EXHIBIT 10.41
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY {***}. THE
CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.
CONFIDENTIAL
AAIRPASS AGREEMENT
This AAirpass Agreement, dated as of the date set forth below, is made by
and between American Airlines, Inc., a Delaware corporation, having its
principal place of business at 0000 Xxxx Xxxxxx Xxxxxxxxx, Xxxx Xxxxx, Xxxxx
00000 ("American"), and Midway Airlines Corporation, a Delaware corporation,
having its principal place of business at 000 X. Xxxxxx Xxxxxx, 00xx Xxxxx,
Xxxxxx, Xxxxx Xxxxxxxx 00000 ("Carrier").
In consideration of the mutual covenants and promises in this Agreement,
American and Carrier hereby agree as follows:
Section 1. Supplemental Definitions
In addition to the definitions set forth elsewhere in this Agreement, for
all purposes of this Agreement, the following capitalized terms shall have the
following meanings:
"AAdvantage Agreement" means the AAdvantage Participating Carrier
Agreement between American and Carrier dated January 18, 1995.
"AAirpass" means American's AAirpass program under which individuals
("members") may purchase travel on American for various periods, for example, 2
years, 5 years and lifetime.
"AAirpass Carriage" means Carrier's carriage of AAirpass members and their
companions in accordance with the terms of this Agreement.
"Actual Miles" means the United States Department of Transportation
approved non-stop mileage between origination and destination cities.
"Affiliate" means, with respect to any Person, any other Person directly
or indirectly controlling or controlled by or under common control with such
Person. For purposes of this definition, "control" (including, without
limitation "controlled by" and "under common control with") shall mean the
power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person whether through the ownership of voting
securities or by contract or otherwise.
"Agreement" means this AAirpass Agreement, as it may, from time to time,
be amended or modified in writing in accordance herewith.
"Applicable Law" means all applicable laws of any jurisdiction, including,
without limitation, securities laws, tax laws, tariff and trade laws,
ordinances, judgments, decrees, injunctions, writs and orders or like actions of
any Competent Authority and the rules, regulations, orders, interpretations,
licenses and permits of any Competent Authority.
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"Business Day" means any day other than a Saturday, Sunday or other day on
which banks in Fort Worth, Texas are required or authorized by law, regulation
or executive order to close.
"Carrier Flight" means (i) any on-line, regularly scheduled, passenger air
travel service operated by Carrier under the Carrier designator code on any O&D
city pair that includes RDU as a connecting point, origination point or
destination point, including the O&D city pairs specified on Attachment A, and
(ii) any Codeshare Flight specified on Attachment A, if any.
"Codeshare Flight" means a flight operated by a third party air carrier
providing regularly scheduled, commercial passenger air transportation services
and marketed under Carrier's "JI" designator code.
"Competent Authority" means any national, federal, state, county, local or
municipal government body, bureau, commission, board, board of arbitration,
instrumentality, authority, agency, court, department, inspectorate, minister,
ministry, official or public or statutory person (whether autonomous or not)
having jurisdiction over this Agreement or any of the parties to this Agreement.
"First Class" means a class of service higher and better than coach class
on an aircraft which offers two distinct classes of service, regardless of the
actual name Carrier may assign to such higher class of service.
"O&D" when used in the context of city pairs means origination and
destination.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization, group or
government, or any group, agency, authority or political subdivision thereof.
"RDU Sublease" means that certain Agreement of Sublease, dated as of
January 18, 1995, by and between American and Carrier.
"Upgrade Sticker" means a sticker (i) issued by American to AAirpass
members, on either a complimentary basis or for consideration, which complies
with such other requirements as American may provide to Carrier at the time
Carrier introduces a First Class service, and (ii) which sticker may be
exchanged by a AAirpass member at the time of check-in for a reserved or
instantaneous (depending on the sticker) one-class class of service upgrade from
coach class on, among other flights designated by American, any Carrier flight
with more than one class of service, or any two or more such Carrier Flights to
be flown consecutively under a single flight coupon. American may discontinue
the use of Upgrade Stickers by AAirpass members at any time at its discretion.
