Execution Copy CAPACITY PURCHASE AGREEMENT between Continental Airlines, Inc., Pinnacle Airlines Corp. and Colgan Air, Inc. Dated as of February 2, 2007
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Exhibit
10.60
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CERTAIN
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT. THE SYMBOL “[***]” HAS BEEN INSERTED IN PLACE OF THE PORTIONS SO
OMITTED.
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Execution
Copy
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between
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Continental
Airlines, Inc.,
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and
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▇▇▇▇▇▇
Air, Inc.
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Dated
as of February 2, 2007
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This
Capacity Purchase Agreement (this “Agreement”), dated as of February
2, 2007, is among Continental Airlines, Inc., a Delaware corporation
(“Continental”), Pinnacle Airlines Corp., a Delaware corporation
(“Parent”), and ▇▇▇▇▇▇ Air, Inc., a Virginia corporation
(“Carrier” and, together with Parent, “Contractor”).
NOW,
THEREFORE, in consideration of the mutual covenants and obligations
hereinafter contained, the parties agree 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
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 and maintenance 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
on all Scheduled Flights. Contractor shall not publish any fares,
tariffs, or related information for the Covered Aircraft on any Scheduled
Flights. 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 (such scheduled
flights, together with Charter Flights and ferry flights required to accommodate
such scheduled flights and Charter Flights or otherwise made at Continental’s
request, referred to herein as “Scheduled Flights”), including
determining the city-pairs served, frequencies, utilization and timing of
scheduled arrivals and departures, and shall, in its sole discretion, make
all
determinations regarding the establishment and scheduling of any Charter
Flights; provided that such schedules shall be subject to Reasonable Operating
Constraints and provided further, that one of the Covered Aircraft shall
be an
operational spare and shall not be scheduled for Scheduled Flights (except
when
needed as a spare aircraft and except as otherwise elected by Continental,
provided that, in connection with such election Continental and Contractor
have
first agreed to any appropriate modification to the Benchmark Controllable
Cancellation Number). Continental shall also be entitled, in its sole
discretion and at any time prior to takeoff, to direct Contractor to delay
or
cancel a Scheduled Flight, including without limitation for delays and
cancellations that are ATC or weather related, and Contractor shall take
all
necessary action to give effect to any such direction. 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 three months. At such meeting, Continental
shall present a planned flight schedule for the Covered Aircraft for each
of the
next three 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. Not later than three Business Days prior to the beginning
of each calendar month, Continental will deliver to Contractor the Final
Monthly
Schedule. Following such monthly meetings and delivery of the Final
Monthly Schedule, however, Continental may make such adjustments to the proposed
Final Monthly Schedule as it deems appropriate (subject to Reasonable Operating
Constraints).
(c) Wet
Leases. At Continental’s option, and provided that
Contractor is not adversely affected in any material respect, Contractor
shall
“wet lease” one or more of the Covered Aircraft to Continental, on terms
mutually acceptable to the parties hereto, which terms are identical in all
material respects, economically and otherwise, to the terms of this Agreement
(taking into account the inherent differences between a “wet lease” arrangement
and a capacity purchase arrangement), and such “wet lease” shall supersede the
capacity purchase provisions of this Agreement with respect to such Covered
Aircraft. In such event, Contractor’s compensation hereunder,
including without limitation in this Article II, in Article III
and in Schedule 3, shall be adjusted so that Contractor’s aggregate
compensation from such “wet lease” arrangements and the capacity purchase
arrangements applicable to the remaining Covered Aircraft are equal to the
amount of Contractor’s aggregate compensation had no such “wet lease”
arrangements been entered into.
Section
2.02 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 or governmental authorities, civic associations
or other third parties 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).
Section
2.03 Pass
Travel. All pass travel and other
non-revenue travel on any Scheduled Flight shall be administered in accordance
with Exhibit E.
Section
2.04 Maintenance
Flights. Notwithstanding anything to the
contrary contained in this Article II or elsewhere in this Agreement,
Contractor shall be entitled to use the Covered Aircraft as agreed by
Continental and Contractor for the purpose of flying maintenance flights
required to facilitate the proper maintenance of the Covered Aircraft and
approved by Continental as part of the Final Monthly Schedule.
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 rates under this
Agreement set forth in Appendices 1 and 3 to Schedule 3 hereto, the
Controllable Completion Factor Incentive Rate set forth in Appendix 2 to
Schedule 3 and the on-time arrival rate set forth in Appendix 4 to
Schedule 3 hereto shall remain in effect through the first Anniversary
Date, and thereafter shall be adjusted on each Anniversary Date, as follows:
the
new rates, applicable beginning on such Anniversary Date, shall equal the
rates
in effect on the immediately preceding date multiplied by the lower of
(a) the Annual CPI Change and (b) [***]; provided that the rate for
each Covered Aircraft for each day in the Term set forth on Appendix 1 to
Schedule 3 shall not be adjusted pursuant to this
Section 3.02.
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. For the avoidance of doubt, Contractor
agrees that, in connection with its provision of Regional Airline Services
to
Continental under the CPA and the provision of other services contemplated
to be
performed by Contractor under the Ancillary Agreements, it shall use
commercially reasonable efforts to minimize costs incurred by it if such
costs
would be reimbursable by Continental to Contractor in accordance with the
CPA or
the applicable Ancillary Agreement. Further to the foregoing, if
Continental can provide or arrange to provide any service or item for which
Continental is required to reimburse Contractor for its cost of providing
at a
lower cost than applicable to Contractor, then Contractor shall allow
Continental to provide or arrange to provide such service or item in order
to
permit Continental to lower its costs, provided such arrangement does not
materially impact Contractor’s performance under this Agreement.
Section
3.04 Continental
Expenses
(a) Certain
Expenses. Continental shall incur
directly those expenses relating to the Regional Airlines Services that are
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,
including facility-related design changes and the cost of changes in uniforms
and other livery, in each case that occur outside of Contractor’s normal
aircraft and facility refurbishment program.
Section
3.05 Audit
Rights; Financial Information. Contractor
shall make available for inspection by Continental and its outside auditors
and
advisors, 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 any payments made
or
amounts or setoff pursuant to this Agreement or otherwise related to
Contractor’s provision of Regional Airline Services to
Continental. Continental and its outside auditors and advisors shall
be entitled to make copies and notes of such information as they deem necessary
and to discuss such records with Contractor’s President or such other employees
or agents of Contractor knowledgeable about such records. Upon the
reasonable written request of Continental or its outside auditors or advisors,
Contractor will cooperate with Continental and its outside auditors and advisors
to permit Continental and its outside auditors and advisors access to
Contractor’s outside auditors for purposes of reviewing such
records. In addition, Contractor shall deliver or cause to be
delivered to Continental (I) as soon as available, but in any event within
90 days after the end of each fiscal year, a copy of the consolidated
balance sheet of each of Carrier (if available in respect of Carrier) and
Parent, as at the end of such year, and the related consolidated statements
of
income and retained earnings and of cash flows for such year, setting forth
in
each case in comparative form the figures for the previous year, reported
on in
the case of Parent by an independent certified public accountants of nationally
recognized standing; and (II) as soon as available, but in any event not
later than 45 days after the end of each of the first three quarterly
periods of each fiscal year, the unaudited consolidated balance sheet of
each of
Carrier and Parent, as at the end of such quarter, and the related unaudited
consolidated statements of income and retained earnings and of cash flows
for
such quarter and the portion of the fiscal year through the end of such quarter,
setting forth in each case in comparative form the figures for the previous
year, certified by a responsible officer of Carrier or Parent, as the case
may
be, as being fairly stated in all material respects (subject to normal year-end
audit adjustments); provided, that no Person shall be required to deliver
financial statements pursuant to this sentence at any time that such Person
is a
reporting issuer pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended, and such financial statements are timely filed with
the
Securities and Exchange Commission pursuant thereto. All financial
statements delivered hereunder shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with
GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may
be,
and disclosed therein).
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 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, net of amounts owed by
Contractor to Continental, including without limitation amounts owed under
the
Master Facility and Ground Handling Agreement and/or any other amounts as
mutually agreed to by both Contractor and Continental, as follows:
(i) [***]
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 of the month (or if such day is not a Business Day,
the
next Business Day) to which such invoice relates;
(ii) [***]
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) [***]
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) [***]
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 14 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. On or before the 15th day following the
end of such month (or if such day is not a Business Day, the next Business
Day),
such reconciled amounts for such month to the extent applicable: (i) shall
be paid by Continental to Contractor, together with any payment to be made
by
Continental pursuant to Section 3.06(a)(iii) above, or
(ii) shall be paid by Contractor to Continental or set off by Continental
against any other amounts owing to Contractor. Further
reconciliations shall be made on or prior to the 22nd day following the end
of such month (or if such day is not a Business Day, the next Business Day)
to
the extent necessary as a result of Continental’s review of financial
information provided by Contractor in respect of such month. Such
further reconciled amounts for such month to the extent applicable
(x) shall be paid by Continental to Contractor, together with any other
payment to be made by Continental pursuant to Section 3.06(a)(iv) above,
or (y) shall be paid by Contractor to Continental or set off by Continental
against any other amounts owing to Contractor. If, subsequent to any
reconciliation payments or set-off, as the case may be, Carrier’s or Parent’s
financial statements are restated, amended or otherwise adjusted for any
calendar month or quarter, 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,
Etc
(a) Contractor
shall be responsible for providing all crews (flight and cabin), maintenance
personnel, gate agents and other ground personnel necessary to operate the
Scheduled Flights and for all aspects (personnel and other) of dispatch control
(in each case except as such persons are provided by Continental pursuant
to the
Master Facility and Ground Handling Agreement), and with respect to ground
handling services, Contractor agrees that it will not subcontract the
performance of any such services to any party that is not a Subsidiary of
Carrier or Parent without Continental’s prior approval; provided, that, any
party utilized to perform similar services at the applicable airport by
Continental for flights operated by Continental shall be deemed approved
by
Continental for use by Contractor in performing such services for Scheduled
Flights, and provided further that, at any Continental Hub Airport, Parent
or a
Subsidiary of Parent that is reasonably acceptable to Continental shall provide
such services, unless otherwise approved in advance by Continental.
(b) Contractor
agrees to give any furloughed Continental pilots preferential interview status
for any pilot openings that may occur at Contractor. Any furloughed
Continental pilot hired by Contractor will not be required by Contractor
to
resign from Continental as a condition for applying or being employed as
a pilot
of Contractor.
(c) Continental
agrees to give Contractor pilots preferential interview status for any pilot
opening that may occur at Continental, consistent with commitments concerning
pilots of other carriers.
Section
4.02 Governmental
Regulations. Contractor has and shall maintain all
certifications, permits, licenses, certificates, exemptions, approvals, plans,
and insurance required by governmental authorities, including, without
limitation, FAA, DOT and TSA, to enable Contractor to perform the services
required by this Agreement. All flight operations, dispatch
operations and all other operations and services undertaken by Contractor
pursuant to this Agreement shall be conducted, operated and provided by
Contractor in compliance with all U.S. and foreign governmental laws,
regulations and requirements, including, without limitation, those relating
to
airport security, the use and transportation of hazardous materials and
dangerous goods, crew qualifications, crew training and crew hours, the carriage
of persons with disabilities and without any violation of U.S. or foreign
laws,
regulations or governmental prohibitions. All Covered Aircraft shall
be operated and maintained by Contractor in compliance with all laws,
regulations and governmental requirements, Contractor’s own operations manuals
and maintenance manuals and procedures, and all applicable equipment
manufacturers’ manuals and instructions. It is agreed that Continental shall
designate the most efficient runway for EWR operations, which normally shall
be
EWR Runway 11/29 when fully operational, available and allowed for safe
operation of such flight, which may be changed in Continental’s sole discretion
as often as may be necessary or desirable on the basis of weather, air traffic
control (ATC) or other conditions to maximize the efficiency of EWR operations
and Continental’s network system. For each EWR flight operated under
this Agreement and only to the extent consistent with safe operation of such
flight, Contractor shall use commercially reasonable efforts to request ATC
clearance to use the most efficient runway, as designated by Continental,
when,
in the sole judgment of Contractor and the pilot in command (PIC), there
is no
safety reason or concern to request another runway. Continental shall
control the use and substitution of any and all slots, operating authorizations
and similar or successor authority issued by the FAA or any airport operator
for
the operation of each flight under this Agreement to enable Continental to
manage the priority of each such flight among all flights in Continental’s
network system. Contractor shall inform Continental no later than
7:00am (Newark time) each day (and updated as operational needs require)
of all
material aspects of Contractor’s ATC plans for all flights operated under this
Agreement on such day and shall defer to Continental’s preferences for such
plans, including, without limitation, the most efficient runway for EWR
operations, unless inconsistent with any other provision of this
Agreement. Contractor shall obtain all required authorizations,
certifications, approvals and training to conduct Required Navigation
Performance (RNP) Area Navigation (RNAV) operations for all flights under
this
Agreement. Notwithstanding the foregoing, no provision of this Agreement
shall
be understood or deemed to affect or limit the responsibility and authority
of
the PIC of such flight under 14 CFR 91.3 or any successor
regulation.
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 and its route network. Contractor
agrees
that the noise and vibration suppression system that each Covered Aircraft
is to
be equipped with will be operable and activated for at least [***] of the
time
that it is lawful for such system to be activated. Contractor shall comply
with
all airline customer service commitments and 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, oversales, baggage services and handling of irregular
operations. In addition, at the request of Continental, Contractor
shall comply with all such airline customer service commitments, policies
and
standards of care of Continental as adopted, amended or supplemented after
the
date hereof. Contractor shall ensure that all Covered Aircraft are
equipped with ACARS (Aircraft Communications Addressing and Reporting System).
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 claims, litigation or
an
investigation by a governmental agency or authority. At either
party’s request, Contractor and Continental will meet to discuss and review
Contractor’s customer service and handling procedures and policies and its
employees’ conduct, appearance and training standards and
policies.
Section
4.04 Incidents
or Accidents. Contractor shall promptly notify
Continental of all irregularities involving a Scheduled Flight or Covered
Aircraft operated by Contractor, including, without limitation, aircraft
accidents and incidents, which result in any damage to persons and/or property
or may otherwise result in a complaint or claim by passengers or an
investigation by a governmental agency or authority. Contractor 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.
Section
4.05 Emergency
Response. Carrier 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 or Scheduled Flight, Continental will have the right to manage the
emergency response efforts on behalf of Contractor with full cooperation
from
Contractor.
Section
4.06 Safety
Matters. In the event of a reasonable safety concern,
Continental shall have the right, at its own cost, to inspect, review, and
observe Contractor’s operations of Scheduled Flights. Notwithstanding
the conduct or absence of any such review, Contractor is and shall remain
solely
responsible for the safe operation of its aircraft and the safe provision
of all
Scheduled Flights and other Regional Airline Services, including without
limitation (a) complying with all FAA and TSA regulations the responsibility
for
compliance with which is not specifically allocated to another party pursuant
to
the Master Facility and Ground Handling Agreement, and (b) maintaining the
airworthiness of all Covered Aircraft. Nothing in this
Section 4.06 or otherwise in this Agreement is intended or shall be
interpreted to make Continental responsible for such safety
matters.
Section
4.07 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. The parties agree that, in the event of a conflict
between the provisions of Article VII hereof and the indemnification provisions
of the Master Facility and Ground Handling Agreement, the latter shall
control.
Section
4.08 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
4.09 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 transferred to Contractor by Continental for use in connection
with Scheduled Flights, or acquired by Contractor for use for Scheduled Flights,
in consideration of the payment to Contractor of the net book value, if any,
of
such slot, authority or authorization on Contractor’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 transferred to Contractor by
Continental for use in connection with Scheduled Flights or acquired 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 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.
Section
4.15 Fuel
Efficiency Program. Contractor shall promptly adopt
and adhere to a fuel efficiency program as described on Exhibit K
hereto.
ARTICLE
V
CERTAIN
RIGHTS OF CONTINENTAL
Section
5.01 Use
of Covered Aircraft. Contractor agrees that, except
as otherwise directed or approved in writing by Continental in Continental’s
sole discretion, the Covered Aircraft may be used only to provide Regional
Airline Services. Without the written consent of Continental, the
Covered Aircraft may not be used by Contractor for any other purpose, including
without limitation flying for any other airline or on Contractor’s own
behalf.
Section
5.02 Most
Favored Nations. Notwithstanding any other provision
in this Agreement to the contrary, at any time during the Term if Contractor
or
any Affiliate of Contractor begins operating any Bombardier Q400 aircraft
for
another Person, then for every such aircraft so operated by Contractor or
any
Affiliate thereof, the rate set forth on Appendix 1 to Schedule 3 hereto
captioned “for each day in the Term” shall be reduced by [***], up to a maximum
reduction of [***] (if [***] or more such aircraft are so
operated).
