EXHIBIT 99.2
INDIRECT CHARTER AGREEMENT #(redacted)
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This Agreement is made and entered into as of November 29, 2001, by and
between XXXXXXXXXX.XXX, Delaware corporation ("Indirect Air Carrier"), having
its principal place of business at 0000 Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxx, XX
00000 and VE HOLDINGS, INC. d/b/a Vacation Express ("Charterer"), having its
principal place of business at 0000 Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxx, XX
00000.
WHEREAS, Indirect Air Carrier desires to charter airline services to
Charterer, and Charterer desires to charter from Indirect Air Carrier, certain
aircraft and services as set forth more fully herein;
WHEREAS, this Agreement is commonly known as an Indirect Charter
Agreement, wherein, Indirect Air Carrier has contracted for the aircraft, crews,
maintenance and insurance ("ACMI") and all other expenses associated with the
charter unless specifically accepted by the Charterer in this Agreement;
WHEREAS, Indirect Charter contracted for PACE AIRLINES ("Airline") to
provide the ACMI services for flights pursuant to this Agreement.
NOW THEREFORE, for and in consideration of the promises and covenants
herein contained and other valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to be legally
bound, do hereby agree as follows:
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Section 1 - Term of Charter
The term of this Agreement shall be from December 20, 2001 to and including
December 19, 2004, a period of 36 months. This agreement may be extended up to
December 19, 2007 after December 20, 2002 with mutual agreement but such
extension must be completed by December 19th, 2003. Subject to such extension as
may be permitted under this Agreement, the charter contemplated herein will
commence on the date of the first flight and will terminate on the date of the
last flight set forth in Appendix A hereto.
Section 2 - Condition Precedent
Performance of this agreement is conditional upon receipt of required
permissions, U.S. Department of Transportation Public Charter Authority,
approvals and consents of all appropriate and required government authorities on
or before fifteen (15) days before the start of the proposed operation. Indirect
Air Carrier will cause the Airline to seek U.S. Federal Aviation Authority (FAA)
approval and all governmental approvals, including but not limited to approvals
of foreign authorities and make all required filings. Indirect Air Carrier will
seek U.S. Department of Transportation (DOT) approval and make the required
filings. Upon written request, each will assist the other in obtaining such
approval, authorities and rights.
This Agreement is further conditioned upon the leasing of six (6) Boeing
737 aircraft pursuant to such terms and conditions that are satisfactory to
Airline in its sole and absolute discretion. Lease Agreement to be completed by
no later than 7th September 2001 and Indirect Air Carrier shall advise the
Charterer of the lease negotiations status no later than 31st August 2001.
Failure to comply with either of these obligations shall release Charterer and
Airtours plc from all further obligations forthwith. The acquisition condition
date may be extended by mutual consent. This condition was met by September 7,
2001.
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This Agreement is further conditioned upon the negotiation and execution of
a Co-Charter Supplementary agreement between Airline, Indirect Air Carrier and
Charterer. This condition was met by August 15, 2001.
This Agreement is further conditioned upon Charterer being satisfied by
September 7th 2001 following an audit of Airline's operation (with which Airline
shall fully cooperate) that Airline has the available resources to fulfill this
contract. Failure to satisfy Charterer shall release Charterer, Airtours plc,
its group companies from all further obligations forthwith. This condition was
met by September 7, 2001.
This Agreement is further conditioned upon Charterer issuing of a Letter of
Credit that shall list the Airline as beneficiary. Such Letter of Credit as
provided in Charter ACMI Agreement #VE0008 shall be maintained during the term
of this Agreement and for a period thirty (30) days thereafter. This condition
was met by September 15, 2001.
This Agreement is further conditioned upon Indirect Air Carrier issuing of
a Letter of Credit on or before December 20th 2001 in the sum of US$200,000
(Charterer having the right to review this figure from time to time if
reasonably necessary) in a form reasonably satisfactory to Charterer that shall
list the Charterer as beneficiary. Such Letter of Credit shall be maintained
during the term of this Agreement and for a period thirty (30) days thereafter.
Section 3 - Primary Payment Obligations of Charterer
The "Charter Price" shall at the commencement of this Agreement be as
specified in Appendix A in consideration of the performance by Indirect Air
Carrier of its obligations under the Agreement.
Charterer will remit at least fourteen (14) days prior to each Flight the
appropriate Charter Price to the Indirect Air Carrier pursuant to Appendix A,
subject to the contract not having been breached prior to the due date. The said
payment shall be made into an escrow account, and shall not accessed by either
Indirect Air carrier or Airline until the said Flight has departed. Subject to
these same provisos, Charterer agrees to pay Indirect Air Carrier the Annual
ACMI Guarantee as listed in Appendix A (subject to the provisos contained within
the schedule), for the flights per calendar year during the term of this
contract. For the purpose of clarification, this does not mean that Charterer is
liable to pay both the Charter Price and the Annual ACMI Guarantee - the Annual
ACMI Guarantee is made up of the individual Charter Prices of the flights listed
in Appendix A. Payment to Indirect Air Carrier is subject to its performance or
availability to perform (ie the Indirect Air Carrier is ready able and willing
to perform, but does not do so either due to a prior material default by the
Charterer, or a request by the Charterer that they should not perform) the terms
and provisions of this Agreement.
For the purposes of this agreement, all airports outside the United States
which are contained within the flight program contained within this Agreement,
together with Sanford, Florida within the United States, and such other airports
as may be added from time to time by the parties shall be known as the "C
Airports".
For the purposes of this agreement, all airports inside the United States,
and which are contained within the flight program contained within this
agreement (excluding Sanford, Florida), and such other airports as may be added
from time to time between the parties shall be known as the "F Airports".
Section 4 - Obligations of the Charterer
Charterer will submit its flight schedule to Indirect Air Carrier no
less than twenty (20) days prior to the first departure date of that month.