Section 2. AAirpass Carriage; Price and Terms
a. Reservations/Acceptance. American hereby grants to Carrier the right to
carry AAirpass members and their companions on Carrier Flights in accordance
with this Agreement. Carrier hereby accepts such grant and agrees to book
AAirpass Carriage in Y class in Carrier's seat inventory (or whatever class is
Carrier's highest coach class seat inventory) on Carrier
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Flights. If a coach seat is available for sale on a Carrier Flight at the time
an AAirpass member wishes to book a reservation for the member and, if
applicable, a companion, Carrier must book and accept AAirpass Carriage for such
AAirpass member and companion, if applicable. On each Carrier Flight that
Carrier has a First Class service, Carrier agrees to book AAirpass Carriage in F
class in Carrier's seat inventory (or whatever class is Carrier's highest First
Class seat inventory) on Carrier Flights for any AAirpass member and companion,
if applicable, who wishes to book First Class. If a First Class seat is
available for sale on a Carrier Flight at the time an AAirpass member wishes to
book a First Class reservation for the member and, if applicable, a companion,
Carrier must book and accept First Class AAirpass Carriage for such member and
companion, if applicable. Carrier shall engage in AAirpass Carriage only with
respect to a Carrier Flight.
b. Carrier New Routes; Discontinued Routes
i. In the event that Carrier desires to introduce a new Codeshare
Flight, which is not included in Attachment A of this Agreement, Carrier
may request, in writing, that such new Codeshare Flight be eligible as a
Carrier Flight under this Agreement and added to Attachment A. American
shall have thirty (30) days from the receipt of the request to evaluate
Carrier's request and American shall, at its sole discretion, decide
whether or not to add the Codeshare Flight to Attachment A, and under what
conditions (including, without limitation, if an addition to Attachment A,
what price will be paid by American for AAirpass Carriage by Carrier on
such Codeshare Flight); if American approves Carriers request, such
Codeshare Flight shall be made subject to this Agreement upon such new or
additional terms as the parties shall agree in writing. Neither party,
however, shall be obligated to make any additions to Attachment A to this
Agreement or to agree to terms applicable to such additions.
ii. In the event Carrier introduces new Carrier-operated service on
an O&D city pair or to a destination, or a new Codeshare Flight, which is
not included in Attachment A of this Agreement, Carrier shall promptly
give American written notice thereof.
iii. Notwithstanding anything to the contrary in this Agreement,
Carrier shall have the right at any time, in its sole judgment and
discretion, to cease to operate service on any Carrier Flight; provided
however, that Carrier shall provide American at least sixty (60) days
prior written notice of the scheduled termination and the termination date
for service. For the purposes of this Section 2b.iii, the off-season
suspension of seasonal service, which service has not otherwise been
permanently terminated, shall not be considered a cessation of service for
which notice must be given.
c. Price. American shall pay Carrier for each of the Actual Miles of (i)
coach class AAirpass Carriage, 22.25(cents) and (ii) First Class AAirpass
Carriage booked in F inventory, 30.03(cents). As an example, Attachment A shows
the payment (each way) to be made by American to Carrier for coach class and
First Class AAirpass Carriage booked in F inventory on a Carrier Flight.
American shall pay Carrier based upon the Actual Miles between the origin and
final destination cities for AAirpass Carriage that is a RDU through flight or a
RDU connecting flight and not based upon the Actual Miles between RDU and the
origin and destination cities. All payments above 50(cents) shall be rounded to
the next higher dollar and all payments of 50(cents) or less shall be rounded to
the next lower dollar.
