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EXHIBIT 10.8
AGENT REPORTING AGREEMENT
TABLE OF CONTENTS
Page
SECTION I: PURPOSE AND SCOPE................................................ 1
SECTION II: DEFINITIONS..................................................... 1
SECTION III: LOCATIONS COVERED BY THIS AGREEMENT............................ 4
SECTION IV: QUALIFICATIONS FOR RETENTION ON THE AGENCY LIST................. 5
A. Financial Requirements........................................... 5
B. Personnel Standards.............................................. 7
C. General Qualification Requirements............................... 8
D. Other Requirements............................................... 8
SECTION V: APPOINTMENT OF AGENT BY CARRIER.................................. 10
SECTION VI: CHANGE OF NAME OR LOCATION...................................... 10
A. Procedures To Change Name........................................ 10
SECTION VII: AGENTS AUTHORITY,
GENERAL RIGHTS AND OBLIGATIONS................................. 11
SECTION VIII: REPORTS AND SETTLEMENTS, DEFAULTS AND
OTHER FINANCIAL IRREGULARITIES UNDER ASP...................... 12
A. Reports and Settlements-General.................................. 12
B. Exceptions To Reports and Settlements
if Agent Has Ten or More Locations............................... 13
C. Other Settlement Arrangements Not Prohibited..................... 14
D. Financial and Reporting Irregularities........................... 14
E. Payment of Carrier Debit Memos................................... 20
F. Failure To Maintain Proper Bond Or Letter of Credit.............. 20
SECTION IX: ADDITIONAL OPERATING REQUIREMENTS............................... 21
SECTION X: REFUND OR EXCHANGE OF ARC TRAFFIC DOCUMENTS...................... 23
SECTION XI: LIABILITY AND WAIVER OF CLAIM................................... 23
SECTION XII: DELIVERY AND WITHDRAWAL OF
TRAFFIC DOCUMENTS AND
IDENTIFICATION PLATES...................................... 25
SECTION XIII: CUSTODY AND SECURITY OF TRAFFIC
DOCUMENTS AND IDENTIFICATION
PLATES..................................................... 27
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Page
SECTION XIV: INSPECTION AND RETENTION OF AGENT RECORDS...................... 27
SECTION XV: REVIEWS OF QUALIFICATIONS OF
AND BREACHES BY AGENT...................................... 27
SECTION XVI: ANNUAL AND APPLICATION FEES.................................... 29
SECTION XVII: SPECIAL LOCATION EXEMPTIONS................................... 30
SECTION XVIII: NOTICES...................................................... 33
SECTION XIX: CENTRAL COLLECTION SERVICE..................................... 33
SECTION XX: TRANSFER OR ASSIGNMENT OF AGREEMENT,
DEATHS AFFECTING OWNERSHIP, ABANDONMENT OF
AUTHORIZED AGENCY LOCATION, TEMPORARY
CLOSURE.................................................... 33
A. Change of Ownership.............................................. 33
B. Disapproval of Change of Ownership............................... 34
C. Death of a Sole Proprietor....................................... 34
D. Death of a Partner............................................... 35
E. Abandonment of Authorized Agency Location........................ 36
F. Temporary Closure................................................ 36
SECTION XXI: REDUCED RATE TRANSPORTATION FOR AGENT.......................... 37
SECTION XXII: REMUNERATION OF AGENTS........................................ 37
SECTION XXIII: TRAVEL AGENT ARBITER......................................... 38
SECTION XXIV: INTERPRETIVE OPINION PROCEDURES............................... 38
SECTION XXV: MEMORANDUM OF AGREEMENT AND
ALTERNATIVE MEANS OF AGENT
CONCURRENCE................................................ 38
SECTION XXVI: AMENDMENT OF THIS AGREEMENT................................... 39
SECTION XXVII: ASSURANCE OF NONDISCRIMINATION
(Effective only as between the
Agent and each U.S. carrier; not
effective as between the Agent
and ARC, itself)........................................... 39
SECTION XXVIII: EFFECTIVENESS............................................... 39
SECTION XXIX: TERMINATION................................................... 39
SECTION XXX: OTHER AGREEMENTS SUPERSEDED................................... 41
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AGENT REPORTING AGREEMENT
This agreement by and between Airlines Reporting Corporation (hereinafter
"ARC"), 0000 Xxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000-0000, on its own
behalf and on behalf of the carriers which have or hereafter execute the ARC
carrier services agreement (hereinafter "carrier" or "carriers") and which
appoint the Agent under this agreement,
and
the person who executes the memorandum of agreement described in section XXV
hereof, agreeing to be bound to the terms and conditions of this agreement
(hereinafter called "the Agent"),
W I T N E S S E T H :
WHEREAS, ARC maintains an agency list containing the names of persons who have
been found to meet certain minimum requirements and qualifications, and are
eligible to issue ARC traffic documents and to sell air transportation or
provide for ancillary services on carriers which appoint them;
WHEREAS, carriers which are parties to the ARC Carrier Services Agreement may
appoint and provide their airline identification plates to such persons for the
sale of air transportation and the issuance of ARC traffic documents on their
behalf;
WHEREAS, ARC administers and operates the agents' standard ticket and area
settlement plan (hereinafter "ASP" or "the Plan") through which persons included
on the ARC agency list report ARC traffic documents for the sale of air
transportation and ancillary services on behalf of the carriers, and make
settlement therefore;
WHEREAS, the Agent engages in the sale of air transportation to the public as
agent for and on behalf of the carriers and, upon application duly submitted,
the agent has been found qualified for inclusion on the ARC agency list;
WHEREAS, the Agent will utilize the plan to report ARC traffic documents issued
for the sales of air transportation and ancillary services on behalf of the
carriers appointing such Agent, and make settlement therefore;
NOW, THEREFORE, in consideration of these premises and the mutual covenants and
agreements hereinafter set forth, it is mutually agreed as follows:
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SECTION I: PURPOSE AND SCOPE
A. The purpose of this agreement is to facilitate the issuance of ARC traffic
documents to the public by agents of carriers in a competitive and
efficient manner.
B. This agreement establishes a principal-agent relationship between the Agent
and appointing carriers, and governs the terms and conditions under which
the Agent is authorized to issue ARC traffic documents at or through its
authorized agency locations in the United States, and does not extend to
the terms and conditions under which the Agent is authorized to issue
tickets and other forms that the carrier may provide to the Agent.
C. This agreement does not constitute the entire agreement between the Agent
and a carrier, but is specifically limited to the terms and conditions
contained herein.
SECTION II: DEFINITIONS
For the purpose of this agreement--
AGENCY LIST and LIST mean the agency list maintained by ARC, which includes the
name, address and agency code number for each authorized agency location which
has been found qualified under ARC standards, and contains the classification
under which the location was included.
AGREEMENT means the ARC Agent Reporting Agreement.
AGENT IDENTIFICATION PLATE means a plate bearing the Agent's name, city, state,
and code number, which is used in a validator machine for the validation of ARC
traffic documents (paper format).
AIRLINE IDENTIFICATION PLATE means a plate bearing the carrier's name or
authorized abbreviation, and code number, and is used in a validator machine for
the validation of ARC traffic documents (paper format).
ARBITER means the Travel Agent Arbiter established by ARC as an independent
entity (including all Associate Travel Agent Arbiters) to decide disputes
between ARC and agents and applicants.
ARC TRAFFIC DOCUMENTS mean agents' standard tickets, miscellaneous charges
orders, tour orders, and all other accountable forms and documents, both manual
and automated, which ARC provides to agents in paper format for issuance to
their clients, and which bear ARC-issued numbers, as well as electronic versions
thereof. Both formats, paper and electronic, are assumed throughout this
agreement; if only one format is applicable, such shall be noted. The term does
not include carriers' own ticket stock, which
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includes tickets, miscellaneous charges orders, tour orders, and other
accountable forms and documents of the carriers, or electronic versions thereof.
ARC TRAFFIC DOCUMENTS (PAPER FORMAT) include both manual and automated
(transitional automated tickets and Automated Ticket and Boarding Pass forms)
ARC traffic documents.
ARC TRAFFIC DOCUMENTS (ELECTRONIC FORMAT) mean any ARC traffic documents other
than ARC traffic documents (paper format).
AREA BANK means a bank or a processing center designated to receive and process
sales reports and remittances from authorized agency locations in a geographic
area.
AUTHORIZED AGENCY LOCATION means a place of business operated by an agent which
is included on the agency list, and includes the home office location and any
branch office location of the Agent.
CHECK means the check, draft, or debit entry that an area bank draws or
initiates on the Agent's account designated pursuant to section VII.B of this
agreement, to charge the amount owed by such agent under section VIII hereof.
The various terms for describing the charge are used interchangeably in this
agreement.
CONTROL means the power or authority to manage, direct, superintend, restrict,
regulate, govern, administer, or oversee; and the term embraces every form of
control, actual or legal; direct or indirect; negative or affirmative;
individual, joint, several, or family, without regard to the type or number of
intervening or supervening persons involved. Two persons are under "common
control" when both are controlled by the same person or persons.
CREDIT REQUEST MEMO means any written request from an agent to a carrier
demanding payment of any obligation arising under the agreement, and includes
any form of credit request authorized by the carrier, including the Agent Sales
Summary Adjustment Request, Form 1282.
DEBIT MEMO means any written request from a carrier to an agent for payment of
any obligation arising under this agreement.
ELECTRONIC ISSUANCE of ARC traffic documents must include, but is not limited
to, the process by which an ARC issued number is assigned to the ARC traffic
document.
INDUSTRY AGENTS' HANDBOOK or HANDBOOK means a handbook containing various rules,
regulations and instructions of ARC covering an agent's responsibilities and
activities under the agreement, which is maintained by ARC, and updated from
time to time, and provided to all agents on a current and continuing basis.
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PERSON includes an individual, corporation, partnership, association, company,
or firm.
SYSTEM PROVIDER means a person, company, or other legal entity which operates a
computerized reservations system which supplies ticketing data required for the
imprinting of ARC traffic documents in paper format, or for the issuance of ARC
traffic documents in electronic format, by ARC-approved Agents, and which has
entered into an agreement with ARC and with the carrier(s) which are parties to
the Agent Reporting Agreement.
