AMENDED AND RESTATED AIRLINE SERVICES AGREEMENT BETWEEN MOKULELE FLIGHT SERVICE, INC. AND SHUTTLE AMERICA CORPORATION DATED AS OF OCTOBER 8, 2008
EXHIBIT
10.2
CONFIDENTIAL
TREATMENT
REQUESTED
PURSUANT TO RULE 24b-2
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.
CONFIDENTIAL
EXECUTION
VERSION
AMENDED
AND RESTATED AIRLINE SERVICES AGREEMENT
BETWEEN
MOKULELE
FLIGHT SERVICE, INC. AND
SHUTTLE
AMERICA CORPORATION
DATED
AS OF OCTOBER 8, 2008
AMENDED
AND RESTATED AIRLINE SERVICES AGREEMENT
This
Amended and Restated Airline Services Agreement (this “Agreement”), dated as
of October 8, 2008 (the “Effective Date”), is
between Mokulele Flight Service, Inc., a Hawaii corporation (“Mokulele”), and
Shuttle America Corporation, an Indiana corporation (“Shuttle”) and
acknowledged by Republic Airline, Inc. (“RAI”).
WHEREAS, Mokulele and RAI
entered into that certain Airline Services Agreement, dated as of October 1,
2008 (“Original
Airline Services Agreement”);
NOW, THEREFORE, in
consideration of the foregoing premises and the mutual covenants and obligations
hereinafter contained, RAI and the parties agree to amend and restate the
Original Airline Services Agreement in its entirety as follows:
ARTICLE
I
DEFINITIONS
Capitalized
terms used in this Agreement (including, unless otherwise defined therein, in
the Schedules, Appendices and Exhibits to this Agreement) shall have the
meanings set forth in Exhibit A
hereto.
ARTICLE
II
AIRLINE
SERVICES, SCHEDULES AND FARES
Section
2.01 Capacity
Purchase. Mokulele agrees to purchase the capacity of each
Covered Aircraft for the period beginning on the date such aircraft is presented
for service by Shuttle under this Agreement and ending on the last day of the
Term, in each case unless such aircraft is earlier withdrawn pursuant to Article VIII, all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,
Shuttle shall provide all of the scheduled service capacity of the Covered
Aircraft solely to Mokulele and use the Covered Aircraft solely to operate the
Scheduled Flights. Except as provided in Section 2.01(e), the
Covered Aircraft may not be used by Shuttle for any other purpose without the
express prior written consent of Mokulele. During the Term (as such
term is defined in Section 8.01) and so
long as Mokulele is not in default under this Agreement or the Loan Agreement
(as such term is defined in Section 2.05),
Shuttle shall not enter into any agreement with any other air carrier to operate
aircraft on routes within the state of Hawaii.
(a) Fares,
Rules and Seat Inventory; Reservations Capabilities. Mokulele
shall establish and publish all fares and related tariff rules for all seats on
the Covered Aircraft. Shuttle shall not publish any fares, tariffs,
or related information for the Covered Aircraft. In addition,
Mokulele shall have complete control over all seat inventory and revenue
management decisions for the Covered Aircraft, including overbooking levels,
discount seat levels and allocation of seats among various fare
buckets. All costs associated with system configuration and interface
for Mokulele’s requirements will be paid directly by Mokulele.
(b) Flight
Schedules. Mokulele shall, in its sole discretion, establish
and publish all schedules for the Covered Aircraft (such scheduled flights,
together with Charter Flights and ferry flights required to accommodate such
scheduled flights and Charter Flights or otherwise made at Mokulele’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 arranged by Mokulele;
provided that such schedules shall be subject to Reasonable Operating
Constraints. Shuttle shall remain in sole operational control of the
Covered Aircraft at all times. Subject to the notice requirement set
forth in Section 4.08 regarding international service, Mokulele will provide
Shuttle with a preliminary schedule in a Standard Schedule Input Message (“SSIM”) file format or
Microsoft Excel format 45 days prior to the first day of the month to which the
preliminary schedule relates. Shuttle will review the proposed
schedule and provide feedback to Mokulele no later than 14 days following
receipt of the preliminary schedule by Shuttle. Mokulele will send
Shuttle a Final Monthly Schedule, together with operational assumptions for the
month (the “Operational
Assumptions”), including without limitation the weighted average number
of Covered Aircraft, estimated passengers, revenue passenger miles, departures,
block hours, and flights hours, based on the Final Monthly Schedule, no later
than two Business Days following receipt of Shuttle’s comments to the
preliminary schedule. Following delivery of the Final Monthly
Schedule, however, Mokulele may make such adjustments to the proposed Final
Monthly Schedule as it deems appropriate (subject to Reasonable Operating
Constraints).
(c) 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
Exhibit
B.
(d) Spare
Aircraft. The Spare Aircraft shall be used by Shuttle solely
as an operational and maintenance spare to replace Covered Aircraft that are out
of service due to scheduled maintenance, unscheduled maintenance or aircraft
damage or to cover for other irregular operations, provided, there shall be no
Spare Aircraft available for operations hereunder on or after March 1,
2009.
(e) Shuttle
Charters or Other Operations. Shuttle shall be permitted to
operate the Covered Aircraft to fly charters so long as such operation does not
adversely affect the performance by Shuttle of its obligations under this
Agreement.
Section
2.02 Flight-Related
Revenue. [*], Shuttle acknowledges and
agrees that all revenues resulting from the sale and issuance of passenger
tickets associated with the operation of the Covered Aircraft and all other
sources of revenue associated with the operation of the Covered Aircraft,
including without limitation fees related to ticket changes, unaccompanied
minors, excess baggage and nonrevenue pass travel, revenues relating to the
transportation of cargo or mail, and revenues associated with food, beverage,
passenger entertainment, 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 Mokulele (or, if received by Shuttle, shall be promptly
accounted for and remitted to Mokulele).
Section
2.03 Pass
Travel. Shuttle operational personnel traveling to provide
critical repair services, management personnel traveling on business in
connection with this Agreement, and dead heading Shuttle crews will be entitled
to travel on flights operated by Shuttle or Mokulele as “must ride”
passengers. Commuting Shuttle crew members and all other Shuttle
employees will be entitled to travel on Mokulele and Mokulele Connect flights at
a priority category one level below the lowest category for Mokulele employees
and subject to the fare policies applicable to individuals traveling at that
priority level. To the extent permitted by existing arrangements,
Mokulele employees will be entitled to (x) travel on Scheduled Flights operated
by Shuttle under the category of travel and fare policies to which they are
entitled to travel on Mokulele flights, and (y) will be entitled to travel on
all other Shuttle operated flights at a category one level below the lowest
category for Shuttle employees.
Section
2.04 Conversion
of Covered Aircraft. Mokulele will be responsible for all
costs and expenses of preparing each Covered Aircraft prior to its being placed
into service hereunder in accordance with the specifications and cabin
configurations as required by Exhibit
C.
Section
2.05 Conditions
Precedent. As conditions precedent to the obligations of
Shuttle pursuant to this Agreement, Mokulele shall (i) enter into an
administrative services agreement in form and substance satisfactory to Shuttle
in respect of certain administrative and support services to be provided to
Mokulele by Shuttle and (ii) enter into a loan agreement in form and substance
satisfactory to Shuttle in respect of the proposed financing by Shuttle (the
“Loan
Agreement”) and satisfy all conditions precedent therein; provided that
Shuttle may terminate this Agreement if the foregoing conditions precedent are
not satisfied on or prior to October 12, 2008. In the event of such a
termination by Shuttle, Mokulele shall reimburse Shuttle for expenses incurred
by Shuttle or its Affiliates (including reasonable expenses of counsel) in
connection with (x) the negotiation of this Agreement, the Loan Agreement and
all related agreements and (y) preparations by Shuttle to perform any of the
foregoing; provided that such reimbursement shall not exceed [*].
ARTICLE
III
SHUTTLE
COMPENSATION
Section
3.01 Base and
Incentive Compensation. For and in consideration of the
aircraft and services to be provided by Shuttle hereunder, Mokulele shall pay
Shuttle the base and incentive compensation as provided in Exhibit D hereto,
subject to the terms and conditions set forth in this Article
III.
*Confidential
Section
3.02 Periodic
Adjustment of Base Compensation. The rates under this
Agreement set forth in Appendix 1 to Exhibit D hereto
shall remain in effect throughout the Term of this Agreement, provided, the rates on
Appendix 1 to Exhibit D hereto will be adjusted from time to time as described
in Exhibit D,
and, provided further,
that the rates on Appendix 1 to Exhibit D designated
as “Subject to Escalation” will remain in effect through December 31, 2008, and
thereafter shall be adjusted on each January 1, beginning with January 1, 2009,
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 ([*] +
(Annual Change in PPI [*])), where PPI = the annual
Producer Price Index, Commodities, Finished Goods (not seasonally adjusted),
Series ID: WPUSOP3000 as published by the Bureau of Labor Statistics
for January of the applicable year, provided further, annual
adjustments will not decrease from the prior year and will not increase more
than [*] over the prior
year. Adjustments will be calculated as soon as the PPI for the prior
year is published by the Bureau of Labor Statistics and the adjusted rates will
be applied retroactively to the 1st day of the calendar year and paid as part of
the next monthly payment.
Section
3.03 Shuttle
Expenses. Except as provided otherwise in Section 3.04, Shuttle
shall pay in accordance with commercially reasonable practices all expenses
incurred in connection with Shuttle’s provision of Regional Airline
Services.