There will be no schedule changes less than ten (10) days prior to departure
without mutual consent of the parties, whose consent will not be unreasonably
withheld.
In relation to the C Airports, Charterer will be responsible at all times
for the performance of its employees subcontractors or agents, except to the
extent resulting directly or indirectly from the action or inaction of Indirect
Air Carrier, Airline, or their directors, officers, agents, servants or
employees.
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Additionally, Charterer shall be responsible for contracting with the
necessary third parties at the C Airports to carry out the Obligations, and
shall be responsible for paying for their services.
Charterer shall reimburse Indirect Air Carrier all those taxes that are
outlined in Schedule D from time to time at the prevailing rate which Indirect
Air Carrier may be obliged to pay from time to time. Indirect Air Carrier shall
immediately remit taxes to the proper governmental authority and indicate this
by signing the Declaration of Obligation (attached).
Charterer will be responsible for the payment of Fuel Charges pursuant to
Section 8 of this Agreement.
Charterer will be responsible for the payment of Charter Price Escalation
Charges pursuant to Section 9 of this Agreement.
Section 5 - Obligations of Indirect Air Carrier
Indirect Air Carrier agrees to charter certain aircraft (the "Aircraft") to
Charterer in accordance with the terms and conditions of this Agreement. The
aircraft type and capacity, routing(s), price, payment schedule, and related
information are set forth in Appendix A. The Aircraft shall be delivered to
Charterer in the configurations set forth in Appendix A and in the usual and
customary condition (including full compliance with air worthiness regulations)
for Aircraft similarly situated.
In consideration of payment by Charterer of the amounts set forth in
Appendix A, Indirect Air Carrier shall cause Airline to provide such ACMI
services in respect of such operation:
a) Fully qualified and licensed cockpit crews as required to carry out the
flights;
b) All required cabin crew to carry out the flights, who will
(together with the cockpit crew) at all times during the operation
of the Aircraft be the employees of Airline;
c) All normal pay and allowances payable by Airline, to its above
identified employees;
d) Flight dispatch services for the Aircraft with respect of the flights
conducted hereunder;
e) All necessary scheduled and unscheduled maintenance and repair to
the Aircraft in accordance with FAA requirements and Airline's and
manufacturer's approved maintenance programs;
f) Insurance as set forth below in Section 7 below.
Additionally, in consideration of payment by Charterer of the amounts set forth
in Appendix A, Indirect Air Carrier shall provide and be responsible for
contracting and paying for the following flight, passenger and ground services
in respect of such operation at the F Airports (the Obligations"):
a) Passenger and Baggage Handling related to their respective travel
and required facilities necessary for travel on these charters
(Airline will be responsible for the imposition of baggage limits
within the space and weight limits of the Aircraft);
b) Passenger ticketing and check-in;
c) Passenger and baggage security fees and inspection fees;
d) Aircraft handling, including aircraft marshalling, air start,
ground power units (except when being used for extended
maintenance purposes), pushback of aircraft, stairs, deicing and
cleaning of aircraft interior at all stations except when Pace is
utilizing the aircraft outside the scope of this agreement;
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e) Liaising with and supervising the providers of aircraft fuel and
into-plane service of fuel which Charterer will contract with
pursuant to Section 8 below.
f) Landing fees, traffic rights and fees, en route navigation and
overflight charges, air traffic control fees and other similar
charges;
g) Fees applicable to aircraft parking and aircraft security at
all airports;
h) Catering of passengers and crew, which should be billed on the
actual uplift
i) Processing, collection and remittance of any baggage claims
(except to the extent resulting directly or indirectly from the
action or inaction, if action is required under this Agreement, of
Charterer, their directors, officers, agents, servants or
employees);
j) Up to six (6) rooms, on an as needed basis, at SFB during hub
operations for the flight crews and cabin crews of spare aircraft
on hub days;
k) Any other hotel accommodations of flight crews, cabin crews and
required maintenance and operations personnel at all airports
other than the airports of SFB and those determined bases (as
agreed upon by Charterer and listed in Appendix A) for those
individuals performing work under this Agreement;
l) Remittance of taxes paid to Indirect Air Carrier to the proper
governmental authority.
m) Remittance of any and all other customs, immigrations,
agricultural and other inspection fees or charges and related
expenses including per passenger fee, over-time charges, and any
governmental fees, either foreign or domestic U.S to the proper
governmental authority;
n) Other services or expenses, other than those specifically agreed
herein to be provided by Charterer, as are required to provide the
charter flight.
Indirect Air Carrier will be responsible for arranging and payment of all
necessary third parties needed to provide the above services at the F Airports.
Furthermore, Indirect Air Carrier shall be responsible for the acts/omissions of
its subcontractors. Additionally, Indirect air Carrier shall cause each of its
subcontractors to provide certificates of insurance to the reasonable
satisfaction of Charterer, shall ensure that at least this level of insurance
remains in place at all times throughout the duration of this contract, and
shall grant Charterer a right if requested to bring a subrogated claim against
any of the said subcontractors in the event of their breach. Further Indirect
Air Carrier shall ensure at all times that the services listed above are
provided to the standards outlined in the service level agreement attached at
Appendix B. Finally, Indirect Air Carrier shall use all reasonable endeavours to
ensure that Charterer shall receive all reasonable assistance from Indirect Air
Carrier's subcontractors in the event of termination of this Agreement following
default by the Indirect Air Carrier.
In relation to the F Airports, Indirect Air Carrier will be responsible at
all times for the performance of its employees subcontractors or agents, except
to the extent resulting directly or indirectly from the action or inaction of
Charterer, or their directors, officers, agents, servants or employees.
In relation to the C Airports, Indirect Air Carrier shall use all
reasonable endeavors to ensure at all times that the services listed above are
provided to the standards outlined in the service level agreement attached at
Appendix B.
