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EXHIBIT 10.22
GROUND SERVICES AGREEMENT
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THIS AGREEMENT is entered into as of December 1, 1996, by and
between International Total Services, an Ohio corporation with its principal
offices at Crown Centre, 0000 Xxxxxxxx Xxxx, Xxxxxxxxx, Xxxx 00000
("Contractor"), and Delta Air Lines, Inc., a Delaware corporation with its
principal offices at Xxxxxxxxxx Atlanta International Airport, Xxxxxxx, Xxxxxxx
00000 ("Delta").
WITNESSETH:
WHEREAS, Delta desires to obtain ground services at
certain times and places; and
WHEREAS, Contractor is in the business of supplying such
ground services and is willing to provide the same for Delta on the terms and
conditions set forth below;
NOW, THEREFORE, in consideration of the mutual promises and
covenants hereinafter set forth, the parties agree as follows:
1. TERM. This Agreement shall be effective as of December 1, 1996, and
shall continue in effect until canceled by Delta giving not less than thirty
(30) days' prior written notice to Contractor or Contractor giving not less than
sixty (60) days' prior written notice to Delta. The commencement date for
services under this Agreement shall be December 1, 1996 (the "Commencement
Date").
2. SERVICES AND STANDARDS.
2.1 From and after the Commencement Date, Contractor shall
furnish to Delta at Delta's facilities located at Cleveland Xxxxxxx
International Airport in Cleveland, Ohio (the "Airport") the ground services
described in Exhibit A attached hereto and incorporated herein by reference
(such services are sometimes referred to herein as the "work"). Such services
shall be performed in accordance with the specifications and other requirements
referenced or set forth in EXHIBIT A. As provided in Section 5 hereof, it is
understood that certain additional services may be required and shall be
provided under this Agreement, even though not specifically listed in EXHIBIT A.
2.2 The services described in EXHIBIT A will be made available
without further request for arrivals and departures scheduled to be made at the
Airport by aircraft of Delta or other carriers ground handled by Delta from time
to time. Delta operates certain flights under the name "Delta Express." Such
operations are Delta operations for all purposes under this Agreement. Delta
will coordinate with Contractor all proposed schedule changes or additions at
least fifteen (15) days in advance of the effective
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date thereof, and Contractor will advise Delta as to Contractor's ability to
accommodate such changes within five (5) days thereafter.
2.3 The services provided under this Agreement shall be
performed in a timely and professional manner at all times and shall be
performed in full compliance with Delta's Ground Operations Manual ("GOM") as
such manual may be in effect from time to time. All personnel utilized by
Contractor shall be properly attired in accordance with the uniform
specifications set forth in EXHIBIT B hereto and shall be able to perform the
contracted services competently.
2.4 Contractor's employees who operate motorized vehicles in
the performance of the work must possess a valid state driver's license for the
state in which the services performed and a valid Delta Mobile Equipment
Operator's License.
2.5 All services shall be furnished by Contractor as an
independent contractor. All personnel utilized by Contractor in the furnishing
of such services shall be employees of Contractor and under no circumstances
shall be deemed employees of Delta. Contractor shall be fully responsible for
all acts and omissions of such personnel. Contractor shall bear sole
responsibility for payment of compensation to its personnel. Contractor shall
withhold (if applicable), pay and report, for all personnel assigned to Delta's
work, federal, state and local income tax withholding, social security taxes,
employment head taxes, and unemployment insurance applicable to such personnel
as employees of Contractor. Contractor shall bear sole responsibility for any
health or disability insurance, retirement benefits, or welfare, pension or
other benefits (if any) to which such personnel may be entitled. Contractor
agrees to defend, indemnify, and hold harmless Delta, Delta's officers,
directors, employees and agents, and the administrators of Delta's benefit
plans, from and against any claims, liabilities, or expenses relating to such
compensation, tax, insurance, or benefit matters.
2.6 Contractor agrees to use its best efforts to follow any
instructions provided by Delta's Station Manager/Director or his designee
regarding the standards, procedures, and practices to be followed in furnishing
services pursuant to this Agreement. In the absence of such instructions,
services will be furnished in accordance with the accepted standards, practices,
and procedures normally followed in the industry in connection with such
operations. Delta's Station Manager/Director or his designee shall be authorized
to request services on behalf of Delta. Provided, however, for purposes of this
Section 2.6, if the services to be provided under this Agreement include cargo
or mail handling services, then Contractor shall coordinate with both Delta's
Station Manager/Director and Delta's Cargo Regional Manager or Cargo Manager for
the Airport or their respective designees for all
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matters addressed by this Section 2.6 with respect to such cargo and mail
handling services.
2.7 All services performed hereunder shall be performed in a
manner which ensures health and safety. Contractor shall comply with all laws,
rules, regulations and procedures relating to health and safety. Without
limiting the foregoing general statements of Contractor's obligations,
Contractor shall ensure that its employees wear all personal protective
equipment necessary to protect such employees from potential hazards, including,
without limitation. all personal protective equipment required by applicable
laws, rules, regulations and procedures.
2.8 Contractor shall ensure that all personnel utilized in the
performance of tile services required hereunder receive all operational and
safety training necessary for the safe and competent performance of such
services, including, without limitation, any specialized training provided or
required by Delta and any training required by applicable laws, rules,
regulations and procedures. Contractor shall designate an employee to be the
Contractor's Training Coordinator responsible for the training of new employees,
dissemination of new procedures and revisions to Delta's cargo manual and
tariffs, and participation in Delta's "Train the Trainer" activities. All
training must be documented in the Delta Automated Training Manual System
(ATMS). Separate supporting documentation Must be maintained by Contractor for
the longer of three (3) years or the period of time specified by applicable
laws, rules, regulations and procedures. Delta shall have the right, but not the
duty, to conduct audits of such training records as it deems prudent to ensure
compliance with this requirement.