THE TRAVEL AGENT ARBITER PROGRAM, INC. is a corporation chartered in the
District of Columbia whose purpose is to oversee the Travel Agent Arbiter and
other specified programs.
UNITED STATES includes only the fifty states and the District of Columbia.
VARIABLE REMITTANCE PLAN means an arrangement negotiated between an individual
carrier and an agent under which the agent settles ARC traffic documents with
ARC on a schedule other than the tenth day after the close of the sales period,
or settles directly with an individual carrier. There are four variable
remittance plan options, including Direct Form of Payment (DP), Direct Form of
Payment with Invoice (DI), Variable Payment with Consolidated Check (PC) and
Variable Payment with Individual Check (PI).
SECTION III: LOCATIONS COVERED BY THIS AGREEMENT
A. The Agent may exercise the authority granted herein, only at such places of
business operated by the Agent as are included on the ARC agency list.
B. This agreement covers the home office and all branch locations of the
Agent, including any which may be added to the ARC agency list after the
date of execution hereof.
C. No branch location shall be included on the agency list unless the
corporate structure or ownership of the home office and the branch is
absolute and all inclusive as a single entity, and the home office has full
legal and financial responsibility for the administration, staff,
liability, maintenance, and operational expense of the branch location.
D. If the Agent wishes to have a place of business included on the agency list
as a branch location under the terms of this agreement, it shall submit an
application to ARC in accordance with the procedures ARC shall prescribe
for submitting and processing such applications. ARC shall not approve any
application for a branch location unless, among other things, the Agent is
properly bonded in the amount required by section IV.A.1 of this agreement.
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SECTION IV: QUALIFICATIONS FOR RETENTION ON THE AGENCY LIST
To be retained on the agency list, the Agent must continue to meet the following
criteria:
A. Financial Requirements
1. a. The Agent shall, without expense to ARC or any carrier, procure and
maintain for the joint and several benefit of the carriers and ARC, a
bond issued by a surety included on the current revision of Circular
570 issued by the United States Treasury Department, entitled "Surety
Companies Acceptable on Federal Bonds." The bond shall be in the form
prescribed from time to time by ARC, shall be in the amount prescribed
below, and shall be conditioned upon the Agent's compliance with the
provisions of this agreement governing remittances to ARC for the
carriers. Subject to the minimum and maximum amounts stated below, the
amount of the bond shall be equal to at least the average monthly net
cash remittance as determined for the twelve-month period ending on
the last sales period ending date of the fifth month prior to the
anniversary date of the Agent's bond. If the Agent was approved by ARC
within the preceding 12 months, the amount of the bond shall be equal
to at least the average monthly net cash remittance of the preceding
months ending on the last sales period ending date of the fifth month
prior to the anniversary date of the Agent's bond.
(1) The minimum amount of the bond that shall be maintained by each Agent
approved by ARC for inclusion on its agency list shall be $20,000.
This requirement shall remain in force as to each such agent for two
years from the date of such approval; thereafter, the minimum shall be
$10,000.
(2) In no event shall the amount of the bond required of an applicant for
a change of ownership as described in sections I, III, and IV of
attachment G of this agreement be less than the amount of the bond
required of the Agent prior to the approval of any such ownership
change.
(3) The minimum amount of the bond that shall be maintained by each Agent
as to which a change of ownership within the scope of section II and
section V of attachment G of this agreement is approved by ARC shall
be $20,000. This requirement shall remain in force as to each such
Agent for two years from the date of such approval, thereafter, the
minimum shall be $10,000. However, in no event shall the amount of the
bond required of an
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applicant for any change of ownership as described in sections II
and V of attachment G of this agreement be less than the amount
of the bond required of the Agent prior to the approval of any
such ownership change, or $20,000, whichever is greater.
(4) The maximum amount of the bond that shall be maintained by each
Agent shall be $70,000.
b. In lieu of the bond required by section IV.A.1.a of this
agreement, the Agent may provide an irrevocable bank letter of
credit in the form prescribed from time to time by ARC. The
amount of the letter of credit shall be determined at all times
in the same manner as the amount of the bond.
2. Effective on and after May 1, 1987, each agent which has been on ARC's
agency list continuously for two years, and each agent (1) as to which ARC
has approved a change of ownership within the scope of parts II or V of
attachment G to this agreement and (2) which has been on ARC's agency list
continuously for two years, may maintain, in lieu of the bond or letter of
credit prescribed above, a bond or letter of credit in the required form in
the amount of $10,000. This option may not be exercised until the Agent has
submitted, and ARC has approved in writing, a current financial statement
which shall thereafter be updated and submitted annually to ARC for written
approval and shall at all times meet the following requirements:
a. The financial statements of the Agent must: (1) be examined or
audited in accordance with generally accepted auditing standards;
and (2) be prepared in accordance with generally accepted
accounting principles; and (3) contain a report on the
examination signed by a person or firm licensed to practice
public accountancy in a state of the U.S. Financial statements
which are merely "reviewed" or "compiled," but not examined or
audited by a firm licensed to practice public accounting, do not
meet these requirements; and
b. Tangible net assets demonstrated by such statements shall be at
least $100,000; and
c. The report on the financial statements must have been prepared
within four months of the close of the period covered by the
financial statements and, together with the relevant forms,
mailed to ARC within thirty (30) days after the date of the
report of the public accountant.
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d. Where the Agent is not a corporation but involves one or more
individuals, personal financial statements may be accepted if
prepared in accordance with Statement of Position 82-1 as
published by the American Institute of Certified Public
Accountants, and meets all other requirements set forth above.
e. Financial statements meeting all the relevant requirements above
may be accepted on behalf of an incorporated agent from either
the parent organization, if the Agent is its subsidiary, or a
stockholder of the Agent, provided that such parent or
stockholder has on file with ARC an acceptable written guarantee
of the Agent's obligations under this agreement.
3. Any required adjustment of the amount of the Agent's bond or
irrevocable bank letter of credit to provide coverage in excess of the
minimum shall be made each time it is renewed, reinstated, or
replaced. If ARC determines that the Agent's bond or irrevocable bank
letter of credit is less than the required amount, ARC will notify the
Agent at least 90 days in advance of the anniversary date of such
instrument. If, however, the increase required is greater than
$10,000, the Agent may increase the bond or letter of credit in the
amount of $10,000 per quarter, or 25% of the total increase required
per quarter, whichever is higher.
Notwithstanding the above concerning the time for adjusting, and the method of
adjusting, the amount of coverage required, ARC will not approve an application
for an additional authorized agency location of an agent unless the agent's bond
or letter of credit is in the amount prescribed by section IV.A.I of this
agreement.
4. In addition to the other financial requirements of this subsection,
the Agent shall cause to have executed on its behalf a "Personal
Guarantee of Performance of Agent's Agreement," attachment C of this
agreement, if:
a. The Agent is declared in default pursuant to section VIII.D of
this agreement and, upon demand, fails to provide a certified
check in replacement of a dishonored check or for withheld sales
of unreported ARC traffic documents, or fails to provide a
missing sales report together with a certified check to cover the
report; or
b. The Agent is required by the Arbiter to do so.
B. Personnel Standards
1. Each authorized agency location of the Agent shall have at least one
person who is a full-time employee at the place
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of business, and is either the owner, partner, officer, or manager who
fulfills each of the following qualifications:
a. Exercises daily supervision of, and responsibility for, the
operations of that agency location and has the authority to make
management decisions therefor;
b. Has at least two years' full-time experience in either (1)
selling general travel services to the public or (2) supervising
the operation of a business offering such services; and
c. Has demonstrated knowledge of the provisions of the Industry
Agents' Handbook.
2. Each authorized agency location of the Agent shall have at least one
full-time employee who has had, within the past three years, one
year's full-time experience in airline ticketing.
C. General Qualification Requirements
1. The Agent shall be a citizen or national of the United States, or an
alien authorized employment (see 8 C.F.R. Part 109), or a foreign
corporation authorized to do business in the jurisdiction in which the
location is situated.
2. Each authorized agency location shall be clearly identified as, and
held out to the public to be, an office for the sale of air
transportation or ancillary services on behalf of the air
transportation industry.
3. The name of the Agent shall not be the same as, or misleadingly
similar to, a carrier, and not be identified as an airline office.
4. Each authorized agency location shall be open and freely accessible to
the public so that access to the authorized agency location is
unimpeded and unhampered, and it can be reached without hindrance or
restraint, and it is open to all comers.
5. The office, department or space which the Agent purports to be the
authorized agency location is engaged primarily in the retail sale of
passenger transportation.
D. Other Requirements
1. The Agent is ineligible for retention on the agency list where
investigation reveals that:
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a. There was a material misrepresentation or inaccuracy in any
application of the Agent for inclusion on the agency list*, or
for changes to its status or listing thereon, or in any
attachments thereto;
b. Any person who is involved in the day-to-day operations of the
agency and has access to monies from the sale of traffic
documents, is not a citizen, or national of the U.S., or an alien
authorized employment in the U.S.; or
c. The Agent's authorized agency location does not have the
requisite licenses of the jurisdiction in which located.
2. The Agent is ineligible for retention on the agency list if ARC has
reason to believe that the Agent, or any person holding a financial or
ownership interest in the Agent, or any officer, director, qualifying
manager, or any person employed by it in a capacity in which that
person has access to ARC traffic documents or money held by the Agent
in payment therefor:
a. Has or had a financial interest in, or a connection or
affiliation with, or was employed by, any agent previously
canceled from the agency list*; or
b. Has or had a financial interest in, or a connection or
affiliation with, or was employed by, any agent presently
declared in default under the provisions of section VIII of the
agent reporting agreement*; or
c. Has been convicted of a felony, or a misdemeanor related to
financial activities, or has been found by a court of competent
jurisdiction to have committed a breach of fiduciary duty
involving the use of funds of others,
unless, based upon investigation, experience of the carriers with such
person(s), where applicable, and all information and facts available, it is
determined by ARC that the Agent can be relied on to adhere to the terms of
this agreement. If the conduct invoking this provision occurred more than
seven years prior to the filing of a complaint with the Arbiter, there
----------
* For the purposes of this subsection, references to the ARC agency list and
the agent reporting agreement include, in addition, the agency list and the
passenger sales agency agreement, and its predecessor sales agency
agreement, of the Air Traffic Conference of America.