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d. Companion Travel. Certain AAirpass members have a companion feature, as
designated by a "C" in the three digit code on the AAirpass card. If the code
has a "C" in it, companion travel is allowed, whereby the AAirpass member is
allowed to take one companion per flight, provided that the companion is
included in the same reservation and is traveling the same itinerary as the
AAirpass member. If the three digit code does not have a "C" in it, companion
travel is not allowed. For companion travel that complies with the foregoing
rules, Carrier shall issue the companion an AAirpass flight coupon imprinted
with the AAirpass member's card. For companion travel that complies with the
foregoing rules, American shall pay Carrier for the companion's travel in the
same manner and at the same rate as the AAirpass member.
e. Reaccommodation. If an AAirpass member has a confirmed reservation on a
Carrier Flight and Carrier cancels such flight for any reason, Carrier will be
responsible for accommodating the AAirpass member and companion travelling on an
AAirpass flight coupon, if applicable, on another air carrier at Carrier's
expense (in the same manner as any other revenue passenger of Carrier). In such
instance, American will pay Carrier based on the original AAirpass flight coupon
issued for travel on Carrier.
f. Pre-Boarding. Carrier shall offer AAirpass members pre-boarding on all
Carrier Flights. Carrier agents will include AAirpass members in Carrier's
pre-board announcement.
g. Upgrade Stickers. On each Carrier Flight that Carrier has a First Class
service, and for as long as American permits AAirpass members to use Upgrade
Stickers, Carrier will accept all Upgrade Stickers and upgrade the member
tendering such Upgrade Sticker by one class of service for Carrier Flights with
First Class service, if space is available, pursuant to the procedures stated in
or established pursuant to the AAdvantage Agreement and subject to the other
terms and conditions, including American's obligation to pay Carrier for such
acceptance, as stated in the AAdvantage Agreement.
h. Offset. If at any time any monies are past due and owing from Carrier
to American under the RDU Sublease, the AAdvantage Agreement or any other
agreement between Carrier and American or American's Affiliates, American may
withhold any monies it may owe to Carrier pursuant to this Agreement and may
apply all or a portion of such withheld monies in partial offset and
satisfaction (or, if such withheld monies are sufficient, in total offset and
satisfaction) of the monies owed to American or American's Affiliates under the
RDU Sublease, the AAdvantage Agreement or such other agreements; provided,
however, that American shall give written notice to Carrier immediately upon
taking such action, which notice shall include a statement of the amounts so
offset.
i. On-Board Amenities. If the AAirpass member identifies himself/herself
to Carrier as an AAirpass member and presents his/her AAirpass card to Carrier,
Carrier will offer AAirpass members traveling in coach complimentary drinks and
complimentary headsets if/when Carrier offers headsets on-board its flights.
j. Ticketing. AAirpass flight coupons may be issued at a Carrier ATO or
via a travel agency. Carrier and Carrier's handling agents must accept only
those AAirpass flight coupons that are properly completed with the following
information: passenger name, airline code (Carrier) and flight number, class of
service and date. The passenger must sign the flight coupon
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and the AAirpass member must present the AAirpass card with one form of
identification. Carrier shall check this identification. Carrier shall validate
with the AAirpass card the flight coupon of the member and also the companion,
if a companion may travel with the member in accordance with the terms of
Section 2d hereof. American reserves the right not to pay Carrier for AAirpass
Carriage if Carrier or Carrier's handling agents accepted improperly completed
flight coupons for such AAirpass Carriage or if the ticketing procedures set
forth herein are not properly followed with respect to such AAirpass Carriage
and in each such case American is therefore unable to properly account for the
flight coupons under the AAirpass program after making reasonable efforts to do
so.
k. Post Departure Procedures. Carrier shall separate AAirpass flight
coupons from the normal ticket lift and shall give such flight coupons daily to
the Carrier station manager in each station. The Carrier station managers in all
cities except RDU shall forward the AAirpass flight coupons a minimum of two
times per week to the Carrier station manager in RDU. On each Tuesday, the
Carrier station manager in RDU shall send AAirpass flight coupons from the
previous week's (Sunday through Saturday) flights via Federal Express to
American in Barbados at the following address:
Caribbean Data Services - LIST PREP
Harbour Industrial Park
Harbour Road
St. Xxxxxxx, Barbados
West Indies
Attention: Xxxx Xxxx Artilles
l. Payment Procedures. Carrier shall submit all lifted AAirpass Carriage
flight coupons to American each month in a single batch. To be eligible for
payment, a lifted flight coupon must be submitted not later than the second
calendar month immediately following the month that the AAirpass travel (one
way) was completed. For example, if the first leg of an AAirpass Carriage
BOS-RDU roundtrip itinerary is completed May 31, Carrier shall submit to
American the lifted flight coupon for BOS-RDU not later than the batch of lifted
flight coupons submitted in July. American shall pay Carrier for AAirpass
Carriage not later than thirty (30) days after receipt of lifted flight coupons.