2.9 At Delta's request and upon the terms set forth herein,
Contractor shall provide the services specified herein, as Delta's contractor,
for other air carriers ground handled by Delta from time to time. Except as
provided in Section 5.3 hereof, such services shall be at no additional cost to
Delta. Contractor shall perform the same services for the ground handled
carrier's aircraft as are performed for Delta aircraft hereunder and such
services shall be subject to the same standards and requirements, unless
otherwise instructed by Delta.
2.10 At all times during which Contractor's employees are
required to be performing the services required under this Agreement, Contractor
agrees to maintain a competent work supervisor (or other employee with
responsibility for overseeing the performance of the services) located at the
Delta facilities at which the services are to be performed, and to keep Delta's
Station Manager/Director (or the Station Manager/Director's designated agent in
charge) continuously advised of the locations) and telephone number(s) at which
such work supervisor (or other
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employee with responsibility for overseeing the performance of the services) may
be contacted to be advised of emergencies, worker absences, accidents involving
workers. or substandard performance of work. The availability of such work
supervisor or other employee shall in no way obligate Delta to communicate any
such information to Contractor.
2.11 Contractor shall comply with all applicable laws, rules,
regulations and procedures which govern the services provided for In this
Agreement. Contractor shall obtain all licenses and permits which may be
required by any governmental authority for the performance of the contracted
services and shall pay all fees and charges therefor. The foregoing obligations
are in addition to those provided in Section 13 of this Agreement.
3. COST OF THE WORK AND GUARANTEED MAXIMUM COST.
3.1 From and after the Commencement Date, Delta will reimburse
Contractor for the cost of the work as defined in Section 6 and as limited in
Section 7, in addition to Contractor's Management Fee stipulated in Section 4.
3.2 The maximum cost to Delta of the aggregate of Contractor's
Management Fee and the cost of the work for each one-year period front December
1 to November 30 is guaranteed by Contractor not to exceed the sum identified in
EXHIBIT C as the "Guaranteed Maximum Cost."
3.3 Adjustments, if any, to the Guaranteed Maximum Cost as a
result of changes in the scope of the work shall be handled in accordance with
Section 5 hereof.
4. CONTRACTOR'S FEE.
4.1 Delta will pay Contractor in current funds, as payment for
its services and personnel, a fee calculated in accordance with the fee schedule
contained in EXHIBIT C and identified in such exhibit as the "Management Fee."
4.2 Adjustments, if any, to Contractor's Management Fee as a
result of changes in the scope of the work shall be handled in accordance with
Section 5.5 hereof.
5. CHANGES IN THE WORK/WORK FOR OTHER CARRIERS.
5.1 SCOPE OF WORK. Contractor is to provide a dedicated work
force to provide the services specified herein as Delta's contractor for all
arrivals and departures scheduled to be made at the Airport by aircraft of Delta
or of other carriers ground handled by Delta from time. The Guaranteed Maximum
Cost set forth in EXHIBIT C was determined in part based on information provided
by Delta to Contractor with respect to the average number of
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flights per week for which Contractor's services are required
hereunder.
5.2 CHANGES. Changes in the scope of the work may become
necessary in order to address changes that were not anticipated at the time the
annual forecast of operating cost ("Forecast of Operating Cost") and Guaranteed
Maximum Cost were established and that were not included in such Forecast of
Operating Cost and Guaranteed Maximum Cost. It is possible that these changes in
the scope of the work could result in increases or decreases in the cost of the
work to Contractor. The following are examples of potential changes in the scope
of the work that might result in an increase in the cost of the work:
5.2.1 A material increase in the average number
of flights per week for which services are required hereunder;
5.2.2 Additional man-hours required as the result of
late or irregular flight operations;
5.2.3 Additional man-hours and/or travel expenses
due to a substantial change in Delta's training requirements or the training
requirements imposed by applicable laws, rules, regulations and procedures;
5.2.4 Unanticipated seasonal changes resulting in
substantial increases in the number of flights handled or otherwise
substantially increasing Contractor's workload under this Agreement;
5.2.5 Additional requirements with respect to the
maintenance of and upkeep of equipment and facilities at the Airport requested
by the Delta Station Manger/Director (e.g., extra painting of ground equipment).
5.3 COMPENSATION FOR INCREASES IN COSTS DUE TO CHANGES IN THE WORK.
Contractor shall be reimbursed for such out-of-scope work and the cost shall not
be counted against the original Guaranteed Maximum Cost only if the requirements
set forth in this Section 5.3 are satisfied. In the event that a change in the
scope of the work is made by Delta and, as the direct result of such change,
Contractor would be required to provide man-hours in excess of the manhours used
by Delta and Contractor in establishing the Forecast of Operating Cost in
EXHIBIT C or incur expenses not covered by the line items set forth in EXHIBIT
C, then, if Contractor desires to receive compensation therefor, Contractor
shall, prior to rendering such services or incurring such additional expenses,
submit to the Delta Station Manager/Director the approved Delta form for
Authorization of Additional Charges for Out-of-Scope Work. If Delta's Station
Manager/Director then agrees in writing that such work is out-of-scope work and
that such work would require man-hours in excess of the man-hours used by Delta
and Contractor in
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establishing the Forecast of Operating Cost or would require Contractor to incur
expenses not covered by the line items Exhibit C, then, at Delta's sole option,
either (i) the Guaranteed Maximum Cost shall be increased by an amount equal to
the sum of the actual increase in Contractor's costs resulting from the change
in the scope of the work plus the increase, if any, in the Contractor's
Management Fee pursuant to Section 5.5 hereof, and the cost of the additional
work shall be billed to Delta in the same fashion as the original scope of work,
or (ii) the additional work shall be billed by Contractor as a separate line
item on the monthly invoice at the hourly rate set forth in EXHIBIT C hereto and
shall not be considered part of the cost of the work or be counted against the
Guaranteed Maximum Cost. Unless the Delta form for Authorization of Additional
Charges for Out-of-Scope Work is submitted by Contractor and approved in advance
in writing by Delta's Station Manager/Director, Delta shall not be responsible
for any extra compensation claimed by Contractor on account of such services or
expenses.