For the purpose of clarification, nothing in this clause shall entitle
Indirect Air Carrier to charge any additional fee to Charterer above and beyond
the Charter Price outlined in Appendix A.
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Section 6 - Operational Control
Charterer acknowledges that Airline will be responsible for the physical
and technical operation of the Aircraft and the safe performance of all flights,
and will retain full authority and control including exclusive operational
control and possession of the Aircraft at all times. Charterer acknowledges the
captain of the Aircraft and the flight dispatcher will have absolute discretion
in all matters concerning the preparation of the Aircraft for flight and the
flight itself, the load carried and its distribution, the decision whether or
not a flight will be undertaken, the route to be flown, the place where landings
will be made, and all other matters relating to the safety in the operation of
the Aircraft. Charterer acknowledges that Airline will be responsible for the
imposition of baggage limits within the space and weight limits of the Aircraft.
Charterer acknowledges the operation of the Aircraft will be carried out in
accordance with applicable regulations and the standards and practices of
Airline as set forth in Airline's approved manuals and operations
specifications.
The Charterer acknowledges that Indirect Air Carrier or Airline may utilize
the Aircraft for charter services for other customers. Such utilization will not
interfere with the flights under this Agreement, and shall be at Airline's/ Air
Carrier's entire cost and risk. If such interference occurs, Charterer shall
enjoy the remedy outlined in Appendix A..
Indirect Air Carrier shall provide to Charterer a monthly report on the
10th day of each month in respect of the previous calendar month's performance
in the form outlined in Appendix C. Carrier shall have a right of audit of
information stemming from this report, or reasonably relevant enquiries, and
Independent Air Carrier shall afford Charterer all reasonable assistance with
such audit.
Section 7 - Insurance and Liability
During the term of this Agreement Indirect Air Carrier shall require and
cause Airline at its sole cost and expense to maintain in full force and effect
the following insurances to the reasonable satisfaction of Xxxxxxxxxx.xxx and
Vacation Express with insurers and through such insurance brokers as they shall
deem appropriate and Airline finds reasonably acceptable:
a) Hull All Risks and Hull War and Allied Perils insurance covering
the Aircraft against all risks of loss or damage on an agreed
value basis. Such insurances shall provide a waiver of insurer's
rights of subrogation against Xxxxxxxxxx.xxx, Vacation Express,
Airtours PLC and each member of the Airtours Group of Companies
and their respective directors, officers, agents, servants and
employees.
b) Aircraft Third Party, Passenger, Passengers Baggage, Cargo and
Mail and Aviation General Third Party Legal Liability for a
Combined Single Limit (Bodily Injury/Property Damage) of USD
750,000,000 and one occurrence and in the aggregate in respect of
products legal liability. Such insurance shall include to the
fullest extent available war and allied perils coverage for those
perils excluding by War, Hijacking and Other Perils Exclusion
Article AVN48B or any modification or substitution thereof for the
time being in force.
Such insurance shall:
a) Include Xxxxxxxxxx.xxx, Vacation Express, Airtours PLC and each
member of the Airtours Group of Companies and their respective
directors, officers, agents, servants and employees as additional
assureds ("the Additional Assureds") for their respective rights
and interests;
b) Provide that all provisions, except the limits of liability, shall
operate in the same manner as if there were a separate policy
issued to each assured.
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c) Be primary and without right of contribution from any other
insurance which may be available to or maintained by the
Additional Insured.
d) Provide that the cover afforded to the Additional Assureds by the
policy shall not be invalidated by any act or omission (including
misrepresentation or non-disclosure) of any other person or party
which results in a breach of any term, condition or warranty of
the policy provided that the Additional Assured so protected has
not caused, contributed to or knowingly condoned the said act or
omission; and
e) Provide for not less than thirty (30) days prior written notice of
cancellation or material alteration of the insurances to be given
to Lessee except that in the case of war and allied perils such
period of notice shall be seven (7) days or such lesser period as
may be available in accordance with policy conditions. Notice will
not however be given at normal expiry date or in the event of
non-renewal.
Prior to the commencement of this Agreement, and on each and every renewal
of the insurances during the term of this Agreement, Indirect Air Carrier shall
require and cause Airline to provide or cause to be provided to the other, in
form reasonably satisfactory to the Charterer, Certificates of Insurance
evidencing Airline's compliance with the foregoing requirements. Indirect Air
Carrier acknowledges that Charterer shall have the right of subrogation in
relation to any claim Indirect Air Carrier may have against Airline.
Section 8 - Fuel Charges
The Charter Price set forth in Appendix A does not include aviation fuel
which shall be provided by the Charterer. In the period from term commencement
to 31st March 2002, the fuel provided by the Charterer shall be sufficient for
the contracted number of block hours based on actual fuel use. In the period
between 1ST April 2002 and the end of the contract, the fuel provided by the
Charterer shall be sufficient for the contracted number of block hours based on
a burn rate of X US Gallons per block hour, X being the average burn rate
achieved by the Airline in relation to this Agreement during the period between
31st March 2002 and the end of the contract . Should Airline exceed X US Gallons
per block hour by more than 1% , Indirect Air Carrier shall be responsible for
the cost of the additional fuel used above and beyond the X US Gallons per block
hour. Should Airline be able to carry out its flying with a burn rate of less
than X US Gallons per block hour, Indirect Air Carrier shall enjoy the benefit
of the difference between the achieved burn rate and the actual burn rate.
The parties appreciate that the aircraft will be used for services outside
this Agreement at Indirect Air Carrier's risk and cost, including Indirect Air
Carrier paying for the fuel for these flights. There shall be a monthly
reconciliation by the parties in which credit will be given by Indirect Air
Carrier to Charterer for use of Charterer's fuel, or vice versa, as the case may
be.