American reserves the right not to pay Carrier for AAirpass Carriage flight
coupons that are not submitted within the time frame specified above. Payment
from American to Carrier will be via wire transfer or other means acceptable to
both parties. In the event the date for any payment required under this
Agreement is not a Business Day, such payment shall be due and payable on the
next succeeding Business Day. Not later than thirty (30) days following the end
of each month, American will send to Carrier (for audit purposes) a report in a
form acceptable to both parties of such month's AAirpass Carriage. This report
will be sent to the following address:
Controller
Midway Airlines Corporation
000 X. Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx Xxxxxxxx 00000
m. Use of Names. Neither party hereto shall use the name of the other
party (or any of its Affiliates), or any trademark, service xxxx, or trade name
of the other party (or of any of its
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Affiliates) in any art work, copy, advertising, promotional materials, direct
mail, press releases, newsletters or other public or promotional communications,
or any other publicity to be issued in connection with the AAirpass program
without first obtaining the other party's written consent. Each party hereto (a
"Referenced Party") shall have the right to review and approve or disapprove,
prior to publication, the portion of any and all art work, copy, advertising,
promotional materials, direct mail, press releases, newsletters or other public
or promotional communications, or any other publicity published, circulated,
distributed or otherwise communicated by the other party hereto (or at its
direction or authorization) in connection with the AAirpass program that names
or references the Referenced Party (or any of its Affiliates) or this Agreement,
or uses any trademark, service xxxx or trade name of the Referenced Party or any
of its Affiliates. Each party acknowledges and agrees that all trademarks,
service marks, or trade names of the other party or any of its Affiliates, are
and shall remain the sole property of the other party.
n. AAdvantage Miles. AAirpass members will earn AAdvantage Miles (as
defined in the AAdvantage Agreement) for AAirpass Carriage and Carrier shall pay
for such AAdvantage Miles in accordance with the terms of the AAdvantage
Agreement.
Section 3. Confidentiality
a. Confidential Information. Carrier and American expressly acknowledge
and agree that the terms and conditions of this Agreement constitute
confidential information of both parties (the "Confidential Information"),
whether or not marked or expressly indicated as confidential, and American and
Carrier each agrees to keep such information confidential, using the same degree
of care with respect to such Confidential Information as it uses in protecting
its own proprietary information, trade secrets and similar items, and not to
disclose such information to any third party, except as permitted hereby.
Notwithstanding the foregoing, Confidential Information shall not include any
information which is in the public domain; is placed in the public domain,
through no violation of this Agreement; or is lawfully obtained from another
source free of restriction.
b. Use of Confidential Information. Except as expressly provided below,
neither party shall sell, transfer, publish, disclose, display or otherwise make
available the Confidential Information to any third party (and third parties
shall be deemed also to include Affiliates of the party so restricted), except
as may be required by Applicable Law (including, without limitation, requirement
by oral questions, interrogatories, subpoenas, civil investigative demands or
similar processes), in which case the party from whom disclosure is sought (or,
if applicable, who is seeking to make disclosure as required by Applicable Law)
shall promptly notify the other party and shall provide the other party (if the
other party so requests) with a copy of the information proposed to be disclosed
and all related descriptions thereof within a reasonable period (which period
shall generally be at least five days) in advance of the proposed disclosure. To
the extent that the other party objects to disclosure of such Confidential
Information, the party from which disclosure is sought (or, if applicable, who
is seeking to make disclosure as required by Applicable Law) shall (i) use
reasonable and lawful efforts to resist making any disclosure of such
Confidential Information, (ii) use reasonable and lawful efforts to limit the
amount of such Confidential Information to be disclosed (and, in connection
therewith, shall reasonably consider all modifications, deletions and additions
to such information, and related descriptions, proposed by the other party), and
(iii) use all reasonable efforts to obtain a protective order or other
appropriate relief to minimize the further dissemination of any Confidential
Information to be
6 CONFIDENTIAL
disclosed. In addition, neither party shall disclose the Confidential
Information received to any of its directors, officers, employees, Affiliates,
or professional advisors (collectively, "Representatives") except on a
need-to-know basis for the purposes of implementing and giving effect to this
Agreement: provided, however, that prior to any such disclosure, the party shall
inform all such Representatives of the confidential nature of the information,
and that it is subject to this non-disclosure obligation, and shall further
instruct such Representatives to treat such information confidentially. American
and Carrier each agrees to be responsible for any breach of this Section by
their respective Representatives.