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shall be a rebuttable presumption the Agent can be relied upon to adhere to
the terms of this agreement.
SECTION V: APPOINTMENT OF AGENT BY CARRIER
A carrier may issue an appointment to the Agent permitting the Agent to issue
ARC traffic documents on behalf of the carrier in one of two ways:
A. The Agent shall be automatically appointed by any carrier which has, or
hereafter may, deposit with ARC a general concurrence for the appointment
of all agents on the ARC agency list. From time to time ARC will publish a
list of all carriers which have deposited such a general concurrence.
B. Any carrier which has not deposited with ARC the general concurrence for
the appointment of all agents on the ARC agency list may appoint the Agent
by delivering to the Agent a written certificate of appointment.
SECTION VI: CHANGE OF NAME OR LOCATION
A. Procedures To Change Name
The Agent must provide thirty (30) days written advance notice to ARC to
change its name and names as set forth in this agreement, under which its
activities must be conducted. Within the thirty (30) day period, ARC shall
ascertain whether the proposed name violates this agreement. If approved,
ARC shall correct the agency list, notify all carriers and the system
providers, and, unless the change relates only to a branch location,
execute an amendment to the memorandum of agreement reflecting the change.
If the proposed change is disapproved, ARC shall notify the carriers and
the system providers and also advise the Agent with specific reasons, and
the Agent may obtain review of that decision by the Arbiter, in accordance
with section XXIII of this agreement.
B. Procedures To Change Location
The Agent must provide written advance notice to ARC to change its business
location, accompanied by a full description in the form prescribed by ARC.
If the new location is qualified under the standards set forth in section
IV.C hereof, it shall be approved and ARC shall correct the agency list and
notify all carriers and the system providers. If the location fails to
qualify, ARC shall disapprove the change and notify the carriers and the
system providers, and so advise the Agent with specific reasons. ARC shall
advise the Agent of its approval or disapproval within forty-five (45) days
of the receipt of the
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written notice from the Agent. The Agent may obtain review of that decision
by the Arbiter, in accordance with section XXIII of this agreement. The
Agent may, nevertheless, change the location pending the Arbiter's
decision. If the Agent does not request such review and, further, fails to
relocate to its former authorized agency location within 30 days from ARC's
notice of disapproval, ARC may file a complaint against the Agent.
SECTION VII: AGENTS AUTHORITY, GENERAL RIGHTS AND OBLIGATIONS
A. The Agent shall at all times maintain ethical standards of business in the
conduct of the agency and in its dealing with its clients, the public and
the carrier.
B. The Agent shall designate a bank account for the benefit of ARC and the
carrier for deposit of (1) the proceeds of the sales of air transportation
and ancillary services for which ARC traffic documents were issued, and (2)
such funds as may be required to pay any other amount which ARC is
authorized to draft from the account. The Agent recognizes that the
proceeds of the sales, less the Agent's commissions, on these ARC traffic
documents are the property of the carrier and shall be held in trust until
accounted for to the carrier.
C. In selecting the airline identification plate to be used in validating ARC
traffic documents, or in the identification of the ticketing carrier, the
Agent will follow the procedures specified in attachment F, hereto.
D. The provisions of section VII.C above notwithstanding, no agent shall use
an airline identification plate of one carrier, or identify a carrier on an
ARC traffic document as the ticketing carrier, in connection with the sale
of air transportation offered solely by another carrier which has notified
the Agent and ARC that the Agent shall not represent that carrier.
E. In exercising its authority under this agreement, the Agent shall issue
only ARC traffic documents supplied pursuant to, or authorized by, this
agreement.
F. The Agent shall deliver to its clients the proper forms of ARC traffic
documents and/or supporting documentation as authorized from time to time
by the carrier. The information shown on any such documents shall be in
accordance with the applicable rules, regulations and instructions
furnished to the Agent by ARC by specific instruction or in the Industry
Agents' Handbook, and by the carrier.
G. The Agent shall comply with all instructions consistent with this agreement
properly issued to him by ARC in the Industry
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Agents' Handbook and other specific instructions consistent with this
agreement provided from time to time by ARC.
H. The Agent shall comply with all instructions of the carrier, and shall make
no representation not previously authorized by the carrier. The Agent shall
deliver to the carrier such specific instructions, requests, or particulars
in connection with a client or his transportation as may be proper to
enable the carrier to render efficient service to its passengers.
I. The Agent shall not knowingly or negligently sell or issue ARC traffic
documents covering air passenger transportation to be offered by the
carrier to persons who plan to sell, issue, or offer to sell or issue, such
ARC traffic documents, but who have not been authorized by the carrier to
represent the carrier.
J. The Agent is not authorized by this agreement to admit, accept or receive
service of summons or any other process on behalf of the carrier or ARC.
K. In the absence of specific permission of the carrier, the Agent shall not
use any credit card which is issued in the name of the Agent, or in the
name of any of the Agent's personnel, or in the name of any third party,
for the purchase of air transportation for sale or resale to other persons,
nor report to the carrier the sale of any air transportation as a credit
card transaction where at any time the Agent bills, invoices, or receives
payment in cash from the customer for such air transportation.
L. The Agent shall identify any sales to itself and/or such other persons
which control, are controlled by, or are under common control with, the
Agent, or with the officers, directors, stockholders, members, or employees
of the Agent and/or such other persons, in accordance with the provisions
of the Industry Agents' Handbook.
SECTION VIII: REPORTS AND SETTLEMENTS, DEFAULTS AND
OTHER FINANCIAL IRREGULARITIES UNDER ASP
A. Reports and Settlements-General
1. The Agent shall make appropriate arrangements to permit the area bank
to draw checks upon its bank account designated pursuant to section
VII.B. of this agreement in payment for amounts owed hereunder. The
Agent shall give ARC advance notice by certified mail of its intention
to change bank accounts. Such notice must be received at least one
week prior to the beginning of the affected sales period, and will
state the first sales period ending date to which it applies.
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2. The Agent shall submit a weekly sales report containing the auditor's
coupon (applicable to both paper and electronic format) of all ARC
traffic documents, and other supporting documents issued and validated
during the 7-day period Monday through Sunday. The weekly sales report
shall be submitted to the designated area bank in the form prescribed.
With each report, the Agent shall submit a settlement authorization
form reflecting the maximum amount to be drawn from the Agent's
account.
If no air transportation or ancillary services have been sold during
the 7-day period, the Agent shall submit to the area bank a weekly
sales report reflecting "no sales."
3. The weekly sales report, with auditor's coupons and other supporting
documents, or advice of "no sales," shall be mailed by First Class
mail postage prepaid, or by Express Mail, or delivered to the
designated area bank, not later than Tuesday following the close of
the report period or by Wednesday if Monday or Tuesday is a Federal or
state legal holiday, Rosh Hashanah or Yom Kippur.
4. The area bank will, based upon documents submitted by the Agent,
determine the amount owed the carriers for the sales period and will
draw a check for such amount on the Agent's account. The check will
not be in excess of the settlement authorization amount provided by
the Agent, or be presented for payment earlier than the tenth day
after the close of the sales period.
The area bank will mail to the Agent a weekly summary showing all
transactions, and the amount of the check drawn, no later than the
tenth day after the close of the sales period. Settlement of amounts
owing will be made in official United States currency.
5. All monies and credit card billing documents, less applicable
commission, collected by the Agent for sales hereunder are property of
the carriers, and shall be held in trust by the Agent until
satisfactorily accounted for to the carriers.
B. Exceptions To Reports and Settlements if Agent Has Ten or More Locations
An agent having 1) ten or more authorized locations, or 2) a wholly owned
subsidiary with ten or more such locations, or 3) a combination of
authorized locations (branch offices) of a wholly owned subsidiary totaling
ten or more, may apply for an exception to the provision of section
VIII.A.3 above requiring that the sales report and supporting documents be
mailed not later than the Tuesday of each week.
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16
The exception will be granted to any agent having the requisite number of
locations, which agrees to process each of its weekly sales reports at its
central accounting office and submit them together to one designated area
bank. An agent wishing such exception must first execute with ARC a
supplementary agreement which, based upon the specific circumstances,
authorizes the multi-reporting Agent to cause its weekly reports to be
received at the area bank by noon on Thursday or Friday of each week. The
exception does not affect the schedule for settlement.
C. Other Settlement Arrangements Not Prohibited
1. Nothing contained in this agreement shall preclude an agent from
proposing to a carrier which is a party to the Carrier Services
Agreement, (a) that, for transactions in which the agent has issued
and validated ARC traffic documents, it settle its account pursuant to
a variable remittance plan, or (b) that the agent utilize the
carrier's traffic documents. If such a proposal is made, the carrier
shall consider the agent's proposal in good faith; however, a
carrier's refusal to enter into such an arrangement shall not, in and
of itself, constitute evidence of bad faith.
2. An agent shall not, without prior written consent by the carrier
concerned, submit a settlement of ARC traffic documents pursuant to a
variable remittance plan.
D. Financial and Reporting Irregularities
1. This subsection governs payment of amounts due in the event of a
dishonored check or failure to file a complete weekly sales report. It
does not govern any amounts settled under a variable remittance plan
if either the payment is made directly to an individual carrier or ARC
collects the amount expressly on behalf of an individual carrier by
means of an individual draft. In determining such amounts, debit memos
based on the following claims are not to be included: (i) any debit
memo issued prior to the date on which the Agent fails or refuses to
provide funds on demand to cover a dishonored check, or the amount
owed on withheld sales, or a missing report, as required by,
respectively, paragraphs D.1.a., D.1.b and D.1.c of this section,
which has been reasonably contested by the Agent in writing within 60
days of the Agent's receipt of such debit memo; and (ii) any debit
memo issued on or after the date of the Agent's failure or refusal, as
described above, for a transaction that occurred more than 60 days
prior to such date; provided, however, that any debit memo issued for
either an unreported sale or a fraudulently issued ARC traffic
document, shall be includable in determining the amounts due the
carriers under this agreement.