Section 9 - Charter Price Escalation
Indirect Air Carrier may increase the Charter Price in the event of the
occurrence of any of the following:
a) Agreement by both parties of an annual rate increase based on the
increase of specific ACMI costs (i.e. reserves, crew, etc.) All
costs will be subject to agreement by Charterer and not to exceed
the CPI as published in the Eastern Edition of The Wall Street
Journal.
b) Agreement by both parties of an annual rate increase based on the
increase of specific ground handling costs. All costs will be
subject to agreement by Charterer and not to exceed the CPI as
published in the Eastern Edition of The Wall Street Journal.
Additionally, Indirect Air Carrier shall be entitled to pass on to Charterer any
increase of any governmental or airport taxes and fees which Indirect Air
Carrier may be responsible for under the terms of this Agreement
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Section 10 - Limitations of Liability
Indirect Air Carrier will have the right to cancel any one or more charter
flights immediately, in the event of the occurrence of any of the following:
a) Charterer fails to make any payment as prescribed in this
Agreement.
b) Charterer or any of its agents, officers or employees fails to
comply with any of the terms and conditions of this Agreement and
such failure materially affects the execution of this agreement
c) Charterer makes any material misrepresentation of any information
required to be supplied under this Agreement and such
misrepresentation has a material adverse affect upon the
performance of this Agreement or Indirect Air Carrier.
Charterer understands that on the basis of such personnel being on standby
at the gate in case Charterer has any unused space at that time Airline at its
option may permit the use of any unused space on any of the charter flights for
the transportation of personnel of Indirect Air Carrier or Airline or its
interline partners. Indirect Air Carrier shall ticket such personnel traveling
on these flights and agrees to be responsible for, both their welfare any and
all applicable taxes or other costs associated with their travel.
In no event will the Charterer or any party for whom the Charterer is
responsible be entitled to recover from Indirect Air Carrier any amount in
excess the limits set forth in Section 7 of this Agreement and deductible
amounts payable by Airline with respect to such insurance. Charterer, for itself
and to the extent permitted by law for those parties for which Charterer is
responsible under the terms of this Agreement, waives and releases any claim,
asserted of right or cause of action that the Charterer and such parties may
have to recover against Indirect Air Carrier for any amount in excess of the
limitations set forth in this paragraph.
In no event will Charterer's liability exceed the agreed sums payable by
the Charterer to the Indirect Air Carrier under this Agreement.
Section 11 - Warsaw Convention Limitation
This Agreement shall be subject to the Convention for the Unification of
Certain Rules Relating to International Carriage by Air, signed at Warsaw,
Poland on October 22, 1929, as amended, (the "Warsaw Convention"). Charterer
shall take all actions necessary to ensure that Indirect Air Carrier will be
entitled to the benefits of limiting its liability to passengers for its
contract of carriage in effect at the time of the flight and under any law,
regulation, international treaty or agreement, including but not limited to the
Warsaw Convention. Both parties acknowledge that the printing of the limitations
of liability of the Warsaw Convention upon the ticket wallet shall suffice for
these purposes. All passengers will be advised of the applicability of the
Warsaw Convention and its limitations.
Section 12 - Termination for Default
In the event one party or the Airline fails to comply with any of its
material obligations hereunder, or in the event of:
a) the dissolution, liquidation, suspension of business or immediate
termination of existence of such party;
b) the insolvency or bankruptcy of such party;
c) the making by such party of an assignment for the benefit of creditors;
d) fraudulent conduct;
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e) the consent of such party to the appointment of a trustee or receiver
for such party for all or a substantial part of its business; or
f) the admission by such party of its inability to pay its debts as they
mature,
The other party shall have the right to immediately terminate the contact.
Such right of termination, whether or not exercised, will not be an exclusive
remedy, but will be in addition to all other legal and equitable rights and
remedies available to such other party. Charterer shall have the right to serve
notice terminating this agreement with immediate effect should one of the
criteria listed above be fulfilled. Further, Charterer shall be entitled to
serve immediate notice on behalf of the Indirect Air Carrier terminating the
ACMI agreement in the event that Airline fulfills one of the criteria listed
above and the Indirect Air Carrier have not served notice terminating the ACMI
agreement. The independent aircraft carrier hereby appoints Charterer as its
agent for this purpose alone.
In the event of termination following default of the Charterer, such
termination shall not relieve the Charterer from its obligation for the payment
of the Minimum Revenue required in this Agreement. Provided however, Indirect
Air Carrier will use its utmost endeavors to mitigate such potential loss. In
the event of termination following default of the Charterer, such termination
shall not relieve the Indirect Air Carrier of any of its historic and ongoing
liabilities.
Section 13 - Force Majeure
Notwithstanding any other provision of this Agreement, Indirect Air Carrier
or Charterer may delay the operation of or cancel any flight(s), including
positioning flight(s), in the event such cancellation or delay is required due
to events beyond Indirect Air Carrier's control including but not limited to
accident to aircraft, weather, third party strikes, lockouts, other industrial
or labor disturbances, acts of public enemy, wars, blockades, riots, epidemics,
lightning, earthquakes, arrests, explosions, failure of public utilities,
unavailability of fuel except directly caused by the actions of Airline,
inability to secure operating approval, seizure under legal process, sanction,
quarantine restrictions, fire, smog, fog, flood, act of God, any restrictive act
of government, bomb threats, unavailability of insurance coverage at
commercially reasonable rates due to civil or political unrest, services from
third party contractors, and any other event beyond the control of Charterer or
Indirect Air Carrier. In no event will Indirect Air Carrier be able to rely on
the benefit of the exclusions listed within this clause unless it can be
demonstrated that the exclusion on which they seek to rely is outside their
reasonable control. Further, there shall be no obligation for either party to
pay or perform during the period in which Force Majeure exists. Finally, the
party not directly affected by the Force Majeure (the "Victim") shall have the
right to contract with a third party whilst the Force Majeure period exists.
