CAPACITY PURCHASE AGREEMENT Between Continental Airlines, Inc., Republic Airways Holdings Inc. and Chautauqua Airlines, Inc. Dated as of July 21, 2006
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EXHIBIT
10.5
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CONFIDENTIAL
TREATMENT
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REQUESTED
PURSUANT TO RULE 24b-2
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| Certain portions of this exhibit have been omitted pursuant to a request for confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. The omitted materials have been filed separately with the Securities and Exchange Commission. |
Between
Continental
Airlines, Inc.,
and
Chautauqua
Airlines, Inc.
Dated
as of July
21, 2006
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Table
of Contents
| Parties |
1
|
| Recitals |
1
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ARTICLE
I
DEFINITIONS
ARTICLE
II
CAPACITY
PURCHASE, SCHEDULES AND FARES
| Section 2.01 Capacity Purchase | ||
| Section 2.02 Flight-Related Revenues | ||
| Section 2.03 Pass Travel | ||
| Section 2.04 Conversion of Covered Aircraft Livery |
ARTICLE
III
| CONTRACTOR COMPENSATION | ||
| Section 3.01 Base and Incentive Compensation | ||
| Section 3.02 Periodic Adjustment of Base and Incentive Compensation | ||
| Section 3.03 Contractor Expenses | ||
| Section 3.04 Continental Expenses | ||
| Section 3.05 Audit Rights; Financial Information | ||
| Section 3.06 Billing and Payment; Reconciliation. |
ARTICLE
IV
| CONTRACTOR OPERATIONS AND AGREEMENTS WITH CONTINENTAL | ||
| Section 4.01 Crews, Etc. | ||
| Section 4.02 Governmental Regulations | ||
| Section 4.03 Quality of Service | ||
| Section 4.04 Incidents or Accidents | ||
| Section 4.05 Emergency Response | ||
| Section 4.06 Safety Matters | ||
| Section 4.07 Master Facility and Ground Handling Agreement | ||
| Section 4.08 Codeshare Terms | ||
| Section 4.09 Fuel Purchasing Agreement | ||
| Section 4.10 Slots and Route Authorities | ||
| Section 4.11 Use of Continental Marks | ||
| Section 4.13 Catering Standards | ||
| Section 4.14 Ticket Handling Terms | ||
| Section 4.15 Fuel Efficiency Program | ||
| Section 4.16 Permitted Charters |
ARTICLE
V
| CERTAIN RIGHTS OF CONTINENTAL | ||
| Section 5.01 Use of Covered Aircraft | ||
| Section 5.02 Most Favored Nations | ||
| Section 5.03 Change of Control |
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ARTICLE
VI
INSURANCE
| Section 6.01 Minimum Insurance Coverages | ||
| Section 6.02 Endorsements | ||
| Section 6.03 Evidence of Insurance Coverage |
ARTICLE
VII
| INDEMNIFICATION | ||
| Section 7.01 Contractor Indemnification of Continental | ||
| Section 7.02 Continental Indemnification of Contractor | ||
| Section 7.03 Indemnification Claims | ||
| Section 7.04 Employer’s Liability; Independent Contractors; Waiver of Control | ||
| Section 7.05 Survival |
ARTICLE
VIII
| TERM, TERMINATION AND DISPOSITION OF AIRCRAFT | ||
| Section 8.01 Term | ||
| Section 8.02 Early Termination | ||
| Section 8.03 Disposition of Aircraft during Wind-Down Period |
ARTICLE
IX
| REPRESENTATIONS, WARRANTIES AND COVENANTS | ||
| Section 9.01 Representations and Warranties of Contractor | ||
| Section 9.02 Representations and Warranties of Continental |
ARTICLE
X
| MISCELLANEOUS | ||
| Section 10.01 Transition Arrangements | ||
| Section 10.02 Notices | ||
| Section 10.03 Binding Effect; Assignment | ||
| Section 10.04 Amendment and Modification | ||
| Section 10.05 Waiver | ||
| Section 10.06 Interpretation | ||
| Section 10.07 Confidentiality | ||
| Section 10.08 Arbitration | ||
| Section 10.09 Counterparts | ||
| Section 10.10 Severability | ||
| Section 10.11 Equitable Remedies; Certain Liquidated Damages | ||
| Section 10.12 Relationship of Parties | ||
| Section 10.13 Entire Agreement; No Third Party Beneficiaries | ||
| Section 10.14 Governing Law | ||
| Section 10.15 Parent Guarantee | ||
| Section 10.16 Right of Set-Off | ||
| Section 10.17 Cooperation with Respect to Reporting | ||
| Section 10.18 Extension of Aircraft Term | ||
| Section 10.19 Other Adjustments to Schedule 1 | ||
| Section 10.20 Termination of April 18, 2006 Agreement | ||
| Section 10.21 Life Limited Parts. |
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| SCHEDULE 1: | Covered Aircraft & Delivery Schedule |
| SCHEDULE 2: | [Reserved] |
| SCHEDULE 3: | Compensation for Capacity Purchase |
| EXHIBIT A: | Definitions |
| EXHIBIT B: | [Reserved] |
| EXHIBIT C: | Master Facility and Ground Handling Agreement |
| EXHIBIT D: | Terms of Codeshare Arrangements |
| EXHIBIT E: | Non-Revenue Pass Travel |
| EXHIBIT F: | Fuel Purchasing Agreement |
| EXHIBIT G: | Use of Continental Marks |
| EXHIBIT H: | Use of Contractor Marks |
| EXHIBIT I: | Catering Standards |
| EXHIBIT J: | Reasonable Operating Constraints |
| EXHIBIT K: | Ticket Handling Terms |
| EXHIBIT L: | Fuel Efficiency Program |
| EXHIBIT M: | Form of Guarantee of Parent |
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This
Capacity Purchase Agreement (this “Agreement”),
dated
as of July 21, 2006, is between Continental Airlines, Inc., a Delaware
corporation (“Continental”),
Republic Airways Holdings Inc., a Delaware corporation (“Parent”),
and
Chautauqua Airlines, Inc., an Indiana corporation (“Contractor”).
NOW,
THEREFORE,
in
consideration of the foregoing premises and the mutual covenants and obligations
hereinafter contained, the parties agree to:
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ARTICLE
I
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|
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.
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ARTICLE
II
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CAPACITY
PURCHASE, SCHEDULES AND FARES
Section
2.01 Capacity
Purchase. Continental
agrees to purchase the capacity of each Covered Aircraft for the period
beginning on the date such aircraft is presented for service by Contractor
under
this Agreement and ending on the exit date set forth for such aircraft on
Schedule
1,
as such
date my be extended pursuant to Section
10.18
hereof,
in each case unless such aircraft is earlier withdrawn pursuant to Article
VIII,
all
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.
(a) Fares,
Rules and Seat Inventory.
Continental shall establish and publish all fares and related tariff rules
for
all seats on the Covered Aircraft. Contractor shall not publish any fares,
tariffs, or related information for the Covered Aircraft. In addition,
Continental shall have complete control over all seat inventory and inventory
and revenue management decisions for the Covered Aircraft, including overbooking
levels, discount seat levels and allocation of seats among various fare
buckets.
(b) Flight
Schedules.
Continental shall, in its sole discretion, establish and publish all schedules
for the Covered Aircraft (such scheduled flights, together with Charter Flights
and ferry flights required to accommodate such scheduled flights and Charter
Flights (excluding ferry flights resulting from Permitted Charters) 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. 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 six months. At such meeting, Continental
shall present a planned flight schedule for the Covered Aircraft for each of
the
next six 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.
(d) Start
Up Dates.
The
Covered Aircraft shall be placed into service under the terms and conditions
of
this Agreement on such dates as are provided on Schedule
1.
(e) Spare
Aircraft.
Notwithstanding anything in this Section
2.01
or
elsewhere in this Agreement to the contrary, Contractor may use (i) Spare
Aircraft that are not Covered Aircraft to operate the Scheduled Flights and
Permitted Charters, and (ii) Spare Aircraft that are Covered Aircraft to operate
flights that are not Scheduled Flights and Permitted Charters, including flights
for other air carriers.
One of
the Spare Aircraft constituting a Covered Aircraft shall be used by Contractor
as an operational spare, and the other Spare Aircraft constituting a Covered
Aircraft shall be used by Contractor as a maintenance spare to replace Covered
Aircraft that are out of service due to scheduled maintenance checks. In the
event that more than one Covered Aircraft is out of service at any time due
to
scheduled maintenance checks, then a third Covered Aircraft may be temporarily
designated as a Spare Aircraft (but shall not be painted in neutral colors
nor
shall its livery be changed), but only for so long as more than one Covered
Aircraft remains out of service for such scheduled maintenance checks. In
addition, if at any time no Covered Aircraft is scheduled to be out of service
due to scheduled maintenance checks for a period of at least five consecutive
weeks, then Contractor shall notify Continental of such circumstance not less
than [*]
in
advance of such period and the Spare Aircraft to be used as a maintenance spare
shall be made available for Scheduled Flights during such period.
Section
2.02 Flight-Related
Revenue. Contractor
and Parent acknowledge and agree that, except for revenues from Permitted
Charters as provided in Section
4.16,
all
revenues resulting from the sale and issuance of passenger tickets associated
with the operation of the Covered Aircraft and all other sources of revenue
associated with the operation of the Covered Aircraft, including without
limitation revenues relating to the transportation of cargo or mail and revenues
associated with food, beverage and duty-free services and guaranteed or
incentive payments from airport, local or municipal authorities in connection
with scheduling flights to such airport or locality, are the sole property
of
and shall be retained by Continental (or, if received by Contractor or Parent,
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 Conversion
of Covered Aircraft Livery. Continental
shall be responsible for Contractor’s reasonable out-of-pocket costs of
preparing each Covered Aircraft (other than the Spare Aircraft), up to
[*]
for
each
CRJ Aircraft and [*]
for
each
ERJ Aircraft, prior to its being placed into service hereunder, in the livery
required by Paragraph
8
of
Exhibit
G
(including replacing all seatcovers on all CRJ Aircraft). In addition,
Continental shall have the unilateral right to change the color referenced
in
the last sentence of Paragraph
8
of
Exhibit
G
at any
time prior to September 1, 2006.
___________
*Confidential
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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 Appendix
1
to
Schedule
3
hereto
and the Controllable Completion Factor Incentive Rate set forth in Appendix
2
to
Schedule
3
hereto
shall remain in effect through December 31, 2007, and thereafter shall be
adjusted on each January 1, beginning with January 1, 2008, as follows: the
new
rates, applicable beginning on such January 1, shall equal the rates in effect
on the immediately preceding December 31 multiplied by the lower of (a) the
Annual CPI Change and (b) [*];
provided
that the
rates “generally for each Covered Aircraft for each day in the Term” and
“separately for each Covered Aircraft for each month in the Term,” in each case
as set forth or cross-referenced 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 pay in accordance with commercially reasonable practices all
expenses incurred in connection with Contractor’s provision of Regional Airline
Services.
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 reimbursement
of
expenses set forth on Appendix 3 of Schedule 3 hereto. In connection with such
audit, 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 Chief Financial Officer or such other employees
or agents of Contractor knowledgeable about such records. Upon the reasonable
written request of Continental or its outside auditors 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 and Parent 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 Parent,
as
at the end of such year, and the related consolidated statements of income
and
retained earnings and of cash flows of Parent for such year, setting forth
in
each case in comparative form the figures for the previous year, reported on
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 Parent, as at the end of such quarter,
and the related unaudited consolidated statements of income and retained
earnings and of cash flows of Parent 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 Parent, as being fairly stated in all material respects (subject
to
normal year-end audit adjustments); provided,
that no
party shall be required to deliver financial statements pursuant to this
sentence if such party 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).
___________
*Confidential
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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) That
portion of the Invoiced Amount constituting aircraft rent, and one-quarter
of
the balance 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) One-quarter
of the balance of the Invoiced Amount shall be payable by Continental to
Contractor, by electronic transfer of funds to a bank account designated by
Contractor, available on or before the 8th day of the month (or if such day
is
not a Business Day, the next Business Day) to which the invoice
relates;
(iii) One-quarter
of the balance of the Invoiced Amount shall be payable by Continental to
Contractor, by electronic transfer of funds to a bank account designated by
Contractor, available on or before the 15th day of the month (or if such day
is
not a Business Day, the next Business Day) to which the invoice relates;
and
(iv) One-quarter
of the balance 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 under this Agreement or any
Ancillary Agreement. 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, Contractor’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.
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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) and maintenance
personnel and, at Contractor Airports, gate agents and other ground personnel,
necessary to operate the Scheduled Flights and for all aspects (personnel and
other) of dispatch control.