Section
5.03 Change
of Control. Upon the occurrence of a Change of
Control of Parent or Contractor without the prior written consent of
Continental, Continental shall have the right to terminate this Agreement
on 90
days prior written notice to Contractor, such notice to be delivered not
later
than 90 days after Continental becomes aware of such Change of Control (which
termination shall not be effective if the circumstances giving rise to such
Change of Control shall no longer exist on the 30th day after Continental
delivers such written notice to Contractor).
ARTICLE
VI
INSURANCE
Section
6.01 Minimum
Insurance Coverages. During the Term, 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 [***] per occurrence, a minimum
limit
in respect of personal injury (per clause AVN 60 or its equivalent) of [***]
per
occurrence and in the aggregate, and War Risk hull and liability insurance
as provided by the Federal Aviation Administration program with a combined
single limit no less than [***] per occurrence;
(b) Workers’
compensation as required by the appropriate jurisdiction and employer’s
liability with a limit of not less than [***] combined single
limit;
(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 6.01 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; and
(d) All
other
insurance that Contractor is required to maintain by any applicable governmental
or airport authority, or by any lessor or owner of any Covered Aircraft,
or
otherwise pursuant to any lease or other contract relating to the Covered
Aircraft or Contractor’s provision of Regional Airline Services.
Section
6.02 Endorsements. Contractor
shall cause the policies described in Section 6.01 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;
(f) To
include a severability of interest (cross liability) provision whereby such
insurance applies separately to each insured; and
(g) 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
6.03 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, including certificates certifying that such insurance
and endorsements are in full force and effect. Initially, this
evidence shall be a certificate of insurance. If Contractor fails to
acquire or maintain insurance as herein provided, Continental may at its
option
secure such insurance on Contractor’s behalf at Contractor’s expense.
ARTICLE
VII
INDEMNIFICATION
Section
7.01 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, 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 Continental
or its
directors, officers, employees or agents, including but not limited to, 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, in each case 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 obligations to be undertaken by Contractor or any of its directors,
officers, employees or agents pursuant to this Agreement or any Ancillary
Agreement, or (y) the operation, non-operation, or improper operation of
the Covered Aircraft or Contractor’s equipment or facilities at any location, in
each case 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 (other than negligence or willful
misconduct imputed to such indemnified person by reason of its interest in
a
Covered Aircraft or a Covered Aircraft Sublease). Contractor will do
all things necessary to cause and assure, and will cause and assure, that
Contractor will at all times 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
7.02 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, 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 but not limited to, 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,
in each case 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 any Ancillary Agreement, (y) the
operation, non-operation or improper operation of Continental’s aircraft,
equipment or facilities (excluding, for the avoidance of doubt, Covered Aircraft
and any equipment or facilities leased or subleased by Continental to
Contractor) at any location, in each case excluding only claims, demands,
damages, liabilities, suits judgments, actions, causes of action, losses,
costs
and expenses (A) to the extent resulting from the negligence or willful
misconduct of Contractor or its directors, officers, agents or employees,
or (B)
for which Contractor is obligated to indemnify or otherwise reimburse
Continental pursuant to a Covered Aircraft Sublease. 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
7.03 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 (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. 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 7.03, 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. 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 without the prior consent
of
the (otherwise) Indemnifying Party. In the latter event, the
Indemnified Party, by proceeding to defend itself or settle the matter, does
not
waive any of its rights hereunder to later seek reimbursement from the
Indemnifying Party.
Section
7.04 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 and workers’ compensation
liability to its respective 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 or retirement 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.
(b) Employees,
etc., of Contractor. 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 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,
etc., 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
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
7.05 Survival. The
provisions of this Article VII shall survive the termination of this Agreement
for a period of seven years.
ARTICLE
VIII
TERM,
TERMINATION AND DISPOSITION OF AIRCRAFT
Section
8.01 Term. The
base term of this Agreement shall commence on the date the first Covered
Aircraft is placed into service under the terms and conditions of this Agreement
and, unless earlier terminated or extended as provided herein, shall continue
until December 1, 2017 (the “Base Term”). The term (the “Term”)
shall include the Base Term and any Wind-Down Period.
Section
8.02 Early
Termination.
(a) By
Continental for Cause. Continental shall have the right to
terminate this Agreement, immediately upon written notice (but without any
prior
notice) following the occurrence of any event that constitutes
Cause. Any termination pursuant to this Section 8.02(a) shall
supersede any other termination pursuant to any other provision of this
Agreement (even if such other right of termination shall already have been
exercised), and the date of first occurrence of such event constituting Cause
shall be the Termination Date for purposes of this Agreement (and such
Termination Date pursuant to this Section 8.02(a) shall supersede
any other Termination Date that may have been previously established pursuant
to
another termination).
(b) 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 (including any Ancillary
Agreement) by Contractor or upon any material breach of that certain Code
Share
agreement dated as of April 1, 2005, as amended from time to time, between
Carrier (or any successor to Carrier’s interest therein) and Continental, which
breach shall not have been cured within 60 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 each of the following shall constitute a material
breach of this Agreement by Contractor: (i) the occurrence of a System
Flight Disruption, (ii) a reasonable and good faith determination by
Continental, using recognized standards of safety, that there is a material
safety concern with the operation of any Scheduled Flights, (iii) the
grounding of any Contractor Fleet by regulatory or court order or other
governmental action, (iv) a Controllable Completion Factor for any
consecutive 60-day period of [***] or below, (v) a Controllable On-Time
Arrival Rate for any consecutive 60-day period of [***] or below, (vi) a
failure
to meet the terms of Section 9.01(j) hereof), and (vii) a material breach
of the
Ticket Handling Terms as set forth in Exhibit J hereto.
(c) 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 (i) within three days
after written notice is delivered by Contractor to Continental of Continental’s
uncured failure to make two consecutive payments owed by Continental to
Contractor pursuant to Section 3.06(a), or (ii) within
60 days after written notice of any other breach is delivered by Contractor
to Continental.
(d) 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 are withdrawn from this Agreement.
Section
8.03 Disposition
of Aircraft during Wind-Down Period.
(a) Termination
by Continental for Cause. If this Agreement is terminated
pursuant to Section 8.02(a), then the Covered Aircraft shall be
withdrawn from the capacity purchase provisions of this Agreement as of the
Termination Date and shall cease to be Covered Aircraft as of such
date. The provisions of this Section 8.03(a) shall
supersede any Wind-Down Schedule delivered pursuant to any other provision
of
this Agreement.
(b) Termination
by Continental for Breach or Change in Control. If this
Agreement is terminated by Continental under Section 8.02(b) or
Section 5.03, then the Covered Aircraft, or in the event of a termination
under clause (iii) of Section 8.02(b), the Covered Aircraft that
are included within the grounded Contractor Fleet, shall be withdrawn from
the
capacity purchase provisions of this Agreement in accordance with the following
terms and conditions:
(i) Within
90 days of delivery of any notice of termination delivered pursuant to
Section 8.02(b) or Section 5.03, which notice shall specify a
Termination Date, Continental shall deliver to Contractor a Wind-Down Schedule,
providing for the withdrawal of such Covered Aircraft from the capacity purchase
provisions of this Agreement, delineating the number of each aircraft to
be
withdrawn by month.
(ii) In
the
event of a termination pursuant to Section 8.02(b) or Section
5.03, the Wind-Down Schedule may not commence until the Termination Date
and
may not provide for the withdrawal of any Covered Aircraft beyond the applicable
exit date for such Covered Aircraft.
(c) Termination
by Contractor for Breach. If this Agreement is terminated by
Contractor under Section 8.02(c), then the Covered Aircraft shall be
withdrawn from the capacity purchase provisions of this Agreement on the
Termination Date, which shall be set forth in the notice of termination
delivered by Contractor to Continental pursuant to Section 8.02(c) and
shall be at least 180 days after the date of such notice.
(d) Termination
at End of Term. If the Agreement is terminated at the end of
the Base Term (other than pursuant to Section 8.02), then each Covered
Aircraft shall be withdrawn from the capacity purchase provisions of this
Agreement on the first day of the month that is the tenth anniversary of
the
month in which such aircraft became a Covered Aircraft.
Section
8.04 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 8.02(b)), 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 8.02(b), in addition to, and not in limitation of, any
recourse or remedy available to Continental at law or in equity, then as
consideration for Continental’s forbearance in exercising its termination
remedies (the parties having agreed that the value of such forbearance may
be
difficult to calculate) and without any further action by any party, each
item
of Base Compensation shall be decreased to an amount equal to such item of
Base
Compensation (per hour, departure or other unit of measurement, as applicable)
divided by [***].
(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 8.02(c), 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 the provisions
of Paragraph B(4)(c) of Schedule 3 and Section 8.04(a)
shall apply.
(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 claims
for punitive, special or exemplary damages suffered by any party or its
affiliates and 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;
provided that nothing in this Section 8.04(d) shall restrict the
right of any party to exercise any right to terminate this Agreement pursuant
to
the terms hereof.
ARTICLE
IX
REPRESENTATIONS,
WARRANTIES AND COVENANTS
Section
9.01 Representations
and Warranties of Carrier and Parent. Each of Carrier
and Parent, jointly and severally, represents, warrants and covenants to
Continental as of the date hereof as follows:
(a) Organization
and Qualification. Each of Carrier and Parent is a duly
organized and validly existing corporation in good standing under the laws
of
its respective state of incorporation and has the corporate power and authority
to own, operate and use its assets and to provide the Regional Airline
Services. Each of Carrier and Parent is duly qualified to do business
as a foreign corporation under the laws of each jurisdiction that requires
such
qualification.
(b) Authority
Relative to this Agreement. Each of Carrier and Parent 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 Carrier and
Parent. This Agreement has been duly and validly executed and
delivered by each of Carrier and Parent 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 Carrier
and Parent, enforceable against each of Carrier and Parent 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. Neither
the execution or delivery of this Agreement nor the performance by Carrier
or
Parent of the transactions contemplated hereby will (i) violate, conflict
with, or constitute a default under any of the terms of either Carrier’s or
Parent’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 Carrier or Parent is a party or by
which
any of them or any of their respective properties or assets may be bound,
(ii) result in the creation or imposition of any lien, charge or
encumbrance in favor of any third person or entity, (iii) violate any law,
statute, judgment, decree, order, rule or regulation of any governmental
authority or body, 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, charges or
encumbrances.
(d) No
Default. Neither Carrier nor Parent is (i) in violation
of its charter or by-laws, (ii) in breach or default in any material
respect, and no event has occurred which, with notice or lapse of time or
both,
would constitute such a breach or default, in the due performance or observance
of any term, covenant or condition contained in any indenture, mortgage,
deed of
trust, loan agreement or other agreement or instrument to which it is a party
or
by which it is bound or to which any of its properties or assets is subject
or
(iii) in violation of any law, ordinance, governmental rule, regulation or
court decree to which it or its property or assets may be subject or has
failed
to obtain any material license, permit, certificate, franchise or other
governmental authorization or permit necessary to the ownership of its property
or to the conduct of its business, where such violation, breach, default
or
failure would have a material adverse effect on Carrier or Parent or on
Contractor’s ability to provide Regional Airlines Services and otherwise perform
its obligations hereunder. To the knowledge of each of Carrier and
Parent, no third party to any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument that is material to Carrier
or
Parent and to which Carrier or Parent is a party or by which any of them
are
bound or to which any of their properties are subject, is in default in any
material respect under any such agreement.
(e) Broker. Neither
Carrier nor Parent has retained or agreed to pay any broker or finder with
respect to this Agreement and the transactions contemplated hereby.
(f) Financial
Statements. The financial statements (including the related
notes and supporting schedules) of each of Carrier and Parent delivered (or,
if
filed with the Securities and Exchange Commission, made available) to
Continental immediately prior to the date hereof fairly present in all material
respects the consolidated financial position of Carrier and Parent, as the
case
may be, and their respective results of operations as of the dates and for
the
periods specified therein. Since the date of the latest of such
financial statements, there has been no material adverse change nor any
development or event involving a prospective material adverse change with
respect to Carrier or Parent, as the case may be. Such financial
statements have been prepared in accordance with generally accepted accounting
principles in the United States consistently applied throughout the periods
involved, except to the extent disclosed therein.
(g) Insurance. Each
of Carrier and Parent is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts and with
such
deductibles as are customary in the businesses in which they are
engaged. Neither Carrier nor Parent has received notice of
cancellation or non-renewal of such insurance. All such insurance is
outstanding and duly in force on the date hereof. Neither Carrier nor
Parent has any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business
at a
cost that would not have a material adverse effect on Carrier or
Parent.
(h) No
Proceedings. There are no legal or governmental proceedings
pending, or investigations commenced of which Carrier or Parent has received
notice, in each case to which Carrier or Parent is a party or of which any
property or assets of Carrier or Parent is the subject which, if determined
adversely to Carrier or Parent, would individually or in the aggregate have
a
material adverse effect on Carrier or Parent or on Contractor’s ability to
provide Regional Airlines Services and otherwise perform its obligations
hereunder; and to the best knowledge of Carrier and Parent, no such proceedings
are threatened or contemplated by governmental authorities or threatened
by
others.
(i) No
Labor Dispute. No labor dispute with the employees of
Carrier exists or, to the knowledge of Carrier or Parent, is imminent which
would reasonably be expected to have a material adverse effect on Contractor
or
on its ability to provide Regional Airlines Services and otherwise perform
their
respective obligations hereunder.
(j) Permits. Each
of Carrier and Parent possesses, or in the case of the Covered Aircraft,
will
possess not later than thirty days prior to the first Scheduled Delivery
Date of
a Covered Aircraft hereunder, all material certificates, authorizations and
permits issued by FAA and other applicable federal, state or foreign regulatory
authorities necessary to conduct their respective businesses, to provide
Regional Airlines Services and otherwise to perform their respective obligations
hereunder, and neither Carrier nor Parent has received any notice of proceedings
relating to the revocation or modification of any such certificate,
authorization or permit which, individually or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would result in a material
adverse effect on Carrier or Parent or on their ability to conduct their
respective businesses, to provide Regional Airlines Services and otherwise
to
perform their respective obligations hereunder.
(k) Delivery
of Covered Aircraft. Contractor shall present for service as
Covered Aircraft each of the aircraft set forth on Schedule 1 not later
than the Scheduled Delivery Date therefor.
Section
9.02 Representations
and Warranties of Continental. Continental represents and
warrants to each of Carrier and Parent 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 validly executed and delivered by Continental
and
is, assuming due execution and delivery thereof by Carrier and Parent and
that
Carrier and Parent 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 or by which it or its properties or assets may be
bound,
(ii) result in the creation or imposition of any lien, charge or
encumbrance in favor of any third person or entity, (iii) violate any law,
statute, judgment, decree, order, rule or regulation of any governmental
authority or body, 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, charges or
encumbrances.
(d) Broker. Continental
has not retained or agreed to pay any broker or finder with respect to this
Agreement and the transactions contemplated hereby.
(e) No
Proceedings. There are no legal or governmental proceedings
pending, or investigations commenced of which Continental has received notice,
in each case to which Continental is a party or of which any property or
assets
of Continental is the subject which, if determined adversely to Continental,
would individually or in the aggregate have a material adverse effect on
Continental or on its ability to perform its obligations hereunder; and to
the
best knowledge of Continental, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
ARTICLE
X
MISCELLANEOUS
Section
10.01 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.: [***]
and
to:
Continental
Airlines, Inc.
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
Attention:
Staff Vice President –
Financial Planning
Telecopy
No.: [***]
if
to
Carrier:
▇▇▇▇▇▇
Air, Inc.
▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention: President
Telecopy
No.: [***]
if
to
Parent:
▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇. #▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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
10.01.
Section
10.02 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 or other consolidation of
either party with another Person (and without limiting Continental’s rights
pursuant to Section 5.03 hereof), 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
10.03 Amendment
and Modification. This Agreement may not be amended
or modified in any respect except by a written agreement signed by the parties
hereto that specifically states that it is intended to amend or modify this
Agreement.