Provided such extended period is commercially necessary, the Victim shall be
free to contract with a third party beyond the length of the Force Majeure if so
necessary, without penalty to that Victim. As such, if for example Airline's
pilots were on strike for one month, and it was both reasonable to assume that
the delay would last a reasonable length of time and it was the only deal
available, Charterer would be able to contract with a third party Airline to fly
for a period of two (2) months with no penalty to Charterer and with no payment
being made to Airline or Indirect Air Carrier during this period. In no event
will Indirect Air Carrier or Charterer be liable for damages of any kind arising
out of or related to any cancellation or delay excusable under this clause.
Section 14 - Indemnification
Charterer will indemnify and hold Indirect Air Carrier (including without
limitation, Indirect Air Carrier's officers, directors, employees, servants and
agents), for, from and against all damages and claims for damages, demands,
liabilities, actions, direct losses (but not indirect or consequential losses),
costs, taxes, assessments, suits, recoveries, judgments or executions
(including, without limitations, reasonable cost of investigation, litigation
costs, court costs, expert witness fees, litigation support services, settlement
cost or reasonable attorney's fees), damages or injury to person or property
(including, without limitation, injury resulting in death) arising from
Charterer or its agents, employees or subcontractors.
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Indirect Air Carrier will indemnify and hold Charterer (including without
limitation, Charterer's officers, employees, servants and agents), for, from and
against all damages and claims for damages, demands, liabilities, actions,
losses, costs, taxes, assessments, suits. recoveries, judgements or executions
(including without limitations, reasonable cost of investigations, litigation
costs, court costs, expert witness fees, litigation support services, settlement
cost or reasonable attorney's fees) damages or injury to person or property
(including without limitation, injury resulting in death) however caused arising
from or relating to any act of Indirect Air Carrier, Airline or its agents,
employees or subcontractors.
Section 15 - Default
In the event of a default in payment of any sums due under this Agreement,
the defaulting party will pay to the non-defaulting party interest upon such
sums, from the payment due date until paid in full, at the rate of two percent
(2 %) per annum above the prime rate of interest specified in the Eastern
Edition of The Wall Street Journal or any successor publication, adjusted for
any change in such prime rate of interest.
In the event of default hereunder and suit resulting therefrom to enforce
any provision of this Agreement, any party against whom judgment is awarded will
be liable to the non-defaulting party for all of its costs and expenses,
including reasonable attorneys' fees incurred in the preparation, prosecution
and appeal of such suit for enforcement or damages.
Section 16 - Miscellaneous
ENTIRE AGREEMENT. This Agreement, together with all Appendices constitute
the entire agreement between the parties and supersedes any prior agreement or
understanding, written or unwritten, regarding the subject matter hereof. Any
amendment or variation to this Agreement will be in writing and will be valid
only when signed by the duly authorized representatives of both parties and
approved by appropriate and required governmental authorities to the extent
required.
SETOFF AND ABATEMENT. All payments and services provided for herein will be
paid in full and without setoff, defense, counterclaim or deduction of any kind,
unless agreed upon by Charterer and Indirect Air Carrier, arising from any other
transaction or relationship, direct or indirect, which may exist between the
parties. However, this shall not preclude either party having the right to
setoff/abatement within this contract subject to mutual consent of the parties
(such consent not to unreasonably withheld) i.e. if Indirect Air Carrier fails
to perform under the contract, Charterer shall not be obliged to pay the whole
of the Minimum Revenue before a defense can be raised. Instead, the Charterer
will continue to make the weekly payment (in the case of a non-material breach
such that the contract continues to exist) into an escrow account that cannot be
accessed without both parties written consent, or in the absence of both parties
written consent, a court order.
CLAUSE HEADINGS. All headings herein are inserted for convenience only and
will not affect the validity, construction or interpretation of this Agreement.
CONFIDENTIALITY. Except as otherwise required by law, neither party will
permit any of its directors, officers, employees, or agents to disclose to any
person or entity (except affiliated companies), other than those permitted in
writing by the other party prior to disclosure, any information contained in
this Agreement. Notwithstanding the foregoing, either party may disclose
information in this Agreement required by law, rule or regulation to be
furnished to the Federal Aviation Administration, the Department of
Transportation, or any other governmental agency having jurisdiction over the
charter flight arrangements or operations contemplated by this Agreement.
HAZARDOUS AND PERISHABLE MATERIALS. Charterer will not request Airline or
Indirect Air Carrier to transport any hazardous materials nor shall Airline or
Indirect Air Carrier be required to transport the same on any flight. Hazardous
material is any matter, which may endanger health, safety or property. Charterer
may request Airline or Indirect Air Carrier to transport perishable products or
materials but such transportation is at the risk of the Charterer. Perishable
material is anything, including live animals, and other objects that may
deteriorate and thereby lose value, create a health hazard, or cause a nuisance.
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Packing and loading of such perishable materials or products shall be the sole
and exclusive responsibility of theIndirect Air Carrier. Indirect Air Carrier
will indemnify and hold harmless Airline and Chartere with respect to any
damages, claims, loss, fines, penalties, or discipline levied from any party
against Airline or Charterer for any hazardous or perishable items carried on
its flights.
WAIVER. None of the terms of this Agreement can be waived except by express
written waiver signed by the party to be charged. The failure of either party to
enforce or the delay by either party in enforcing any of such party's right
under this Agreement shall not be deemed a continuing waiver or a modification
thereof, and either party may, within the time provided by applicable law,
commence appropriate proceeding to enforce any and all such rights.
CHOICE OF LAW AND FORUM. This Agreement shall be construed according to the
laws of the State of New York, without regard to its conflict of law provisions.