Section
3.04 Mokulele
Expenses
(a) Certain
Expenses. Mokulele shall incur directly those expenses
relating to the Regional Airlines Services that are described in Paragraph 6 of Exhibit
D.
(b) Design
Changes. Mokulele 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 Mokulele,
including facility-related design changes and the cost of changes in aircraft
livery, in each case that occur outside of the Covered Aircraft specifications,
livery and other requirements of Exhibit C to this
Agreement or as otherwise specified in this Agreement.
Section
3.05 Audit
Rights; Financial Information. Shuttle shall make available
for inspection by Mokulele and its outside auditors and advisors, within a
reasonable period of time after Mokulele makes a written request therefor, all
of Shuttle’s books and records (including all financial and accounting records
and operations reports, and records of other subsidiaries or affiliates of
Shuttle, if any) as necessary to audit any reimbursement of Pass-Thru Costs or
other expenses set forth in Paragraph 6 of Exhibit D
hereto. In connection with such audit, Mokulele 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 Shuttle’s
Chief Financial Officer or such other employees or agents of Shuttle
knowledgeable about such records. Upon the reasonable written request
of Mokulele or its outside auditors or advisors, Shuttle will cooperate with
Mokulele and its outside auditors and advisors to permit Mokulele and its
outside auditors and advisors access to RAI Holding’s outside auditors for
purposes of reviewing such records.
Section
3.06 Billing
and Payment; Reconciliation.
(a) Billing
and Payment. No later than ten calendar days prior to the
beginning of the month covered by a Final Monthly Schedule and the Operational
Assumptions for a given month pursuant to Section 2.01(b),
Shuttle 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 and Operational
Assumptions pertain, calculated in accordance with Paragraph 2 of Exhibit
D. Mokulele shall pay Shuttle the amount due under such
invoice (the “Invoiced
Amount”), subject to Mokulele’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 Shuttle to Mokulele, as follows:
(i) Thirty-four
percent (34%) of the Invoiced Amount on the later of the first Business Day of
the covered month or the third Business Day following receipt by Mokulele of the
invoice, by electronic transfer of funds to a bank account designated by
Shuttle;
(ii) Thirty-three
percent (33%) of the Invoiced Amount on the 10th calendar day of the
covered month, or if such day is not a Business Day, the next Business Day
thereafter, by electronic transfer of funds to a bank account designated by
Shuttle; and
(iii) Thirty-three
percent (33%) of the Invoiced Amount on the 20th calendar day of the covered
month, or if such day is not a Business Day, the next Business Day thereafter,
by electronic transfer of funds to a bank account designated by
Shuttle.
(b) Reconciliation. Not
later than 15 days following the end of each month, Shuttle and Mokulele shall
reconcile actual amounts due in respect of such month for the Fixed Cost and
Variable Cost elements set forth in Appendix 1 to Exhibit D with the
estimated amounts included in the Invoiced Amount for such elements for such
month in accordance with the terms and conditions set forth in Exhibit
D. On or before the 5th day following the end of such
reconciliation period (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 Mokulele to Shuttle, together with
any payment to be made by Mokulele pursuant to Section 3.06(a)(iii)
above, or (ii) shall be paid by Shuttle to Mokulele or set off by Mokulele
against any other amounts owing to Shuttle under this Agreement.
(c) Reimbursed
Costs. From time to time it is anticipated that Shuttle may
incur certain costs and expenses in connection will the provision of Regional
Airline Services under this Agreement for which Shuttle will be reimbursed by
Mokulele. These costs and expenses are indicated as “Pass-Thru Costs”
on Appendix 1
to Exhibit
D. Shuttle will pay all Pass-Thru Costs in advance, and will
submit to Mokulele an invoice together with all supporting documentation for all
Pass-Thru Costs incurred. Mokulele will reimburse Shuttle for all
uncontested Pass-Thru Costs within five Business Days following receipt of the
invoice and supporting documentation by electronic transfer of funds to a bank
account designated by Shuttle will provide any additional supporting information
and documentation to Mokulele for any Pass-Thru Costs contested by Mokulele at
Shuttle’s earliest convenience. Any disputed Pass-Thru Costs not
resolved within 30 days of receipt of the invoice by Mokulele will be resolved
in accordance with the arbitration provisions of this Agreement.
*Confidential
Section
3.07 Security
Payment. Mokulele shall pay
Shuttle the sum of [*]
by paying [*] on or
prior to each date on which a Covered Aircraft (as described by Exhibit B) is
placed into service hereunder (such amounts collectively referred to herein as
the “Security
Payment”); [*]. The Security
Payment shall be the property of Shuttle. If a default by Mokulele
shall occur hereunder and be continuing, then, in addition to any other rights
that Shuttle may have hereunder or under applicable law, Shuttle may at any time
as an agreed remedy set off all or any portion of the amount of the Security
Payment in full or partial payment for amounts constituting or corresponding to
any amounts owed by Mokulele to Shuttle hereunder. If Shuttle
exercises any such right of set-off, Mokulele shall immediately upon demand from
Shuttle pay to Shuttle an amount equal to such set-off. [*].
Section
3.08 [*]
ARTICLE
IV
SHUTTLE
OPERATIONS AND AGREEMENTS WITH MOKULELE
Section
4.01 Crews,
Etc. Shuttle shall be responsible for providing all crews
(flight and cabin) and maintenance personnel necessary to operate the Scheduled
Flights and for all aspects (personnel and other) of dispatch
control. Flight crews will be domiciled in Honolulu, Hawaii and any
other location deemed suitable for Shuttle’s staffing
requirements. Shuttle pilots will wear neutral uniforms with Shuttle
logo items. Shuttle flight attendants will wear neutral uniforms with
accessories displaying approved Mokulele Marks and designs. Shuttle
flight attendants will obtain Mokulele branded accessories through Mokulele or
its approved vendor (subject to the vendor’s approval), and Mokulele will be
responsible for all costs and expenses, including shipping, relating to their
orders. Notwithstanding the foregoing, at its election, Mokulele may
provide alternative “Hawaii style” uniforms for pilots and flight crew; provided that, any such
alternate uniforms would be subject to the approval of Shuttle and provided at
the sole cost and expense of Mokulele.
Section
4.02 Governmental
Regulations. Shuttle 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 Shuttle to perform the services required
by this Agreement. All flight operations, dispatch operations and all
other operations and services undertaken by Shuttle pursuant to this Agreement
shall be conducted, operated and provided by Shuttle 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 Shuttle in compliance with all laws, regulations and governmental
requirements, Shuttle’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, Shuttle shall provide Regional
Airline Services with appropriate standards of care, but in no event lower than
such standards provided by Shuttle for its other scheduled airline partners as
well as such standards held by Mokulele as of the date of this
Agreement. Mokulele 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
Shuttle. Shuttle shall achieve at least the comparable quality of
airline service as provided by Shuttle for its other scheduled airline partners
and by Mokulele, subject to limitations imposed by the type of aircraft used by
Shuttle and its route network. Shuttle shall comply with all airline
customer service commitments and policies of Mokulele as of the date hereof,
including without limitation the 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, Shuttle shall maintain adequate aircraft staffing levels,
to achieve a level of operations that routinely meet or exceed the on-time
performance Target Threshold and the completion factor Target Threshold as set
forth in Appendix
2 to Exhibit
D. Shuttle shall provide Mokulele with timely communication
regarding the status of all Scheduled Flights. At either party’s
request, Shuttle and Mokulele will meet to discuss and review Shuttle’s customer
service and handling procedures and policies and its employees’ conduct,
appearance and training standards and policies. Mokulele shall give
Shuttle 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. Shuttle shall promptly notify Mokulele of all
irregularities involving a Scheduled Flight or Covered Aircraft operated by
Shuttle, 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. Shuttle shall furnish to Mokulele as much detail as
practicable concerning such irregularities and shall cooperate with Mokulele at
Shuttle’s own expense in any appropriate investigation. Mokulele
shall promptly notify Shuttle of all irregularities involving ground handling in
respect of Scheduled Flights or Covered Aircraft, including, without limitation,
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. Mokulele shall furnish to
Shuttle as much detail as practicable concerning such irregularities and shall
cooperate with Shuttle at Mokulele’s own expense in any appropriate
investigation.
Section
4.05 Emergency
Response. Shuttle shall adopt Mokulele’s Emergency Response
Plan for aircraft accidents or incidents. In the event of an accident
or incident involving a Covered Aircraft or Scheduled Flight, Mokulele will have
the right to manage the emergency response efforts on behalf of Shuttle with
full cooperation from Shuttle and if such right is exercised, Shuttle
acknowledges and agrees that Mokulele representatives will conduct all public
communications, and that Shuttle will make no public statements, regarding such
accident or incident.
Section
4.06 Safety
Matters. In the event of a reasonable safety concern, Mokulele
shall have the right, at its own cost, to inspect, review, and observe Shuttle’s
operations of Scheduled Flights. Notwithstanding the conduct or
absence of any such review, Shuttle 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 Mokulele
responsible for such safety matters.
Section
4.07 Codeshare
Terms. Shuttle agrees to operate all Scheduled Flights using
the Mokulele flight code and flight numbers assigned by Mokulele, or such other
flight codes and flight numbers as may be assigned by Mokulele (to accommodate,
for example, a Mokulele alliance partner), and otherwise under the codeshare
terms set forth in Exhibit
E.
