS SICK TIME % OVERTIME % HOLIDAY % VACATION %
------ ------------------ ---------- ----------- ---------- --------- ----------
Jan-01 XXX XXX XXX XXX XXX XXX
Feb-01 XXX XXX XXX XXX XXX XXX
Mar-01 XXX XXX XXX XXX XXX XXX
Apr-01 XXX XXX XXX XXX XXX XXX
May-01 XXX XXX XXX XXX XXX XXX
Jun-01 XXX XXX XXX XXX XXX XXX
Jul-01 XXX XXX XXX XXX XXX XXX
Aug-01 XXX XXX XXX XXX XXX XXX
Sep-01 XXX XXX XXX XXX XXX XXX
Oct-01 XXX XXX XXX XXX XXX XXX
Nov-01 XXX XXX XXX XXX XXX XXX
Dec-01 XXX XXX XXX XXX XXX XXX
Jan-02 XXX XXX XXX XXX XXX XXX
Feb-02 XXX XXX XXX XXX XXX XXX
Mar-02 XXX XXX XXX XXX XXX XXX
Apr-02 XXX XXX XXX XXX XXX XXX
May-02 XXX XXX XXX XXX XXX XXX
Jun-02 XXX XXX XXX XXX XXX XXX
Jul-02 XXX XXX XXX XXX XXX XXX
Aug-02 XXX XXX XXX XXX XXX XXX
Sep-02 XXX XXX XXX XXX XXX XXX
Oct-02 XXX XXX XXX XXX XXX XXX
Nov-02 XXX XXX XXX XXX XXX XXX
Dec-02 XXX XXX XXX XXX XXX XXX
Jan-03 XXX XXX XXX XXX XXX XXX
Feb-03 XXX XXX XXX XXX XXX XXX
Mar-03 XXX XXX XXX XXX XXX XXX
Apr-03 XXX XXX XXX XXX XXX XXX
May-03 XXX XXX XXX XXX XXX XXX
Jun-03 XXX XXX XXX XXX XXX XXX
Jul-03 XXX XXX XXX XXX XXX XXX
Aug-03 XXX XXX XXX XXX XXX XXX
Sep-03 XXX XXX XXX XXX XXX XXX
Oct-03 XXX XXX XXX XXX XXX XXX
Nov-03 XXX XXX XXX XXX XXX XXX
Dec-03 XXX XXX XXX XXX XXX XXX
Jan-04 XXX XXX XXX XXX XXX XXX
Feb-04 XXX XXX XXX XXX XXX XXX
Mar-04 XXX XXX XXX XXX XXX XXX
Apr-04 XXX XXX XXX XXX XXX XXX
May-04 XXX XXX XXX XXX XXX XXX
Jun-04 XXX XXX XXX XXX XXX XXX
Jul-04 XXX XXX XXX XXX XXX XXX
Aug-04 XXX XXX XXX XXX XXX XXX
Sep-04 XXX XXX XXX XXX XXX XXX
Oct-04 XXX XXX XXX XXX XXX XXX
Nov-04 XXX XXX XXX XXX XXX XXX
Dec-04 XXX XXX XXX XXX XXX XXX
XXX REPRESENTS CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
APPENDIX 22
-----------------------------------------------------------------------------------------------------------------
RECONCILIATION OF EXPENSES (000'S)
-----------------------------------------------------------------------------------------------------------------
B(9)(a) B(9)(a) B(9)(a) B(9)(a) B(9)(a) B(9)(a) B(9)(a) B(9)(a) B(9)(a) B(9)(a) B(9)(a) B(9)(a)
DATE (i) (ii) (iii) (iv) (v) (v) (vi) (vii) (viii) (viii) (viii) (ix)
------ ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Jan-01 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Feb-01 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Mar-01 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Apr-01 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
May-01 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Jun-01 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Jul-01 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Aug-01 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Sep-01 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Oct-01 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Nov-01 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Dec-01 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Jan-02 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Feb-02 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Mar-02 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Apr-02 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
May-02 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Jun-02 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Jul-02 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Aug-02 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Sep-02 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Oct-02 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Nov-02 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Dec-02 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Jan-03 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Feb-03 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Mar-03 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Apr-03 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
May-03 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Jun-03 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Jul-03 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Aug-03 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Sep-03 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Oct-03 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Nov-03 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Dec-03 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Jan-04 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Feb-04 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Mar-04 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Apr-04 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
May-04 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Jun-04 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Jul-04 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Aug-04 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Sep-04 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Oct-04 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Nov-04 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
Dec-04 XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX
-----------------------------------------------------
RECONCILIATION OF EXPENSES (000'S)
-----------------------------------------------------
B(9)(a) B(9)(a) B(9)(a) B(9)(a) B(9)(a)
DATE (x) (xi) (xii) (xiv) (xv)
------ ------- ------- ------- ------- -------
Jan-01 XXX XXX XXX XXX XXX
Feb-01 XXX XXX XXX XXX XXX
Mar-01 XXX XXX XXX XXX XXX
Apr-01 XXX XXX XXX XXX XXX
May-01 XXX XXX XXX XXX XXX
Jun-01 XXX XXX XXX XXX XXX
Jul-01 XXX XXX XXX XXX XXX
Aug-01 XXX XXX XXX XXX XXX
Sep-01 XXX XXX XXX XXX XXX
Oct-01 XXX XXX XXX XXX XXX
Nov-01 XXX XXX XXX XXX XXX
Dec-01 XXX XXX XXX XXX XXX
Jan-02 XXX XXX XXX XXX XXX
Feb-02 XXX XXX XXX XXX XXX
Mar-02 XXX XXX XXX XXX XXX
Apr-02 XXX XXX XXX XXX XXX
May-02 XXX XXX XXX XXX XXX
Jun-02 XXX XXX XXX XXX XXX
Jul-02 XXX XXX XXX XXX XXX
Aug-02 XXX XXX XXX XXX XXX
Sep-02 XXX XXX XXX XXX XXX
Oct-02 XXX XXX XXX XXX XXX
Nov-02 XXX XXX XXX XXX XXX
Dec-02 XXX XXX XXX XXX XXX
Jan-03 XXX XXX XXX XXX XXX
Feb-03 XXX XXX XXX XXX XXX
Mar-03 XXX XXX XXX XXX XXX
Apr-03 XXX XXX XXX XXX XXX
May-03 XXX XXX XXX XXX XXX
Jun-03 XXX XXX XXX XXX XXX
Jul-03 XXX XXX XXX XXX XXX
Aug-03 XXX XXX XXX XXX XXX
Sep-03 XXX XXX XXX XXX XXX
Oct-03 XXX XXX XXX XXX XXX
Nov-03 XXX XXX XXX XXX XXX
Dec-03 XXX XXX XXX XXX XXX
Jan-04 XXX XXX XXX XXX XXX
Feb-04 XXX XXX XXX XXX XXX
Mar-04 XXX XXX XXX XXX XXX
Apr-04 XXX XXX XXX XXX XXX
May-04 XXX XXX XXX XXX XXX
Jun-04 XXX XXX XXX XXX XXX
Jul-04 XXX XXX XXX XXX XXX
Aug-04 XXX XXX XXX XXX XXX
Sep-04 XXX XXX XXX XXX XXX
Oct-04 XXX XXX XXX XXX XXX
Nov-04 XXX XXX XXX XXX XXX
Dec-04 XXX XXX XXX XXX XXX
XXX REPRESENTS CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
APPENDIX 22A
------------------------------------------------------------------------
FIRST IMPLIED RATES
------------------------------------------------------------------------
DATE B1900 ATR42 EMB120 RJ135 RJ145
------ ----- ----- ------ ----- -----
Jan-01 XXX XXX XXX XXX XXX
Feb-01 XXX XXX XXX XXX XXX
Mar-01 XXX XXX XXX XXX XXX
Apr-01 XXX XXX XXX XXX XXX
May-01 XXX XXX XXX XXX XXX
Jun-01 XXX XXX XXX XXX XXX
Jul-01 XXX XXX XXX XXX XXX
Aug-01 XXX XXX XXX XXX XXX
Sep-01 XXX XXX XXX XXX XXX
Oct-01 XXX XXX XXX XXX XXX
Nov-01 XXX XXX XXX XXX XXX
Dec-01 XXX XXX XXX XXX XXX
Jan-02 XXX XXX XXX XXX XXX
Feb-02 XXX XXX XXX XXX XXX
Mar-02 XXX XXX XXX XXX XXX
Apr-02 XXX XXX XXX XXX XXX
May-02 XXX XXX XXX XXX XXX
Jun-02 XXX XXX XXX XXX XXX
Jul-02 XXX XXX XXX XXX XXX
Aug-02 XXX XXX XXX XXX XXX
Sep-02 XXX XXX XXX XXX XXX
Oct-02 XXX XXX XXX XXX XXX
Nov-02 XXX XXX XXX XXX XXX
Dec-02 XXX XXX XXX XXX XXX
Jan-03 XXX XXX XXX XXX XXX
Feb-03 XXX XXX XXX XXX XXX
Mar-03 XXX XXX XXX XXX XXX
Apr-03 XXX XXX XXX XXX XXX
May-03 XXX XXX XXX XXX XXX
Jun-03 XXX XXX XXX XXX XXX
Jul-03 XXX XXX XXX XXX XXX
Aug-03 XXX XXX XXX XXX XXX
Sep-03 XXX XXX XXX XXX XXX
Oct-03 XXX XXX XXX XXX XXX
Nov-03 XXX XXX XXX XXX XXX
Dec-03 XXX XXX XXX XXX XXX
Jan-04 XXX XXX XXX XXX XXX
Feb-04 XXX XXX XXX XXX XXX
Mar-04 XXX XXX XXX XXX XXX
Apr-04 XXX XXX XXX XXX XXX
May-04 XXX XXX XXX XXX XXX
Jun-04 XXX XXX XXX XXX XXX
Jul-04 XXX XXX XXX XXX XXX
Aug-04 XXX XXX XXX XXX XXX
Sep-04 XXX XXX XXX XXX XXX
Oct-04 XXX XXX XXX XXX XXX
Nov-04 XXX XXX XXX XXX XXX
Dec-04 XXX XXX XXX XXX XXX
---------------------------------------------------------------------------- ----------------
SECOND IMPLIED RATES THIRD IMPLIED
---------------------------------------------------------------------------- ----------------
DATE B1900 ATR42 EMB120 RJ135 RJ145 EXPENSES (000'S)
------ ----- ----- ------ ----- ----- ----------------
Jan-01 XXX XXX XXX XXX XXX XXX
Feb-01 XXX XXX XXX XXX XXX XXX
Mar-01 XXX XXX XXX XXX XXX XXX
Apr-01 XXX XXX XXX XXX XXX XXX
May-01 XXX XXX XXX XXX XXX XXX
Jun-01 XXX XXX XXX XXX XXX XXX
Jul-01 XXX XXX XXX XXX XXX XXX
Aug-01 XXX XXX XXX XXX XXX XXX
Sep-01 XXX XXX XXX XXX XXX XXX
Oct-01 XXX XXX XXX XXX XXX XXX
Nov-01 XXX XXX XXX XXX XXX XXX
Dec-01 XXX XXX XXX XXX XXX XXX
Jan-02 XXX XXX XXX XXX XXX XXX
Feb-02 XXX XXX XXX XXX XXX XXX
Mar-02 XXX XXX XXX XXX XXX XXX
Apr-02 XXX XXX XXX XXX XXX XXX
May-02 XXX XXX XXX XXX XXX XXX
Jun-02 XXX XXX XXX XXX XXX XXX
Jul-02 XXX XXX XXX XXX XXX XXX
Aug-02 XXX XXX XXX XXX XXX XXX
Sep-02 XXX XXX XXX XXX XXX XXX
Oct-02 XXX XXX XXX XXX XXX XXX
Nov-02 XXX XXX XXX XXX XXX XXX
Dec-02 XXX XXX XXX XXX XXX XXX
Jan-03 XXX XXX XXX XXX XXX XXX
Feb-03 XXX XXX XXX XXX XXX XXX
Mar-03 XXX XXX XXX XXX XXX XXX
Apr-03 XXX XXX XXX XXX XXX XXX
May-03 XXX XXX XXX XXX XXX XXX
Jun-03 XXX XXX XXX XXX XXX XXX
Jul-03 XXX XXX XXX XXX XXX XXX
Aug-03 XXX XXX XXX XXX XXX XXX
Sep-03 XXX XXX XXX XXX XXX XXX
Oct-03 XXX XXX XXX XXX XXX XXX
Nov-03 XXX XXX XXX XXX XXX XXX
Dec-03 XXX XXX XXX XXX XXX XXX
Jan-04 XXX XXX XXX XXX XXX XXX
Feb-04 XXX XXX XXX XXX XXX XXX
Mar-04 XXX XXX XXX XXX XXX XXX
Apr-04 XXX XXX XXX XXX XXX XXX
May-04 XXX XXX XXX XXX XXX XXX
Jun-04 XXX XXX XXX XXX XXX XXX
Jul-04 XXX XXX XXX XXX XXX XXX
Aug-04 XXX XXX XXX XXX XXX XXX
Sep-04 XXX XXX XXX XXX XXX XXX
Oct-04 XXX XXX XXX XXX XXX XXX
Nov-04 XXX XXX XXX XXX XXX XXX
Dec-04 XXX XXX XXX XXX XXX XXX
XXX REPRESENTS CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
APPENDIX 22b
-------------------------------------------------------------------------------------
FOURTH IMPLIED RATES
-------------------------------------------------------------------------------------
DATE B1900 ATR42 EMB120 RJ135 RJ145
------------ ----- ----- ------ ----- -----
BENCHMARK SL XXX XXX XXX XXX XXX
Jan-01 XXX XXX XXX XXX XXX
Feb-01 XXX XXX XXX XXX XXX
Mar-01 XXX XXX XXX XXX XXX
Apr-01 XXX XXX XXX XXX XXX
May-01 XXX XXX XXX XXX XXX
Jun-01 XXX XXX XXX XXX XXX
Jul-01 XXX XXX XXX XXX XXX
Aug-01 XXX XXX XXX XXX XXX
Sep-01 XXX XXX XXX XXX XXX
Oct-01 XXX XXX XXX XXX XXX
Nov-01 XXX XXX XXX XXX XXX
Dec-01 XXX XXX XXX XXX XXX
Jan-02 XXX XXX XXX XXX XXX
Feb-02 XXX XXX XXX XXX XXX
Mar-02 XXX XXX XXX XXX XXX
Apr-02 XXX XXX XXX XXX XXX
May-02 XXX XXX XXX XXX XXX
Jun-02 XXX XXX XXX XXX XXX
Jul-02 XXX XXX XXX XXX XXX
Aug-02 XXX XXX XXX XXX XXX
Sep-02 XXX XXX XXX XXX XXX
Oct-02 XXX XXX XXX XXX XXX
Nov-02 XXX XXX XXX XXX XXX
Dec-02 XXX XXX XXX XXX XXX
Jan-03 XXX XXX XXX XXX XXX
Feb-03 XXX XXX XXX XXX XXX
Mar-03 XXX XXX XXX XXX XXX
Apr-03 XXX XXX XXX XXX XXX
May-03 XXX XXX XXX XXX XXX
Jun-03 XXX XXX XXX XXX XXX
Jul-03 XXX XXX XXX XXX XXX
Aug-03 XXX XXX XXX XXX XXX
Sep-03 XXX XXX XXX XXX XXX
Oct-03 XXX XXX XXX XXX XXX
Nov-03 XXX XXX XXX XXX XXX
Dec-03 XXX XXX XXX XXX XXX
Jan-04 XXX XXX XXX XXX XXX
Feb-04 XXX XXX XXX XXX XXX
Mar-04 XXX XXX XXX XXX XXX
Apr-04 XXX XXX XXX XXX XXX
May-04 XXX XXX XXX XXX XXX
Jun-04 XXX XXX XXX XXX XXX
Jul-04 XXX XXX XXX XXX XXX
Aug-04 XXX XXX XXX XXX XXX
Sep-04 XXX XXX XXX XXX XXX
Oct-04 XXX XXX XXX XXX XXX
Nov-04 XXX XXX XXX XXX XXX
Dec-04 XXX XXX XXX XXX XXX
XXX REPRESENTS CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
APPENDIX 22c
-------------------------------------------------------------------------------------
FIFTH IMPLIED RATES
-------------------------------------------------------------------------------------
DATE B1900 ATR42 EMB120 RJ135 RJ145
------------ ----- ----- ------ ----- -----
BENCHMARK SL XXX XXX XXX XXX XXX
Jan-01 XXX XXX XXX XXX XXX
Feb-01 XXX XXX XXX XXX XXX
Mar-01 XXX XXX XXX XXX XXX
Apr-01 XXX XXX XXX XXX XXX
May-01 XXX XXX XXX XXX XXX
Jun-01 XXX XXX XXX XXX XXX
Jul-01 XXX XXX XXX XXX XXX
Aug-01 XXX XXX XXX XXX XXX
Sep-01 XXX XXX XXX XXX XXX
Oct-01 XXX XXX XXX XXX XXX
Nov-01 XXX XXX XXX XXX XXX
Dec-01 XXX XXX XXX XXX XXX
Jan-02 XXX XXX XXX XXX XXX
Feb-02 XXX XXX XXX XXX XXX
Mar-02 XXX XXX XXX XXX XXX
Apr-02 XXX XXX XXX XXX XXX
May-02 XXX XXX XXX XXX XXX
Jun-02 XXX XXX XXX XXX XXX
Jul-02 XXX XXX XXX XXX XXX
Aug-02 XXX XXX XXX XXX XXX
Sep-02 XXX XXX XXX XXX XXX
Oct-02 XXX XXX XXX XXX XXX
Nov-02 XXX XXX XXX XXX XXX
Dec-02 XXX XXX XXX XXX XXX
Jan-03 XXX XXX XXX XXX XXX
Feb-03 XXX XXX XXX XXX XXX
Mar-03 XXX XXX XXX XXX XXX
Apr-03 XXX XXX XXX XXX XXX
May-03 XXX XXX XXX XXX XXX
Jun-03 XXX XXX XXX XXX XXX
Jul-03 XXX XXX XXX XXX XXX
Aug-03 XXX XXX XXX XXX XXX
Sep-03 XXX XXX XXX XXX XXX
Oct-03 XXX XXX XXX XXX XXX
Nov-03 XXX XXX XXX XXX XXX
Dec-03 XXX XXX XXX XXX XXX
Jan-04 XXX XXX XXX XXX XXX
Feb-04 XXX XXX XXX XXX XXX
Mar-04 XXX XXX XXX XXX XXX
Apr-04 XXX XXX XXX XXX XXX
May-04 XXX XXX XXX XXX XXX
Jun-04 XXX XXX XXX XXX XXX
Jul-04 XXX XXX XXX XXX XXX
Aug-04 XXX XXX XXX XXX XXX
Sep-04 XXX XXX XXX XXX XXX
Oct-04 XXX XXX XXX XXX XXX
Nov-04 XXX XXX XXX XXX XXX
Dec-04 XXX XXX XXX XXX XXX
XXX REPRESENTS CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
APPENDIX 22d
---------------------------------------------------------------------
SIXTH IMPLIED RATES
DATE B1900 ATR42 EMB120 RJ135 RJ145
---------------------------------------------------------------------
Jan-01 XXX XXX XXX XXX XXX
Feb-01 XXX XXX XXX XXX XXX
Mar-01 XXX XXX XXX XXX XXX
Apr-01 XXX XXX XXX XXX XXX
May-01 XXX XXX XXX XXX XXX
Jun-01 XXX XXX XXX XXX XXX
Jul-01 XXX XXX XXX XXX XXX
Aug-01 XXX XXX XXX XXX XXX
Sep-01 XXX XXX XXX XXX XXX
Oct-01 XXX XXX XXX XXX XXX
Nov-01 XXX XXX XXX XXX XXX
Dec-01 XXX XXX XXX XXX XXX
Jan-02 XXX XXX XXX XXX XXX
Feb-02 XXX XXX XXX XXX XXX
Mar-02 XXX XXX XXX XXX XXX
Apr-02 XXX XXX XXX XXX XXX
May-02 XXX XXX XXX XXX XXX
Jun-02 XXX XXX XXX XXX XXX
Jul-02 XXX XXX XXX XXX XXX
Aug-02 XXX XXX XXX XXX XXX
Sep-02 XXX XXX XXX XXX XXX
Oct-02 XXX XXX XXX XXX XXX
Nov-02 XXX XXX XXX XXX XXX
Dec-02 XXX XXX XXX XXX XXX
Jan-03 XXX XXX XXX XXX XXX
Feb-03 XXX XXX XXX XXX XXX
Mar-03 XXX XXX XXX XXX XXX
Apr-03 XXX XXX XXX XXX XXX
May-03 XXX XXX XXX XXX XXX
Jun-03 XXX XXX XXX XXX XXX
Jul-03 XXX XXX XXX XXX XXX
Aug-03 XXX XXX XXX XXX XXX
Sep-03 XXX XXX XXX XXX XXX
Oct-03 XXX XXX XXX XXX XXX
Nov-03 XXX XXX XXX XXX XXX
Dec-03 XXX XXX XXX XXX XXX
Jan-04 XXX XXX XXX XXX XXX
Feb-04 XXX XXX XXX XXX XXX
Mar-04 XXX XXX XXX XXX XXX
Apr-04 XXX XXX XXX XXX XXX
May-04 XXX XXX XXX XXX XXX
Jun-04 XXX XXX XXX XXX XXX
Jul-04 XXX XXX XXX XXX XXX
Aug-04 XXX XXX XXX XXX XXX
Sep-04 XXX XXX XXX XXX XXX
Oct-04 XXX XXX XXX XXX XXX
Nov-04 XXX XXX XXX XXX XXX
Dec-04 XXX XXX XXX XXX XXX
XXX REPRESENTS CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
APPENDIX 23
COST DIFFERENCE = XXX
XXX REPRESENTS CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
EXHIBIT A
DEFINITIONS
Actual Passengers - means, for any period, the actual Revenue Onboards on
Scheduled Flights during such period.
Adjusted Appendix 14 Block Hour Rate - is defined in Paragraph B(6)(c) of
Schedule 3.
Administrative Support and Information Services Provisioning Agreement - means
that certain Administrative Support and Information Services Provisions
Agreement, dated as of January 1, 2001, among Continental, Holdings and
ExpressJet, in the form attached hereto as Exhibit E (or as otherwise agreed or
amended).
Agent Paid Hours - means the hours (including sick, holiday, overtime, and
vacation) for which agents at Contractor Airports are paid to ground handle
Scheduled Flights.
Agreement - means the Amended and Restated
Capacity Purchase Agreement, dated as
of April [__], 2002, among Continental, Holdings, XJT and ExpressJet.
Ancillary Agreements - means each of the agreements entered into by Continental
and Contractor substantially in the form of Exhibits B, C, E, and F hereto,
together with all amendments, exhibits, schedules and annexes thereto.
Appendix 1 Expenses - are set forth on Appendix 1 to Schedule 3.
Appendix 3 Block Hour Rate - is set forth for each aircraft type and month on
Appendix 3 to Schedule 3.
Appendix 4 Block Hour Rate - is set forth for each aircraft type and month on
Appendix 4 to Schedule 3.
Appendix 5 Block Hour Rate - is set forth for each aircraft type and month on
Appendix 5 to Schedule 3.
Appendix 6 Block Hour Rate - is set forth for each aircraft type on Appendix 6
to Schedule 3.
Appendix 7 Block Hours - is set forth for each aircraft type on Appendix 7 to
Schedule 3.
Appendix 9 Rate Per Block Hour - is set forth for each aircraft type on Appendix
9 to Schedule 3.
Appendix 13 Incremental Cost Rate - is set forth for each aircraft type and
month on Appendix 13 to Schedule 3.
▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ Hour Rate - is set forth for each aircraft type and month on
Appendix 14 to Schedule 3.
Exhibit A-1
Average Peer Group Rates - means, with respect to any insurance coverage, the
average cost of such insurance coverage to the five regional airlines with
annual revenues closest to those of Contractor, as determined by available
information obtained from public sources or reputable insurance brokers.
Baggage Handling Benchmark - means, for any applicable month, the number of bags
that were not properly handled (as measured by claims filed for mishandled
baggage) at Contractor Airports, per 1,000 Enplanements at Contractor Airports
during the last five full calendar years immediately preceding such month for
which such calculations are available as of such date of determination (but
excluding from these calculations all data for September 2001 and for any month
in which a Labor Strike shall have occurred); provided that in no event shall
the Baggage Handling Benchmark be above {CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT}.
Base Compensation - is defined in Paragraph A(1) of Schedule 3.
Base Term - is defined in Section 9.01.
Block Hour Rate - means, for any month, the Base Compensation for such month
divided by the total number of block hours comprising the Scheduled Flights
during such month.
Business Day - means each Monday, Tuesday, Wednesday, Thursday and Friday unless
such day shall be a day when financial institutions in New York, New York or
Houston,
Texas are authorized by law to close.
Cause - means (i) bankruptcy of ExpressJet, XJT or Holdings, (ii) the suspension
or revocation of Contractor's authority to operate as a scheduled airline, (iii)
the ceasing of Contractor's operations as a scheduled airline, other than as a
result of a Labor Strike and other than any temporary cessation not exceeding 14
days in length, (iv) the occurrence of a Labor Strike that shall have continued
for 90 days or (v) a willful or intentional material breach of this Agreement by
ExpressJet, XJT or Holdings that substantially deprives Continental of the
benefits of this Agreement, which breach shall have continued for 90 days after
notice thereof is delivered to ExpressJet, XJT or Holdings, as the case may be.