(b) 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. Contractor agrees to give any furloughed Continental
pilot preferential interview status for any pilot openings that may occur at
Contractor consistent with Contractor’s commitments concerning pilots of other
carriers. Any furloughed Continental pilot hired by Contractor shall be required
to comply with all standard terms and conditions of employment applicable to
employees of Contractor, but will not be required by Contractor to resign from
Continental as a condition for applying or being employed as a pilot of
Contractor.
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.
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 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
an aircraft communications addressing and reporting system that provides
operational information in a form reasonably acceptable to Continental, half
of
the cost of which will be borne by Continental, up to an amount equal to
one-half of the amount which ARINC Incorporated would charge for providing
similar services. 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.
Continental shall give Contractor not less than 15 days prior written notice
of
any non-safety-related breach of this Section
4.03
prior to
exercising any remedy regarding such breach.
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. Contractor
shall adopt Continental’s Emergency Response Plan for aircraft accidents or
incidents. 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 Regional Airline Services, including all Scheduled
Flights, and 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.
-8-
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.
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 during the Term or 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 held by Contractor and used 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 held by Contractor and used for
Scheduled Flights is withdrawn or otherwise forfeited as a result of
Controllable Cancellations or any other reason within Contractor’s reasonable
control, then Contractor agrees to pay to Continental promptly upon demand
an
amount equal to the market value of such withdrawn or forfeited slot, authority
or authorization.
Section
4.11 Use
of Continental Marks. Continental
hereby grants to Contractor the non-exclusive and non-transferable rights to
use
the Continental Marks and other 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
K
hereto.
The parties agree that, in the event of a conflict between the provisions of
Exhibit
K
and the
Contractor Ground Handling Agreement, the provisions of Exhibit
K
shall
control.
Section
4.15 Fuel
Efficiency Program. Contractor
shall use its commercially reasonable best efforts to promptly adopt and adhere
to a fuel efficiency program as described on Exhibit
L
hereto.
Section
4.16 Permitted
Charters. With
Continental’s prior written consent (which consent shall not be unreasonably
withheld with respect to any request for a charter flight made within six months
of such flight), Contractor shall be permitted to operate charter flights
(“Permitted
Charters”)
using
the Covered Aircraft, provided that Contractor pays Continental a fee of
[*].
Any
revenue from the Permitted Charters shall be solely for the account of
Contractor, and any expense, direct or indirect, related to the Permitted
Charters (including ferrying or repositioning flights required following or
anticipating any Permitted Charters and costs incurred by Continental if, as
a
result of a Permitted Charter, a Scheduled Flight is delayed or cancelled)
shall
be sole responsibility of Contractor.
___________
*Confidential
-9-
ARTICLE
V
CERTAIN
RIGHTS OF CONTINENTAL
Section
5.01 Use
of Covered Aircraft. Contractor
and Parent agree that, except as otherwise directed or approved in writing
by
Continental pursuant to Section
4.16
or
otherwise in Continental’s sole discretion, the Covered Aircraft (other than
Covered Aircraft that are Spare Aircraft which may be used as provided in
Section
2.01(e)),
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. Each
of
Contactor and Parent represents to Continental that in its reasonable view
as of
the date hereof the overall terms of this Agreement are more favorable to
Continental than the overall terms of any other existing agreement pursuant
to
which Contractor provides comparable services to any other major
carrier.
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, in addition to any insurance required to be maintained by Contractor
pursuant to the terms of any aircraft lease, or by any applicable governmental
or airport authority, Contractor shall maintain, or cause to be maintained,
in
full force and effect policies of insurance with insurers of recognized
reputation and responsibility, in each case to the extent available on a
commercially reasonable basis, as follows:
(a) Comprehensive
aircraft hull and liability insurance, including aircraft third party, passenger
liability (including passengers’ baggage and personal effects), cargo and mail
legal liability, and all-risk ground and flight physical damage, with a combined
single limit of not less than [*]
per
occurrence and 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; and
(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.
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; and
(f) To
provide that such policies shall not be canceled, terminated or materially
altered, changed or amended until 30 days (but seven days or such lesser period
as may be available in respect of hull, war and allied perils) after written
notice shall have been sent to Continental.
Section
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.
___________
*Confidential
-10-
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 (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 gross
negligence or willful misconduct of Continental or its directors, officers,
agents or employees (other than gross negligence or willful misconduct imputed
to such indemnified person by reason of its interest in a Covered Aircraft).
Contractor will use commercially reasonable efforts to 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,
(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 to the extent resulting from the negligence or willful misconduct
of Contractor or its directors, officers, agents or employees. Continental
will
use commercially reasonable efforts to 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.
-11-
(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.
(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.
-12-
ARTICLE
VIII
TERM,
TERMINATION AND DISPOSITION OF AIRCRAFT
Section
8.01 Term.
The
Term
of this Agreement shall commence on and shall be effective as of the date that
the first Covered Aircraft is placed into service under the terms and conditions
of this Agreement (the “Commencement
Date”)
and,
unless earlier terminated or extended as provided herein, shall continue until
the exit date of the last Covered Aircraft, as such date may be extended
pursuant to Section
10.18
hereof
(the “Term”).
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). In the event that Continental shall not have
delivered written notice of termination pursuant to this Section
8.02(a)
within
four months after Continental receives written notice from Contractor of the
occurrence of any event that constitutes Cause by Contractor, then Continental
shall be conclusively deemed to have waived any right to terminate this
Agreement based upon such event; provided
that
such waiver shall not apply to any subsequent or continuing event that
constitutes Cause.
(b) By
Continental for Breach.
Continental may terminate this Agreement, upon two Business Days prior written
notice, upon the occurrence of (x) a material breach of this Agreement by
Contractor as described in clause
(ii)
below,
which breach shall not have been cured, or (y) a breach of the guarantee
executed by Parent pursuant to Section
10.15.
Continental may terminate this Agreement upon the occurrence of any other
material breach of this Agreement by Contractor, which breach shall not have
been cured within 60 days after written notice of such breach is delivered
by
Continental to Contractor (which 60-day notice period may run concurrently
with
the 15-day notice period, if any, provided pursuant to Section
4.03
for
non-safety-related breaches). 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 of the Contractor Fleets by regulatory or court
order
or other governmental action, (iv) a Controllable Completion Factor for
any 2
consecutive calendar months
of
[*]
or below
(excluding any cancellations resulting from a Labor Strike, labor slowdown
or
other similar action) and (v) a Controllable On-Time Departure Rate (excluding
any delays resulting from a Labor Strike, labor slowdown or other similar
action) for
any 2
consecutive calendar months
of
[*]
or
below. In the event that Continental shall not have delivered written notice
of
termination pursuant to this Section
8.02(b)
within
four months after Continental receives written notice from Contractor of any
material breach of this Agreement by Contractor, then Continental shall be
conclusively deemed to have waived any right to terminate this Agreement based
upon such breach; provided
that
such waiver shall not apply to any subsequent or continuing breach.
(c) By
Contractor for Breach.
Contractor may terminate this Agreement upon (i) five Business Days prior
written notice upon any failure by Continental to make any payment or payments
under this Agreement aggregating in excess of [*]
(or
[*]
at any
time when there are [*]
or fewer
Covered Aircraft), including without limitation, any payments which become
due
during any Wind-Down Period, but specifically excluding any amounts which are
the subject of a good faith dispute between the parties, which failure shall
not
have been cured within such five Business Day period, (ii) the occurrence of
any
other failure by Continental to make any payment or payments under this
Agreement aggregating in excess of [*],
including without limitation, any payments which become due during any Wind-Down
Period, but specifically excluding any amounts which are the subject of a good
faith dispute between the parties, which failure shall not have been cured
within 20 days after written notice of such breach is delivered by Contractor
to
Continental, or (iii) the occurrence of any other material breach of this
Agreement by Continental, including without limitation, any breach during any
Wind-Down Period, which breach shall not have been cured within 60 days after
written notice of such breach is delivered by Contractor to Continental. In
the
event that Contractor shall not have delivered written notice of termination
pursuant to this Section
8.02(c)
within
four months after Contractor receives written notice from Continental of any
material breach of this Agreement by Continental, then Contractor shall be
conclusively deemed to have waived any right to terminate this Agreement based
upon such breach; provided
that
such waiver shall not apply to any subsequent or continuing breach.
(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
___________
*Confidential
-13-
(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 of 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 Section
8.02(b)(iii),
the
Covered Aircraft that are included within the grounded Contractor Fleets, 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,
Continental shall deliver to Contractor an irrevocable written 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 type 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 following dates:
for any ERJ aircraft, any date more than 60 months after the Termination Date,
and for any CRJ aircraft, any date beyond the then-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 in accordance with the following terms and conditions: The notice
of termination delivered by Contractor to Continental pursuant to Section
8.02(c)(i)
shall be
irrevocable and shall contain a Termination Date that is not more than 60 days
after the date of such notice; provided
that
such termination notice shall be void and of no further effect automatically
upon the payment by Continental prior to such Termination Date of all unpaid
amounts giving rise to the default under Section
8.02(c)(i).
As of
the Termination Date set forth in a notice of termination delivered pursuant
to
Section
8.02(c)(i),
all of
the Covered Aircraft shall automatically be withdrawn from the capacity purchase
provisions of this Agreement and shall cease to be Covered Aircraft as of such
date. The notice of termination delivered by Contractor to Continental pursuant
to Section
8.02(c)(ii)
shall be
irrevocable and shall contain a Termination Date that is at least 10 days and
not more than 360 days after the date of such notice. The notice of termination
delivered by Contractor to Continental pursuant to Section
8.02(c)(iii)
shall be
irrevocable and shall contain a Termination Date that is at least 180 days
after
the date of such notice. Prior to the earlier of the second business day prior
to the Termination Date and the 90th day after receipt of such termination
notice pursuant to Section
8.02(c)(ii)
or
8.02(c)(iii),
Continental shall deliver to Contractor a Wind-Down Schedule beginning on such
Termination Date; provided
that no
Wind-Down Period shall occur following a termination pursuant to Section
8.02(c)(ii)
if
Continental shall not have cured the payment default giving rise to such
termination prior to or simultaneously with its delivery of the Wind-Down
Schedule to Contractor. The Wind-Down Schedule may not provide for the
withdrawal of more than [*]
Covered
Aircraft per month, and may not provide for the withdrawal of any Covered
Aircraft beyond the following dates: for any ERJ Aircraft, any date more than
12
months after the Termination Date, and for any CRJ Aircraft, any date beyond
the
then-applicable exit date for such Covered Aircraft.
(d) Termination
at End of Term.
If the
Agreement is terminated at the end of the 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 exit date set forth for such Covered Aircraft on
Schedule
1,
as
amended.
(e) Other
Remedies for Labor Strike and Other Circumstances.
In the
event of (i) the occurrence of a Labor Strike that shall have continued for
at
least three consecutive days or (ii) the mandatory grounding of any of the
Contractor Fleets by the FAA, then for so long as such Labor Strike or grounding
shall continue and thereafter until the number of Scheduled Flights that are
Controllable On-Time Departures on any day of the week equals or exceeds the
number of Scheduled Flights that were Controllable On-Time Departures on the
same day of the week prior to such Labor Strike or grounding, Continental shall
not be required to pay any of the amounts set forth or cross-referenced on
Appendix
1
to
Schedule
3
as being
required “for each day in the Term,” “generally for each Covered Aircraft for
each day in the Term” or “separately for each Covered Aircraft for each month in
the Term.” The rights set forth in this Section
8.03(e)
are in
addition to, and not in limitation of, any other right of Continental arising
hereunder.
(f) 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, 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
8.03(f)
shall
restrict the right of any party to exercise any right to terminate this
Agreement pursuant to the terms hereof.
___________
*Confidential
-14-
ARTICLE
IX
REPRESENTATIONS,
WARRANTIES AND COVENANTS
Section
9.01 Representations
and Warranties of Contractor. Contractor
represents, warrants and covenants to Continental as of the date hereof as
follows:
(a) Organization
and Qualification.
Contractor is a duly organized and validly existing corporation under the laws
of the State of Indiana. Contractor has the corporate power and authority to
own, operate and use its assets and to provide the Regional Airline Services.
Contractor 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.
Contractor 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 Contractor. This Agreement
has
been duly and validly executed and delivered by Contractor 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
Contractor, enforceable against Contractor 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 Contractor
of
the transactions contemplated hereby will (i) violate, conflict with, or
constitute a default under any of the terms of Contractor’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 Contractor is a party or by which it or any of 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) No
Default.
Contractor is not (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 Contractor or on its ability to provide Regional Airlines Services
and
otherwise perform its obligations hereunder. To the knowledge of Contractor,
no
third party to any indenture, mortgage, deed of trust, loan agreement, lease
or
other agreement or instrument that is material to Contractor to which Contractor
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.
Contractor has not 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 Contractor 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 Contractor or 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 Contractor 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.
Contractor 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. Contractor 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. Contractor 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 Contractor or Parent.
(h) No
Proceedings.