Section
4.08 Slots
and Route Authorities. Should Mokulele schedule Covered
Aircraft on international routes, Mokulele will provide Shuttle notice of such
intent no fewer than 150 days in advance of the intended start
date. To the extent permitted under applicable laws and regulations,
Mokulele will obtain the necessary slots, route authorities or other approval
required for such service at its own cost and expense, provided such items may be
held and controlled by Mokulele. If it is required that Shuttle, as
the operator of the Scheduled Flights, obtain the authorities and approvals, or
if Mokulele is prohibited from holding such authorities and approvals in its own
name, Shuttle will use its commercially reasonable efforts to obtain all
necessary licenses, permits, route authorities or slots (collectively referred
to as “Permits”) and
complete all necessary filings and registrations, and Mokulele shall reimburse
Shuttle for its reasonable costs and expenses, in order to obtain such Permits
and initiate such service. During the Term, Shuttle will operate
Scheduled Flights on these routes solely on behalf of Mokulele.
Section
4.09 Use of
Mokulele Marks. Mokulele hereby grants to Shuttle the
non-exclusive and non-transferable rights to use the Mokulele Marks as provided
in, and Shuttle shall use the Mokulele Marks, in accordance with the terms and
conditions of Exhibit
C.
Section
4.10 Use of
Shuttle Marks. Shuttle hereby grants to Mokulele the
non-exclusive and non-transferable rights to use the Shuttle Marks as provided
in, and Mokulele shall use the Shuttle Marks in accordance with, the terms and
conditions of Exhibit
F.
Section
4.11 Catering
Standards.
(a) Station
Services. Mokulele or its designated agents shall provide all
airport passenger and aircraft ground handling at all airports served by
Scheduled Flights.
(b) Onboard
Services. Mokulele will determine, in its sole discretion, and
at its sole cost, meal/beverage service parameters and scheduling for Scheduled
Flights. Mokulele has the right to conduct onboard service audits on
Scheduled Flights to ensure service standards are being met. Shuttle
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. Shuttle will provide sufficient galley service ship’s
equipment to operate onboard services, such as ovens, coffee makers and trash
bins. Mokulele will provide all, at its sole expense, liveried
catering items, such as cups and napkins, and all food, liquor and other
beverage items.
*Confidential
ARTICLE
V
CERTAIN
RIGHTS AND OBLIGATIONS OF MOKULELE
Section
5.01 Use of
Covered Aircraft. Shuttle agrees that, except as otherwise
directed or approved in writing by Mokulele in Mokulele’s sole discretion or as
provided in Section
2.01(e) herein with respect to the Spare Aircraft, the Covered Aircraft
may be used only to provide Regional Airline Services.
Section
5.02 Mokulele
Obligations. Mokulele shall provide to Shuttle, at no cost to
Shuttle, the following support services (either directly or by contracting with
third party vendors or by contracting with Shuttle pursuant to a separately
negotiated handling agreement):
(a) all
airport passenger service and aircraft ground handling at all airports served,
including without limitation:
|
(i)
|
all
ticket counter and gate check-in
services;
|
|
(ii)
|
all
passenger enplaning and deplaning services, including sky cap and
wheelchair services;
|
|
(iii)
|
aircraft
loading and unloading services, including airside
busing;
|
|
(iv)
|
passenger
ticketing;
|
|
(v)
|
jet
bridges and air stairs, including maintenance and
cleaning;
|
|
(vi)
|
janitorial
services;
|
|
(vii)
|
deicing
services;
|
|
(viii)
|
aircraft
towing and push back; and
|
|
(ix)
|
airport
security services.
|
(b) all
Mokulele logo items, such as drink cups, napkins, pillows, blankets and inflight
magazines;
(c) lavatory
service and light aircraft cleaning (“turn cleaning”) at Honolulu International
Airport (HNL), heavy interior cleaning at all aircraft overnight locations that
are not Shuttle maintenance locations, and, upon the written request of Shuttle,
at other cities served by the Covered Aircraft;
(d) denied
boarding amenities and travel voucher compensation certificates consistent with
Mokulele customer service programs;
(e) customer
reaccommodations due to schedule disruption;
(f) interface
and all technological support necessary to ensure accurate and reliable dynamic
transfer of operational data from Mokulele to Shuttle’s system operational
control center in Indianapolis, Indiana, a data interface of Shuttle’s ACARS to
Mokulele’s reservation systems, and of Shuttle’s system control with Mokulele’s
flight information data;
(g) capital
expenditures for aircraft ground handling;
(h) advertising
and sales programs;
(i) operations
space at Honolulu International Airport (HNL) (the “Honolulu Operations
Space”), including gates, holdrooms, and airport concourse space for
offices, break rooms, parts storage, crew lounges, and flight operations, all as
agreed to by the parties;
(j) hangar
access as needed;
(k) nightly
engine power washing program and exterior aircraft wash program;
(l) interface
of Shuttle’s system control with Mokulele FLIFO data;
(m) hangar
space for one XXX Covered Aircraft at Honolulu International Airport (HNL);
and
(n) engine
washes as required by Shuttle.
Section
5.03 Change
of Control. Upon the occurrence of a Change of Control of
Mokulele (excluding a Change of Control involving Shuttle or an affiliate of
Shuttle) without the prior written consent of Shuttle (such consent not to be
unreasonably withheld), Shuttle shall have the right to terminate this Agreement
on 90 days prior written notice, such notice to be delivered not later than 90
days after Shuttle 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 the written notice of
termination is delivered).
Section
5.04 Transfer
of Assets. Mokulele shall not enter into an agreement (or
series of agreements) to sell, assign transfer or convey substantially all of
its assets to any Person (excluding Shuttle or an affiliate of Shuttle) unless,
as part of such agreement, such Person agrees to assume any and all of
Mokulele’s rights, duties and obligations arising under this Agreement and
Shuttle consents in writing in advance to such sale, assignment, transfer or
conveyance.
ARTICLE
VI
INSURANCE
Section
6.01 Insurance
Coverages. During the Term, Shuttle shall maintain, or cause
to be maintained, in full force and effect for the Covered Aircraft policies of
insurance with insurers of recognized reputation and responsibility, in each
case in an amount and subject to such terms as are consistent with the insurance
carried on similar aircraft operated by Shuttle under similar
circumstances.
Section
6.02 Evidence
of Insurance Coverage. At the commencement of this Agreement,
and thereafter upon Mokulele’s reasonable request, Shuttle shall furnish to
Mokulele evidence of such insurance coverage, including certificates certifying
that such insurance and endorsements are in full force and effect.
ARTICLE
VII
INDEMNIFICATION
Section
7.01 Shuttle
Indemnification of Mokulele. Shuttle shall be liable for and
hereby agrees to fully defend, release, discharge, indemnify and hold harmless
Mokulele, 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 Mokulele 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 Shuttle’s or Mokulele’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 (x) any act or omission by
Shuttle or any of its directors, officers, employees or agents relating to the
provision of Regional Airline Services, (y) the performance, improper
performance, or non-performance of any and all obligations to be undertaken by
Shuttle or any of its directors, officers, employees or agents pursuant to this
Agreement, or (z) the operation, non-operation, or improper operation of the
Covered Aircraft or Shuttle’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 Mokulele 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). Shuttle will use commercially reasonable efforts to cause
and assure that Shuttle will at all times be and remain in custody and control
of all aircraft, equipment, and facilities of, or operated by, Shuttle, and
Mokulele 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 Mokulele
Indemnification of Shuttle. Mokulele shall be liable for and
hereby agrees fully to defend, release, discharge, indemnify, and hold harmless
Shuttle, 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 Shuttle, 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 Shuttle’s or Mokulele’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, (x) the performance,
improper performance, or nonperformance of any and all obligations to be
undertaken by Mokulele or any of its directors, officers, employees or agents
pursuant to this Agreement, (y) the operation, non-operation or improper
operation of Mokulele’s aircraft, equipment or facilities (excluding, for the
avoidance of doubt, Covered Aircraft and any equipment or facilities leased or
subleased by Mokulele to Shuttle) 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 Shuttle or its directors, officers, agents
or employees.
Section
7.03 Indemnification
Claims. A party entitled to indemnification (the “Indemnified Party”)
from another party under the terms of this Agreement (the “Indemnifying Party”)
shall provide the Indemnifying Party with prompt written notice (an “Indemnity Notice”) of
any third party claim which the Indemnified Party believes gives rise to a claim
for indemnity against the Indemnifying Party hereunder. The
Indemnifying Party shall be entitled, if it accepts financial responsibility for
the third party claim, to control the defense of or to settle any such third
party claim at its own expense and by its own counsel; provided that the Indemnified
Party’s prior written consent (which may not be unreasonably withheld or
delayed) must be obtained prior to settling any such third party
claim. The Indemnified Party shall provide the Indemnifying Party
with such information as the Indemnifying Party shall reasonably request to
defend any such third party claim and shall otherwise cooperate with the
Indemnifying Party in the defense of any such third party
claim. Except as set forth in this Section 7.03, the
Indemnified Party shall not enter into any settlement or other compromise or
consent to a judgment with respect to a third party claim as to which the
Indemnifying Party has an indemnity obligation hereunder without the prior
written consent of the Indemnifying Party (which may not be unreasonably
withheld or delayed), and the entering into of any settlement or compromise or
the consent to any judgment in violation of the foregoing shall constitute a
waiver by the Indemnified Party of its right to indemnity hereunder to the
extent the Indemnifying Party was prejudiced thereby. Any
Indemnifying Party shall be subrogated to the rights of the Indemnified Party to
the extent that the Indemnifying Party pays for any loss, damage or expense
suffered by the Indemnified Party hereunder. If the Indemnifying
Party does not accept financial responsibility for the third party claim or
fails to defend against the third party claim that is the subject of an
Indemnity Notice within 30 days of receiving such notice (or sooner if the
nature of the third party claim so requires), or otherwise contests its
obligation to indemnify the Indemnified Party in connection therewith, the
Indemnified Party may, upon providing written notice to the Indemnifying Party,
pay, compromise or defend such third party claim without the prior consent of
the (otherwise) Indemnifying Party. In the latter event, the
Indemnified Party, by proceeding to defend itself or settle the matter, does not
waive any of its rights hereunder to later seek reimbursement from the
Indemnifying Party.