c. No Adequate Remedy. Each party acknowledges and agrees that the other
party will have no adequate remedy at law if there is a breach or threatened
breach of this Section and, accordingly, that such other party shall be entitled
to an injunction or other equitable or preventative relief against the allegedly
breaching party or its Representatives for such breach or threatened breach.
Nothing herein shall be construed as a waiver of any other legal or equitable
remedies which may be available to the non-breaching party in the event of a
breach or threatened breach of this Section, and the non-breaching party may
pursue any other such remedy, including, without limitation, the recovery of
damages.
d. Survival. The provisions of this Section shall survive the execution,
expiration or termination of this Agreement and the consummation of the
transactions contemplated hereby.
Section 4. Indemnification
Carrier shall indemnify, defend and hold harmless American, its Affiliates
and each of their respective directors, officers, employees and agents
(individually, an "American Indemnified Party") from all liabilities, losses,
damages, claims, suits, actions, recoveries, awards, judgments or executions of
any nature or kind whatsoever (including, without limitation, costs of
investigation, litigation costs, court costs, expert witness fees, litigation
support services costs, settlement costs and reasonable attorneys' fees) which
may be made, asserted, had, brought, or recovered by any third party against an
American Indemnified Party by reason of or in any way arising out of (i) travel
on Carrier, (ii) use of Carrier's facilities, (iii) Carrier's performance,
failure to perform or improper performance of this Agreement, or (iv) any claims
or statements made by Carrier in its advertising or promotional activities which
are in conflict or inconsistent with the terms of this Agreement.
American shall indemnify, defend and hold harmless Carrier, its Affiliates
and each of their respective directors, officers, employees and agents
(individually, a "Carrier Indemnified Party") from all liabilities, losses,
damages, claims, suits, actions, recoveries, awards, judgments or executions of
any nature or kind whatsoever (including, without limitation, costs of
investigation, litigation costs, court costs, expert witness fees, litigation
support services costs, settlement costs and reasonable attorneys' fees) which
may be made , asserted, had, brought or recovered by any third party against a
Carrier Indemnified Party by reason of or in any way arising out of (i)
American's performance, failure to perform or improper performance of this
Agreement or (ii) any claims or statements made by American in its advertising
or promotional activities which are in conflict or inconsistent with the terms
of this Agreement.
If an American Indemnified Party or a Carrier Indemnified Party, as the
case may be, seeks indemnification hereunder, it will inform Carrier or American
as the case may be, promptly
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after receipt of notice of any claim with respect to which such indemnity is
asserted, in which case, Carrier or American, as the case may be, will assume
and shall control the defense or settlement of such claim; provided, however,
that counsel selected by Carrier or American as the case may be, shall be
reasonably acceptable to American or Carrier, as the case may be. No compromise
or settlement of any such claim may be effected by Carrier or American as the
case may be, without the prior written consent of the relevant American
Indemnified Party or the Carrier Indemnified Party, as the case may be.
The provisions of this Section shall survive the termination of this
Agreement and the performance and completion of the transactions contemplated
hereunder.