Section
10.04 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
that
specifically states that it is intended to waive such term. 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
10.05 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
10.06 Confidentiality. Except
as required by law or stock exchange regulation or in any proceeding to enforce
the provisions of this Agreement, or as otherwise provided below, Contractor
hereby agrees 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
Continental. Except as required by law or stock exchange regulation
or in any proceeding to enforce the provisions of this Agreement or any of
the
Ancillary Agreements, or as otherwise provided below, Contractor hereby agrees
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
Continental. Contractor shall be entitled to share this Agreement and
any of the Ancillary Agreements with any of its lenders, financiers or potential
lenders and potential financiers, in each case who agree in writing to keep
such
information confidential and to use such information solely for the purposes
of
making a loan or otherwise extending credit to Contractor, and of considering
such a transaction; provided that such Person may not be a commercial air
carrier or a subsidiary or parent of a commercial air
carrier. Contractor hereby agrees not to use any such confidential
information or data of the other party other than in connection with performing
its obligations or enforcing its 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 Contractor is served with a
subpoena or other process requiring the production or disclosure of any of
such
agreements or information, then, before complying with such subpoena or other
process, Contractor shall immediately notify Continental of same and permit
Continental 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. Continental shall not be restricted from disclosing publicly
or to any third party the terms and conditions of this Agreement or any of
the
Ancillary Agreements, or any exhibit, schedule or appendix hereto or thereto,
or
from making use of any information or data relating thereto or to Regional
Airlines Services; provided, that except as required by law or stock exchange
regulation or in any proceeding to enforce the provisions of this Agreement
or
any of the Ancillary Agreements, Continental will only disclose confidential
information or data received from Contractor to a third party who has agreed
to
keep such information confidential. The provisions of this
Section 10.06 shall survive the termination of this Agreement for a period
of ten years.
Section
10.07 Arbitration.
(a) Agreement
to Arbitrate. Subject to the equitable remedies provided
under Section 10.10, any and all claims, demands, causes of action,
disputes, controversies and other matters in question (all of which are referred
to herein as “Claims”) arising out of or relating to this Agreement,
shall be resolved by binding arbitration pursuant to the procedures set forth
by
the International Institute for Conflict Prevention and Resolution (the
“CPR”). Subject to the equitable remedies provided under
Section 10.10, each of the parties agrees that arbitration under
this Section 10.07 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 10.07, to compel any other party to participate in
arbitration under this Section 10.07. The governing law
for any such action or proceeding shall be the law set forth in
Section 10.07(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 Claim
to or from a disputing party, then the arbitration may be initiated by one
party
by providing to the other party a written notice of arbitration specifying
the
Claim or Claims to be arbitrated. If a party refuses to honor its
obligations to arbitrate under this provision, the other party may compel
arbitration in either federal or state court in Houston, Texas and seek recovery
of its attorneys’ fees and court costs incurred if the arbitration is ordered to
proceed.
(c) Place
of Arbitration. The arbitration proceeding shall be
conducted in Houston, Texas, or some other location mutually agreed upon
by the
parties.
(d) Selection
of Arbitrators. The arbitration panel (the “Panel”)
shall consist of three arbitrators who are qualified to hear the type of
Claim
at issue. They may be selected by agreement of the Parties within
thirty days of the notice initiating the arbitration procedure, or from the
date
of any order compelling such arbitration to proceed. If the Parties
fail to agree upon the designation of any or all the Panel, then the Parties
shall request the assistance of the CPR. The Panel shall make all of
its 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. The decision of the Panel will be
binding and non-appealable, except as permitted under the Federal Arbitration
Act.
(e) Choice
of Law as to Procedural Matters. The enforcement 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, and
the rules governing the conduct of the arbitration, unless otherwise agreed
by
the Parties, 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. It
is contemplated that the arbitration proceeding will be self-administered
by the
parties and conducted in accordance with procedures jointly determined by
the
Panel and the Parties; provided, however, that if either or both Parties
believes the process will be enhanced if it is administered by the CPR, then
either or both Parties shall have the right to cause the process to become
administered by the CPR and, thereafter, the arbitration shall be conducted,
where applicable or appropriate, pursuant to the administration of the
CPR. In determining the extent of discovery, the number and length of
depositions, and all other pre-hearing matters, the Panel 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 entire Panel. The final hearing
shall not exceed ten business days, with each party to be granted one-half
of the allocated time to present its case to the arbitrators, unless otherwise
agreed by the Parties.
(i) Damages. Only
actual damages may be awarded. It is expressly agreed that the Panel
shall have no authority to award treble, 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 Panel shall render its final
decision and award in writing within 20 days of the completion of the final
hearing completely resolving all of the Claims that are the subject of the
arbitration proceeding. The Panel shall certify in its decision that
no part of its award includes any amount for treble, exemplary or punitive
damages. The Panel’s decision and award shall be final and
non-appealable to the maximum extent permitted by law. Any and all of
the Panel’s orders and decisions will be enforceable in, and judgment upon any
award rendered in the arbitration proceeding may be confirmed and entered
by,
any federal or state court in Houston, Texas having jurisdiction.
(k) Confidentiality. All
proceedings conducted hereunder and the decision and award of the Panel shall
be
kept confidential by the Panel and, except as required by law or stock exchange
regulation or in any proceeding to enforce any decision or award by the Panel,
by the Parties.
Section
10.08 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
10.09 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
10.10 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 (and
notwithstanding the provisions of Section 10.07 above), 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
10.11 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
10.12 Entire
Agreement; No Third Party Beneficiaries. 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. This Agreement is made among, and for the
benefit of, the parties hereto, and the parties do not intend to create any
third-party beneficiaries hereby, and no other Person shall have any rights
arising under, or interests in or to, this Agreement.
Section
10.13 Governing
Law. Except with respect to matters referenced in
Section 10.07(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 10.07(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
10.14 Right
of Set-Off. If any party hereto shall be in default
hereunder or under any Ancillary Agreement to any other party hereto, 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 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
between Continental and Contractor; (ii) reciprocity between Continental
and Contractor 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), including without limitation pursuant
to Section 3.06(b)(ii) hereof.
Section
10.15 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.
Section
10.16 Parent
Guarantee. Contemporaneous with the execution and
delivery of this Agreement, Parent shall execute a guarantee in favor of
Continental in form of Exhibit L. Parent hereby agrees that it shall
not participate in any transaction or series of transactions if, after giving
effect to such transaction or series of transactions, Contractor will become
the
Subsidiary of another Person, unless at the time such transactions are
consummated the entity with respect to which Contractor is or will be a
Subsidiary executes and delivers to Continental a guarantee of the obligations
of Contractor under this Agreement and the Ancillary Agreements substantially
in
the form of Exhibit L.
Section
10.17 Transition
Arrangements.
(a) Scheduling. Subsequent
to the execution of this Agreement, and prior to the commencement of the
Term,
Contractor and Continental shall work together to facilitate the initial
monthly
scheduling of Scheduled Flights.
(b) Other
Setup Arrangements. Subsequent to the execution of this Agreement, and
prior to the commencement of the Term, Contractor and Continental shall work
together to facilitate all other relevant aspects of the commencement of
Contractor’s provision of Regional Airlines Services as of the beginning of the
Term, including without limitation the provision of passenger-related airport
services, ground handling services and technology-related services.
Section
10.18 Alternative
Aircraft. At any time that Continental desires to
utilize aircraft other than aircraft constituting part of the Contractor
Fleet,
Contractor and Continental agree to meet and discuss in good faith the
appropriate adjustments to this Agreement necessary to include such other
aircraft as a Covered Aircraft and part of the Contractor Fleet.
IN
WITNESS WHEREOF, the parties hereto have caused this Capacity Purchase
Agreement to be duly executed and delivered as of the date and year first
written above.
CONTINENTAL
AIRLINES,
INC.
By: /s/
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇
▇.
▇▇▇▇▇▇
Title: President
By: /s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇
▇.
▇▇▇▇▇▇▇
Title: President
& CEO
▇▇▇▇▇▇
AIR, INC.
By: /s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
Title: Vice
President
SCHEDULE
1
Aircraft
Delivery
Schedule
|
Number*
|
Aircraft
Type
|
Scheduled
Delivery Date**
|
|
1.
|
Bombardier
Q400
|
[***]
|
|
2.
|
Bombardier
Q400
|
[***]
|
|
3.
|
Bombardier
Q400
|
[***]
|
|
4.
|
Bombardier
Q400
|
[***]
|
|
5.
|
Bombardier
Q400
|
[***]
|
|
6.
|
Bombardier
Q400
|
[***]
|
|
7.
|
Bombardier
Q400
|
[***]
|
|
8.
|
Bombardier
Q400
|
[***]
|
|
9.
|
Bombardier
Q400
|
[***]
|
|
10.
|
Bombardier
Q400
|
[***]
|
|
11.
|
Bombardier
Q400
|
[***]
|
|
12.
|
Bombardier
Q400
|
[***]
|
|
13.
|
Bombardier
Q400
|
[***]
|
|
14.
|
Bombardier
Q400
|
[***]
|
|
15.
|
Bombardier
Q400
|
[***]
|
Each
of
the Bombardier Q400 aircraft shall be a new aircraft outfitted with all basic
equipment and standard options required to operate the aircraft and provide
a
level of service consistent with Continental operations. The Bombardier Q400
aircraft shall be delivered for service hereunder configured with 74 seats
as
shown on Schedule 2 hereto and shall additionally be equipped with the optional
equipment specified on Schedule 4 hereto; provided, that Continental may
instead
specify an alternative configuration of 74 seats with 31” pitch as shown as the
alternative configuration on Schedule 2 if Continental provides Contractor
with
written notice of such election at least 15 days prior to the date by which
Contractor must inform the manufacturer of the final seat configuration for
the
applicable aircraft.
The
spare
aircraft shall be aircraft position [***] or later, unless otherwise agreed
by
Continental.
*
Parent
represents that it has secured Bombardier Q400 aircraft delivery option rights
from the manufacturer that would permit Parent to purchase from the manufacturer
(and that require the manufacturer to sell to Parent) one or more (but not
more
than [***]) additional Q400 aircraft (at Parent’s option), with scheduled
delivery dates (if the applicable related option therefor is exercised) as
follows: [***] aircraft a month beginning in [***] and continuing each month
thereafter through and including [***] (being a total of up to [***] additional
aircraft delivery positions). It is acknowledged that Parent is required
to give the manufacturer notice of Parent’s exercise of the applicable option
right for each additional aircraft to which such option right applies [***]
months prior to the applicable related aircraft’s scheduled delivery month
as above provided. It is agreed that Continental may direct Parent to
exercise any one or more option rights for the applicable related option
aircraft by providing Parent with written notice of such direction prior to
the date that is 10 business days before the final date by which Parent must
provide the manufacturer with notice of the exercise of the
applicable option right (and upon such direction Parent agrees that it
will exercise the subject option right). If Continental provides such
direction, Contractor and Continental shall add the applicable option
aircraft and the Scheduled Delivery Date therefor to this Schedule 1,
such that such option aircraft will be designated as a Covered Aircraft
hereunder and become subject to the provisions of this Agreement for the
remaining Term; provided that the rate set forth on Appendix 1 to Schedule
3 as
the rate “for each Covered Aircraft for each day in the Term” shall be increased
or decreased for each such additional aircraft when such aircraft is delivered
for service hereunder proportionately based on any percentage increase
or decrease in the aircraft purchase cost relative to the average purchase
cost for each of the first [***] Covered Aircraft. Parent agrees not
to amend the terms applicable to the option rights for such additional aircraft
without Continental’s prior written approval and further that Parent shall cause
to be fulfilled any conditions imposed by the manufacturer related to such
option rights such that such option rights shall remain effective in favor
of
Parent as herein contemplated throughout the applicable option periods. In
addition, should Continental request Parent and manufacturer to adjust any
of the dates referenced herein related to the option rights, Parent agrees
to negotiate in good faith with Continental and the manufacturer to do
so.
**
The
precise delivery date within the specified calendar month shall be determined
by
mutual agreement of Contractor and Continental.
SCHEDULE
2
Seating
Configuration
SCHEDULE
3
Compensation
|
A.
|
Base
and Incentive Compensation.
|
|
1.
|
Base
Compensation. Continental will pay to Contractor, in
respect of the Covered Aircraft, block hours, flight hours, departures
and
each day in the Term, an amount calculated for each of the foregoing
measurements and aggregated, as follows for each calendar
month:
|
|
a.
|
the
weighted average number of Covered Aircraft during such month,
multiplied
by the “for each Covered Aircraft for each day in the Term” rate as set
forth in Appendix 1 hereto, multiplied by the actual number of days
in such month; plus
|
|
b.
|
the
number of block hours set forth on the Final Monthly Schedule for
such
month, multiplied by the “block hour” rate as set forth in Appendix
1 hereto, multiplied by [***]; plus
|
|
c.
|
for
the first [***] months of the Term, flight hours calculated at
[***] of
the number of block hours set forth on the Final Monthly Schedule
for such
month, and thereafter the trailing two-month average ratio of actual
flight hours flown to actual block hours flown, multiplied by the
number
of block hours set forth on the Final Monthly Schedule for such
month, in
each case multiplied by the “flight hour” rate as set forth in Appendix
1 hereto, multiplied by [***]; plus
|
|
d.
|
the
number of departures set forth on the Final Monthly Schedule for
such
month, multiplied by the rate set forth in Appendix 1 hereto for
each Scheduled Flight departure, multiplied by [***]; plus
|
|
e.
|
the
number of departures set forth on the Final Monthly Schedule for
such
month at all Contractor Airports, multiplied by the rate set forth
in
Appendix 1 hereto for each Scheduled Flight departure at a
Contractor Airport, multiplied by [***]; plus
|
|
f.
|
the
actual number of days in such month multiplied by the “each day in the
Term” rate set forth in Appendix 1 hereto; provided, that
until such time as all of the Covered Aircraft set forth on Schedule
1 have been delivered (and after such time as Covered Aircraft
begin
exiting service hereunder), the “each day in the Term” rate set forth on
Appendix 1 shall be deemed to be, for each day during the relevant
period, [***] of the amount set forth on such appendix multiplied
by the
number of Covered Aircraft then delivered and remaining in service
hereunder on or prior to such day (except that if Continental has
previously elected to increase the number of Covered Aircraft pursuant
to
Schedule 1, then the [***] multiplier shall be further adjusted
to reflect
the total number of Covered Aircraft that will be, or have been
as
applicable, delivered hereunder).
|
In
addition,
Continental will pay Contractor an allocation for Reconciled Expenses set
forth
in Appendix 3, and as reconciled and further described in Paragraph
B(6)(a) below:
|
g.
|
for
Reconciled Expenses constituting payments for Terminal Facilities
at
Contractor Airports, glycol and de-icing costs at Contractor Airports,
and
passenger-related interrupted trip costs (including hotel, meal
and
calling card vouchers) and baggage handling claims, repairs and
delivery
costs related to Uncontrollable Cancellations and oversales at
Contractor
Airports, Base Compensation shall include the amount set forth
for such
Reconciled Expenses on Appendix 3; and
|
|
h.
|
for
Reconciled Expenses constituting payments for passenger liability
insurance, hull and war risk insurance costs, landing fees and
air
navigation fees, Base Compensation shall include an allocation
based on
the factors set forth for such Reconciled Expenses on Appendix 3
and calculated in accordance with Paragraph B(6)(b).
|
The
aggregate Base
Compensation shall be invoiced as provided in
Section 3.06(a).
|
2.
|
Incentive
Compensation. With respect to each calendar month,
incentive compensation shall be calculated as follows:
|
|
a.
|
On-Time
Bonus/Rebate. The reconciliation for any calendar month
shall include, as applicable, a bonus (represented by a payment
by
Continental to Contractor) or a rebate (represented by a payment
by
Contractor to Continental), in each case in respect of on-time
performance, as determined pursuant to Appendix 4 to this
Schedule 3.
|
|
b.
|
Fuel
Efficiency Bonus. The reconciliation for any calendar
month shall include, as applicable, a bonus (represented by a payment
by
Continental to Contractor) in respect of Fuel burn efficiency,
as
determined pursuant to Appendix 4 to this Schedule
3.
|
The
aggregate
Incentive Compensation shall be invoiced as provided in
Section 3.06(b).
|
B.
|
Expenses
and Reconciliation.
|
|
1.
|
Passenger
and Cargo Revenue-Related Expenses. With respect to
Scheduled Flights, in consideration of the provision by Contractor
of
Regional Airline Services and its compliance with the other terms
and
conditions of this Agreement, the following expenses shall be incurred
directly by Continental:
|
|
a.
|
passenger
and cargo revenue-related expenses, including but not limited to
commissions, taxes and fees related to the transportation of passengers
or
cargo, food and beverage costs, charges for fare or tariff filings,
sales
and advertising costs, computer reservation system fees, credit
card fees,
interline fees, revenue taxes, GDS fees, airport collateral materials,
reservation costs, revenue accounting costs, including costs associated
with ticket sales reporting and unreported sales, OnePass participation
costs and Continental Currencies;
|
|
b.
|
glycol,
de-icing and snow removal costs at Continental Airports;
|
|
c.