Section
7.04 Employer’s Liability;
Independent Contractors; Waiver of Control
(a) Employer’s
Liability and Workers’ Compensation. Each party hereto assumes
full responsibility for its employer’s and workers’ compensation liability to
its respective officers, directors, employees or agents on account of injury or
death resulting from or sustained in the performance of their respective service
under this Agreement. Each party, with respect to its own employees,
accepts full and exclusive liability for the payment of workers’ compensation
and employer’s liability insurance premiums with respect to such employees, and
for the payment of all taxes, contributions or other payments for unemployment
compensation or old age or retirement benefits, pensions or annuities now or
hereafter imposed upon employers by the government of the United States or any
other governmental body, including state, local or foreign, with respect to such
employees measured by the wages, salaries, compensation or other remuneration
paid to such employees, or otherwise.
(b) Employees,
etc., of Shuttle. The employees, agents, and independent
contractors of Shuttle engaged in performing any of the services Shuttle is to
perform pursuant to this Agreement are employees, agents, and independent
contractors of Shuttle for all purposes, and under no circumstances will be
deemed to be employees, agents or independent contractors of
Mokulele. In its performance under this Agreement, Shuttle will act,
for all purposes, as an independent contractor and not as an agent for
Mokulele. Notwithstanding the fact that Shuttle has agreed to follow
certain procedures, instructions and standards of service of Mokulele pursuant
to this Agreement, Mokulele will have no supervisory power or control over any
employees, agents or independent contractors engaged by Shuttle in connection
with its performance hereunder, and all complaints or requested changes in
procedures made by Mokulele will, in all events, be transmitted by Mokulele to
Shuttle’s designated representative. Nothing contained in this
Agreement is intended to limit or condition Shuttle’s control over its
operations or the conduct of its business as an air carrier.
(c) Employees,
etc., of Mokulele. The employees, agents, and independent
contractors of Mokulele engaged in performing any of the services Mokulele is to
perform pursuant to this Agreement are employees, agents, and independent
contractors of Mokulele for all purposes, and under no circumstances will be
deemed to be employees, agents, or independent contractors of
Shuttle. Shuttle will have no supervision or control over any such
Mokulele employees, agents and independent contractors and any complaint or
requested change in procedure made by Shuttle will be transmitted by Shuttle to
Mokulele’s designated representative. In its performance under this
Agreement, Mokulele will act, for all purposes, as an independent contractor and
not as an agent for Shuttle. Nothing contained in this Agreement is
intended to limit or condition Mokulele’s control over its operations (except
with respect to operational control over the Covered Aircraft, which shall
remain with Shuttle) or the conduct of its business as an air
carrier.
(d) Shuttle
Flights. The fact that Shuttle’s operations are conducted
under Mokulele’s Marks and listed under the MW designator code will not affect
their status as flights operated by Shuttle for purposes of this Agreement or
any other agreement between the parties, and Shuttle and Mokulele agree to
advise all third parties, including passengers, of this fact.
Section
7.05 Survival. The
provisions of this Article VII shall survive the termination of this Agreement
for a period of seven years.
ARTICLE
VIII
TERM,
TERMINATION AND DISPOSITION OF AIRCRAFT
Section
8.01 Term. The
Term of this Agreement shall commence on and shall be effective as of the
Effective Date and, unless earlier terminated for Cause or breach shall continue
until October 31, 2018 (the “Term”), and on such
date the Covered Aircraft shall be completely withdrawn from the capacity
purchase provisions of this Agreement and cease to be a Covered
Aircraft.
Section
8.02 Early
Termination
(a) By
Mokulele for Cause. Mokulele shall have the right to terminate
this Agreement upon written 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). The notice of termination provided by Mokulele pursuant
to this Section
8.02(a) shall designate a Termination Date (which may be any date between
the date of the notice and a date no more than 120 days of the date of the
notice), and on such date the Covered Aircraft shall be completely withdrawn
from the capacity purchase provisions of this Agreement and cease to be a
Covered Aircraft, and the termination date set forth in the notice provided by
Mokulele will 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 Mokulele shall
not have delivered written notice of termination pursuant to this Section 8.02(a)
within 45 days after Mokulele receives written notice from Shuttle of the
occurrence of any event that constitutes Cause by Shuttle, then Mokulele 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
Mokulele for Breach. Mokulele may terminate this Agreement,
upon two Business Days’ prior written notice, upon the occurrence of a material
breach of this Agreement by Shuttle with respect to matters reasonably within
its control, which breach shall not have been cured within 60 days after written
notice of such breach is delivered by Mokulele to Shuttle (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). Any termination notice provided by
Mokulele pursuant to this Section 8.02(b),
shall specify a Termination Date that will be no more than 90 days from the date
of such notice and on such date the Covered Aircraft shall be completely
withdrawn from the capacity purchase provisions of this Agreement and cease to
be a Covered Aircraft. In the event that Mokulele shall not have
delivered written notice of termination pursuant to this Section 8.02(b)
within 45 days after Mokulele receives written notice from Shuttle of any
material breach of this Agreement by Shuttle, then Mokulele 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
Shuttle for Breach. Shuttle may terminate this Agreement upon
(i) five Business Days prior written notice upon (A) any failure by Mokulele to
make any payment or payments under this Agreement aggregating in excess of [*], 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 five Business Days after
written notice of such failure is delivered by Shuttle to Mokulele, or (B) a
breach by Mokulele of its covenant contained in Section 5.03 or 5.04,
(ii) the occurrence of any other failure by Mokulele to make any payment or
payments under this Agreement aggregating in excess of [*], 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 Shuttle to Mokulele, or (iii) the
occurrence of any other material breach of this Agreement by Mokulele, which
breach shall not have been cured within 60 days after written notice of such
breach is received by Mokulele. In the event that Shuttle shall not
have delivered written notice of termination pursuant to this Section 8.02(c)
within 45 days after Shuttle receives written notice from Mokulele of any
material breach of this Agreement by Mokulele, then Shuttle 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.
If this
Agreement is terminated by Shuttle under the first paragraph of
this Section 8.02(c), the
notice of termination delivered by Shuttle to Mokulele pursuant to Section 8.02(c)(i)
shall be irrevocable and shall contain a Termination Date that is no more than
180 days after the date of such notice; provided that in the case of
a termination under Section 8.02(c)(i)(A) or
(c)(ii), such termination notice shall be void and of no further effect
automatically upon the payment by Mokulele prior to such Termination Date of all
unpaid amounts giving rise to such termination notice. As of the
Termination Date set forth in a notice of termination, 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.
Section
8.03 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 shall restrict the right of any party to exercise any right to
terminate this Agreement pursuant to the terms hereof.
ARTICLE
IX
REPRESENTATIONS,
WARRANTIES AND COVENANTS
Section
9.01 Representations
and Warranties of Shuttle. Shuttle represents, warrants and
covenants to Mokulele as of the date hereof as follows:
(a) Organization
and Qualification. Shuttle is a duly organized and validly
existing corporation under the laws of the State of Indiana. Shuttle
has the corporate power and authority to own, operate and use its assets and to
provide the Regional Airline Services.
(b) Authority
Relative to this Agreement. Shuttle 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 Shuttle. This
Agreement has been duly and validly executed and delivered by Shuttle and is,
assuming due execution and delivery thereof by Mokulele and that Mokulele has
legal power and right to enter into this Agreement, a valid and binding
obligation of Shuttle, enforceable against Shuttle 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 Shuttle of
the transactions contemplated hereby will (i) violate, conflict with, or
constitute a default under any of the terms of Shuttle’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 Shuttle 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. Shuttle 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 Shuttle or on its ability to provide Regional Airlines
Services and otherwise perform its obligations hereunder.
(e) Insurance. Shuttle
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.
(f) No
Proceedings. There are no legal or governmental proceedings
pending, or investigations commenced of which Shuttle has received notice, in
each case to which Shuttle is a party or of which any property or assets of
Shuttle is the subject which, if determined adversely to Shuttle, would
individually or in the aggregate have a material adverse effect on Shuttle or on
Shuttle’s ability to provide Regional Airlines Services and otherwise perform
its obligations hereunder; and to the best knowledge of Shuttle, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others.
(g) Permits. Shuttle
possesses 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 Shuttle has
not 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 Shuttle or on
its ability to conduct its businesses, to provide Regional Airlines Services and
otherwise to perform its obligations hereunder.
Section
9.02 Representations
and Warranties of Mokulele. Mokulele represents and warrants
to Shuttle as of the date hereof as follows:
(a) Organization
and Qualification. Mokulele is a duly incorporated and validly
existing corporation in good standing under the laws of the State of
Hawaii.