Any dispute, controversy or difference arising between the parties out of or
with respect to the performance, interpretation, or application of this
Agreement or the respective rights and liabilities of the parties hereunder, and
which cannot be agreed amicably between the parties, shall be referred to
arbitration to be conducted pursuant to the provisions of the Commercial
Arbitration Rules of the American Arbitration Association applicable to the
settlement of commercial disputes. The parties may agree on the selection of a
single arbitrator, but if they cannot agree, each party shall select an
arbitrator and the two selected arbitrators shall select a third arbitrator. The
cost of the arbitration proceeding shall be borne equally between the parties
unless the arbitration panel otherwise determines. The decision of the
arbitrators(s) shall be final and binding upon the parties and judgment upon the
award rendered by the arbitrator(s) may be entered in any court of competent
jurisdiction.
EXECUTION OF AGREEMENT AND COUNTERPARTS. Each person executing this
Agreement on behalf of a party hereto represents and warrants that such person
is duly and validly authorized to do so on behalf of such party, with full right
and authority to execute this Agreement and to bind such party with respect to
all of its obligations hereunder. This Agreement may be executed (by original or
faxed signature) in counterparts, each of which shall be deemed an original, but
all of which taken together shall constitutes but one and the same instrument.
10
NOTICES. Any notice or other communication required or permitted hereunder
shall be in writing and shall be deemed to be properly given when personally
delivered (by hand or by courier), when sent by certified or registered mail,
postage prepaid and return receipt requested, when sent by facsimile
transmission, or when delivered by overnight or similar delivery services, fees
prepaid, to the party entitled to receive such notice at the address (or
facsimile number) set forth below or at such other address (or facsimile number)
as such party shall provide in a written notice to the others in accordance with
the terms of this Section. Except as otherwise specifically provided in this
Agreement, notice shall be deemed to be received by the party to whom such
notice was sent, in the case of notice given by personal delivery, on the date
of delivery, in the case of notice given by certified mail (or by such
comparable method), three business days after mailing, in the case of notice by
overnight delivery service, on the date of actual delivery, and, in the case of
notice by facsimile transmission, on the date of actual transmission.
------------------------------------------- ------------------- --------------------------------------------
Xxxxxxxxxx.xxx Vacation Express
------------------------------------------- --------------------------------------------
------------------------------------------- --------------------------------------------
0000 Xxxxxxx Xx., Xxxxx 000 Address 0000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
Xxxx Xxxxxxx Attn Xxxxx Xxxxxxx
President Vice-President - Operations
000-000-0000 Phone 000-000-0000
000-000-0000 Fax 000-000-0000
Xxxxxxxx@xxxxxxxxxx.xxx E-Mail xxxxxx@xxxxxxxxxxxxxxx.xxx
----------------------- --------------------------
------------------------------------------- ------------------- --------------------------------------------
or to such other address as either party may designate in notice given in
accordance with this paragraph.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by and
through their duly authorized officers of the date first written above.
For Indirect Air Carrier: For Charterer:
----------------------------------------------------- -------------------------------------------------
----------------------------------------------------- -------------------------------------------------
Signature Signature
----------------------------------------------------- -------------------------------------------------
----------------------------------------------------- -------------------------------------------------
Name (Printed) Name (Printed)
----------------------------------------------------- -------------------------------------------------
----------------------------------------------------- -------------------------------------------------
Title Title
----------------------------------------------------- -------------------------------------------------
----------------------------------------------------- -------------------------------------------------
Date Date
11
AIRCRAFT CHARTER A.C.M.I. AGREEMENT #VE0007
APPENDIX A
AIRCRAFT AND AIRCRAFT BASE
--------------------------
"Guaranteed Aircraft"
--------------------
One (1) - 737-300 with 148 Seats at ATL
One (1) - 737-300 with 148 Seats at CLT
One (1) - 737-300 with 148 Seats at CVG
One (1) - 737-300 with 148 Seats at SDF
"Power-by-the-Hour Aircraft"
----------------------------
One (1) - 737-300 with 148 Seats at BNA
One (1) - 737-300 with 148 Seats at IAD
FLIGHT SCHEDULE
Status Arrival
Date Aircraft Origin Destination (Live/Ferry) Departure Time Time
------------------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
------------------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
Flight dates pursuant the Schedule of Routes and Prices
Departure and Arrival Times to be agreed upon by Charter and
Indirect Air Carrier from time to time.
PRICES AND PAYMENT DATES
Charterer shall pay Charter Price in U.S. Dollars for each Flight to Indirect
Air Carrier on the Due Dates set-forth in the Schedule of Routes and Prices
herein. Charterer shall pay an additional sum in U.S. Dollars for any air
transportation services performed at Charterer's request that is in addition to
the Flights listed in the Schedule of Routes and Prices. Indirect Air Carrier
may increase the Charter Price as described in Section 9 of this Agreement.
UTILIZATION GUARANTEE
Guaranteed Aircraft
Charterer agrees to a minimum total hourly utilization per calendar year on the
Guaranteed Aircraft. The following table specifies the total number of Minimum
Guaranteed Annual Block Hours that the Charterer agrees to charter from the
Indirect Air Carrier on the Guaranteed Aircraft in each calendar year.
(redacted table)
Any hours not operated due to mechanical failure of any of the Guaranteed
Aircraft shall be credited towards the Minimum Guaranteed Annual Block Hours.
Should Charterer fail to meet the Minimum Guaranteed Annual Block Hours for any
one or more calendar years, Charterer agrees to pay to Indirect Air Carrier
(redacted) per hour for each and every block hour not operated and paid for on
the Guaranteed Aircraft. Any payments made to Indirect Air Carrier as a result
of cancelled block hours pursuant to the Cancellation Chargers of the Guaranteed
Aircraft shall be credited to this Utilization Guarantee of the Guaranteed
Aircraft. Any hours operated on the Power-by-the-Hour Aircraft that are in
addition to the Flights listed in the Schedule of Routes and Prices that are
operated and paid for by the Charterer will be credited towards the Minimum
Guaranteed Annual Block Hours in the year that they are operated.