There
are no legal or governmental proceedings pending, or investigations commenced
of
which Contractor or Parent has received notice, in each case to which Contractor
or Parent is a party or of which any property or assets of Contractor or Parent
is the subject which, if determined adversely to Contractor or Parent, would
individually or in the aggregate have a material adverse effect on Contractor
or
Parent or on Contractor’s ability to provide Regional Airlines Services and
otherwise perform its obligations hereunder; and to the best knowledge of
Contractor and Parent, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
-15-
(i) No
Labor Dispute.
No
labor dispute with the employees of Contractor exists or, to the knowledge
of
Contractor 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.
Contractor possesses or, in the case of the CRJ Aircraft will possess not later
than December 1, 2006, 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 Contractor 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 Contractor or Parent or on their ability to conduct their
respective businesses, to provide Regional Airlines Services and otherwise
to
perform their respective obligations hereunder.
Section
9.02 Representations
and Warranties of Continental. Continental
represents and warrants to Contractor 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 Contractor and Parent and that Contractor
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.
-16-
ARTICLE
X
MISCELLANEOUS
Section
10.01 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 (subject to the related cost-allocation
provisions in Section
4.03).
Section
10.02 Notices.
All
notices made pursuant to this Agreement shall be in writing and shall be deemed
given upon (a) a transmitter’s confirmation of a receipt of a facsimile
transmission (but only if followed by confirmed delivery by a standard overnight
courier the following Business Day or if delivered by hand the following
Business Day), or (b) confirmed delivery by a standard overnight courier or
delivered by hand, to the parties at the following addresses:
if
to
Continental:
Continental
Airlines, Inc.
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
Attention:
Senior Vice President - Corporate Development
Telecopy
No.: (▇▇▇) ▇▇▇-▇▇▇▇
with
a
copy to:
Continental
Airlines, Inc.
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
Attention:
General Counsel
Telecopy
No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
to:
Continental
Airlines, Inc.
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
Attention:
Staff Vice President - Financial Planning
Telecopy
No.: (▇▇▇) ▇▇▇-▇▇▇▇
if
to
Contractor:
Chautauqua
Airlines, Inc.
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
Chief Financial Officer
Telecopy
No.: ▇▇▇-▇▇▇-▇▇▇▇
with
a
copy to:
▇▇▇▇▇▇
▇.
▇▇▇▇▇
Wexford
Capital LLC
▇▇▇
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Telecopy
No.: ▇▇▇-▇▇▇-▇▇▇▇
if
to
Parent:
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
President and Chief Executive 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
10.02.
-17-
Section
10.03 Binding
Effect; Assignment. This
Agreement and all of the provisions hereof shall be binding upon the parties
hereto and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. Except with respect to a merger 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
10.04 Amendment
and Modification. This
Agreement may not be amended or modified in any respect except by a written
agreement signed by the parties hereto that specifically states that it is
intended to amend or modify this Agreement.
Section
10.05 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
10.06 Interpretation.
The
table
of contents and the section and other headings and subheadings contained in
this
Agreement and in the exhibits and schedules hereto are solely for the purpose
of
reference, are not part of the agreement of the parties hereto, and shall not
in
any way affect the meaning or interpretation of this Agreement or any exhibit
or
schedule hereto. All references to days or months shall be deemed references
to
calendar days or months. All references to “$” shall be deemed references to
United States dollars. Unless the context otherwise requires, any reference
to
an “Article,” a “Section,” an “Exhibit,” or a “Schedule” shall be deemed to
refer to a section of this Agreement or an exhibit or schedule to this
Agreement, as applicable. The words “hereof,” “herein” and “hereunder” and words
of similar import referring to this Agreement refer to this Agreement as a
whole
and not to any particular provision of this Agreement. Whenever the words
“include,” “includes” or “including” are used in this Agreement, unless
otherwise specifically provided, they shall be deemed to be followed by the
words “without limitation.” This Agreement shall be construed without regard to
any presumption or rule requiring construction or interpretation against the
party drafting or causing the document to be drafted.
Section
10.07 Confidentiality.
Except
as
required by law or stock exchange or other regulation or in any proceeding
to
enforce the provisions of this Agreement, or as otherwise provided below, each
party 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
the
other parties thereto (except that a party may disclose such information to
its
third party consultants, advisors and representatives, in each case who are
themselves bound to keep such information confidential). Except as required
by
law or stock exchange or other regulation or in any proceeding to enforce the
provisions of this Agreement or any of the Ancillary Agreements, or as otherwise
provided below, each party 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 the party providing such confidential information or data
(except that a party may disclose such information to its third party
consultants, advisors and representatives, in each case who are themselves
bound
to keep such information confidential). Each of party hereby agrees not to
use
any such confidential information or data of the other party other than in
connection with performing their respective obligations or enforcing their
respective rights under this Agreement or any of the Ancillary Agreements,
or as
otherwise expressly permitted or contemplated by this Agreement or any of the
Ancillary Agreements. If either 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
hereto 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. Without limiting the foregoing, no party shall be prevented from
disclosing the following terms of this Agreement: the number of aircraft subject
hereto, the periods for which such aircraft are subject hereto, and any
termination provisions contained herein. The provisions of this Section 10.07
shall
survive the termination of this Agreement for a period of ten
years.
Section
10.08 Arbitration
(a) Agreement
to Arbitrate.
Subject
to the equitable remedies provided under Section
10.11,
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”).
Each
of the parties agrees that arbitration under this Section
10.08
is the
exclusive method for resolving any Claim and that it will not commence an action
or proceeding based on a Claim hereunder, except to enforce the arbitrators’
decisions as provided in this Section
10.08,
to
compel any other party to participate in arbitration under this Section
10.08.
The
governing law for any such action or proceeding shall be the law set forth
in
Section
10.08(f).
(b) Initiation
of Arbitration.
If any
Claim has not been resolved by mutual agreement on or before the 15th
day
following the first notice of the 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.
-18-
(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
10.09 Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument. The Agreement may be executed by facsimile signature.
Section
10.10 Severability.
Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof. Any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.
Section
10.11 Equitable
Remedies;
Certain Liquidated Damages
(a) Equitable
Remedies.
Each
party acknowledges and agrees that, under certain circumstances, the breach
by a
party 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.
(b) Certain
Liquidated Damages.
If
Contractor shall fail to complete Schedule 1
in
accordance with Section
10.19
with
respect to the TBD Aircraft (including meeting the date milestones contained
therein) (it being understood that Schedule
1
shall be
deemed complete for purposes of this Section
10.11(b)
if not
more than an aggregate of five TBD Aircraft to be identified by any milestone
set forth in such Section
10.19
are not
so identified by such milestone), then for each TBD Aircraft in excess of such
five TBD Aircraft for which complete information is not provided, Contractor
shall (x) identify by “number” and “scheduled delivery date” on Schedule
1
the TBD
Aircraft for which information is deemed to have been omitted, and (y) pay
to
Continental within 10 days following such failure liquidated damages in an
amount determined as follows:
|
(i)
|
[*]
for a TBD Aircraft the scheduled delivery date for which is more
than
[*]
after
the relevant milestone giving rise to such
failure;
|
|
(ii)
|
[*]
for a TBD Aircraft the scheduled delivery date for which is less
than (or
exactly) [*]
after the relevant milestone giving rise to such failure;
and
|
|
(iii)
|
[*]
for a TBD Aircraft the scheduled delivery date for which is less
than (or
exactly) [*]
after the relevant milestone giving rise to such
failure.
|
The
parties agree that the damages to be suffered by Continental in connection
with
Contractor’s failure to complete Schedule 1
as
described above shall be difficult to calculate, and that the foregoing
liquidated damages are a good faith estimate of such damages, and that such
liquidated damages are not intended to be a penalty. The parties further agree
that the foregoing liquidated damages and the right to terminate pursuant to
Section
8.02(a)
shall be
Continental’s sole and exclusive remedies against Parent and Contractor for any
damages suffered solely as a result of Contractor’s failure to provide complete
information with respect to the TBD Aircraft as described above (it being agreed
that separate payment obligations are set forth in Section
10.19
for the
failure to identify up to an aggregate of five TBD Aircraft to be identified
by
any milestone set forth in such Section
10.19).
In
connection with a payment of liquidated damages in respect of a TBD Aircraft,
Schedule 1
shall be
automatically amended without any further action by any party hereto to
eliminate such TBD Aircraft and thereby reduce the aggregate number of Covered
Aircraft on such schedule.
___________
*Confidential
-19-
(c) Other
Limitations on Seeking Damages.
Neither
the right of any party to terminate this Agreement, nor the exercise of such
right, shall constitute a limitation on such party’s right to seek damages or
such other legal redress to which such party may otherwise be entitled;
provided
that,
absent the occurrence of another breach of this Agreement by Contractor,
Continental shall not be entitled to seek damages solely for the occurrence
of
(i) an event of Cause of the type described in clause
(iii)
or
clause
(v)
of the
definition thereof, (ii) a material breach of the type described in clause
(iii)
of
Section
8.02(b),
or
(iii) a termination pursuant to Section
5.03.
Section
10.12 Relationship
of Parties. Nothing
in this Agreement shall be interpreted or construed as establishing between
the
parties a partnership, joint venture or other similar arrangement.
Section
10.13 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
10.14 Governing
Law. Except
with respect to matters referenced in Section
10.08(e)
(which
shall be governed by and construed pursuant to the Federal Arbitration Act),
this Agreement shall be governed by and construed in accordance with the laws
of
the State of Texas (excluding Texas choice-of-law principles that might call
for
the application of the law of another jurisdiction) as to all matters, including
matters of validity, construction, effect, performance and remedies. Except
as
otherwise provided in Section
10.08(e),
any
action arising out of this Agreement or the rights and duties of the parties
arising hereunder may be brought, if at all, only in the state or federal courts
located in ▇▇▇▇▇▇ County, Texas.
Section
10.15 Parent
Guarantee. Contemporaneous
with the execution and delivery of this Agreement, Parent shall execute a
guarantee in favor of Continental in form of Exhibit
M.
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 M.
Section
10.16 Right
of Set-Off. If
any
party hereto shall be in default hereunder to any other party, 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 among the parties; (ii) reciprocity among
the
parties 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
10.17 Cooperation
with Respect to Reporting. Each
of
the parties hereto agrees to use its commercially reasonable efforts to
cooperate with each other party in providing necessary data, to the extent
in
the possession of the first party, required by such other party in order to
meet
any reporting requirements to, or otherwise in connection with any filing with
or provision of information to be made to, any regulatory agency or other
governmental authority.
-20-
Section
10.18 Extension
of Aircraft Term. At
any
time and from time to time, and at its sole option, Continental may extend
the
exit date for any Covered Aircraft (which shall extend the capacity purchase
provisions hereof with respect to such Covered Aircraft to such later exit
date)
by delivering to Contractor a revised Schedule
1
reflecting such later exit date; provided,
that no
extension of the exit date for a CRJ Aircraft shall be permitted by Continental
hereunder if (a) the resulting exit date would be subsequent to the date that
is
14 days prior to the end of the then-applicable lease term for such aircraft
and
(b) Contractor or Parent does not have the unilateral right to extend such
lease
term to a date coincident with or subsequent to the resulting exit date;
provided
further,
that
Contractor shall be deemed to have the unilateral right to extend such lease
term if Continental and Contractor’s or Parent’s lessor shall have negotiated a
lease extension to a date coincident with the resulting exit date at a lease
cost not in excess of the rent per month for such aircraft on Schedule
1
(or such
other amount as Continental shall agree to include in an amended Schedule
1),
which
lease extension shall otherwise be on the same terms and conditions as the
lease
being extended; provided
further,
that any
extension shall be made only in increments of twelve months; provided
further,
that the
exit date for any Covered Aircraft may be extended more than once; provided
further,
that the
exit date for any Covered Aircraft shall not be extended more than an aggregate
of five extension years; and provided
further,
that no
extension may be made upon less than six months’ prior written notice. Upon
delivery to Contractor, such revised Schedule
1
shall be
incorporated into this Agreement without any further action by any party and
shall thereafter constitute the amended and restated Schedule
1
for all
purposes of this Agreement. Upon any determination by Contractor not to renew
any lease for any Covered Aircraft, Contractor shall promptly notify
Continental.