5.4 DECREASES IN COSTS DUE TO CHANGES IN THE WORK. In the
event that the change in the work would decrease the cost of the work, Delta
shall be billed only for the actual decreased cost of the work and, at Delta's
option, the Guaranteed Maximum Cost for the work shall be reduced by the sum of
the decrease in the actual cost of the work and the reduction, if any, in the
Contractor's Management Fee pursuant to Section 5.5 hereof.
5.5 ADJUSTMENTS TO CONTRACTOR'S MANAGEMENT FEE. In the event that Delta
elects to make an adjustment to the Guaranteed Maximum Cost pursuant to Section
5.3(i) or 5.4 hereof as the result of a change in the scope of the work, then
Contractor's Management Fee shall be reviewed for adjustment if the change in
the scope of the work results in an Increase or decrease of 10% or more of the
amount specified in EXHIBIT C as the annual Forecast of Operating Cost. If the
Contractor's Management Fee is so adjusted, then the Guaranteed Maximum Cost
will be adjusted accordingly to reflect the revised Management Fee.
5.6 CREDITS FOR WORK PERFORMED FOR OTHER CARRIERS. Should
Contractor desire to provide services at the Airport to carriers other than
Delta with manpower from the work force prove dedicated to Delta, Contractor
shall reimburse Delta on the monthly invoice for work hours associated with such
services based on the hourly rate set forth in EXHIBIT C hereto. Such
reimbursement shall be identified as a separate line item credit on the monthly
invoice and will not affect the Guaranteed Mesa-new-n Cost. Contractor is
authorized to utilize manpower fried-n the work force dedicated to Delta only if
such manpower is not needed to furnish services to Delta or carriers ground
handled by Delta and only if agreed to in advance by Delta's Station
Manager/Director. Delta's facilities shall not be used by Contractor for any
purpose other than the performance of the work hereunder for Delta and carriers
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ground handled by Delta.
6. COSTS TO BE REIMBURSED.
6.1 The term "cost of the work" shall mean costs necessarily
and reasonably incurred in the proper performance of the work and paid by
Contractor. Such costs shall be at rates not higher than those prevailing in the
locality of the work except with prior written consent of Delta, and shall
include the following items:
6.1.1 Wages paid for labor in the direct employ
of Contractor in the performance of the work on site. Bonuses or other
incentives shall be reimbursable only if approved in writing in advance by
Delta.
6.1.2 Cost of contributions, assessments or taxes
required to be paid to any governmental authority for such items as unemployment
compensation and social security, insofar as such cost is based on wages,
salaries or other remuneration paid to employees of Contractor and included in
the cost of the work under Section 6.1.1. Such costs shall be limited to those
required by applicable federal, state or local laws and regulations.
6.1.3 Cost of performing background checks and drug
screening tests in order to comply with Section 13 hereof.
6.1.4 The amortization, calculated as set forth
in this Section 6.1.4, of the cost of all vehicles, vacuums, carpet extractors
and radios, if any, purchased by Contractor and used exclusively in the
performance of the work. The purchase price of vehicles shall be amortized over
five years, without interest. The purchase price of vacuums, extractors and
radios shall be amortized over four years, without interest. Upon full
amortization, title to such equipment or vehicles shall pass to Delta and no
charges shall be imposed for use of the equipment or vehicles. The cost of the
maintenance of, and repairs to, such vehicles and equipment necessary to
maintain such vehicles and equipment in an operable condition shall also be a
reimbursable cost. Reimbursable maintenance and repairs shall not include an
overhaul or restoration Of Such equipment or vehicles.
6.1.5 Rental charges of all necessary equipment used at the
site of tile work, to the extent Such equipment is used exclusively in the
performance of the work. Such rental charges shall be at rates consistent with
those prevailing in the area for periods of time when such equipment is required
and used in the performance of the work. The cost of the work shall also include
minor repairs and replacements to Such equipment and costs incurred for removal,
transportation and delivery of such equipment. Contractor shall, as may be
periodically required by Delta, evaluate the anticipated total rental charge of
each item of
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equipment and should the anticipated total rental charges for the expected
duration of tile work equal 75% or more of tile purchase price of the equipment,
Delta shall be notified of such facts and i-nay direct Contractor to purchase
the equipment (in which case, title to such property shall pass to Delta upon
payment of such costs). The phrase "minor repairs and replacements" above is
limited to repairs and parts replacements to maintain the item of equipment in
an operable condition and does not include major repair/overhaul to restore
equipment to a nearly new condition.
6.1.6 The proportionate cost attributable to the
work for premiums for all bonds and insurance which Contractor is required by
this Agreement to purchase and maintain.
6.1.7 Sales, use or similar taxes, related to the
work and for which Contractor is liable, imposed by any applicable governmental
authority. The proportionate cost attributable to the work for any city business
licenses required for the performance of the work shall also be a reimbursable
cost.