(b) Authority
Relative to this Agreement. Mokulele 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 Mokulele. This
Agreement has been duly and validly executed and delivered by Mokulele and is,
assuming due execution and delivery thereof by Shuttle and that Shuttle has
legal power and right to enter into this Agreement, a valid and binding
obligation of Mokulele, enforceable against Mokulele 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 Mokulele of the transactions contemplated hereby will (i)
violate, conflict with, or constitute a default under any of the terms of
Mokulele’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 Mokulele 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. Mokulele
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 Mokulele has received notice, in
each case to which Mokulele is a party or of which any property or assets of
Mokulele is the subject which, if determined adversely to Mokulele, would
individually or in the aggregate have a material adverse effect on Mokulele or
on its ability to perform its obligations hereunder; and to the best knowledge
of Mokulele, no such proceedings are threatened or contemplated by governmental
authorities or threatened by others. For the avoidance of doubt, the
parties hereto acknowledge that the United States Department of Transportation
pursuant to 14 C.F.R. Part 204 may review a substantial change of operations
and/or a substantial change of ownership of Mokulele in connection with this
Agreement and any related transaction.
(f) Financial
Statements. The financial statements (including the related
notes and supporting schedules) of Mokulele delivered (or, if filed with the
Securities and Exchange Commission, made available) to Shuttle immediately prior
to the date hereof fairly present in all material respects the consolidated
financial position of Mokulele. 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 Mokulele. 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.
Section
9.03 Covenants
of Mokulele. Mokulele shall
deliver to Shuttle:
(a) as soon
as available, but in any event within 90 days after the end of each fiscal year
of Mokulele, its consolidated balance sheet as at the end of such fiscal year,
and the related consolidated statements of income or operations, shareholders’
equity and cash flows for such fiscal year, setting forth in each case in
comparative form the figures for the previous year, all in reasonable detail and
prepared in accordance with GAAP, audited by an independent certified public
accountant;
(b) as soon
as available, but in any event within 20 days after the end of each month, a
consolidated balance sheet of Mokulele as at the end of such fiscal month, and
the related consolidated statements of income or operations, shareholders’
equity and cash flows for such fiscal month and for the portion of Mokulele’s
fiscal year then ended, setting forth in each case in comparative form the
figures for the corresponding fiscal month of the previous fiscal year and the
corresponding portion of the previous fiscal year, all in reasonable detail and
certified by the chief financial officer of Mokulele as fairly presenting the
financial condition, results of operations, shareholders’ equity and cash flows
of Mokulele in accordance with GAAP, subject only to normal year end audit
adjustments and the absence of footnotes.
ARTICLE
X
MISCELLANEOUS
Section
10.01 Transition
Arrangements
(a) Scheduling. Subsequent
to the execution of this Agreement, and prior to the inservice date of the first
Covered Aircraft, Shuttle and Mokulele 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 inservice date of the first Covered Aircraft,
Shuttle and Mokulele shall work together to facilitate all other relevant
aspects of the commencement of Shuttle’s provision of Regional Airlines
Services, including without limitation the provision of passenger-related and
technology-related services.
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 Mokulele:
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|
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[*]
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|
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With
copy to:
|
[*]
if to
Shuttle:
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[*]
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|
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With
copy to:
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[*]
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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.
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 Shuttle’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.
*Confidential
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 (x) the
terms or conditions of this Agreement, or any exhibit, schedule or appendix
hereto or thereto, or any information, data, schedules, route information, fare
schedules and rules shared between the parties during the course of performance
under this Agreement, without the prior written consent of the other parties
thereto, or (y) any confidential information or data, both oral and written,
received from the other, whether pursuant to or 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 (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 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 as otherwise expressly permitted or contemplated
by this Agreement. 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, unless expressly requested
not to do so by a government agency issuing the subpoena or other process,
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 New York, New York 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
New York, New York, 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 of the Panel, then the Parties shall
request the assistance of the CPR. The Panel shall make all of its
decisions by majority vote. Evident partiality on the part of an
arbitrator exists only where the circumstances are such that a reasonable person
would have to conclude there in fact existed actual bias, and a mere appearance
or impression of bias will not constitute evident partiality or otherwise
disqualify an arbitrator. The decision of the Panel will be binding
and non-appealable, except as permitted under the Federal Arbitration
Act.
(e) Choice
of Law as to Procedural Matters. The enforcement of this
agreement to arbitrate, and all procedural aspects of the proceeding pursuant to
this agreement to arbitrate, including but not limited to, the issues subject to
arbitration (i.e., arbitrability), the scope of the arbitrable issues, and the
rules governing the conduct of the arbitration, unless otherwise agreed by the
Parties, shall be governed by and construed pursuant to the Federal Arbitration
Act.
(f) Choice
of Law as to Substantive Claims. In deciding the substance of
the parties’ Claims, the arbitrators shall apply the substantive laws of the
State of New York (excluding New York 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 New York, New York 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 Shuttle shall fail to provide a Covered
Aircraft within 30 days of the applicable in-service day reflected on Exhibit B (such
Covered Aircraft being referred to herein as a “Delayed Aircraft”),
Shuttle will pay to Mokulele following such failure liquidated damages in an
amount equal to [*] for
each day between the [*]
day following the in-service date reflected on Exhibit B and the
actual in-service date of such Delayed Aircraft; provided that, in the event
such in-service delay is due to circumstances beyond the control of Shuttle and
Shuttle provides prior notice of such delay, such liquidated damages shall not
in any event exceed [*].
The
parties agree that the damages to be suffered by Mokulele in connection with
Shuttle’s failure to deliver an aircraft on a scheduled in-service date as
provided in Exhibit
B 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 shall be Mokulele’s sole and exclusive
remedy against Shuttle for any damages suffered solely as a result of Shuttle’s
failure to deliver an aircraft on a scheduled in-service date as provided in
Exhibit
B.
(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 Shuttle, Mokulele
shall not be entitled to seek damages solely for the occurrence of an event of
Cause of the type described in clause (iii) or clause (iv) of the definition
thereof.
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) 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 New York (excluding New York 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 the City and County of New York, New York.
Section
10.15 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. 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
10.16 Cooperation
with Respect to Reporting. Each of the parties hereto agrees
to use its commercially reasonable efforts to cooperate with each other party in
providing necessary data, to the extent in the possession of the first party,
required by such other party in order to meet any reporting requirements to, or
otherwise in connection with any filing with or provision of information to be
made to, any regulatory agency or other governmental authority.
Section
10.17 Reserved.
Section
10.18 Life
Limited Parts. Mokulele and Shuttle shall each cooperate with
one another in order to manage and minimize engine life limited parts (“LLP”) expenses for
Covered Aircraft. To that end, Shuttle shall provide annual
projections of LLP requirements and supplemental notice of specific engine
maintenance events which require LLP replacement as they are
scheduled. Mokulele may, at its option and with Shuttle’s consent
(which consent shall not be unreasonably withheld), provide or arrange the
provision of used serviceable LLPs that otherwise meet Shuttle’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), Mokulele shall pay Shuttle
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 Shuttle shall pay Mokulele for the pro-rata
cost (based on useful life and using the then-current catalogue price for LLPs)
of all LLPs provided by Mokulele and incorporated into such Covered Aircraft
pursuant to the previous sentence and not consumed for any Scheduled Flights
under this Agreement.
Section
10.19 Original Airline Services
Agreement
Mokulele,
RAI and Shuttle hereby agree that upon the effectiveness of this Agreement, the
terms and provisions of the Original Airline Services Agreement which in any
manner govern or evidence the obligations arising hereunder, the rights and
interests of the RAI and Shuttle and any terms, conditions or matters related to
any thereof, shall be and hereby are amended and restated in their entirety by
the terms, conditions and provisions of this Agreement, and the terms and
provisions of the Original Airline Services Agreement, except as otherwise
expressly provided herein, shall be superseded by this
Agreement.
*Confidential
IN
WITNESS WHEREOF, the parties hereto have caused this Airline Services Agreement
to be duly executed and delivered as of the date and year first written
above.
| MOKULELE FLIGHT SERVICE, INC. | SHUTTLE AMERICA CORPORATION | |||
|
/s/
Xxxxxxx X. Xxxxx, Xx.
|
/s/
Xxxxxx X. Xxxxxx
|
|||
|
Name:
Xxxxxxx X. Xxxxx, Xx. CEO
|
Name:
Xxxxxx X. Xxxxxx , Executive Vice-President
|
|||
|
|
|
|||
| Acknowledged and Agreed to by: | ||||
| REPUBLIC AIRLINE, INC. |
|
/s/
Xxxxxx X. Xxxxxx
|
|
|||
|
Name:
Xxxxxx X. Xxxxxx,Executive Vice-President
|
|
|||
|
|
|
Exhibits
Exhibit A
– Definitions
Exhibit B
– Covered Aircraft &
Inservice Schedule
Exhibit C
– Aircraft Specification,
Interior Configuration, Livery and Use of Mokulele Marks
Exhibit D
– Compensation
Exhibit E
– Terms of Codeshare
Arrangements
Exhibit F
– Use of Shuttle
Marks
Exhibit G
– Reasonable Operating
Constraints
EXHIBIT
A
Definitions
Agreement – means the Airline
Services Agreement, dated as of October _, 2008, among Mokulele and Shuttle, as
amended from time to time pursuant to Section 10.04
hereof.
Base Compensation – is
defined in Paragraph
A.1 of Exhibit D.
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 Honolulu, Hawaii are
authorized by law to close or the general offices of Mokulele or Shuttle are
closed due to weather or other natural forces.