Change of Control - means:
(i) ExpressJet, XJT or Holdings consolidates with, or merges with or into,
another Person or conveys, transfers, leases or otherwise disposes of
all or substantially all of its assets to any Person, or any Person
consolidates with, or merges with or into, ExpressJet, XJT or Holdings,
in any such event pursuant to a transaction in which the voting
securities of ExpressJet, XJT or Holdings are converted into or
exchanged for cash or securities, except where the holders of voting
securities of ExpressJet, XJT or Holdings immediately prior to such
transaction own not less than a majority of the voting securities of
the surviving or transferee corporation
Exhibit A-2
immediately after such transaction, in each case other than any such
transaction between ExpressJet, XJT and/or Holdings, on the one hand,
and Continental and/or any of its Subsidiaries on the other;
(ii) a transaction, other than one described in clause (i) above, as a
result of which ExpressJet, XJT or Holdings and a Major Carrier (other
than Continental) are legally combined;
(iii) a transaction, other than one described in clause (i) above, as a
result of which ExpressJet, XJT or Holdings acquires, directly or
indirectly, beneficial ownership of 10% or more of the capital stock or
voting power of an air carrier (other than Continental and its
successors and any Subsidiary thereof), the consolidated annual
revenues of which for the most recently completed fiscal year for which
audited financial statements are available are in excess of $1 billion
as of the date of determination (or the U.S. dollar equivalent
thereof);
(iv) the direct or indirect acquisition by a Major Carrier (other than
Continental) or any Person directly or indirectly controlling a Major
Carrier of beneficial ownership of 10% or more of the capital stock or
voting power of ExpressJet, XJT or Holdings;
(v) the direct or indirect acquisition by any "person" or "group" (as such
terms are used in Section 13(d) of the Securities Exchange Act of 1934)
not described in clause (iv) above, of beneficial ownership of more
than 25% of the capital stock or voting power of ExpressJet, XJT or
Holdings, other than (A) Continental or its Subsidiaries or (B) any
"person" or "group" that is a Person who has a Schedule 13G on file
with the Securities and Exchange Commission pursuant to the
requirements of Rule 13d-1 under the Securities Exchange Act of 1934
(the "Exchange Act") with respect to its holdings of ExpressJet's,
XJT's or Holdings' voting securities (a "13G Person"), so long as (1)
such 13G Person is principally engaged in the business of managing
investment funds for unaffiliated securities investors and, as part of
such 13G Person's duties as agent for fully managed accounts, holds or
exercises voting or dispositive power over ExpressJet's, XJT's or
Holdings' voting securities, (2) such 13G Person acquires and continues
to have beneficial ownership of ExpressJet's, XJT's or Holdings' voting
securities pursuant to trading activities undertaken in the ordinary
course of such 13G Person's business and not with the purpose nor the
effect, either alone or in concert with any 13G Person, of exercising
the power to direct or cause the direction of the management and
policies of ExpressJet, XJT or Holdings or of otherwise changing or
influencing the control of ExpressJet, XJT or Holdings, nor in
connection with or as a participant in any transaction having such
purpose or effect, including any transaction subject to Rule 13d-3(b)
of the Exchange Act and (3) such 13G Person is not obligated to, and
does not, file a Schedule 13D with respect to the securities of
ExpressJet, XJT or Holdings; provided, that a "Change of Control" shall
not occur pursuant to this clause (v) if such "person" or "group"
reduces its ownership of the capital stock or voting power of
ExpressJet,
Exhibit A-3
XJT or Holdings, as the case may be, to less than 25% within 30 days of
the acquisition of ownership of at least 25% of such capital stock or
voting power;
(vi) the liquidation or dissolution of ExpressJet, XJT or Holdings in
connection with which Contractor ceases operations as an air carrier;
(vii) the sale, transfer or other disposition of all or substantially all of
the airline assets of ExpressJet, XJT or Holdings on a consolidated
basis directly or indirectly to a Major Carrier (other than
Continental) or its affiliate, whether in a single transaction or a
series of related transactions;
(viii) the direct or indirect acquisition, whether in a single transaction or
a series of related transactions, by ExpressJet, XJT or Holdings of
airline assets and associated employees, which airline assets on a
stand-alone basis would have pro forma annual passenger revenues for
the most recently completed four fiscal quarters for which financial
statements can be reasonably prepared in excess of the Revenue
Threshold;
(ix) individuals who constitute the Board of Directors of ExpressJet, XJT or
Holdings as of March 1, 2002 (each such individual, an "Incumbent
Director") cease for any reason to constitute at least a majority of
the applicable Board of Directors (each such board constituted of a
majority of Incumbent Directors, an "Incumbent Board"); provided that
any individual becoming a director subsequent to March 1, 2002 whose
appointment to fill a vacancy or to fill a new position on an Incumbent
Board or whose nomination for election by the shareholders of
ExpressJet, XJT or Holdings, as the case may be, was approved by a vote
of at least a majority of the directors of the applicable Incumbent
Board shall be considered as though such individual were an Incumbent
Director; or
(x) the execution by ExpressJet, XJT or Holdings of bona fide definitive
agreements, the consummation of the transactions contemplated by which
would result in a transaction described in the immediately preceding
clauses (i), (ii), (iii), (iv), (v), (vi), (vii), (viii) or (ix).
Continental - means Continental Airlines, Inc., a Delaware corporation, and its
successors and permitted assigns.
Continental Airport - means any airport at which Continental provides or
arranges for the provision of ground handling services pursuant to the
Continental Ground Handling Agreement.
Continental Ground Handling Agreement - means that certain IATA Standard Ground
Handling Agreement (April 1993 version) between Continental and Contractor,
together with Annex A thereto (Ground Handling Services, April 1993 version) and
Annex B thereto substantially in the form of Exhibit C to the Master Facility
and Ground Handling Agreement (or as otherwise agreed or amended) providing for
the provision by or on
Exhibit A-4
behalf of Continental to Contractor of ground handling services at the airports
specified therein.
Continental Marks - is defined in Exhibit G.
Continental Pilot - means a pilot who was employed by Continental as a pilot on
September 10, 2001.
Continental Premium Surcharge Amount - is defined in Paragraph B(7)(d)(III) of
Schedule 3.
Contract Fuel Rate - means the sum of the aircraft fuel capped rate of $0.6110
per gallon for 2002 and $0.6600 per gallon thereafter, the intoplane capped rate
of $0.0571 per gallon, and tax capped rate of $0.0520 per gallon.
Contract Hotel Stay - means a 24 hour or less stay in a hotel room by a pilot or
flight attendant that was contracted for by Contractor no less than 12 hours in
advance of such stay in connection with a Scheduled Flight, in accordance with
current practices as of the date hereof; provided that in no event shall a
Contract Hotel Stay include an Extraordinary Hotel Stay or include a hotel stay
as a result of pilot or flight attendant training.
Contractor - means, collectively, ExpressJet, XJT and Holdings.
Contractor Airport - means (i) any airport at which Contractor provides or
arranges for the provision of ground handling services pursuant to the
Contractor Ground Handling Agreement, and (ii) any other airport into or out of
which Contractor operates any Scheduled Flight and which is not a Continental
Airport.
Contractor Ground Handling Agreement - means that certain IATA Standard Ground
Handling Agreement (April 1993 version) between Continental and Contractor,
together with Annex A thereto (Ground Handling Services, April 1993 version) and
Annex B thereto substantially in the form of Exhibit D to the Master Facility
and Ground Handling Agreement (or as otherwise agreed or amended) providing for
the provision by or on behalf of Continental to Contractor of ground handling
services at the airports specified therein
Contractor Marks - is defined in Exhibit H.
Contractor Premium Surcharge Amount - is defined in Paragraph B(7)(e)(IV) of
Schedule 3.
Contractor Premium Surcharge Limit - is defined in Paragraph B(7)(e)(III) of
Schedule 3.
Contractor Premium Surcharge Overflow Amount - is defined in Paragraph
B(7)(e)(V) of Schedule 3.
Exhibit A-5
Contractor Services - is defined in the Master Facility and Ground Handling
Agreement.
Controllable Cancellation - means a cancellation of a Scheduled Flight that is
not an Uncontrollable Cancellation.
Cost Factor - means 0.10 (or, where such term is to be expresses as a
percentage, 10%).
Cost Difference - is defined in Appendix 23 to Schedule 3.
Covered Aircraft - means all aircraft listed on Schedule 1 acquired or to be
acquired under the Embraer Contract, as adjusted from time to time for
additional aircraft pursuant to Section 2.05 and for early withdrawals pursuant
to Section 2.02.
Covered Aircraft Sublease - means a sublease (or lease) substantially in the
form of Exhibit B (or as otherwise agreed or amended) between Continental and
Contractor pursuant to which Contractor subleases (or leases) a Covered Aircraft
from Continental.
Delivered Covered Aircraft - means, as of any date of determination, the Covered
Aircraft that have been delivered to Contractor, excluding all Turboprop
Aircraft.
DOT - means the United States Department of Transportation.
Early Withdrawal Schedule - means the schedule, determined as provided in
Section 2.02 of this Agreement, for Covered Aircraft to become Uncovered
Aircraft.
Effective Date - means, with respect to any initial notice of reduction
delivered by Continental pursuant to Section 2.02 hereunder, the date selected
by Continental that is not more than 18 and not less than 12 months after the
date of such notice.
Eighth Implied Rate - is set forth for each aircraft type and month on Appendix
22f.
Embraer - means Empresa Brasileira de Aeronautica S.A., a Brazilian corporation
with its principal place of business in Sao Paulo, Brazil.
Embraer Contract - means, collectively, Purchase Agreement No. GPJ-003/96
between Embraer and XJT dated August 5, 1996, Letter of Agreement No. GPJ-004/96
between Embraer and XJT dated August 5, 1996, Letter of Agreement No.
PCJ-004A/96 among Embraer, Continental and XJT dated August 31, 1996, Purchase
Agreement No. DCT-054/98, between Embraer and XJT dated December 23, 1998,
Letter of Agreement No. DCT-059/2000 between Embraer and XJT dated October 27,
2000, Letter of Agreement No. DCT-055/98 between Embraer and XJT dated December
23, 1998, Letter of Agreement No. DCT-058/2000 between Embraer and XJT dated
October 27, 2000, and EMB-135 Financing Letter of Agreement among Continental,
Embraer and XJT dated March 23, 2000, in each case including such amendments and
supplements as incorporated by reference in Holding's registration statement on
Form S-1 (Registration No. 333-64808) as Exhibits 10.12 - 10.19.
Embraer ERJ-145 Fleet - means all Covered Aircraft that are ERJ-145 aircraft.
Exhibit ▇-▇
▇▇▇▇▇▇▇ ▇▇▇-▇▇▇ Fleet - means all Covered Aircraft that are ERJ-135 aircraft.
Embraer Fleets - means any of the Embraer ERJ-135 Fleet, the Embraer ERJ-145
Fleet or the Embraer XRJ-145 Fleet
Embraer Option Aircraft - means any of the ▇▇▇ ▇▇▇▇▇▇▇ regional jet aircraft
that Contractor has an option to purchase under the Embraer Contract as of the
date hereof.
Embraer XRJ-145 Fleet - means all Covered Aircraft that are XRJ-145 aircraft.
Engine - means any jet aircraft engine that constitutes an "Engine," as such
term is defined in a Covered Aircraft Sublease for a jet aircraft, under such
Covered Aircraft Sublease.
Enplanement - means one passenger for such passenger's entire one-way flight
itinerary, regardless of how many Scheduled Flights or flight segments comprise
such itinerary.
Excess Insurance Costs - means, in respect of any insurance policy obtained by
Contractor, the cost of such insurance coverage, if any, in excess of the amount
such insurance coverage would have cost if Contractor and Continental had
participated in a combined placement pursuant to Section 7.04.
Excess Inventory - means, at any time of determination, the spare engines and
other rotable parts, repairable parts, expendable parts and other miscellaneous
spare parts comprising components of the Covered Aircraft that are, in the
reasonable judgment of Contractor and as a result of a reduction in the number
of Covered Aircraft, in excess of the needs of Contractor for the provision of
Regional Airline Services at such time of determination.
Excluded Costs - means, for any Performance Period, (i) labor costs (including
all wages, salaries and other benefits to all Contractor officers and other
employees, including contract employees) incurred in such period in excess of
those for which Contractor is entitled to reimbursement pursuant to the Block
Hour Rates then in effect and, with respect to certain benefits, the
reconciliation provisions of Schedule 3, (ii) all costs allocable to Scheduled
Flights cancelled during such period as a result of strikes and other labor
actions, disputes or interruptions, and other costs incurred during such period
outside of the ordinary course of business in connection with such events, (iii)
costs resulting from allocable to Scheduled Flights cancelled during such period
as a result of an event constituting Cause, and other costs incurred during such
period outside of the ordinary course of business in connection with such event,
(iv) costs of litigation and threatened litigation (including investigations,
attorney's fees, adverse judgments and settlements not covered by insurance)
incurred during such period and (v) other expenses incurred during such period
that do not comprise a portion of the Block Hour Rates reflected in Schedule 3
and are not reasonable and customary in the industry, or were not otherwise
approved in advance by Continental (it being understood that the expenses
reimbursed pursuant to reconciliation provisions of Schedule 3 constitute
expenses that comprise a portion of the Block Hour Rates reflected in Schedule
3).
Exhibit A-7
Excluded Revenue - means, for any Performance Period, all incentive compensation
payable in respect of such period pursuant to Paragraph A(2)(a) and Paragraph
A(2)(b) of Schedule 3, and all Incentive Amounts payable pursuant to Paragraph
B(6)(c) and Paragraph B(6)(d) of Schedule 3 in respect of such period.
Existing Hub Airports - means ▇▇▇▇▇▇ ▇▇▇▇ Intercontinental Airport in Houston,
Texas, ▇▇▇▇▇▇▇ International Airport in Cleveland, Ohio and Newark International
Airport in Newark, New Jersey.
ExpressJet - means ExpressJet Airlines, Inc., a Delaware corporation (formerly
New ExpressJet Airlines, Inc.), and its successors and permitted assigns.
Extension Term - is defined in Section 9.02.
Extraordinary Hotel Stay - means a 24 hour or less stay in a hotel room by a
pilot or flight attendant that was reserved by Contractor no more than 12 hours
in advance of such stay as a result of an unexpected event in connection with a
Scheduled Flight, in accordance with current practices as of the date hereof,
such as a cancellation or delay of the Scheduled Flight as a result of weather
or air traffic control; provided that in no event shall an Extraordinary Hotel
Stay include a Contract Hotel Stay or include a hotel stay as a result of pilot
or flight attendant training.
Fifth Implied Rate - is set forth for each aircraft type and month on Appendix
22c.
Fifth Incremental Cost Rate - is defined in Paragraph B(6)(c) of Schedule 3.
Final Monthly Schedule - means the final schedule of Scheduled Flights for the
next calendar month delivered by Continental to Contractor pursuant to Section
2.01(b).
FINAME - means Agencia Especial de Financiamento Industrial, a Brazilian federal
public company with its principal place of business in Rio de Janeiro, Brazil.
First Adjusted Block Hour Rate - is defined in Paragraph A(1) of Schedule 3.
First Benchmark Factor - is defined in Paragraph A(1) of Schedule 3.
First Cancellation Number - is defined in Paragraph B(6)(a) of Schedule 3.
First Cancellation Rate - means for any calendar month, the average percentage
(expressed as a decimal fraction) of Contractor's Scheduled Flights (or, for all
periods prior to the date hereof, scheduled flights) which constituted
Uncontrollable Cancellations during such month in each of the last five full
calendar years for which such calculations are available as of such date of
calculation (but excluding from these calculations all data for September 2001
and for any month in which a Labor Strike shall have occurred).
First Forecast Rate-Component 1 - is set forth for each month on Appendix 8 to
Schedule 3.
Exhibit A-8
First Forecast Rate-Component 2 - is set forth for each month on Appendix 8 to
Schedule 3.
First Implied Rate - is set forth for each aircraft type and month on Appendix
22a.
First Incremental Cost Rate - is set forth for each aircraft type and month on
Appendix 11 to Schedule 3.
First Weighted Average Number - is defined in Paragraph A(1) of Schedule 3.
Flight Attendant Per Diem Hour - means each hour that a flight attendant accrues
the right to receive a per diem payment as a result of a Scheduled Flight.
Flight Cancellation Reconciliation - is defined in Paragraph B(6) of Schedule 3.
Flight Hour Agreement - means that certain AE3007A Series Engine Fleet Hour
Agreement, dated as of March 6, 2000, between ▇▇▇▇▇▇▇ Engine Company, Inc.,
doing business as Rolls-▇▇▇▇▇ ▇▇▇▇▇▇▇, and XJT.
Flight Overfly Reconciliation - is defined in Paragraph B(5) of Schedule 3.
Forecasted Passengers - means, for any month, the forecasted Revenue Onboards
derived from the Final Monthly Schedule for the previous month.
Fourth Block Hour Rate - is defined in Paragraph A(1) of Schedule 3.
Fourth Cancellation Number - is defined in Paragraph B(6)(d) of Schedule 3.
Fourth Implied Rate - is set forth for each aircraft type and month on Appendix
22b.
Fourth Incremental Cost Rate - is defined in Paragraph B(6)(c) of Schedule 3.
Fuel Price - means Contractor's cost of fuel, exclusive of costs associated with
intoplane and fuel taxes.
Fuel Purchasing Agreement - means that certain Fuel Purchasing Agreement, dated
as of January 1, 2001, between Continental and Contractor, in the form attached
hereto as Exhibit F (or as otherwise agreed or amended).
Fuel-Related Component - means any of the three components of fuel-related
expense: (i) fuel, (ii) intoplane and (iii) fuel tax.
Fuel-Related Component Expense - means the expense, on a component-by-component
basis, of any of the Fuel-Related Components.
Fuel-Related Expense - means, collectively, fuel, intoplane and fuel tax
expenses.
Funding Agreement - means the Funding Agreement, dated as of October 27, 2000,
among Continental, XJT and FINAME, as amended and supplemented from time to
time.
Exhibit A-9
Headstart Flight - means a flight that is the first departure of the day for an
aircraft; provided that such departure is before 10am local time and that the
aircraft has been on the ground for at least four hours prior to departure.
Headstart On-time Benchmark - means, for any month on or prior to December 31,
2001, the percentage (expressed as a decimal fraction) of Contractor's Headstart
Flights that were On-time Headstart Flights during the years 1997 through 2000,
and for any month on or after January 1, 2002, the percentage (expressed as a
decimal fraction) of Contractor's Headstart Flights that were On-time Headstart
Flights in the last five full calendar years immediately preceding such month
for which such calculations are available as of such date of determination (but
excluding from these calculations all data for September 2001 and for any month
in which a Labor Strike shall have occurred); provided that in no event shall
the Headstart On-time Benchmark be lower than {CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT}.
Holdings - means ExpressJet Holdings, Inc., a Delaware corporation, and its
successors and permitted assigns.
Hub Airports - means (i) the Existing Hub Airports and (ii) any other airport at
which Continental, together with its Subsidiaries and all other regional jets
operating under Continental's code, operates an average of more than 50
flights/day during a relevant Performance Period.
Identification - means the Continental Marks, the aircraft livery set forth on
Exhibit H, the Continental flight code and other trade names, trademarks,
service marks, graphics, logos, employee uniform designs, distinctive color
schemes and other identification selected by Continental in its sole discretion
for the Regional Airline Services to be provided by Contractor, whether or not
such identification is copyrightable or otherwise protected or protectable under
federal law.
Immediate Withdrawal Election - is defined in Section 9.04(b)(i).
Incremental Passenger-Related Facilities - means Passenger-Related Terminal
Facilities used by Contractor for the provision of Contractor Services, but only
to the extent that such facilities are incremental to the facilities required by
Continental at such airport, it being understood that facilities actually used
by Continental shall be deemed not to be incremental to Continental's
requirements, notwithstanding the availability of alternative facilities for
Continental's use.
Incentive Amount - means either (1) the portion of the reconciliation amount
payable from Continental to Contractor pursuant to Paragraph B(6)(c) of Schedule
3 for a particular month and aircraft type equal to the product of (a) the
difference between the Third Incremental Cost Rate and the First Incremental
Cost Rate for such month and aircraft type, multiplied by (b) the Third
Cancellation Number for such aircraft type, multiplied by (c) the actual number
of block hours per flight for such aircraft type and
Exhibit A-10
calendar month, or (2) the portion of the reconciliation amount payable from
Contractor to Continental pursuant to Paragraph B(6)(d) of Schedule 3 for a
particular month and aircraft type equal to the product of (a) the difference
between the Third Incremental Cost Rate and the First Incremental Cost Rate for
such month and aircraft type, multiplied by (b) the Fourth Cancellation Number
for such aircraft type, multiplied by (c) the average number of block hours per
Scheduled Flight for such aircraft type and calendar month.
Labor Strike - means a labor dispute, as such term is defined in 29 U.S.C.
Section 113(c) involving Contractor and some or all of its employees, which
dispute results in a union-authorized strike occurring after the National
Mediation Board has released the Contractor and such employees to self-help and
the 30-day "cooling-off" period relating thereto shall have expired.
LIBOR - means, with respect to any Interest Period (as defined below), the rate
of interest per annum appearing on Telerate Page 3750 (or any successor page) as
the London interbank offered rate for deposits in Dollars at approximately 11:00
A.M. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period; provided, however, if more
than one rate is specified on Telerate Page 3750, the applicable rate shall be
the arithmetic mean of all such rates. If, for any reason, such rate is not
available, the term "LIBOR" shall mean, with respect to any Interest Period, the
rate of interest per annum appearing on such other service as may be nominated
by the British Bankers' Association as the London interbank offered rate for
deposits in Dollars at approximately 11:00 A.M. (London time) two Business Days
prior to the first day of such Interest Period for a term comparable to such
Interest Period; provided, however, if more than one rate is specified, the
applicable rate shall be the arithmetic mean of all such rates. For purposes of
this definition, the term "Interest Period" means a period of one, two, three or
six months' duration, as Continental may elect, commencing, in each case, on the
date of the relevant borrowing (including continuations and conversions of
borrowings); provided, however, (a) if any Interest Period would end on a day
which is not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day (except that where the next succeeding Business Day
falls in the next succeeding calendar month, then on the next preceding Business
Day), (b) no Interest Period shall extend beyond any applicable maturity date
and (c) where an Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month in which the Interest Period
is to end, such Interest Period shall end on the last Business Day of such
calendar month.
Major Carrier - means an air carrier (other than Continental and its successors
and any Subsidiary thereof), the consolidated annual revenues of which for the
most recently completed fiscal year for which audited financial statements are
available are in excess of the Revenue Threshold as of the date of determination
(or the U.S. dollar equivalent thereof).
Major Loss - means an aviation-related accident or incident that results in the
combined policy insurance providers establishing a reserve in an amount greater
than the aggregate combined base premium amount for the year in which such
accident or incident occurs, net of contribution from or subrogation against any
third parties.
Exhibit A-11
Master Facility and Ground Handling Agreement - means that certain Master
Facility and Ground Handling Agreement, dated as of January 1, 2001, between
Continental and Contractor, in the form attached hereto as Exhibit C (or as
otherwise agreed or amended).
New Contractor Pilot - means any Person actively employed by Contractor as a
pilot whose employment began after January 1, 2002.
Original
Capacity Purchase Agreement - means that certain
Capacity Purchase
Agreement, dated as of January 1, 2001, among Continental, Holdings and XJT.
On-time Headstart Flight - means a Headstart Flight that departed at or before
the scheduled departure time.
Passenger-Related Terminal Facilities - is defined in the Master Facility and
Ground Handling Agreement.
Performance Period - means a fiscal quarter.
Person - means an individual, partnership, limited liability company,
corporation, joint stock company, trust, estate, joint venture, association or
unincorporated organization, or any other form of business or professional
entity.
Pilot Block Hours - means the product of scheduled block hours as set forth on
the Final Monthly Schedule, multiplied by two.
Pilot Flight Paid Hours - means the hours for which Contractor's pilots are paid
in connection with providing Regional Airline Services, excluding hours
associated with training.
Pilot New Hire Training Cycle - means the training required to be provided by
Contractor to qualify a newly-hired pilot to commence flying (whether as a first
officer or a captain) an aircraft on behalf of Contractor as recorded in such
pilot's training records pursuant to the requirements of the FAA.
Pilot Per Diem Hour - means each hour that a pilot accrues the right to receive
a per diem payment as a result of a Scheduled Flight, excluding any per diem
payments that are accrued as a result of pilot training.
Pilot Recurrent Flight Training Cycle - means the cycle of in-flight training
required to be provided by Contractor to an existing pilot to maintain such
pilot's qualifications to fly the aircraft type such pilot flies immediately
before such training as recorded in such pilot's records pursuant to the
requirements of the FAA.
Exhibit A-12
Pilot Recurrent Ground Training Cycle - means the cycle of on-the-ground
training required to be provided by Contractor to an existing pilot to maintain
such pilot's qualifications to fly the aircraft type such pilot flies
immediately before such training as recorded in such pilot's records pursuant to
the requirements of the FAA.
Pilot Transitional Training Cycle - means the training required to be provided
by Contractor to qualify an existing pilot to fly another type of aircraft as
recorded in such pilot's training records pursuant to the requirements of the
FAA.
Pilot Upgrade Training Cycle - means the training required to be provided by
Contractor to qualify a first officer as a captain in the aircraft type such
pilot flies immediately before such training as recorded in such pilot's
training records pursuant to the requirements of the FAA.
Prevailing Margin - means, for any Performance Period, the decimal fraction (in
any event not less than zero) equal to Contractor's earnings before interest,
taxes and extraordinary items derived from the Scheduled Flights (as determined
by the separate books maintained by Contractor for the Regional Airline Services
pursuant to Section 3.05(a)), divided by Contractor's aggregate revenues
allocable to Scheduled Flights, in each case as reflected on the books and
records of Contractor after giving effect to the provisions of Section 3.06(b),
except for any reconciliation pursuant to Paragraph B(9)(d) of Schedule 3, and
excluding Excluded Costs and Excluded Revenue.
Reasonable Operating Constraints - means the reasonable constraints on the
operation of Scheduled Flights imposed by the aircraft type, maintenance
requirements, crew training requirements, aircraft rotation requirements, and
route authorities, slots and other applicable regulatory restrictions on flight
schedules.
Reconciled Expenses - is defined in Paragraph B(9)(a) of Schedule 3.
Regional Airline Services - means the provisioning by Contractor to Continental
of Scheduled Flights using the Covered Aircraft in accordance with this
Agreement.
Replacement Aircraft - means an aircraft that is the same aircraft type, is
substantially the same age (or newer), has substantially the same passenger
configuration and is in substantially the same operating condition (or better)
as the aircraft that is being so replaced.
Revenue Onboard - means one revenue-generating passenger on one flight segment,
regardless of whether such flight segment is all or part of such passenger's
entire one-way flight itinerary.
Revenue Threshold - means five hundred million dollars ($500,000,000), as such
amount may be increased based on the amount by which, for any date of
determination, the most recently published Consumer Price Index for all-urban
consumers published by the Department of Labor (the "CPI") has increased to such
date above the CPI for calendar year 2000. For purposes hereof, the CPI for
calendar year 2000 is the monthly average of the CPI for the 12 months ending on
December 31, 2000.
Scheduled ASMs - means, for any period of calculation, the available seat miles
for all Scheduled Flights during such period of calculation.
Exhibit A-13
Scheduled Flight - means a flight by a Covered Aircraft as determined by
Continental pursuant to Section 2.01(b).
Second Block Hour Rate - is defined in Paragraph A(1) of Schedule 3.
Second Cancellation Number - is defined in Paragraph B(6)(b) of Schedule 3.
Second Cancellation Rate - means for any calendar month, the average percentage
(expressed as a decimal fraction) of Contractor's Scheduled Flights (or, for all
periods prior to the date hereof, scheduled flights) which constituted
Controllable Cancellations during such month in each of the last five full
calendar years for which such calculations are available as of such date of
calculation (but excluding from these calculations all data for September 2001
and for any month in which a Labor Strike shall have occurred); provided that in
no event shall the Second Cancellation Rate be above {CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT}.
Second Forecast Rate - is defined in Paragraph B(2) of Schedule 3.
Second Implied Rate - is set forth for each aircraft type and month on Appendix
22a.
Second Incremental Cost Rate - is set forth for each aircraft type and month on
Appendix 12 to Schedule 3.
Second Weighted Average Number - is defined in Paragraph A(1) of Schedule 3.
Seventh Implied Rate - is set forth for each aircraft type and month on Appendix
22e.
Sixth Implied Rate - is set forth for each aircraft type and month on Appendix
22d.
Staffing Model - means the mathematical model used by Continental to predict the
number of ground handling employee man-hours necessary to provide ground
handling services for Scheduled Flights at Contractor Stations for a particular
calendar month.
Staffing Model Agent Paid Hours - means, for any calendar month, the product of
the base hours obtained from the Staffing Model for such month, multiplied by 1
plus the percentage amounts for sick time, overtime, holiday time, and vacation
time set forth in Appendix 21 for such month.