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17
a. ARC will immediately notify the Agent and its surety when a check
drawn by the area bank has been dishonored by the Agent's bank.
If the Agent does not immediately provide a certified check or
wire funds to cover the dishonored check, ARC will i. withdraw
from the Agent, and from all agents under common control with the
Agent, and all authorized agency locations under common Control
with the Agent, all ARC traffic documents (paper format) and
airline identification plates, ii. notify the system providers to
inhibit the transmission of ticketing records for the printing of
such onto ARC traffic documents (paper format) by such Agent, and
iii. prohibit the use of ARC traffic document numbers by system
providers for the issuance of ARC traffic documents (electronic
format) on behalf of such Agent, and so notify the carriers.
ARC traffic documents will be resupplied and airline
identification plates will be returned, except the identification
plate of the carrier which has expressly instructed ARC to the
contrary, to the Agent and all authorized agency locations under
common control with the Agent, and the system providers notified
that the issuance of ARC traffic documents is authorized, unless
the carrier has also taken action to terminate the Agent's
appointment pursuant to section XXIX of this agreement, when all
amounts owing the carriers under this agreement have been fully
paid (including, but not limited to, all other checks drawn by
the area bank and dishonored by the Agent's bank) unless there is
an outstanding notice of cancellation of the Agent's bond.
A compensatory assessment shall be charged by ARC for each
dishonored check for payment of sales reports to defray
processing costs associated with the handling of dishonored
checks, interest expense and special service costs described in
section XI.I. This assessment will be calculated and charged by
ARC based on a formula approved by the ARC Board of Directors.
ARC shall notify the Agent as to the amount of the charge and the
date on which payment will be due. The Agent hereby authorizes
the area bank to collect the charge by issuing a draft against
the bank account maintained pursuant to section VII.B of this
agreement. Alternatively, the Agent shall make payment directly
to ARC if required by the notice.
b. ARC will notify the Agent if it has failed to include in its
weekly sales report all ARC traffic documents issued through the
close of the sales report period, as provided in subsection A.2
of this section. Unless the Agent immediately provides a
certified check and
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18
supporting documents to cover the withheld sales, ARC will, where
a clear and present danger of substantial loss is present, i.
withdraw from the Agent, and all authorized agency locations
under common control with the Agent, all ARC traffic documents
(paper format) and airline identification plates, ii. notify the
system providers to inhibit the transmission of ticketing records
for the printing of such onto ARC traffic documents (paper
format) by such Agents, and iii. prohibit the use of ARC traffic
document numbers by system providers for the issuance of ARC
traffic documents (electronic format) on behalf of such Agent,
and notify the carriers.
ARC traffic documents will be resupplied and airline
identification plates will be returned, except the identification
plate of any carrier which has instructed ARC to the contrary, to
the Agent and all agents under common control with the Agent, and
the system providers notified that the issuance of ARC traffic
documents is authorized on behalf of all appointing carriers,
unless the carrier has also taken action to terminate the Agent's
appointment pursuant to section XXIX of this agreement, when all
amounts owing the carriers under this agreement have been
satisfactorily accounted for (including, but not limited to,
payment of all checks drawn by the area bank and dishonored by
the Agent's bank) unless there is an outstanding notice of
cancellation of the Agent's bond.
A compensatory assessment shall be charged by ARC for unreported
sales disclosed by an inspection pursuant to section XIV of this
agreement, or otherwise disclosed, to defray costs associated
with the processing and handling of the discovery and resolution
of unreported sales, and special service costs described in
section XI.I. This assessment will be calculated and charged by
ARC based on a formula approved by the ARC Board of Directors.
ARC shall notify the Agent as to the amount of the charge and the
date on which payment will be due. The Agent hereby authorizes
the area bank to collect the charge by issuing a draft against
the bank account maintained pursuant to section VII.B of this
agreement. Alternatively, the Agent shall make payment directly
to ARC if required by the notice.
c. If a weekly sales report together with auditor's coupons and
supporting documents has not been received by the area bank
within eight days after the close of the period, ARC will notify
the Agent.
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19
Evidence of timely dispatch will be limited to
(1) A Post Office postmark; or
(2) Other evidence supplied by the Post Office of the mailing date; or
(3) Priority service air xxxx or any other documentation acceptable to
ARC.
If the Agent has evidence of timely dispatch of the report, it shall,
within 96 hours of notification by ARC send copies of such evidence to ARC
and promptly transmit to the area bank a duplicate report, a settlement
authorization form, and facsimiles of the auditor's coupons and other
supporting documents for the report. In all other circumstances, the Agent
shall, within 96 hours of notification by ARC, provide the report, or a
duplicate report, to the area bank with either the auditor's coupons and
other supporting documents if available, or their facsimiles, and a
certified check to cover the amount owed.
Unless the Agent complies with the above, ARC will i. withdraw from the
Agent, and all authorized agency locations under common control with the
Agent, all ARC traffic documents (paper format) and airline identification
plates, ii. notify the system providers to inhibit the transmission of
ticketing records for the printing of such onto ARC traffic documents
(paper format) by such Agent, and iii. prohibit the use of ARC traffic
document numbers for the issuance of ARC traffic documents (electronic
format) by the system providers on behalf of such Agent, and so notify the
carriers.
ARC traffic documents will be resupplied and airline identification plates
will be returned, except the identification plate of any carrier which has
expressly instructed ARC to the contrary, to the Agent and authorized
agency locations under common control with the Agent, and the system
providers notified that the issuance of ARC traffic documents is
authorized, unless the carrier has also taken action to terminate the
Agent's appointment pursuant to section XXIX of this agreement, when the
Agent has provided the report or duplicate report, and paid in full all
amounts owed the carriers under this agreement (including, but not limited
to, payment of all checks drawn by the area bank and dishonored by the
Agent's bank) unless there is an outstanding notice of cancellation of the
Agent's bond.
A compensatory assessment shall be charged by ARC for a missing report for
which the Agent does not have evidence of timely dispatch to defray
handling and processing costs attributable to missing reports and special
service costs described in
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20
section XI.I. This assessment will be calculated and charged by ARC based
on a formula approved by the ARC Board of Directors. ARC shall notify the
Agent as to the amount of the charge and the date on which payment will be
due. The Agent hereby authorizes the area bank to collect the charge by
issuing a draft against the bank account maintained pursuant to section
VII.B of this agreement. Alteratively, the Agent shall make payment
directly to ARC if required by the notice.
d. If the Agent is unable to satisfy its debts to ARC arising from
circumstances described in paragraphs D.l.a,b, and c of this section
within the prescribed time:
(1) The Agent and authorized agency locations and authorized agency
locations under common control with the Agent may purchase
prepaid special value tickets to be provided by ARC;
(2) In lieu of the Agent and authorized agency locations under common
control with the Agent surrendering its ARC traffic documents
(paper format) and airline identification plates, the Agent may
provide a separate bond to ARC applicable to ARC traffic
documents (paper format) remaining in the Agent's possession, the
amount of which is based on the average value of ARC traffic
documents previously issued by the Agent times the number of
documents to be retained. The Agent shall not be eligible to
issue ARC traffic documents in electronic format.
e. (1) If the Agent does not provide the required weekly sales reports
and full payment therefor, or fails to make full payment of all
amounts owed to the carrier (including, but not limited to,
payment of all checks drawn by the area bank and dishonored by
the agent's bank), on or before the 31st day after the date of
ARC's written notice of a default based on a dishonored draft,
unreported sale, or missing sales report, this agreement shall
terminate automatically and without further notice, unless the
Agent has surrendered all ARC traffic documents (paper format)
and airlines identification plates and has ceased to issue ARC
traffic documents in electronic format and, on or before such
31st day, has provided all missing sales reports and made a
partial payment in an amount deemed appropriate by ARC, and ARC
has determined that the Agent could make full payment if the time
were extended, in which case ARC may extend the time for the
Agent to make full payment and avoid termination of this
agreement. Upon termination of the agreement pursuant to this
section, ARC shall notify the carriers and the system providers
that the Agent's agreement has
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21
been terminated, and that the issuance of ARC traffic documents
is prohibited.
(2) The full amount to be paid within the 31-day period described
above or any extension thereof shall include, but not be limited
to, all amounts owed for dishonored checks, unreported sales,
compensatory fees and missing reports, regardless of whether such
amounts and/or reports have been specifically identified in the
written notice.
(3) In determining whether or not to extend the time for full
payment, ARC will consider the following factors, among others:
the cause of the dishonor, unreported sale, or missing report;
the payment schedule proposed; the current financial condition of
the Agent; and any proposed remedial action.
(4) An extension of time on the terms provided in the foregoing
paragraphs shall be available to all agents, regardless of size.
(5) In conjunction with the extension of time provided in the
foregoing paragraphs, the Agent may obtain authority from one or
more of the carriers involved to convert the Agent's cash
indebtedness to each such carrier into individually sponsored
credit plans, thereby transferring the indebtedness from ARC to
such carrier. Upon receipt of written notice from the carrier
concerned, ARC will modify or withdraw the notice of termination,
as appropriate.
(6) Upon the Agent's compliance with the foregoing paragraphs, ARC
shall resupply the Agent with traffic documents and the carriers
may, in their individual discretion, supply or authorize ARC to
return to the Agent the airline identification plates. In
addition, ARC will notify all system providers that the Agent may
issue ARC traffic documents, and the carriers may, in their
individual discretion, notify the system providers, if action is
to be taken pursuant to section XXIX.
f. Each Agent to whom notice of financial or reporting irregularity is
sent pursuant to sections VIII.C.1.a, b or c of this agreement shall
cause to be executed and filed with ARC a "Personal Guarantee of
Performance of Agent's Agreement" as set forth in section V,
attachment C to the agreement. Such execution and filing shall be a
condition precedent to an agent's right to use ARC traffic documents
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22
and airline identification plates in the sale of air transportation
and/or ancillary services.