|
denied
boarding amenities and travel certificates issued in connection
with
oversales;
|
|
d.
|
passenger-related
interrupted trip costs (including hotel, meal and calling cards
vouchers)
and baggage handling claims, repairs and delivery costs related
to
Uncontrollable Cancellations and oversales at Continental
Airports;
|
|
e.
|
as
provided by and in consideration of Contractor’s compliance with its
obligations under this Agreement and the Ancillary Agreements,
fuel, fuel
taxes and fuel into plane charges, including administration fees,
if
any;
|
|
f.
|
rent
for Terminal Facilities at Continental Airports;
|
|
g.
|
ground
handling costs at Continental Airports, for which costs Continental
is
responsible pursuant to the Continental Ground Handling Agreement;
and
|
|
h.
|
technology
services related to all passenger services processes.
|
|
2.
|
[reserved]
|
|
3.
|
Flight
Reconciliation.
|
|
a.
|
With
respect to Scheduled Flights, for any calendar month in which Contractor’s
actual block hours flown exceeds the block hours invoiced pursuant
to
Paragraph A(1)(b) for such calendar month, then the reconciliation
for such period shall include a payment by Continental to Contractor
in an
amount equal to the product of (i) the difference between the actual
block
hours flown for Scheduled Flights and such invoiced block hours,
multiplied by (ii) the Base Compensation per block hour as set
forth in
Appendix 1 hereto.
|
|
b.
|
With
respect to Scheduled Flights, for any calendar month for which
the block
hours invoiced pursuant to Paragraph A(1)(b) exceeds Contractor’s
actual block hours flown in such calendar month, then the reconciliation
for such period shall include a payment by Contractor to Continental
in an
amount equal to the product of (i) the difference between such
invoiced
block hours and the actual block hours flown for Scheduled Flights,
multiplied by (ii) the Base Compensation per block hour as set
forth in
Appendix 1 hereto.
|
|
c.
|
With
respect to Scheduled Flights, for any calendar month in which Contractor’s
actual flight hours flown exceeds the flight hours invoiced pursuant
to
Paragraph A(1)(c) for such calendar month, then the reconciliation
for such period shall include a payment by Continental to Contractor
in an
amount equal to the product of (i) the difference between the actual
flight hours flown for Scheduled Flights and such invoiced flight
hours,
multiplied by (ii) the Base Compensation per flight hour as set
forth in
Appendix 1 hereto.
|
|
d.
|
With
respect to Scheduled Flights, for any calendar month for which
the
scheduled flight hours invoiced pursuant to Paragraph A(1)(b)
exceeds Contractor’s actual flight hours flown in such calendar month,
then the reconciliation for such period shall include a payment
by
Contractor to Continental in an amount equal to the product of
(i) the
difference between such invoiced flight hours and the actual flight
hours
flown for Scheduled Flights, multiplied by (ii) the Base Compensation
per
flight hour as set forth in Appendix 1 hereto.
|
|
|
e.
|
With
respect to Scheduled Flights, for any calendar month in which Contractor’s
actual departures exceeds the scheduled departures invoiced pursuant
to
Paragraph A(1)(d) for such calendar month, then the reconciliation
for such period shall include a payment by Continental to Contractor
in an
amount equal to the product of (i) the difference between the departures
for Scheduled Flights and such invoiced departures, multiplied
by (ii) the
Base Compensation per Scheduled Flight departure as set forth in
Appendix 1 hereto.
|
|
|
f.
|
With
respect to Scheduled Flights, for any calendar month for which
the
scheduled departures invoiced pursuant to Paragraph A(1)(d) exceeds
Contractor’s actual departures in such calendar month, then the
reconciliation for such period shall include a payment by Contractor
to
Continental in an amount equal to the product of (i) the difference
between such invoiced departures and the actual departures for
Scheduled
Flights, multiplied by (ii) the Base Compensation per Scheduled
Flight
departure as set forth in Appendix 1
hereto.
|
|
|
g.
|
With
respect to Scheduled Flights, for any calendar month in which Contractor’s
actual departures at Contractor Airports exceeds the scheduled
invoiced
pursuant to Paragraph A(1)(e) for such calendar month, then the
reconciliation for such period shall include a payment by Continental
to
Contractor in an amount equal to the product of (i) the difference
between
the departures for Scheduled Flights at Contractor Airports and
such
invoiced departures, multiplied by (ii) the Base Compensation per
Scheduled Flight departureat Contractor Airports as set forth in
Appendix 1 hereto.
|
|
|
h.
|
With
respect to Scheduled Flights, for any calendar month for which
the
scheduled departures at Contractor Airports invoiced pursuant to
Paragraph A(1)(e) exceeds Contractor’s actual departures at
Contractor Airports in such calendar month, then the reconciliation
for
such period shall include a payment by Contractor to Continental
in an
amount equal to the product of (i) the difference between such
invoiced
departures and the actual departures at Contractor Airports for
Scheduled
Flights, multiplied by (ii) the Base Compensation per Scheduled
Flight
departure at Contractor Airports as set forth in Appendix 1
hereto.
|
|
4.
|
Flight
Cancellation Reconciliation.
|
|
a.
|
With
respect to Scheduled Flights, for any calendar month in which (x)
the
actual number of Controllable Cancellations exceeds (y) the product
of
[***] multiplied by the total number of actual Scheduled Flight
departures
in such calendar month (the “Benchmark Controllable Cancellation
Number” for such calendar month), then the reconciliation for such
period shall include a payment by Contractor to Continental in
an amount
equal to the product of (i) the Controllable Completion Factor
Incentive
Rate set forth on Appendix 2 multiplied by (ii) the number of such
excess actual Controllable Cancellations above the Benchmark Controllable
Cancellation Number.
|
|
b.
|
With
respect to Scheduled Flights, for any calendar month in which (x)
the
Benchmark Controllable Cancellation Number for such calendar month
exceeds
(y) the actual number of Controllable Cancellations in such calendar
month, then the reconciliation for such period shall include a
payment by
Continental to Contractor in an amount equal to the product of
(i) the
Controllable Completion Factor Incentive Rate as set forth in Appendix
2 multiplied by (ii) the excess of such Benchmark Controllable
Cancellation Number above the number of actual Controllable
Cancellations.
|
|
c.
|
For
purposes of this Paragraph B(4), for any month during which a Labor
Strike occurs, the Benchmark Controllable Cancellation Number for
such
month shall be [***].
|
|
d.
|
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 as a result of such delay,
then
such cancellation shall constitute an Uncontrollable
Cancellation.
|
|
e.
|
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 Continental’s historical
experience and practice with operators of its regional
aircraft.
|
|
5.
|
Payload
Restriction Reconciliation. Appendix 6 sets forth
the number of seats per aircraft that Contractor shall make available
for
sale in each market. Contractor will be responsible for the
cost associated with any reduction in seats available for sale
per
Scheduled Flight, but only to the extent that a reduction is imposed
on
more than [***] of the Scheduled Flights with the same city pairs
and
departure times in any month or on Scheduled Flights with the same
city
pairs and departure times on more than [***] consecutive
days. The cost associated with the reduction in seats will be
deemed to be equal to (a) the aggregate number of seats on the
affected
Scheduled Flights removed from sale during such month, divided
by (b) the
aggregate number of seats expected to be available for sale for
such
Scheduled Flights during such month as set forth in Appendix 6,
multiplied by (c) the sum of the flight hour and block hour rates
set
forth in Appendix 1, multiplied by (d) the average number of actual
block hours flown for such Scheduled Flight over the past twelve
months.
|
|
6.
|
Reconciled
Expenses.
|
|
a.
|
Except
to the extent that payments are made by Contractor to Continental
pursuant
to Paragraph B(4)(c) 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 shall be reconciled monthly (except
as
specifically set forth below) to actual costs: (i) all payments
made by Contractor for Terminal Facilities at Contractor Airports
(other
than payments constituting indemnity or similar payments); (ii)
passenger
liability, hull and war risk insurance costs; provided, that
Continental shall not pay to Contractor any amount in respect of
this
clause (ii) that is in excess of the greater of (A) [***] of Contractor’s
actual passenger liability, hull and war risk insurance costs,
or (B) the
average costs of passenger liability, hull and war risk insurance
for
those regional airline operators who fly exclusively aircraft having
[***]
or more seats and having capacity purchase agreements with Continental,
excluding (x) any such operator that experienced a major loss within
the
previous three years, and (y) any such operator whose insurance
rates are
included with its Major Airline partner(s), and provided further,
that Continental shall not pay to Contractor any amount in respect
of this
clause (ii) that is in excess of the Average Peer Group Rates;
(iii) landing fees; (iv) glycol and de-icing costs at Contractor
Airports; (v) passenger-related interrupted trip costs (including
hotel, meal and calling cards vouchers) and baggage handling claims,
repairs and delivery costs related to Uncontrollable Cancellations
and
oversales at Contractor Airports, at a per passenger cost not unreasonably
in excess of Continental’s per passenger cost for regional airline
passengers; and (vi) air navigation fees paid to NavCanada (or any
Canadian successor thereto) and Servicios a la Navegación en el Espacio
Aéreo Mexicano (SENEAM) (or any Mexican successor thereto), in each
case
in respect of Scheduled Flights (collectively, the “Reconciled
Expenses”). The Base Compensation includes allocations of the
Reconciled Expenses as set forth in Appendix 3 and with respect to
certain Reconciled Expenses, as further provided in Paragraph
B(6)(b) below. If in any month the Contractor’s actual
Reconciled Expenses exceed the amount of Reconciled Expenses included
in
the Base Compensation in accordance with Appendix 3 and with
respect to certain Reconciled Expenses as further provided in Paragraph
B(6)(b) below for such month, Continental shall pay to Contractor
an
amount equal to such difference. If in any month the amount of
Reconciled Expenses included in the Base Compensation in accordance
with
Appendix 3 and with respect to certain Reconciled Expenses as
further provided in Paragraph B(6)(b) below for such month exceeds
the Contractor’s actual Reconciled Expenses, Contractor shall pay to
Continental an amount equal to such difference.
|
|
b.
|
The
allocations included in Base Compensation for Reconciled Expenses
of the
type set forth in Paragraph A(1)(i) for any particular month shall
be calculated as provided below:
|
|
I.
|
The
amount of passenger liability, hull and war risk insurance costs
referred
to in clause (ii) of Paragraph B(6)(a) included in the Base
Compensation for any particular month will be equal to the product
of (1)
the insurance rate set forth on Appendix 3 multiplied by (2) the
Forecasted Passengers for such month.
|
|
II.
|
The
amount of landing fees referred to in clause (iii) of
Paragraph B(6)(a) included in the Base Compensation for any
particular month will be equal to the aggregate sum of the following
products: (1) the landing fee rate set forth in Appendix 3,
multiplied by (2) the number of scheduled departures set forth
in the
Final Monthly Schedule, multiplied by (3) [***].
|
|
III.
|
The
amount of Canadian and Mexican air navigation fees referred to
in
clause (vi) of Paragraph B(6)(a) included in the Base
Compensation for any particular month will be equal to the aggregate
sum
of the following products: (1) the Canadian and Mexican air navigation
rates set forth in Appendix 3, multiplied by (2) the number of
scheduled departures in Canada and Mexico set forth in the Final
Monthly
Schedule, multiplied by (3) [***].
|
|
7.
|
No
Reconciliation for Fines, Etc. Notwithstanding anything to
the contrary contained in this Paragraph B, Continental shall not
be required to incur any cost or make any reconciliation payment
pursuant
to this Paragraph B to the extent that such cost or 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.
|
Schedule
3 Appendices
Appendix
1 Base
Compensation Rates
Appendix
2 Controllable
Completion Factor Incentive Rate
Appendix
3 Reconciliation
of Expenses
Appendix
4 Incentive
Bonuses/Penalties
Appendix
5 Insurance
Rates
Appendix
6 Weight
Restrictions
Appendix
1 to Schedule 3
Base
Compensation Rates
$[***] for
each day in the Term
$[***] for
each Covered Aircraft for each day in the Term
$[***] for
each actual block hour
$[***] for
each actual flight hour
$[***] for
each Scheduled Flight departure
$[***] for
each Scheduled Flight departure at a Contractor Airport
Appendix
2 to Schedule 3
Controllable
Completion Factor Incentive Rate
The
“Controllable Completion Factor Incentive Rate” shall be [***],
as adjusted pursuant to Section 3.02 of this Agreement.
Appendix
3 to Schedule 3
Reconciliation
of Expenses
|
Reconciled
|
Schedule
3
|
Statistical
|
|
|
Expense
|
Reference
|
Driver
|
Rate
|
|
Terminal
Facility Rent at Contractor Airports
|
Sched3.B.6(a)(i)
|
Per
month
|
[***]
|
|
Passenger
Liability,
Hull
and War Risk Insurance
|
Sched3.B.6(a)(iv)
|
Per
Passenger
|
[***]
|
|
Landing
Fees
|
Sched3.B.6(a)(v)
|
Per
Departure
|
[***]
|
|
Glycol
and De-icing at Contractor Airports
|
Sched3.B.6(a)(vi)
|
Per
winter month*
|
[***]
|
|
Interrupted
Trip and Baggage Handling at Contractor Airports
|
Sched3.B.6(a)(vii)
|
Per
month
|
[***]
|
|
Canadian
and Mexican Air Navigation
|
Sched3.B6(a)(viii)
|
Per
Departure**
|
[***]
|
|
The
Appendix 1 Rates shall be adjusted pursuant to the terms of Section
3.02
of this Agreement.
|
|||
*
Winter Months refer to November 1 to April 30
** Includes
flights to or from an airport in Canada or Mexico
Appendix
4 to Schedule 3
Incentive
Bonuses/Rebates
1. On
Time Bonus/Rebate: For purposes of Paragraph A(2), the
bonus or rebate, as the case may be, for on-time performance shall be determined
as follows:
|
a.
|
Contractor’s
on-time Scheduled Flight departures (i.e. Scheduled Flight departures
that
actually departed not later than the scheduled departure time excluding
departures impacted by weather or ATC) to or from each of EWR,
CLE and IAH
shall be measured.
|
|
b.
|
If
Contractor’s actual percentage of Scheduled Flight departures within zero
minutes (as a percentage of Contractor’s actual departures excluding
departures impacted by weather or ATC) for any such calendar month
to or
from any of EWR, CLE or IAH is above the Annual Historical Percentage
set
forth below for such airport, then the reconciliation payment for
such
month shall include a payment by Continental to Contractor equal
to [***]
multiplied by the number of Contractor’s actual departures (excluding
departures impacted by weather or ATC) for such month at such airport,
multiplied by the excess of Contractor’s actual percentage of Scheduled
Flight departures within zero minutes above the Annual Historical
Percentage of Scheduled Flight departures within zero
minutes. If Contractor’s actual percentage of Scheduled Flight
departures within zero minutes (as a percentage of actual departures
excluding departures impacted by weather or ATC) for any such calendar
month to or from any of EWR, CLE or IAH is below the Annual Historical
Percentage set forth below for such airport, then the reconciliation
payment for such month shall include a payment by Contractor to
Continental equal to [***] multiplied by the number of Contractor’s actual
departures (excluding departures impacted by weather or ATC) for
such
month at such airport, multiplied by the excess of the Annual Historical
Percentage of Scheduled Flight departures within zero minutes over
Contractor’s actual percentage of Scheduled Flight departures within zero
minutes. For purposes of this Appendix 4, the “Annual
Historical Percentage” for any of EWR, CLE or IAH for any year shall
equal the average of the actual percentage of Scheduled Flight
departures
within zero minutes (as a percentage of Contractor’s flown departures
excluding departures impacted by weather or ATC) of Covered Aircraft
during such year in each of the last five full calendar years (or
such
lesser number of years as shall date back to January 1, 2004);
provided that for the purposes of calculating the Annual
Historical Percentage inclusive of years through December 31, 2007
calculations shall include all of Continental’s regional jet
aircraft. Should the processes currently utilized by the air
traffic control system in the United States to manage commercial
aircraft
change, Contractor and Continental agree to meet and confer to
adjust the
targets. Additionally, should Continental’s ground handling
performance materially change from historical performance levels,
Contractor and Continental agree to meet and confer to adjust the
targets. Should the parties be unable to reach an agreement on
prospective targets, the on-time incentive provisions set forth
in this
Appendix 4 to Schedule 3 will cease to be of any force or
effect. As of January 1, 2007, the Annual Historical
Percentages for EWR, CLE or IAH were as follows:
|
|
CLE
|
EWR
|
IAH
|
|
[***]
|
[***]
|
[***]
|
2. Fuel
Efficiency Bonus: At Continental’s expense, Contractor agrees to
develop a fuel efficiency program modeled on Continental’s fuel
program. Contractor acknowledges that such program is the property of
Continental, shall be deemed confidential by Contractor and, for Contractor
but
not for Continental, shall be subject to the provisions of Section 10.06
of the Agreement. For purposes of Paragraph A(2), the bonus,
as the case may be, for fuel burn reduction shall be determined as
follows:
|
a.