Subsidiary - means, as to any Person, (a) any corporation more than 50% of whose
stock of any class or classes having by the terms thereof ordinary voting power
to elect a majority of the directors of such corporation (irrespective of
whether or not at the time, any class or classes of such corporation shall have
or might have voting power by reason of the happening of any contingency) is at
the time owned by such Person directly or indirectly through Subsidiaries and
(b) any partnership, association, joint venture, limited liability company,
joint stock company or any other form of business or professional
Exhibit A-14
entity, in which such Person directly or indirectly through Subsidiaries has
more than 50% equity interest at any time.
System Flight Disruption - means the failure by Contractor to complete at least
90% of the aggregate Scheduled ASMs in any three consecutive calendar months, or
at least 75% of the aggregate Scheduled ASMs in any consecutive 45-day period,
in each case excluding the effect of Uncontrollable Cancellations and flight
cancellations caused solely by non-carrier specific airworthiness directives or
other non-carrier specific regulatory order; provided, that if the average
number of Block Hours flown per Covered Aircraft during such period is more than
the Trailing Utilization Rate, then the calculation for purposes of this
definition shall disregard that number of Scheduled ASMs for such period as is
necessary to reduce the average number of Block Hours flown per Covered Aircraft
during such period to such Trailing Utilization Rate; provided further, that a
System Flight Disruption shall be deemed to continue until the next occurrence
of a single calendar month in which Contractor completes at least 90% of the
aggregate Scheduled ASMs; and provided further, that completions and
cancellations of Scheduled Flights on any day during which a Labor Strike is
continuing shall not be taken into account in the foregoing calculations.
Term - means the Base Term and any Extension Terms as set forth in Sections 9.01
and 9.02, as earlier terminated pursuant to Section 9.03, and any Wind-Down
Period.
Termination Date - means the date of early termination of this Agreement, as
provided in a notice delivered from one party to the others pursuant to Section
9.03, or, if no such early termination shall have occurred and the Term shall
not have been further extended pursuant to Section 9.02, the date of the end of
the Base Term or the then-occurring Extension Term, as the case may be.
Third Block Hour Rate - is defined in Paragraph A(1) of Schedule 3.
Third Cancellation Number - is defined in Paragraph B(6)(c) of Schedule 3.
Third Implied Expenses - are set forth for each aircraft type and month on
Appendix 22a.
Third Incremental Cost Rate - is defined in Paragraph B(6)(c) of Schedule 3.
Trailing Utilization Rate - means, as of any date of determination, the average
number of Block Hours flown per Covered Aircraft for the last completed
Performance Period.
Turboprop Aircraft - means any of the aircraft identified as turboprop aircraft
on Schedule 1.
Uncontrollable Cancellation - means a cancellation of a Scheduled Flight that is
solely weather-related, air traffic control-related or described in Paragraph
B(6)(f) of Schedule 3, in each case as coded on Contractor's operations reports
in accordance with Continental's standard coding policies and consistent with
Contractor's past practices.
Exhibit A-15
Uncovered Aircraft - means aircraft owned, leased or operated by Contractor,
other than Covered Aircraft.
Uncovered Aircraft Sublease - means a sublease (or lease) substantially in the
form of Exhibit B (or as otherwise agreed or amended) between Continental and
Contractor pursuant to which Contractor subleases (or leases) an Uncovered
Aircraft from Continental for an increased lease rate (over the lease rate for a
Covered Aircraft) equal to amount calculated pursuant to Schedule 2.
Undelivered Covered Aircraft - means, as of any date of determination, the
Covered Aircraft that have not yet been delivered to Contractor.
Weighted Departure Number- is defined in Paragraph A(1) of Schedule 3.
Wind-Down Period - means the period after the Termination Date and until the
time when the last Covered Aircraft has become an Uncovered Aircraft or has been
returned to Continental (or its designee), as applicable.
Wind-Down Schedule - means the schedule, determined as provided in Article IX of
this Agreement, for Covered Aircraft to become Uncovered Aircraft or be returned
to Continental (or its designee), as applicable.
XJT - means XJT Holdings, Inc., a Delaware corporation (formerly ExpressJet
Airlines, Inc.), and its successor and permitted assigns.
Exhibit A-16
EXHIBIT B
FORM OF AIRCRAFT SUBLEASE
Exhibit B-1
--------------------------------------------------------------------------------
FORM OF
[AMENDED AND RESTATED]
AIRCRAFT SUBLEASE AGREEMENT (XJT-___)
DATED AS OF ___________, 20__
BETWEEN
CONTINENTAL AIRLINES, INC.
SUBLESSOR,
AND
EXPRESSJET AIRLINES, INC.
SUBLESSEE
--------------------------------------------------------------------------------
The right, title and interest of Sublessor in and to, among other things, this
Sublease Agreement has been assigned to and is subject to a security interest in
favor of [___________], a [___________], as Security Trustee, under the Aircraft
Security Agreement (XJT-___), dated as of [___________], for the benefit of the
holders of the Notes referred to in such Aircraft Security Agreement, all to the
extent provided in such Aircraft Security Agreement. This Sublease Agreement has
been executed in multiple counterparts; to the extent, if any, that this
Sublease Agreement constitutes chattel paper (as defined in the Uniform
Commercial Code as in effect in any applicable jurisdiction), no security
interest in Sublessor's right, title and interest in and to this Sublease
Agreement may be perfected through the delivery or possession of any counterpart
of this Sublease Agreement other than the counterpart of this Sublease Agreement
that contains the original receipt executed by [___________], as Security
Trustee.
Exhibit B-2
FORM OF
[AMENDED AND RESTATED]
AIRCRAFT SUBLEASE AGREEMENT (XJT-___)
This Amended and Restated Aircraft Sublease Agreement (XJT-___) dated
as of ______________, 200__ (the "Sublease") by and between CONTINENTAL
AIRLINES, INC., a Delaware corporation, as sublessor ("Sublessor"), and
EXPRESSJET AIRLINES, INC., a Delaware corporation, as sublessee ("Sublessee").
RECITALS
Sublessor leases the airframe, engines and related equipment described
in Exhibit A hereto pursuant to a lease agreement that is also described in
Exhibit A.
[Include if subleased prior to 1/1/01: Sublessor and Sublessee entered
into a sublease agreement of such airframe, engines and equipment described on
Exhibit A (the "Original Sublease"). The parties desire to amend and restate the
original sublease agreement as set forth herein.]
NOW THEREFORE, in consideration of the premises and the mutual promises
herein contained, the parties hereto agree as follows:
1. Definitions. As used in this Sublease, the following terms shall
have the following definitions, and each such definition shall be equally
applicable to the singular and plural forms of such term:
"Aircraft" means the Airframe and the Engines.
"Airframe" means the airframe described on Exhibit A hereto.
"Basic Rent" means the rental amount payable at the times and
in the amounts set forth in Schedule 1 hereto under the caption "Basic
Rent" subject to adjustment as provided in the proviso to the first
sentence of Section 3.
"Capacity Purchase Agreement" means that certain Capacity
Purchase Agreement dated as of January 1, 2001, as amended, modified
and supplemented from time, among Sublessor and Sublessee and certain
affiliates of Sublessee, and any agreement between Sublessor and
Sublessee that by its terms replaces such capacity purchase agreement.
"Covered Aircraft" has the meaning specified in the Capacity
Purchase Agreement.
"Delivery Date" means [include if subleased prior to 1/1/01:
the date of the Original Sublease] [include if subleased on or after
1/1/01: _____________].
Exhibit B-3
"Engine" means any of the engines described on Exhibit A
hereto or any engine substituted for any such engine by Sublessee
hereunder but pursuant to the terms of the Head Lease as if Sublessee
were "lessee" thereunder.
"Head Lease" means the lease agreement described on Exhibit A
hereto as the same may be amended or modified from time to time.
"Head Lessor" means at any time, the entity then serving as
the "Lessor" under the Head Lease.
"Operative Agreements" means all agreements or documents
defined as "Operative Agreements" or "Operative Documents" in or as
provided by the Head Lease, and all letter agreements pertaining
thereto, and all other similar agreements or documents entered into in
connection with and specifically relating to the Head Lease.
[Include if subleased prior to 1/1/01: "Original Sublease" has
the meaning specified in the recitals to this Sublease.]
[Include if aircraft is BNDES-financed and subleased while
Sublessee remains a Specified Affiliate of Sublessor: "Revised Basic
Rent" the monthly rental amount payable at the times and in the amounts
set forth in Schedule 1 hereto opposite the caption "Revised Basic
Rent", subject to adjustment as provided in the proviso to the second
sentence of Section 3.]
"Sublease" means this Sublease Agreement as the same may be
amended or modified from time to time.
"Sublessee" means ExpressJet Airlines, Inc., a Delaware
corporation, and its successors and assigns.
"Sublessor" means Continental Airlines, Inc., a Delaware
corporation, and its successors and assigns.
"Supplemental Rent" means an amount equal to (i) all amounts
payable under the Head Lease as "Supplemental Rent" thereunder, (ii)
without duplication, all other amounts payable by the Sublessor under
any other Operative Agreement and (iii) without duplication, all
amounts payable by the Sublessee under this Sublease other than Basic
Rent [Include if aircraft is BNDES-financed and subleased while
Sublessee remains a Specified Affiliate of Sublessor: and Supplemental
Rent].
"Uncovered Aircraft" means aircraft owned, leased or operated
by Sublessee, other than Covered Aircraft.
All other capitalized terms used herein and not otherwise defined shall have the
meaning provided therefor in the Head Lease.
2. Sublease. On the terms and subject to the conditions of this
Sublease, the Sublessor agrees to sublease the Aircraft to the Sublessee, and
the Sublessee agrees to sublease the Aircraft from the Sublessor, for a term
beginning on the Delivery Date and ending on the date on which the term of the
Head Lease terminates in accordance with its terms, whether as a
Exhibit B-4
result of the expiration of the term thereof, or as a result of earlier
termination following the occurrence of a Lease Event of Default thereunder or
otherwise, unless this Sublease is terminated earlier pursuant to the Capacity
Purchase Agreement. If the Sublessor has the right, by exercise of a renewal or
similar option, to extend the term of the Head Lease, Sublessor shall, at the
request of the Sublessee, exercise any such right so as to extend the term of
this Sublease; provided that Sublessee may not request such an extension and
Sublessor shall have no obligation to exercise any such renewal or similar
option to extend the term of the Head Lease if, on or prior to the date on which
Sublessor would otherwise exercise such renewal or similar option, (A) an Event
of Default under Section 7 of this Sublease shall have occurred and be
continuing, (B) the Aircraft has become, or Sublessor has notified Sublessee
that the Aircraft is scheduled to become, an Uncovered Aircraft pursuant to the
terms of the Capacity Purchase Agreement, (C) Sublessor has notified Sublessee
that this Sublease will be terminated pursuant to the terms of the Capacity
Purchase Agreement, or (D) Sublessor and Sublessee shall not have agreed on the
amount of Basic Rent [Include if aircraft is BNDES-financed and subleased while
Sublessee remains a Specified Affiliate of Sublessor: or Revised Basic Rent, as
the case may be] applicable during such extension of the term. Notwithstanding
the foregoing, if the Sublessor is not entitled to possession of the Aircraft
under the Head Lease for any reason, the right of the Sublessee to possession of
the Aircraft under this Sublease shall likewise terminate and the Sublessee
shall immediately redeliver possession of the Aircraft to the Sublessor, or if
required under the Head Lease, to the Head Lessor. This Sublease shall be for
all purposes a sublease of the Aircraft, and not an assignment of the Head Lease
to the Sublessee.
3. Rent. The Sublessee shall pay as rent under this Sublease Basic Rent
to Sublessor, which shall be paid at the times provided on Schedule 1, [Include
if aircraft is BNDES-financed and subleased while Sublessee remains a Specified
Affiliate of Sublessor: for so long as Sublessee shall be a Specified
Affiliate,] and Supplemental Rent to the person entitled thereto immediately
upon demand thereof, to the end that the Sublessee will pay directly to the
party entitled thereto any and all Supplemental Rent amounts payable by the
Sublessor; provided, that if the Aircraft shall become an Uncovered Aircraft
under the terms of the Capacity Purchase Agreement, then from and after the date
on which the Aircraft becomes an Uncovered Aircraft, the amount of Basic Rent
payable under this Sublease shall be recalculated by increasing the relevant
interest rate used in the original calculations of Basic Rent on the Delivery
Date by the number of basis points set forth in Schedule 2 hereto opposite the
caption "Uncovered Aircraft Basic Rent Adjustment". [Include if aircraft is
BNDES-financed and subleased while Sublessee remains a Specified Affiliate of
Sublessor: If Sublessee shall cease to be a Specified Affiliate, then Sublessee
shall pay as rent under this Sublease Revised Basic Rent, which shall be paid at
the times provided on Schedule 1; provided, that if the Aircraft shall become an
Uncovered Aircraft under the terms of the Capacity Purchase Agreement, then from
and after the date on which the Aircraft becomes an Uncovered Aircraft, the
amount of Revised Basic Rent payable under this Sublease shall be recalculated
by increasing the relevant interest rate used in the original calculations of
Revised Basic Rent by the number of basis points set forth in Schedule 2 hereto
opposite the caption "Uncovered Aircraft Basic Rent Adjustment".]
4. Terms of the Sublease. Except as expressly provided in this
Sublease, the obligations of the Sublessee under this Sublease to the Sublessor
or in respect of the Aircraft shall be identical in all respects to the
obligations of the Sublessor as "Lessee" under the Head Lease to the Head Lessor
or in respect of the Aircraft. In furtherance thereof, except as set forth in
Section 5(c) below:
(a) The Sublessee shall take or cause to be taken any and all
actions required of the "Lessee" under the Head Lease as if the
Sublessee was Lessee thereunder, and
(b) The Sublessee will refrain from taking, and shall cause
any other person to refrain from taking, any action which the "Lessee"
under the Head Lease is prohibited from taking or is required to
prohibit any party from taking, in each case as if the Sublessee was
"Lessee" thereunder.
Exhibit B-5
The terms of the Head Lease are incorporated herein by reference in their
entirety with the same effect as if such terms were set out herein and, unless
the context in the Head Lease otherwise requires, as if the Sublessor were
"Lessor" and the Sublessee were "Lessee" thereunder, and Sublessee agrees to be
bound by the same as though the same were set forth herein in full. Without
intending to limit the scope of the foregoing provisions of this Section 4, the
Sublessee agrees (i) to maintain the aircraft (including the Airframe and
Engines) and cause the Aircraft to be registered as required by the Head Lease,
(ii) to operate and possess the Aircraft only as permitted by the Head Lease,
(iii) to provide inspection rights and the insurance required by the Head Lease,
which policies of insurance shall name, in addition to any parties required by
the Head Lease, Sublessor as an additional named insured and as an additional
recipient of all notices to be received by the Head Lessor with respect to any
such policies of insurance, (iv) to keep the Aircraft free of any and all Liens
as required by the Head Lease, (v) to return the Aircraft in the condition
required by the Head Lease, including any provisions relating to time or cycles
remaining on any time or cycle controlled parts, at the termination of this
Sublease, except as set forth in Section 5(c) below, and (vi) not to permit a
Lease Default or Lease Event of Default to occur under the Head Lease, and the
Sublessor shall have all of the rights of the "Lessor" under the Head Lease with
respect to enforcement of such rights. Notwithstanding any other provision
hereof, this Sublease and Sublessee's rights hereunder shall be subject and
subordinate to all the terms of the Head Lease, including, without limitation,
the Lessor's (or, acting as Lessor's assignee under the Security Agreement,
Security Trustee's) right to repossession under Section 15 of the Head Lease and
the Lessor's (or, acting as Lessor's assignee under the Security Agreement, the
Security Trustee's) rights to avoid this Sublease for any reason upon the
occurrence and during the continuance of a Lease Event of Default under the Head
Lease. Sublessee shall not be permitted to take any action hereunder not
permitted to be taken by Sublessor under the Head Lease. Sublessee agrees to
execute such further documents confirming such subordination of this Sublease as
may be reasonably requested by Sublessor. In addition, the Sublessee agrees to
perform all other obligations of the Sublessor under the Operative Agreements,
except for those obligations of the Sublessor thereunder that are not capable of
being performed or satisfied by the Sublessee, including without limitation
those obligations that pertain to the maintenance of the Sublessor's status as a
corporation and as a certificated United States air carrier, the Sublessor's
qualification as a foreign corporation in good standing, financial reporting
obligations that depend for their fulfillment the provision of information
pertaining to the Sublessor and similar obligations. Sublessee acknowledges
receipt of an executed copy of the Head Lease and the Operative Agreements (as
in effect on the date of this Sublease).
5. Delivery Acceptance and Return.
(a) Sublessor hereby delivers and Sublessee hereby accepts
delivery of the Aircraft and the Aircraft is hereby subject to the
terms and conditions of this Sublease.
(b) At the termination of this Sublease, the Aircraft shall be
delivered in the condition required by the Head Lease, except as set
forth below in clause (c) to this Section 5, at a location designated
by Sublessor.
(c) Notwithstanding the provisions of clause (v) of the fourth
sentence of the last paragraph of Section 4 and the preceding clause
(b) of this Section 5, if this
Exhibit B-6
Sublease is terminated prior to its then current scheduled expiration
date pursuant to the Capacity Purchase Agreement for any reason other
than the exercise of remedies by Sublessor under Section 8 of this
Sublease, the return conditions applicable to the Aircraft upon return
shall be as provided in Annex A to this Sublease. For the avoidance of
doubt, if (I) this Sublease is not terminated prior to its then current
scheduled expiration date pursuant to the Capacity Purchase Agreement,
or (II) this Sublease is terminated pursuant to the exercise of
remedies by Sublessor under Section 8 of this Sublease, or (III)
Sublessee retains the Aircraft as an Uncovered Aircraft in accordance
with the terms of the Capacity Purchase Agreement, then in any such
case, at the time when the Aircraft is required hereunder to be
returned, Sublessee shall be required to meet the return conditions
applicable to the Aircraft under clause (v) of the fourth sentence of
the last paragraph of Section 4, including those conditions and
financial adjustments relating to time or cycles remaining between
maintenance events or to any time- or cycle-controlled part.
6. NO REPRESENTATIONS OR WARRANTIES AS TO CONDITION BY SUBLESSOR.
SUBLESSEE ACKNOWLEDGES THAT THE AIRCRAFT HAS BEEN SELECTED FOR USE BY IT, THAT
IT HAS HAD AMPLE OPPORTUNITY TO INSPECT, AND IN FACT HAS INSPECTED, THE AIRCRAFT
AND THAT IT TAKES THE AIRCRAFT "AS IS". SUBLESSEE FURTHER ACKNOWLEDGES THAT
SUBLESSOR MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, WHETHER EXPRESS OR
IMPLIED, AS TO THE AIRWORTHINESS, VALUE, CONDITION, DESIGN, OPERATION OR FITNESS
FOR ANY USE OR PURPOSE OF THE AIRCRAFT.
7. Defaults. The following events shall constitute Events of Default
hereunder:
(a) The Sublessee shall fail to make any payment of Basic
Rent, Renewal Rent, Stipulated Loss Value or Termination Value within
three (3) Business Days after the same shall have become due; or the
Sublessee shall fail to pay any Supplemental Rent (other than
Stipulated Loss Value or Termination Value) when due and such failure
shall continue for a period in excess of five (5) Business Days from
and after the date of any written notice to Sublessee from Sublessor.
(b) The Sublessee shall fail to perform or observe any
covenant or agreement of the "Lessee" under the Head Lease as if the
Sublessee were "Lessee" and the Sublessor were "Lessor" thereunder (all
of which covenants and agreements are incorporated herein by reference
pursuant to Section 4 hereof) and any applicable grace period contained
in the Head Lease shall have expired.
(c) Any other "Lease Event of Default" shall occur under the
Head Lease as if the Sublessee were "Lessee" and the Sublessor were
"Lessor" thereunder.
(d) The Sublessee shall fail to perform or observe any
covenant or agreement of Sublessee under this Sublease or any
representation or warranty of the Sublessee contained in this Sublease
shall be false or misleading in any material respect and shall remain
uncured for a period in excess of 15 days from and after the date of
written notice thereof from Sublessor to Sublessee.
Exhibit B-7
8. Remedies. Upon the occurrence of an Event of Default under this
Sublease, Sublessor shall have the rights and remedies with respect to the
Sublessee and this Sublease enjoyed by the Head Lessor under the Head Lease as
if the Sublessor were "Lessor" and the Sublessee were "Lessee" thereunder, and
the remedies provisions of the Head Lease are incorporated herein by reference
and made a part hereof.
9. Entire Agreement, Waivers and Amendments. This Sublease constitutes
the entire understanding of the parties hereto with respect to the subject
matter hereof, superseding all prior discussions and agreements, written or
oral; provided that, except for the obligations of the Sublessee pursuant to
Section 4 above (which are not subordinate in any respect), the rights of the
Sublessee under this Sublease are subject in all respects to the provisions of
the Capacity Purchase Agreement. This Sublease may not be amended, nor may any
of its provisions be waived, except by writing signed by both parties. No delay
on the part of any party hereto in exercising any right, power or privilege
hereunder shall operate as a waiver hereof, nor shall any waiver operate as a
continuing waiver of any right, power or privilege.
10. Notices. All notices given hereunder shall be in writing delivered
by hand, certified mail, or telecopy to the parties hereto at the following
addresses:
If to Sublessor:
Continental Airlines, Inc. Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇. HQSFN Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Senior Vice President-Finance & Treasurer
If to Sublessee:
ExpressJet Airlines, Inc. Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇. HQSCE Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
11. Successors and Assigns. Neither party may assign its rights or
delegate its duties under this Sublease without the prior written consent of the
other party, or in a manner inconsistent with the Head Lease.
12. Severability. Any provision of this Sublease which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provision hereof, and any prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
13. Headings. The headings in this Sublease are for convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.
Exhibit B-8
14. Counterparts. This Sublease may be executed in counterparts, all of
which taken together shall constitute one agreement.
15. Governing Law. This Sublease shall be governed by and construed in
accordance with the laws of the State of New York.
[Remainder of this page is blank.]
Exhibit B-9
IN WITNESS WHEREOF, the parties hereto have cause this Sublease to be
executed as of the date first above written.
CONTINENTAL AIRLINES, INC. EXPRESSJET AIRLINES, INC.
By: By:
---------------------------------- ----------------------------------
Vice President Vice President
Exhibit B-10
IN WITNESS WHEREOF, the parties hereto have cause this Sublease to be
executed as of the date first above written.
CONTINENTAL AIRLINES, INC. EXPRESSJET AIRLINES, INC.
By: By:
---------------------------------- ----------------------------------
Vice President Vice President
Receipt of this original counterpart of the foregoing Sublease is
hereby acknowledged on this ____ day of _________, 20__.
-------------------------
as Security Trustee
By
-----------------------------------
Name:
------------------------------
Title:
-----------------------------
Exhibit B-11
EXHIBIT A
LEASE
Lease Agreement (XJT-___), dated as of _______, 20__, between
___________________, not in its individual capacity except as expressly provided
but solely as Owner Trustee, as lessor, and Continental Airlines, Inc., as
lessee, as supplemented by Supplement No. 1 thereto, dated as of _______, 20___,
[and amended by Amendment No. ___ thereto among ___________________, not in its
individual capacity but solely as Owner Trustee, as lessor, Continental
Airlines, Inc., as lessee, and ExpressJet Airlines, Inc., as sublessee, dated as
of _______, 20__,] which were recorded as a single instrument with the FAA on
_______, 20__, as conveyance no. ______.
SUBLEASE
Sublease Agreement (XJT-___), dated as of _______, 20__ between Continental
Airlines, Inc., as sublessor, and ExpressJet Airlines, Inc., as sublessee, which
was recorded with the FAA on _______, 20__, as conveyance no._____
AIRCRAFT
Airframe Embraer Model EMB-_____
U.S. Registration No.: ______
Manufacturer's Serial No.: _____
Engines: Two ▇▇▇▇▇▇▇ Model AE3007A Engines
bearing Engine Manufacturer's Serial
Nos: ______ and ______
Each of the above engines has take-off horsepower of 750 or more of the
equivalent of such horsepower.
Exhibit B-12
Annex A
To Aircraft Sublease Agreement (XJT-___)
Alternative Return Conditions
If this Sublease is terminated prior to its then current scheduled expiration
date pursuant to the Capacity Purchase Agreement for any reason other than the
exercise of remedies by Sublessor under Section 8 of this Sublease, then unless
Sublessee retains the Aircraft as an Uncovered Aircraft in accordance with the
terms of the Capacity Purchase Agreement, at the return of the Aircraft by
Sublessee to Sublessor (or its designee), Sublessee shall not be required to
meet the return conditions applicable to the Aircraft relating to time or cycles
remaining between maintenance events or to any time- or cycle-controlled part
under clause (v) of the fourth sentence of the last paragraph of Section 4 of
this Sublease; provided that Sublessee shall remain obligated to comply with all
other provisions of this Sublease applicable at the time, including without
limitation provisions generally applicable to the maintenance, airworthiness,
repair and general operating condition and cleanliness of the Aircraft; and
provided further, that the general condition of the Aircraft shall not have
materially changed relative to the condition of Sublessee's fleet of the same
aircraft type since the Sublessor delivered the notice of withdrawal or
termination (as the case may be) to Sublessee pursuant to the Capacity Purchase
Agreement, and the Aircraft shall not have been discriminated against or
operated, maintained or otherwise treated differently (including with respect to
the removal of any part for convenience or without cause) than other Covered
Aircraft.
Exhibit B-13
Schedule 1
To Aircraft Sublease Agreement (XJT-___)
Basic Rent: Basic Rent shall be payable during the Term in [arrears]
[advance] in the amounts and on the dates set forth below;
provided that if such day for a particular payment of Basic
Rent is not a "Business Day" (as defined below), then payment
of Basic Rent shall be due on the next Business Day. "Business
Day" for purposes of this provision means any day other than a
Saturday, Sunday or any other day on which commercial banks
are authorized or required by law to close in New York, New
York or Houston, Texas.
[For non-BNDES-financed aircraft, insert amount of
monthly Basic Rent payments, and monthly due date]
[For BNDES-financed aircraft, insert the following:
Basic Rent in the amounts and on the dates required under the Head Lease]
[Insert the following for BNDES-financed aircraft:
Revised Basic Rent: Revised Basic Rent shall be payable during the Term in
[arrears] [advance] in the amounts and on the dates
set forth below; provided that if such day for a
particular payment of Revised Basic Rent is not a
"Business Day" (as defined below), then payment of
Basic Rent shall be due on the next Business Day.
"Business Day" for purposes of this provision means
any day other than a Saturday, Sunday or any other day
on which commercial banks are authorized or required
by law to close in New York, New York or Houston,
Texas.
[Insert amount of monthly Revised Basic Rent payments, and monthly due date]
Schedule 2
To Aircraft Sublease Agreement (XJT-___)
Uncovered Aircraft
Basic Rent Adjustment
EXHIBIT C
MASTER FACILITY AND GROUND HANDLING AGREEMENT
Exhibit C-1
MASTER FACILITY AND GROUND HANDLING AGREEMENT
This Master Facility and Ground Handling Agreement (this "Agreement"),
dated as of January 1, 2001, is among Continental Airlines, Inc., a Delaware
corporation ("Continental"), ExpressJet Holdings, Inc., a Delaware corporation
("Holdings"), and ExpressJet Airlines, Inc., a Delaware corporation
("ExpressJet" and, collectively with Holdings, "Contractor").