2. This subsection governs insufficient settlement authorization amounts.
a. If the area bank determines that the amount specified by the
Agent on the settlement authorization form is less than the
amount owed the carriers, the area bank will xxxx the Agent for
the difference. If the area bank xxxx remains unsatisfied fifteen
days after the date on which it was sent, ARC will xxxx the Agent
for the amount owed.
b. If ARC's xxxx remains unsatisfied for fifteen days after the date
on which it was sent, ARC shall take such action as it deems
appropriate under the circumstances.
E. Payment of Carrier Debit Memos
1. If the Agent fails to pay a debit memo sent to it by a carrier or is
otherwise in default to a carrier under this agreement, excluding
liability for stolen ARC traffic documents or identification plates
under section XI hereof, the carrier may:
a. Terminate its appointment of the Agent, by notice in writing to
the Agent, with such notice taking effect on the date specified
therein, and withdraw its airline identification plate; or
b. Withdraw from the Agent its airline identification plate; or
c. Forward any uncontested debit memo to the Central Collection
Service according to the provisions of section XIX of this
agreement.
2. If any carrier which has deposited a general concurrence for the
appointment of all agents invokes paragraph E.1.a of this section, it
may so notify ARC. Upon receipt of such notice, ARC will immediately
notify all carriers and the system providers.
F. Failure To Maintain Proper Bond Or Letter of Credit
1. Upon cancellation of the Agent's bond or irrevocable bank letter of
credit, ARC will immediately so notify all carriers and the Agent, and
will i. withdraw all ARC traffic documents (paper format) and airline
identification plates supplied to the Agent, ii. notify the system
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23
providers to inhibit the transmission of ticketing records for the
printing of such onto ARC traffic documents (paper format) by such
Agent, and iii. prohibit the use of ARC traffic document numbers by
system providers for the issuance of ARC traffic documents (electronic
format) on behalf of such Agent provided, however, that as a temporary
measure to avoid these events, the Agent may assign, in a form
acceptable to ARC, a Certificate of Deposit in the amount required for
a bond pursuant to section IV.A.1.a of this agreement. The effective
date and acceptance by ARC of such assignment shall be no later than
the date of cancellation of the bond or letter of credit and shall be
accepted by ARC as a substitute for a period not to exceed thirty days
from the date of the cancellation.
Unless the Agent provides ARC a proper replacement bond or irrevocable bank
letter of credit within 30 days after the cancellation, ARC will terminate
this agreement. Upon termination of the agreement pursuant to this section,
ARC shall notify the carriers and the system providers that the Agent's
agreement has been terminated, and that the issuance of ARC traffic
documents is prohibited.
2. If ARC determines that the Agent has failed to adjust its bond or
letter of credit as required by section IV.A.3 of this agreement, ARC
may apply to the Arbiter for an emergency authorization to i. remove
ARC traffic documents (paper format) and the airline identification
plates from the Agent, and ii. notify the system providers to inhibit
the transmission of ticketing records for the printing of such onto
ARC traffic documents (paper format) by such Agent, and iii. prohibit
the use of ARC traffic document numbers by system providers for the
issuance of ARC traffic documents (electronic format) on behalf of
such Agent, and to so notify the carriers.
SECTION IX: ADDITIONAL OPERATING REQUIREMENTS
A. The Agent shall be subject to the requirements of this section when,
during any twelve month period,
1. three or more of the Agent's checks for weekly sales have been
dishonored and ARC has not received immediate reimbursement for
such upon demand by ARC; or
2. three or more of the Agent's weekly sales reports, including
auditor's coupons and supporting documents, have not been
provided to ARC within 96 hours of notice to the Agent from ARC
but such are ultimately received, prior to the Agent's
termination.
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24
B. ARC will provide the Agent with 45 days advance written notice of the
effectiveness of this section, which notice shall also be provided to
the carriers. The notice will also inform the Agent that the following
must be accomplished prior to the effective date of the section:
1. The Agent must provide a bond or letter of credit equal to or
greater than its net cash remittances for a current 10 week
period. The instrument may be a rider to the existing bond or
letter of credit; will be calculated to take into account the
amount of the existing bond or letter of credit; and, must
conform in all other respects to the provisions of section IV.A.
2.a. The Agent must surrender traffic documents (paper format) to
ARC, with an accompanying inventory summary, so that it
retains no more than the highest number of ARC traffic
documents issued at each of its locations during any one
month in the past twelve months, rounded up to the next even
100. In order to insure the Agent's compliance with this
section, ARC will inform the Agent, in the written notice
required by this section, of the number of documents, by
stock control number, that are permitted to be retained.
b. The Agent may possess additional supplies of traffic
documents (paper format only), but in no event more than a
three month supply, only if it is able to post a bond or
letter of credit as provided for in section VIII.D.1.d.(2).
3. The Agent must discontinue the issuance of ARC traffic documents
in an electronic format and any and all use of Electronic Ticket
Delivery Network(s).
4. Any pending application(s) for an additional approved location
will be withdrawn by Agent, and ARC will reject and return to
Agent any such application submitted while the Agent is subject
to this section.
C. If the Agent is not in compliance with the provisions of section IX.B.
as of the effective date of this section, or at any time during the
period of its effectiveness, ARC will terminate this agreement with
the Agent and notify the carriers and the system providers that the
Agent's agreement has been terminated and that the issuance of ARC
traffic documents is prohibited.
D.1. If, following the effectiveness of this section, and Agent's
compliance with the provisions of section IX.B., there are no
instances of dishonored drafts or
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25
missing reports within a twelve month period, the additional
operating requirements of this section shall be removed, and the
carriers shall be notified.
2. Alternatively, if there is an additional dishonored draft or
missing report, ARC will file a complaint, pursuant to section
XV.B., seeking the removal of the Agent from the agency list.
E. The Agent may appeal ARC's determination that it is subject to this
section to the Travel Agent Arbiter. During the pendency of the
appeal, which shall be given expedited consideration, the section will
continue to apply to the Agent unless or until removed by the Travel
Agent Arbiter or the Agent's compliance with section IX.D.1.
SECTION X: REFUND OR EXCHANGE OF ARC TRAFFIC DOCUMENTS
A. The agent may refund any fare or charge applicable to air
transportation only if sold by the Agent hereunder and for which the
Agent has issued an ARC traffic document. The Agent shall make refund
only to the person authorized to receive the refund and in accordance
with tariffs, rules, regulations, and instructions issued by the
carrier.
B. The Agent, without the authority of the ticketing carrier whose ARC
traffic document is to be issued, shall not:
1. Issue an ARC traffic document in exchange for any traffic
document previously issued by another agent or by a carrier; or
2. Issue an ARC traffic document in exchange for a traffic document
previously issued by that Agent naming another carrier as the
ticketing carrier.
SECTION XI: LIABILITY AND WAIVER OF CLAIM
A. The carrier will indemnify and hold harmless the Agent, its officers,
agents and employees from all responsibility and liability for any
damage, expense, or loss to any person or thing caused by or arising
from any negligent act, omission or misrepresentation of the carrier,
its representatives, agents, employees, or servants, relating directly
or indirectly to the performance of the duties and obligations of the
carrier under this agreement.
B. The Agent will indemnify and hold harmless the carrier, its officers,
agents, and employees from all responsibility and liability for any
damage, expense, or loss to any person or thing caused by or arising
from any negligent act, omission, or misrepresentation of the Agent,
its
- 23 -
26
representatives, agents, employees, or servants relating directly or
indirectly to the performance of the duties and obligations of the
Agent under this agreement.
C. The Agent will indemnify and hold harmless the carrier, its officers,
agents and employees, from any and all damage, expense, or loss, on
account of the loss,misapplication, theft, forgery or unlawful use of
ARC traffic documents, ARC-issued numbers or other supplies furnished
by or on behalf of the carrier to the Agent. However, the Agent shall
be relieved of liability for losses arising from the proven theft or
unlawful use, except by the Agent or his employees, of ARC traffic
documents, ARC-issued numbers or identification plates from his
premises upon a determination by ARC that the Agent, at the time of
theft or unlawful use, exercised reasonable care for the protection of
such ARC traffic documents, ARC-issued numbers or airline
identification plates, and has, upon discovery, immediately reported
the theft or unlawful use to the appropriate law enforcement
authorities and has promptly notified ARC of the particulars of such
theft or unlawful use both by telephone and telegram. Reasonable care,
as used herein, shall include but not be limited to compliance with
the minimum safeguards set forth in attachment B to this agreement. In
making the determination specified herein, ARC may rely on the
findings of the ARC Field Investigations and Fraud Prevention office
or cooperating security officers of carriers. However, if ARC has
filed a complaint with the Arbiter alleging the Agent failed to comply
with the minimum safeguards set forth in attachment B of this
agreement, ARC shall rely on the finding of the Arbiter in determining
whether or not reasonable care was exercised by the Agent. If ARC
determines that the Agent did not exercise reasonable care, ARC shall
inform the Agent of the specific details and exact manner in which the
Agent failed to exercise reasonable care. The Agent may appeal ARC's
determination to the Arbiter pursuant to section XXIII.
D. The Agent hereby expressly waives any and all claims, causes of
action, or rights to recovery based upon libel, slander, or defamation
of character by reason of publication of asserted grounds or reasons
for removal from the agency list or such other action which may have
been prescribed, or of alleged violations or other charges for which
review of the Agent's eligibility is requested, as is reasonably
related to the performance of appropriate functions specified for ARC,
its officers and employees, or the Director of Field Investigations
and Fraud Prevention or the Arbiter in the performance of their duties
under this agreement.