6.1.8 The cost of uniforms to the extent Contractor
is unable, after reasonable efforts, to obtain reimbursement from its personnel
for such costs and only if and to the extent that a line item for such cost has
been included in the Forecast of Operating Cost in EXHIBIT C.
6.1.9 Minor expenses such as telegrams, long
distance telephone calls, telephone service at the site (if applicable), express
age, office supplies, postage and similar xxxxx cash items reasonably and
necessarily incurred in connection with the work.
6.1.10 Purchased computer software and hardware,
office copiers and facsimile machines necessary to perform the work and used
exclusively in the work. Any such equipment to be purchased under this Agreement
must be previously approved in writing by Delta and the title to such equipment
shall transfer to Delta on Delta's reimbursing the Contractor or the cost of
such equipment.
6.1.11 To the extent provided in this Section
6.1.11, the cost of initial training (i.e., prior to the Commencement Date) for
the Contractor's initial staff dedicated to performance of the work for Delta at
the Airport. Delta shall reimburse Contractor for the actual salary costs
incurred by Contractor for such staff during training hours, including the
associated statutory overhead, and such costs shall not be applied to the
Guaranteed Maximum Cost. Any other costs related to training shall not be
reimbursable unless included as a separate positive line item dollar amount on
EXHIBIT C. If so included on EXHIBIT C, such line item costs shall be reimbursed
at actual cost and shall be applied to the Guaranteed Maximum Cost. In the event
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that Such initial training is conducted in a city other than the city in which
the Airport is located, Delta shall provide air transportation to such location
on Delta, hotel accommodations at Delta's negotiated corporate rates, and shall
reimburse actual meal expenses (subject to a maximum of Delta's published per
diem meal allowance then in effect for ground employees). No cash reimbursement
for air transportation shall he provided. With respect to costs incurred prior
to the Commencement Date for Contractor's home office employees and other
necessary overhead expenses, Contractor shall be paid a pro rata portion of the
Contractor's Management Fee for the period commencing on the effective date of
this Agreement, as set forth in Section 1 hereof (the "Effective Date"), and
ending upon the Commencement Date. This fee shall be determined by dividing the
annual Contractor's Management Fee set forth in EXHIBIT C by 365 and multiplying
such daily amount by the number of days between the Effective Date and
the Commencement Date. All training and services performed or undertaken in
connection with this Agreement prior to the Commencement Date shall be subject
to the terms and provisions of this Agreement, including, without limitation,
the indemnification provisions of Section 17. Training costs incurred after the
Commencement Date, other than for recurrent training and training of new
employees, shall not be reimbursable.
6.1.12 The cost of fuel consumed by the vehicles
utilized by Contractor in the performance of the work, so long as such vehicles
are licensed only for use on the Airport Operating Area at the Airport (the
"AOA") and are used exclusively in the performance of the work.
6.1.13 Other costs incurred in the performance of
the work if and to the extent specifically included as a positive line item
dollar amount in the Forecast of Operating Cost set forth in EXHIBIT C hereto or
approved in advance in writing by Delta in accordance with Section 5 hereof.
6.2 Notwithstanding the inclusion of the specific cost items
contained in this Section 6 and notwithstanding any other provision of this
Agreement, no such item shall be included as part of the cost of the work unless
substantiated to the reasonable satisfaction of Delta and unless the Forecast of
Operating Cost set forth in EXHIBIT C hereto expressly includes a positive line
item dollar amount for such type of cost.
6.3 Further, notwithstanding the inclusion of the specific
cost items contained in this Section 6, said items shall not be included as part
of the cost of the work to the extent that the cost of such items, together with
Contractor's fee, exceeds the Guaranteed Maximum Cost referenced in Section 3
and set forth in EXHIBIT C hereto.
7. COSTS NOT TO BE REIMBURSED.
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7.1 Notwithstanding any other provision of this Agreement, the terM
"cost of the work" shall not include any of the following items (unless the item
is expressly included as a positive line item dollar amount in the Forecast of
Operating Cost in EXHIBIT C hereto):
7.1.1 Salaries or other compensation of Contractor's
personnel at Contractor's principal office. branch offices and field offices
(other than the on-site office at the Airport).
7.1.2 Expenses of Contractor's principal office,
branch offices and field offices (other than the on-site office at the Airport).
7.1.3 Any part of Contractor's capital expenses
or interest on Contractor's capital employed in the work, unless expressly
permitted in Section 6.1.4.
7.1.4 Advertising (unless directed specifically
to recruitment of employees for the Xxxxx xxxx at the Airport) and public
relations expenses.
7.1.5 Fees of consultants.
7.1.6 Home office accounting department costs.
7.1.7 Contributions and donations.
7.1.8 Federal, state and local taxes measured by
net income, assets or net worth.
7.1.9 Overhead or general expenses of any kind,
except for any that are both not excluded by other provisions in this Section 7
and are expressly included in any of the specified items listed in Sections
6.1.1 through 6.1.13.
7.1.10 Cost of fuel for Contractor's supervisory
vehicle, if any, licensed to operate off the AOA.
7.1.11 Costs due to the fault or negligence (in
either case, including, but not limited to, waste or in is management) of
Contractor, anyone directly or indirectly employed by Contractor or for whose
acts Contractor may be liable, including, but not limited to, costs of or
related to defective or non-conforming work, or disposal of material or
equipment wrongly supplied.
7.1.12 Costs incurred in connection with or in
anticipation of any claim against Delta under this Agreement, whether or not
such claim becomes the subject of a judicial or other formal proceeding.
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7.1.13 Costs of civil penalties or fines levied
by any federal, state or local authority, including costs to defend such
actions, due to tile acts or omissions of Contractor, its officers, directors,
employees, agents or subcontractors.