WHEREAS, Continental and Contractor are entering into a Capacity
Purchase Agreement contemporaneously with the execution of this Agreement (the
"Capacity Purchase Agreement");
WHEREAS, Continental and Contractor desire to establish the terms by
which both Continental and Contractor will use and share airport facilities in
furtherance of the Capacity Purchase Agreement, to include, without limitation,
the mutual or coordinated use of airport facilities at any airport in or out of
which Continental operates any flight or Contractor operates any Scheduled
Flight; and
WHEREAS, Continental and Contractor desire to establish the terms by
which each of them will provide certain ground handling services for the other
at certain airports in furtherance of the Capacity Purchase Agreement;
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements herein contained, Continental and Contractor agree as follows:
Section 1. Defined Terms. Capitalized terms used in this Agreement
(including, unless otherwise defined therein, in the Exhibits, Schedules and
Annexes to this Agreement) and not otherwise defined herein shall have the
respective meanings ascribed to such terms in the Capacity Purchase Agreement.
The following terms shall have the meanings set forth below:
"Airport Facilities" shall mean all Terminal Facilities and
Non-Terminal Facilities.
"Airport Authority" shall mean any municipal, county, state or federal
governmental authority, or any private authority, owning or operating any
Applicable Airport with authority to lease, convey or otherwise grant rights to
use any Airport Facilities.
"Applicable Airport" shall mean any Continental Airport or Contractor
Airport.
"CLE Primary Hangar" shall mean the aircraft maintenance hangar located
at ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇.
"Continental Airport" shall mean any airport at which Continental
provides or arranges for the provision of ground handling services pursuant to
the Continental Ground Handling Agreement.
-1-
"Continental Ground Handling Agreement" shall mean that certain IATA
Standard Ground Handling Agreement (April 1993 version) between Continental and
Contractor, together with Annex A thereto (Ground Handling Services, April 1993
version), and Annex B thereto substantially in the form of Exhibit C hereto (or
as otherwise agreed) providing for the provision by or on behalf of Continental
to Contractor of ground handling services at the airports specified therein.
"Contractor Airport" shall mean any airport at which Contractor
provides or arranges for the provision of ground handling services pursuant to
the Contractor Ground Handling Agreement, and any other airport into or out of
which Contractor operates any Scheduled Flight and which is not a Continental
Airport.
"Contractor Facilities" shall mean the Contractor Terminal Facilities
and the Contractor Non-Terminal Facilities.
"Contractor Ground Handling Agreement" shall mean that certain IATA
Standard Ground Handling Agreement (April 1993 version) between Contractor and
Continental, together with Annex A thereto (Ground Handling Services, April 1993
version), and Annex B thereto substantially in the form of Exhibit D hereto (or
as otherwise agreed) providing for the provision by or on behalf of Contractor
to Continental and, at Continental's request from time to time, its codeshare
partners, of ground handling services at the airports specified therein.
"Contractor Non-Terminal Facility" shall mean any Non-Terminal Facility
to the extent owned, leased, subleased or otherwise retained or used by
Contractor as of the date hereof, and any Non-Terminal Facility to the extent
owned, leased, subleased or otherwise retained or used by Contractor pursuant to
Section 2 after the date hereof for the provision of Contractor Services.
"Contractor Services" shall mean Regional Airline Services as
contemplated by the Capacity Purchase Agreement and the ground handling services
contemplated by the Contractor Ground Handling Agreement.
"Contractor Terminal Facility" shall mean any Terminal Facility to the
extent owned, leased, subleased or otherwise retained or used by Contractor as
of the date hereof, and any Terminal Facility to the extent owned, leased,
subleased or otherwise retained or used by Contractor pursuant to Section 2
after the date hereof for the provision of Contractor Services.
"IAH Express Training Center" shall mean the training center located at
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇.
"Incremental Facilities" shall mean all Airport Facilities used by
Contractor for the provision of Contractor Services, but only to the extent that
such facilities are incremental to the facilities required by Continental, it
being understood that facilities actually used by Continental shall be deemed
not to be incremental to Continental's requirements, notwithstanding the
availability of alternative facilities for Continental's use.
-2-
"Non-Terminal Facilities" shall mean all maintenance, training, office
and other facilities and spaces leased, subleased or otherwise retained or used
by a party at an Applicable Airport or adjacent thereto that are not Terminal
Facilities.
"Passenger-Related Terminal Facilities" shall mean all
passenger-related terminal facilities and spaces leased, subleased or otherwise
retained or used by a party at an Applicable Airport, including without
limitation all passenger lounges, passenger holding areas, aircraft parking
positions (which may or may not be adjacent to a passenger holding area) and
associated ramp spaces, gates (including loading bridges and associated ground
equipment parking areas), ticketing counters and curbside check-in facilities.
"Terminal Facilities" shall mean (i) all Passenger-Related Terminal
Facilities and (ii) all other terminal facilities and spaces leased, subleased
or otherwise retained or used by a party at an Applicable Airport, including
without limitation all baggage makeup areas, inbound baggage areas, crew rooms,
in-terminal office spaces, associated employee parking areas and other terminal
facilities.
"Transfer" shall mean any lease, sublease, assignment, disposition or
other transfer.
Section 2. Lease, Use and Modification of Airport Facilities.
(a) Continental and Contractor agree that the use by
Contractor of all Airport Facilities at all Applicable Airports for the
provision of Contractor Services shall be at the direction of
Continental. In furtherance of this Section 2(a), from time to time at
the request and direction of Continental and subject to Section 2(b)
and Section 2(c), and subject to the provisions of Sections 6(c) and
6(f) relating to Transfers in connection with certain terminations,
Contractor shall:
(i) use its commercially reasonable efforts to enter
into a lease, sublease or other appropriate agreement with any
Airport Authority at any Applicable Airport for the lease,
sublease or use of any Airport Facilities used or to be used
in connection with the provision of Contractor Services;
(ii) use its commercially reasonable efforts to
amend, modify or terminate any agreement with any Airport
Authority at any Applicable Airport for the lease, sublease or
use of any Contractor Facilities;
(iii) use its commercially reasonable efforts to
obtain the consent of any relevant Airport Authority at any
Applicable Airport for the Transfer to Continental or its
designee of any lease, sublease or other agreement in respect
of any Contractor Facilities, or for the right of Continental
or its designee to use any Contractor Facilities;
(iv) enter into a sublease substantially in the form
of Exhibit A hereto (or as otherwise agreed) for the sublease
to Continental or its designee of Contractor's interest in any
Contractor Facility;
-3-
(v) enter into an assignment substantially in the
form of Exhibit B hereto (or as otherwise agreed) for the
assignment to Continental or its designee of Contractor's
interest in any Contractor Facility;
(vi) enter into a sublease substantially in the form
of Exhibit A hereto (or as otherwise agreed) for the sublease
to Contractor of Continental's interest in any Airport
Facility at any Applicable Airport used or to be used in
connection with the provision of Contractor Services;
(vii) enter into an assignment substantially in the
form of Exhibit B hereto (or as otherwise agreed) for the
assignment to Contractor of Continental's interest in any
Airport Facility at any Applicable Airport used or to be used
in connection with the provision of Contractor Services; and
(viii) take any other action reasonably requested by
Continental in furtherance of this Section 2(a).
(b) The assignments and subleases to be entered into pursuant
to Section 2(a) shall be subject to the rights of the Applicable
Airports in such Airport Facilities and to the receipt of all necessary
consents from Airport Authorities and other third parties to such
sublease or assignment.
(c) Notwithstanding any other provision of this Section 2, but
without limiting any other provision hereof, including without
limitation Section 7 hereof, Contractor shall not be required to
sublease or assign to Continental or its designee any interest of
Contractor in any Contractor Non-Terminal Facility; provided that the
provisions of this Section 2(c) shall not apply at any time from and
after any Termination Date occurring pursuant to Continental's
termination of the Capacity Purchase Agreement pursuant to Section
9.03(b) or 9.03(c) thereof.
(d) Each of Contractor and Continental shall pay for all
landing fees for its flights at all Applicable Airports, and to the
extent that the other party is obligated to make such payments under
any applicable lease or other agreement, the first party hereby
indemnifies and agrees to hold harmless the other party for all such
amounts.
(e) Contractor shall perform in a timely manner all
obligations under all leases, subleases and other agreements to which
Contractor is or becomes a party for the use of Contractor Facilities,
including without limitation making in a timely manner all payments of
rent and other amounts due under such agreement, and shall use
commercially reasonable efforts to keep such agreements in effect (or
to promptly renew or extend such agreements on substantially similar
terms as directed by Continental); provided that Continental shall
indemnify Contractor for any amounts owed to any Airport Authority or
other third party under any such agreement as a direct result of any
breach by Continental of such agreement.
-4-
(f) Contractor shall obtain the written consent of Continental
prior to entering into any lease or other agreement for the use or
modification of, or otherwise relating to, any Contractor Terminal
Facilities (or other airport facilities which would become Contractor
Terminal Facilities), or amending or modifying in any manner any such
agreement, or consenting to any of the same. Subject to the provisions
of Section 5(e), Contractor may enter into an agreement for the use or
modification of, or otherwise relating to, any Contractor Non-Terminal
Facility that is not leased or subleased from Continental without the
consent of Continental; provided that such agreement permits (or does
not prohibit) Continental's right of first refusal (or the exercise
thereof) pursuant to Section 7. Contractor may not enter into an
agreement for the use or modification of, or otherwise relating to, any
Contractor Non-Terminal Facility that is leased or subleased from
Continental without the consent of Continental, which consent shall not
be unreasonably withheld; provided that it shall be reasonable for
Continental to withhold any such consent until any required Airport
Authority's consent is obtained or if such agreement would prohibit
Continental's right of first refusal pursuant to Section 7.
(g) If Contractor shall make any payment pursuant to Section
2(e), which payment is in whole or in part in respect of facilities
other than Incremental Facilities, then Continental shall promptly
reimburse Contractor for the portion of such payment in respect of
facilities other than Incremental Facilities; provided that there shall
be no duplication of payment if, for example, Continental is a
sublessee of Contractor with respect to some or all of these
facilities. If Continental shall make any payment pursuant to any
lease, sublease or other agreement for the use of Airport Facilities,
which payment is in whole or in part in respect of Incremental
Facilities, then Contractor shall promptly reimburse Continental for
the portion of such payment in respect of Incremental Facilities;
provided that there shall be no duplication of payment if, for example,
Contractor is a sublessee of Continental with respect to some or all of
these facilities.
(h) Contractor shall give Continental at least 30 days' prior
written notice before ceasing to use any Airport Facilities for the
provision of Contractor Services, provided that no such notice shall be
required with respect to Terminal Facilities at locations where such
use is ceasing because Continental has informed Contractor that no
Scheduled Flights will be scheduled in or out of such location.
Section 3. Exclusivity. Each Contractor Terminal Facility constituting
a Passenger-Related Terminal Facility used for the provision of Regional Airline
Services shall be used by Contractor exclusively for the provision of Contractor
Services, and may not be used by Contractor in connection with any other
flights, including any flights using an Uncovered Aircraft, or for any other
purpose; provided that the foregoing limitation shall not apply to:
(i) baggage claim and other similar facilities that are leased or
otherwise made available to all air carriers at such airport on a common-use or
joint-use basis; or
(ii) to any facilities that are properly required by an Airport
Authority to be made available for use by others in accordance with any
applicable agreement that is in place as of the date hereof or has been approved
by Continental under Section 2(f).
-5-
Subject to the provisions of Article IX of the Capacity Purchase Agreement, each
Contractor Terminal Facility that is not a Passenger-Related Terminal Facility
used for the provision of Regional Airline Services, and each Contractor
Non-Terminal Facility may be used by Contractor in connection with other
flights, including flights using Uncovered Aircraft, or for other purposes;
provided that, for so long as the number of Scheduled Flights in a calendar
month represent at least 50% of the aggregate number of Contractor's scheduled
flights of Covered and Uncovered Aircraft in such month, Contractor shall use
such facilities for the provision of Regional Airline Services in priority to
any other use of Contractor, and any other use of such facilities by Contractor
shall be subordinate to Contractor's use for the provision of Regional Airline
Services.
Section 4. Ground Handling.
(a) Each of Continental and Contractor shall enter into the
Continental Ground Handling Agreement. Notwithstanding the identity of
the lessee, sublessor or sublessee under any lease or other agreement
relating to any Airport Facilities, Continental shall use commercially
reasonable efforts to provide Contractor with access to all Terminal
Facilities at each Continental Airport, and at any Contractor Airport
where Continental is the lessee or sublessee, in each case as
reasonably necessary for the provision of Regional Airline Services. In
connection with Continental granting to Contractor access to any
Airport Facilities leased by Continental pursuant to this Section 4(a),
Contractor covenants and agrees, for the benefit of Continental and its
lessor, that Contractor shall not, by its use and occupancy of such
facilities, violate any of the provisions of such lease or other
agreements relating thereto which have been made available to
Contractor, and that it shall not knowingly permit any breach of any of
the obligations of Continental under such agreements, and Contractor
further agrees to release and indemnify Continental in respect of such
facilities to the same extent as provided in Section 11 of the Form of
Sublease Agreement attached hereto as Exhibit A (which provisions are
hereby incorporated by reference), as if a sublease in respect of such
facilities had been entered into by Continental and Contractor.
(b) Each of Continental and Contractor shall enter into the
Contractor Ground Handling Agreement. Notwithstanding the identity of
the lessee, sublessor or sublessee under any lease or other agreement
relating to any Airport Facilities, Contractor shall use commercially
reasonable efforts to provide Continental or its designee with access
to all Terminal Facilities at each Contractor Airport, and at any
Continental Airport where Contractor is the lessee or sublessee, in
each case as reasonably necessary for Continental's or such designee's
operations for which Contractor is providing ground handling services
pursuant to the Contractor Ground Handling Agreement. In connection
with Contractor granting to Continental access to any Airport
Facilities leased by Contractor pursuant to this Section 4(b),
Continental covenants and agrees, for the benefit of Contractor and its
lessor, that Continental shall not, by its use and occupancy of such
facilities, violate any of the provisions of such lease or other
agreements relating thereto which have been made available to
Contractor, and that it shall not knowingly permit any breach of any of
the obligations of Contractor under such agreements, and Continental
-6-
further agrees to release and indemnify Contractor in respect of such
facilities to the same extent as provided in Section 11 of the Form of
Sublease Agreement attached hereto as Exhibit A (which provisions are
hereby incorporated by reference), as if a sublease in respect of such
facilities had been entered into by Contractor and Continental.
Section 5. Capital Costs and Modification Designs.
(a) Contractor Funded. Contractor shall fund all capital
expenditures required to be made by Continental or Contractor under any
lease or other appropriate agreement to which either of them is a
party:
(i) in connection with any Terminal Facility used for
the provision of Contractor Services at any Contractor
Airport; provided, that Contractor shall not be required to
fund any expenditures that are subject to the provisions of
Section 5(b)(i);
(ii) in connection with any non-passenger-related
Terminal Facility (including crew rooms, break rooms and
office space) used exclusively or dedicated exclusively to
Contractor at any Continental Airport;
(iii) in connection with any Non-Terminal Facility
used for the provision of Contractor Services, which
Non-Terminal Facility is not also regularly used by
Continental, and regardless of whether such Non-Terminal
Facility is located at a Continental Airport or a Contractor
Airport;
(iv) in respect of ground handling equipment of the
type described in Paragraph 1.1.3 of the Continental Ground
Handling Agreement as being supplied by the Carrier (as
defined therein); and
(v) in respect of any Airport Facility used for the
provision of Contractor Services at any Contractor Airport not
described in clauses (i) through (iv) above and not described
in Section 5(b) below;
provided, however, that Contractor shall not make any capital
expenditures pursuant to the foregoing clauses (i) and (iii) without
the express written consent of Continental, which consent shall not be
unreasonably withheld if such capital expenditures are required by an
applicable Airport Authority or under the terms of an applicable lease
or other applicable agreement in effect as of the date hereof or to
which Continental shall have consented pursuant to Section 2(f); and
provided, further, that Contractor shall not be required to make any
capital expenditures in respect of ground handling equipment of the
type described in Paragraph 1.1.3 of the Contractor Ground Handling
Agreement as being supplied by the Carrier (as defined therein).
(b) Continental Funded. Continental shall fund all capital
expenditures required to be made by Continental or Contractor under any
lease or other appropriate agreement to which either of them is a
party:
-7-
(i) in respect of any Terminal Facility used for the
provision of Contractor Services as required in connection
with a change to the Continental Marks or the other
Identification, except for such capital expenditures made as a
part of Contractor's customary refurbishment expenditures;
(ii) in respect of any Terminal Facility used for the
provision of Contractor Services at any Continental Airport;
provided, that Continental shall not be required to fund any
expenditures that are subject to the provisions of Section
5(a)(iii);
(iii) in connection with any Non-Terminal Facility
regularly used by Continental, regardless of whether such
Non-Terminal Facility is also used by Contractor for the
provision of Contractor Services or whether such Non-Terminal
Facility is located at a Continental Airport or a Contractor
Airport;
(iv) in respect of ground handling equipment of the
type described in Paragraph 1.1.3 of the Contractor Ground
Handling Agreement as being supplied by the Carrier (as
defined therein); and
(v) in respect of any Airport Facility used for the
provision of Contractor Services at any Continental Airport
not described in clauses (i) through (iv) above and not
described in Section 5(a) above;
provided, however, that Continental shall not be required to make any
capital expenditures in respect of ground handling equipment of the
type described in Paragraph 1.1.3 of the Continental Ground Handling
Agreement as being supplied by the Carrier (as defined therein).
(c) Airport Conversion. If during the Term a Contractor
Airport becomes a Continental Airport, then Continental shall purchase
from Contractor at their book value at such time (as reflected on
Contractor's books) all fixtures and other unremovable capitalized
items that either (i) have been paid for by Contractor pursuant to
clauses (ii) or (iv) of Section 5(a) and consented to by Continental
pursuant to the proviso to Section 5(a), or (ii) are reflected on
Contractor's books as of the date of this Agreement; and provided that
any payment under this Section 5(c) shall not be in duplication of any
payment made under Section 6. If a Continental Airport becomes a
Contractor Airport, then Contractor shall have no obligation to
Continental in respect of expenditures made pursuant to Section 5(b).
(d) Reimbursements. Any reimbursement (whether or not made in
the form of a rental credit) by any Airport Authority of any capital
expenditures made by Contractor or Continental and referenced in this
Section 5 shall be remitted to the party (Contractor or Continental)
that funded such capital expenditures, except that any such
reimbursement in respect of fixtures or other capitalized items
purchased by Continental pursuant to Section 5(c) shall be remitted to
Continental, and provided that any such
-8-
reimbursement to Contractor shall be applied, for all purposes relating
to the Capacity Purchase Agreement, as a reduction of book value of the
asset or assets in respect of which such capital expenditure was made.
(e) Modification Designs. The designs (including the design
and construction specifications and scope of work) for any modification
of Contractor Facilities, including without limitation all
modifications funded by capital expenditures pursuant to Section 5, or
any Contractor Non-Terminal Facility that is at or adjacent to an
Existing Hub Airport, shall be generated by Continental and shall be
consistent with the Continental Marks and other Identification. The
contractors hired to make such modifications shall be selected by
Continental. All such modifications, including without limitation all
modifications funded by capital expenditures pursuant to Section 5,
shall be consistent with the requirements of the applicable leases or
other relevant agreements in respect of such Airport Facilities.
Section 6. Transfer of Terminal Facilities.
(a) Except as otherwise provided in Section 2(a), Section 5(c)
or this Section 6, during the Term Contractor shall not Transfer all or
any portion of its interest in any Contractor Terminal Facility. Any
purported Transfer of an interest in a Contractor Terminal Facility in
violation of Section 2(a), Section 5(c) or this Section 6 shall be void
and ineffectual ab initio.
(b) Upon the termination or other non-temporary cessation of
all Scheduled Flights into or out of any Applicable Airport at which
there are any Contractor Terminal Facilities (including in connection
with the termination of the Capacity Purchase Agreement), Continental
shall provide written notice as soon as practicable (but in no event
later than 20 Business Days after such termination or other
non-temporary cessation) to Contractor of Continental's intention to
retain for itself or its designee any Contractor Terminal Facilities at
such Applicable Airport.
(c) If, pursuant to a notice delivered pursuant to Section
6(b), Continental or its designee is retaining any or all of the
Contractor Terminal Facilities, then Continental shall purchase from
Contractor, at their book value (as reflected on Contractor's books) at
the time such notice is delivered, all fixtures and other unremovable
capitalized items paid for by Contractor (with Continental's approval
pursuant to Section 5) in connection with the use of such Contractor
Terminal Facilities; provided that any payment under this Section 6(c)
shall not be in duplication of any payment made under Section 5(c). In
addition, Contractor shall use commercially reasonable efforts to
assign the rights and obligations of the lease or other applicable
agreements with regard to such Contractor Terminal Facilities to
Continental or its designee, in which event Continental shall assume
such rights and obligations applicable to such Contractor Terminal
Facilities, including without limitation the obligation to make all
rental or similar payments from and after the date of such assignment,
but not including any amounts owed in respect of any breach by
Contractor of such lease or applicable agreements. Prior to the
consummation of such assignment, Contactor shall continue to fulfill
its obligations
-9-
under such lease or other applicable agreements; provided that
Continental shall promptly reimburse Contractor for all rental or
similar payments applicable to such Contractor Terminal Facilities from
the date of such notice until the lease or applicable agreements are
assigned, but not including any amounts owed in respect of any breach
by Contractor of such lease or applicable agreements.
(d) If, pursuant to a notice delivered pursuant to Section
6(b), Continental is not retaining one or more of the Contractor
Terminal Facilities (such Contractor Terminal Facilities not so
retained, the "Continental Rejected Facilities"), then Contractor shall
provide written notice as soon as practicable (but in no event later
than 20 Business Days after receipt of a notice pursuant to Section
6(b)) to Continental of Contractor's intention to retain or reject the
Continental Rejected Facilities; provided that if such termination of
Scheduled Flights is pursuant to a termination of the Capacity Purchase
Agreement for Cause, then, without limiting any of Continental's
remedies under the Capacity Purchase Agreement, Contractor shall retain
all of the Continental Rejected Facilities.
(e) If, pursuant to a notice delivered pursuant to, or the
proviso of, Section 6(d), Contractor is retaining any of the
Continental Rejected Facilities, then Continental's obligations under
this Agreement shall terminate with respect to those Continental
Rejected Facilities as of the date of such notice.
(f) If pursuant to a notice delivered pursuant to Section
6(d), Contractor is not retaining one or more of the Continental
Rejected Facilities (such Continental Rejected Facilities not so
retained, the "Contractor Rejected Facilities"), then Continental shall
purchase from Contractor, at their book value (as reflected on
Contractor's books) at the time such notice is delivered, all fixtures
and other unremovable capitalized items paid for by Contractor (with
Continental's approval pursuant to Section 5) in connection with the
use of the Contractor Rejected Facilities. In addition, at
Continental's direction, Contractor shall use commercially reasonable
efforts to either (i) terminate the lease or other agreement applicable
with respect to any such Contractor Rejected Facility, (ii) assign the
rights and obligations of such leases or other applicable agreements to
Continental or its designee, in which event Continental shall assume
such rights and obligations applicable to such Contractor Rejected
Facilities, including without limitation the obligation to make all
rental or similar payments from and after the date of such assignment,
including any termination payments, but not including any amounts owed
in respect of any breach by Contractor of such lease or applicable
agreements; provided that any payment under this Section 6(f) shall not
be in duplication of any payment made under Section 5(c), or (iii)
continue to fulfill its obligations under such lease or other
applicable agreements; provided that Continental shall promptly
reimburse Contractor for all rental or similar payments applicable to
such Contractor Rejected Facilities from the date of Contractor's
notice until the leases or applicable agreements terminate or are
otherwise assigned, but not including any amounts owed in respect of
any breach by Contractor of such lease or applicable agreements.
(g) Notwithstanding any other provision of this Section 6, if
Contractor returns to or otherwise reuses any Contractor Rejected
Facility or begins the use of any
-10-
other Airport Facilities at such airport reasonably similar to any
Contractor Rejected Facility (other than at the written direction of
Continental pursuant to Section 2 or otherwise pursuant to the Capacity
Purchase Agreement) within six months of the termination or other
non-temporary cessation of all Scheduled Flights to such airport, then
Contractor shall reimburse Continental for all amounts paid to
Contractor pursuant to this Section 6.
(h) For purposes of this Agreement, the parties agree that the
cessation of seasonal Scheduled Flights upon the end of the relevant
season shall constitute a temporary cessation if such Scheduled Flights
are expected to resume in the subsequent relevant season.
Section 7. Right of First Refusal for Certain Transfers.
(a) Until the fifth anniversary of the Termination Date under
the Capacity Purchase Agreement, Contractor shall not accept any offer
that, if consummated, would result in a Transfer of all or any portion
of an interest in a Contractor Facility, or a facility that was at any
time during the Term a Contractor Facility (including any Contractor
Terminal Facility that was retained by Contractor pursuant to Section
6(d) (an "Offer"), unless (x) Contractor shall have provided written
notice (an "Offer Notice") to Continental of such Offer, setting forth
all material terms and conditions upon which the proposed Transfer is
to be made, and (y) a period of 20 Business Days shall have expired
after receipt of the Offer Notice by Continental (the "Option Period"),
or Continental shall have earlier declined the Offer in writing
delivered to Contractor. Transmittal of the Offer Notice to Continental
shall constitute an offer by Contractor to Transfer the specified
interest in the Contractor Facility to Continental or its designee
subject to the terms and conditions set forth in the Offer Notice;
provided that, if the Offer Notice contains non-financial terms and
conditions that are not capable of being matched by Continental on
commercially reasonably terms, then Continental and Contractor shall
use commercially reasonable efforts to determine the economic value of
such terms and conditions (and the Option Period will be deemed not to
have commenced until the parties have so determined such economic
value), and Continental shall be entitled to accept the Offer Notice
without matching such terms and conditions, but rather by matching the
economic value of such terms and conditions.
(b) Continental shall have the exclusive option during the
Option Period to accept Contractor's offer to Transfer the specified
interest in the Contractor Facility to Continental or its designee,
subject to the terms and conditions set forth in the Offer Notice,
which option shall be exercisable during the Option Period by written
notice from Continental to Contractor. During the Option Period,
Contractor shall fully cooperate with Continental in the determination
of any material data relevant to the Transfer of the specified interest
in the Contractor Facility.
(c) If Continental shall accept the Offer in writing delivered
to Contractor during the Option Period, then Continental and Contractor
shall consummate the Transfer of the specified interest in the
Contractor Facility to Continental or its designee, subject
-11-
to the terms and conditions of the Offer, within 20 Business Days after
receipt of such written notice.
(d) If Continental does not accept the Offer in writing
delivered to Contractor during the Option Period, then Contractor shall
be entitled to Transfer the specified interest in the Contractor
Facility within 20 Business Days after the end of the Option Period on
terms and conditions no more favorable to the transferee than those set
forth in the Offer Notice. If the Transfer is not completed within such
time period, then Contractor must again comply with all of the
provisions of this Section 7 prior to making any Transfer of the
specified interest in the Contractor Facility.