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27
E. If ARC uses legal counsel to i. enforce its right to possession of ARC
traffic documents (paper format) and airline identification plates,
because the Agent failed or refused to surrender them upon demand made
pursuant to this agreement, and/or ii. to otherwise obtain compliance
by the Agent with the provisions of this section, the Agent shall
reimburse ARC for all costs incurred by it, and for the reasonable
fees of its attorneys, if its action is adjudicated or otherwise
resolved in its favor. If its action is adjudicated or otherwise
resolved in favor of the Agent, ARC shall reimburse the Agent for all
costs incurred by it, and for the reasonable fees of its attorneys, in
defending itself against ARC's action. The term "costs" as used herein
shall include, but not be limited to, court costs, litigation bond
premiums, private investigator fees incurred in attempting to locate
traffic documents, and locksmith fees.
F. If ARC uses legal counsel to enforce its right to inspect the Agent's
books and records, because the Agent failed or refused to permit an
inspection upon demand made pursuant to this agreement, the Agent
shall reimburse ARC for all costs incurred by it, and for the
reasonable fees of its attorneys, if its demand is adjudicated or
otherwise resolved in its favor. If its demand is adjudicated or
otherwise resolved in favor of the Agent, ARC shall reimburse the
Agent for all costs incurred by it, and for the reasonable fees of its
attorneys, in defending itself against ARC's demand. The term "costs"
as used herein shall include, but not be limited to, court costs and
litigation bond premiums.
G. The Agent hereby agrees to indemnify and hold the carrier harmless
from and against any claim arising from the failure of the Agent to
refund to the authorized refund payee the proper amount of fare or
other charges collected.
H. The Agent hereby agrees that whenever an ARC representative must go to
an agency or other location to remove ARC traffic documents (paper
format only), collect funds due hereunder, etc., the Agent will pay
the out-of-pocket special service costs incurred by ARC in conjunction
with such action.
SECTION XII: DELIVERY AND WITHDRAWAL OF TRAFFIC DOCUMENTS AND IDENTIFICATION
PLATES
A. The Agent shall procure, at no expense to ARC, one or more validator
machine(s), or ticket writer(s), of a type approved by ARC for use at
each place of business covered by this agreement in the issuance of
ARC traffic documents (paper format).
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28
B. ARC will supply the Agent with ARC traffic documents (paper format)
for issuance to the Agent's clients to cover transportation and
ancillary services purchased, and one or more agent identification
plates which the Agent will purchase from ARC. Shipping and handling
costs on ARC traffic document (paper format) requisitions, submitted
by the Agent, will be paid by the Agent as prescribed from time to
time by ARC.
C. After receipt of notice from ARC that an agency location has been
included on the agency list, any carrier may deliver to such Agent
airline identification plates for use at an authorized agency location
in the issuance of ARC traffic documents (paper format) in a validator
machine or ticket writer, and such identification plates shall not be
used at any other place of business. Such airline identification
plates shall remain the property of the carrier, and shall be returned
to it upon demand or upon the termination of this agreement as between
the Agent and carrier.
D. All ARC traffic documents (including ARC-issued numbers used in an
electronic format) supplied to the Agent shall be held in trust for
ARC by the Agent until issued to the Agent's clients to cover
transportation or ancillary services purchased, or until otherwise
satisfactorily accounted for to ARC or the carrier, and shall be
surrendered upon demand, together with all airline identification
plates, to ARC pursuant to this agreement.
E. ARC traffic documents (including ARC-issued numbers used in an
electronic format) supplied for issuance at a specified place of
business covered by this agreement shall not be written up or
validated at any other place of business. ARC traffic documents (paper
format) shall not be delivered to customers at or through any other
agency location outside the United States, or customer-premises
location.
F. The Agent shall not accept custody of or deliver, blank, prevalidated,
or partially written ARC traffic documents (including ARC-issued
numbers used in an electronic format) not previously assigned to it
under this agreement. Should the Agent be approached by another agent
to distribute blank, prevalidated, or partially written, ARC traffic
documents (paper format), or to distribute ARC traffic documents not
provided to it through the system provider (electronic format), the
Agent shall notify the ARC Director, Field Investigations and Fraud
Prevention.
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29
SECTION XIII: CUSTODY AND SECURITY OF TRAFFIC DOCUMENTS AND IDENTIFICATION
PLATES
During its custody and control of ARC traffic documents, ARC-issued numbers and
airline identification plates, the Agent shall comply with the security rules
for such as specified in attachment B of this agreement.
SECTION XIV: INSPECTION AND RETENTION OF AGENT RECORDS
A. The Agent shall retain his duplicate copy of each sales report and his
copies of supporting documents, as well as the weekly sales summary
and his copies of voided ARC traffic documents, for at least two years
from the date the sales report was due to be submitted to the area
bank.
B. The Agent recognizes and agrees that ARC and its designees, are
authorized to represent ARC and the carriers for purposes of
inspecting the books and records of the Agent pursuant to this
agreement. In making such inspections, they may seek to determine
whether the Agent is in full compliance with the provisions of the
agreement. Books and records shall be opened for such inspection upon
reasonable notice and the authorized representatives shall have
authority to make such notes and copies as they deem appropriate.
C. The Agent will be apprised of the purpose or occasion for such
examination, and will be obligated to provide only those documents
material and relevant to the examination, that are requested by the
authorized representative. ARC shall, upon written request by the
Agent, provide a copy of any written report prepared by the ARC
representative who has completed an inspection of the books and
records of such Agent.
D. A carrier may examine the Agent's records with respect to ARC traffic
documents issued by the Agent on behalf of such carrier at any time.
SECTION XV: REVIEWS OF QUALIFICATIONS OF AND BREACHES BY AGENT
A. In situations such as the following, in which it appears to ARC that
there may be or has been fraudulent conduct on the part of the Agent
and that there is a clear and present danger of substantial loss to
ARC and/or the carriers, ARC may i. immediately remove its traffic
documents (paper format only) and all airline identification plates
from the Agent, and so notify the carriers, ii. notify the system
providers to inhibit the transmission of ticketing records for the
printing of such onto ARC traffic documents (paper format) by such
Agent, and iii. prohibit the use of ARC
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30
traffic document numbers for the issuance of ARC traffic documents
(electronic format) by system providers on behalf of such Agent and
all agents under common control with the Agent:
1. Failure to include in a report the auditor's coupon (paper or
electronic format) of all ARC traffic documents issued through
the close of the sales report period, even though payment was
subsequently made upon demand;
2. Issuance of ARC traffic documents against a credit card without
the cardholder's authority, or against a stolen or otherwise
fraudulent credit card;
3. Post-validation of ARC traffic documents; alteration of the
issuance date on ARC traffic documents; or consistent or
extensive reporting of sales in which ARC traffic documents have
been issued out of numerical sequence;
4. Failure to account for missing ARC traffic documents or for
flight, exchange, or service coupons thereof;
5. Permitting blank, prevalidated, or partially written ARC traffic
documents (paper format), or ARC-issued numbers (electronic
format) to be removed from the authorized agency location for
issuance elsewhere;
6. Permitting alteration, omission, or other falsification on
coupons of original ARC traffic documents or on any reissue
thereof;
7. Falsification of reports, traffic documents, or other documents;
8. Acceptance of custody of, or delivering, blank, prevalidated, or
partially written ARC traffic documents (paper format) or
ARC-issued numbers (electronic format) not previously assigned to
it under this agreement;
9. Distribution, sale or issuance of ARC traffic documents (paper
format) or ARC-issued numbers (electronic format) which the Agent
knew, or reasonably should have known, were stolen or reported as
missing; or
10. Reporting cash refunds against sales made on credit cards.
11. Permitting the unlawful or unauthorized access or use of an
airline or system provider computer reservations
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system owned, leased or controlled by it in connection with the
issuance of ARC traffic documents.
The Agent shall thereupon have the right of appeal to the Arbiter on an
expedited basis pursuant to procedures established by the Arbiter. If an
appeal is not taken within 10 days after ARC's demand for ARC traffic
documents and airline identification plates, the Agent's agreement will be
terminated by ARC without further notice. Upon termination of the agreement
pursuant to this section, ARC shall notify the carriers and the system
providers that the Agreement has been terminated and that the issuance of
ARC traffic documents is prohibited.
B. If there is reason to believe that the Agent has breached a provision
of this agreement, ARC may file a complaint against the Agent with the
Arbiter.
C. If the Arbiter so directs, ARC shall remove from the agency list the
Agent or any branch location. After the Agent has been removed from
the agency list, ARC shall terminate the agreement with the Agent on
behalf of all carriers. Upon termination of the agreement pursuant to
this section, ARC shall notify the carriers and the system providers
that the agreement has been terminated and that the issuance of ARC
traffic documents is prohibited.
SECTION XVI: ANNUAL AND APPLICATION FEES
A. For each calendar year the Agent agrees to pay an annual
administrative fee to ARC for each of its authorized agency locations
to defray a portion of the costs associated with the operation of the
ARC program as well as half of the costs associated with the operation
of the Travel Agent Arbiter Program, Inc. The amount of such annual
fee will be determined by the ARC Board of Directors, and ARC will
notify the Agent of the amount of the fee for the next ensuing year
before the end of the previous calendar year.
1. This fee will be collected by an area bank which will draw a
separate check against the designated account of each authorized
agency location with the second sales report period ending in
January for the current calendar year.
2. If the separate check for the annual fee is not paid, and the
amount remains unpaid 14 days thereafter, the Agent or authorized
agency location involved will be removed from the agency list.
Thereafter, ARC shall terminate the agreement and withdraw from
the Agent all ARC traffic documents and airline identification
plates and so notify the carriers. ARC shall also notify the
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carriers and the system providers that the agreement has been
terminated and that the issuance of ARC traffic documents is
prohibited.
3. For an authorized agency location added to the agency list during
a calendar year, the annual fee, will be included with the
application fee.
B. An application filed by the Agent under this agreement to change its
name, location, or ownership shall include therewith a fee as
prescribed from time to time by ARC. The amount of such fee shall
relate to the administrative expenses in processing the application
and expenses incurred in updating the database.