Section
10.19 Other
Adjustments to Schedule 1. Continental
and Contractor have agreed to the scheduled delivery dates, scheduled exit
dates
and aircraft rent per month for the following aircraft listed on Schedule
1:
aircraft nos. 3-4, 11-12, 15-18, 22-23, 27-28, 31-32 and 36-37, 4144. With
respect to the remaining 24 aircraft to be listed on Schedule
1
(the
“TBD
Aircraft”),
Contractor agrees (i) to use its reasonable commercial efforts to negotiate,
for
a period of not less than 30 days after the date hereof, with potential lessors
of TBD Aircraft to minimize the costs of leasing such aircraft and to maximize
the flexibility for extending the term of such leases, (ii) to include
Continental in all such negotiations, (iii) to use its reasonable commercial
efforts to agree to any negotiated lease for a TBD Aircraft that contains terms
that are acceptable to both Continental and Contractor, (iv) following any
such
agreement that reduces such lease costs below [*]
per
month, to adjust the “rent per month” for such Covered Aircraft set forth on
Schedule
1
to
reflect any difference between the lease costs in such negotiated lease and
[*]
per
month, and (v) following any such agreement that contains more flexible terms
with regard to lease extensions than the exit date extension provisions
contained herein, to adjust such exit date extension provisions to match such
increased flexibility in such negotiated lease and, if such negotiated lease
includes lease costs in excess of [*]
per
month agreed upon by Continental, to reflect any difference between the lease
costs in such negotiated lease and [*]
per
month. In addition, Contractor agrees to provide Continental with manufacturer
serial numbers and all other missing information from Schedule
1
with
respect to eight of the TBD Aircraft not later than 90 days after the date
hereof, an additional eight of the TBD Aircraft not later than 120 days after
the date hereof, and the final eight of the TBD Aircraft not later than 150
days
after the date hereof. Upon review and written acceptance by Continental within
10 days of receipt (which acceptance shall not be unreasonably withheld so
long
as such schedule, as amended or completed, is consistent with the provisions
set
forth above and the notations on Schedule
1
as
attached hereto), such revised Schedule
1
shall be
incorporated into this Agreement without any further action by any party and
shall thereafter constitute the amended and restated Schedule
1
for all
purposes of this Agreement. If Contractor does not identify any of the TBD
Aircraft and complete Schedule
1
with
respect thereto in accordance with the foregoing milestones, Contractor shall
pay to Continental a fee of [*]
for each
TBD Aircraft not so identified for each day until such aircraft is so identified
and such schedule is complete with respect thereto; provided
that
Continental shall have the right at its sole discretion to amend Schedule 1
at any
time during such period to reduce the aggregate number of Covered Aircraft
by
eliminating the TBD Aircraft not yet identified. Not later than January 1,
2007,
Contractor will provide to Continental a schedule of the lease expiration dates
for all Covered Aircraft, and shall promptly provide notice to Continental
upon
any subsequent change to any lease expiration date for any Covered
Aircraft.
Section
10.20 Termination
of April 18, 2006 Agreement. The
parties hereto, constituting all of the parties to that certain Capacity
Purchase Agreement dated April 18, 2006 (the “April
CPA”),
hereby agree that the April CPA and each of the Ancillary Agreements (as defined
therein) are terminated as of the date hereof and, other than with respect
to
the confidentiality provisions of Section 10.07 of the April CPA, shall be
of no
further force or effect. Except with respect to such confidentiality provisions
(which shall continue to apply in accordance with their terms), no party thereto
shall have any liability to any other party thereto arising thereunder, and
each
party waives any claims it has or may have against each other party arising
thereunder.
Section
10.21 Life
Limited Parts.
Continental
and Contractor shall each cooperate with one another in order to manage and
minimize engine life limited parts (“LLP”)
expenses for Covered Aircraft. To that end, Contractor shall provide annual
projections of LLP requirements and supplemental notice of specific engine
maintenance events which require LLP replacement as they are scheduled.
Continental may, at its option and with Contractor’s consent (which consent
shall not be unreasonably withheld) provide or arrange the provision of used
serviceable LLPs that otherwise meet Contractor’s specifications and reasonable
minimum cycle-remaining requirements, to be incorporated into a Covered
Aircraft. In connection with the withdrawal of any Covered Aircraft from the
capacity purchase provisions of this Agreement (whether at the end of such
aircraft’s scheduled term or otherwise), Continental shall pay Contractor for
the pro-rata cost (based on useful life and using the then-current catalogue
price for LLPs) of all LLPs consumed for all Scheduled Flights by such Covered
Aircraft under this Agreement, and Contractor shall pay Continental for the
pro-rata cost (based on useful life and using the then-current catalogue price
for LLPs) of all LLPs provided by Continental and incorporated into such Covered
Aircraft pursuant to the previous sentence and not consumed for any Scheduled
Flights under this Agreement.
___________
*Confidential
-21-
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/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |
|
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ |
||
| Title: President | ||
| CHAUTAUQUA AIRLINES, INC. | ||
| |
|
|
| By: | /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ | |
|
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇ |
||
| Title: Chairman & CEO | ||
| REPUBLIC AIRWAYS HOLDINGS INC. | ||
| |
|
|
| By: | /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ | |
|
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇ |
||
| Title: Chairman, President & CEO | ||
-22-
SCHEDULE
1
Covered
Aircraft&
Delivery Schedule
As
last adjusted on: July 21, 2006
|
Number1
|
Aircraft
Type2
|
Tail
Number
|
MSN
|
Scheduled
Delivery Date3,4
|
Scheduled
Exit Date5,6
|
Scheduled
Term
|
Rent
Per Month7
|
|
1.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
2.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
3.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
4.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
5.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
6.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
7.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
8.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
9.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
10.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
11.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
12.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
13.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
14.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
15.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
16.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
17.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
18.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
19.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
20.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
21.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
22.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
23.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
24.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
25.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
26.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
27.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
28.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
29.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
30.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
31.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
32.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
33.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
34.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
35.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
36.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
37.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
38.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
39.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
40.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
41.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
42.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
43.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
44.
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
1 Up
to two
delivery positions to be designated as Spare Aircraft.
2 Each
Covered Aircraft must be an aircraft constituting part of the Contractor Fleet.
The 44 Covered Aircraft shall include a minimum of 20 ERJ Aircraft and one
CRJ
Aircraft.
3 The
Scheduled Delivery Dates for all Covered Aircraft must satisfy the following
conditions: the 44 Covered Aircraft must be delivered and in service not earlier
than January 1, 2007 and not later than July 15, 2007, with not more than 10
Covered Aircraft being delivered in any calendar month.
4 The
actual delivery date (within the designated month) shall be determined by
agreement between Continental and Contractor.
5 In
the
aggregate, that 10 of the 44 Covered Aircraft shall have scheduled exit dates
that are five years after the scheduled delivery date, 17 of the 44 Covered
Aircraft shall have scheduled exit dates that are three years after the
scheduled delivery date and 17 of the 44 Covered Aircraft shall have scheduled
exit dates that are two years after the scheduled delivery date. The actual
scheduled exit date for any aircraft shall be the relevant anniversary date
of
the day such aircraft became subject to the capacity purchase provisions hereof
and became a Covered Aircraft hereunder.
6 The
exit
dates set forth in this Schedule
1
shall be
adjusted from time to time to reflect any extension of the exit date for any
Covered Aircraft pursuant to Section
10.l8
of this
Agreement.
7 The
rent
per month shall be [*],
subject
to change in accordance with Section
10.19
of this
Agreement.
|
___________
*Confidential
|
-23-
SCHEDULE
2
[Reserved]
-24-
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, rent, 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. |
for
each Covered Aircraft, the “rent per month” set forth for such aircraft on
Schedule 1
hereto; provided,
that for any calendar month in which such Covered Aircraft enters
or exits
service hereunder, such amount shall be multiplied by a fraction,
the
numerator of which is the actual number of days in such month such
aircraft constituted a Covered Aircraft, and the denominator of which
is
the actual number of days in such month;
plus
|
| b. |
the
weighted average number of Covered Aircraft during such month, multiplied
by the rate “generally for each Covered Aircraft for each day in the Term”
as set forth in Appendix
1
hereto, multiplied by the actual number of days in such month;
plus
|
| c. |
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
|
| d. |
for
the first two 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
|
| e. |
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
|
| f. |
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
|
| g. |
the
actual number of days in such month multiplied by the rate “for each day
in the Term” set forth in Appendix
1
hereto.
|
___________
*Confidential
-25-
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:
|
h.
|
for
Reconciled Expenses constituting payments for Terminal Facilities
at
Contractor Airports, property taxes, 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
|
|
i.
|
for
Reconciled Expenses constituting payments for passenger liability
insurance, hull
and war risk insurance costs,
landing fees, air navigation fees, TSA fees or charges and any other
passenger security fees or charges for security at all Contractor
Airports, 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) 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;
|
| (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 the Fuel Purchasing Agreement, 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;
|
| (h) |
technology
services related to all passenger services processes;
and
|
| (i) |
TSA
fees or charges and any other passenger security fees or charges
for
security at all Continental
Airports.
|
2. [Reserved]
-26-
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)(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 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)(c)
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)(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 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)(d)
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)(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
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)(e)
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 a Contractor Airport exceeds the scheduled invoiced
pursuant to Paragraph
A(1)(f)
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 departure at
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 Contractors Airports invoiced pursuant to
Paragraph
A(1)(f)
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
the exception of the first three months of operations, 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 over the Benchmark Controllable Cancellation
Number.
|
|
b.
|
With
the exception of the first three months of operations, 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 over the number of actual Controllable
Cancellations.
|
|
___________
*Confidential
|
-27-
|
c.
|
[Intentionally
omitted.]
|
|
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) in caused by the Environmental Protection Agency, airport or any other governmental authority, or (ii) occurs after Contractor received less than 90 days' advance notice of such Scheduled Flight to a new airport and used its commercially reasonable efforts to prepare the required facilities and make all necessary arrangements (all in accordance with the Master Facility and Ground Handling Agreement), and in either case such Scheduled flight is cancelled, then such cancellation shell constitute an Uncontrollable Cancellation. |
|
e.
|
For
purposes of this Schedule
3,
in the event of a Labor Strike, labor slowdown or other similar action,
all calculations of the
actual number of Controllable
Cancellations
and the Benchmark
Controllable Cancellation Number shall not include any Scheduled
Flight
cancelled as a result of such Labor Strike, labor slowdown or other
similar action.
|
|
f.
|
Contractor
hereby agrees that each cancellation of a Scheduled Flight shall
be
designated as either a Controllable Cancellation or an Uncontrollable
Cancellation on a basis consistent with Continental’s historical
experience and practice with operators of its regional
jets.
|
|
5.
|
Payload
Restriction Reconciliation.
Appendix
7
shall set forth the number of seats per Scheduled Flight, in each
market
and on each aircraft type set forth on Appendix
7,
that Contractor shall make available for sale by Continental. Appendix
7
shall be provided by Continental prior to the operation of the first
Scheduled Flight, and shall be amended from time to time as may be
required in response to governmental regulation or safety matters;
provided
that Contractor shall have given Continental not less than 30 days’
advance written notice of such amendment and met (or offered to meet)
with
Continental to discuss such
adjustments.
|
6. Reconciled
Expenses.
|
a.
|
The
following expenses incurred in connection with Scheduled Flights
shall be
reconciled monthly (except as specifically set forth below) to actual
costs: (i) rent paid by Contractor for Terminal Facilities at Contractor
Airports (it being understood, for the avoidance of doubt, that the
term
“rent” as used herein shall not be deemed to include indemnity or similar
payments, irrespective of its definition under any applicable lease);
(ii)
property taxes (but excluding all other taxes including without limitation
income, profits, withholding, employment, social security, disability,
occupation, severance, excise ad valorem, sales, use and franchise
taxes);
(iii) passenger liability, hull
and war risk insurance costs;
provided,
that Continental shall not pay to Contractor any amount in respect
of this
clause
(iii)
that is in excess of the Average Peer Group Rates; (iv) landing fees;
(v) glycol and de-icing costs at Contractor Airports;
(vi) 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 its regional airline passengers;
(vii) 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, and (viii) the amount of TSA fees or
charges
and any other passenger security fees or charges for security at
all
Contractor Airports (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 (iii) of Paragraph
B(6)(a)
and the amount of TSA fees or charges and any other passenger security
fees or charges at all Contractor Airports for security referred
to in
clause (viii) 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 and TSA rates set forth
on
Appendix
3
multiplied by (2) the Forecasted Passengers for such
month.
|
|
II.
|
The
amount of landing fees referred to in clause (iv) 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 Canada and Mexico air navigation fees referred to in clause (vii) 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 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. Continental shall be liable for all 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 Continental or its agents of any law,
statute,
judgment, decree, order, rule or regulation of any governmental or
airport
authority.
|
___________
*Confidential
-28-
Schedule
3 Appendices
Appendix
1 Base
Compensation Rates
Appendix
2 Controllable
Completion Factor Incentives
Appendix
3 Reconciliation
Of Expenses
Appendix
4 Incentive
Bonuses/Rebates
Appendix
5 Insurance
Rates
Appendix
6 [Intentionally
Omitted]
Appendix
7 Minimum
Seats
for Scheduled Flights
-29-
Appendix
1 to Schedule 3
Base
Compensation Rates
$[*]separately
for each Covered Aircraft for each month in the Term
$[*]generally
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
$[*]for
each
day in the Term
*
This
rate, calculated separately for each Covered Aircraft, shall be the “rent per
month” set forth on Schedule 1
for such
Covered Aircraft, calculated for months in which such aircraft enters or exits
service hereunder as provided in Paragraph
A(1)(a)
of this
Schedule
3.