(e) Any purported Transfer of an interest in a Contractor
Facility in violation of this Section 7 shall be void and ineffectual
ab initio.
8. Term. This Agreement shall terminate at the end of the Term;
provided that, any right or obligation hereunder that is specifically extended
beyond the termination of this Agreement shall be so extended.
9. Special CLE Primary Hangar Provisions. With regard to that certain
Sublease Agreement, dated effective as of January 1, 2001, between Continental
and ExpressJet relating to the CLE Primary Hangar, Continental agrees that it
shall use commercially reasonable efforts to keep in full force and effect that
certain Lease By Way of Concession, dated February 28, 2001, between Continental
and the City of Cleveland, for the Term and for a period of three years after
the Termination Date.
10. Special IAH Express Training Center Provisions. With regard to that
certain Sublease Agreement, dated effective as of January 1, 2001, between
Continental and ExpressJet relating to the IAH Express Training Center,
Continental agrees that it shall use commercially reasonable efforts to keep in
full force and effect that certain First Amended and Restated Special Facilities
Lease Agreement, dated effective as of December 1, 1998, between Continental and
the City of Houston, but only to the extent that such lease relates to the IAH
Express Training Center, until the earlier of the Termination Date and the end
of the term of such lease.
11. Continental Inventory. After receipt of notice by Continental from
time to time of inventory or equipment available for acquisition from
Continental, Contractor agrees to use reasonable commercial efforts to satisfy
all of its inventory or equipment acquisition requirements by acquiring items of
such inventory and equipment from Continental.
12. Cooperation. Notwithstanding any other provision of this Agreement,
each of the parties hereto shall use commercially reasonable efforts to comply
in a timely manner with all reasonable requests of the other parties made from
time to time that are in furtherance of this Agreement.
-12-
13. Relationship of the Parties. Nothing in this Agreement shall be
interpreted or construed as establishing among the parties a partnership, joint
venture or other similar arrangement.
14. Binding Effect; Assignment. This Agreement and all of the
provisions hereof shall be binding upon the parties hereto and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns. Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by a party hereto without the prior written consent
of the other parties.
15. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. The Agreement may be
executed by facsimile signature.
16. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas (excluding Texas choice-of-law
principles that might call for the application of the law of another
jurisdiction) as to all matters, including matters of validity, construction,
effect, performance and remedies. Any action arising out of this Agreement or
the rights and duties of the parties arising hereunder may be brought, if at
all, only in the state or federal courts located in ▇▇▇▇▇▇ County, Texas.
17. Confidentiality. Except as required by law or in any proceeding to
enforce the provisions of this Agreement, Continental, ExpressJet and Holdings
hereby agree not to publicize or disclose to any third party the terms or
conditions of this Agreement or any exhibit, schedule or appendix hereto without
the prior written consent of the other parties hereto. Except as required by law
or in any proceeding to enforce the provisions of this Agreement, Continental,
ExpressJet and Holdings hereby agree not to disclose to any third party any
confidential information or data, both oral and written, received from the other
in connection with this Agreement and designated as such by the other, without
the prior written consent of the party providing such confidential information
or data. If any party is served with a subpoena or other process requiring the
production or disclosure of any of such agreements or information, then the
party receiving such subpoena or other process, before complying with such
subpoena or other process, shall immediately notify the other parties of same
and permit said other parties a reasonable period of time to intervene and
contest disclosure or production. Upon termination of this Agreement, each party
must return to each other any confidential information or data received from the
other and designated as such by the party providing such confidential
information or data which is still in the recipient's possession or control.
18. Equitable Remedies. Each of Continental and Contractor acknowledges
and agrees that under certain circumstances the breach by Continental or
Contractor of a term or provision of this Agreement will materially and
irreparably harm the other party, that money damages will accordingly not be an
adequate remedy for such breach and that the non-defaulting party, in its sole
discretion and in addition to its rights under this Agreement and any other
remedies it may have at law or in equity, may apply to any court of law or
equity of competent jurisdiction (without posting any bond or deposit) for
specific performance and/or other injunctive relief in order to enforce or
prevent any breach of the provisions of this Agreement.
-13-
19. Subject to Capacity Purchase Agreement. Notwithstanding anything to
the contrary contained in this Agreement, the provisions of this Agreement shall
be subject in all respects to the provisions of the Capacity Purchase Agreement.
-14-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date and year first written above.
CONTINENTAL AIRLINES, INC.
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
EXPRESSJET HOLDINGS, INC.
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
EXPRESSJET AIRLINES, INC.
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
-15-
EXHIBIT A
to the Master Facility and Ground Handling Agreement
FORM OF SUBLEASE AGREEMENT
This Sublease Agreement (this "Agreement"), dated as of the __ day of
__________, by and between __________, a __________ corporation ("Sublessor"),
whose address is __________, and __________, a __________ corporation
("Sublessee"), whose address is __________.
WITNESSETH:
WHEREAS, Sublessor and Sublessee are parties to that certain Master
Facility and Ground Handling Agreement dated as of January 1, 2001 ("Master
Facility Agreement");
WHEREAS, Sublessor has entered into various agreements (such
agreements, as the same may have been or may from time to time be amended, the
"Prime Agreements") with other parties ("Prime Lessors") pursuant to which the
Prime Lessors have conferred upon Sublessor the right to use certain premises;
WHEREAS, Sublessor desires to allow Sublessee the right to use certain
portions of the premises that Sublessor has the right to use pursuant to the
Prime Agreements (such portions, together with such associated rights and
privileges, such as reasonable and necessary ingress and egress thereto to the
extent permitted by the applicable Prime Agreement, are described on Schedule 1
attached hereto and are hereinafter referred to as the "Subleased Premises");
and,
WHEREAS, Sublessee desires to hire and take said Subleased Premises as
provided herein, in accordance with the terms and conditions hereinafter set
forth.
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements herein contained, Sublessor and Sublessee agree as follows:
1 -- Subleased Premises
a) Sublessor hereby lets unto Sublessee and Sublessee hereby hires and
takes from Sublessor the Subleased Premises in accordance with the
terms and conditions hereof.
b) Sublessee agrees and accepts the associated rights and privileges
granted under the Prime Agreements, subject, however, to the following
limitations and reservations, and subject to other terms and conditions
set forth in this Agreement:
(1) The Prime Agreements, insofar as they relate to the Subleased
Premises, and such Prime Agreements are hereby incorporated by
this reference as if fully set forth herein.
A-1
(2) Sublessee covenants and agrees, for the benefit of Sublessor
and the Prime Lessors, that it shall not, by its use and
occupancy of the Subleased Premises, violate any of the
provisions of the Prime Agreements relating thereto, and that
it shall not knowingly permit any breach of any of the
obligations of Sublessor under such Prime Agreements.
Sublessee covenants and agrees that this Agreement shall be in
all respects subject and subordinate to the Prime Agreements
relating thereto. Nothing contained in this Agreement shall be
deemed to confer upon Sublessee any rights that are not
granted by or are in conflict with the applicable Prime
Agreement.
(3) Sublessor reserves the right to enter upon the Subleased
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 for the purpose of
inspection, maintenance, making repairs, replacements,
alterations or improvements (to the Subleased Premises or to
other areas), showing to prospective subtenants or other
users, and for other purposes permitted elsewhere in this
Agreement.
2 -- CONDITION OF SUBLEASED PREMISES AND ALTERATIONS
Except to the extent that Sublessor has been granted representations or
warranties under the Prime Agreements regarding the condition of the Subleased
Premises the benefit of which may, pursuant to the applicable Prime Agreement
and applicable law, inure to Sublessee (in which case such representations and
warranties shall be deemed made by Sublessor in favor of Sublessee), Sublessee
accepts the Subleased Premises AS-IS, WITH ALL FAULTS, LATENT OR KNOWN. Subject
to the foregoing, Sublessor MAKES NO WARRANTIES, GUARANTEES, OR REPRESENTATIONS
OF ANY KIND EITHER EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, PERTAINING
TO THIS AGREEMENT OR THE PROPERTY DESCRIBED IN THIS AGREEMENT. Subject to the
foregoing, SUBLESSEE HEREBY WAIVES, AND SUBLESSOR EXPRESSLY DISCLAIMS ALL
WARRANTIES, GUARANTEES AND REPRESENTATIONS, EXPRESS OR IMPLIED, ARISING BY LAW
OR OTHERWISE, INCLUDING BUT NOT LIMITING THE GENERALITY OF THE FOREGOING, ANY
IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE OR REGARDING THE CONDITION
OF THE PROPERTY. Subject to the forgoing, IN NO EVENT SHALL SUBLESSOR'S
LIABILITY OF ANY KIND UNDER THIS AGREEMENT INCLUDE ANY SPECIAL, INCIDENTAL,
CONSEQUENTIAL OR EXEMPLARY DAMAGES EVEN IF SUBLESSOR SHALL HAVE BEEN ADVISED OF
THE POSSIBILITY OF POTENTIAL LOSS OR DAMAGE.
Any alterations will be the sole responsibility and expense of the
Sublessee and will require the prior written approval of Sublessor and, if
required under the applicable Prime Agreement, the respective Prime Lessor.
A-2
3 -- TERM
The term of this Agreement shall commence as of the date of first
occupancy of the Subleased Premises by Sublessee and (unless sooner terminated
as hereinafter provided) shall continue in effect thereafter until termination
of the Master Facility Agreement, but under no circumstances shall it continue
beyond the term of the Prime Agreement relating to such portion of the Subleased
Premises.
4 -- RENTAL
For the use of the Subleased Premises, Sublessee agrees to pay to
Sublessor the amounts set forth for each separate Subleased Premises location on
Schedule 2 attached hereto.
5 -- UTILITIES AND SERVICES
Sublessor shall not be liable for any interruptions of utilities or
services arising from repairs, alterations, or improvements on or about the
Subleased Premises, except (and only) to the extent that the Prime Lessor of
such portion of the Subleased Premises is liable to Sublessor for such event.
Sublessee shall pay Sublessor an equitably allocated pro rata share of any
electrical, gas, water or other utility costs associated with the use by
Sublessee of the Subleased Premises.
6 -- GOVERNMENT REQUIREMENTS
Sublessee shall procure from all governmental authorities having
jurisdiction over the operations of Sublessee at the Subleased Premises, all
licenses, certificates, permits or other authorization which may be necessary
for the conduct of its operations. Sublessee shall also at all times promptly
observe, comply with, and execute the provisions of any and all present and
future governmental laws, rules, regulations, requirements, orders and
directives which may apply to the operations of Sublessee on the Subleased
Premises or its occupancy thereof.
7 -- RULES, REGULATION & ADMINISTRATION
Sublessee covenants and agrees to observe and obey the applicable rules
and regulations promulgated by the applicable Prime Lessor and all reasonable
rules and regulations promulgated by Sublessor for the conduct of tenants and
subtenants at the Subleased Premises; and to observe and obey all present rules
and regulations issued by Sublessor and/or the respective Prime Lessor for
safety, health, preservation of the Subleased Premises, security and all
reasonable rules and regulations promulgated in writing in the future by
Sublessor and/or the respective Prime Lessor.
8 -- OTHER OBLIGATIONS OF SUBLESSEE
Sublessee, in its use of all of the Subleased Premises and related
facilities, and in the conduct of its operations, shall:
A-3
a) Conduct its operations in an orderly and proper manner. Sublessee shall
not create or generate or permit the creation or generation of
vibrations that could reasonably be regarded as posing a material risk
of damage to the Subleased Premises; unreasonably loud noises; the
emission of steam, gases or unpleasant or noxious odors; nor in any
other manner annoy, disturb or be offensive to other tenants or users
of the premises or common areas.
b) Comply with all applicable federal, state and local laws, ordinances,
regulations and orders. Without limiting the generality of the
foregoing, to the extent that the activities of Sublessee shall be
subject to the same, Sublessee shall comply with the following:
1. Compliance with Regulations. Sublessee shall comply with the
regulations relative to nondiscrimination in federally
assisted programs of the United States Department of
Transportation (hereinafter "DOT") Title 49, Code of Federal
Regulations, Part 21, as they may be amended from time to time
("Regulations"), which are herein incorporated by reference
and made a part of this Agreement.
2. Nondiscrimination Generally. Sublessee shall not discriminate
on the grounds of race, color, sex, creed or national origin
in the selection and retention of subcontractors, including
procurements of materials and leases of equipment.
3. Solicitations for Subcontractors, Including Procurements of
Materials and Equipment. If required by the Regulations, in
all solicitations either by competitive bidding or negotiation
made by Sublessee for work to be performed under a
subcontract, including procurements of materials or leases of
equipment, each potential subcontractor or supplier shall be
notified by Sublessee of Sublessee's obligations under the
Regulations relative to nondiscrimination on the grounds of
race, color, or national origin.
4. Information and Reports. Sublessee shall provide all
information and reports required by the Regulations or
directives issued pursuant thereto and shall permit access to
its books, records, accounts other sources of information, and
its facilities as may be determined by the airport sponsor or
the Federal Aviation Administration (the "FAA") to be
pertinent to ascertain --- compliance with such Regulations,
orders, and instructions. Where any information required of
Sublessee is in the exclusive possession of another who fails
or refuses to furnish this information, Sublessee shall so
certify to the airport sponsor or the FAA, as appropriate, and
shall set forth what efforts it has made to obtain the
information.
5. Nondiscrimination Covenant. Sublessee hereby covenants and
agrees, as a covenant running with the land, that in the event
facilities are constructed, maintained, or otherwise operated
by Sublessee on the Subleased Premises for a purpose for which
a DOT program or activity is extended or for another purpose
involving the provision of similar services or benefits,
Sublessee shall maintain and operate such facilities and
services in compliance with all other requirements imposed
pursuant to 49 CFR Part 21, Nondiscrimination in Federally
Assisted
A-4
Programs of the Department of Transportation, and as said
Regulations may be amended. Sublessee hereby covenants and
agrees, as a covenant running with the land: (1) that no
person on the grounds of race, color, sex, creed or national
origin shall be excluded from participation in, denied the
benefits of, or be otherwise subjected to discrimination in
the use of the Subleased Premises, (2) that in the
construction of any improvements on, over, or under such
Subleased Premises and the furnishing of services thereon, no
person on the grounds of race, color, sex, creed or national
origin shall be excluded from participation in, denied the
benefits of, or otherwise be subjected to discrimination, (3)
that Sublessee shall use the Subleased Premises in compliance
with all other requirements imposed by or pursuant to 49 CFR
Part 21, Nondiscrimination in Federally Assisted Programs of
the Department of Transportation, and as said Regulations may
be amended. Sublessee assures that it will comply with
pertinent statutes, Executive Orders and such rules as are
promulgated to assure that no person shall, on the grounds of
race, creed, color, national origin, sex, age, or handicap be
excluded from participating in any activity conducted with or
benefiting from Federal assistance.
c) Control the demeanor and appearance of its officers, and employees so
as to maintain professional standards and upon objection from Sublessor
or the respective Prime Lessor concerning the conduct, demeanor, or
appearance of any person, Sublessee shall immediately take all steps
necessary to remove the cause of the objection.
d) Not allow garbage, debris, or other waste materials (whether solid,
liquid or gaseous) to collect or accumulate on the Subleased Premises
or in access and service areas of the Subleased Premises used by
Sublessee, and Sublessee shall cause to be removed from the Subleased
Premises any debris and other waste material generated by Sublessee.
Sublessee shall use all due care when effecting removal of all such
waste and shall effect such removal pursuant to the applicable
regulations existing at Subleased Premises for the removal of waste as
promulgated by the respective Prime Lessor, Sublessor or others having
jurisdiction. Sublessee shall keep all lobbies, vestibules and steps
within the Subleased Premises free from dirt and rubbish.
e) Sublessee is responsible to maintain at all times the Subleased
Premises and all equipment, fixtures, and materials used by Sublessee
thereon, or in other areas, in a clean and sanitary manner.
It is intended that the standards and obligations imposed by this section shall
be maintained or complied with by Sublessee in addition to its compliance with
any applicable governmental laws, ordinances and regulations currently in effect
or which may be enacted.
9 -- MAINTENANCE AND REPAIR
a) Sublessee shall take good care of the Subleased Premises while they are
under Sublessee's control and shall make or cause to be made at its own
expense all installations, repairs, replacements, redecorating and
other maintenance necessary to keep
A-5
the Subleased Premises, and equipment, fixtures, furnishings and signs
therein clean and in good condition and repair; all of which shall be
in accordance with the standards of the facility and of a quality and
class not inferior to the original material or workmanship. All
maintenance and repair work undertaken by Sublessee shall be done in a
good and workmanlike manner, leaving the Subleased Premises free of
liens for labor and materials.
b) Sublessee shall maintain the Subleased Premises and conduct its
operations in such manner that at no time during the letting hereunder
will it do or knowingly permit to be done any act or thing upon the
Subleased Premises which will invalidate or conflict with any fire and
casualty insurance policies covering the Subleased Premises, or any
part thereof, or the Subleased Premises, or any part thereof, or which
may create a hazardous condition so as to increase the risk normally
attendant upon the operations contemplated hereunder, and Sublessee
shall promptly observe and comply with any and all present and future
rules and regulations, requirements, orders and directions of Fire
Underwriters Association or of any other board or organization which
may exercise similar functions. Any increase in fire or casualty
insurance premiums attributable to Sublessee's acts or omissions under
this Agreement shall be promptly reimbursed by Sublessee, upon receipt
of Sublessor's invoice therefor.
10 -- RELATIONSHIP
It is expressly understood and agreed that Sublessee is and shall be an
independent contractor and operator, responsible for its acts or omissions in
connection with its use and occupancy of the Subleased Premises and any related
areas used by Sublessee.
11 -- RELEASE AND INDEMNITY
Release
Sublessee agrees that Sublessor shall not be liable for any loss or
damage to any property of any persons (including property of Sublessee, its
officers, directors, employees, agents, customers, concessionaires, vendors,
contractors or invitees), occasioned by theft, fire, acts of God, or any
governmental body or authority, injunction, riot, war, other tenants of the
Subleased Premises or the premises of which the Subleased Premises are a part,
or any damage or inconvenience which may arise through repair, or alteration of
the Subleased Premises, or failure to make repairs in a timely manner, or the
unavailability of utilities, or for any other cause, EXCEPT TO THE EXTENT CAUSED
BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUBLESSOR OR THE RESPECTIVE
PRIME LESSOR, IT BEING AGREED THAT THIS RELEASE SHALL APPLY TO CLAIMS RESULTING
FROM THE NEGLIGENCE OF SUBLESSOR OR SUCH PRIME LESSOR. Sublessor agrees that any
waivers of claims for property damage contained in the respective Prime
Agreement made by the Prime Lessor thereunder shall inure to the benefit of
Sublessee to the extent permitted by the applicable Prime Agreement and
applicable law.
A-6
Indemnity
Anything in this Agreement to the contrary notwithstanding, and without
limiting Sublessee's obligation to provide insurance pursuant to Article 12
hereunder, Sublessee covenants and agrees that it shall indemnify, defend and
save harmless Sublessor, its affiliates (other than Sublessee), any affected
Prime Lessor, and their respective directors, officers, employees, agents,
successors and assigns ("Indemnitees"), from and against all liabilities,
losses, damages, penalties, claims, costs, charges and expenses, causes of
action and judgments of any nature whatsoever, including without limitation
reasonable attorney's fees, costs and related expenses that may be imposed upon
or incurred by the Indemnitees by reason or arising out of any of the following,
except if caused by the negligence or willful misconduct of any such Indemnitee
(it being acknowledged, however, that if the indemnification obligations of
Sublessor under the respective Prime Agreement requires Sublessor to indemnify
such Prime Lessor (or other parties therein identified) Sublessee shall be
required to indemnify such Prime Lessor and other identified parties to the same
extent; AND THAT SUCH INDEMNIFICATION DUTIES MAY APPLY EVEN WHERE AN INDEMNITEE
UNDER THE APPLICABLE PRIME AGREEMENT IS NEGLIGENT OR OTHERWISE AT FAULT):
a) Any occupancy, management or use of the Subleased Premises, or areas
surrounding the Subleased Premises or the service areas, parking areas,
or pedestrian areas in or around the Subleased Premises, by Sublessee
or any of its directors, officers, agents, contractors, servants,
employees, licensees, invitees, successors and assigns;
b) Any negligence on the part of Sublessee or any of its directors,
officers, agents, contractors, servants, employees, licensees,
invitees, successors and assigns;
c) Any accident, injury to or death of any person, or damage to or
destruction of any property of Sublessee or its officers, directors,
employees, agents, customers, concessionaires, vendors, contractors or
invitees occurring in or on the Subleased Premises; or
d) Any failure on the part Sublessee to comply with any of the covenants,
agreements, terms or conditions contained in this Agreement.
12 -- INSURANCE
Without limiting Sublessee's obligation to indemnify Sublessor as
provided for in this Agreement, Sublessee shall procure and maintain, at its own
cost and expense, at all times during the term of this Agreement, insurance of
the following types in amounts not less than those indicated with insurers
satisfactory to Sublessor:
Comprehensive public liability insurance with limits of not less than
$5,000,000 per occurrence for death or bodily injury; workers compensation
insurance with statutory limits; and employer's liability insurance of not less
than $10,000,000 in limits.
A-7
Such insurance shall contain the following endorsements:
(1) Name Sublessor and the respective Prime Lessor, its parents and
subsidiaries, their respective directors, officers, employees, agents,
successors and assigns, as Additional Insureds as it pertains to this
Agreement and the respective Subleased Premises. Upon written notice
from Sublessor, Sublessee shall promptly cause any other party required
to be named by as an Additional Insured under the Prime Agreement to be
so named.
(2) Include a Severability of Interest (Cross Liability) provision whereby
such insurance applies separately to each insured to the extent of
Sublessee's indemnity obligations hereunder.
(3) Include a breach of warranty clause in favor of the Additional
Insureds, whereby such insurance shall not be invalidated by any breach
of warranty by Sublessee.
(4) Include a blanket contractual liability clause to cover the liability
and indemnity assumed by the Sublessee under this Agreement.
(5) Provide that such insurance is primary without right of contribution
from Sublessor's insurance.
(6) Provide that Sublessor is not obligated for payment of any premiums,
deductibles, retention or other self-insurances thereunder.
(7) Provide for 30 days advance notice to Sublessor and the respective
Prime Lessor, by registered or certified mail, of any cancellation,
reduction, lapse or other material change.
(8) Include a Waiver of Subrogation clause in favor of the Additional
Insureds.
The indemnities and insurance provisions contained or referred to herein shall
survive the expiration or other termination of this Agreement.
13 -- ASSIGNMENT
This Agreement and the rights and obligations created hereunder may not
be assigned or delegated by Sublessee without the prior written consent of
Sublessor and, if required of Sublessor under the applicable Prime Agreement,
the applicable Prime Lessor; but subject to the foregoing, this Agreement and
the rights and obligations of the parties hereby created, shall be binding upon
and inure to the benefit of the parties hereto, their respective successors,
assigns and legal representatives. Sublessor reserves the right to assign or
transfer its interest hereunder without notice.
14 -- WAIVER
The observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or prospectively)
by the party entitled to enforce such term, but such waiver shall be effective
only if it is in writing signed by the party against which
A-8
such waiver is to be asserted. Unless otherwise expressly provided in this
Agreement, no delay or omission on the part of any party in exercising any right
or privilege under this Agreement shall operate as a waiver thereof, nor shall
any waiver on the part of any party of any right or privilege under this
Agreement operate as a waiver of any other right or privilege under this
Agreement nor shall any single or partial exercise of any right or privilege
preclude any other or further exercise thereof or the exercise of any other
right or privilege under this Agreement. No failure by either party to take any
action or assert any right or privilege hereunder shall be deemed to be a waiver
of such right or privilege in the event of the continuation or repetition of the
circumstances giving rise to such right unless expressly waived in writing by
the party against whom the existence of such waiver is asserted.
15 -- FORCE MAJEURE
Neither party shall be deemed in violation of this Agreement if it is
prevented from performing any of its non-monetary obligations hereunder by any
labor or industrial dispute; civil disturbance; vandalism or act of a public
enemy; shortage of labor, energy or material; court order, regulation, action or
non-action of any governmental authority; weather condition; natural disaster;
act of God; or other circumstances not reasonably within its control, and which,
with the exercise of due diligence, it is unable to overcome; provided that, the
provisions of this Article 15 shall not apply where the time period for
Sublessor to perform its obligations under the Prime Agreement would not be
extended upon the occurrence of any of the foregoing. Each party shall give the
other immediate notice of such interruption, shall make all reasonable efforts
to eliminate it as soon as possible, and at its conclusion, shall resume
performance in accordance with its obligations hereunder; provided that, neither
party shall be required to settle or compromise any strike or other labor
dispute to so eliminate such interruption.
16 -- NOTICE
All notices made pursuant to this Agreement shall be in writing and
shall be deemed given upon (a) a transmitter's confirmation of a receipt of a
facsimile transmission (but only if followed by confirmed delivery of a standard
overnight courier the following Business Day or if delivered by hand the
following Business Day), or (b) confirmed delivery of a standard overnight
courier or delivered by hand, to the parties at the following addresses:
if to Sublessor:
[insert]
if to Sublessee:
[insert]
or to such other address as either party hereto may have furnished to the other
party by a notice in writing in accordance with this Article 16.
A-9
17 -- TERMINATION
Without limiting any rights of Sublessor, either at law or in equity,
to exercise any remedies available to Sublessor as may be afforded by operation
of law, this Agreement may be terminated as follows:
a) Immediately upon termination or expiration of the respective Prime
Agreement (notwithstanding that such agreement may remain in effect as
to space other than the Subleased Premises), or upon expiration or
termination of Sublessor's right to grant Sublessee the right to occupy
and use the applicable portion of the Subleased Premises.
b) Immediately without notice to Sublessee if Sublessee files a voluntary
petition in bankruptcy or if proceedings in bankruptcy shall be
instituted against it and not dismissed within 30 days, or that a court
shall take jurisdiction of Sublessee or its assets pursuant to
proceedings brought under the provisions of any Federal Reorganization
Act, or that a receiver of Sublessee's assets shall be appointed and
such taking or appointment shall not be stayed or vacated within a
period of 30 days.
c) Immediately upon written notice to Sublessee, if Sublessee fails to pay
any installment of rent or additional rent within 10 days after receipt
of written notice that the same was not paid when due.
d) Immediately upon written notice to Sublessee, if Sublessee fails to
perform, keep, and observe any of the terms, covenants or conditions
herein contained on the part of Sublessee to be performed, kept, or
observed and such failure continues for 30 days after the date of
written notice thereof is sent to Sublessee; provided that, if
Sublessor would have a lesser period of time to cure such default under
the applicable Prime Agreement, then Sublessee shall only be permitted
the time period that Sublessor would be permitted to cure such default,
less 48 hours; it being further agreed that Sublessor may, but shall
not be obligated to, take any action it reasonably deems necessary or
advisable at Sublessee' expense to cure such default if such default
causes interference with Sublessor's operations or if it is determined
by Sublessor, acting reasonably, that such default is likely to result
in Sublessor's loss of the use of the Subleased Premises pursuant to
the Prime Agreement.
e) Immediately by either party upon the acquisition or condemnation of the
Subleased Premises by eminent domain, in which event Sublessee shall
have no claim for the unexpired term nor a claim for any part of the
award made for the Subleased Premises.