SECTION XVII: SPECIAL LOCATION EXEMPTIONS
A. An authorized agency location that is located on the premises of a
customer of the Agent and that issues ARC traffic documents primarily
to that customer or its employees, may, upon request by the Agent, be
classified as a customer-premises location. A customer-premises
location must meet all the requirements provided in this agreement,
including the qualifications in section IV for retention on the agency
list, except that:
1. The person meeting the personnel standards of section IV.B.2 may
be an employee of either the Agent or the customer; and
2. The location need not meet the requirements of sections IV.C.2,
4, and 5; and
3. If the location is a branch location, it need not meet the
requirements of section IV.B.I.
B. An authorized agency location that is not open and freely accessible
to the public may, upon request by the Agent, be classified as a
restricted-access location. A restricted-access location must meet all
the requirements provided in this agreement, including the
qualifications in section IV for retention on the agency list, except
for the requirements provided in sections IV.C.2, 4, and 5.
C.1. An Agent who wishes to have an authorized agency location classified
as a customer-premises or restricted-access location, or who wishes to
have an existing classification terminated, shall submit to ARC a
written request for such action. If the request is to obtain a new
classification, it shall set forth facts sufficient to show that the
location is entitled to the classification requested in accordance
with the qualifications set forth in subsection
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A or B above. If the request is to terminate an existing
classification, it shall set forth facts sufficient to show that the
location meets the qualifications in section IV for retention on the
agency list from which the location was exempted by virtue of its
current classification.
2. ARC shall promptly review any such request and notify the Agent
whether the request is granted or denied. If the request is
denied, the notification to the Agent shall include a statement
of the reasons therefor. The Agent may obtain review of the
denial, in accordance with section XXIII of this agreement.
D. An agency location may, upon request by the Agent, be classified as an
on-site location if it meets the following conditions:
1. The location is on the premises of a single client of the Agent
for the primary purpose of providing travel services to that
client; it is not intended to serve the general public;
[Official Commentary: It is ARC's intent that the Agent primarily serve one
client's business needs at this location (for example, one corporate client or
one government client), but not be precluded from providing that client's
employees with leisure travel counseling and ticketing or from serving other
business clients.]
2. The location complies with all requirements for a branch
application, except as otherwise noted, although it need not
comply with section IV.B.I, section IV.C.5, section III of
Attachment B (only insofar as it pertains to the storage of ARC
traffic documents), or section VII of Attachment B; and
3. The location is or will be staffed by a person meeting the
personnel standards of section IV.B.2 (but that person may be
employed by either the Agent or the client of the Agent):
4. The location is not identified or advertised to the public as, or
held out to the public to be, an office for the sale of air
transportation or ancillary services on behalf of the air
transportation industry. However, signage, identifying the
on-site branch location within the premises occupied by the
Agent's client, is permitted;
5. The Agent assumes full and absolute liability for any and all
damage, expense, or loss experienced by any carrier, its
officers, agents or employees on account
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of the loss, misapplication, theft or forgery of ARC traffic
documents assigned to the location;
6. Security for the traffic documents assigned to the location
includes the following:
A. The Agent shall close, lock or otherwise secure all means of access to
the authorized location (when applicable) and traffic document
containers at all times when the location is not attended by
authorized personnel.
[Official Commentary: ARC envisions that a cubicle may be the actual
on-site location, and recognizes such a location cannot be locked.]
B. ARC recommends that all manual traffic documents, except those that
are being issued, and all automated traffic documents not in use in a
printer be locked in a safe meeting the requirements of section IV.B.3
of the Attachment B.
C. All automated ticket printers must be either (a) locked up, (b) housed
in a locked container, or (c) placed in a locked room. Alternatively,
the traffic documents for the printer must be in a locked box. The
printer and housing must be of such design that no traffic document
stock is visible or accessible prior to printing.
D. The Agent must maintain daily inventory procedures. For manual traffic
documents, this means a daily usage log must be kept of all traffic
documents assigned to the on-site location by ARC, with the current
status of each. For automated traffic documents, this means, at a
minimum, the maintenance of a record of daily usage, e.g., range usage
as provided by an automated stock usage report, as well as a daily
record of visual inspection.
[Official Commentary: In connection with the visual inspection requirement,
it is suggested that the agent consider, where appropriate, marking the
side of the in-use stock with a "V" or a vertical line which, when
inspected on a daily basis by the agent, will quickly signal whether
tickets have been removed from the contents. Another suggestion would be to
insert a ruler into the feed stock bin on a daily basis to verify that the
volume depleted was related to the documents used.]
E. All traffic documents must be removed from the printer and placed in
the safe recommended in section 6.B., above, or in a locked steel
container at the end of each operating day.
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SECTION XVIII: NOTICES
Any notice which this agreement explicitly requires to be given in writing shall
be sufficient if sent by prepaid telegram, mailgram, mail, or any government
licensed delivery service which service provides a shipping receipt, airbill, or
documentation of delivery, addressed as the Agent or ARC (as appropriate) shall
have designated in writing during the term of this agreement.
The date of such notice, for the purpose of making calculations with regard
thereto, shall be the date such notice was mailed, telegraphed, or placed in the
hand of a government licensed delivery service for delivery.
SECTION XIX: CENTRAL COLLECTION SERVICE
In order to expedite the flow and payment of (I) debit memos issued by a carrier
against the Agent, and (2) credit request memos issued by the Agent against a
carrier, and to provide a uniform manner of processing such items should the
Agent or carrier fail to act upon direct submissions to them within a reasonable
time, the Agent and carriers may issue credit request memos and debit memos,
respectively, which may be submitted to the Central Collection Service, under
the terms and conditions set forth in attachment D hereto.
SECTION XX: TRANSFER OR ASSIGNMENT OF AGREEMENT, DEATHS AFFECTING OWNERSHIP,
ABANDONMENT OF AUTHORIZED AGENCY LOCATION, TEMPORARY CLOSURE
A. Change of Ownership
1. This agreement may not be assigned or transferred by the Agent
without the approval of ARC. Moreover, if 30% or more of the
shares of stock, cumulative, of the Agent have been sold or
otherwise transferred (unless such Agent is an entity whose
shares are listed on a securities exchange or are regularly
traded in an over-the counter market), ARC approval, for purposes
of retention on the ARC agency list, must be obtained.
2. Procedures for approval of changes of ownership are set forth in
attachment G hereof. Upon receipt of a complete application for
approval of a change of ownership, ARC shall notify the carriers
and the system providers. Carriers and system providers will also
be notified when such application is approved.
3. Possession of ARC traffic documents (paper format) by a new owner
as well as access to such in an electronic format prior to ARC
approval will be subject to appropriate action by ARC.
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4. If ARC determines that this agreement has been assigned or
transferred, or that ownership of a branch location covered by
this agreement has been assigned or transferred or that 30% or
more of the stock in the agency entity has been sold or otherwise
transferred and that ARC approval for purposes of retention on
the ARC agency list has not been given, ARC may take appropriate
action consistent with section XXIII of this agreement.
5. In the event a transfer or assignment of ownership interest
occurs without ARC approval with respect to a branch location,
the procedures set forth in paragraph 4 above shall only apply to
the agency location affected by the change.
B. Disapproval of Change of Ownership
If ARC disapproves an application for a change of ownership, the
carriers and the system providers shall be notified. The applicant may
obtain a review of the disapproval by the Arbiter, in accordance with
section XXIII of this agreement.
The carriers and system providers shall also be notified when an
application for approval of change of ownership is withdrawn and/or
returned to the applicant.
C. Death of a Sole Proprietor
1. On receipt of information of the death of the sole proprietor of
the Agent, ARC shall notify all carriers, and may i. withdraw all
ARC traffic documents (paper format) and airline identification
plates supplied to such Agent, and ii. notify the system
providers to inhibit the transmission of ticketing records for
the printing of such onto ARC traffic documents (paper format) by
such Agent, and iii. prohibit the use of ARC traffic document
numbers by system providers for the issuance of ARC traffic
documents (electronic format) on behalf of such Agent. In order
to preserve the goodwill of the agency as far as possible, ARC
may, at the request of the person entitled to represent the
deceased's estate, enter into a temporary agreement with such
person acting on behalf of the estate provided that such person
submits a proper bond or letter of credit in the name of the
estate. The temporary agreement shall be in the same form and
have the same effect as this agreement. ARC shall examine the
matter periodically, and, if it considers that conditions so
warrant, shall direct that the temporary agreement be terminated.
ARC shall notify all carriers
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and the agency accordingly, and may take appropriate action
consistent with section XXIII of this agreement. Upon termination
of the temporary agreement, ARC shall so notify the carriers and
the system providers that the issuance of ARC traffic documents,
whether in paper or electronic format, is prohibited.
2. If the person entitled to represent the estate proposes to
transfer the temporary agreement to an heir, legatee, or other
person, such transfer shall be deemed a change of ownership, and
the procedures of attachment G shall apply.
3. Subject to earlier termination under the provision set forth
above, a temporary agreement shall terminate if the
representative of the estate ceases to carry on the agency
business at the location covered by such agreement.
D. Death of a Partner
1. In the event of a death of a member of a partnership or other
unincorporated firm, ARC will notify all carriers, and may i.
withdraw all ARC traffic documents (paper format) and airline
identification plates supplied to such Agent and ii. notify the
system providers to inhibit the transmission of ticketing records
for the printing of such onto ARC traffic documents (paper
format) by such Agent, and iii. prohibit the use of ARC traffic
document numbers by system providers for the issuance of ARC
traffic documents (electronic format) on behalf of such Agent. In
order to preserve the goodwill of the agency as much as possible,
ARC may enter into a temporary agreement with the representative
of the deceased's estate and/or remaining partner(s), provided
such person(s) presents a proper bond or letter of credit as
provided herein. The temporary agreement may be extended by ARC
for good cause shown. The temporary agreement shall be in the
same form and have the same terms and conditions as this
agreement.
2. If the person(s) with whom the temporary agreement is executed
proposes to become the new owner(s), or proposes to transfer the
agreement to another person, such transfer shall be deemed a
change of ownership and the procedures of attachment G shall
apply.
3. Subject to earlier termination under the provision set forth
above, a temporary agreement shall terminate if the person(s)
with whom the temporary agreement is
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executed ceases to carry on the agency business at the location
covered by such agreement.