12
Power-by-the-Hour Aircraft
Charterer does not guarantee a minimum number of block hours per month or year
to be operated on either Power-by-the-Hour Aircraft. However, should the
Charterer cancel 50% or more of the block hours pursuant to the Schedule of
Routes and Prices on either or both Power-by-the-Hour Aircraft, Indirect Air
Carrier may, upon 60 days written notice to the Charterer, cancel all remaining
Flights on the affected aircraft. In the event that 50% or more of the block
hours are cancelled by the Charterer on either or both of the Power-by-the-Hour
Aircraft after May 31, 2002 and the Indirect Air Carrier elects to cancel all of
the remaining flights, no Cancellation Penalty shall be due by the Charterer to
the Indirect Air Carrier. In the event that the Indirect Air Carrier elects to
cancel all of the remaining Flights before May 31, 2002 due to the cancellation
of 50% or more of the block hours by the Charterer, the Charterer shall
reimburse Pace Airlines for the out-of-pocket expenses directly related to
recruiting and training the Cockpit, Cabin and Maintenance personnel assigned to
the cancelled aircraft. The table below depicts the block hours indicated in the
Schedule of Routes and Prices for the Power-by-the-Hour Aircraft.
(monthly table 2002-0004 redacted)
CANCELLATION POLICY
GUARANTEED AIRCRAFT
In the event any one or more Flights scheduled on the Guaranteed Aircraft is
cancelled on or prior to the date of departure at the request of Charterer for
any reason other than Force Xxxxxx permitted under this Agreement, the parties
specifically agree that, with respect to each and every Flight cancelled,
Charterer shall pay Indirect Air Carrier a reasonable estimate of Indirect Air
Carrier's suffered damages ("Cancellation Charges"). The Cancellation Charges
shall be equal to $(redacted) per scheduled block hour.
The Cancellation Charges may be offset by previously scheduled, paid and
operated Flights that were in addition to the Schedule Of Routes and Prices on
the Guaranteed Aircraft. Further, any Cancellation Charges not offset by
previously scheduled, paid and operated Flights that were in addition to the
Schedule Of Routes and Prices may be applied to future additions of Flights not
included in the Schedule of Routes and Prices on the Guaranteed Aircraft.
POWER-BY-THE-HOUR AIRCRAFT
The Charterer may cancel any one or more of the Flights scheduled on the
Power-by-the-Hour Aircraft upon 15 days written notice without penalty.
Charterer's right to cancel any one or more of the Flights scheduled on the
Power-by-the-Hour Aircraft does not provide relief from the Charterer's
obligation to reimburse Pace Airlines for recruiting and training costs pursuant
to the Utilization Guarantees specified above.
DELAY POLICY ATTRIBUTABLE TO AIRLINE
In the event of a delay to mechanical reasons, crewing or other operational
issues of Airline, Indirect Air Carrier will not provide any services for delays
up to 2 hours. If the delay is between 2:01 hours and 5:00 hours, Indirect Air
Carrier will provide a light snack or lunch as appropriate for the time of day
at its own costs. If the delay is over 5 hours, Indirect Air Carrier will
provide additional meals as appropriate for the time of day at its own costs.
At C airports, in the event of the Charterer contracted ground handling agents
providing the meals other services pursuant to this clause, Indirect Air Carrier
shall reimburse Charterer for reasonable costs and disbursements so incurred.
13
If a flight is delayed more than eight (8) hours (two (2) hours in the case of
delays caused as described in paragraph three of Section 6) due to mechanical
reasons or other operational issues, Indirect Air Carrier will use its best
efforts to provide substitute air transportation. Should Indirect Air Carrier
not be able to secure alternative transportation by that stage and Charterer,
with permission of Indirect Air Carrier, is able to provide transportation, the
any additional financial responsibility of the alternative air transportation
will be borne by Indirect Air Carrier if it is consented in writing, whose
consent will not be unreasonably withheld and will be provided within twenty
(20) minutes of request by Charterer.
Should departure performance factor of flights on the Guaranteed Aircraft,
defined as the percentage of flights departing within one hour of after the
scheduled departure time fall below 75% for an two consecutive months or 80% for
any six consecutive months due to delays attributable to maintenance or
operational deficiencies involving the Guaranteed Aircraft, excluding weather,
ATC related delays, any acts or omissions of Charterer or any of its passengers,
contractors, agents or employees or representatives, or any other facts of Force
Majeure, The ACMI rate on the Guaranteed Aircraft will be reduced by 8% until
such time that Indirect Air Carrier brings its rolling 30-day performance factor
on the Guaranteed Aircraft above 75% and maintains the performance above 75%.
The penalty will cease as soon as the 75% performance rate on the Guaranteed
Aircraft is achieved, however the probationary period will continue for 75 days.
Should the on time performance of flights on the Guaranteed Aircraft fall below
75% at any time during the probationary period, the 8% penalty will again be in
effect and the 75 day probationary period will begin again after the flight's on
time performance exceeds 75% for the 30 day rolling average.
Should departure performance factor of flights on the Guaranteed Aircraft,
defined as the percentage of flights departing within one hour of after the
scheduled departure time fall below 65% for an two consecutive months or 70% for
any six consecutive months due to delays attributable to maintenance or
operational deficiencies involving the Guaranteed Aircraft, excluding weather,
ATC related delays, any acts or omissions of Charterer or any of its passengers,
contractors, agents or employees or representatives, or any other facts of Force
Majeure, The ACMI rate on the Guaranteed Aircraft will be reduced by 10% until
such time that the flights rolling 30-day performance factor on the Guaranteed
Aircraft above 65% and maintains the performance above 65%. The penalty will
cease as soon as the 65% performance rate on the Guaranteed Aircraft is
achieved, however the probationary period will continue for 75 days. Should on
time performance factor of flights on the Guaranteed Aircraft fall below 65% at
any time during the probationary period, the 10% penalty will again be in effect
and the 75 probationary period will begin again after on time performance factor
of flights exceeds 65% for the 30 day rolling average.