In the event that this Agreement is terminated in accordance with the
foregoing provisions prior to the expiration of the term after a default by
Sublessee hereunder, Sublessor may (but shall not be obligated to) relet the
Subleased Premises for a term and upon any conditions it may deem proper. In no
event will Sublessee be entitled to receive any payment from Sublessor if the
profits from such reletting exceed the rental reserved to be paid hereunder by
Sublessee. Any termination by Sublessor under this section shall not affect or
impair the right
A-10
of Sublessor to recover actual damages occasioned by any default by Sublessee
that may be recoverable under applicable law.
18 -- SURRENDER OF SUBLEASED PREMISES
Upon expiration or other termination of this Agreement, Sublessee shall
remove all its signs, trade fixtures and any other personal property, repair all
damage caused by removal, and surrender the Subleased Premises in good order and
condition, reasonable wear and tear excepted. If Sublessee fails to surrender
possession as aforestated, Sublessor may re-enter and repossess the Subleased
Premises without further notice (any personal property therein being deemed
abandoned by Sublessee) and Sublessee hereby waives service of any notice of
intention to re-enter and/or right to redeem that may be granted by applicable
laws.
Sublessor agrees that on payment of the rents and any other payments
due, and performance of the covenants and agreements on the part of Sublessee to
be performed hereunder, Sublessee shall peaceably have and enjoy the Subleased
Premises for the uses granted to Sublessee hereunder, subject to Sublessor's
continued rights under the applicable Prime Agreement and any limitations
otherwise stated herein.
20 -- CONDITIONS
It is agreed that if required under the terms of the applicable Prime
Agreement, the use of the Subleased Premises by Sublessee is subject to the
consent and approval of the applicable Prime Lessor. If written consent by any
Prime Lessor is denied after reasonable efforts by the parties hereto to obtain
such consent, then either party may, at its option (but without limiting any of
Sublessor's rights in respect of any breach of the terms hereof prior to such
rescission) rescind its signature hereon and thereafter this Agreement shall
become null and void (but only as to the portion of the Subleased Premises
covered by such Prime Agreement), and the parties shall become discharged from
all further unaccrued liabilities hereunder. If the consent of any Prime Lessor
is required, then for purposes of submittal of this Agreement for the consent of
such Prime Lessor, it is agreed that Schedule 1 may be redacted so as to
describe only the portion of the Subleased Premises as are leased by Sublessor
from such Prime Lessor and so as to set forth only the respective Prime
Agreements that pertain to the Subleased Premises.
21 -- TAXES
If Sublessor shall be assessed for taxes on any of the Sublessee's
leasehold improvements, equipment, furniture, fixtures, personal property or
business operations, Sublessee shall pay to Sublessor the amount of such taxes
within 10 days after delivery of a written statement thereof.
22 -- SUBJECT IN ALL RESPECTS TO OTHER AGREEMENTS
Notwithstanding anything to the contrary contained in this Agreement,
the provisions of this Agreement shall be subject in all respects to the
provisions of the Master Facility Agreement and to the provisions of that
certain Capacity Purchase Agreement, dated as of January 1, 2001, among
Continental Airlines, Inc., ExpressJet Holdings, Inc., and ExpressJet Airlines,
Inc.
[SIGNATURE PAGE FOLLOWS]
A-11
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the day and year first above written.
SUBLESSOR SUBLESSEE
BY: BY:
-------------------------- ---------------------------
------------------ ------------------
------------------ ------------------
------------------ ------------------
DATE: DATE:
------------------------- ---------------------------
Schedules to be added:
Schedule 1 -- Description of Subleased Premises
Schedule 2 -- Rental Amounts for Subleased Premises
A-12
EXHIBIT B
to the Master Facility and Ground Handling Agreement
FORM OF ASSIGNMENT
This Agreement (this "Agreement") is made and entered into, and is to
be effective on, this the ____ day of ____________ (the "Effective Date"), by
____________, a ____________ corporation ("Assignor") and ____________, a
____________ corporation ("Assignee"), [and the ____________ ("Airport
Lessor")].
WITNESSETH:
WHEREAS, Assignor leases space], designated on Exhibit(s) _____
attached hereto and made a part hereof (together the "Premises"), at
____________ at the ____________ Airport, ____________ (the "Airport") under a
certain [Airport Use and Lease Agreement dated ____________, (as amended,
hereinafter referred to as the "Lease")] between Assignor and the Airport
Lessor;
WHEREAS, a copy of the Lease has been provided to Assignee and is
incorporated herein by reference;
WHEREAS, Assignee operates at the Airport and from portions of the
Premises;
WHEREAS, Assignor desires to assign to Assignee [all] [a portion] of
Assignor's remaining right, title and interest in the Lease [insofar (and only
insofar) as the Lease pertains to certain leased premises and improvements
described on the attached Annex 1], such space herein called the "Assigned
Space" and the improvements located within the Assigned Space are herein called
the "Assigned Space Improvements". The Assigned Space and Assigned Space
Improvements are herein called the "Assigned Premises";
WHEREAS, Assignee desires to accept such assignment from Assignor;
[WHEREAS, such assignment requires the prior written consent of the
Airport Lessor];
[WHEREAS, pursuant to the Lease, such assignment does not require the
consent of the Airport Lessor (but written notice of such assignment is required
to be given to the Airport Lessor)].
NOW, THEREFORE, in consideration of the assignment herein made and of
the mutual agreements and covenants hereinafter set forth, the parties hereto
agree as follows:
1. DEMISE AND USE
Effective on the Effective Date, Assignor hereby assigns to Assignee
all of the interest of the lessee under the Lease [insofar (and only insofar) as
the Lease pertains to the Assigned Premises].
Annex B.SYS.0
Continental Airlines/ExpressJet Airlines, Inc.[ExpressJet as Handling Company]
Dated: January 1, 2001
B-1
2. ACCEPTANCE OF ASSIGNMENT
Assignee accepts the foregoing assignment of the Lease [insofar (and
only insofar) as the Lease pertains to the Assigned Premises] and covenants with
Assignor, from and after the Effective Date, to pay all rent and other charges
provided for in the Lease, as amended and to perform and observe all of the
other covenants, conditions and provisions in the Lease, as amended, to be
performed or observed by or on the part of Assignor as tenant under the Lease
[in respect of the Assigned Premises].
3. WARRANTIES
Assignor hereby warrants and covenants that (i) except for the rights
and interests of the Airport Lessor under the Lease, Assignor is now the sole
owner of all rights and interests in and to the Assigned Premises, (ii) the
Lease[, as it relates to the Assigned Premises,] is in full force and effect,
(iii) Assignor has complied with all terms and provisions of the Lease [as it
relates to the Assigned Premises] and same is not currently in default and
Assignor knows of no condition which with the passage of time or giving of
notice might constitute a default under the Lease by any party, and (iv) the
Assigned Premises and the Lease[, insofar as it relates to the Assigned
Premises,] are free from all liens and encumbrances. A copy of the Lease (and
all amendments thereto) are attached as Annex 2.
Subject to the foregoing, Assignee accepts the Assigned Premises and
equipment thereon "AS IS" and acknowledges that there is, with respect to the
Assigned Premises and equipment thereon, NO WARRANTY, REPRESENTATION, OR
CONDITION OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING THE WARRANTY OF
MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE, and that none shall be
implied by law. Except as stated in this Agreement, Assignee acknowledges that
Assignor has made no representations with respect to the Assigned Premises or
equipment. Final determination of the suitability of the Assigned Premises or
equipment for the use contemplated by Assignee is the sole responsibility of
Assignee, and Assignor shall have no responsibility in connection with such
suitability.
4. ASSIGNEE TO COMPLY WITH LEASE TERMS
Assignee agrees to perform and observe all of the covenants, conditions
and terms of the Lease relating to the period of time from and after the
Effective Date [(insofar, but only insofar, as the same related to the Assigned
Premises)], and to protect, defend, indemnify and hold harmless Assignor from
and against all claims, damages, and expenses of any kind asserted by any person
or entity, including the Lessor, arising out of the nonperformance,
nonobservance or improper performance or observance of the covenants, conditions
or terms of the Lease [(insofar, but only insofar, as the same relates to the
Assigned Premises)]. Assignor shall comply with all remaining terms of the
Lease, to the extent any non-compliance could adversely affect Assignee rights
in or to the Assigned Premises. Assignor agrees to protect, defend, indemnify
and hold harmless Assignee from and against all claims, damages, and expenses of
any kind asserted by any person or entity, including the Airport Lessor, arising
out of the nonperformance, nonobservance or improper performance or observance
prior to the Effective Date of the covenants, conditions or terms of the Lease
[(insofar, but only insofar as the same relates to or
Annex B.SYS.0
Continental Airlines/ExpressJet Airlines, Inc.[ExpressJet as Handling Company]
Dated: January 1, 2001
B-2
effects the Assigned Premises)]. Nothing herein shall be construed as to
obligate Assignee to be responsible in any way for any hazardous material
located in, or the environmental condition of, the Assigned Premises as of the
Effective Date to the extent not caused by or arising from Assignee's
operations.
5. APPROVALS
[This Agreement shall not become effective unless and until the consent
of the Airport Lessor is given by execution of consents for the assignments
herein made, which consents shall be requested on the standard form for such
consents by the lessor as attached hereto as Annex 3. Assignor and Assignee
hereby mutually agree to expeditiously take any and all actions, and to
cooperate fully with each other, with respect to obtaining any approvals,
authorizations, licenses or similar items that may be necessary or desirable in
order to carry out the agreements set forth herein or contemplated hereby. The
parties hereto agree to request the consent of the Lessor on the consent form
attached hereto as Annex 3. The parties agree to make such reasonable changes to
such form as may be required by Lessor.]
[Consent by Airport Lessor. Airport Lessor, as evidenced by its
execution below, does hereby consent to this Assignment, [releases Assignor from
all of its responsibilities and obligations under the Lease that are
attributable to the period of time after the Effective Date, and] agrees to look
solely to Assignee for performance of all obligations thereafter under the Lease
[as it relates to the Assigned Premises].]
[Acknowledgement. Assignor and Airport Lessor hereby represent to
Assignee that the Lease is currently in full force and effect, and that they
know of no events of default relating to the Lease or the Assigned Premises as
of the date hereof.]
6. APPLICABLE LAW
[The laws of the State where the Assigned Premises are located shall be
used in interpreting this Agreement and in determining the rights of the parties
under it.]
7. SEVERABILITY
If any part of this Agreement is held to be invalid by final judgment
of any court of competent jurisdiction, the part held invalid shall be modified
to the extent necessary to make it valid or, if necessary, excised, and the
remainder of the Agreement shall continue to remain effective.
8. ENTIRE AGREEMENT
This Agreement contains the entire agreement between the parties with
respect to its subject matter and may not be changed in any way, except by a
written instrument executed by the parties and, if necessary, approved by the
Airport Lessor.
Annex B.SYS.0
Continental Airlines/ExpressJet Airlines, Inc.[ExpressJet as Handling Company]
Dated: January 1, 2001
B-3
9. SUCCESSORS AND ASSIGNS
The provisions of this Agreement shall be binding on the parties, their
successors and assigns.
IN WITNESS WHEREOF, the parties have properly executed this Agreement
effective the date first above written.
ATTEST: [ASSIGNOR]
BY:
---------------------------- ----------------------------
TITLE:
-------------------------
DATE:
--------------------------
ATTEST: [ASSIGNEE]
BY:
---------------------------- ----------------------------
TITLE:
-------------------------
DATE:
--------------------------
[Consent of Airport Lessor
By:
-------------------------
Name:
Title:
Date: ]
-----------------------
Exhibits to be Attached:
Annex 1 -- Description of Assigned Space
Annex 2 -- Copy of Lease
Annex 3 -- Request for Consent
Annex B.SYS.0
Continental Airlines/ExpressJet Airlines, Inc.[ExpressJet as Handling Company]
Dated: January 1, 2001
B-4
EXHIBIT C
to the Master Facility and Ground Handling Agreement
FORM OF CONTINENTAL GROUND HANDLING AGREEMENT
(Continental as Handling Company, Contractor as Carrier)
-----------------
AHM 810 - ANNEX B
-----------------
STANDARD GROUND HANDLING AGREEMENT
SIMPLIFIED PROCEDURE
ANNEX B.SYS.0 -- LOCATIONS AGREED SERVICES, FACILITIES AND CHARGES
to the Standard Ground Handling Agreement (SGHA) of April 1993
Between: ExpressJet Airlines, Inc.
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
(hereinafter referred to as the "Carrier")
And: Continental Airlines, Inc.
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
(hereinafter referred to as the "Handling Compan y")
effective from: January 1, 2001
This Annex B.SYS.0
for the location: The Handling Company shall provide ground handling services
for Scheduled Flights at the airports set forth on
Schedule 1 hereto.
In addition to the airports on Schedule 1 and except for the
airports set forth on Schedule 3 (at which Carrier currently
provides ground handling), the Handling Company shall also
provide ground handling services to the Carrier pursuant to
the terms hereof at each additional airport to which Scheduled
Flights are scheduled to fly after the date hereof (each, a
"New Airport") unless (i) at the time of commencement of
Scheduled Flights to such New Airport, the Handling Company
does not fly any flights to such airport; (ii) in the calendar
month in which such Scheduled Flights commence, such New
Airport would be the first, second or third New Airport at
which the Handling
Annex B.SYS.0
Continental Airlines/ExpressJet Airlines, Inc.[ExpressJet as Handling Company]
Dated: January 1, 2001
C-1
Company would not provide services to the Carrier pursuant to
the terms hereof; and (iii) the Handling Company gives at
least 90 days' prior written notice (or such shorter period of
time as is reasonably practicable) before the commencement of
Scheduled Flights to such New Airport that the Handling
Company will not provide ground handling services at such
airport. Schedule 1 shall be amended to reflect each such
addition.
The Handling Company may elect, upon at least 90 days' prior
written notice to the Carrier, to provide ground handling
services to the Carrier at any other airport to which
Scheduled Flights fly at the time of such election. Schedule 1
shall be amended to reflect each such addition.
Notwithstanding the foregoing, the Handling Company may elect
to terminate the provision of services by the Handling Company
pursuant hereto at any airport to which the Handling Company
does not fly any flights, upon at least 90 days' prior written
notice to the Carrier and in any event only at such time as
the Carrier, using its commercially reasonable efforts, is
able to provide the ground handling services provided by the
Handling Company hereunder with respect to Scheduled Flights
at such airport. In addition, the provisions of this agreement
shall terminate with respect to any airport to which Scheduled
Flights cease to be scheduled (other than a temporary
cessation, it being understood that the cessation of seasonal
Scheduled Flights upon the end of the relevant season shall
constitute a temporary cessation if such Scheduled Flights are
expected to resume in the subsequent relevant season).
Schedule 1 shall be amended to reflect each such termination.
is valid from: January 1, 2001
and replaces: N/A
Capitalized terms used herein that are not defined herein or in the Standard
Ground Handling Agreement of April 1993 as published by the International Air
Transport Association (the "Main Agreement") or in Annex A thereto, shall have
the meanings given to such terms in the Capacity Purchase Agreement among the
Carrier, the Handling Company and ExpressJet Holdings, Inc., the Carrier's
parent.
This Annex B is prepared in accordance with the simplified procedure whereby the
Carrier and the Handling Company agree that the terms and conditions of the Main
Agreement and Annex A to the Main Agreement shall apply as if such terms were
repeated here in full, except as otherwise modified pursuant to this Annex B. By
signing this Annex B, the parties confirm that they are familiar with the
aforementioned Main Agreement and Annex A. The Main Agreement and Annex A, as
modified pursuant to this Annex B shall be referred to herein as the
"Agreement."
Annex B.SYS.0
Continental Airlines/ExpressJet Airlines, Inc.[ExpressJet as Handling Company]
Dated: January 1, 2001
C-2
PARAGRAPH 1 - HANDLING CHARGES
1.1 The Handling Company shall provide the services of Annex A enumerated
below for the Carrier's Scheduled Flights at the locations set forth
above:
1.1.1. For services of the Annex A in its:
SECTION 1 -- REPRESENTATION AND ACCOMMODATION:
1.1.2., 1.1.3., 1.1.4.
1.2.1., 1.2.2, 1.2.3.
SECTION 2 -- LOAD CONTROL AND COMMUNICATION:
2.1.3.
2.2.1., 2.2.2., 2.2.3.
SECTION 4 -- PASSENGERS AND BAGGAGE:
4.1.1., 4.1.2., 4.1.3., 4.1.4., 4.1.5., 4.1.6, 4.1.7.(in
accordance with the Baggage Resolution System Agreement, 4.2.,
4.3., 4.4.1., 4.4.2. (a), 4.4.4. (a)(c), 4.4.5., 4.4.6.,
4.4.7.
SECTION 5 -- CARGO AND MAIL:
5.1. thru 5.5 (CO's cargo products)
SECTION 6 -- RAMP:
6.1., 6.2.1., 6.2.2. (a), 6.2.3. (on request at ad hoc rate),
6.3., 6.4.3., 6.4.4., 6.4.5., 6.4.6. (a)(b), 6.4.7., 6.4.8.,
6.4.9., 6.4.12., 6.5.1. (on request at ad hoc rate), 6.6.1.,
6.7.1.
SECTION 7 -- AIRCRAFT SERVICING:
7.2.2., 7.3., 7.6.2. (ad hoc rates apply)
1.1.2. NO SEPARATE FEES FOR SERVICES COVERED UNDER THE SECTIONS
LISTED ABOVE:
The ground handling services to be provided hereunder shall be
provided in consideration of the mutual obligations of the
Handling Company and the Carrier set forth in the Capacity
Purchase Agreement among the Carrier, the Handling Company and
ExpressJet Holdings, Inc., the Carrier's parent, with no
separate fee charged hereunder; provided that the additional
charges specified in Paragraph 2 below shall apply when
applicable; and provided further that the Carrier will be
responsible for all airport landing fees and other airport
taxes or charges, and shall make payment directly therefor.
1.1.3 EQUIPMENT PROVIDED BY CARRIER:
Notwithstanding anything contained in Paragraph 1.1.1 to the
contrary, at each
Annex B.SYS.0
Continental Airlines/ExpressJet Airlines, Inc.[ExpressJet as Handling Company]
Dated: January 1, 2001
C-3
airport that does not constitute a Hub Airport, the Carrier
shall be responsible for supplying all ground handling
equipment that is usable only for regional jets or turboprops
of the type used by Contractor for Scheduled Flights (as
opposed to other types of jets flown by the Handling Company),
which, as of the date hereof, is the equipment set forth on
Schedule 2 hereto, and which equipment shall not be used by
Handling Company for any purpose other than providing ground
handling services to Carrier. At all Hub Airports, the
Handling Company shall be responsible for supplying such
equipment. As between Handling Company and Carrier, Handling
Company shall be responsible for supplying all other ground
handling equipment necessary for the provision of ground
handling services hereunder.
PARAGRAPH 2 -- ADDITIONAL CHARGES
2.1 Services in Annex A which are not included in Paragraph 1 of this Annex
and all other additional services when available will be charged for as
follows:
2.1.1. Overtime. If, upon Carrier's request, the Handling Company
agrees to provide additional personnel in order to handle a
flight outside of the scheduled arrival and departure times or
for any other reason, the Handling Company not will charge
Carrier more than the Handling Company's actual cost of
providing such additional personnel.
2.1.2. Supplies. The Carrier will furnish the Handling Company those
items specific to its operation, such as, but not limited to,
cabin appearance supplies, (i.e. safety cards, pillows and
blankets), baggage tags, forms, ticket envelopes, tariffs,
timetables, etc. Any materials or supplies provided to the
Carrier by the Handling Company will not be charged back to
the Carrier at more than the Handling Company's replacement
cost.
2.1.3. Third Party Services. The Carrier shall, at the Handling
Company's discretion, be responsible for the cost and/or a
pro-rata share of the cost, whichever is applicable, incurred
by the Handling Company for outside vendor services, such as,
but not limited to, water/lavatory services, cabin appearance,
ramp handling services, bussing services, aircraft de-icing,
aircraft washing and aircraft maintenance services, skycaps,
security screening, armed guard and armored car services,
baggage claim security, janitorial services, baggage delivery
services, wheel chair services, electric cart services, denied
boarding compensation, distressed passenger meals and
overnight accommodation, etc.
2.1.4. De-Icing. For de-icing services provided by the Handling
Company, the Handling Company shall not charge the Carrier
more than the procurement cost of fluids and all other actual
costs of the Handling Company for providing such
Annex B.SYS.0
Continental Airlines/ExpressJet Airlines, Inc.[ExpressJet as Handling Company]
Dated: January 1, 2001
C-4
de-icing services including the Handling Company's actual
labor costs associated with such services.
2.1.6. Training. At the Handling Company's request, the Carrier
agrees to reimburse the Handling Company for all associated
out-of-pocket expenses required to train the Handling
Company's employees in the Carrier's procedures and
administrative requirements.
PARAGRAPH 3 -- DISBURSEMENTS
3.1 At the Handling Company's request, disbursements made on behalf of the
Carrier shall be reimbursed to the Handling Company at cost.
PARAGRAPH 4 --SETTLEMENT OF ACCOUNT
4.1 All payments to be made pursuant to this Agreement shall be subject to
the setoff provisions of Section 11.16 of the Capacity Purchase
Agreement. Notwithstanding Article 7.2 of the Main Agreement, and
subject to such setoff provisions of the Capacity Purchase Agreement,
settlement of account shall be effected through the IATA Clearing House
via the Airlines Clearing House in accordance with the Rules and
Regulations of the IATA Clearing House and the Airlines Clearing House.
PARAGRAPH 5 -- TERMINATION OF AGREEMENT
5.1 This Agreement may be terminated by either party at any time following
the termination of the Capacity Purchase Agreement; provided, that this
Agreement may not be terminated pursuant to this sentence during the
Wind-Down Period with respect to any location to which Scheduled
Flights continue to fly during such Wind-Down Period. If the Carrier
fails to make payments as agreed upon in Paragraph 4.1., the Handling
Company may terminate the agreement upon twenty-four (24) hours notice
by letter, teletype or facsimile.
PARAGRAPH 6 -- TRANSFER OF SERVICES
6.1 In accordance with Article 3.1 of the Main Agreement, the Handling
Company may subcontract the services of Annex A as necessary in order
to support the Carrier's operation.
Annex B.SYS.0
Continental Airlines/ExpressJet Airlines, Inc.[ExpressJet as Handling Company]
Dated: January 1, 2001
C-5
PARAGRAPH 7 -- OTHER MODIFICATIONS TO MAIN AGREEMENT
7.1 Sections 11.4, 11.5, 11.6, and 11.10 of the Main Agreement shall not
apply to this Agreement.
7.2 Handling Company and Carrier agree that all third-parties engaged by
Carrier or Handling Company as of the date hereof to provide of ground
handling services to Carrier at any of the airports listed on Schedule
1 hereto are hereby approved for all purposes of Section 3.1 and
Section 3.2, as appropriate, of the Main Agreement.
Annex B.SYS.0
Continental Airlines/ExpressJet Airlines, Inc.[ExpressJet as Handling Company]
Dated: January 1, 2001
C-6
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers duly authorized thereunto, as of the 1st
day of January, 2001.
Handling Company: Carrier:
CONTINENTAL AIRLINES, INC. EXPRESSJET AIRLINES, INC.
BY: BY:
----------------------------- -----------------------------
TITLE: TITLE:
-------------------------- --------------------------
DATE: DATE:
--------------------------- ---------------------------
Schedule 1 Airports
Schedule 2 Carrier Equipment
Schedule 3 1/1/01 Carrier-Handled Airports
Annex B.SYS.0
Continental Airlines/ExpressJet Airlines, Inc.[ExpressJet as Handling Company]
Dated: January 1, 2001
C-7
EXHIBIT D
to the Master Facility and Ground Handling Agreement
FORM OF CONTRACTOR GROUND HANDLING AGREEMENT
(Contractor as Handling Company, Continental as Carrier)
-----------------
AHM 810 - ANNEX B
-----------------
STANDARD GROUND HANDLING AGREEMENT
SIMPLIFIED PROCEDURE
ANNEX B.SYS.0 -- LOCATIONS AGREED SERVICES, FACILITIES AND CHARGES
to the Standard Ground Handling Agreement (SGHA) of April 1993
Between: Continental Airlines, Inc.
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
(hereinafter referred to as the "Carrier")
And: ExpressJet Airlines, Inc.
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
(hereinafter referred to as the "Handling Company")
effective from: January 1, 2001
This Annex B.SYS.0
for the location: The Handling Company shall provide ground handling
services at the airports set forth on Schedule 1 hereto.
The Carrier may elect, at its sole discretion and upon at
least 90 days notice to the Handling Company, to require
the Handling Company to provide ground handling services
to the Carrier at any airport to which the Handling
Company already flies Scheduled Flights at the time of
such election, but only if the Carrier does not provide
ground handling services to the Handling Company at
such airport. Schedule 1 shall be amended to reflect
each such addition.
Notwithstanding the foregoing, the Carrier may elect, at
its sole discretion and upon at least 90 days' prior
written notice to the Handling Company, to terminate the
provision of services covered hereunder by the Handling
Annex B.SYS.0
Continental Airlines/ExpressJet Airlines, Inc.[ExpressJet as Handling Company]
Dated: January 1, 2001
D-1
Company at any airport. In addition, the provisions of
this agreement shall terminate with respect to any
airport to which Scheduled Flights cease to be scheduled
(other than a temporary cessation, it being understood
that the cessation of seasonal Scheduled Flights upon the
end of the relevant season shall constitute a temporary
cessation if such Scheduled Flights are expected to resume
in the subsequent relevant season). Schedule 1 shall be
amended to reflect each such termination.
is valid from: January 1, 2001
and replaces: N/A
Capitalized terms used herein that are not defined herein or in the Standard
Ground Handling Agreement of April 1993 as published by the International Air
Transport Association (the "Main Agreement") or in Annex A thereto, shall have
the meanings given to such terms in the Capacity Purchase Agreement among the
Carrier, the Handling Company and ExpressJet Holdings, Inc., the Handling
Company's parent.
This Annex B is prepared in accordance with the simplified procedure whereby the
Carrier and the Handling Company agree that the terms and conditions of the Main
Agreement and Annex A to the Main Agreement shall apply as if such terms were
repeated here in full, except as otherwise modified pursuant to this Annex B. By
signing this Annex B, the parties confirm that they are familiar with the
aforementioned Main Agreement and Annex A. The Main Agreement and Annex A, as
modified pursuant to this Annex B shall be referred to herein as the
"Agreement."
PARAGRAPH 1 -- HANDLING CHARGES
1.1 The Handling Company shall provide the services of Annex A enumerated
below for the Carrier's scheduled flights at the locations set forth
above:
1.1.1. For services of the Annex A in its:
SECTION 1 -- REPRESENTATION AND ACCOMMODATION:
1.1.2., 1.1.3., 1.1.4.
1.2.1., 1.2.2, 1.2.3.
SECTION 2 -- LOAD CONTROL AND COMMUNICATION:
2.1.3.
2.2.1., 2.2.2., 2.2.3.
SECTION 4 -- PASSENGERS AND BAGGAGE:
4.1.1., 4.1.2., 4.1.3., 4.1.4., 4.1.5., 4.1.6, 4.1.7.(in
accordance with the Baggage Resolution System Agreement, 4.2.,
4.3., 4.4.1., 4.4.2. (a), 4.4.4. (a)(c), 4.4.5., 4.4.6.,
4.4.7.
