Exhibit 99.1
AGREEMENT
This Agreement, dated and effective as of July 1, 2002, and replacing the
previous agreement of May 1, 2002, is entered into by and among ATA Holdings
Corp., an Indiana Corporation ("ATA"), Betaco Ltd., a Grand Cayman exempted
company (Owner #1), and Betaco, Inc., a Delaware Corporation (Owner #2),
(Owner #1 and Owner #2 collectively known as "Owners").
RECITALS:
A. J. Xxxxxx Xxxxxxxxx ("Xxxxxxxxx") is founder and principal shareholder of
ATA, an airline holding company, and is also the sole equity holder of
Owners.
B. Owner #1 owns a Feadship motor yacht, with an overall length of 125 feet,
beam of 28 feet, mean draft of 8 feet, with accommodations for 8 guests
plus crew and Owner #2 owns an Express Xxxxx Xxxxx with an overall length
of 52 feet, beam of 16 feet, mean draft of 5 feet, with accommodations
for 4 guests plus crew (the "Vessels").
C. ATA has used the Vessels for business purposes, which use, has
historically accounted for most of their use.
D. Prior to January 1, 2002, Owners have never charged ATA for the business
use of the Vessels, any of the costs or expenses of operating the
Vessels, or any other maintenance of the Vessels.
E. ATA desires to continue using the Vessels for its business purposes.
F. Owners are willing to allow ATA to continue using the Vessels, provided,
that ATA employs the full-time crew necessary to maintain and operate the
Vessels (the "Crew").
NOW, THEREFORE, the parties agree as follows:
1. Employment of Crew. ATA shall maintain the Crew for the Vessels
consisting of a captain and seven crewmembers at the sole expense of ATA.
The names of the persons ATA will hire as the initial Crew are listed on
the attached Exhibit A.
The Crew shall be hired at the initial salary set forth opposite their
name on the attached Exhibit A. The parties agree to treat the Crew as
employees of ATA for all purposes. Each member of the Crew shall be assigned
to work on the Vessels in the capacity set forth on Exhibit A. The Crew shall
be available on a full time basis, including during periods that ATA is not
using the Vessels. ATA shall provide benefits to the Crew equivalent to ATA's
other salaried or hourly employees who are similarly compensated.
Each member of the Crew will be an employee-at-will, and ATA, in its sole
discretion, may fire any or all members of the Crew. ATA will confer with
Owners in all employment matters relating to the Crew. If the employment of a
member of the Crew is terminated for any reason, ATA shall replace such person
with a person of equivalent experience and ability after consulting with
Owners.
2
2. Use of Vessels. ATA may use the Vessels at any time with the following
limitations:
(a) Notice of Intended Use by ATA. ATA, through any authorized officer,
shall give Owners reasonable notice of its intended use of the Vessels. Each
use of the Vessels shall be considered a separate charter, and each notice
relating to a charter shall provide the following: the date(s) of such
charter, the time ATA anticipates boarding the Vessels, the time ATA
anticipates returning the Vessels, and any other specific requirements ATA has
with respect to the charter. (See Exhibit B)
(b) Limitation on Use. ATA will use the Vessels solely for their intended
uses and will follow all applicable laws, rules and regulations pertaining to
its possession and operation of the Vessels. ATA will not carry passengers or
cargo for hire.
(c) Return of Vessels. Following each charter of the Vessels by ATA, ATA
shall return the Vessels in good repair, ordinary wear and tear resulting from
proper use excepted.
(d) Owners' Use. Owners may use the Vessels any time that ATA is not
using the Vessels.
3. Audit Committee Review and Reimbursement. No less often than annually,
ATA's Audit Committee, with the assistance of ATA's independent outside
auditors, will review this Agreement, including the expense of employment
of the Crew compared to the rate which would be charged by an outside
third party under a fair market rental contract for the use of the
Vessels that is the equivalent to ATA's usage. In the event that in any
fiscal year, the expense of employment of the Crew is more than the rate
which would have been charged by an outside third party under a fair
market rental contract for the actual usage of the Vessels, the Audit
Committee will advise the Chief Financial Officer of ATA and he shall
invoice the Owners for the difference. Owners hereby agree to pay such
difference, if any.
4. Term. This Agreement shall continue until terminated by either party
providing thirty (30) days written notice to the other party.
5. Maintenance of Vessels. The Vessels are equipped with all safety
equipment required by the United States Coast Guard for such Vessels. The
Vessels were overhauled and inspected by Owners prior to May 1, 2002 and
at that time were found to be seaworthy and otherwise in good condition.
Owners shall provide all maintenance aboard the Vessels including:
routine inspections and repair. ATA shall not make any alterations in or
to the Vessels. Owners shall provide fuel, potable water, food and
refreshments along with all normal supplies for use aboard the Vessels in
a manner that is comparable to what would be available under charter
contracts with other yachts of this class.
Owners have not and do not make any representation, warranty, or
covenant, express or implied, with respect to the condition, quality,
durability, or suitability for ATA's intended use of the Vessels. Owners will
not be liable to ATA for any liability, loss, or damage caused by or alleged
to be caused directly or indirectly by the Vessels, by any inadequacy of, or
defect in, or any incident in connection with the Vessels, while they are in
ATA's possession.
3
6. Insurance. Owners shall purchase from an insurance company, and
thereafter maintain in full force and effect, insurance policies payable
to Owners in the following amounts:
(a) Standard yacht hull insurance providing full marine coverage in the
amount of $7,000,000 for the Feadship and $1,000,000 for the Express
Xxxxx Xxxxx;
(b) Protection and indemnity insurance in the amount of $10,000,000.