The obligations of the previous two clauses are mutually exclusive but are to be
read together i.e. if the performance rises above the 65% limit, but still
breaches the 75% limit, the penalty will reduce from 10% to 8%, but will never
be 18%.
DELAY POLICY ATTRIBUTABLE TO INDIRECT AIR CARRIER
In any given month, no more than 5% of flights under this Agreement will be
delayed due to inactions/actions of Indirect Air Carrier's ground handling
agents/subcontractors being the primary cause of the said delay. In the event
that the percentage increases above 5% in any given month, Indirect Air Carrier
shall pay Charterer the following sums:
---------------------------------------------------------------- --------------------------------------------------------------
5 - 9.99% $100 per delayed flight
---------------------------------------------------------------- --------------------------------------------------------------
---------------------------------------------------------------- --------------------------------------------------------------
10- 14.99% $150 per delayed flight
---------------------------------------------------------------- --------------------------------------------------------------
---------------------------------------------------------------- --------------------------------------------------------------
15- 19.99% $200 per delayed flight
---------------------------------------------------------------- --------------------------------------------------------------
For the purpose of clarification a delay shall mean at least thirty minutes.
14
SPARE AIRCRAFT
In this Agreement, a provision has been made for the utilization of a spare
aircraft, if necessary. The location of the Spare Aircraft will be agreed upon
by both the Indirect Air Carrier and the Charterer and may change from time to
time. If an operational situation arises where the spare aircraft is needed to
fly as a result of a mechanical failure on another aircraft, then it will be
flown to the city where the operational problem exists. It will then operate the
schedule flying out of that city while the affected aircraft is being repaired.
When the spare aircraft is being utilized, it is understood that Indirect Air
Carrier is responsible, full in, for positioning and depositioning of all
aircraft concerned, and there shall be no additional cost to Charterer.
MISCELLANEOUS
It is understood by both parties that Charterer has full availability of all
belly space on all flights. Indirect Air Carrier or Airline may use this space
with prior approval from Charterer.
For Indirect Air Carrier: For Charterer:
----------------------------------------------------- -------------------------------------------------
----------------------------------------------------- -------------------------------------------------
Signature Signature
----------------------------------------------------- -------------------------------------------------
----------------------------------------------------- -------------------------------------------------
Name (Printed) Name (Printed)
----------------------------------------------------- -------------------------------------------------
----------------------------------------------------- -------------------------------------------------
Title Title
----------------------------------------------------- -------------------------------------------------
----------------------------------------------------- -------------------------------------------------
Date Date
00
XXXXXXXX X
SERVICE LEVEL AGREEMENT
16
APPENDIX C
INFORMATION REQUIRED BY CHARTERER
Each month, Indirect Air Carrier shall provide the following copy information to
the Charterer:
1. The voyage report in respect of each flight to include
i) Block times;
ii) Flight times;
iii) Fuel on board;
iv) Uplift;
v) Fuel on arrival;
vi) Fuel Burn
2. The monthly tech log for each aircraft used in this Agreement
3. Confirmation in relation to each flight whether:
i) the GPU was used;
ii) the airstart was used;
iii) whether any welfare payments were made to passengers, and if so, how
much;
iv) notification of use of the aircraft outside of this Agreement
17
Schedule D
Taxes to be paid by Indirect Air Carrier and Reimbursable by Charterer
PASSENGER FACILITY CHARGES
INTERNATIONAL DEPARTURE TAXES
18
Indirect Charter Agreement Appendix A
Xxxxxxxxxx.xxx and Vacation Express Page 52 of 53
Appendix A - Schedule of Routs and Prices
Excerpt from VEX and flightserv contract - last page of routes and prices schedule as of August 2002. Note
that the schedule of routes and prices is modified from time to time based upon changes in the
flight schedules. The Company assumes no obligation to update this information.
Block
Plane Hours ACMI Total
29-Nov-02 12-Dec-02 Thursday ATL-CUN-ATL 737-300
BNA-MEM-CUN-MEM-BNA 737-300
CLT-CUN-CLT 737-300
CVG-CUN-CVG 737-300
IAD-BWI-CUN-BWI-IAD 737-300
SDF-IND-CUN-IND-SDF 737-300
12-Dec-02 Total
13-Dec-02 Friday ATL-SFB-ATL 737-300
CLT-SFB-CUN-SFB-CLT 737-300
CVG-SFB-CUN-SFB-CVG 737-300
SDF-SFB-PUJ-SFB-SDF 737-300
13-Dec-02 Total
14-Dec-02 Saturday ATL-SFB-LIR-SFB-ATL 737-300
BNA-SFB-BNA 737-300
CLT-SFB-CUN-SFB-CLT 737-300
CVG-SFB-AUA-SFB-CVG 737-300
IAD-SFB-IAD 737-300
SDF-SFB-PUJ-SFB-SDF 737-300 (detail redacted)
14-Dec-02 Total
15-Dec-02 Sunday ATL-CUN-ATL 737-300
BNA-MEM-CUN-MEM-BNA 737-300
CLT-CUN-CLT 737-300
CVG-CUN-CVG 737-300
IAD-BWI-CUN-BWI-IAD 737-300
SDF-IND-CUN-IND-SDF 737-300
15-Dec-02 Total
16-Dec-02 Monday ATL-SFB-ATL 737-300
CLT-SFB-CUN-SFB-CLT 737-300
CVG-SFB-CUN-SFB-CVG 737-300
SDF-SFB-PUJ-SFB-SDF 737-300
16-Dec-02 Total
29-Nov-02 Total
Grand Total $23,151,079
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