Annex B.SYS.0
Continental Airlines/ExpressJet Airlines, Inc.[ExpressJet as Handling Company]
Dated: January 1, 2001
D-2
SECTION 5 -- CARGO AND MAIL:
5.1. thru 5.5 (CO's cargo products)
SECTION 6 -- RAMP:
6.1., 6.2.1., 6.2.2. (a), 6.2.3. (on request at ad hoc rate),
6.3., 6.4.3., 6.4.4., 6.4.5., 6.4.6. (a)(b), 6.4.7., 6.4.8.,
6.4.9., 6.4.12., 6.5.1. (on request at ad hoc rate), 6.6.1.,
6.7.1.
SECTION 7 -- AIRCRAFT SERVICING:
7.2.2., 7.3., 7.6.2. (ad hoc rates apply)
1.1.2. FEES FOR SERVICES COVERED UNDER THE SECTIONS LISTED ABOVE:
The charges set forth below do not include airport landing
fees, or any other airport taxes or charges. The Carrier will
be responsible for such charges at its own expense and shall
make payment directly therefor.
Flight Fee:
The Carrier shall pay to the Handling Company a Base Per
Flight Fee for the ground handling services to be provided
hereunder, which fee shall equal the Handling Company's cost
of providing such services, as reasonably determined by the
Handling Company and subject to the audit rights of the
Carrier as set forth in Section 3.05 of the Capacity Purchase
Agreement.
1.1.3 EQUIPMENT PROVIDED BY CARRIER:
Notwithstanding anything contained in Paragraph 1.1.1 to the
contrary, at each airport, the Carrier shall be responsible
for supplying all ground handling equipment that is usable
only for jet aircraft other than regional jets, which, as of
the date hereof, is the equipment set forth on Schedule 2
hereto, and which equipment shall not be used by Handling
Company for any purpose other than providing ground handling
services to Carrier. As between Handling Company and Carrier,
Handling Company shall be responsible for supplying all other
ground handling equipment necessary for the provision of
ground handling services hereunder.
PARAGRAPH 2 -- ADDITIONAL CHARGES
2.1 Services in Annex A which are not included in Paragraph 1 of this Annex
and all other additional services when available will be charged for as
follows:
2.1.1. Overtime. If, upon Carrier's request, the Handling Company
agrees to provide additional personnel in order to handle a
flight outside of the scheduled arrival
Annex B.SYS.0
Continental Airlines/ExpressJet Airlines, Inc.[ExpressJet as Handling Company]
Dated: January 1, ▇▇▇▇
▇-▇
and departure times or for any other reason, the Handling
Company will charge Carrier the Handling Company's actual cost
of providing such additional personnel.
2.1.2. Supplies. The Carrier will furnish the Handling Company those
items specific to its operation, such as, but not limited to,
cabin appearance supplies, (i.e. safety cards, pillows and
blankets), baggage tags, forms, ticket envelopes, tariffs,
timetables, etc. Any materials or supplies provided to the
Carrier by the Handling Company will be charged back to the
Carrier at the Handling Company's replacement cost.
2.1.3. Third Party Services. The Carrier shall, at the Handling
Company's discretion, be responsible for the cost and/or a
pro-rata share of the cost, whichever is applicable, incurred
by the Handling Company for outside vendor services, such as,
but not limited to, water/lavatory services, cabin appearance,
ramp handling services, bussing services, aircraft de-icing,
aircraft washing and aircraft maintenance services, skycaps,
security screening, armed guard and armored car services,
baggage claim security, janitorial services, baggage delivery
services, wheel chair services, electric cart services, denied
boarding compensation, distressed passenger meals and
overnight accommodation, etc.
2.1.4. De-Icing. For de-icing services provided by the Handling
Company, the Handling Company shall charge the Carrier the
procurement cost of fluids and all other actual costs of the
Handling Company for providing such de-icing services
including the Handling Company's actual labor costs associated
with such services.
2.1.6. Training. The Carrier agrees to reimburse the Handling Company
for all associated out-of-pocket expenses required to train
the Handling Company's employees in the Carrier's procedures
and administrative requirements.
PARAGRAPH 3 -- DISBURSEMENTS
3.1 Disbursements made on behalf of the Carrier shall be reimbursed to the
Handling Company at cost.
PARAGRAPH 4 -- SETTLEMENT OF ACCOUNT
4.1 Notwithstanding Article 7.2 of the Main Agreement and subject to the
setoff provisions of the Capacity Purchase Agreement, settlement of
account shall be effected through the IATA Clearing House via the
Airlines Clearing House in accordance with the Rules and Regulations of
the IATA Clearing House and the Airlines Clearing House.
Annex B.SYS.0
Continental Airlines/ExpressJet Airlines, Inc.[ExpressJet as Handling Company]
Dated: January 1, 2001
D-4
PARAGRAPH 5 -- TERMINATION OF AGREEMENT
5.1 This Agreement may be terminated by either party at any time following
the termination of the Capacity Purchase Agreement; provided, that this
Agreement may not be terminated pursuant to this sentence during the
Wind-Down Period with respect to any location to which Scheduled
Flights continue to fly during such Wind-Down Period. If the Carrier
fails to make payments as agreed upon in Paragraph 4.1., the Handling
Company may terminate the agreement upon twenty-four (24) hours notice
by letter, teletype or facsimile.
PARAGRAPH 6 -- TRANSFER OF SERVICES
6.1 In accordance with Article 3.1 of the Main Agreement, the Handling
Company may subcontract the services of Annex A as necessary in order
to support the Carrier's operation.
PARAGRAPH 7 -- OTHER MODIFICATIONS TO MAIN AGREEMENT
7.1 Upon the request of the Carrier from time to time at its sole
discretion, and for so long as requested by the Carrier during the Term
of this Agreement, the Handling Company shall provide ground handling
services pursuant to this Agreement at any location covered by this
Annex B to any of the Carrier's codeshare partners.
7.2 Sections 11.4, 11.5, 11.6, and 11.10 of the Main Agreement shall not
apply to this Agreement.
7.3 Handling Company and Carrier agree that all third-parties engaged by
Carrier or Handling Company as of the date hereof to provide of ground
handling services to Carrier at any of the airports listed on Schedule
1 hereto are hereby approved for all purposes of Section 3.1 and
Section 3.2, as appropriate, of the Main Agreement.
7.4 In connection with the determination of the Base Per Flight Fee
pursuant to Section 1.1.2 above and the charges pursuant to Section 2
above, Handling Company shall make available for inspection by Carrier
and its outside auditors, within a reasonable period of time after
Carrier makes a written request therefor, all of Handling Company's
books and records (including all financial and accounting records)
relating to this Agreement and the provision of services hereunder by
Handling Company. Each of Carrier and its outside auditors shall be
entitled to make copies and notes of such information as it deems
necessary and to discuss such records with Handling Company's Chief
Financial Officer or such other employees or agents of Handling Company
knowledgeable about such records. Upon the reasonable written request
of Carrier or its outside auditors, Handling Company will cooperate
with Carrier and its outside auditors to permit Carrier and its outside
auditors access to Handling Company's outside auditors for purposes of
reviewing such records.
Annex B.SYS.0
Continental Airlines/ExpressJet Airlines, Inc.[ExpressJet as Handling Company]
Dated: January 1, 2001
D-5
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers duly authorized thereunto, as of the 1st
day of January, 2001.
Carrier: Handling Company:
CONTINENTAL AIRLINES, INC. EXPRESSJET AIRLINES, INC.
BY: BY:
----------------------------- -----------------------------
TITLE: TITLE:
-------------------------- --------------------------
DATE: DATE:
--------------------------- ---------------------------
Schedule 1 Airports
Schedule 2 Carrier Equipment
D-6
EXHIBIT D
TERMS OF CODESHARE ARRANGEMENTS
1. Contractor's use of CO code. During the Term of the Agreement,
Continental shall be permitted to place its two-letter designator code "CO" on
all flights operated by Contractor and shall place its designator code, "CO", on
all flights operated by Contractor with Covered Aircraft. Continental may
suspend the display of its code on flights operated by Contractor if Contractor
is in breach of any of its operational or safety-related obligations under the
Agreement during the period that such breach continues. All Contractor operated
flights that display the CO code are referred to herein as "CO* Flights".
2. Contractor's display of CO code.
(a) All CO* Flights will be included in the schedule,
availability and fare displays of all computerized
reservations systems in which Continental and
Contractor participate, the Official Airline Guide
(to the extent agreed upon) and Continental's and
Contractor's internal reservation systems, under the
CO code, to the extent possible. Continental and
Contractor will take the appropriate measures
necessary to ensure the display of the schedules of
all CO* Flights in accordance with the preceding
sentence.
(b) Continental and Contractor will disclose and identify
the CO* Flights to the public as actually being a
flight of and operated by Contractor, in at least the
following ways:
(i) a symbol will be used in timetables and
computer reservation systems indicating that
CO* Flights are actually operated by
Contractor;
(ii) to the extent reasonable, messages on
airport flight information displays will
identify Contractor as the operator of
flights shown as CO* Flights;
(iii) Continental and Contractor advertising
concerning CO* Flights and Continental and
Contractor reservationists will disclose
Contractor as the operator of each CO*
Flight; and
(iv) in any other manner prescribed by law.
3. Terms and Conditions of Carriage. In all cases the contract of
carriage between a passenger and a carrier will be that of the carrier whose
code is designated on the ticket. Continental and Contractor shall each
cooperate with the other in the
Exhibit D-1
exchange of information necessary to conform each carrier's contract of carriage
to reflect service offered by the other carrier.
4. Notification of irregularities in operations. Contractor shall
promptly notify Continental of all irregularities involving a CO* Flight which
result in any material damage to persons or property as soon as such information
is available and shall furnish to Continental as much detail as practicable. For
purposes of this section, notification shall be made as follows:
Continental Airlines System Operations Control Center (SOCC)
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Operations Director
Phone no. (▇▇▇) ▇▇▇-▇▇▇▇
Fax no. (▇▇▇) ▇▇▇-▇▇▇▇,
SITA FCFDDCO.
5. Code Sharing License.
(a) Grant of License. Subject to the terms and conditions of
the Agreement, Continental hereby grants to Contractor a nonexclusive,
nontransferable, revocable license to use the CO* designator code on
all of its flights operated as a CO* Flight.
(b) Control of CO* Flights. Subject to the terms and
conditions of the Agreement, Contractor shall have sole responsibility
for and control over, and Continental shall have no responsibility for,
control over or obligations or duties with respect to, each and every
aspect of Contractor's operation of CO* Flights.
6. Display of other codes. During the Term of the Agreement,
Continental shall have the exclusive right to determine which other airlines
("Alliance Airlines"), if any, may place their two letter designator codes on
flights operated by Contractor with Covered Aircraft and to enter into
agreements with such Alliance Airlines with respect thereto. Contractor will
cooperate with Continental and any Alliance Airlines in the formation of a code
share relationship between Contractor and the Alliance Airlines and enter into
reasonably acceptable agreements and make the necessary governmental filings, as
requested by Continental, with respect thereto.
7. Customer First. During the period that Continental places its
designator code on flights operated by Contractor, Contractor will adopt and
follow plans and policies comparable (to the extent applicable and permitted by
law and subject to operational constraints) to Continental's Customer First
Commitments as presently existing and hereafter modified. Contractor
acknowledges that it has received a copy of Continental's presently existing
Customer First Commitments. Continental will provide Contractor with any
modifications thereto promptly after they are made.
Exhibit D-2
EXHIBIT E
ADMINISTRATIVE SUPPORT AND INFORMATION SERVICES PROVISIONING AGREEMENT
Exhibit E-1
ADMINISTRATIVE SUPPORT AND INFORMATION SERVICES
PROVISIONING AGREEMENT
This ADMINISTRATIVE SUPPORT AND INFORMATION SERVICES PROVISIONING
AGREEMENT is made and entered into as of January 1, 2001 by and among
Continental Airlines, Inc., a Delaware corporation ("Continental"), ExpressJet
Holdings, Inc., a Delaware corporation ("Holdings"), and ExpressJet Airlines,
Inc., a Delaware corporation and a wholly owned subsidiary of Holdings
("ExpressJet" and collectively with Holdings, "Express").
WHEREAS, Continental and Express desire to enter into this
Administrative Support and Information Services Provisioning Agreement with
respect to the provision of certain administrative support and information
services in connection with entering into the Capacity Purchase Agreement ,
dated as of January 1, 2001, among Continental, Holdings and ExpressJet;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and intending to be legally bound
hereby, the parties hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms shall
have the following definitions:
"Agreement" means this Administrative Support and Information Services
Provisioning Agreement, as the same may be amended or supplemented from time to
time.
"Business Day" means any day other than a Saturday, a Sunday, or a day
on which banking institutions located in the State of Texas are authorized or
obligated by law or executive order to close.
"Capacity Purchase Agreement" means that certain Capacity Purchase
Agreement among Continental, Holdings and ExpressJet dated as of January 1,
2001, as the same may be amended or supplemented from time to time.
"Continental" has the meaning set forth in the Preamble.
"Continental's Cost" means, with respect to any Service, the cost to
Continental of providing such Service, including the associated overhead or
general and administrative expenses.
"Express" has the meaning set forth in the Preamble.
"ExpressJet" has the meaning set forth in the Preamble.
"Holdings" has the meaning set forth in the Preamble.
1
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Services" means the services provided by Continental to Express
pursuant to Section 2.
2. Provision of Services.
Continental agrees, in consideration of the payments described in
Section 3 hereof, to provide Express with the Services described on Exhibit A
hereto. Subject to the availability of Continental personnel and resources,
Services shall be provided on an "as-needed" basis, as determined in good faith
by Continental, with Express receiving the same priority in the provision of
such Services as is received by Continental's internal operations.
3. Payment for Services.
3.1 Subject to the provisions of Section 4, the Services shall be
billed at the applicable monthly rates set forth on Exhibit A for each period
through December 31, 2003 Where feasible, Continental may cause third-party
vendors of Services to ▇▇▇▇ Express for such services directly.
3.2 The amounts specified in Exhibit A for Services shall, at
Continental's option, either be set off by Continental against any payment of
any Invoiced Amount under Section 3.06(a) of the Capacity Purchase Agreement,
or, to the extent such amounts are not so set off prior to the 15th Business Day
of the month following the month during which such Services were provided (the
"Services Payment Date"), be payable by Express to Continental on the Services
Payment Date.
4. Changes in Services or Prices.
4.1 Adjustments to Pricing. The pricing or billing classification of,
or other charges related to, Services to be provided pursuant to Section 2
hereof may be adjusted by Continental to reflect changes in Continental's Cost
of providing such Services. If Continental desires to adjust the pricing or
billing classification of, or other charges related to, any Service, it shall
provide Express with written notice of the adjustment at least 90 days prior to
the effective date of the proposed change, which notice shall be accompanied
with detailed information supporting the adjustment.
4.2 Deletions of Services. Upon not less than 30 days prior written
notice, Express may elect to cease receiving any of the Services provided
pursuant hereto, and, in such case, the prices or billing classifications of
Services shall be adjusted pursuant to Section 4.1 to reflect such deletion,
effective upon the date such Services are no longer provided.
2
5. Purchasing and Third-Party Vendors
5.1 Purchasing. If and to the extent that the Services provided
pursuant to this Agreement include the services of Continental's purchasing
department or any affiliate of Continental organized therefor for the purchase
on Express's behalf of supplies or other materials (excluding fuel), Continental
or such affiliate may either purchase such supplies or other material in its own
name or in the name of Express, and to the extent that Express is not billed
directly for any such supplies or other material by the provider thereof,
Express shall promptly reimburse Continental or such affiliate for the actual
cost thereof, including freight, storage and any applicable taxes, but excluding
any allocation by Continental or such affiliate of overhead or general and
administrative expenses.
5.2 Use of Third-Party Vendors. It is expressly acknowledged by Express
that certain of the Services to be provided by Continental pursuant to this
Agreement may be provided by, or using services supplied by, third parties under
contracts or other arrangements with Continental. Express consents to the use by
Continental of such third-party vendors or subcontractors as Continental, in the
exercise of its sole discretion, may from time to time select.
6. Standard of Care; Disclaimer of Warranties; Limitation of
Liabilities. Continental's standard of care with respect to the provision of
Services pursuant to this Agreement shall be limited to providing services of
the same general quality as Continental provides for its own internal
operations, and Express's sole and exclusive remedy for the failure by
Continental to meet such standard of care shall be to terminate this Agreement
pursuant to Section 8 hereof. Continental makes no representations or warranties
of any kind, whether express or implied (i) as to the quality or timeliness or
fitness for a particular purpose of Services it provides or any Services
provided hereunder by third-party vendors or subcontractors, or (ii) with
respect to any supplies or other material purchased on behalf of Express
pursuant to this Agreement, the merchantability or fitness for any purpose of
any such supplies or other materials. Under no circumstances shall Continental
have any liability hereunder for damages in excess of amounts paid by Express
under this Agreement or for consequential or punitive damages, including,
without limitation, lost profits.
7. Independent Parties.
7.1 Independent Contractors. It is expressly recognized and agreed that
each party, in its performance and otherwise under this Agreement, is and shall
be engaged and acting as an independent contractor and in its own independent
and separate business; and that each party shall retain complete and exclusive
control over its staff and operations and the conduct of its business. Neither
Continental nor Express nor any officer, employee, representative, or agent of
Continental or Express shall in any manner, directly or indirectly, expressly or
by implication, be deemed to be in, or make any representation or take any
action which may give rise to the existence of, any employment, agent,
partnership or other similar relationship as between Continental and Express,
but each party's relationship as respects the other parties in connection with
this Agreement is and shall remain that of an independent contractor.
3
7.2 Employees. The employees, agents and independent contractors of
Express are employees, agents, and independent contractors of Express for all
purposes, and under no circumstances will be deemed to be employees, agents or
independent contractors of Continental. The employees, agents and independent
contractors of Continental are employees, agents and independent contractors of
Continental for all purposes, and under no circumstances will be deemed to be
employees, agents or independent contractors of Express. Continental will have
no supervision or control over any such Express employees, agents and
independent contractors and any complaint or requested change in procedure made
by Continental will be transmitted by Continental to Express. Express will have
no supervision or control over any such Continental employees, agents and
independent contractors and any complaint or requested change in procedure made
by Express will be transmitted by Express to Continental.
8. Transition and Termination.
8.1 Transition; Term. Promptly after June 30, 2002, the parties hereby
agree to negotiate in good faith and enter into a Transition Services Agreement
with terms reasonably acceptable to each party. The Transition Services
Agreement will provide for the termination of all administrative support and
information services provided by Continental to Express over a period of time to
be set forth therein. Unless terminated earlier pursuant to another provision
hereof, this Agreement shall terminate upon the effectiveness of the Transition
Services Agreement referred to in the preceding sentences or, if no Transition
Services Agreement is entered into, on December 31, 2003.
8.2 By Express for Breach. Express may terminate this Agreement upon
the occurrence of any material breach of this Agreement by Continental,
including Continental's failure to meet the standard of care described in
Section 6 hereof, which breach shall not have been cured within 60 days after
written notice of such breach is delivered by Express to Continental.
8.3 By Continental for Breach. Continental may terminate this Agreement
upon the occurrence of any material breach of this Agreement by Express, which
breach shall not have been cured within 60 days after written notice of such
breach is delivered by Continental to Express.
9. Miscellaneous.
9.1 Entire Agreement. Except as otherwise set forth in this Agreement,
this Agreement and the exhibit hereto constitute the entire agreement between
the parties hereto with respect to the subject matter hereof and supersede all
prior agreements and understandings, whether written or oral, among the parties
with respect to the subject matter hereof.
9.2 Authority. Each of the parties hereto represents to the other that
(a) it has the corporate power and authority to execute, deliver and perform
this Agreement, (b) the execution,
4
delivery and performance of this Agreement by it has been duly authorized by all
necessary corporate action, (c) it has duly and validly executed and delivered
this Agreement, and (d) this Agreement is a legal, valid and binding obligation,
enforceable against it in accordance with its terms subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and general equity principles.
9.3 Consent to Exclusive Jurisdiction. Any action, suit or proceeding
arising out of any claim that the parties cannot settle through good faith
negotiations shall be litigated exclusively in the state courts of ▇▇▇▇▇▇ County
of the State of Texas. Each of the parties hereto hereby irrevocably and
unconditionally (a) submits to the jurisdiction of such state courts of Texas
for any such action, suit or proceeding, (b) agrees not to commence any such
action, suit or proceeding except in such state courts of Texas, (c) waives, and
agrees not to plead or to make, any objection to the venue of any such action,
suit or proceeding in such state courts of Texas, (d) waives, and agrees not to
plead or to make, any claim that any such action, suit or proceeding brought in
such state courts of Texas has been brought in an improper or otherwise
inconvenient forum, (e) waives, and agrees not to plead or to make, any claim
that such state courts of Texas lack personal jurisdiction over it, and (f)
waives its right to remove any such action, suit or proceeding to the federal
courts except when such courts are vested with sole and exclusive jurisdiction
by statute. The parties shall cooperate with each other in connection with any
such action, suit or proceeding to obtain reliable assurances that confidential
treatment will be accorded any information that any party shall reasonably deem
to be confidential or proprietary. Each of the parties hereto further covenants
and agrees that, until the expiration of all applicable statutes of limitations
relating to potential claims under this Agreement, each such party shall
maintain a duly appointed agent for the service of summonses and other legal
process in the State of Texas.
9.4 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas (other than the laws regarding
conflicts of laws) as to all matters, including matters of validity,
construction, effect, performance and remedies.
9.5 Notices. All notices shall be in writing and shall be deemed given
upon (a) a transmitter's confirmation of a receipt of a facsimile transmission
(but only if followed by confirmed delivery by a standard overnight courier the
following Business Day or if delivered by hand the following Business Day), or
(b) confirmed delivery by a standard overnight courier or delivered by hand, to
the parties at the following addresses:
if to Continental:
Continental Airlines, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Senior Vice President - Corporate Development
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
5
with a copy to:
Continental Airlines, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
if to Express, to:
ExpressJet Holdings, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as a party hereto may have furnished to the other
parties by a notice in writing in accordance with this Section 9.5.
9.6 Amendment and Modification. This Agreement may not be amended or
modified in any respect except by a written agreement signed by each of the
parties hereto.
9.7 Binding Effect; Assignment. This Agreement and all of the
provisions hereof shall be binding upon the parties hereto and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns. Except with respect to a merger of a party with another Person, neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by a party hereto without the prior written consent of the other
parties, which consent shall not be unreasonably withheld or delayed.
9.8 Third Party Beneficiaries. Nothing in this Agreement, express or
implied, is intended to or shall confer upon any Person any legal or equitable
right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement, and no Person shall be deemed a third party beneficiary under or by
reason of this Agreement.
9.9 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement may be
executed by facsimile signature.
9.10 Waiver. The observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively) by the party entitled to enforce such term, but such waiver shall
be effective only if it is in writing signed by the party against which such
waiver is to be asserted. Unless otherwise expressly provided in this Agreement,
no delay or omission on the part of any party in exercising any right or
privilege under this Agreement shall operate as a waiver thereof, nor shall any
waiver on the part of any party of any right or privilege under this Agreement
operate as a waiver of any other right or privilege under this Agreement nor
shall any single or partial exercise of any right or privilege preclude any
other or further exercise thereof or the exercise of any other right or
6
privilege under this Agreement. No failure by a party to take any action or
assert any right or privilege hereunder shall be deemed to be a waiver of such
right or privilege in the event of the continuation or repetition of the
circumstances giving rise to such right unless expressly waived in writing by
the party against whom the existence of such waiver is asserted.
9.11 Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
9.12 Equitable Remedies. Each of Continental and Express acknowledges
and agrees that under certain circumstances the breach by Continental or any of
its affiliates or Express or any of its affiliates of a term or provision of
this Agreement will materially and irreparably harm the other party, that money
damages will accordingly not be an adequate remedy for such breach and that the
non-defaulting party, in its sole discretion and in addition to its rights under
this Agreement and any other remedies it may have at law or in equity, may,
notwithstanding the provisions contained in Section 9.3, apply to any court of
law or equity of competent jurisdiction (without posting any bond or deposit)
for specific performance and/or other injunctive relief in order to enforce or
prevent any breach of the provisions of this Agreement.
9.13 References; Construction. The section and other headings and
subheadings contained in this Agreement and the exhibits hereto are solely for
the purpose of reference, are not part of the agreement of the parties hereto,
and shall not in any way affect the meaning or interpretation of this Agreement
or any exhibit hereto. All references to days or months shall be deemed
references to calendar days or months. All references to "$" shall be deemed
references to United States dollars. Unless the context otherwise requires, any
reference to a "Section" or an "Exhibit" shall be deemed to refer to a section
of this Agreement or an exhibit to this Agreement, as applicable. The words
"hereof," "herein" and "hereunder" and words of similar import referring to this
Agreement refer to this Agreement as a whole and not to any particular provision
of this Agreement. Whenever the words "include," "includes" or "including" are
used in this Agreement, unless otherwise specifically provided, they shall be
deemed to be followed by the words "without limitation." This Agreement shall be
construed without regard to any presumption or rule requiring construction or
interpretation against the party drafting or causing the document to be drafted.
9.14 Equal Opportunity. EEO clauses contained at 11 C.F.R. Sections
60-1.4, 60-250.4 and 60-741.4 are hereby incorporated by reference. Each party
shall comply with all equal opportunity laws and regulations which apply to or
must be satisfied by that party as a result of this Agreement.
7
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
CONTINENTAL AIRLINES, INC. EXPRESSJET HOLDINGS, INC.
By: By:
------------------------------- -------------------------------------
Title: Title:
---------------------------- ----------------------------------
EXPRESSJET AIRLINES, INC.
By:
-------------------------------------
Title:
----------------------------------
8
EXHIBIT F
FUEL PURCHASING AGREEMENT
FUEL PURCHASING AGREEMENT
This Fuel Purchasing Agreement (this "Agreement") is made as of this
1st day of January 2001, by and between CONTINENTAL AIRLINES, INC., a Delaware
corporation ("Continental"), and EXPRESSJET AIRLINES, INC., a Delaware
corporation ("ExpressJet").
WHEREAS, Continental, ExpressJet and ExpressJet Holdings, ExpressJet's
parent ("Holdings"), are entering into a Capacity Purchase Agreement
contemporaneously with the execution of this Agreement (the "Capacity Purchase
Agreement");
WHEREAS, ExpressJet has requested that Continental purchase on
ExpressJet's behalf and supply it with all of the jet fuel needed to provide the
Regional Airline Services, and Continental is willing to do so on the terms and
subject to the conditions of this Agreement;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. Definitions. All capitalized terms that are used and not otherwise defined
herein shall have the meanings given to such terms in the Capacity Purchase
Agreement.
2. Products Covered. The product covered by this Agreement shall be aviation jet
fuel meeting ASTM Specification D 1655-99 (such fuel being referred to herein as
"Fuel"). The definition of future products and the scope of this Agreement may
be revised from time to time upon mutual consent of the parties.