7.1.14 Costs in excess of the Guaranteed Maximum
Cost, as referenced in Section 3 and set forth in EXHIBIT C hereto.
7.1.15 The cost of any item not specifically and
expressly included in the items described in Section 6.
8. DISCOUNTS, REBATES AND REFUNDS. All cash discounts shall accrue to
Delta. All trade discounts, rebates and refunds and all returns from sale of
surplus materials and equipment shall accrue to Delta and Contractor shall make
provisions so that they will be obtained.
9. ACCOUNTING RECORDS. Contractor shall keep full and detailed records
and books of account on the basis of its currently established accounting
methods in effect as of the effective date of this Agreement, showing the actual
direct cost reimbursable to Contractor under the provisions of this Agreement.
Delta, or its nominee, shall at all times during regular business hours have the
right to audit and have access to the books of account, receipts and records
pertaining to the reimbursable cost of performance hereunder by Contractor.
Delta shall also be afforded access to all the Contractor's other records, books
correspondence, instructions, memoranda and similar data relating to this
Agreement an@ any of the work. Contractor shall preserve such documents and
other records to which Delta has access rights under this Section 9 without
additional compensation therefor for a period of three (3) years, or such longer
period as may be required by law, after termination or expiration of this
Agreement. If as a result of any such audit or otherwise it is determined that
Delta has paid any excess charges for the work, Delta shall be entitled to
immediate refunds for any such excess charges paid by Delta.
10. APPLICATIONS FOR PAYMENT.
10.1 INVOICES; BILLING, ADDRESS. Each month during the term of
this Agreement, as soon as actual expenses are determined for the preceding
month, an invoice shall be submitted to Delta by Contractor. Such invoice shall
reflect the total cost of the work incurred by Contractor during the preceding
month and the monthly management fee, subject to the Guaranteed Maximum Cost
referenced in Section 3.2 and set forth in EXHIBIT C of this Agreement. Such
invoice shall be accompanied by all documentation necessary to support the
entire month's payment has been made and for which reimbursement is sought. The
invoice should be sent to:
Station Manager - Cleveland Station
Delta Air Lines, Inc.
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Cleveland Xxxxxxx International Airport
Xxxxxxxxx, Xxxx 00000
10.2 PRORATION. If the Commencement Date is a date other than
tile first day of a month or this Agreement ends on a date other than the last
day of a month, then the monthly amounts on the Forecast of Operating Cost and
the monthly management fee amounts shall be prorated for such first or last
month.
10.3 QUALITY ASSURANCE. Contractor agrees to comply with
Delta's quality assurance procedures and performance standards applicable to the
work. Delta shall provide Contractor with a copy of such procedures and
standards and any revisions made thereto from time to time. Contractor further
agrees to accept the appropriate reduction in payment where the quality of
service provided does not meet the prescribed Delta performance standards. All
reductions imposed by Delta shall be included as a credit to Delta on the first
monthly invoice presented by Contractor to Delta after imposition of the
reduction by Delta.
11. PAYMENTS TO CONTRACTOR
11.1 Delta will review Contractor's statements of moneys due,
in accordance with Section 10, and the undisputed amount shall be payable within
thirty (30) days of receipt of invoice. Delta shall have the option not to pay
any amount if Delta shall dispute its reasonableness or necessity. Delta and
Contractor shall make a good faith effort to resolve such dispute prior to the
next payment date. Delta's review of any of the Contractor's statements, failure
to dispute any amount claimed to be due or payment of any amount shall not waive
any rights Delta has under this Agreement or otherwise, including, without
limitation, the right to recover any amounts subsequently determined not to have
been payable to the Contractor and the right to terminate this Agreement.
11.2 The final payment due under this Agreement shall be paid
by Delta to Contractor within forty-five (45) days after the later of (i)
expiration or termination of this Agreement, (ii) receipt of Contractor's final
invoice, and (iii) completion of proper accounting for all Delta property.
12. TERMINATION OF AGREEMENT AND REDUCTION IN WORK.
12.1 Contractor may stop the work or otherwise terminate this
Agreement if Delta shall fail to make payment of undisputed amounts when due, in
accordance with Section 11, after ten (10) days written notice of such failure
of payment.
12.2 Delta reserves the right to reduce the scope of work
to be performed by not less than fifteen (15) days written notice
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to Contractor. Reductions in compensation as a result of reductions in scope
shall be handled in accordance with Section 5 hereof.
12.3 As provided in Section 1, either party shall have the
right to terminate this Agreement, without cause, for convenience, upon not less
than thirty (30) days' prior written notice by Delta to the Contractor and not
less than sixty (60) days' prior written notice by the Contractor to Delta.
12.4 If the Contractor files for bankruptcy, has an
involuntary petition filed against it which is not dismissed within thirty (30)
days, dissolves, is insolvent, fails to promptly pay for materials or services
for which it has received payment from Delta, creates or permits the creation of
any lien on any property or premises of Delta, makes an assignment or
arrangement for the benefit of its creditors, refuses or neglects to perform the
work properly and diligently (including failure to perform as a result of
strike, walkout, or labor dispute affecting Contractor or others), is in default
under any other agreement between the parties, or fails to perform any of the
provisions of this Agreement, Delta may, at its option, by written notice to
Contractor, declare Contractor in default, terminate Contractor's right to
proceed with all or a part of the work, and take control or possession thereof
and of materials, vehicles, equipment, supplies, tools and facilities and finish
such terminated work by such means as it sees fit; provided, however, with
respect to any refusal or neglect by the Contractor to perform the work properly
and diligently, or failure to perform under other provisions of this Agreement,
the Contractor shall have ten (10) days from receipt of written notice of such
default from Delta to cure the default. Upon termination pursuant to this
provision or Section 12.3, Contractor shall thereupon assign to Delta any
contracts for goods or services in support of the work, if any, selected by
Delta to be so assigned.