Cause – means (i) the
suspension for three consecutive days or longer or the revocation of Shuttle’s
authority to operate as a scheduled airline, (ii) the ceasing of Shuttle’s
operations as a scheduled airline, other than as a result of a Labor Strike or
the mandatory grounding of the Covered Aircraft by the FAA and other than any
temporary cessation for not more than 14 consecutive days, (iii) beginning after
the month in which the 4th aircraft is placed in service, Shuttle operating at
or below the Default Threshold as described in Appendix 2 to Exhibit D, for any
three consecutive calendar months, or (iv) a willful or intentional material
breach of this Agreement by Shuttle that substantially deprives Mokulele of the
benefits of this Agreement, which breach shall have continued for 45 days after
notice thereof is delivered by Mokulele to Shuttle.
Change of Control – means,
with respect to any Person, the merger of such Person with, or the acquisition
of direct or indirect control of such Person by, another air carrier, or a
corporation directly or indirectly owning or controlling or directly or
indirectly owned or controlled by another air carrier (a “Holding Company”), or
a corporation directly or indirectly owned or controlled by such Holding
Company, unless (1) such Person is the acquiring or surviving entity in such
merger or acquisition, or (2) the ultimate beneficial ownership of the surviving
entity immediately following such transaction is substantially similar (i.e., at
least 60% common ownership) to the beneficial ownership of such Person
immediately prior to such transaction.
Charter Flights – means any
flight by a Covered Aircraft for charter operations arranged by Mokulele that is
not reflected in the Final Monthly Schedule.
[*]
Covered Aircraft – means all
of the aircraft listed on Exhibit B (as amended from time to time pursuant to
the provisions of this Agreement) and presented for service by Shuttle, as
adjusted from time to time for withdrawals pursuant to Article VIII and for
extensions pursuant to Section
10.17.
Direct Cost – means, with
respect to any given calendar quarter, all costs incurred by Mokulele in respect
of Scheduled Flights, including all costs and expenses for which Mokulele is
liable pursuant to this Agreement and any distribution or marketing costs
incurred by Mokulele in respect of Scheduled Flights but not including fixed and
overhead costs incurred by Mokulele generally in the ordinary course of its
business.
DOT – means the United States
Department of Transportation.
Effective Date – is as set
forth in the preamble to this Agreement.
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 Mokulele to Shuttle pursuant to Section
2.01(b).
Labor Strike – means a labor
dispute, as such term is defined in 29 U.S.C. Section 113(c)
involving Shuttle and some or all of its employees, which dispute results in a
union-authorized strike resulting in a work stoppage.
LLP – is defined in Section
10.18.
Mokulele – means Mokulele
Flight Service, Inc., a Hawaii corporation, and its successors and permitted
assigns.
Mokulele Marks – is defined
in Exhibit C.
Original Airline Services
Agreement – means the Airline Services Agreement, dated as of October 1,
2008, among Mokulele and RAI, as amended from time to time pursuant to Section 10.04
thereof.
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.
RAI - means Republic Airline,
Inc., an Indiana corporation.
RAI Holdings – means Republic
Airways Holdings Inc., a Delaware corporation.
Shuttle Marks – is defined in
Exhibit
F.
Reasonable Operating
Constraints – means the operating constraints on Scheduled Flights set
forth on Exhibit
G.
Regional Airline Services –
means the provisioning by Shuttle to Mokulele of Scheduled Flights and related
ferrying using the Covered Aircraft or neutral spare aircraft in accordance with
this Agreement.
Scheduled Flight – means a
flight as determined by Mokulele pursuant to Section
2.01(b)
Shuttle– means Shuttle
America Corporation, an Indiana corporation, and its successors and permitted
assigns.
Spare Aircraft – means the
Aircraft designated as such by Shuttle that will not be part of the Scheduled
Flights and is intended to be used in place of Aircraft that are removed from
Scheduled Flights due to mechanical issues, heavy check requirements or to
compensate for Scheduled Flights in which a line is running behind
schedule.
Term – has the meaning set
forth in Section
8.01, as earlier terminated pursuant to Section 8.02, if
applicable.
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.
Total Revenue – means, with
respect to any given calendar quarter, all revenue earned by Mokulele in respect
of Scheduled Flights for such quarter, including but not limited to passenger
and baggage revenue, catering revenue, and any other revenue or fees collected
by Mokulele in respect of such Scheduled Flights.
TSA – means the United States
Transportation Security Administration.
*Confidential
EXHIBIT
B
Covered
Aircraft & In-Service Schedule
|
Number
|
Aircraft Type
|
U.S.
Registration Number
|
Scheduled
In- Service Day
|
|
1.
|
EMB
170
|
[*]
|
|
|
2.
|
EMB
170
|
[*]
|
|
|
3.
|
EMB
170
|
[*]
|
|
|
4.
|
EMB
170
|
[*]
|
1 Aircraft
number 3 will be considered the Spare Aircraft from the Scheduled In-Service Day
until March 1, 2009.
*Confidential
EXHIBIT
C
Aircraft
Specification, Interior Configuration, Livery and Use of Mokulele
Marks
|
1.
|
Aircraft
Specification. The specifications of the Covered
Aircraft will be as set forth in Schedule 1 of
this Exhibit
C.
|
|
2.
|
Grant. Mokulele
hereby grants to Shuttle, and Shuttle accepts, a non-exclusive, personal,
non-transferable, royalty-free right and license to adopt and use the
Mokulele Marks in connection with the rendering by Shuttle of Regional
Airline Services, subject to the conditions and restrictions set forth
herein.
|
|
3.
|
Ownership of the
Mokulele Marks.
|
a. Mokulele
shall at all times remain the owner of the Mokulele Marks and any registrations
thereof and Shuttle’s use of any Mokulele Marks shall clearly identify Mokulele
as the owner of such marks (to the extent practical) to protect Mokulele’s
interest therein. All use by Shuttle of the Mokulele Marks shall
inure to the benefit of Mokulele. Nothing in this Agreement shall
give Shuttle any right, title, or interest in the Mokulele Marks other than
right to use the Mokulele Marks in accordance with the terms of this
Agreement.
b. Shuttle
acknowledges that Mokulele is the owner of the Mokulele Marks and hereby agrees
to take no action that would be contrary to Mokulele’s ownership of the Mokulele
Marks and agrees to cooperate with all of Mokulele’s reasonable request to take
any and all actions necessary to protect and preserve Mokulele’s ownership of
the Mokulele Marks.
|
4.
|
Use of the Mokulele
Marks.
|
a. Shuttle
shall use the Mokulele Marks only as authorized herein by Mokulele and in
accordance with such standards of quality as Mokulele may
establish.
b. Shuttle
shall use the Mokulele Marks on all Covered Aircraft (other than the Spare
Aircraft) and all facilities, equipment and printed materials used in connection
with the Regional Airline Services.
c. Shuttle
shall not use the Mokulele Marks for any purpose other than as set forth in this
Exhibit C, and
specifically shall have no right to use the Mokulele Marks on or in any aircraft
other than Covered Aircraft or in connection with any other operations of
Shuttle.
d. Mokulele
shall have exclusive control over the use and display of the Mokulele Marks, and
may change the Mokulele Marks at any time and from time to time, in which case
Shuttle shall as soon as practicable make such changes as are requested by
Mokulele to incorporate the new Mokulele Marks; provided that Mokulele shall
either pay directly the reasonable costs of making such changes or shall
promptly reimburse Shuttle for its reasonable expenses incurred in making such
changes.
e. Nothing
shall abridge Mokulele’s right to use and/or to license the Mokulele Marks, and
Mokulele reserves the right to the continued use of all the Mokulele Marks, to
license such other uses of the Mokulele Marks and to enter into such agreements
with other carriers providing for arrangements similar to those with Shuttle as
Mokulele may desire. No term or provision of this Agreement shall be
construed to preclude the use of the Mokulele Marks by other persons or for
similar or other uses not covered by this Agreement.
|
5.
|
Mokulele-Controlled
Litigation. Mokulele at its sole expense shall take all
steps that in its opinion and sole discretion are necessary and desirable
to protect the Mokulele Marks against any infringement or
dilution. Shuttle agrees to cooperate fully with Mokulele in
the defense and protection of the Mokulele Marks as reasonably requested
by Mokulele. Shuttle shall report to Mokulele any infringement
or imitation of, or challenge to, the Mokulele Xxxx, immediately upon
becoming aware of same. Shuttle shall not be entitled to bring,
or compel Mokulele to bring, an action or other legal proceedings on
account of any infringements, imitations, or challenges to any element of
the Mokulele Marks without the written agreement of
Mokulele. Mokulele shall not be liable for any loss, cost,
damage or expense suffered or incurred by Shuttle 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 Mokulele shall commence
any action or legal proceeding on account of such infringements,
imitations or challenges, Shuttle agrees to provide all reasonable
assistance requested by Mokulele in preparing for and prosecuting the
same.
|
|
6.
|
Revocation of
License. Mokulele 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 Mokulele Marks
provided Shuttle herein shall revert to Mokulele and the Mokulele Marks
shall not be used by Shuttle in connection with any operations of
Shuttle. The following provisions shall apply to the
termination of the license provided herein: in the case of a
termination of the license to use the Mokulele Marks, Shuttle shall cease
all use of the Mokulele Marks with respect to each Covered Aircraft within
30 days of such aircraft being withdrawn from the capacity purchase
provisions of the Agreement, and shall cease all use of the Mokulele Marks
in all other respects within 30 days of last Covered Aircraft being
withdrawn from this Agreement. Within such specified period,
Shuttle shall cease all use of such other Mokulele Marks, and shall change
its facilities, equipment, uniforms and supplies to avoid any customer
confusion or the appearance that Shuttle is continuing to have an
operating relationship with Mokulele, and Shuttle shall not thereafter
make use of any word, words, term, design, name or xxxx confusingly
similar to the Mokulele Marks or take actions that otherwise may infringe
the Mokulele Marks.