|
The
Contractor’s second year of operation will be the first year under which
the Contractor will be eligible to receive a bonus payment. The
Contractor’s second year of operations will be measured against the lower
of (a) [***] gallons per block hour and (b) the average gallons
per block
hour consumed in Contractor’s first year of operations. The
baseline for each subsequent year will be the previous year’s
performance. For each year a Block Hour Fuel Burn Rate will be
calculated by dividing gallons consumed in a given year by total
block
hours flown in the same year.
|
|
b.
|
The
Contractor’s bonus will be calculated by subtracting the current year’s
Block Hour Fuel Burn Rate from the baseline year’s Block Hour Fuel Burn
Rate (a) times Continental’s average domestic price per gallon of fuel
paid in the current year (b) times the total gallons consumed by
Contractor in current year (c) times [***] (d). Any
expense borne by Continental to develop Contractor’s Fuel Efficiency
program as herein contemplated will offset any fuel bonus payment
until
the balance of such account is
zero.
|
Appendix
5 to Schedule 3
Insurance
Rates
For
passenger liability, hull and war risk insurance coverages - [***] per
passenger
Appendix
6 to Schedule 3
Weight
Restrictions
|
SEGMENT
|
AVAILABLE
SEATS
|
|
ACK
|
[***]
|
|
ALB
|
[***]
|
|
ASE-Summer
|
[***]
|
|
ASE-Winter
|
[***]
|
|
AUS
|
[***]
|
|
BDL
|
[***]
|
|
BGR
|
[***]
|
|
BRO
|
[***]
|
|
BTR
|
[***]
|
|
BTV
|
[***]
|
|
BUF
|
[***]
|
|
BWI
|
[***]
|
|
CRP
|
[***]
|
|
DAL
|
[***]
|
|
DFW
|
[***]
|
|
GPT
|
[***]
|
|
HRL
|
[***]
|
|
IAD
|
[***]
|
|
JAN
|
[***]
|
|
LBB
|
[***]
|
|
LFT
|
[***]
|
|
LIT
|
[***]
|
|
MAF
|
[***]
|
|
MHT
|
[***]
|
|
MTY
|
[***]
|
|
OKC
|
[***]
|
|
ORF
|
[***]
|
|
PIT
|
[***]
|
|
PNS
|
[***]
|
|
PVD
|
[***]
|
|
PWM
|
[***]
|
|
RIC
|
[***]
|
|
ROC
|
[***]
|
|
SAT
|
[***]
|
|
SYR
|
[***]
|
|
TUL
|
[***]
|
|
YOW
|
[***]
|
|
YQB
|
[***]
|
|
YUL
|
[***]
|
|
YYZ
|
[***]
|
All
other
segments will have [***] available seats unless a
different number is mutually agreed to by Continental and
Contractor.
SCHEDULE
4
Optional
Equipment List
SELECTED
OPTIONAL FEATURES AND
DESCRIPTIONS
[***]
Contractor
agrees that it will use commercially reasonable efforts to cause the
manufacturer to add to the aircraft any other optional equipment requested
by
Continental, subject to agreement on how the additional costs thereof will
be
paid.
EXHIBIT
A
Definitions
Agreement–
means the Capacity Purchase Agreement, dated as of February 2, 2007, among
Continental, Parent and Carrier, as amended from time to time pursuant to
Section 10.03 hereof.
Ancillary
Agreements– means each of the agreements entered into by Continental and
Contractor substantially in the form of Exhibits C, F and L hereto, together
with all amendments, exhibits, schedules and annexes thereto (including any
ground handling agreements entered into pursuant to Exhibit C).
Anniversary
Date– the annual anniversary of the date of delivery of the last Covered
Aircraft.
Annual
CPI Change– means, for any January 1, the fraction (expressed as
a number rounded to four decimal places) as determined on the immediately
preceding December 15th (or the
first
Business Day thereafter on which relevant CPI figures are publicly available)
equal to the quotient obtained by dividing the simple average of the sum
of the
CPI for each of the last twelve months ending November immediately preceding
such January 1 by the simple average of the sum of the CPI for each of the
last
twelve months ending November of the preceding year. (As an example,
and for illustrative purposes only, the Annual CPI Change for January
1, 2005 would be equal to [***] (the simple average of the sum of the
CPI for the last twelve months ending November of 2004) divided by [***]
(the
simple average of the sum of the CPI for the last twelve months ending November
of 2003), or [***].)
Average
Peer Group Rates– means, with respect to the insurance coverages and as of
any date of determination, (x) the insurance rate set forth on Appendix 5
to Schedule 3, multiplied by (y) the average percentage increase or
decrease, as appropriate, from January 1, 2006 to such date of determination,
in
the cost of such insurance coverages for the five regional airlines
with
annual revenues per passenger mile closest to those of Contractor, as
determined by available information obtained from public sources or reputable
insurance brokers, excluding (i) any such regional airline that experienced
a
major loss within the previous three years, and (ii) any regional airline
whose
insurance rates are included with its Major Airline partner(s).
Base
Compensation– is defined in Paragraph A(1) of Schedule
3.
Base
Term– is defined in Section 8.01.
Benchmark
Controllable Cancellation Number– is defined in Paragraph B(4)(a) of
Schedule 3.
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.
Carrier
– means ▇▇▇▇▇▇ Air, Inc., a Virginia corporation, and its successors and
permitted assigns.
Cause–
means (i) the suspension or revocation of Contractor’s authority to operate as a
scheduled airline, (ii) 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, (iii) the occurrence of a Labor
Strike that shall have continued for 15 days or (iv) a willful or intentional
material breach of this Agreement by Parent or Carrier that substantially
deprives Continental of the benefits of this Agreement, which breach shall
have
continued for 45 days after notice thereof is delivered by Continental to
Parent
or Carrier, as the case may be.
Change
of Control– means:
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(i) Parent
or Carrier consolidates with, or merges with or into, a Prohibited
Person
or conveys, transfers, leases or otherwise disposes of all or
substantially all of its assets to a Prohibited Person, or a Prohibited
Person consolidates with, or merges with or into, Parent or Carrier
in any
such event pursuant to a transaction in which the voting securities
of
Parent or Carrier are converted into or exchanged for cash or securities
of a Prohibited Person, except where the holders of voting securities
of
Parent or Carrier immediately prior to such transaction own not
less than
a majority of the voting securities of the surviving or transferee
corporation immediately after such transaction, in each case other
than
any such transaction between Parent or Carrier on the one hand,
and
Continental and/or any of its Subsidiaries on the other;
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(ii) the
direct or indirect acquisition by a Prohibited Person or any Person
directly or indirectly controlling a Prohibited Person of beneficial
ownership of [***] (unless such person is the largest shareholder
of
Parent or Carrier, in which case [***]) or more of the capital
stock or
voting power of Parent or Carrier;
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(iii) 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 (ii) above, of beneficial ownership of more
than [***] of the capital stock or voting power of Parent or Carrier,
other than (A) Continental or its Subsidiaries or (B) any “person” or
“group” that is a Person who has a Schedule 13D 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 Parent’s or Carrier’s voting
securities (a “13D Person”), so long as (1) such 13D Person is
principally engaged in the business of managing investment funds
for
unaffiliated securities investors and, as part of such 13D Person’s duties
as agent for fully managed accounts, holds or exercises voting
or
dispositive power over Parent’s or Carrier’s voting securities, (2) such
13D Person was a Person who had a Schedule 13G on file with the
Securities
and Exchange Commission pursuant to the requirements of Rule 13d-1
under
the Exchange Act with respect to its holdings of Parent’s or Carrier’s
voting securities, and became a 13D Person pursuant to Rule 13d-1(f)(1),
and (3) such 13D Person acquires and continues to have beneficial
ownership of Parent’s or Carrier’s voting securities pursuant to trading
activities undertaken in the ordinary course of such 13D Person’s business
and not with the purpose nor the effect, either alone or in concert
with
any 13D Person, of exercising the power to direct or cause the
direction
of the management and policies of Parent or Carrier or of otherwise
changing or influencing the control of Parent or Carrier, 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; provided, that a “Change of Control” shall not
occur pursuant to this clause (iii) if such “person” or “group”
reduces its ownership of the capital stock or voting power of Parent
or
Carrier, as the case may be, to less than [***] within 30 days
of the
acquisition of ownership of at least [***] of such capital stock
or voting
power;
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(iv) the
liquidation or dissolution of Parent or Carrier in connection with
which
Carrier ceases operations as an air carrier;
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(v) the
sale, transfer or other disposition of all or substantially all
of the
airline assets of Parent or Carrier on a consolidated basis directly
or
indirectly to a Prohibited Person or its affiliate, whether in
a single
transaction or a series of related transactions; or
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(vi) the
execution by Parent or Carrier of bona fide definitive agreements,
the
consummation of the transactions contemplated by which would result
in a
transaction described in the immediately preceding clauses.
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Charter
Flights– means any flight by a Covered Aircraft for charter operations at
the direction of Continental that is not reflected in the Final Monthly
Schedule.
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
Currencies– means inflight currency coupons issued by Continental that may
only be purchased at any Continental eService Center and may only be redeemed
for alcoholic beverages or headsets on any Continental or Contractor
flight.
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 behalf of Continental to Contractor of ground handling
services at the airports specified therein.
Continental
Hub Airport– means (i) ▇▇▇▇▇▇ ▇▇▇▇ Intercontinental Airport in Houston,
Texas (IAH), ▇▇▇▇▇▇▇ International Airport in Cleveland, Ohio (CLE) and Liberty
International Airport in Newark, New Jersey (EWR), and (ii) as of any date
of
determination, 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 [***] flights/day during the 90 days prior
to
such date of determination.
Continental
Marks– is defined in Exhibit G.
Continental
Premium Surcharge Amount– is defined in Paragraph B(5)(d)(III)
of Schedule 3.
Contractor–
is defined in the preamble.
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
Fleet– means the Bombardier Q400 aircraft, or any portion of such aircraft
consisting of one or more models, or any subgroup of such aircraft as determined
from time to time by regulatory or court order or other governmental action
(for
example, all such aircraft manufactured within specific time
frames).
Contractor
Marks– is defined in Exhibit H.
Contractor
Services– is defined in the Master Facility and Ground Handling
Agreement.
Controllable
Completion Factor Incentive Rate– is defined in Appendix 2 to
Schedule 3.
Controllable
Cancellation– means a cancellation of a Scheduled Flight that is not an
Uncontrollable Cancellation.
Controllable
Cancellation Factor– means, for any period of determination, the percentage
of flights completed during such period, excluding Uncontrollable
Cancellations.
Controllable
On-Time Arrival Rate– means, for any period of determination, the
percentage of flights arriving within [***] of scheduled arrival time during
such period, excluding flights impacted by ATC or weather related
delays.
Covered
Aircraft– means all of the aircraft listed on Schedule 1 and
presented for service by Contractor, as adjusted from time to time for
withdrawals pursuant to Article VIII.
CPI–
means (i) the Consumer Price Index for All Urban Consumers – U.S. City
Average, All Items, Not Seasonally Adjusted Base Period: 1982-84 = 100, as
published by the Bureau of Labor Statistics, United States Department of
Labor,
or (at any time when the Bureau of Labor Statistics is no longer publishing
such
Index) as published by any other agency or instrumentality of the United
States of America, or (ii) at any time after the index described in
clause (i) shall have been discontinued, any reasonably comparable
replacement index or other computation published by the Bureau of Labor
Statistics or any other agency or instrumentality of the United States of
America. If any such index shall be revised in any material respect
(such as to change the base year used for computation purposes), then all
relevant determinations under this Agreement shall be made in accordance
with
the relevant conversion factor or other formula published by the Bureau of
Labor
Statistics or any other agency or instrumentality of the United States of
America, or (if no such conversion factor or other formula shall have been
so
published) in accordance with the relevant conversion factor or other formula
published for that purpose by any nationally recognized publisher of such
statistical information.
DOT–
means the United States Department of Transportation.
FAA–
means the United States Federal Aviation Administration.
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).
Flight
Cancellation Reconciliation– is defined in Paragraph B(6) of
Schedule 3.
Flight
Reconciliation– is defined in Paragraph B(3) of Schedule
3.
Forecasted
Passengers– means, for any month, the forecasted Revenue Onboards derived
from the Final Monthly Schedule for the previous month.
Fuel
Purchasing Agreement– means that certain Fuel Purchasing Agreement to be
entered into between Continental and Contractor, in the form attached hereto
as
Exhibit F (or as otherwise agreed or amended).
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.
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.
Major
Airline– means an air carrier, 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).
Master
Facility and Ground Handling Agreement– means that certain Master Facility
and Ground Handling Agreement to be entered into between Continental and
Contractor, in the form attached hereto as Exhibit C (or as otherwise
agreed or amended).
Parent–
means Pinnacle Airlines Corp., a Delaware corporation, and its successors
and
permitted assigns.
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.
Prohibited
Person– means (i) 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), in each case other than any air
carrier
at least [***] of whose available seat miles, together with the available
seat
miles of its affiliates, are flown under the livery or brand of another air
carrier, and (ii) any executive officer, as of the date hereof or any date
of
determination, 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 the Revenue Threshold as of the date of determination
and any entity in which such current executive officer is an officer or
significant shareholder.
Reasonable
Operating Constraints– means (i) the reasonable constraints on the
operation of Scheduled Flights imposed by the aircraft type, maintenance
requirements, crew scheduling requirements, crew training requirements, aircraft
rotation requirements, and route authorities, slots and other applicable
regulatory restrictions on flight schedules, provided, that, Contractor agrees
that without Continental’s prior written approval (provided that if there are
more than 20 Covered Aircraft then in service hereunder, then Continental
agrees
not to unreasonably withhold such approval), no Covered Aircraft shall be
scheduled to be out of service for any scheduled maintenance check during
any
portion of the calendar year on or between June 1st and August
15th and not
more than
one Covered Aircraft shall be scheduled to be out of service for any scheduled
maintenance check during the same time period during the year (it being further
agreed that the parties agree to confer from time to time during the Term
in
good faith with one another with the goal of planning any scheduled maintenance
checks to be done at times that are mutually convenient for the parties),
and
(ii) for so long as Carrier is restricted from operating such flights by
the
terms of its agreement with USAirways, Inc., Continental agrees that it will
not
schedule Scheduled Flights hereunder to or from any of [***] and from or
to any
airport that is not then considered to be a hub airport in the industry (it
being acknowledged that EWR, CLE and IAH are airports that are considered
to be
hub airports and accordingly, no limitations exist under this clause (ii)
respecting flights to or from EWR, CLE or IAH and from or to any airport
specified above (and upon any request to do so by Continental in connection
with
a desire by Continental to schedule Scheduled Flights hereunder that would
otherwise not be permitted by this clause (ii), Carrier and Parent each agrees
to use its commercially reasonable efforts to cause any limitation described
in
this clause (ii) to be removed so as to permit such scheduling).
Reconciled
Expenses– is defined in Paragraph B(6)(a) of Schedule
3.
Regional
Airline Services– means the provisioning by Contractor to Continental of
Scheduled Flights and related ferrying using the Covered Aircraft in accordance
with this Agreement.
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 [***], as such amount may be increased based on the amount
by which, for any date of determination, the most recently published CPI
has
increased to such date above the CPI for calendar year 2006. For
purposes hereof, the CPI for calendar year 2006 is the monthly average of
the
CPI for the twelve months ending on December 31, 2006.
Scheduled
ASMs– means, for any period of calculation, the available seat miles for
all Scheduled Flights during such period of calculation.
Scheduled
Flight– means a flight by a Covered Aircraft as determined by Continental
pursuant to Section 2.01(b) (including all Charter
Flights).
Subsidiary–
means, as to any Person, (a) any corporation more than [***] 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 entity,
in
which such Person directly or indirectly through Subsidiaries has more than
[***] equity interest at any time.
System
Flight Disruption– means the failure by Contractor to complete at least
[***] of the aggregate Scheduled ASMs in any three consecutive calendar months,
or at least [***] 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 average number of Block Hours flown per Covered Aircraft
during the three consecutive calendar months immediately preceding the period
first measured, 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 the average number of Block Hours flown per Covered Aircraft during
prior three consecutive calendar month period; 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 [***] 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–
is defined in Section 8.01.
Terminal
Facilities– means “Terminal Facilities” as such term is defined in the
Master Facility and Ground Handling Agreement.