12.5 If Delta terminates this Agreement, Delta shall reimburse
Contractor for any unpaid cost of the work which has been incurred by Contractor
and is due it under Section 3, and in addition shall pay the unpaid balance of
Contractor's Management Fee for the period up to and including the date of
termination subject in each case to the Guaranteed Maximum Cost. Delta can
deduct from the amount due hereunder any amount that Delta may be required to
pay to a third party due to the nonpayment by Contractor of any amount and any
damages, costs or expenses Delta may incur or suffer in the event said
termination is made pursuant to Section 12.4. Contractor shall, as a condition
of receiving the payments referred to in this Section 12, execute and deliver to
Delta any and all instruments that may be required to transfer property to
Delta, or otherwise required for the orderly termination of this Agreement. If
the Agreement is terminated, for any reason, or expires on any date other than
the last day of the
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then current forecast year as to which the Guaranteed Maximum Cost is applicable
(as set forth in EXHIBIT C), the Contractor's Management Fee and the Guaranteed
Maximum Cost for the then current forecast year shall be prorated.
12.6 Delta reserves the right to retain Contractor's
subcontractors, if any, and all or any part of Contractor's employees executing
the work may, at Delta's option, become employees of Delta or another contractor
selected by Delta. Upon termination or expiration of the Agreement, Delta shall
take possession of all materials, vehicles, equipment, supplies, tools and
facilities owned by Delta or for which Contractor shall have been reimbursed by
Delta (except for such items as to which Delta shall have accepted a credit for
salvage value). Delta shall have no obligation to purchase any item from
Contractor, even if Contractor has not been reimbursed for the costs or the
costs have not been fully amortized, unless Delta expressly agreed in writing to
do so with respect to the particular item prior to the acquisition of such item
by Contractor.
13. SECURITY CONSIDERATIONS. Contractor agrees that in the performance
of this Agreement it is of paramount importance to maintain the security and
safety of passengers, the general public and all personnel employed at the
Airport and to safeguard the security and integrity of all personal, public and
corporate property. In this regard, Contractor agrees, in accordance with
applicable laws, to take those actions necessary to accomplish this purpose,
including but not limited to the actions outlined in this Section 13.
13.1 BACKGROUND CHECKS.
13.1.1 Contractor warrants and agrees that it has
performed and will continue to perform employment and access investigations in
accordance with Delta's Air Carrier Standard Security Program as approved by the
Federal Aviation Administration (the "FAA") as in effect from time to time,
including, without limitation, the requirements of 49 U.S.C. ss. 44936 and the
FAA's regulations promulgated pursuant thereto at 14 C.F.R. Parts 107 or 108, of
all persons hired by Contractor who have unescorted access to any airport area
controlled for security reasons. Such employment and access investigations shall
include without limitation employment histories and verifications, verifications
of identity, and, in certain cases, criminal history record checks as more
particularly required in said regulations.
13.1.2 Contractor shall also perform background
checks, to the extent allowable by applicable law, which will include, but not
be limited to, a five year criminal history check for all persons Contractor has
hired or will hire. Further, for all persons Contractor has hired or will hire
who may operate a motor vehicle on the AOA, Contractor will also conduct a five
year
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check of the person's state motor vehicle record.
13.1.3 Employment and access investigations,
background checks and motor vehicle checks shall be completed for all persons
prior to Contractor allowing such persons unescorted access to any airport area
controlled for security reasons or allowing such persons to operate motor
vehicles on the AOA.
13.2 DRUG AND ALCOHOL TESTING. Contractor warrants and agrees
that, on or before the effective date of this Agreement and to the extent
required by applicable laws, regulations and orders, it will establish and
thereafter maintain a drug and alcohol testing program for those personnel, if
so employed by the Contractor, who perform sensitive safety related and security
related functions as defined by the FAA's Anti-Drug Program for Personnel
Engaged in Specified Aviation Activities (the "FAA's Anti-Drug Program").
Contractor agrees that such program will comply with all requirements set forth
by the FAA. To the extent permitted by law, if Contractor employs personnel who
are not covered by the FAA's Anti-Drug Program but who will have unescorted
access to any airport area controlled for security reasons, such personnel shall
be subject to pre-employment drug testing by Contractor for the same substances
and in accordance with the same procedures as required by the FAA's Anti-Drug
Program.
13.3 ADDITIONAL REQUIREMENTS. Contractor also agrees to
undertake whatever other measures are necessary to comply with security, drug
and alcohol testing, record-keeping, and other requirements appropriate to the
areas to which Contractor has access or to the work performed by Contractor
under this Agreement that are imposed from time to time by public agencies such
as the FAA, the United States Postal Service, the United States Customs Service,
and the Airport Operator (as defined in Section 15) or by Delta. In particular,
but without limiting the generality of the foregoing, if Contractor's services
hereunder include transportation, sortation, loading, unloading of the U.S.
Mail, Contractor shall, to the fullest extent permitted by applicable law,
comply with the requirements set forth in SCHEDULE II attached hereto and made a
part hereof.
13.4 AUDIT OF EMPLOYMENT RECORDS. Contractor shall keep at the
Airport full and detailed records demonstrating its compliance with this Section
13 as to each employee and shall maintain and preserve such records without
additional compensation therefor for a period of three (3) years after
termination or expiration of this Agreement. Delta shall have the right, but not
the duty, to conduct such audits of Contractor's employment records as it deems
prudent to ensure Contractor's compliance with this Section 13. Delta may
terminate this Agreement immediately if it finds any evidence which indicates
that Contractor has not complied with the obligations imposed by this Section
13.