|
|
7.
|
Assignment. The
non-exclusive license granted by Mokulele to Shuttle is personal to
Shuttle and may not be assigned, sub-licensed or transferred by Shuttle in
any manner without the written consent of a duly authorized representative
of Mokulele.
|
|
8.
|
Mokulele
Marks. The Mokulele Marks are as set forth in Schedule 2 to
this Exhibit
C and also include the Aircraft Livery, the Mokulele flight code
and other trade names, trademarks, service marks, graphics, logos,
employee uniform designs, distinctive color schemes and other
identification selected by Mokulele in its sole discretion for the
Regional Airline Services to be provided by Shuttle, whether or not such
identification is copyrightable or otherwise protected or protectable
under federal law.
|
|
9.
|
Aircraft
Livery. The Covered Aircraft will be painted in
accordance with the designs shown on Schedule 3 to
this Exhibit
C at Shuttle’s sole cost and expense. Any subsequent
livery change shall be at Mokulele’s sole cost and
expense.
|
|
10.
|
Aircraft
Interior. Each Covered Aircraft will enter service with
an “as is, where is” interior and will be clean and in good working order
for passenger operations.
|
|
11.
|
Survival. The
provisions of this Exhibit C shall
survive the termination of this Agreement for a period of six
years.
|
Attachments to Exhibit
C
Schedule 1 – Aircraft
Specifications
Schedule 2 – Mokulele
Marks
Schedule 3 – Aircraft
Livery
SCHEDULE
1 TO EXHIBIT C
Aircraft
Specifications
(to be
provided by Shuttle)
SCHEDULE
2 TO EXHIBIT C
Mokulele
Marks
(to be
provided by Mokulele)
SCHEDULE
3 TO EXHIBIT C
Aircraft
Livery
(to be
provided by Mokulele sufficiently in advance to allow a reasonable time for the
painting of the livery as provided by Section 9 of Exhibit C)
EXHIBIT
D
Compensation
Base
and Incentive Compensation.
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1.
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Base
Compensation. Mokulele will pay to Shuttle, in respect
of the Covered Aircraft, the rates set forth on Appendix 1 to this Exhibit
D for each calendar month, times, the applicable Unit of Measure, times,
in each case where the rate category is indicated [*].
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2.
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Pre-Xxxx Invoiced
Amount. The Invoiced Amount calculated in accordance
with Section 3.06 (a) of the Agreement will be calculated by using the
data from the Final Monthly Schedule and the Operational Assumptions for
any given month as follows:
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a. the
Invoiced Amount for each of the Fixed Cost cost elements will be calculated by
multiplying (i) the Rate, times (ii) the Unit of Measure (as set forth in the
Final Monthly Schedule and the Operational Assumptions for the
month). The Rate for each Fixed Cost element will not change during
the Term except for the annual adjustment pursuant to Section 3.02 of the
Agreement for those elements noted as “Subject to Escalation”; plus
b. the
Invoiced Amount for each of the Variable Cost elements will be calculated by
multiplying (i) the Rate, times (ii) the Unit of Measure (as set forth in the
Final Monthly Schedule and the Operational Assumptions for the month), times
(iii) the Completion Factor Target Threshold percentage as in effect at the time
of calculation, where “Blk Hrs” are the block hours estimated to be flown by the
Covered Aircraft for the month, “W/A A/C” is the weighted average number of
Covered Aircraft for the month, “Departures” is the number of departures
estimated to be made by the Covered Aircraft during the month, “Flt Hrs” are the
flight hours estimated to be flown by the Covered Aircraft for the month, “Pax”
is the number of passengers estimated to be transported by the Covered Aircraft
during the month, and “1000 RPMS” is the estimated revenue passenger miles flown
by the Covered Aircraft during the month divided by 1,000. The Rate
for each Variable Cost element will not change during the Term except for (i)
the annual adjustment pursuant to Section 3.02 of the Agreement for those
elements noted as “Subject to Escalation, and (ii) those elements noted as
subject to “Periodic Adjustment” will be adjusted based on the actual costs of
the related insurance premiums paid by Shuttle, taking into account any
increases or reductions in those premiums due to end of the coverage year
calculations based on Shuttle’s operational statistics.
*Confidential
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3.
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Reconciled
Costs. The Fixed Cost elements calculated by using the
“W/A A/C” Unit of Measure, and the Variable Cost elements will be
reconciled pursuant to Section 3.06 (b) of the Agreement by calculating
the difference between the Invoiced Amount for such elements and the
amount due for such elements based on the Rate for each Variable Cost
element times the actual Unit of Measure for the
month.
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4.
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Pass-Thru
Costs. Mokulele will reimburse Shuttle for each
Pass-Thru Cost element in accordance with Section 3.06 (c) of the
Agreement. Pass-Thru Costs are actual costs incurred and are
not subject to [*], Escalation or
Periodic Adjustment.
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5.
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Incentive
Compensation. With respect to each calendar month,
incentive compensation shall be calculated as
follows:
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a. On-Time
Bonus/Rebate. The reconciliation for any calendar month shall
include, as applicable, a bonus (represented by a payment by Mokulele to
Shuttle) or a rebate or offset (represented by a payment by Shuttle to
Mokulele), in each case in respect of on-time performance, as determined
pursuant to Appendix 2 to this Exhibit D .
b. Completion Factor
Bonus/Rebate. The reconciliation for any calendar month shall
include, as applicable, a bonus (represented by a payment by Mokulele to
Shuttle) or a rebate or offset (represented by a payment by Shuttle to
Mokulele), in each case in respect of Shuttle’s completion factor for the month,
as determined pursuant to Appendix 2 to this Exhibit D.
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6.
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Mokulele
Expenses. With respect to Scheduled Flights, in
consideration of the provision by Shuttle of Regional Airline Services and
its compliance with the other terms and conditions of this Agreement, the
following expenses shall be incurred directly by Mokulele, provided that, should Shuttle
incur any such expenses, Shuttle will be reimbursed for such expenses in
accordance with Section 3.06 (c) of the
Agreement:
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(a)
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Covered
Aircraft fuel, including into plane charges, taxes and administrative
fees;
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(b)
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Landing
fees;
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(c)
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Passenger
catering;
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(d)
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Travel
agency and OAL related CRS booking
fees;
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(e)
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Revenue
taxes and PFCs;
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(f)
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Credit
card processing fees;
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(g)
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Deicing
services at all cities;
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(h)
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All
customer inconvenience charges;
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(i)
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TSA
fees or charges and any other passenger security
fees;
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(j)
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Any
local, state, federal or other fees associated with the transportation of
passengers and cargo;
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(k)
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Staged
overnight hotel and per diem expenses;
and
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(l)
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Rates
and charges relating to the Honolulu Operations Space as defined in
Section 5.02(i).
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7.
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No Reconciliation for Fines,
Etc. Notwithstanding anything to the contrary contained
in this Exhibit
D or the Agreement, Mokulele shall not be required to incur any
cost or make any reconciliation payment to Shuttle 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 Shuttle as a result
of any violation by Shuttle of any law, statute, judgment, decree, order,
rule or regulation of any governmental or airport authority, provided that, Mokulele
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 Shuttle as a result of any violation
by Mokulele or its agents of any law, statute, judgment, decree, order,
rule or regulation of any governmental or airport
authority.
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*Confidential
Exhibit D
Appendices
Appendix
1 Base
Compensation Rates
Appendix
2 Incentive
Bonuses/Rebates
Appendix 1 to Exhibit
D
Base
Compensation Rates
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Carrier
Controlled Costs:
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RATE
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[*]
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SUBJECT
TO
ESCALATION
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Per
AC per Month: (Rents)
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$
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[*]
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[*]
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[*]
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Per
AC per Month:
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$
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[*]
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[*]
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[*]
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Per
BH:
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$
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[*]
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[*]
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[*]
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Per
FH:
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$
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[*]
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[*]
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[*]
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Per
Departure:
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$
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[*]
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[*]
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[*]
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Amounts
expressed in January 2008
economics.
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Appendix 2 to Exhibit
D
Incentive
Bonuses/Rebates
(to be
mutually agreed prior to March 1, 2009, provided that a failure to mutually
agree on Incentive Bonuses and Rebates shall not be an event of default or
grounds for termination of this Agreement)
EXHIBIT
E
Terms
of Codeshare Arrangements
1. Shuttle’s
use of MW code. During the Term of the Agreement, Mokulele
shall place its designator code, “MW”, on all Scheduled Flights operated by
Shuttle. Mokulele may suspend the display of its code on flights
operated by Shuttle if Shuttle 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 Shuttle
operated flights that display the MW code are referred to herein as “MW
Flights”.
2. Shuttle’s
display of MW code.
(a) All
MW Flights will be included in the schedule, availability and fare displays of
all computerized reservations systems in which Mokulele and Shuttle participate,
the Official Airline Guide (to the extent agreed upon) and Mokulele’s and
Shuttle’s internal reservation systems, under the MW code, to the extent
possible. Mokulele and Shuttle will take the appropriate measures
necessary to ensure the display of the schedules of all MW Flights in accordance
with the preceding sentence.