These
Base Compensation Rates shall be adjusted pursuant to the terms of Section
3.02
of this
Agreement.
___________
*Confidential
-30-
Appendix
2 to Schedule 3
Controllable
Completion Factor Incentives
|
"Controllable
Completion Factor Incentive Rate"
shall be [*],
as adjusted pursuant to
|
||
|
Section
3.02 of this Agreement.
|
||
___________
*Confidential
-31-
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)
|
Fixed
|
[*]
|
|
Property
Taxes
|
Sched3.B.6(a)(iii)
|
Fixed
|
[*]
|
|
Passenger
Liability, Hull and War Risk Insurance
|
Sched3.B.6(a)(iv)
|
Passengers
|
[*]
|
|
Landing
Fees
|
Sched3.B.6(a)(v)
|
Departures
|
[*]
|
|
Glycol
and De-icing at Contractor Airports
|
Sched3.B.6(a)(vi)
|
Fixed
|
[*]
|
|
Interrupted
Trip and Baggage Handling at Contractor Airports
|
Sched3.B.6(a)(vii)
|
Fixed
|
[*]
|
|
Canadian
and Mexican Air Navigation
|
Sched3.B6(a)(viii)
|
Departures
|
[*]
|
|
TSA
fees or charges and any other passenger security fees or charges
for
security at all Contractor Airports
|
Sched
3.B.6(a)(ix)
|
Passengers
|
[*]
|
|
The
Appendix 3 Rates shall be adjusted from time to time with the mutual
agreement of the parties to reflect the actual rates charged to
Contractor.
|
|||
___________
*Confidential
-32-
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 or unscheduled, extra-section or diversion related departures) to or from each of [*]shall be measured. |
|
b.
|
If Contractor’s actual percentage of on-time Scheduled
Flight departures (as a percentage of Contractor’s actual departures
excluding departures impacted by weather or ATC or unscheduled,
extra-section or diversion related departures) for any such calendar
month
to or from any of [*]
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 or unscheduled, extra-section
or
diversion related departures) for such month at such airport, multiplied
by the excess of Contractor’s actual percentage of on-time Scheduled
Flight departures over the Annual Historical Percentage of on-time
Scheduled Flight departures. If Contractor’s actual percentage of on-time
Scheduled Flight departures (as a percentage of actual departures
excluding departures impacted by weather or ATC or unscheduled,
extra-section or diversion related departures) for any such calendar
month
to or from any of [*]
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 or unscheduled, extra-section
or
diversion related departures) for such month at such airport, multiplied
by the excess of the Annual Historical Percentage of on-time Scheduled
Flight departures over Contractor’s actual percentage of on-time Scheduled
Flight departures. For purposes of this Appendix
4,
the “Annual
Historical Percentage”
for any of [*]
for any year shall equal the average of the actual percentage of
on-time
Scheduled Flight departures (as a percentage of Contractor’s flown
departures excluding departures impacted by weather or ATC, and
unscheduled, extra section or diversion related departures) 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, 2006 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, 2006, the
Annual
Historical Percentages for [*]
were as follows:
|
|
[*]
|
[*]
|
[*]
|
|
[*]
|
[*]
|
[*]
|
2. Fuel
Efficiency Bonus:
At
Continental’s expense Contractor agrees to develop a fuel efficiency program
modeled on Continental’s fuel program as set forth in Exhibit L.
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
10.07
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 first year of operations will provide the baseline by which
the second year of operations will be measured. 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 (a) the current
year’s Block Hour Fuel Burn Rate from (b) the baseline year’s Block Hour
Fuel Burn Rate, and multiplying the positive difference, if any,
by (c)
Continental’s average domestic price per gallon of fuel paid in the
current year, multiplied by (d) the total gallons consumed by Contractor
in current year multiplied by (e) 0.1. Any expense born by Continental
to
develop the Fuel Efficiency program will offset any fuel bonus payment
until the balance of such account is
zero.
|
___________
*Confidential
-33-
Appendix
5 to Schedule 3
Insurance
Rates
|
Insurance
Type
|
Rate
|
Driver
Units
|
|
Hull
Insurance
|
[*]
|
per
$100 value
|
|
Liability
Insurance
|
[*]
|
per
Departure
|
|
Liability
Insurance
|
[*]
|
per
Passenger
|
|
War
Risk Insurance
|
[*]
|
per
1000 RPMs
|
|
War
Risk Insurance
|
[*]
|
per
Passenger
|
___________
*Confidential
-34-
Appendix
6 to Schedule 3
[Intentionally
omitted]
-35-
Appendix
7 to Schedule 3
Minimum
Seats for Scheduled Flights
Appendix
7
shall be
provided and subsequently adjusted from time to time in accordance with the
provisions of Paragraph
B.5
of this
Schedule
3.
-36-
EXHIBIT
A
Definitions
Agreement
- means
the Capacity Purchase Agreement, dated as of July 21, 2006, among Continental,
Parent and Contractor, as amended from time to time pursuant to Section
10.04
hereof.
Ancillary
Agreements
- means
each of the agreements entered into by Continental and Contractor substantially
in the form of Exhibits B, C, F and M hereto, together with all amendments,
exhibits, schedules and annexes thereto (including any ground handling
agreements entered into pursuant to Exhibit C).
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 188.383 (the simple
average of the sum of the CPI for the last twelve months ending November of
2004) divided by 183.6750 (the simple average of the sum of the CPI for the
last
twelve months ending November of 2003), or 1.0256.)
Annual
Historical Percentage
- is
defined in Appendix
4
to
Schedule
3.
April
CPA
- is
defined in Section
10.20.
Average
Peer Group Rates
- means,
with respect to any insurance coverage and as of any date of determination,
(x)
the insurance rates 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 coverage 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.
Benchmark
Controllable Cancellation Number
- is
defined in Paragraph
B(4)(a)
of
Schedule
3.
Benchmark
Controllable Cancellation Percentage
- means
[*].
Business
Day
- means
each Monday, Tuesday, Wednesday, Thursday and Friday unless such day shall
be a
day when financial institutions in New York, New York or Houston, Texas are
authorized by law to close.
Cause
- means
(i) the suspension for three consecutive days or longer or the 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 or the mandatory grounding of any of the Contractor Fleets by
the
FAA, and other than any temporary cessation for not more than 14 consecutive
days, (iii) the occurrence of a Labor Strike that shall have continued for
10
consecutive days or longer, (iv) the failure of Schedule 1
to have
been completed in accordance with Section
10.19
(including meeting the date milestones contained therein) (it being understood
that Schedule
1
shall be
deemed complete for purposes of this definition if not more than an aggregate
of
five TBD Aircraft to be identified by any milestone set forth in such
Section
10.19
are not
so identified by such milestone), (v) a Controllable On-Time Departure Rate
(including any delays resulting from a Labor Strike, labor slowdown or other
similar action) for
any
two consecutive calendar months
of
[*]
or below
or (vi) a willful or intentional material breach of this Agreement by Parent
or
Contractor 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 Contractor, as the case may
be.
Change
of Control
-
means:
|
(i)
|
Parent
or Contractor 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 Contractor
in
any such event pursuant to a transaction in which the voting securities
of
Parent or Contractor are converted into or exchanged for cash or
securities of a Prohibited Person, except where the holders of voting
securities of Parent or Contractor 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 Contractor on the
one
hand, and Continental and/or any of its Subsidiaries on the
other;
|
|
(ii)
|
the
direct or indirect acquisition by a Prohibited Person or any Person
directly or indirectly controlling a Prohibited Person of beneficial
ownership of 15% (unless such person is the largest shareholder of
Parent
or Contractor, in which case 10%) or more of the capital stock or
voting
power of Parent or Contractor; provided
that the acquisition of capital stock of Parent or Contractor by
Delta Air
Lines pursuant to contractual rights existing as of the date hereof
shall
not constitute a Change of Control, unless Delta shall at any time
file a
Schedule 13D in respect of such
ownership;
|
|
(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 25% of the capital stock
or
voting power of Parent or Contractor, 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 Contractor’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
Contractor’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 Contractor’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 Contractor’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 Contractor or of otherwise changing or influencing the
control of Parent or Contractor, 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 Contractor, as the case may be, to less
than 25%
within 30 days of the acquisition of ownership of at least 25% of
such
capital stock or voting power;
|
|
___________
*Confidential
|
-37-
|
(iv)
|
the
liquidation or dissolution of Parent or Contractor in connection
with
which Contractor ceases operations as an air
carrier;
|
|
(v)
|
the
sale, transfer or other disposition of all or substantially all of
the
airline assets of Parent or Contractor 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
|
|
(vi)
|
the
execution by Parent or Contractor of bona fide definitive agreements,
the
consummation of the transactions contemplated by which would result
in a
transaction described in the immediately preceding
clauses.
|
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.
Commencement
Date -
is
defined in Section 8.01.
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
any airport at which Continental operates an average of more than [*]
flights/day.
Continental
Marks
- is
defined in Exhibit
G.
Contractor
-
means
Chautauqua Airlines, Inc., an Indiana corporation, and its successors and
permitted assigns.
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
Fleet
- means
all
or
any of the following fleets of Covered Aircraft (to the extent that any Covered
Aircraft are part of such fleet): CRJ Aircraft, ERJ 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
Ground Handling Agreement
-
means
that certain IATA Standard Ground Handling Agreement (April 1993 version)
between Continental and Contractor, together with Annex A thereto (Ground
Handling Services, April 1993 version) and Annex B thereto substantially in
the
form of Exhibit
D
to the
Master Facility and Ground Handling Agreement (or as otherwise agreed or
amended) providing for the provision by or on behalf of Continental to
Contractor of ground handling services at the airports specified
therein.
Contractor
Marks
- is
defined in Exhibit
H.
___________
*Confidential
-38-
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 Departure -
means a
flight departing within 15 minutes of scheduled departure time during such
period, excluding flights impacted by ATC, weather-related delays, aircraft
damage caused by Continental or its agents or any other circumstance beyond
Contractor’s control.
Controllable
On-Time Departure Rate
- means,
for any period of determination, the percentage of flights that are Controllable
On-Time Departures.
Covered
Aircraft
- means
all of the aircraft listed on Schedule
1
(as
amended from time to time pursuant to the provisions of this Agreement) and
presented for service by Contractor, as adjusted from time to time for
withdrawals pursuant to Article
VIII
and for
exit date extensions pursuant to Section
10.18.
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.
CRJ
Aircraft
- means
any Bombardier CRJ-200 ER or LR aircraft.
DOT
- means
the United States Department of Transportation.
Enplanement
- means
one passenger for such passenger’s entire one-way flight itinerary, regardless
of how many Scheduled Flights or flight segments comprise such
itinerary.
ERJ
Aircraft
- means
any A1P-powered Embraer ERJ-145LR aircraft.
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, dated as of July 21, 2006, 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 resulting in a work stoppage.
-39-
LLP
- is
defined in Section
10.21.
Master
Facility and Ground Handling Agreement
- means
that
certain Master Facility and Ground Handling Agreement, dated as of July 21,
2006, between Continental and Contractor, in the form attached hereto as
Exhibit
C
(or as
otherwise agreed or amended).
Parent
- means
Republic Airways Holdings Inc., a Delaware corporation, and its successors
and
permitted assigns.
Permitted
Charters -
is
defined in Section
4.16.
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
75%
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
the operating constraints on Scheduled Flights set forth on Exhibit
J.
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 2000. For purposes hereof, the CPI for calendar year
2000 is the monthly average of the CPI for the twelve months ending on December
31, 2000.
Scheduled
ASMs
- means,
for any period of calculation, the available seat miles for all Scheduled
Flights during such period of calculation.
Scheduled
Flight
- means
a flight as determined by Continental pursuant to Section 2.01(b)
(including all Charter Flights).
Spare
Aircraft
- means
any ERJ Aircraft or CRJ Aircraft (including up to two or, pursuant only to
Section
2.01(e),
three
Covered Aircraft) that are designated by Contractor as spare aircraft and which
will be painted in neutral livery, both with respect to interior markings and
exterior colors and markings which may be used by Contractor to replace another
aircraft in the operation of a Scheduled Flight that otherwise would be
cancelled.
Subsidiary
- means,
as to any Person, (a) any corporation more than 50% of whose stock of any
class or classes having by the terms thereof ordinary voting power to elect
a
majority of the directors of such corporation (irrespective of whether or not
at
the time, any class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency) is at the time
owned
by such Person directly or indirectly through Subsidiaries and (b) any
partnership, association, joint venture, limited liability company, joint stock
company or any other form of business or professional entity, in which such
Person directly or indirectly through Subsidiaries has more than 50% equity
interest at any time.