3. Services to Be Provided. Continental shall supply or cause to be supplied to
ExpressJet all Fuel that ExpressJet shall require to provide the Regional
Airline Services, and ExpressJet shall purchase and pay for such Fuel in
accordance with the terms and conditions of Section 5 of this Agreement. In
connection with the provision of Fuel to ExpressJet pursuant to this Agreement,
Continental shall manage all aspects of procuring, transporting and delivering
Fuel to ExpressJet in respect of Regional Airline Services, including without
limitation selecting the source of Fuel, negotiating and consummating agreements
with fuel suppliers and into-plane service providers, providing consortium
representation and furnishing day-to-day management pertaining to any
fuel-related services. Continental shall be the exclusive provider of Fuel and
fuel-related services used to provide Regional Airline Services during the term
of this Agreement.
4. Planning. ExpressJet will provide Continental each month with a rolling
twelve-month forecast of fuel needs not later than the 5th day of such month,
which forecast shall reflect the Final Monthly Schedule for such month,
Continental's proposed schedule for Scheduled Flights for the two months
following such month as presented to ExpressJet pursuant to Section 2.01(b) of
the Capacity Purchase Agreement and such other information published by
Continental regarding scheduled ExpressJet flights over the next twelve-month
period.
F-1
5. Price and Payment.
(a) In consideration of Continental providing Fuel and other
services to ExpressJet pursuant to this Agreement, ExpressJet
shall pay Continental, in accordance with the terms of Section
5(b) with respect to any applicable period, an amount in cash
equal to the Contract Fuel Rate multiplied by the amount of
Fuel so provided during such period. For the avoidance of
doubt, the parties agree that all of Continental's costs,
gains or losses resulting from engaging in any fuel-price
hedging transactions with respect to Fuel provided to
ExpressJet under this Agreement shall be for Continental's
account.
(b) Not later than two (2) Business Days prior to the beginning of
each calendar month during the term of this Agreement,
Continental shall send an invoice to ExpressJet setting forth
the estimated amount payable by ExpressJet to Continental for
Fuel and services to be rendered hereunder for the following
calendar month, which amounts shall, at Continental's option,
either be set off by Continental against any payment of any
Invoiced Amount under Section 3.06(a) of the Capacity Purchase
Agreement, or be immediately payable by ExpressJet on or
before the beginning of each calendar month. Not later than 12
days following the end of each calendar month, Continental and
ExpressJet shall reconcile actual amounts due in respect of
such calendar month pursuant to Section 5(a) with the
estimated amounts paid by ExpressJet pursuant to the first
sentence of this Section 5(b), such reconciliation to occur
pursuant to Section 3.06(b) of the Capacity Purchase
Agreement.
6. Fuel Storage Consortia. Continental may, in its sole discretion and at its
sole expense, direct ExpressJet to do any of the following (in which event
ExpressJet shall comply with Continental's directions): (i) join any fuel
consortium selected by Continental at any airport at which Continental provides
Fuel to ExpressJet, (ii) terminate any membership that it has or may have in any
such consortium or (iii) not join any such consortium at any such airport and,
in lieu thereof, pay a non-member fee to such consortium for the right to use
fuel stored at such consortium's storage facilities.
7. Term. This agreement is coterminous with the Capacity Purchase Agreement and
may be terminated by either party upon the termination of the Capacity Purchase
Agreement; provided, however, that if a party hereto elects to terminate this
Agreement as a result of the Capacity Purchase Agreement being terminated, the
terms of this Agreement shall continue with respect to any locations to which
Scheduled Flights are flown during the Wind-Down Period.
8. Authority. Each of the parties hereto represents to the other that (a) it has
the corporate power and authority to execute, deliver and perform this
Agreement, (b) the execution, delivery and performance of this Agreement by it
has been duly authorized by all necessary corporate action, (c) it has duly and
validly executed and delivered this Agreement, and (d) this Agreement is a
legal, valid and binding obligation, enforceable against it in accordance with
its terms subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally and
general equity principles.
F-2
9. Consent to Exclusive Jurisdiction. Any action, suit or proceeding arising out
of any claim that the parties cannot settle through good faith negotiations
shall be litigated exclusively in the state courts of ▇▇▇▇▇▇ County of the State
of Texas. Each of the parties hereto hereby irrevocably and unconditionally (a)
submits to the jurisdiction of such state courts of Texas for any such action,
suit or proceeding, (b) agrees not to commence any such action, suit or
proceeding except in such state courts of Texas, (c) waives, and agrees not to
plead or to make, any objection to the venue of any such action, suit or
proceeding in such state courts of Texas, (d) waives, and agrees not to plead or
to make, any claim that any such action, suit or proceeding brought in such
state courts of Texas has been brought in an improper or otherwise inconvenient
forum, (e) waives, and agrees not to plead or to make, any claim that such state
courts of Texas lack personal jurisdiction over it, and (f) waives its right to
remove any such action, suit or proceeding to the federal courts except when
such courts are vested with sole and exclusive jurisdiction by statute. The
parties shall cooperate with each other in connection with any such action, suit
or proceeding to obtain reliable assurances that confidential treatment will be
accorded any information that any party shall reasonably deem to be confidential
or proprietary. Each of the parties hereto further covenants and agrees that,
until the expiration of all applicable statutes of limitations relating to
potential claims under this Agreement, each such party shall maintain a duly
appointed agent for the service of summonses and other legal process in the
State of Texas.
10. Binding Effect; Assignment. This Agreement and all of the provisions hereof
shall be binding upon the parties hereto and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. Neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by either party without the prior written consent of the other party.
Notwithstanding the foregoing, Continental may assign its rights and delegate
its duties hereunder to a successor that is a certificated air carrier and that
will continue to operate a significant portion of Continental's current airline
operations.
11. Employees of Continental. The employees, agents and independent contractors
of Continental engaged in performing any of the services Continental is to
perform pursuant to this Agreement are employees, agents and independent
contractors of Continental for all purposes, and under no circumstances will be
deemed to be employees, agents or independent contractors of ExpressJet. In its
performance under this Agreement, Continental will act, for all purposes, as an
independent contractor and not as an agent for ExpressJet. ExpressJet will have
no supervisory power or control over any employees, agents or independent
contractors engaged by Continental in connection with its performance hereunder.
12. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas (other than laws regarding
conflicts of laws) as to all matters, including matters of validity,
construction, effect, performance and remedies.
13. Notices. All notices shall be in writing and shall be deemed given upon (a)
a transmitter's confirmation of a receipt of a facsimile transmission (but only
if followed by confirmed delivery of a standard overnight courier the following
Business Day or if delivered by hand the following Business Day), or (b)
confirmed delivery of a standard overnight courier or delivered by hand, to the
parties at the following addresses:
F-3
if to Continental:
Continental Airlines, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Senior Vice President - Corporate Development
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Continental Airlines, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
if to ExpressJet, to:
ExpressJet Airlines, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as either party hereto may have furnished to the other
party by a notice in writing in accordance with this Section 2.
14. Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof. Any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
15. Entire Agreement. Except as otherwise set forth in this Agreement, this
Agreement constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements and
understandings, whether written or oral, between the parties with respect to
such subject matter.
16. Amendment and Modification. This Agreement may not be amended or modified in
any respect except by a written agreement signed by both of the parties hereto.
F-4
17. Third Party Beneficiaries. Nothing in this Agreement, express or implied, is
intended to or shall confer upon any Person any legal or equitable right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement,
and no Person shall be deemed a third party beneficiary under or by reason of
this Agreement.
18. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. The Agreement may be executed by
facsimile signature.
19. Waiver. The observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or prospectively)
by the party entitled to enforce such term, but such waiver shall be effective
only if it is in writing signed by the party against which such waiver is to be
asserted. Unless otherwise expressly provided in this Agreement, no delay or
omission on the part of any party in exercising any right or privilege under
this Agreement shall operate as a waiver thereof, nor shall any waiver on the
part of any party of any right or privilege under this Agreement operate as a
waiver of any other right or privilege under this Agreement nor shall any single
or partial exercise of any right or privilege preclude any other or further
exercise thereof or the exercise of any other right or privilege under this
Agreement. No failure by either party to take any action or assert any right or
privilege hereunder shall be deemed to be a waiver of such right or privilege in
the event of the continuation or repetition of the circumstances giving rise to
such right unless expressly waived in writing by the party against whom the
existence of such waiver is asserted.
20. Equitable Remedies. Each of Continental and ExpressJet acknowledges and
agrees that under certain circumstances the breach by Continental or any of its
affiliates or ExpressJet or any of its affiliates of a term or provision of this
Agreement will materially and irreparably harm the other party, that money
damages will accordingly not be an adequate remedy for such breach and that the
non-defaulting party, in its sole discretion and in addition to its rights under
this Agreement and any other remedies it may have at law or in equity, may,
notwithstanding the provisions contained in Section 10, apply to any court of
law or equity of competent jurisdiction (without posting any bond or deposit)
for specific performance and/or other injunctive relief in order to enforce or
prevent any breach of the provisions of this Agreement.
21. References; Construction. The section and other headings and subheadings
contained in this Agreement are solely for the purpose of reference, are not
part of the agreement of the parties hereto, and shall not in any way affect the
meaning or interpretation of this Agreement. All references to days or months
shall be deemed references to calendar days or months. Unless the context
otherwise requires, any reference to a "Section" shall be deemed to refer to a
section of this Agreement. The words "hereof," "herein" and "hereunder" and
words of similar import referring to this Agreement refer to this Agreement as a
whole and not to any particular provision of this Agreement. Whenever the words
"include," "includes" or "including" are used in this Agreement, unless
otherwise specifically provided, they shall be deemed to be followed by the
words "without limitation." This Agreement shall be construed without regard to
any presumption or rule requiring construction or interpretation against the
party drafting or causing the document to be drafted.
F-5
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers duly authorized thereunto, as of the 1st
day of January, 2001.
CONTINENTAL AIRLINES, INC. EXPRESSJET AIRLINES, INC.
By: By:
------------------------------- -------------------------------------
Name: Name:
------------------------------ ------------------------------------
Title: Title:
---------------------------- ----------------------------------
F-6
EXHIBIT G
USE OF CONTINENTAL MARKS AND OTHER IDENTIFICATION
1. Grant. Continental hereby grants to Contractor, and Contractor accepts,
a non-exclusive, personal, non-transferable, royalty-free right and
license to adopt and use the Continental Marks and other Identification
in connection with the rendering by Contractor of Regional Airline
Services, subject to the conditions and restrictions set forth herein.
2. Ownership of the Continental Marks and Other Identification.
a. Continental shall at all times remain the owner of the
Continental Marks and the other Identification and any
registrations thereof and Contractor's use of any Continental
Marks or other Identification shall clearly identify
Continental as the owner of such marks (to the extent
practical) to protect Continental's interest therein.
b. Contractor acknowledges Continental's ownership of the
Continental Marks and the other Identification and further
acknowledges the validity of the Identification. Contractor
agrees that it will not do anything that in any way infringes
or abridges Continental's rights in the Identification or
directly or indirectly challenges the validity of the
Identification.
3. Use of the Continental Marks and the Other Identification.
a. Contractor shall use the Continental Marks and other
Identification only as authorized herein by Continental and in
accordance with such standards of quality as Continental may
establish.
b. Contractor shall use the Identification on all Covered
Aircraft and all facilities, equipment, uniforms and printed
materials used in connection with the Regional Airline
Services.
c. Contractor shall not use the Identification for any purpose
other than as set forth in this Exhibit G, and specifically
shall have no right to use the Continental Marks or other
Identification on or in any Uncovered Aircraft or in
connection with any other operations of Contractor.
d. Continental shall have exclusive control over the use and
display of the Continental Marks and other Identification, and
may change the Identification at any time and from time to
time (including by adding or deleting marks from the list
specified in this Exhibit G), in which case Contractor shall
as soon as practicable make such changes as are requested by
Continental to utilize the new Identification; provided that
Continental shall either pay directly the reasonable costs of
making such changes to
Exhibit G-1
the Identification or shall promptly reimburse Contractor for
its reasonable expenses incurred in making such changes.
e. Nothing shall abridge Continental's right to use and/or to
license the Identification, and Continental reserves the right
to the continued use of all the Identification, to license
such other uses of the Identification and to enter into such
agreements with other carriers providing for arrangements
similar to those with Contractor as Continental may desire. No
term or provision of this Agreement shall be construed to
preclude the use of the Continental Marks or other
Identification by other persons or for similar or other uses
not covered by this Agreement.
4. Continental-Controlled Litigation. Continental at its sole expense
shall take all steps that in its opinion and sole discretion are
necessary and desirable to protect the Continental Marks and other
Identification against any infringement or dilution. Contractor agrees
to cooperate fully with Continental in the defense and protection of
the Continental Marks and other Identification as reasonably requested
by Continental. Contractor shall report to Continental any infringement
or imitation of, or challenge to, the Continental Marks and other
Identification, immediately upon becoming aware of same. Contractor
shall not be entitled to bring, or compel Continental to bring, an
action or other legal proceedings on account of any infringements,
imitations, or challenges to any element of the Continental Marks and
other Identification without the written agreement of Continental.
Continental shall not be liable for any loss, cost, damage or expense
suffered or incurred by Contractor because of the failure or inability
to take or consent to the taking of any action on account of any such
infringements, imitations or challenges or because of the failure of
any such action or proceeding. If Continental shall commence any action
or legal proceeding on account of such infringements, imitations or
challenges, Contractor agrees to provide all reasonable assistance
requested by Continental in preparing for and prosecuting the same.
5. Revocation of License. Continental shall have the right to cancel the
license provided herein in whole or in part at any time and for any
reason, in which event all terminated rights to use the Identification
provided Contractor herein shall revert to Continental and shall not be
used by Contractor in connection with any operations of Contractor. The
following provisions shall apply to the termination of the license
provided herein: (i) in the case of a termination of the license to use
the globe element of the Continental Marks, Contractor shall cease all
use of the globe element of the Continental Marks with respect to each
Covered Aircraft within 90 days of such aircraft being withdrawn from
the capacity purchase provisions of the Agreement, and shall cease all
use of the globe element of the Continental Marks in all other respects
within 90 days of last Covered Aircraft becoming an Uncovered Aircraft
(unless this Agreement is terminated for Cause or pursuant to Section
9.03(b) or the first sentence of Section 9.03(c), in which case
Contractor shall cease all use of the globe element of the Continental
Marks
Exhibit G-2
within 45 days of the Termination Date); (ii) in the case of a
termination of the license to use any other Continental Marks and
Identification, Contractor shall cease all use of such other
Continental Marks and Identification within 45 days of the termination
of the license for such other Continental Marks and other
Identification. Within such specified period, Contractor shall change
its facilities, equipment, uniforms and supplies to avoid any customer
confusion or the appearance that Contractor is continuing to have an
operating relationship with Continental, and Contractor shall not
thereafter make use of any word, words, term, design, name or ▇▇▇▇
confusingly similar with the Continental Marks or other Identification
so that any such word, words, term, design, name or ▇▇▇▇ would present
a likelihood of confusion or otherwise suggest a continuing
relationship between Contractor and Continental.
6. Assignment. The non-exclusive license granted by Continental to
Contractor is personal to Contractor and may not be assigned,
sub-licensed or transferred by Contractor in any manner without the
written consent of a duly authorized representative of Continental.
7. Continental Marks. The Continental Marks are as follows:
CONTINENTAL EXPRESS
CONTINENTAL EXPRESS'S LOGO (DESIGN) IN COLOR
CONTINENTAL EXPRESS'S LOGO (DESIGN) IN BLACK & WHITE
[LOGO]
8. Aircraft Livery. The aircraft livery shall be as follows, unless
otherwise directed by Continental: The colors blue, ▇▇▇▇, white and
gold are used on the aircraft. The color white appears on the top
approximate 2/3 of the body of the aircraft; the color ▇▇▇▇ appears
below the color white on the remainder of the bottom portion of the
body of the aircraft; the color gold is used as a stripe or band
dividing the white and ▇▇▇▇ colors. The tail of the aircraft is
primarily blue with a logo design in a gold and white combination and
the trade name is written in blue on the white portion of the body of
the aircraft. The color blue is the dominant aircraft interior color.
9. Survival. The provisions of this Exhibit G shall survive the
termination of this Agreement for a period of six years.
Exhibit G-3
EXHIBIT H
USE OF CONTRACTOR MARKS
1. Grant. Contractor hereby grants to Continental, and Continental
accepts, a non-exclusive, personal, non-transferable, royalty-free
right and license to adopt and use the Contractor Marks (as defined
below) in connection with Continental's entering into this Agreement,
subject to the conditions and restrictions set forth herein.
2. Ownership of the Contractor Marks.
a. Contractor shall at all times remain the owner of the
Contractor Marks and any registrations thereof and
Continental's use of any Contractor Marks shall clearly
identify Contractor as the owner of such marks (to the extent
practical) to protect Contractor's interest therein.
b. Continental acknowledges Contractor's ownership of the
Contractor Marks and further acknowledges the validity of the
Contractor Marks. Continental agrees that it will not do
anything that in any way infringes or abridges Contractor's
rights in the Contractor Marks or directly or indirectly
challenges the validity of the Contractor Marks.
3. Use of the Contractor Marks.
a. Continental shall use the Contractor Marks only as authorized
herein by Contractor and in accordance with such standards of
quality as Contractor may establish.
b. Continental shall use the Contractor Marks as necessary or
appropriate in Continental's sole discretion in connection
with the Regional Airline Services, including without
limitation the sale or disposition by Continental of the seat
inventory of the Scheduled Flights.
c. Continental shall not use the Contractor Marks for any purpose
other than as set forth in this Exhibit H, and specifically
shall have no right to use the Contractor Marks in connection
with any other operations of Continental.
d. Contractor may change the Contractor Marks at any time and
from time to time (including by adding or deleting marks from
the list specified in this Exhibit H), in which case
Continental shall as soon as practicable make such changes as
are requested by Contractor to utilize the new Contractor
Marks; provided that Contractor shall either pay directly the
reasonable costs of making such changes to the Contractor
Marks or shall promptly reimburse Continental for its
reasonable expenses incurred in making such changes.
Exhibit H-1
e. Nothing shall abridge Contractor's right to use and/or to
license the Contractor Marks, and Contractor reserves the
right to the continued use of all the Contractor Marks, to
license such other uses of the Contractor Marks and to enter
into such agreements with other carriers providing for
arrangements similar to those with Continental as Contractor
may desire. No term or provision of this Agreement shall be
construed to preclude the use of the Contractor Marks by other
persons or for other similar uses not covered by this
Agreement.
4. Contractor-Controlled Litigation. Contractor at its sole expense shall
take all steps that in its opinion and sole discretion are necessary
and desirable to protect the Contractor Marks against any infringement
or dilution. Continental agrees to cooperate fully with Contractor in
the defense and protection of the Contractor Marks as reasonably
requested by Contractor. Continental shall report to Contractor any
infringement or imitation of, or challenge to, the Contractor Marks,
immediately upon becoming aware of same. Continental shall not be
entitled to bring, or compel Contractor to bring, an action or other
legal proceedings on account of any infringements, imitations, or
challenges to any element of the Contractor Marks without the written
agreement of Contractor. Contractor shall not be liable for any loss,
cost, damage or expense suffered or incurred by Continental because of
the failure or inability to take or consent to the taking of any action
on account of any such infringements, imitations or challenges or
because of the failure of any such action or proceeding. If Contractor
shall commence any action or legal proceeding on account of such
infringements, imitations or challenges, Continental agrees to provide
all reasonable assistance requested by Contractor in preparing for and
prosecuting the same.
5. Revocation of License. Contractor shall have the right to cancel the
license provided herein in whole or in part at any time and for any
reason, in which event all terminated rights to use the Contractor
Marks provided Continental herein shall revert to Contractor and shall
not be used by Continental in connection with any operations of
Continental. Continental shall cease all use of the Contractor Marks in
all respects upon the last Covered Aircraft becoming an Uncovered
Aircraft. Continental shall not thereafter make use of any word, words,
term, design, name or ▇▇▇▇ confusingly similar with the Contractor
Marks so that any such word, words, term, design, name or ▇▇▇▇ would
present a likelihood of confusion or otherwise suggest a continuing
relationship between Continental and Contractor.
6. Assignment. The non-exclusive license granted by Contractor to
Continental is personal to Continental and may not be assigned,
sub-licensed or transferred by Continental in any manner without the
written consent of a duly authorized representative of Contractor.
Exhibit H-2
7. Contractor Marks. The Contractor Marks are as follows: XJT.
8. Survival. The provisions of this Exhibit H shall survive the
termination of this Agreement for a period of six years.
Exhibit H-3
EXHIBIT I
CATERING STANDARDS
Station Services
o Contractor will provide caterer oversight at Contractor Airports that are
non-Chelsea Catering locations. Continental will provide caterer oversight
at Continental Airports that are non-Chelsea Catering locations.
o At Contractor Airports without contract catering, Contractor will provide
supplies and beverage uplift as necessary and will remove, store and
re-board perishable supply and beverage items on ▇▇▇/originating flights.
At Continental Airports without contract catering, Continental will provide
supplies and beverage uplift as necessary and will remove, store and
re-board perishable supply and beverage items on ▇▇▇/originating flights.
o Contractor will provide meal ordering services at Contractor Airports that
are non-Chelsea Catering locations or where catering is downlined by
Chelsea Catering. Continental will provide meal ordering services at
Continental Airports that are non-Chelsea Catering locations or where
catering is downlined by Chelsea Catering.
o Contractor will provide trained catering truck guide person for all
Contractor Airports that are Chelsea Catering locations to assist with
backing off the aircraft. Continental will provide trained catering truck
guide person for all Continental Airports that are Chelsea Catering
locations to assist with backing off the aircraft.
o Contractor will coordinate and communicate with Chelsea Catering regarding
all flight activity, cancellations and irregular operations providing
necessary information in a timely manner.
Onboard Services
o Continental has right to determine meal/beverage service parameters and
scheduling for Scheduled Flights.
o Continental has right to conduct onboard service audits on Scheduled
Flights to ensure service standards are being met.
o Contractor flight attendants providing Regional Airline Services will be
trained on meal and beverage service procedures, including liquor and
duty-free sales and cash handling, and will collect all on-board revenue
for liquor and duty-free sales.
o Contractor will provide sufficient galley service ship's equipment to
operate, such as hot jugs, coffee makers and trash bins.
Exhibit I-1
EXHIBIT J
TICKET HANDLING TERMS
1. Passenger Ticket Stock and Accounting Procedures. Continental will
provide Contractor with Continental passenger ticket stock in accordance with
the following procedures:
A. Continental will supply Contractor with adequate supplies
of all necessary passenger ticket forms, bag tags, boarding passes,
validator plates and other documents and materials necessary to enable
Contractor to operate in a manner consistent with Continental
procedures, upon request to the office designated by Continental from
time to time. A receipt for all ticket forms delivered to Contractor
shall be signed by an appropriate representative of Contractor, and
Contractor shall comply with Continental's procedures with respect to
the control of, safeguarding of and accounting for ticket stock and
validator plates. All tickets and other documents and materials
supplied by Continental for use in connection with the Agreement shall
be and remain the property of Continental and shall be held in trust
for Continental by Contractor and issued or otherwise utilized only as
provided in the Agreement.
B. Contractor shall be responsible for the safe and secure
custody and care of all tickets and other documents and materials
furnished by Continental. The tickets and other documents of
Continental shall be secured in a manner satisfactory to Continental
and consistent with any applicable IATA standards and specifications.
Such tickets and documents and all records relating to them and to the
sale of transportation on Continental shall at all times be made
available for inspection by Continental or its designated
representative.
C. All tickets shall be issued by Contractor in accordance
with the currently effective tariffs and contract of carriage
applicable to the transportation being purchased and applicable trade
manuals, all in accordance with appropriate instructions, which may be
issued from time to time by Continental.
D. All tickets shall be issued by Contractor in numerical
sequence and all must be accounted for at each reporting period. All
auditors' coupons for tickets issued by Contractor and all coupons of
voided tickets shall be sent to the office or offices designated by
Continental from time to time on the workday following issuance.
E. All checks accepted for the sale of tickets on Continental
ticket stock shall be payable to Continental and acceptance of checks
shall conform to Continental's acceptance procedures. Any losses
resulting from returned checks where Contractor has failed to follow
Continental's acceptance procedures, will be charged to Contractor
after Continental exhausts reasonable efforts to collect.
Exhibit J-1
F. All tickets issued for a form of payment other than cash or
check shall be supported by such documents as shall be specified by
Continental.
G. Contractor shall assume full liability for and agrees to
defend, indemnify and hold Continental harmless from and against any
and all claims, demands, liability, expenses, losses, costs or damages
whatsoever in any manner arising out of or attributed to Contractor'
possession, issuance, loss, misapplication, theft, or forgery of
tickets, other travel documents, or supplies furnished by Continental
to Contractor including but not limited to lost ticket forms, bag tags,
boarding passes or other documents and errors in ticket issuance. In
the event Contractor loses or has stolen any ticket, fails to return
tickets or other documents to Continental upon demand, fails to remit
pursuant to the Agreement the monies to which Continental is entitled
from the sale of any such ticket or document, or fails to account
properly for any such tickets or document, Contractor shall be liable
to Continental for the agreed value of any such ticket or document,
which is agreed to be the actual damages or loss sustained by
Continental from usage of any such ticket or document, as measured by
the then current, non-discounted retail price of the transportation or
other service obtained with the ticket or document or, if such value
cannot be determined, US $2,000.00 per ticket.
H. Contractor may accept all credit cards honored by
Continental and is appointed Continental's agent for such purpose,
provided:
(i) Contractor observes the floor limits for each
credit card set by the issuer of the credit card (the "Card
Issuer") as amended by the Card Issuer from time to time;
(ii) Contractor accepts each credit card within the
terms of the contracts between Continental and Card Issuer;
(iii) Contractor complies with 14 CFR, Part 374;
(iv) Contractor does not accept blacklisted cards;
(v) Contractor shall reimburse Continental for any
losses incurred by Continental as a result of Contractor'
failure to observe the terms of this section or of the
contracts between Continental and the Card Issuer;
(vi) Contractor complies with all of Continental's
established procedures relating to credit cards; and
(vii) For tickets that are not for transportation on
Scheduled Flights, Contractor shall reimburse Continental for
all charge backs, returns and other direct charges
attributable to or arising from Contractor'
Exhibit J-2
acceptance of credit cards, unless either (a) Continental has
realized an offsetting credit (including through the return
and cancellation of a previously issued ticket) or (b) such
charge back, return or other charge resulted from the gross
negligence, recklessness, or willful misconduct of
Continental.
I. Contractor shall prepare and furnish to Continental all
written reports, accounts, and documentation with regard to ticket
handling that Continental may require daily or at such lesser frequency
as Continental may prescribe, at its sole discretion, from time to time
during the life of the Agreement. Contractor will comply with all
reasonable procedures specified by Continental with regard to ticket
handling.
J. Within two business days after the termination of the
Agreement for any reason, Contractor will return to Continental all
passenger ticket forms, bag tags, boarding passes and other documents
provided to Contractor by Continental pursuant to the Agreement.
2. Deposits. Contractor shall deposit all funds, both cash and checks,
realized from the sale of tickets on Continental ticket stock by it in
Continental accounts maintained at depositories from time to time designated by
Continental on or before the first banking day following receipt of such funds.
3. Ticket Acceptance. For the term of the Agreement, Continental hereby
authorizes Contractor to accept flight coupons written for CO* Flights in
accordance with any applicable restrictions. Contractor shall not endorse or
refund any such coupons without Continental's written consent, except in
accordance with Continental's contract of carriage.
Exhibit J-3