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13.5 SECURITY OF PROPERTY. Maintaining the security of the
property of Delta and of its employees, agents, customers and invitees is an
essential aspect of Contractor's performance under this Agreement. To the extent
allowable by applicable law, Contractor shall conduct random searches of its
employees' lunch boxes, bags, cases, containers and other items in which such
property could be concealed. In the event that Delta is not satisfied with the
effectiveness of Contractor's program of random searches, Delta may require
Contractor to increase the frequency of such searches. Contractor shall
emphasize to its employees the importance of ensuring the security of the
property of Delta and of Delta's employees, agents, customers and invitees and
shall, in accordance with applicable law, properly notify its employees of the
existence and extent of the random search program prior to instituting such
program.
14. PROPRIETARY INFORMATION. In the course of performing services under
this Agreement, it is possible that Contractor may obtain access to confidential
and proprietary information of Delta, such as passenger or customer lists and
pricing information. Contractor agrees that if it acquires any such information
in the course of performing services under this Agreement, it shall maintain
such information in confidence, shall not use such information for any purpose
other than performing Contractor's obligations under this Agreement and shall
not disclose such information to a third party during the term of this Agreement
and for three (3) years after the termination or expiration of this Agreement,
unless Contractor has obtained the prior written consent of Delta. Contractor
may make disclosure pursuant to requirements of a governmental agency or
disclosure required by operation of law, provided that Contractor shall give
Delta reasonable advance notice to contest such requirement of disclosure.
15. ON-SITE OPERATIONS AND OFFICE SPACE. Delta shall provide Contractor
with on-site office and operations space at the Airport (referred to in this
Section 15 as the "Premises") solely for use by Contractor in the performance of
this Agreement. The size and location of the Premises shall be determined by
Delta, in its sole discretion, and may be changed if deemed necessary or
desirable by Delta, in its sole discretion. This grant of the right to use the
Premises in connection with this Agreement is in all respects subject and
subordinate to the terms and conditions of any and all leases, permits or other
agreements between the operator of the Airport (the "Airport Operator") and
Delta and any and all leases, permits or other agreements between any other
entity and Delta with regard to the Premises, as amended or supplemented (such
leases, permits and other agreements, as amended or supplemented, are
hereinafter referred to as the "Master Agreements"). Contractor shall not commit
or permit to be committed any act or omission that shall violate any term or
condition of the Master Agreements and shall make no alterations, additions or
improvements to the Premises. Upon the expiration or earlier termination of this
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Agreement, Contractor shall return the Premises to Delta in their original
condition, subject only to ordinary wear and tear. The Premises are to be used
solely for the purpose of providing office space and operations space for the
performance of this Agreement for Delta and shall be used for no other purpose
whatsoever. Delta shall provide at the Premises services; provided, however,
that Delta shall have no liability or responsibility, and Contractor hereby
waives any claims against Delta, for any interruption or cessation of any such
services, unless such interruption or cessation is caused by the gross
negligence or willful misconduct of Delta.
16. INSURANCE.
16.1 At all times during the term of this Agreement,
Contractor, with respect to the operations and services contemplated in this
Agreement, agrees to carry and maintain at its own cost and expense
Comprehensive General Liability Insurance for an amount of not less than
$15,000,000 combined single limit on an occurrence basis for bodily injury and
property damage. This insurance shall include contractual liability and shall be
in such form as reasonably required by Delta. The insurance shall name Delta and
the Airport Operator as additional insureds to the extent of Contractor's
indemnity obligations hereunder and shall contain a standard cross-liability
endorsement.
16.2 Contractor agrees to maintain Workers' Compensation
Insurance for statutory limits and Employers' Liability Insurance in the amount
of $1,000,000 to cover its employees. Contractor agrees to be solely and fully
responsible for the payment of all Workers' Compensation benefits for its
employees.
16.3 Contractor agrees to maintain Automobile Liability
Insurance with minimum limits for Bodily Injury and Property Damage equal to
$5,000,000 Combined Single Limit for each occurrence covering all liability
arising out of any vehicle operated by Contractor and used in the performance of
the express or implied terms of this Agreement. The policy shall name Delta and
the Airport Operator as additional insureds to the extent of Contractor's
indemnity obligations hereunder and shall contain a standard cross-liability
endorsement.
16.4 Contractor shall obtain the Insurance required by this
Agreement from a financially sound insurance company of recognized
responsibility and shall furnish Delta with a certificate of insurance
evidencing such coverage prior to commencing its services under this certificate
of insurance evidencing such coverage Agreement. Such insurance policies shall
be considered primary, without contribution from any other Insurance which is
carried by Delta or the Airport Operator. All insurance policies shall provide
that the insurance shall not be
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invalidated by any action or inaction of Contractor, that Contractor agrees to
waive all rights of subrogation against Delta and the Airport Operator and that
the insurance shall continue in full force and effect for at least thirty (30)
days after Delta and the Airport Operator receive written notice of
cancellation, termination or material alteration.