___________
*Confidential
-40-
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; 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.
TBD
Aircraft
- is
defined in Section
10.19.
Term
- has
the meaning set forth in Section
8.01,
as
earlier terminated pursuant to Section 8.02,
if
applicable, and any Wind-Down Period.
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
Term.
TSA
- means
the United States Transportation Security Administration.
Uncontrollable
Cancellation
- means
a cancellation of a Scheduled Flight as a result of weather, air traffic
control, an event described in Paragraph B(4)(d)
of
Schedule 3
or any
other circumstance beyond Contractor’s reasonable control,
in each
case as coded on Contractor’s operations reports in accordance with
Continental’s standard coding policies and consistent with Contractor’s past
practices, it being understood and agreed that if Continental’s operations are
subject to the same circumstance giving rise to the cancellation and Continental
does not cancel flights as a result, such cancellation shall be a Controllable
Cancellation, it being further understood and agreed that cancellations
resulting from a labor slowdown or other similar action, but not constituting
a
Labor Strike, shall not constitute Uncontrollable Cancellations.
Wind-Down
Period
- means
the period after the Termination Date and until the time when the last Covered
Aircraft has been withdrawn from the capacity purchase provisions of this
Agreement.
Wind-Down
Schedule -
means
the schedule, determined as provided in Article
VIII
of this
Agreement, for Covered Aircraft to be withdrawn from the capacity purchase
provisions of this Agreement.
___________
*Confidential
-41-
EXHIBIT
B
[Reserved]
-42-
EXHIBIT
C
Master
Facility and Ground Handling Agreement
-43-
MASTER
FACILITY
AND
GROUND
HANDLING AGREEMENT
among
Continental
Airlines, Inc.
and
Chautauqua
Airlines, Inc.
Executed
as of July 21, 2006
-44-
MASTER
FACILITY AND GROUND HANDLING AGREEMENT
This
Master Facility and Ground Handling Agreement (this “Agreement”),
dated
as of July 21,
2006 is
among Continental Airlines, Inc., a Delaware corporation (“Continental”),
Republic Airways Holdings Inc., a Delaware corporation (“Parent”)
and
Chautauqua Airlines, Inc., an Indiana 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 July 21, 2006 (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 (i) each Hub Airport and (ii) each other 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
(except for any Hub Airport), 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, [*].
“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.
___________
*Confidential
-45-
“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 an Uncovered Aircraft, or for any other
purpose; provided
that the
foregoing limitation shall not apply to:
(i) baggage
claim and other similar facilities that are leased or otherwise made available
to all air carriers at such airport on a common-use or joint-use basis;
or
(ii) to
any
facilities that are properly required by an Airport Authority to be made
available for use by others in accordance with any applicable agreement that
is
in place as of the date hereof or has been approved by Continental under
Section
2(f).
-46-
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).
-47-
(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.
-48-
(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.
-49-
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 11.08 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.
-50-
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/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |
|
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ |
||
| Title: President | ||
| CHAUTAUQUA AIRLINES, INC. | ||
| |
|
|
| By: | /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ | |
|
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇ |
||
| Title: Chairman & CEO | ||
| REPUBLIC AIRWAYS HOLDINGS INC. | ||
| |
|
|
| By: | /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ | |
|
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇ |
||
| Title: Chairman, President & CEO | ||
-51-
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 ●, 2006 ( 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
|
a)
|
Sublessor
hereby lets unto Sublessee and Sublessee hereby hires and takes
from
Sublessor the Subleased Premises in accordance with the terms and
conditions hereof.
|
|
b)
|
Sublessee
agrees and accepts the associated rights and privileges granted
under the
Prime Agreements, subject, however, to the following limitations
and
reservations, and subject to other terms and conditions set forth
in this
Agreement:
|
|
(1)
|
The
Prime Agreements, insofar as they relate to the Subleased Premises,
and
such Prime Agreements are hereby incorporated by this reference
as if
fully set forth herein.
|
|
(2)
|
Sublessee
covenants and agrees, for the benefit of Sublessor and the Prime
Lessors,
that it shall not, by its use and occupancy of the Subleased Premises,
violate any of the provisions of the Prime Agreements relating
thereto,
and that it shall not knowingly permit any breach of any of the
obligations of Sublessor under such Prime Agreements. Sublessee
covenants
and agrees that this Agreement shall be in all respects subject
and
subordinate to the Prime Agreements relating thereto. Nothing contained
in
this Agreement shall be deemed to confer upon Sublessee any rights
that
are not granted by or are in conflict with the applicable Prime
Agreement.
|
|
(3)
|
Sublessor
reserves the right to enter upon the Subleased Premises at any
time during
an emergency to take such action therein as may be required for
the
protection of persons or property and at other reasonable times
for the
purpose of inspection, maintenance, making repairs, replacements,
alterations or improvements (to the Subleased Premises or to other
areas),
showing to prospective subtenants or other users, and for other
purposes
permitted elsewhere in this
Agreement.
|
2
-
CONDITION OF SUBLEASED PREMISES AND ALTERATIONS
Except
to
the extent that Sublessor has been granted representations or warranties
under
the Prime Agreements regarding the condition of the Subleased Premises the
benefit of which may, pursuant
to the applicable Prime Agreement and applicable law, inure to Sublessee
(in
which case such representations and warranties shall be deemed made by Sublessor
in favor of Sublessee), Sublessee accepts the Subleased Premises AS-IS, WITH
ALL
FAULTS, LATENT OR KNOWN. Subject to the foregoing, Sublessor MAKES NO
WARRANTIES, GUARANTEES, OR REPRESENTATIONS OF ANY KIND EITHER EXPRESS OR
IMPLIED, ARISING BY LAW OR OTHERWISE, PERTAINING TO THIS AGREEMENT OR THE
PROPERTY DESCRIBED IN THIS AGREEMENT. Subject to the foregoing, SUBLESSEE
HEREBY
WAIVES, AND SUBLESSOR EXPRESSLY DISCLAIMS ALL WARRANTIES, GUARANTEES AND
REPRESENTATIONS, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, INCLUDING
BUT
NOT LIMITING THE GENERALITY OF THE FOREGOING, ANY IMPLIED WARRANTY OF FITNESS
FOR A PARTICULAR PURPOSE OR REGARDING THE CONDITION OF THE PROPERTY. Subject
to
the forgoing, IN NO EVENT SHALL SUBLESSOR’S LIABILITY OF ANY KIND UNDER THIS
AGREEMENT INCLUDE ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR EXEMPLARY DAMAGES
EVEN IF SUBLESSOR SHALL HAVE BEEN ADVISED OF THE POSSIBILITY OF POTENTIAL
LOSS
OR DAMAGE.
Any
alterations will be the sole responsibility and expense of the Sublessee
and
will require the prior written approval of Sublessor and, if required under
the
applicable Prime Agreement, the respective Prime Lessor.
-52-
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:
| a) |
Conduct
its operations in an orderly and proper manner. Sublessee shall not
create
or generate or permit the creation or generation of vibrations
that could reasonably be regarded as posing a material risk of damage
to
the Subleased Premises; unreasonably loud noises; the emission of
steam,
gases or unpleasant or noxious odors; nor in any other manner annoy,
disturb or be offensive to other tenants or users of the premises
or
common areas.
|
| b) |
Comply
with all applicable federal, state and local laws, ordinances, regulations
and orders. Without limiting the generality of the foregoing, to
the
extent that the activities of Sublessee shall be subject to the same,
Sublessee shall comply with the
following:
|
|
1.
|
Compliance
with Regulations.
Sublessee shall comply with the regulations relative to nondiscrimination
in federally assisted programs of the United States Department
of
Transportation (hereinafter “DOT”)
Title 49, Code of Federal Regulations, Part 21, as they may be
amended
from time to time (“Regulations”),
which are herein incorporated by reference and made a part of this
Agreement.
|
|
2.
|
Nondiscrimination
Generally.
Sublessee shall not discriminate on the grounds of race, color,
sex, creed
or national origin in the selection and retention of subcontractors,
including procurements of materials and leases of equipment.
|
-53-
|
3.
|
Solicitations
for Subcontractors, Including Procurements of Materials and
Equipment.
If required by the Regulations, in all solicitations either by
competitive
bidding or negotiation made by Sublessee for work to be performed
under a
subcontract, including procurements of materials or leases of equipment,
each potential subcontractor or supplier shall be notified by Sublessee
of
Sublessee’s obligations under the Regulations relative to
nondiscrimination on the grounds of race, color, or national
origin.
|
|
4.
|
Information
and Reports.
Sublessee shall provide all information and reports required by
the
Regulations or directives issued pursuant thereto and shall permit
access
to its books, records, accounts other sources of information, and
its
facilities as may be determined by the airport sponsor or the Federal
Aviation Administration (the “FAA”)
to be pertinent to ascertain compliance with such Regulations,
orders, and
instructions. Where any information required of Sublessee is in
the
exclusive possession of another who fails or refuses to furnish
this
information, Sublessee shall so certify to the airport sponsor
or the FAA,
as appropriate, and shall set forth what efforts it has made to
obtain the
information.
|
|
5.
|
Nondiscrimination
Covenant.
Sublessee hereby covenants and agrees, as a covenant running with
the
land, that in the event facilities are constructed, maintained,
or
otherwise operated by Sublessee on the Subleased Premises for a
purpose
for which a DOT program or activity is extended or for another
purpose
involving the provision of similar services or benefits, Sublessee
shall
maintain and operate such facilities and services in compliance
with all
other requirements imposed pursuant to 49 CFR Part 21, Nondiscrimination
in Federally Assisted Programs of the Department of Transportation,
and as
said Regulations may be amended. Sublessee hereby covenants and
agrees, as
a covenant running with the land: (1) that no person on the grounds
of
race, color, sex, creed or national origin shall be excluded from
participation in, denied the benefits of, or be otherwise subjected
to
discrimination in the use of the Subleased Premises, (2) that in
the
construction of any improvements on, over, or under such Subleased
Premises and the furnishing of services thereon, no person on the
grounds
of race, color, sex, creed or national origin shall be excluded
from
participation in, denied the benefits of, or otherwise be subjected
to
discrimination, (3) that Sublessee shall use the Subleased Premises
in
compliance with all other requirements imposed by or pursuant to
49 CFR
Part 21, Nondiscrimination in Federally Assisted Programs of the
Department of Transportation, and as said Regulations may be amended.
Sublessee assures that it will comply with pertinent statutes,
Executive
Orders and such rules as are promulgated to assure that no person
shall,
on the grounds of race, creed, color, national origin, sex, age,
or
handicap be excluded from participating in any activity conducted
with or
benefiting from Federal assistance.
|
|
c)
|
Control
the demeanor and appearance of its officers, and employees so as
to
maintain professional standards and upon objection from Sublessor
or the
respective Prime Lessor concerning the conduct, demeanor, or appearance
of
any person, Sublessee shall immediately take all steps necessary
to remove
the cause of the objection.
|
|
d)
|
Not
allow garbage, debris, or other waste materials (whether solid,
liquid or
gaseous) to collect or accumulate on the Subleased Premises or
in access
and service areas of the Subleased Premises used by Sublessee,
and
Sublessee shall cause to be removed from the Subleased Premises
any debris
and other waste material generated by Sublessee. Sublessee shall
use all
due care when effecting removal of all such waste and shall effect
such
removal pursuant to the applicable regulations existing at Subleased
Premises for the removal of waste as promulgated by the respective
Prime
Lessor, Sublessor or others having jurisdiction. Sublessee shall
keep all
lobbies, vestibules and steps within the Subleased Premises free
from dirt
and rubbish.
|
|
e)
|
Sublessee
is responsible to maintain at all times the Subleased Premises
and all
equipment, fixtures, and materials used by Sublessee thereon, or
in other
areas, in a clean and sanitary
manner.
|
It
is
intended that the standards and obligations imposed by this section shall
be
maintained or complied with by Sublessee in addition to its compliance with
any
applicable governmental laws, ordinances and regulations currently in effect
or
which may be enacted.
9
-
MAINTENANCE AND REPAIR
|
a)
|
Sublessee
shall take good care of the Subleased Premises while they are under
Sublessee’s control and shall make or cause to be made at its own expense
all installations, repairs, replacements, redecorating and other
maintenance necessary to keep 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.
|
-54-
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):
|
a)
|
Any
occupancy, management or use of the Subleased Premises, or areas
surrounding the Subleased Premises or the service areas, parking
areas, or
pedestrian areas in or around the Subleased Premises, by Sublessee
or any
of its directors, officers, agents, contractors, servants, employees,
licensees, invitees, successors and
assigns;
|
|
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
|
|
d)
|
Any
failure on the part Sublessee to comply with any of the covenants,
agreements, terms or conditions contained in this
Agreement.
|
12
-
INSURANCE
Without
limiting Sublessee’s obligation to indemnify Sublessor as provided for in this
Agreement, Sublessee shall procure and maintain, at its own cost and expense,
at
all times during the term of this Agreement, insurance of the following types
in
amounts not less than those indicated with insurers satisfactory to
Sublessor:
Comprehensive
public liability insurance with limits of not less than [*]
per
occurrence for death or bodily injury; workers compensation insurance with
statutory limits; and employer's liability insurance of not less than
[*]
in
limits.