7. Maritime Liens. Subject to applicable maritime law, Owners maintain all
normal ownership responsibilities. ATA shall not incur any maritime liens
or other encumbrances on the Vessels, and shall not remove or deface any
notice that may be posted on the Vessels by Owners as evidence of Owners'
interest.
8. Breach and Remedy. In the event either party fails to perform its
obligations under this Agreement, the aggrieved party shall have all
rights and remedies available to them at law (including reasonable
attorneys' fees), in equity, or otherwise.
9. Assignment. ATA shall not assign or sublet its interest in the Vessels
without the prior written consent of Owners.
10. Notices. Any notices required to be given hereunder shall be in writing
and shall be deemed effective as follows: (a) if delivered personally, by
mail or by reputable commercial courier by receipted delivery, upon the
date of actual delivery of such notice to the notice party at the address
listed below for such party; or (b) if sent by facsimile, on the date of
the sender's receipt of transmission confirmation of such notice to the
notice party at the facsimile number listed below, provided that if the
receipt of such transmission is after 5:00 p.m. (local time of the notice
party) such notice shall be deemed effective as of the next succeeding
business day and further provided that the party giving such notice mails
a copy of such notice to the notice party at the address listed below
within three days after the transmission of such notice by facsimile. The
addresses and facsimile numbers of the parties to this Agreement, as of
the date hereof, are as follows:
(a) IF TO ATA, TO:
0000 X. Xxxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
ATTN: Xxxxx X. Xxxx
Vice President & General Counsel
PHONE: 000-000-0000
FACSIMILE: 000-000-0000
(b) if to Owners:
0000 X. 00xx Xxxxxx
Xxxxxxxxxxxx, XX 00000
ATTN: J. Xxxxxx Xxxxxxxxx, Chairman
Betaco, Inc.
PHONE: 000-000-0000
FACSIMILE: 000-000-0000
4
Either party may change its address or facsimile number by providing
written notice of such change as provided in this Paragraph 11 to the other
party.
11. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Indiana and the laws of
the United States, notwithstanding any state's choice of law rules to the
contrary.
12. Modification. No change or modification of this Agreement shall be valid
unless the same is in writing and duly executed by all of the parties
hereto.
13. No Waiver. Any waiver of any provision of this Agreement must be in
writing and signed by each party against whom the claim is being
asserted. No waiver of any provision of this Agreement will constitute a
waiver of any other provision of this Agreement (whether or not similar)
or a continuing waiver. The performance by any of the parties hereto of
any act not required of it under the terms and conditions of this
Agreement will not constitute a waiver of the parameters for and
limitations on its obligations under this Agreement, and no such
performance shall stop such party from asserting such parameters or
limitations as to any further or future performance of his, her or its
obligations.
14. Complete Agreement. This Agreement represents a complete and total
integration of the agreement of the parties hereto and supersedes all
prior or contemporaneous written or oral agreements relating to this
subject matter. The parties hereto agree that any and all prior
agreements covering the subject matter of this Agreement are hereby
terminated and of no further force or effect.
15. Severability. The invalidity or unenforceability of any particular
provision of this Agreement shall not affect the other provisions of this
Agreement and the Agreement shall be construed in all respects as if such
invalid or unenforceable provisions were omitted.
16. No Third Party Beneficiary. This Agreement is intended and agreed to be
solely for the benefit of the parties hereto, and no third party,
including the Crew, shall accrue any benefit, claim or right of any kind
whatsoever pursuant to, under, by or through this Agreement.
17. Execution in Counterpart; Facsimile Signature. This Agreement may be
executed in one or more counterparts, each of which shall be deemed an
original but all of which shall constitute one and the same instrument.
The parties agree that delivery of executed counterparts of this
Agreement may be effected by facsimile transmission and that any such
transmitted counterpart shall be deemed an originally executed
counterpart.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
ATA HOLDINGS CORP.
By: _____________________________
Printed: __________________________
Title: ____________________________
BETACO, LTD.
By: ______________________________
Printed: ___________________________
Title: _____________________________
BETACO, INC.
By: _____________________________
Printed: __________________________
Title: ____________________________
6
Exhibit A
---------
--------------------------------------------------------------------------------
ANNUAL
CREW MEMBER POSITION COMPENSATION
--------------------------------------------------------------------------------
Xxxxx X. Xxxxxxxx Captain/Orion $100,000
Xxxxxxx X. Xxxxx, XX Captain/Orion's Little Dipper $47,500
Xxxxxxx X. Xxxxxx Engineer $49,060
Xxxxxxx X. Xxxxxxxx Stewardess $33,800
Xxxxx Xxxx Mate $38,800
Xxxx X. Xxxxxxx Mate $30,000
Xxxxxxx X. Xxxxxxx Stewardess $26,000
7
EXHIBIT B
---------
NOTICE OF INTENDED USE BY ATA
ATA SPONSOR:
----------------------------------------------------------
GUEST NAMES:
----------------------------------------------------------
DATE OF CHARTER:
----------------------------------------------------------
BOARDING TIME:
----------------------------------------------------------
PROPOSED ROUTING:
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
RETURN DATE:
----------------------------------------------------------
RETURN TIME:
----------------------------------------------------------
BUSINESS PURPOSE:
----------------------------------------------------------