E. Abandonment of Authorized Agency Location
1. If ARC has cause to believe that the Agent has failed to keep its
authorized agency location open and freely accessible to the
public in accordance with section IV.C.4 (except as provided in
section XVII of this agreement) and/or the Agent has moved its
agency location without prior written notice to ARC (in
accordance with section VI.B of this agreement), ARC will notify
the agent in writing of such breach or breaches. Such notice
shall be sent to the address which the Agent shall have
designated in writing during the term of this Agreement, by a
delivery service which provides a shipping receipt, airbill, or
documentation of delivery. If ARC does not receive a written
response to such notice on or before the 15th day from the date
of such notice, this agreement shall terminate automatically and
without further notice, effective the 16th day from the date of
such notice. ARC shall notify the carriers and the system
providers that the Agreement has been terminated and that the
issuance of ARC traffic documents is prohibited.
a. ARC shall have cause to believe that the Agent has closed,
abandoned, or changed its authorized agency location without
notifying ARC, for the purposes of this section, based on
any reliable indicia of abandonment, closure, or changed
location, including, but not limited to, the following: (1)
the disconnection of the telephone number of the Agent's
authorized location with no indication that the number has
been changed or the telephone line has been damaged or is
being serviced; (2) an ARC representative's observations
upon visiting the Agent's authorized location, e.g.,
location is empty or non-existent, no forwarding address;
or, (3) 2 or more returned letters or written notices sent
by ARC to Agent's address of record.
F. Temporary Closure
1. In the event of a situation beyond the Agent's control, e.g.,
fire, flood, illness, ARC may, upon written request by the Agent,
permit the Agent to temporarily close its authorized agency
location(s), for a period not to exceed 30 days. The Agent's
request must be made within 10 days of the closure of the agency
location. If circumstances warrant, ARC may approve a request for
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temporary closure which exceeds 30 days. All requests for
temporary closure must be in the form prescribed by ARC and
approved by ARC in writing. ARC's approval shall state the
temporary closure time period. ARC shall not unreasonably deny
any request for temporary closure of an authorized agency
location, and the Agent may request the Travel Agent Arbiter to
review any such denial.
2. The Agent's bond or letter of credit shall remain in full force
and effect. Agent shall, in accordance with section VIII of this
agreement, continue to submit weekly sales reports reflecting "no
sales" when the agency location is temporarily closed unless ARC
has removed all ARC traffic documents and carrier identification
plates from the Agent during the period of closure, and notified
the carriers and system providers that issuance of ARC traffic
documents is prohibited.
3. ARC shall notify the carriers and the system providers of the
temporary closure of the Agent's authorized location(s),
directing that the system providers inhibit the transmission of
ticketing records for the printing of such onto ARC traffic
documents (paper format) by such Agents, and prohibiting the use
of ARC traffic document numbers by system providers for the
issuance of ARC traffic documents (electronic format) on behalf
of such Agent. When the location(s) are reopened, the carriers
and the system providers shall be notified.
4. If the agent fails to reopen within the time period approved by
ARC, the agreement with the closed location(s) will be
terminated, following 10 days advance notice to the Agent, and
ARC shall notify the carriers and the system providers,
accordingly.
SECTION XXI: REDUCED RATE TRANSPORTATION FOR AGENT
The provision of free or reduced rate transportation by a carrier to the Agent
and its employees shall be in accordance with such terms, rules and regulations
as the carrier shall establish.
SECTION XXII: REMUNERATION OF AGENTS
The remuneration paid the Agent for the sale of air transportation shall be that
established by the carrier, or shall be such as may be mutually agreed between
the carrier and the Agent, and is not provided herein.
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SECTION XXIII: TRAVEL AGENT ARBITER
Disputes between the Agent and ARC shall be resolved by the Arbiter in
accordance with the rules and procedures promulgated and published by the
Arbiter and the decision of the Arbiter shall be final and binding; provided,
however, that neither the Agent nor ARC is precluded from seeking judicial
relief to enforce a decision of the Arbiter, or to compel compliance with a
requirement or prohibition of this agreement prior to the filing of an answer in
a proceeding concerning such requirement or prohibition before the Arbiter.
SECTION XXIV: INTERPRETIVE OPINION PROCEDURES
A. The Agent may, by written submission, request from ARC an opinion of
the interpretation or application of an ARC resolution or a provision
of an ARC agreement which may affect travel agents in their role as
agents for carrier parties to the ARC carrier services agreement. The
following guidelines will apply to such a request:
1. ARC must answer the request within fifteen (15 days of its
receipt;
2. The opinion shall relate only to the Agent and the specific
question(s) raised in the request; and
3. Unless the Agent seeks appeal of the opinion as hereinafter
provided, the request and opinion shall not be circulated to any
other person.
B. The Agent seeking appeal of an opinion rendered above may by written
submission to ARC, place on the agenda of the next ARC Board of
Directors meeting, a request for the review of the opinion. The
Board's decision shall be reported in the Minutes of the meeting, and
a copy of the decision shall be promptly provided to the Agent.
SECTION XXV: MEMORANDUM OF AGREEMENT AND ALTERNATIVE MEANS OF AGENT CONCURRENCE
ARC may prepare a memorandum of agreement, execution of which binds ARC and the
Agent, and the carriers appointing the Agent, to the terms and conditions of
this agreement. The memorandum of agreement shall be executed in duplicate. The
Agent's copy shall be attached to its copy of this agreement and the second copy
will be returned to, and retained by, ARC. Alternatively, the Agent's
concurrence in the terms and conditions of this Agreement may be obtained
through an electronic signature; may be deemed to have occurred upon the Agent's
performance under the Agreement, following advance notice, as of a fixed date;
or, may be obtained or deemed to have occurred by any other means adopted by the
ARC Board of Directors.
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SECTION XXVI: AMENDMENT OF THIS AGREEMENT
A. ARC, in discharging the responsibility of notice, will submit each
future amendment to this agreement to the Agent not less than
forty-five days prior to the effective date of the amendment, unless
otherwise specified.
In the event that, immediately prior to the effectiveness of the
amendment, this agreement is at that time subject to termination in
accordance with its terms, this agreement shall remain subject to such
termination, without regard to whether the amendment alters any
provision of this agreement related to the basis for the termination.
B. If ARC does not receive an executed amendment by the effective date
thereof or the Agent's concurrence in the Agreement cannot be
demonstrated, ARC may remove the Agent from the agency list and
terminate this agreement with the Agent. Thereupon, ARC shall notify
the carriers and, also, the system providers that the issuance of ARC
traffic documents is prohibited.
SECTION XXVII: ASSURANCE OF NONDISCRIMINATION (Effective only as between the
Agent and each U.S. carrier; not effective as between the Agent
and ARC, itself).
In accordance with the Air Carrier Access Act of 1986 and 14 C.F.R. Part 382,
the Agent shall not discriminate on the basis of handicap in performing services
for air carriers subject to said Act, and the Agent shall comply with directives
of the air carrier Complaints Resolution Officials issued pursuant to 14 C.F.R.
Part 383.
SECTION XXVIII: EFFECTIVENESS
A. This agreement shall become effective as between the Agent and ARC on
the date stated on the memorandum of agreement.
B. This agreement shall be effective as between the Agent and each
carrier which has, or hereafter may have, issued an appointment to the
Agent. This agreement shall have the same force and effect between the
carrier and the Agent as though they were both named in, and had
subscribed their names to, the memorandum on the date appearing
thereon.
SECTION XXIX: TERMINATION
A. This agreement may be terminated as between the Agent and ARC, and
between the Agent and all carriers jointly, at any time by notice from
the Agent to ARC, subject to a full and
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complete accounting. This agreement may be terminated as between ARC
and the Agent in accordance with this agreement by notice in writing
from ARC to the Agent.
B. Whenever under the terms of this agreement ARC is required to remove
the Agent or its branch location from the agency list, ARC will
terminate this agreement with respect to the Agent or location,
respectively.
C. Upon termination as between the Agent and ARC, and between the Agent
and all carriers jointly, all unused ARC traffic documents (paper
format) and airline identification plates shall be immediately
returned, together with all monies due and payable to the carriers
hereunder, and a complete and satisfactory accounting rendered. ARC
may designate a representative to remove all ARC traffic documents
(paper format) and airline identification plates from the Agent.
D. Whenever this agreement is terminated pursuant to paragraph A or B
above, ARC shall notify all carriers and advise them of the effective
date thereof. ARC shall also notify the system providers that the
issuance of ARC traffic documents, whether in paper or electronic
format, is prohibited. Additionally, the Agent shall cease any and all
use of its code number(s) for purposes related to the issuance of ARC
traffic documents.
E. A carrier appointment may be terminated as between the Agent and any
individual carrier at any time by notice in writing from one to the
other. If a carrier which issues specific certificates of appointment
under section V hereof, elects to terminate its appointment of the
Agent, it shall notify the Agent of the termination of the certificate
of appointment. A carrier which has deposited with ARC a concurrence
for appointment of all agents may terminate its appointment of the
Agent by notifying the Agent by certified mail, with a copy to ARC's
Agency Accreditation Services, such notice to be distributed by ARC to
all carrier participants, that the Agent shall not represent that
carrier. ARC shall also notify the system providers that the Agent's
agreement with the carrier is terminated. The system providers shall
inhibit the printing of ARC traffic documents validated with such
carrier's identifier as well the generation of such ARC traffic
documents in an electronic format. Upon receipt of notice from a
carrier that the termination of the Agent's agreement has been
rescinded or revoked, ARC shall so notify the carriers and the system
providers.
F. Termination shall take effect immediately upon receipt of notice, or
upon the date indicated therein, whichever shall
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be later, subject to the fulfillment by each of the parties of all
obligations accrued prior to the effective date of such termination.
SECTION XXX: OTHER AGREEMENTS SUPERSEDED
This agreement shall supersede any and all prior agreements between the Agent
and any carrier party to the Carrier Services Agreement concerning the issuance
of ARC traffic documents for such party, including the Air Traffic Conference of
America Passenger Sales Agency Agreement, except with respect to rights and
liabilities thereunder existing at the date hereof.
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