___________
*Confidential
-55-
Such
insurance shall contain the following endorsements:
|
(1)
|
Name
Sublessor and the respective Prime Lessor, its parents and subsidiaries,
their respective directors, officers, employees, agents, successors
and
assigns, as Additional Insureds as it pertains to this Agreement
and the
respective Subleased Premises. Upon written notice from Sublessor,
Sublessee shall promptly cause any other party required to be named
by as
an Additional Insured under the Prime Agreement to be so
named.
|
|
(2)
|
Include
a Severability of Interest (Cross Liability) provision whereby
such
insurance applies separately to each insured to the extent of Sublessee’s
indemnity obligations hereunder.
|
|
(3)
|
Include
a breach of warranty clause in favor of the Additional Insureds,
whereby
such insurance shall not be invalidated by any breach of warranty
by
Sublessee.
|
|
(4)
|
Include
a blanket contractual liability clause to cover the liability and
indemnity assumed by the Sublessee under this
Agreement.
|
|
(5)
|
Provide
that such insurance is primary without right of contribution from
Sublessor’s insurance.
|
|
(6)
|
Provide
that Sublessor is not obligated for payment
of any premiums,
deductibles, retention or other self-insurances
thereunder.
|
|
(7)
|
Provide
for 30 days advance notice to Sublessor and the respective Prime
Lessor,
by registered or certified mail, of any cancellation, reduction,
lapse or
other material change.
|
|
(8)
|
Include
a Waiver of Subrogation clause in favor of the Additional
Insureds.
|
The
indemnities and insurance provisions contained or referred to herein shall
survive the expiration or other termination of this Agreement.
13
-
ASSIGNMENT
This
Agreement and the rights and obligations created hereunder may not be assigned
or delegated by Sublessee without the prior written consent of Sublessor
and, if
required of Sublessor under the applicable Prime Agreement, the applicable
Prime
Lessor; but subject to the foregoing, this Agreement and the rights and
obligations of the parties hereby created, shall be binding upon and inure
to
the benefit of the parties hereto, their respective successors, assigns and
legal representatives. Sublessor reserves the right to assign or transfer
its
interest hereunder without notice.
14
-
WAIVER
The
observance of any term of this Agreement may be waived (either generally
or in a
particular instance and either retroactively or prospectively) by the party
entitled to enforce such term, but such waiver shall be effective only if
it is
in writing signed by the party against which 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.
-56-
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]
-57-
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
-58-
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].
-59-
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.
-60-
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
-61-
ANNEX
1
to
the
Form of Assignment
DESCRIPTION
OF ASSIGNED SPACE
-62-
ANNEX
2
to
the
Form of Assignment
COPY
OF LEASE
-63-
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.]
|
-64-
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:_____________________________
-65-
EXHIBIT
C
to
the
Master Facility and Ground Handling Agreement
FORM
OF CONTINENTAL GROUND HANDLING AGREEMENT
(Continental
as Handling Company, Contractor as Carrier)
-66-
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: Chautauqua
Airlines, Inc.
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
Chief Financial Officer
(hereinafter
referred to as the “Carrier”)
And: Continental
Airlines, Inc.
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
Mail
Stop
HQSLG
▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
(hereinafter
referred to as the “Handling Company”)
effective
from: July
21,
2006
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: July
21,
2006
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 Republic Airways Holdings Inc., 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 Republic Airways Holdings Inc., 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.”
-67-
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
that does not constitute a Hub Airport, the Carrier shall be responsible
for supplying all ground handling equipment that is usable only
for
regional jets or turboprops of the type used by Contractor for
Scheduled
Flights (as opposed to other types of jets flown by the Handling
Company),
which, as of the date hereof, is the equipment set forth on Schedule
2
hereto, and which equipment shall not be used by Handling Company
for any
purpose other than providing ground handling services to Carrier.
At all
Hub Airports, the Handling Company shall be responsible for supplying
such
equipment. As between Handling Company and Carrier, Handling Company
shall
be responsible for supplying all other ground handling equipment
necessary
for the provision of ground handling services
hereunder.
|
-68-
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 11.14 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 11.08
of the
Capacity Purchase Agreement.
|
-69-
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by
their respective officers duly authorized thereuntu, as of the 21st day of
July,
2006.
| Handling Company: | Carrier: | ||
| Continental Airlines, Inc. | Chautauqua Airlines, Inc. | ||
| /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ | ||
|
|
|
||
| Name:
▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ Title: President |
Name:
▇▇▇▇▇
▇▇▇▇▇▇▇ Title: Chairman & CEO |
Schedule
1 Airports
Schedule
2 Carrier
Equipment
-70-
|
AHM
810 - Annex B
|
Schedule
1
CONTINENTAL
AIRPORTS [To Be Provided]
-71-
|
AHM
810 - Annex B
|
Schedule
2
CARRIER
EQUIPMENT
[to
be
added]
-72-
EXHIBIT
D
to
the
Master Facility and Ground Handling Agreement
FORM
OF CONTRACTOR GROUND HANDLING AGREEMENT
(Contractor
as Handling Company, Continental as Carrier)
-73-
CONTRACTOR
GROUND HANDLING AGREEMENT
(Contractor as Handling Company, Continental as
Carrier)
|
AHM
810 - Annex B
|
STANDARD
GROUND HANDLING AGREEMENT
SIMPLIFIED
PROCEDURE
ANNEX
B.SYS.0 - LOCATIONS AGREED SERVICES, FACILITIES AND
CHARGES
to
the
Standard Ground Handling Agreement (SGHA) of April 1993
Between: Continental
Airlines, Inc.
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
Mail
Stop
HQSLG
▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
(hereinafter
referred to as the “Carrier”)
And: Chautauqua
Airlines, Inc.
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
Chief Financial Officer
(hereinafter
referred to as the “Handling Company”)
effective
from: July
21,
2006
This
Annex B.SYS.0
for
the
location: The
Handling Company shall provide ground handling services as provided herein
at
the airports set forth on Schedule 1 hereto.
The
Carrier may elect, at its sole discretion and upon at least 90 days notice
to
the Handling Company, to require the Handling Company to provide ground handling
services to the Carrier at any airport other than a Hub Airport. Schedule
1
shall be amended to reflect each such addition.
Notwithstanding
the foregoing, the Carrier may elect, at its sole discretion and upon at
least
90 days’ prior written notice to the Handling Company, to terminate the
provision of services covered hereunder by the Handling Company at any airport.
In addition, the provisions of this agreement shall terminate with respect
to
any airport to which Scheduled Flights cease to be scheduled (other than
a
temporary cessation, it being understood that the cessation of seasonal
Scheduled Flights upon the end of the relevant season shall constitute a
temporary cessation if such Scheduled Flights are expected to resume in the
subsequent relevant season). Schedule 1 shall be amended to reflect each
such
termination.
is
valid
from: July
21,
2006
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 Republic Airways Holdings Inc., 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 Republic Airways Holdings Inc., 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.”
-74-
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.
|
FEES
FOR SERVICES COVERED UNDER THE SECTIONS LISTED
ABOVE:
|
The
charges set forth below do not include airport landing fees, or any other
airport taxes or charges. The Carrier will be responsible for such charges
at
its own expense and shall make payment directly therefor.
Flight
Fee:
|
The
Carrier shall pay to the Handling Company a Base Per Flight Fee
for the
ground handling services 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.
|
|
1.1.3
|
EQUIPMENT
PROVIDED BY CARRIER:
|
|
Notwithstanding
anything contained in Paragraph 1.1.1 to the contrary, at each
airport,
the Carrier shall be responsible for supplying all ground handling
equipment that is usable only for jet aircraft other than regional
jets,
which, as of the date hereof, is the equipment set forth on Schedule
2
hereto, and which equipment shall not be used by Handling Company
for any
purpose other than providing ground handling services to Carrier.
As
between Handling Company and Carrier, Handling Company shall be
responsible for supplying all other ground handling equipment necessary
for the provision of ground handling services
hereunder.
|
PARAGRAPH
2 - ADDITIONAL CHARGES
|
2.1
|
Services
in Annex A which are not included in Paragraph 1 of this Annex
and all
other additional services when available will be charged for as
follows:
|
|
2.1.1.
|
Overtime.
If, upon Carrier’s request, the Handling Company agrees to provide
additional personnel in order to handle a flight outside of the
scheduled
arrival and departure times or for any other reason, the Handling
Company
will charge Carrier the Handling Company’s actual cost of providing such
additional personnel.
|
|
2.1.2.
|
Supplies. The
Carrier will furnish the Handling Company those items specific
to its
operation, such as, but not limited to, cabin appearance supplies,
(i.e.
safety cards, pillows and blankets), baggage tags, forms, ticket
envelopes, tariffs, timetables, etc. Any materials or supplies
provided to
the Carrier by the Handling Company will be charged back to the
Carrier at
the Handling Company’s replacement
cost.
|
|
2.1.3.
|
Third
Party Services.
The Carrier shall, at the Handling Company’s discretion, be responsible
for the cost and/or a pro-rata share of the cost, whichever is
applicable,
incurred by the Handling Company for outside vendor services, such
as, but
not limited to, water/lavatory services, cabin appearance, ramp
handling
services, bussing services, aircraft de-icing, aircraft washing
and
aircraft maintenance services, skycaps, security screening, armed
guard
and armored car services, baggage claim security, janitorial services,
baggage delivery services, wheel chair services, electric cart
services,
denied boarding compensation, distressed passenger meals and overnight
accommodation, etc.
|
|
2.1.4.
|
De-Icing.
For de-icing services provided by the Handling Company, the Handling
Company shall charge the Carrier the procurement cost of fluids
and all
other actual costs of the Handling Company for providing such de-icing
services including the Handling Company’s actual labor costs associated
with such services.
|
|
2.1.5.
|
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.
|
-75-
PARAGRAPH
3 - DISBURSEMENTS
|
3.1
|
Disbursements
made on behalf of the Carrier shall be reimbursed to the Handling
Company
at cost.
|
PARAGRAPH
4 -SETTLEMENT OF ACCOUNT
|
4.1
|
Notwithstanding
Article 7.2 of the Main Agreement and subject to the setoff provisions
of
the Capacity Purchase Agreement, settlement of account shall be
effected
through the IATA Clearing House via the Airlines Clearing House
in
accordance with the Rules and Regulations of the IATA Clearing
House and
the Airlines Clearing House.
|
PARAGRAPH
5 - TERMINATION OF AGREEMENT
|
5.1
|
This
Agreement may be terminated by either party at any time following
the
termination of the Capacity Purchase Agreement; provided, that
this
Agreement may not be terminated pursuant to this sentence during
the
Wind-Down Period with respect to any location to which Scheduled
Flights
continue to fly during such Wind-Down Period. If the Carrier fails
to make
payments as agreed upon in Paragraph 4.1., the Handling Company
may
terminate the agreement upon twenty-four (24) hours notice by letter,
teletype or facsimile.
|
PARAGRAPH
6 - TRANSFER OF SERVICES
|
6.1
|
In
accordance with Article 3.1 of the Main Agreement, the Handling
Company
may subcontract the services of Annex A as necessary in order to
support
the Carrier’s operation.
|
PARAGRAPH
7 -
OTHER
MODIFICATIONS TO MAIN AGREEMENT
|
7.1
|
Upon
the request of the Carrier from time to time at its sole discretion,
and
for so long as requested by the Carrier during the Term of this
Agreement,
the Handling Company shall provide ground handling services pursuant
to
this Agreement, for the fees specified for such services herein,
at any
location covered by this Annex B to any of the Carrier’s codeshare
partners.
|
|
7.2
|
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.
|
7.3 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.
|
7.4
|
In
connection with the determination of the Base Per Flight Fee pursuant
to
Section 1.1.2 above and the charges pursuant to Section 2 above,
Handling
Company shall make available for inspection by Carrier and its
outside
auditors, within a reasonable period of time after Carrier makes
a written
request therefor, all of Handling Company’s books and records (including
all financial and accounting records) relating to this Agreement
and the
provision of services hereunder by Handling Company. Each of Carrier
and
its outside auditors shall be entitled to make copies and notes
of such
information as it deems necessary and to discuss such records with
Handling Company’s Chief Financial Officer or such other employees or
agents of Handling Company knowledgeable about such records. Upon
the
reasonable written request of Carrier or its outside auditors,
Handling
Company will cooperate with Carrier and its outside auditors to
permit
Carrier and its outside auditors access to Handling Company’s outside
auditors for purposes of reviewing such
records.
|
|
7.5
|
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.
|
|
7.6
|
This
Agreement shall be governed by and construed in accordance with
the laws
of the State of Texas as provided in Section 11.14 of the Capacity
Purchase Agreement.
|
|
7.7
|
Any
Claims arising out of or related to this Agreement shall be resolved
by
binding arbitration pursuant to the provisions of Section 11.08
of the
Capacity Purchase Agreement.
|
-76-
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by
their respective officers duly authorized thereunto, as of the 21st day
of
July, 2006.
| Carrier: | Handling Company: | ||
| Continental Airlines, Inc. | Chautauqua Airlines, Inc. | ||
| By: | By: | ||
| /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ | ||
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|
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||
| Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Title: President |
Name:
▇▇▇▇▇ ▇▇▇▇▇▇▇ Title: Chairman & CEO |
Schedule
1 Airports
Schedule
2 Carrier
Equipment
-77-
|
AHM
810 - Annex B
|
Schedule
1
CONTRACTOR
AIRPORTS (To Be Provided)
-78-
|
AHM
810 - Annex B
|
Schedule
2
CARRIER
EQUIPMENT
[to
be
added]
-79-
EXHIBIT
D
Terms
of Codeshare Arrangements
1. Contractor’s
use of CO code.