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 8.02, or, if no such early termination shall have occurred,
the date of the end of the Base Term.
TSA–
means the United States Transportation Security Administration.
Uncontrollable
Cancellation– means a cancellation of a Scheduled Flight that is solely
weather-related, air traffic control-related or described in
Paragraph B(4)(d) of Schedule 3, in each case as coded
on Contractor’s operations reports in accordance with Continental’s standard
coding policies and pursuant to Paragraph B(4)(e) of Schedule
3.
Wind-Down
Period– means the period after the Termination Date or the end of the Base
Term, as the case may be, and until the time when the last Covered Aircraft
has
been withdrawn from this Agreement.
Wind-Down
Schedule – means the schedule, determined as provided in Article
VIII of this Agreement, for Covered Aircraft to be withdrawn from this
Agreement.
EXHIBIT
B
[Reserved]
EXHIBIT
C
Master
Facility and Ground Handling Agreement
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.
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(a)
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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.
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(b)
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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:
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(i)
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a
symbol will be used in timetables and computer reservation systems
indicating that CO* Flights are actually operated by
Contractor;
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(ii)
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to
the extent reasonable, messages on airport flight information displays
will identify Contractor as the operator of flights shown as CO*
Flights;
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(iii)
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Continental
and Contractor advertising concerning CO* Flights and Continental
and
Contractor reservationists will disclose Contractor as the operator
of
each CO* Flight; and
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(iv)
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in
any other manner prescribed by law.
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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 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.
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(a)
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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.
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(b)
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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.
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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
E
Non-Revenue
Pass Travel
Continental
will have the sole right to design, implement and oversee a pass travel program
for the Regional Air Services, including jump seat policies.
EXHIBIT
F
Fuel
Purchasing Agreement
THIS
FUEL
PURCHASING AGREEMENT (this “Agreement”) is made as of this 2nd
day of February,
2007, by and between CONTINENTAL AIRLINES, INC., a Delaware corporation
(“Continental”), and ▇▇▇▇▇▇ Air, Inc., a Virginia corporation
(“Contractor”).
WHEREAS,
Continental, Contractor and Pinnacle Airlines Corp., Contractor’s parent
(“Parent”), are entering into a Capacity Purchase Agreement
contemporaneously with the execution of this Agreement (the “Capacity
Purchase Agreement”);
WHEREAS,
Contractor has requested that Continental purchase on Contractor’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
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 Contractor all Fuel that Contractor shall require to provide the Regional
Airline Services, and Contractor 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 Contractor
pursuant to this Agreement, Continental shall manage all aspects of procuring,
transporting and delivering Fuel to Contractor 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. Contractor
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
Contractor pursuant to Section 2.01(b) of the Capacity Purchase Agreement
and such other information published by Continental regarding scheduled
Contractor flights over the next twelve-month period.
5. Price
and Payment. In consideration of Continental providing Fuel and
other services to Contractor pursuant to this Agreement, Contractor, in addition
to other consideration as set forth in Paragraph A on Schedule 3
to the Capacity Purchase Agreement, shall pay Continental [***] per calendar
month. This amount shall be included in the Invoiced Amount pursuant
to Section 3.06(a) of the Capacity Purchase
Agreement. 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 Contractor under this
Agreement shall be for Continental’s account. Upon Continental’s
request, Contractor agrees to execute promptly a written statement (on an
Internal Revenue Service certificate entitled “Waiver For Use By Ultimate
Purchasers Of Aviation-Grade Kerosene Used In Nontaxable Uses” or such other
certificate or document as may be reasonably requested by Continental)
stipulating that Continental is the ultimate vendor of the fuel sold to
Contractor by Continental hereunder.
6. Fuel
Consortia. Continental may, in its sole discretion and at its
sole expense, direct Contractor to do any of the following (in which event
Contractor shall comply with Continental’s directions): (i) join any
fuel consortium selected by Continental at any airport at which Continental
provides Fuel to Contractor, (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.
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 any of its affiliates.
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
Contractor. In its performance under this Agreement, Continental will
act, for all purposes, as an independent contractor and not as an agent for
Contractor. Contractor 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:
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.: [***]
and
to:
Continental
Airlines, Inc.
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
Attention:
Staff Vice President –
Financial Planning
Telecopy
No.: [***]
if
to
Contractor, to:
▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇.
▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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 13.
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 that specifically states that it is intended to amend or modify this
Agreement.
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 Contractor acknowledges and
agrees that under certain circumstances the breach by Continental or any
of its
affiliates or Contractor 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, 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.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by
their respective officers duly authorized thereunto, as of the date first
above
written.
CONTINENTAL
AIRLINES, INC. ▇▇▇▇▇▇ AIR, INC.
By: /s/
▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
Name:
▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇
Name: ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
Title: President
Title: Vice
President
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. All use by Contractor
of the Continental Marks and the other Identification shall inure
to the
benefit of Continental. Nothing in this Agreement shall give
Contractor any right, title, or interest in the Continental Marks
or the
other Identification other than right to use the Continental Marks
and the
other Identification in accordance with the terms of this
Agreement.
|
|
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 aircraft
other than
Covered 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
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 the
Continental
Marks and the other Identification 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 being withdrawn from this Agreement (unless
this
Agreement is terminated for Cause or pursuant to Section 9.02(a) or
the first sentence of Section 9.02(b), in which case Contractor
shall cease all use of the globe element of the Continental Marks
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 cease all use of such other
Continental
Marks and Identification, and 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 to the Continental
Marks or other Identification or take actions that otherwise may
infringe
the Continental Marks and the other Identification.
|
|
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
CONNECTION
CONTINENTAL
CONNECTION’S LOGO (DESIGN)
IN COLOR
CONTINENTAL
CONNECTION’S LOGO (DESIGN)
IN BLACK & WHITE
[insert
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 the globe 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
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. All use by
Continental of the Contractor Marks shall inure to the benefit
of
Contractor. Nothing in this Agreement shall give Continental
any right, title, or interest in the Contractor Marks other than
right to
use the Contractor Marks in accordance with the terms of this
Agreement
|
|
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 inonnection 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.
|
|
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 the
Contractor
Marks 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
being
withdrawn from this Agreement. Continental shall not thereafter
make use of any word, words, term, design, name or ▇▇▇▇ confusingly
similar to the Contractor Marks or take actions that otherwise
may
infringe the Contractor Marks.
|
|
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.
|
|
7.
|
Contractor
Marks. The Contractor Marks are as follows:
|
[insert
logo]
|
8.
|
Survival. The
provisions of this Exhibit H shall survive the termination of this
Agreement for a period of six
years.
|
EXHIBIT
I
Catering
Standards
Station
Services
|
·
|
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.
|
|
·
|
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.
|
|
·
|
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.
|
|
·
|
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.
|
|
·
|
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
|
·
|
Continental
has right to determine meal/beverage service parameters and scheduling
for
Scheduled Flights.
|
|
·
|
Continental
has right to conduct onboard service audits on Scheduled Flights
to ensure
service standards are being met.
|
|
·
|
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.
|
|
·
|
Contractor
will provide sufficient galley service ship’s equipment to operate, such
as hot jugs, coffee makers and trash
bins.
|
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.
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
[***] 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’ 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
K
Fuel
Efficiency Program
Contractor
shall use commercially reasonable efforts to develop and maintain a
comprehensive fuel efficiency program, acceptable to Continental, in a timely
manner and with the overall objective of operating and maintaining the Covered
Aircraft in a manner that maximizes fuel efficiency, with due consideration
to
other performance objectives. The program will include applicable
data collection and trend analysis, and will set and track target
metrics. Continental shall audit Contractor’s program at its
discretion, but at no less than annual intervals. Such audits will be
based on the IATA Fuel and Emissions Efficiency Checklist, supplemented by
the
IATA Guidance Material and Best Practices for Fuel and Environmental Management,
any applicable manufacturer material, Continental’s own fuel efficiency program
applicable to its own fleet, and any other material standard in the
industry.
Contractor’s
fuel efficiency program shall emphasize at least the following:
|
1.
|
A
“cost index” (CI) based flight planning system, or as an alternative a
flight planning system that adequately balances the cost of fuel
versus
the cost of time on a segment specific basis. The ability to
provide the system with current and accurate applicable costs is
required.
|
|
2.
|
Flight
planning technology that accurately predicts fuel burn and optimizes
lateral and vertical profiles for takeoff and landing runway, climb
and
descent, crossing restrictions, special use airspace, preferred
routings,
enroute altitude agreements, etc.
|
|
3.
|
Appropriate,
implemented, well documented, and thoroughly trained policies and
procedures for dispatchers, pilots, load planners, station agents,
mechanics and management that maximize opportunities for fuel
efficiency.
|
|
4.
|
An
active interface with appropriate Air Traffic Control (ATC) facilities,
management, and other personnel to minimize operational restrictions,
and
improve ATC handling of Contractor flights.
|
|
5.
|
Well-defined
and fully integrated flight planning fuel policies, including statistical
tracking of fuel added by pilots and dispatchers, efficient reserves,
guidelines for efficient alternate selection, a “no-alternate”
policy, and target “fuel on deck”.
|
|
6.
|
Thorough
and effective pilot and dispatcher training on aerodynamics, cruise
performance and overall fuel efficient flying in initial, transition,
upgrade, and recurrent programs, with an emphasis on operating
the
aircraft at the most efficient speeds and altitudes as well as
correct
descent and approach planning.
|
|
7.
|
Maximized
use of on-board Flight Management Systems (FMS) or performance
management
computers as an in-flight fuel efficiency tool. Applicable
thorough and effective training is required.
|
|
8.
|
An
effective fuel tankering program, including automated tankering
suggestions and calculations, using validated methods and
formulas.
|
|
9.
|
Thorough
statistical tracking, analysis and measurement of fuel efficiency
using
actual data, data from flight plans, and FOQA data with a comprehensive
plan to identify and correct deficiencies, including individual
pilot and
dispatcher issues.
|
|
10.
|
A
designated manager charged with overall responsibility for fuel
efficiency
either as a stand alone position, or as a substantial element of
an
individual job description.
|
|
11.
|
The
inclusion of fuel efficiency issues and targets in appropriate
job
descriptions and performance objectives. Applicable work groups
include, but are not limited to, pilots, dispatchers, SOCC managers,
and
gate and ramp personnel.
|
|
12.
|
A
weight management program that prevents the carriage of unnecessary
galley
supplies, spare parts and equipment, customer service items,
etc.
|
|
13.
|
A
center of gravity management system that considers the most efficient
center of gravity in load distribution.
|
|
14.
|
Adequate
ground equipment and an APU management program that prevents unnecessary
or costly operation of the APU.
|
|
15.
|
An
engine-out taxi program both before takeoff and after
landing.
|
|
16.
|
Fuel
and operationally efficient takeoff and landing flap selection
priorities.
|
|
17.
|
An
engine maintenance program or maintenance contracts that track
deterioration in Specific Fuel Consumption (SFC) and allow for
cost
effective early removal and repair/overhaul of high burn
engines.
|
|
18.
|
An
airframe maintenance program that measure airframe drag and corrects
high
drag airframes that exceed an agreed upon threshold. An
airframe maintenance program shall also include scheduled thorough
aerodynamic conformity checks and corrective
action.
|
|
|
|
EXHIBIT
L
Form
of Guarantee of Parent
THIS
GUARANTEE AGREEMENT (this “Guarantee”), effective as
of February 2, 2007 (the “Effective Date”) by PINNACLE
AIRLINES CORP., a Delaware corporation (“Guarantor”),
for the benefit of CONTINENTAL AIRLINES, INC., a Delaware corporation
(“Continental”).
RECITALS
WHEREAS
Continental, Guarantor and ▇▇▇▇▇▇ Air, Inc., a Virginia corporation
(“Carrier”) are prepared to enter into that certain
Capacity Purchase Agreement, dated as of February 2, 2007
(“CPA”);
WHEREAS,
pursuant to the CPA, Carrier is obligated, among other things, to provide
Regional Airline Services to Continental and, in certain circumstances, to
make
certain reconciliation or indemnity payments to Continental;
WHEREAS,
Continental, Guarantor and Carrier are prepared to enter into the Ancillary
Agreements pursuant which Carrier is obligated, among other things, to provide
ground handling and other services to Continental and, in certain circumstances,
to make certain payments to Continental;
WHEREAS,
Carrier is the wholly-owned subsidiary of Guarantor; and
WHEREAS,
it is a condition precedent to Continental’s execution and delivery of the CPA
that Guarantor execute and deliver this Guarantee;
NOW,
THEREFORE, for and in consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which Guarantor acknowledges,
Guarantor covenants and agrees for the benefit of Continental as
follows:
ARTICLE
I
DEFINITIONS
Section
1.01 Certain
Definitions. Any terms not defined herein shall have the
definition given such term in the Capacity Purchase Agreement. As
used in this Agreement, the following terms have the following
meanings:
“Beneficiaries”
has the meaning given to that term in Section
3.07.
“Carrier”
has the meaning given to that term in the Recitals.
“Continental”
has the meaning given to that term in the Recitals.
“CPA”
has the meaning given to that term in the Recitals.
“Default
Interest” has the meaning given to that term in Section
3.06.
“Documents”
has the meaning given to that term in Section 2.02(a).
“Effective
Date” has the meaning given to that term in the
preamble.
“Enforcement
Expenses” has the meaning given to that term in
Section 3.06.
“Guarantee”
has the meaning given to that term in the preamble.
“Guarantor”
has the meaning given to that term in the preamble.
Section
1.02 Other
Definitions. Other terms defined in this Guarantee have the
meanings so given them. Capitalized terms used but not defined herein
shall the same meaning herein as in the CPA.
Section
1.03 Terminology. Unless
the context of this Guarantee clearly requires otherwise, (a) pronouns, wherever
used herein, and of whatever gender, shall include natural persons and
corporations, partnerships, limited liability companies and entities of every
kind and character, (b) the singular shall include the plural wherever and
as
often as may be appropriate, (c) the word “includes”
or “including” shall mean “including
without limitation”, and (d) the words
“hereof”, “herein”,
“hereunder”,
and similar terms in this Guarantee shall
refer to this Guarantee as a whole and not any particular section or article
in
which such words appear. The section, article, and other headings in
this Guarantee are for reference purposes and shall not control or affect
the
construction of this Guarantee or the interpretation hereof in any
respect. Article, section, subsection, and exhibit references are to
this Guarantee unless otherwise specified. All exhibits attached to
this Guarantee constitute a part of this Guarantee and are incorporated
herein. All references to a specific time of day in this Guarantee
shall be based upon Central Standard Time or Central Daylight Time, whichever
is
applicable.
ARTICLE
II
GUARANTEE
Section
2.01 Guarantee
of Obligations. Guarantor unconditionally, absolutely and
irrevocably guarantees unto the Beneficiaries the timely payment and performance
by Carrier of all of its obligations under the CPA and the Ancillary Agreements,
including the obligation to provide Regional Airlines Services, to provide
ground handling services, and to make all indemnification payments and
reconciliation payments that Carrier is required to make pursuant to the
CPA and
the Ancillary Agreements.
Section
2.02 Guarantee
Absolute. This Guarantee is absolute, continuing and independent
of, and in addition to, any and all rights and remedies Continental may have
under the CPA or any Ancillary Agreement and any other guaranties or documents
now or hereafter given in connection therewith by Guarantor or others. Without
limiting any of the provisions of this Guarantee or the CPA, including without
limitation, Sections 5.03 and 10.02 thereof, it is acknowledged that Guarantor
is not currently a certificated airline and that therefore Guarantor may
be
required to cause its obligations hereunder to be performed rather than
performing them directly. Except as otherwise expressly herein provided,
the
enforceability of Guarantor’s obligations hereunder in accordance with the terms
hereof shall not in any way be discharged, impaired or otherwise affected
by:
(a) Any
change in the time, manner or place of payment of amounts due under the CPA
or
any Ancillary Agreement, or any other change or modification in or of any
terms,
provisions, covenants or conditions of any or all of them;
(b) The
entering into, or the modification or amendment in or of, any lease or sublease
of any aircraft or engine, any contract or arrangement for the maintenance
or
refurbishment of any aircraft or engine, any contract or arrangement for
the
provision of ground handling services, any lease, sublease or other agreement
relating to the use of any terminal or non-terminal airport facility, or
any
loan agreement, note, deed of trust, assignment, contract or other document
or
agreement entered into by Carrier or Guarantor relating to the provision
of
Regional Airline Services (together with the CPA and the Ancillary Agreements,
the “Documents”);
(c) Any
lack
of validity or enforceability of any of the Documents;
(d) Any
release or amendment or waiver of or consent to the modification of any other
guarantee of payment or performance of all or any obligations under the CPA
or
any Ancillary Agreement, or any sale or transfer by Carrier of any of its
interest in the CPA or any Ancillary Agreement (without implying that Carrier
has consented or will consent to any such sale or transfer);
(e) Any
sale
or transfer by Guarantor of any of its interest in Carrier (without implying
that Guarantor has consented or will consent to any such sale or
transfer);
(f) Any
release or waiver of or delay in the enforcement of rights against Carrier,
Guarantor or any other person or entity under any of the Documents or against
any security thereunder;
(g) The
exercise by Continental of any of its rights or remedies under any one or
more
of the Documents; or
(h) Any
other
circumstance which might otherwise constitute a defense available to, or
discharge of, Guarantor.