(b) Mokulele
and Shuttle will disclose and identify the MW Flights to the public as actually
being a flight of and operated by Shuttle, in at least the following
ways:
(i) a
symbol or a flight number range will be used in timetables and computer
reservation systems indicating that MW Flights are actually operated by
Shuttle;
(ii) to
the extent reasonable, messages on airport flight information displays will
identify Shuttle as the operator of flights shown as MW Flights;
(iii) Mokulele
and Shuttle advertising concerning MW Flights and Mokulele and Shuttle
reservationists will disclose Shuttle as the operator of each MW Flight;
and
(iv) in
any other manner prescribed by law or DOT regulation.
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. Mokulele and Shuttle 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 Irregular Operations. Shuttle shall promptly notify
Mokulele System Operations Control via both positive phone contact and email of
all irregularities involving a MW Flight which result in any material damage to
persons or property as soon as such information is available and shall furnish
to Mokulele as much detail as practicable. For purposes of this
section, notification shall be made as follows:
[*]
5. Code
Sharing License.
(a) Grant of
License. Subject to the terms and conditions of the Agreement,
Mokulele hereby grants to Shuttle a nonexclusive, nontransferable, revocable
license to use the MW designator code on all of its flights operated as a MW
Flight.
(b) Control
of MW Flights. Subject to the terms and conditions of the
Agreement, Shuttle shall have sole responsibility for and control over, and
Mokulele shall have no responsibility for, control over or obligations or duties
with respect to, each and every aspect of Shuttle’s operation of MW
Flights.
6. Display
of other Codes. During the Term of the Agreement, Mokulele
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 Shuttle with Covered Aircraft and to enter into agreements with such
Alliance Airlines with respect thereto. Shuttle will cooperate with
Mokulele and any Alliance Airlines in the formation of a code share relationship
between Shuttle and the Alliance Airlines and enter into reasonably acceptable
agreements and make the necessary governmental filings, as requested by
Mokulele, with respect thereto.
*Confidential
EXHIBIT
F
Use
of Shuttle Marks
1. Grant. Shuttle
hereby grants to Mokulele, and Mokulele accepts, a non-exclusive, personal,
non-transferable, royalty-free right and license to adopt and use the Shuttle
Marks (as defined below) in connection with Mokulele’s entering into this
Agreement, subject to the conditions and restrictions set forth
herein.
2. Ownership of the Shuttle
Marks.
a. Shuttle
shall at all times remain the owner of the Shuttle Marks and any registrations
thereof and Mokulele’s use of any Shuttle Marks shall clearly identify Shuttle
as the owner of such marks (to the extent practical) to protect Shuttle’s
interest therein. All use by Mokulele of the Shuttle Marks shall
inure to the benefit of Shuttle. Nothing in this Agreement shall give
Mokulele any right, title, or interest in the Shuttle Marks other than right to
use the Shuttle Marks in accordance with the terms of this
Agreement
b. Mokulele
acknowledges Shuttle’s ownership of the Shuttle Marks and further acknowledges
the validity of the Shuttle Marks. Mokulele agrees that it will not
do anything that in any way infringes or abridges Shuttle’s rights in the
Shuttle Marks or directly or indirectly challenges the validity of the Shuttle
Marks.
3. Use of the Shuttle
Marks.
a. Mokulele
shall use the Shuttle Marks only as authorized herein by Shuttle and in
accordance with such standards of quality as Shuttle may establish.
b. Mokulele
shall use the Shuttle Marks as necessary or appropriate in Mokulele’s sole
discretion in connection with the Regional Airline Services, including without
limitation the sale or disposition by Mokulele of the seat inventory of the
Scheduled Flights.
c. Mokulele
shall not use the Shuttle Marks for any purpose other than as set forth in this
Exhibit F, and specifically shall have no right to use the Shuttle Marks in
connection with any other operations of Mokulele.
d. Shuttle
may change the Shuttle Marks at any time and from time to time (including by
adding or deleting marks from the list specified in this Exhibit F), in which
case Mokulele shall as soon as practicable make such changes as are requested by
Shuttle to utilize the new Shuttle Marks; provided that Shuttle shall
either pay directly the reasonable costs of making such changes to the Shuttle
Marks or shall promptly reimburse Mokulele for its reasonable expenses incurred
in making such changes.
e. Nothing
shall abridge Shuttle’s right to use and/or to license the Shuttle Marks, and
Shuttle reserves the right to the continued use of all the Shuttle Marks, to
license such other uses of the Shuttle Marks and to enter into such agreements
with other carriers providing for arrangements similar to those with Mokulele as
Shuttle may desire. No term or provision of this Agreement shall be
construed to preclude the use of the Shuttle Marks by other persons or for other
similar uses not covered by this Agreement.
4. Shuttle-Controlled
Litigation. Shuttle at its sole expense shall take all steps
that in its opinion and sole discretion are necessary and desirable to protect
the Shuttle Marks against any infringement or dilution. Mokulele
agrees to cooperate fully with Shuttle in the defense and protection of the
Shuttle Marks as reasonably requested by Shuttle. Mokulele shall
report to Shuttle any infringement or imitation of, or challenge to, the Shuttle
Marks, immediately upon becoming aware of same. Mokulele shall not be
entitled to bring, or compel Shuttle to bring, an action or other legal
proceedings on account of any infringements, imitations, or challenges to any
element of the Shuttle Marks without the written agreement of
Shuttle. Shuttle shall not be liable for any loss, cost, damage or
expense suffered or incurred by Mokulele because of the failure or inability to
take or consent to the taking of any action on account of any such
infringements, imitations, challenges or because of the failure of any such
action or proceeding. If Shuttle shall commence any action or legal
proceeding on account of such infringements, imitations or challenges, Mokulele
agrees to provide all reasonable assistance requested by Shuttle in preparing
for and prosecuting the same.
5. Revocation of
License. Shuttle 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 Shuttle Marks provided Mokulele herein
shall revert to Shuttle and the Shuttle Marks shall not be used by Mokulele in
connection with any operations of Mokulele. Mokulele shall cease all
use of the Shuttle Marks in all respects upon the last Covered Aircraft being
withdrawn from this Agreement. Mokulele shall not thereafter make use
of any word, words, term, design, name or xxxx confusingly similar to the
Shuttle Marks or take actions that otherwise may infringe the Shuttle
Marks.
6. Assignment. The
non-exclusive license granted by Shuttle to Mokulele is personal to Mokulele and
may not be assigned, sub-licensed or transferred by Mokulele in any manner
without the written consent of a duly authorized representative of
Shuttle.
7. Shuttle
Marks. The Shuttle Marks shall be as provided to Mokulele
prior to the commencement of the Term.
8. Survival. The
provisions of this Exhibit F shall survive the termination of this Agreement for
a period of six years.
EXHIBIT
G
Reasonable
Operating Constraints
The
schedules for the Covered Aircraft shall meet all of the following quarterly
average requirements:
1. Minimum & Maximum
Scheduling Parameters:
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Minimum
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Maximum
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Scheduled
Block Hours per Aircraft per day
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[*]
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[*]
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Scheduled
Cycles per Aircraft per day
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[*]
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[*]
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Note: the
above minimum and maximum schedule parameters apply only to those Covered
Aircraft in scheduled service, not to the Spare Aircraft.
2. Aircraft Maintenance and
Crew Requirements.
Mokulele
agrees to take into consideration Shuttle’s operational requirements for
overnight maintenance and crew productivity (including, where feasible, mid-day
flights into Shuttle crew base cities for crew exchanges) and
legality.
Mokulele
shall produce a Final Monthly Schedule in cooperation with Shuttle that meets
the following location and minimum hour requirements for overnight
aircraft:
(i) each
of the Covered Aircraft will remain overnight at Honolulu International Airport
(HNL) for normal maintenance; and
(ii) each
of the Covered Aircraft shall remain overnight for at least 10 hours (as
measured by the time from the last terminating flight to the first originating
flight).
3. Maintenance
Bases.
Shuttle
will establish a crew base and a maintenance base for line and overnight
aircraft maintenance work at Honolulu International Airport
(HNL). Provided that Mokulele provides adequate hangar space, such
maintenance base will be sufficient to perform intermediate maintenance checks,
clear minimum equipment list and configuration deviation list items, and perform
general maintenance, trouble shooting, and component removals and
repairs.
4. Crew
Overnights.
The
schedule may allow for single overnights, multiple overnights, staged, and
continuous duty overnights of crews in outstations, provided, should Mokulele
schedule continuous duty overnights or staged crews, incremental hotel and per
diem costs related to such continuous duty overnights or staged crews will be
billed by Shuttle to Mokulele in arrears as a Pass Thru costs [*]. Mokulele
reserves the right to review Shuttle’s crew schedules to ensure efficient and
economic crew scheduling and agrees to negotiate economic settlement with
Shuttle for schedule changes that materially affect crew utilization or line
maintenance requirements.
5. Charter Flights Sold by
Mokulele.
Mokulele
may schedule, price and sell Charter Flights using the Covered Aircraft, provided Shuttle receives 60
days’ advance notice of the tentative dates and times of such Charter Flights
and the final dates are built into the Final Monthly
Schedule. Mokulele may also request Shuttle to consider ad hoc
Charter Flights or extra sections. Mokulele agrees to compensate
Shuttle for any additional operating costs of the Charter Flights, including but
not limited to aircraft ferry costs and unproductive crew time, as such costs
are provided to Mokulele at the time Mokulele provides notice to Shuttle of the
Charter Flights, or sufficiently in advance of Mokulele’s bid for the Charter
Flight to allow such costs to be passed through to the charterer.
EXHIBIT
H
Financial
Projections
(see
attached)