During
the Term of the Agreement, Continental shall place its designator code, “CO”, on
all Scheduled Flights operated by Contractor. Continental may suspend the
display of its code on flights operated by Contractor if Contractor is in breach
of any of its safety-related obligations, or material breach of any of its
operational 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) in
any
other manner prescribed by law.
3. Terms
and Conditions of Carriage.
In all
cases the contract of carriage between a passenger and a carrier will be that
of
the carrier whose code is designated on the ticket. Continental and Contractor
shall each cooperate with the other in the exchange of information necessary
to
conform each carrier’s contract of carriage to reflect service offered by the
other carrier.
4. Notification
of irregularities in operations.
Contractor shall promptly notify Continental of all irregularities involving
a
CO* Flight which result in any material damage to persons or property as soon
as
such information is available and shall furnish to Continental as much detail
as
practicable. For purposes of this section, notification shall be made as
follows:
Continental
Airlines System Operations Control Center (SOCC)
▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
Attention:
Operations Director
Phone
no.
(▇▇▇) ▇▇▇-▇▇▇▇
Fax
no.
(▇▇▇) ▇▇▇-▇▇▇▇
SITA
FCFDDCO
5. Code
Sharing License.
(a) Grant
of License.
Subject
to the terms and conditions of the Agreement, Continental hereby grants to
Contractor a nonexclusive, nontransferable, revocable license to use the CO*
designator code on all of its flights operated as a CO* Flight.
(b) Control
of CO* Flights.
Subject
to the terms and conditions of the Agreement, Contractor shall have sole
responsibility for and control over, and Continental shall have no
responsibility for, control over or obligations or duties with respect to,
each
and every aspect of Contractor’s operation of CO* Flights.
6. Display
of other codes.
During
the Term of the Agreement, Continental shall have the exclusive right to
determine which other airlines (“Alliance
Airlines”),
if
any, may place their two letter designator codes on flights operated by
Contractor with Covered Aircraft and to enter into agreements with such Alliance
Airlines with respect thereto.
Contractor
will cooperate with Continental and any Alliance Airlines in the formation
of a
code share relationship between Contractor and the Alliance Airlines and enter
into reasonably acceptable agreements and make the necessary governmental
filings, as requested by Continental, with respect thereto.
7. Customer
First.
During
the period that Continental places its designator code on flights operated
by
Contractor, Contractor will adopt and follow plans and policies comparable
(to
the extent applicable and permitted by law and subject to operational
constraints) to Continental’s Customer First Commitments as presently existing
and hereafter modified. Contractor acknowledges that it has received a copy
of
Continental’s presently existing Customer First Commitments. Continental will
provide Contractor with any modifications thereto promptly after they are
made.
-80-
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.
-81-
EXHIBIT
F
Fuel
Purchasing Agreement
THIS
FUEL
PURCHASING AGREEMENT (this “Agreement”)
is
made as of this 21st day of July, 2006, by and between CONTINENTAL AIRLINES,
INC., a Delaware corporation (“Continental”),
and
Chautauqua Airlines, Inc. an Indiana corporation (“Contractor”).
WHEREAS,
Continental, Contractor and Republic Airways, Inc., 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 jet fuel meeting ASTM
Specification D 1655-99 (such fuel being referred to herein as “Fuel”).
The
definition of future products and the scope of this Agreement may be revised
from time to time upon mutual consent of the parties.
3. Services
to Be Provided.
Continental shall supply or cause to be supplied to 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 on Paragraph
A
of
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, in each case of clauses (i) through (iii), with
respect only to Contractor’s provision of Regional Airline
Services.
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.
___________
*Confidential
-82-
9. Arbitration
of Disputes.
Any
dispute arising hereunder shall be resolved in accordance with the provisions
of
Section
10.08
of the
Capacity Purchase Agreement.
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:
Chautauqua
Airlines, Inc.
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
Chief Financial Officer
Telecopy
No.: ▇▇▇-▇▇▇-▇▇▇▇
with
a
copy to:
▇▇▇▇▇▇
▇.
▇▇▇▇▇
Wexford
Capital LLC
▇▇▇
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
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.
-83-
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
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
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. 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.
-84-
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. | CHAUTAUQUA AIRLINES, INC. | ||
| /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ | ||
|
|
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||
| Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Title: President |
Name:
▇▇▇▇▇ ▇▇▇▇▇▇▇ Title: Chairman & CEO |
-85-
EXHIBIT
G
Use
of Continental Marks and Other Identification
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1.
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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.
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2.
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Ownership
of the Continental Marks and Other Identification.
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a.
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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.
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b.
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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
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3.
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Use
of the Continental Marks and the Other Identification.
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a.
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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.
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b.
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Contractor
shall use the Identification on all Covered Aircraft (other than
the Spare
Aircraft) and all facilities, equipment and printed materials used
in
connection with the Regional Airline
Services.
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c.
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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.
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d.
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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.
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e.
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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.
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4.
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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.
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5.
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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.
|
-86-
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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.
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7.
|
Continental
Marks.
The Continental Marks are as
follows:
|
CONTINENTAL
EXPRESS
CONTINENTAL
EXPRESS’S LOGO (DESIGN) IN COLOR
CONTINENTAL
EXPRESS’S LOGO (DESIGN) IN BLACK & WHITE
[Missing
Graphic Reference]
8. Aircraft
Livery.
With
the exception of the Spare Aircraft (which may be in neutral 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.
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9.
|
Survival.
The provisions of this Exhibit
G
shall survive the termination of this Agreement for a period of six
years.
|
-87-
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.
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2.
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Ownership
of the Contractor Marks.
|
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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
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|
b.
|
Continental
acknowledges Contractor’s ownership of the Contractor Marks and further
acknowledges the validity of the Contractor Marks. Continental agrees
that
it will not do anything that in any way infringes or abridges Contractor’s
rights in the Contractor Marks or directly or indirectly challenges
the
validity of the Contractor Marks.
|
|
3.
|
Use
of the Contractor Marks.
|
|
a.
|
Continental
shall use the Contractor Marks only as authorized herein by Contractor
and
in accordance with such standards of quality as Contractor may
establish.
|
|
b.
|
Continental
shall use the Contractor Marks as necessary or appropriate in
Continental’s sole discretion in connection with the Regional Airline
Services, including without limitation the sale or disposition by
Continental of the seat inventory of the Scheduled
Flights.
|
|
c.
|
Continental
shall not use the Contractor Marks for any purpose other than as
set forth
in this Exhibit
H,
and specifically shall have no right to use the Contractor Marks
in
connection with any other operations of
Continental.
|
|
d.
|
Contractor
may change the Contractor Marks at any time and from time to time
(including by adding or deleting marks from the list specified in
this
Exhibit
H),
in which case Continental shall as soon as practicable make such
changes
as are requested by Contractor to utilize the new Contractor Marks;
provided
that Contractor shall either pay directly the reasonable costs of
making
such changes to the Contractor Marks or shall promptly reimburse
Continental for its reasonable expenses incurred in making such
changes.
|
|
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:
|
[Missing
Graphic Reference].
|
8.
|
Survival.
The provisions of this Exhibit
H
shall survive the termination of this Agreement for a period of six
years.
|
-88-
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.
|
| · |
Continental
will provide all liveried catering items, including cups, napkins,
etc.
|
| · |
-89-
EXHIBIT
J
Reasonable
Operating Constraints
The
weekly schedules for the Covered Aircraft shall meet all of the following
requirements:
1. Minimum
& Maximum Scheduling Parameters:
| Minimum | Maximum | |
| Scheduled Block Hours per Aircraft per day | [*] | [*] |
| Scheduled Departures per Aircraft per day | [*] | [*] |
Note:
the
above minimum and maximum schedule parameters apply only to those Covered
Aircraft in revenue service, not to Spare Aircraft.
2. Aircraft
Maintenance Requirements.
One-third
of the Covered Aircraft (rounded up to the nearest whole number excluding Spare
Aircraft) shall be scheduled for a minimum of nine (9) hours of overnight
maintenance per aircraft for six (6) days per week. The parties will agree
to a
reasonable number of aircraft that shall be scheduled for sixteen (16) hours
of
continuous maintenance time per aircraft each week beginning on Saturday
afternoon.
3. Maintenance
Bases.
Contractor
and Continental will meet and confer on maintenance bases and maintenance base
operations as they related to the Covered Aircraft.
4. Crew
Overnights.
The
schedule shall allow for single overnights of crews in outstations and shall
not
require Contractor to schedule any continuous duty overnights. Any additional
costs associated with continuous duty overnights or high-speed overnights shall
be for the account of Continental and shall be invoiced separately by Contractor
as a Reconciled Expense.
5. Certain
Other Restrictions.
Notwithstanding
any other provision of this Agreement, Contractor shall not be required to
provide Regional Airline Services to Continental consisting of Scheduled Flights
to or from any of the following locations at any time when such location
constitutes a Continental Hub Airport: [*].
___________
*Confidential
-90-
EXHIBIT
K
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.
___________
*Confidential
-91-
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.
-92-
EXHIBIT
L
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.
|
-93-
EXHIBIT
M
Form
of Guarantee of Parent
THIS
GUARANTEE AGREEMENT (this “Guarantee”),
effective as of July 21, 2006
(the
“Effective
Date”)
by
REPUBLIC AIRWAYS HOLDINGS INC., a Delaware corporation (“Guarantor”),
for
the benefit of CONTINENTAL AIRLINES, INC., a Delaware
corporation (“Continental”).
RECITALS
WHEREAS
Continental, Guarantor and Chautauqua Airlines, Inc., an Indiana corporation
(“Contractor”)
are
prepared to enter into that certain Capacity Purchase Agreement, dated as of
July 21, 2006 (“CPA”);
WHEREAS,
pursuant to the CPA, Contractor 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 Contractor are prepared to enter into the Ancillary
Agreements pursuant which Contractor 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,
Contractor 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
XI
|
|
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.
“Contractor”
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(b).
“Effective
Date”
has
the
meaning given to that term in the preamble.
“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.
-94-
|
ARTICLE II
|
|
GUARANTEE
|
Section
2.01 Guarantee
of Obligations. Guarantor
unconditionally, absolutely and irrevocably guarantees unto the Beneficiaries
the
timely payment and performance by Contractor 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 Contractor 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. 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 Contractor 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 Contractor of any of its
interest in the CPA or any Ancillary Agreement (without implying that Contractor
has consented or will consent to any such sale or transfer);
e. Any
sale
or transfer by Guarantor of any of its interest in Contractor (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 Contractor,
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.
-95-
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, 2004;
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 Contractor 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
Contractor’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 Contractor.
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 Contractor 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.
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|
ARTICLE
III
|
|
MISCELLANEOUS
|
Section
3.01 Exhausting
Recourse. Continental
shall not be obligated to pursue or exhaust its recourse against Contractor
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 Contractor or failure to
give any such notice to or make any such demand on Contractor 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 Contractor 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.
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.
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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:
Republic
Airways Holdings Inc.
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
President and Chief Executive Officer
Telecopy
No.: ▇▇▇-▇▇▇-▇▇▇▇
with
a copy to:
▇▇▇▇▇▇
▇.
▇▇▇▇▇
Wexford
Capital LLC
▇▇▇
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
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.: (▇▇▇) ▇▇▇-▇▇▇▇
and
to:
Continental
Airlines, Inc.
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
Attention:
Staff Vice President - Financial Planning
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.
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EXECUTED
as of the Effective Date.
| GUARANTOR: | ||
| |
|
|
| By: | /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ | |
|
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇ |
||
| Title: Chairman, President and CEO | ||
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