Section
2.03 Guarantee
of Payment. This Guarantee is a guarantee of payment and
performance and not merely a guarantee of collection, and Guarantor’s
liabilities and obligations under this Guarantee are and shall at all times
continue to be absolute, irrevocable and unconditional in all respects in
accordance with the terms of this Guarantee, and shall at all times be valid
and
enforceable without set off, deduction or counterclaim irrespective of any
other
agreements or circumstances of any nature whatsoever which might otherwise
constitute a defense to this Guarantee or the obligations of Guarantor under
this Guarantee.
Section
2.04 Financial
Statements. Not later than ninety (90) days following the end of
each calendar year, Guarantor shall deliver to Continental a copy of Guarantor’s
audited consolidated financial statements for such calendar year, certified
by
Guarantor as being true, correct and complete, together with a report thereon
of
Guarantor’s independent auditors; provided, that Guarantor shall not be required
to deliver financial statements pursuant to this sentence if it is a reporting
issuer pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934,
as amended, and such financial statements are timely filed with the Securities
and Exchange Commission pursuant thereto.
Section
2.05 Representations. Guarantor
represents, warrants and covenants that:
(a) All
financial statements heretofore delivered to Continental with respect to
Guarantor are, and all financial statements hereafter delivered to Continental
by Guarantor will be, true and correct in all material respects and fair
presentations of Guarantor as of the respective dates thereof;
(b) No
material adverse change has occurred in the financial condition of Guarantor
since December 31, 2005;
(c) Guarantor
is a duly organized and validly existing corporation in good standing under
the
laws of the State of Delaware. Guarantor has the corporate power and
authority to enter into and perform its obligations under this
Guarantee. Guarantor is duly qualified to do business as a foreign
corporation under the laws of each jurisdiction that requires such
qualification;
(d) This
Guarantee has been duly executed and delivered by Guarantor and constitutes
the
legal, valid and binding obligation of Guarantor, fully enforceable against
Guarantor in accordance with the terms hereof except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws
affecting the rights of creditors and subject to the principles of
equity;
(e) Neither
the execution or delivery of this Agreement nor the performance by Guarantor
of
the transactions contemplated hereby will (i) violate, conflict with, or
constitute a default under any of the terms of Guarantor’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 Guarantor is a party or by which any of them or any of their respective
properties or assets may be bound, (ii) result in the creation or imposition
of
any lien, charge or encumbrance in favor of any third person or entity, (iii)
violate any law, statute, judgment, decree, order, rule or regulation of
any
governmental authority or body, 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, charges or
encumbrances;
(f) No
consent of any other person and no consent, license, permit, approval or
authorization of, exemption by, notice or report to, or registration, filing
or
declaration with, any governmental authority, bureau or agency is required
in
connection with the execution, delivery or performance by Guarantor, the
enforceability against Guarantor, or the validity, of this
Guarantee;
(g) Guarantor
has, independently and with advice of counsel of Guarantor’s choice and without
reliance upon Continental, and based upon such documents and information
as
Guarantor has deemed appropriate, made its own analysis and decision to enter
into this Guarantee;
(h) The
financial statements (including the related notes and supporting schedules)
of
Guarantor delivered (or, if filed with the Securities and Exchange Commission,
made available) to Continental immediately prior to the date hereof fairly
present in all material respects the consolidated financial position of
Guarantor and its results of operations as of the dates and for the periods
specified therein. Since the date of the latest of such financial
statements, there has been no material adverse change nor any development
or
event involving a prospective material adverse change with respect to
Guarantor. Such financial statements have been prepared in accordance
with generally accepted accounting principles in the United States consistently
applied throughout the periods involved, except to the extent disclosed
therein;
(i) Guarantor
is insured by insurers of recognized financial responsibility against such
losses and
risks
and in such amounts and with such deductibles as are customary in the businesses
in which it is engaged, and Guarantor has not received notice of cancellation
or
non-renewal of such insurance. All such insurance is outstanding and
duly in force on the date hereof. Guarantor has no reason to believe
that it will not be able to renew its existing insurance coverage as and
when
such coverage expires or to obtain similar coverage from similar insurers
as may
be necessary to continue its business at a cost that would not have a material
adverse effect on Guarantor;
(j) No
litigation, arbitration, investigation or administrative proceeding of or
before
any court, arbitrator or governmental authority, bureau or agency is currently
pending or, to the knowledge of Guarantor, threatened: (i) with respect to
this
Guarantee or any of the transactions contemplated by this Guarantee; (ii)
with
respect to the CPA or any Ancillary Agreement or any of the transactions
contemplated thereby; or (iii) against or affecting Guarantor, or any of
its
property or assets, which, if adversely determined, would have a material
adverse effect on the ability of Guarantor to perform its obligations hereunder;
and
(k) Guarantor
has filed or caused to be filed all tax returns required to be filed, and
has
paid all taxes due on said returns or on any assessments made against Guarantor,
which if not filed or not paid would have a material adverse effect on the
business, operations, assets or condition, financial or otherwise, of Guarantor
(other than those being contested in good faith by appropriate proceedings
for
which adequate reserves have been provided for in accordance with generally
accepted accounting principles).
Without
limiting the other remedies of the Beneficiaries as a result of a breach
of any
of the foregoing representations and warranties, Guarantor hereby agrees
to
indemnify the Beneficiaries, their Affiliates and their respective officers,
directors, partners, members, employees and agents, and hold them harmless
from
and against any and all losses, claims, damages, liabilities, expenses
(including without limitation reasonably legal fees and expenses), judgments,
fines and settlements any of them may incur as a result of any material breach
of any representation or warranty contained herein.
Section
2.06 Reinstatement. This
Guarantee shall continue to be effective, or be reinstated (as the case may
be)
if at any time payment by Carrier or Guarantor of all or any part of any
sum
payable pursuant to the CPA or any Ancillary Agreement, this Guarantee or
the
other Documents is rescinded or otherwise must be returned by Continental
upon
Carrier’s insolvency, bankruptcy or reorganization, all as though such payment
had not been made. Until all of the obligations guaranteed hereunder shall
have
been paid or performed in full, Guarantor shall have no right of subrogation
or
any other right to enforce any remedy which any of the Beneficiaries now
has or
may hereafter have against Carrier.
Section
2.07 Self-Help
Rights. If Guarantor fails or refuses to perform any or all
monetary or non-monetary obligations that are guarantied hereunder and, in
the
case of any non-monetary obligations, such failure or refusal continues for
twenty (20) days following written notice thereof to Guarantor, then, in
addition to any other rights and remedies which any Beneficiary may have
hereunder or elsewhere, and not in limitation thereof, any Beneficiary shall
have the right (but without any obligation so to do) to take action (including
the payment of amounts due to any third party) to satisfy such obligation
either
before or after the exercise of any right or remedy of Continental against
Carrier or Guarantor. The amounts of any and all expenditures so made
by Continental in satisfaction of such obligation (INCLUDING ANY SUCH
EXPENDITURE ARISING FROM OR IN CONNECTION WITH CONTINENTAL’S NEGLIGENCE IN
TAKING SUCH ACTION, BUT EXCEPTING ANY SUCH EXPENDITURES TO THE EXTENT PROVEN
TO
HAVE BEEN CAUSED BY OR ARISING FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT
OF CONTINENTAL) shall be immediately due and payable to Continental by
Guarantor.
ARTICLE
III
MISCELLANEOUS
Section
3.01 Exhausting
Recourse. Continental shall not be obligated to pursue or exhaust
its recourse against Carrier or any other Person or guarantor, or any security
it may have for satisfaction of the obligations guarantied hereunder, before
being entitled to performance by Guarantor of each and every one of the
obligations hereunder. No delay on the part of Beneficiaries in
exercising any right or remedy under this Guarantee or failure to exercise
the
same shall operate as a waiver in whole or in part of any such right or
remedy. No notice to or demand on Carrier or failure to give any such
notice to or make any such demand on Carrier shall be deemed to be a waiver
of
the obligations of Guarantor hereunder or of the right of Beneficiaries to
take
further action without notice or demand as provided in this
Guarantee. No course of dealing between Guarantor and Beneficiaries
shall change, modify or discharge, in whole or in part, this Guarantee or
any of
the obligations of Guarantor hereunder.
Section
3.02 Guarantee
Remains Effective. This Guarantee shall remain in full force and
effect, notwithstanding any invalidity, irregularity, or unenforceability
of any
one or more of the CPA and the Ancillary Agreements. No release or
discharge of Carrier in any receivership, bankruptcy, winding-up or other
creditor proceedings shall affect, diminish or otherwise impair or otherwise
be
a defense to the enforcement of this Guarantee by the
Beneficiaries. The liability of Guarantor shall not be affected by
Continental causing work necessary for the provision of Regional Airline
Services to be done, or by Continental’s pursuing any other remedies provided
for in the Documents.
Section
3.03 No
Conditions. This Guarantee has been delivered free of any
conditions and, except as otherwise expressly set forth herein, no
representations have been made to Guarantor affecting or limiting the liability
of Guarantor hereunder except as expressly provided herein.
Section
3.04 No
Bar
or Defense; Waiver of Defenses. No action or proceeding brought
or instituted under this Guarantee and no recovery in pursuance thereof shall
be
a bar or defense to any further action or proceeding which may be brought
under
this Guarantee by reason of any further default or defaults hereunder or
in the
performance and observance of the terms, covenants, conditions, and provisions
in the Documents. Guarantor
hereby waives all suretyship defenses and defenses in the nature
thereof. Guarantor hereby further waives presentment, protest,
notice, demand, or action or delinquency in respect to any obligation hereby
guarantied except as expressly provided herein. Guarantor waives
acceptance of this Guarantee. Without limiting the generality of the
foregoing, Guarantor specifically waives any requirements imposed by or to
which
Guarantor may otherwise be entitled by virtue of the suretyship laws of the
State of Texas, including requirements pursuant to Rule 31 of the Texas Rules
of
Civil Procedure, Section 17.001 of the Texas Civil Practice and Remedies
Code
and Chapter 34 of the Texas Business and Commerce Code.
Section
3.05 Liability
Independent. The liability of Guarantor hereunder is independent
of any other bonds or guaranties or other obligations at any time in effect
with
respect to the Documents and may be enforced regardless of the existence,
validity, enforcement or non-enforcement of any such other guaranties or
other
obligations.
Section
3.06 Expenses. Guarantor
shall pay all costs, fees and expenses (including reasonable attorneys’ fees)
incurred by Continental in enforcing this Guarantee, provided that Continental
prevails in such enforcement (the “Enforcement
Expenses”). Any and all amounts due and owing by
Guarantor to Continental hereunder that are not paid in full to Continental
within ten (10) days following the earlier of the due date or demand therefor
shall bear interest from the date such amounts were due hereunder until paid
in
full at the highest contract rate of interest permitted by applicable law
(the
“Default Interest”).
Section
3.07 Binding
Effect. Neither this Guarantee nor any provisions hereof may be
amended, modified, waived, discharged, or terminated orally, except by an
instrument in writing duly signed by or on behalf of the party against whom
enforcement of such amendment, modification, waiver, discharge or termination
is
sought. This Guarantee shall inure to the benefit of Continental and
its successors and assigns (collectively, the
“Beneficiaries”), and shall be binding upon Guarantor
and its successors and assigns; provided, however, that Guarantor shall
in no event have the right to assign or transfer Guarantor’s obligations and
liabilities under this Guarantee in whole or part and any such attempted
assignment or transfer without the prior written consent of Continental shall
be
null and void and of no force or effect. This Guarantee is intended
to be for the benefit of, and shall be enforceable by, only the Beneficiaries
and not by any third parties (including creditors of the
Beneficiaries).
Section
3.08 Entire
Agreement. This Guarantee, together with the CPA and the
Ancillary Agreements, to the extent references are made thereto in this
Guarantee, contain the undersigned’s sole and entire understanding and agreement
with respect to its entire subject matter, and all prior negotiations,
discussions, commitments, representations, agreements and understandings
heretofore had between Continental and Guarantor with respect thereto are
merged
herein.
Section
3.09 Governing
Law. This instrument shall be governed by and construed in
accordance with the laws of the State of Texas.
Section
3.10 Reliance. Guarantor
acknowledges that Continental will rely upon this Guarantee in entering into
the
CPA and the Ancillary Agreements.
Section
3.11 Notices. Unless
otherwise expressly permitted by the terms of this Guarantee, all notices,
consents, approvals and other communications required or permitted hereunder
shall be in writing and shall be deemed to have been properly given if delivered
by hand personally to the addressee or sent overnight by a nationally recognized
air courier, and
If
directed to Guarantor, addressed to:
▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇.
▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief
Financial
Officer
Telecopy
No.: [***]
If
directed to Continental, addressed to:
Continental
Airlines, Inc.
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
Attention: Senior
Vice President – Corporate Development
Telecopy
No.: [***]
with
a copy to:
Continental
Airlines, Inc.
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
Attention: General
Counsel
Telecopy
No.: [***]
or
to
such other address as last designated by a party by notice in writing to
the
other party hereto.
Section
3.12 Waiver
of Jury Trial. Guarantor and Continental each hereby knowingly,
voluntarily and intentionally waive the right to a trial by jury in respect
of
any litigation based hereon, arising out of, under or in connection with
this
Guarantee. This waiver is a material inducement for Guarantor to
deliver and Continental to accept this Guarantee.
Section
3.13 Drafting
of Guarantee. Guarantor represents and warrants that (i) it was
represented by counsel of its choice, who has reviewed this Guarantee and
advised it of the contents and meaning; (ii) it is signing this Guarantee
voluntarily and with full understanding of its contents and meaning; (iii)
it
waives any claim or defense that this Guarantee should be construed more
strictly against the other party as the drafter thereof.
Section
3.14 Severability. If
any provision of this Guarantee or its application to any Person or circumstance
is held invalid or unenforceable to any extent, the remainder of this Guarantee
and the application of that provision to other Persons or circumstances is
not
affected in that provision shall be enforced to the greatest extent permitted
by
law.
Section
3.15 Further
Assurances. In connection with this Guarantee and the
transactions contemplated by it, Guarantor shall execute and deliver any
additional documents and instruments and perform any additional acts that
may be
necessary or appropriate to effectuate and perform the provisions of this
Guarantee and those transactions.
Section
3.16 Multiple
Counterparts. This Guarantee may be executed in any number of
counterparts and with the same effect as if all signing parties had signed
the
same document. All counterparts shall be construed together and
constitute the same instrument.
EXECUTED
as of the Effective Date.
GUARANTOR:
By:
/s/
▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇
▇.
▇▇▇▇▇▇▇
Title: President
& CEO
MASTER
FACILITY
AND
GROUND
HANDLING AGREEMENT
among
Continental
Airlines, Inc.
Pinnacle
Airlines Corp.
and
▇▇▇▇▇▇
air, Inc.
Executed
as of February 2, 2007
[Execution
Version]
MASTER
FACILITY AND GROUND HANDLING AGREEMENT
This
Master Facility and Ground Handling Agreement (this “Agreement”), dated
as of February 2, 2007 is among Continental Airlines, Inc., a Delaware
corporation (“Continental”), Pinnacle Airlines Corp., a Delaware
corporation (“Parent”) and ▇▇▇▇▇▇ Air, Inc., a Virginia corporation and a
wholly-owned subsidiary of Parent (“Carrier” and, collectively with
Parent, “Contractor”).
WHEREAS,
Continental, Parent and Carrier are parties to that certain Capacity
Purchase Agreement, dated as of February 2, 2007 (as amended from time to
time,
the “Capacity Purchase Agreement”);
WHEREAS,
Continental, Parent and Carrier 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
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
obligations hereinafter 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
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.
“Continental Airport”
shall mean each 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” 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
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
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 for the provision
of Contractor Services.