17. INDEMNIFICATION.
To the fullest extent permitted by law, Contractor shall
release, indemnify, defend and hold harmless Delta and the Airport Operator, and
their respective directors, officers, employees and agents (collectively, the
"Indemnified Parties" and individually, an "Indemnified Party") from and against
any and all claims, damages, losses, fines, civil penalties, liabilities,
judgments, costs and expenses of any kind or nature whatsoever (including but
not limited to interest, court costs and attorney's fees), which in any way
arise out of or result from any act(s) or omission(s) by Contractor (or anyone
directly or indirectly employed by Contractor or anyone for whose acts
Contractor may be liable) in the performance or nonperformance of services or
other obligations under this Agreement or in the use or Occupancy of any
facilities or equipment provided by Delta, including but not limited to injury
to or death of any person, damage to or destruction of any property, real or
personal (including but not limited to property owned, leased or under the
control of Delta), and liability or obligations under or with respect to any
violation of federal, state and local laws, regulations, rules, codes and
ordinances (including but not limited to those concerning environmental
protection). This Section shall apply regardless of whether or not the damage,
loss or injury complained of arises out of or relates to the negligence (whether
active, passive or otherwise) of, or was caused in part by, an Indemnified
Party. However, nothing contained in this Section shall be construed as a
release or indemnity by Contractor of an Indemnified Party from or against any
loss, liability or claim to the extent arising from the gross negligence or
willful misconduct of that Indemnified Party. This Section shall not be
construed to negate, abridge or otherwise reduce any other right to indemnity
which would otherwise exist in favor of any Indemnified Party, or any other
obligation of Contractor, its officers, directors, employees, agents or
contractors to indemnify an Indemnified Party. Contractor's obligations under
this Section shall not be limited in any way by any limitation on the amount or
type of damages, compensation or benefits paid or payable by Contractor under
Workers' Compensation Acts, disability benefits acts or other employee benefit
laws or regulations. The indemnification obligations of this Section shall
survive termination or expiration of this Agreement.
18. NOTICES. Any notices, requests or other communications
required or permitted to be given hereunder shall be in writing and
shall be delivered by hand, by overnight courier, or by facsimile
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transmission ("fax"), or mailed by United States registered or certified mail,
return receipt requested, postage prepaid, and addressed to the appropriate
party at its address or to its fax number, as appropriate, as set forth below:
Contractor:
INTERNATIONAL TOTAL SERVICES, INC.
Crown Centre
0000 Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxx XxXxxxxx
Fax No.: (000)000-0000
Delta:
DELTA AIR LINES, INC.
0000 Xxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: ACS Business Partners, Department #108
Fax No.: (000)000-0000
Any such notice, request, or other communication shall be considered given on
the date of hand or courier delivery if delivered by hand or overnight courier,
on the date of receipt if delivered by fax, or on the date of deposit in the
United States mail as provided above. Rejection or other refusal to accept or
inability to deliver because of changed address or fax number of which no notice
was given shall not affect the validity or the effectiveness of the notice,
request or other communication. By giving at least ten (10) days' prior written
notice thereof, either party may from time to time and at any time change its
mailing address or fax number hereunder.
19. CONSENT. The Airport Operator's consent to this Agreement may be
necessary. In the event such consent is required and is denied, this Agreement
shall terminate and Contractor shall immediately vacate and surrender the
Premises.
20. FORCE MAJEURE. In the event that Delta's night operations at the
Airport are halted or substantially decreased by reason of strike, labor
dispute, picketing, action or interference of governmental authorities, riots,
terrorist attack, act of God or other cause reasonably beyond the control of
Delta, this Agreement (and payment for services hereunder) may be suspended for
the duration of such halted or decreased operations, on twenty-four (24) hours'
notice addressed by Delta to Contractor.
21. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia. excluding its laws regarding
conflict or choice of law, and Contractor voluntarily submits itself to the
jurisdiction of the
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state and federal courts situated in Xxxxxx County, Georgia, for any dispute
arising hereunder.
22. SUBCONTRACTS ASSIGNMENT. Contractor shall not subcontract out or
delegate the services to be provided hereunder without the prior written consent
of Delta. All subcontracts must be approved in writing by Delta prior to
execution and shall conform to any applicable requirements of this Agreement.
This Agreement shall not be assigned, in whole or in part, by either party
without the prior written consent of the other party. Subject to the foregoing,
this Agreement shall be binding upon and inure to the benefit of the parties,
their respective successors and assigns.
23. ENTIRE AGREEMENT. This Agreement, including all Exhibits and
Schedules hereto (which Exhibits and Schedules are incorporated herein by
reference), constitutes the complete agreement of the parties with respect to
the subject matter hereof and supersedes all prior negotiations, agreements,
representations and understandings, if any, between the parties concerning the
same, whether written or oral.
24. MODIFICATIONS AND AMENDMENTS. This Agreement shall not be modified
or amended in any respect except by written instrument duly executed by or on
behalf of each of the parties to this Agreement.
25. NO WAIVER. No provision of this Agreement shall be deemed to have
been waived by Delta unless such waiver is in writing and signed by Delta, nor
shall any custom or practice which may evolve between the parties in the
administration of the terms hereof be construed to waive or lessen the right of
Delta to insist upon the performance by Contractor in strict accordance with the
terms hereof.
26. REMEDIES CUMULATIVE. Each right and remedy of Delta provided for in
this Agreement, or now or hereafter existing at law, in equity or by statute or
otherwise, shall be cumulative and concurrent, and the exercise or beginning of
the exercise of any one or more of such rights or remedies shall not preclude
the exercise of that right or remedy in the future or the exercise of any other
right or remedy at any time.
27. SEVERABILITY. If any provision or term of this Agreement shall be
determined to be illegal, invalid or unenforceable, the remainder of this
Agreement shall not be affected thereby and shall remain valid and enforceable
to the fullest extent permitted by law.
28. NONDISCRIMINATION. The provisions of SCHEDULE 1, attached
hereto, are incorporated herein for all purposes.
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by their duly authorized representatives as of the date and year
first written above.
INTERNATIONAL TOTAL SERVICES, DELTA AIR LINES, INC.
INC.
By___________________________ By ___________________________
Title _______________________ Title _________________________
Date_________________________ Date___________________________
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