“Hub
Airport” shall mean, as of any date of determination, (i) each of ▇▇▇▇▇▇
▇▇▇▇ Intercontinental Airport in Houston, Texas, ▇▇▇▇▇▇▇ International Airport
in Cleveland, Ohio and Newark Liberty International Airport in Newark, New
Jersey, and (ii) any other airport at which Continental and its Subsidiaries,
together with all other operators operating under Continental's livery or
a
derivative thereof, operate an average of at least than [***] flights/day
at
such airport during the six months period prior to such date of
determination.
“Non-Terminal
Facilities” shall mean all maintenance, training, office and other
facilities and spaces at an Applicable Airport or adjacent thereto that are
not Terminal Facilities.
“Terminal
Facilities” shall mean all terminal facilities and spaces leased, subleased
or otherwise retained or used by a party at an Applicable Airport, including
without limitation all 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, curbside check-in
facilities, 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 Terminal 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, and notwithstanding the execution of any lease, sublease
or
other agreement pursuant to this Section 2, at the request and direction
of Continental and subject to Section 2(b), 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 Terminal 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 Terminal 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 Terminal Facility, or for the right of Continental or its designee
to
use any Contractor Terminal Facility;
(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 Terminal Facility;
(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 Terminal 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 Terminal Facility 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 Terminal Facility 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 Terminal
Facilities and to the receipt of all necessary consents from Airport Authorities
and other third parties to such sublease or assignment.
(c) 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.
(d) 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 Terminal 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).
(e) 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.
(f) Contractor
shall give Continental at least 30 days’ prior written notice before ceasing to
use any Contractor Terminal Facilities, provided that no such notice
shall be required 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 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 aircraft other than Covered 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).
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 Terminal
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 Terminal 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 Terminal
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 Terminal
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 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 pertaining to Terminal Facilities 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; and
(iii) 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);
provided,
however, that Contractor shall not make any capital expenditures pursuant
to the foregoing clauses (i) and (ii) unless Continental has
specifically approved such capital expenditure, which approval shall not
be
unreasonably withheld if such capital expenditures are required by an applicable
Airport Authority or if required 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(e); 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 pertaining to Terminal Facilities to which either of them is a
party:
(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)(ii); and
(iii) 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);
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 located at the Contractor Terminal
Facilities at such Airport that have been paid for by Contractor pursuant
to
clause (i) of Section 5(a) and approved by Continental
pursuant to the proviso to Section 5(a); 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 that have been made prior to such
conversion 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 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 Terminal
Facilities, including without limitation all modifications funded by capital
expenditures pursuant to Section 5, 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 Terminal
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 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
other
Terminal 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.
7. 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.
8. Continental
Inventory, Equipment and Non-Terminal Facilities. 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
in
connection with the provision of Contractor Services by acquiring items of
such
inventory and equipment from Continental. After receipt of notice by Continental
from time to time of any Non-Terminal Facilities available for lease or sublease
from Continental, Contractor agrees to use reasonable commercial efforts
to
satisfy all of its Non-Terminal Facility requirements in connection with
the
provision of Contractor Services by leasing or subleasing any such Non-Terminal
Facilities from Continental.
9. 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.
10. 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.
11. 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.
12. 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.
13. 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.
14. Arbitration. Any
Claims arising out of or related to this Agreement shall be resolved by binding
arbitration pursuant to the provisions of Section 10.07 of the Capacity Purchase
Agreement.
15. Confidentiality. Except
as required by law or in any proceeding to enforce the provisions of this
Agreement, Continental, Parent and Carrier 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, Parent and Carrier
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.
16. Equitable
Remedies. Each of Continental, Parent and Carrier acknowledges
and agrees that under certain circumstances the breach by Continental, Parent
or
Carrier 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.
17. 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 any provisions of the Capacity Purchase
Agreement that require any true-up or reconciliation payment be made by
Continental, Parent or Carrier.
[Execution
Version]
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:/s/
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
Title: President
PINNACLE
AIRLINES CORP.
By:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
Title: President
& CEO
▇▇▇▇▇▇
AIR, INC.
By:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
Title: Vice
President
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 February 2, 2007 (the “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
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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.
|
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b)
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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:
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(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.
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(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.
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|
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(3)
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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.
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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.
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 terminated pursuant to
the
provisions of this Agreement or the Master Facility Agreement, but under
no
circumstances shall it continue beyond the term of the Prime Agreement (as
the
same may be extended) 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:
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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.
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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:
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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.
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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.
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3.
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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.
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4.
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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.
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5.
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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 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.
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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.
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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.
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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
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a)
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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 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.
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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.
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):
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a)
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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;
|
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d)
|
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
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d)
|
Any
failure on the part Sublessee to comply with any of the covenants,
agreements, terms or conditions contained in this
Agreement.
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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 [***] per occurrence
for
death or bodily injury; workers compensation insurance with statutory limits;
and employer's liability insurance of not less than [***] in
limits.
Such
insurance shall contain the following endorsements:
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(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.
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(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.
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(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.
|
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(4)
|
Include
a blanket contractual liability clause to cover the liability and
indemnity assumed by the Sublessee under this
Agreement.
|
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(5)
|
Provide
that such insurance is primary without right of contribution from
Sublessor’s insurance.
|
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(6)
|
Provide
that Sublessor is not obligated for payment of
any premiums, deductibles, retention or other
self-insurances thereunder.
|
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(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.
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(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 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.
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 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.
[signature
page follows]
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
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”)].
W
I T N E
S S E T H:
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].
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 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.
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
1
to
the
Form of Assignment
DESCRIPTION
OF ASSIGNED SPACE
ANNEX
2
to
the
Form of Assignment
COPY
OF LEASE
ANNEX
3
to
the
Form of Assignment
REQUEST
FOR CONSENT TO ASSIGNMENT
____________,
a ____________ corporation (“Assignor”) and ____________, a ____________
corporation (“Assignee”) hereby apply to the [____________] (the
“Airport Lessor”) for its consent to an Assignment attached as Exhibit
“A” and dated ____________ (the “Effective Date”), for premises described
therein (the “Assigned Premises”) as required by the [____________ Use
and Lease Agreement] (the “Agreement”) with ____________ for certain
premises at ____________ Airport. As consideration for the
granting of the aforesaid consent and without limitation of any right or
remedy
of the Airport Lessor as set out in the Agreement, Assignor and Assignee
agree
with the Airport Lessor as follows:
|
1.
|
Assignor
represents to Assignee that to its knowledge as of the date hereof,
the
agreement dated ____________, by and between the Airport Lessor,
as
Lessor, and Assignor, as Lessee, is in full force and effect and
there are
no rental fees in arrears and no notices of termination or default
are
outstanding.
|
|
2.
|
The
parties hereto recognize and agree that the cancellation, termination,
or
expiration of the Agreement shall serve to terminate Assignor’s and
Assignee’s rights and obligations concerning the Assigned
Premises.
|
|
3.
|
All
notices to Assignee (as Lessee) with respect to the Assigned Premises
pursuant to the Agreement shall hereinafter be sent to Assignee
at the
following address:
|
_______________
_______________
_______________
4. In
addition, it is expressly understood and agreed as follows:
|
(a)
|
That
by the granting of this consent to Assignment, the Airport Lessor
is not
consenting in advance to any future subleases or assignments of
the
Assigned Premises or any other facilities by [either Assignor or]
Assignee.
|
|
(b)
|
That
no future amendment, modification or alteration to the Assignment
shall be
or become effective without prior notice to and approval by the
Airport
Lessor if required by the provisions of the
Agreement.
|
|
(c)
|
That
Airport Lessor, as evidenced by it execution of this consent below,
[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].
|
|
(d)
|
[That
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.]
|
The
parties accept the foregoing acknowledgments and agreements and the Airport
Lessor hereby consents to the Assignment attached as Exhibit
“A”. However, the terms of the Agreement and this Request for Consent
shall prevail over any conflicting terms or provisions contained in Exhibit
“A”
hereto.
FOR
THE
AIRPORT
LESSOR: FOR
[ASSIGNOR]:
APPROVED APPROVED
________________________________ ________________________________
Name:
Name:
Title:
Director, Department of
Aviation
Title:____________________________
Date:__________________________ Date:___________________________
FOR
[ASSIGNEE]:
APPROVED
ATTEST/SEAL:
________________________________
_________________________________
Name: Name:
Title:
Corporate
Secretary
Title:_____________________________
Date:____________________________
Date:_____________________________
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:
|
▇▇▇▇▇▇
Air, Inc.
|
|
|
▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇
|
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
President
|
|
(hereinafter
referred to as the “Carrier”)
|
|
And:
|
Continental
Airlines, Inc.
|
|
|
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
|
|
|
Mail
Stop HQSLG
|
|
|
▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
|
|
|
(hereinafter
referred to as the “Handling Company”)
|
|
effective
from:
|
February
2, 2007
|
|
This
Annex
|
B.SYS.0
|
|
for
the location :
|
The
Handling Company shall provide ground handling services as provided
herein
for Scheduled Flights at the airports set forth on Schedule 1
hereto.
|
|
|
In
addition to the airports on Schedule 1, the Handling Company shall
also
provide ground handling services to the Carrier for Scheduled Flights
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 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 elects not to provide ground handling services at such
airport. Schedule 1 shall be amended to reflect each such
addition. The Handling Company may also elect, upon at least 90
days’ prior written notice to the Carrier, to provide ground handling
services as provided herein to the Carrier for Scheduled Flights
at any
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
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:
|
February
2, 2007
|
|
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 Carrier,
Handling Company and Pinnacle Airlines Corp., Carrier’s parent, as amended from
time to time (the “Capacity Purchase Agreement”) or the Master Facility and
Ground Handling Agreement among Carrier, Handling Company and Pinnacle Airlines
Corp., as amended from time to time.
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.
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
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 Parent, with no 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 (unless Contractor is instructed in writing by Continental
that Continental will make such payment directly).
|
1.1.3
|
EQUIPMENT
PROVIDED BY CARRIER:
|
|
|
Notwithstanding
anything contained in Paragraph 1.1.1 to the contrary, at each
airport at
which Handling Company is providing ground handling services hereunder
other than 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.
At
all Hub Airports at which Handling Company is providing ground
handling
services hereunder, 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 will
not
charge Carrier more than the Handling Company’s actual cost of providing
such additional personnel.
|
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 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.
|
PARAGRAPH
7 – OTHER MODIFICATIONS TO MAIN AGREEMENT
|
7.1
|
Sections
2.2, 3.2, 11.4, 11.5, 11.6, 11.7 and 11.10 and Article 9 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, or engaged by Handling
Company
after the date hereof, to provide 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.
|
|
7.3
|
Carrier
specifically acknowledges that Article 8 of the Main Agreement
provides that Handling Company is not to be responsible for, and
that
Carrier is to indemnify Handling Company in respect of, legal liability
for certain claims arising out of the provision of ground handling
services even in circumstances where Handling Company is negligent,
and
Carrier agrees not to contend otherwise.
|
|
7.4
|
This
Agreement shall be governed by and construed in accordance with
the laws
of the State of Texas as provided in Section 10.13 of the Capacity
Purchase Agreement.
|
|
7.5
|
Any
Claims arising out of or related to this Agreement shall be resolved
by
binding arbitration pursuant to the provisions of Section 10.07
of the
Capacity Purchase Agreement.
|
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by
their respective officers duly authorized thereunto, as of the 2nd day of
February, 2007.
Handling
Company: Carrier:
Continental
Airlines,
Inc. ▇▇▇▇▇▇
Air, Inc.
By: /s/
▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇
▇.
▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
Title: Vice
President
Schedule
1 Airports
Schedule
2 Carrier
Equipment
|
AHM
810 – Annex B
|
Schedule
1
CONTINENTAL
AIRPORTS [To Be Updated]
Schedule
2
CARRIER
EQUIPMENT
[to
be added]
EXHIBIT
D
to
the
Master Facility and Ground Handling Agreement
FORM
OF CONTRACTOR GROUND HANDLING AGREEMENT
(Contractor
as Handling Company, Continental as Carrier)
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AHM
810 – Annex B
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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
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Between:
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Continental
Airlines, Inc.
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Mail
Stop HQSLG
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▇▇▇▇▇▇▇,
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(hereinafter
referred to as the “Carrier”)
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And:
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Air, Inc.
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▇▇▇▇▇▇▇▇,
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Attention:
President
(hereinafter
referred to as the
“Handling Company”)
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effective
from:
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February
2, 2007
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This
Annex
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B.SYS.0
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for
the location:
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The
Handling Company shall provide ground handling services as provided
herein
at the airports set forth on Schedule 1 hereto.
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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 other than a Hub
Airport
(and Schedule 1 shall be amended to reflect each such addition);
provided
that, it is acknowledged for the avoidance of doubt that, even
though
Handling Company shall not be required hereunder to provide ground
handling services in respect of Carrier’s flights at any Hub Airport,
Handling Company shall still be responsible for providing all necessary
ground handling services in respect of its Scheduled Flights in
accordance
with the Capacity Purchase Agreement (as defined below), unless
Continental elects to provide such services in accordance with
the terms
of the Continental Ground Handling Agreement.
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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 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.
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is
valid from:
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February
2, 2007
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and
replaces:
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N/A
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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 Carrier,
Handling Company and Pinnacle Airlines Corp., Handling Company’s parent, as
amended from time to time (the “Capacity Purchase Agreement”) or the Master
Facility and Ground Handling Agreement among Carrier, Handling Company and
Pinnacle Airlines Corp., as amended from time to time.
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
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1.1
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The
Handling Company shall provide the services of Annex A enumerated
below
for the Carrier’s scheduled flights at the locations set forth
above:
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1.1.1.
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For
services of the Annex A in its:
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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)
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1.1.2.
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FEES
FOR SERVICES COVERED UNDER THE SECTIONS LISTED ABOVE:
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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.
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Flight
Fee:
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The
Carrier shall pay to the Handling Company a Base Per Flight Fee
for the
ground handling services listed above 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.
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1.1.3
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EQUIPMENT
PROVIDED BY CARRIER:
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Notwithstanding
anything contained in Paragraph 1.1.1 to the contrary, at each
airport at
which Handling Company provides ground handling services for Carrier
hereunder, the Carrier shall be responsible for supplying all ground
handling equipment that is usable only for jet aircraft, 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.
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PARAGRAPH
2 – ADDITIONAL CHARGES
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2.1
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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:
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2.1.1.
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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 will
charge
Carrier the Handling Company’s actual cost of providing such additional
personnel.
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2.1.2.
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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.
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2.1.3.
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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.
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2.1.4.
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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.
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2.1.5.
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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.
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PARAGRAPH
3 – DISBURSEMENTS
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3.1
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Disbursements
made on behalf of the Carrier shall be reimbursed to the Handling
Company
at cost.
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PARAGRAPH
4 –SETTLEMENT OF ACCOUNT
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4.1
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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.
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PARAGRAPH
5 – TERMINATION OF AGREEMENT
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5.1
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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.
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PARAGRAPH
6 – TRANSFER OF SERVICES
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6.1
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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.
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PARAGRAPH
7 – OTHER MODIFICATIONS TO MAIN
AGREEMENT
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7.1
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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, for the fees specified for such services herein,
at any
location covered by this Annex B to any of the Carrier’s codeshare
partners.
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7.2
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Sections
2.2, 3.2, 11.4, 11.5, 11.6, 11.7 and 11.10 and Article 9 of the
Main
Agreement shall not apply to this Agreement.
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7.3
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Handling
Company and Carrier agree that all third-parties engaged by Carrier
or
Handling Company as of the date hereof, or engaged by Carrier after
the
date hereof, to provide 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.
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7.4
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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.
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7.5
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Carrier
specifically acknowledges that Article 8 of the Main Agreement
provides that Handling Company is not to be responsible for, and
that
Carrier is to indemnify Handling Company in respect of, legal liability
for certain claims arising out of the provision of ground handling
services even in circumstances where Handling Company is negligent,
and
Carrier agrees not to contend otherwise.
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7.6
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This
Agreement shall be governed by and construed in accordance with
the laws
of the State of Texas as provided in Section 10.13 of the Capacity
Purchase Agreement.
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7.7
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Any
Claims arising out of or related to this Agreement shall be resolved
by
binding arbitration pursuant to the provisions of Section 10.07
of the
Capacity Purchase Agreement.
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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by
their respective officers duly authorized thereunto, as of the 2nd day of
February, 2007.
Carrier: Handling
Company:
Continental
Airlines,
Inc. ▇▇▇▇▇▇
Air, Inc.
By: /s/
▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ By: /s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇
▇.
▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
Title: Vice
President
Schedule
1 Airports
Schedule
2 Carrier
Equipment
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AHM
810 – Annex B
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Schedule
1
CONTRACTOR
AIRPORTS (To Be Provided)
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AHM
810 – Annex B
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Schedule
2
CARRIER
EQUIPMENT
[to
be added]