Section 5. Insurance
Carrier will carry and maintain in effect, or cause to be carried and
maintained in effect, at its own cost and expense, with an established insurer
or insurers in the passenger aviation industry, (i) comprehensive airline
liability insurance, including but not limited to, aircraft liability, passenger
liability, cargo liability and comprehensive general liability insurance, with
combined single limits for each and every loss and each aircraft of not less
than Two Hundred Fifty Million Dollars ($250,000,000), all such policies of
insurance to be of such types, terms and, if applicable, higher amounts, as are
customarily carried by prudent major domestic air carriers, similarly situated
to Carrier, operating aircraft of similar size on similar schedules and routes,
and (ii) all risk hull insurance in an amount at least equal to the current
insured value. Each and any policy of insurance carried in accordance with this
Section, and each and any policy obtained in substitution or replacement for any
of such policies shall (A) designate American and its assigns as an additional
insured (but without imposing upon American any obligation imposed upon the
insured, including, without limitation, the liability to pay any premiums for
any such policies), (B) expressly provide that, in respect of the interests of
American and its assigns, the insurance shall not be invalidated as to an
insured by any act or omission of Carrier or any other insured and shall insure
American its assigns, regardless of any breach or violation by Carrier or any
other insured of any warranty, declaration or condition contained in such
policies, (C) provide that the insurer(s) waive any and all rights they may or
could have against American, (D) provide that the insurer(s) accept and insure
the indemnification provision included in this Letter Agreement, and (E) provide
that if such insurance is canceled for any reason whatsoever, or is changed in
any adverse way with respect to the interests of American or if such insurance
is allowed to lapse for non-payment of premium, such cancellation, change or
lapse shall not be effective as to American and its assigns, until thirty (30)
days (or such lesser period of time as is customarily available at the time in
the case of any war risk and allied perils coverage), after notice to American
from such insurer or insurers, of such prospective cancellation, change or
lapse. Each such liability policy shall be primary without right of contribution
from any other insurance which may be carried by American or its assigns, and
shall expressly provide that all of the provisions thereof shall operate in the
same manner as if there were a separate policy covering each insured.
Section 6. Representations and Warranties
a. Of Carrier. In order to induce American to enter into this Agreement,
Carrier hereby represents and warrants for the benefit of American as follows,
which shall be true and correct as of the date hereof and as of each date
Carrier provides AAirpass Carriage:
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Carrier is a duly incorporated and validly existing corporation, in good
standing under the laws of the State of Delaware. The execution and delivery of,
and the performance by Carrier of its obligations under this Agreement have been
duly authorized by all necessary corporate action, and no other corporate
proceedings are necessary in conjunction therewith. This Agreement has been duly
executed and delivered by Carrier, and, assuming due authorization, execution
and delivery by American, this Agreement constitutes the legal, valid and
binding obligation of Carrier, enforceable against Carrier in accordance with
the terms and conditions hereof, except as enforcement may be limited by
bankruptcy, insolvency, moratorium or other laws affecting creditors' rights
generally, and the application of general principles of equity (regardless of
whether such enforceability is considered a proceeding in equity or law).
b. Of American. American hereby represents and warrants for the benefit of
Carrier as follows, which shall be true and correct as of the date hereof and as
of each date Carrier provides AAirpass Carriage:
American is a duly incorporated and validly existing corporation, in good
standing under the laws of the State of Delaware. The execution and delivery of,
and the performance by American of its obligations under this Agreement have
been duly authorized by all necessary corporate action, and no other corporate
proceedings are necessary in conjunction therewith. This Agreement has been duly
executed and delivered by American, and, assuming due authorization, execution
and delivery by Carrier, this Agreement constitutes the legal, valid and binding
obligation of American, enforceable against American in accordance with the
terms and conditions hereof, except as enforcement may be limited by bankruptcy,
insolvency, moratorium or other laws affecting creditors' rights generally, and
the application of general principles of equity (regardless of whether such
enforceability is considered a proceeding in equity or law).
Section 7. Term
Unless sooner terminated in accordance with this Agreement, this Agreement
shall terminate on March 1, 2000.
Section 8. Default and Termination
a. Breach.
i. General. In the event of a breach of any term, representation, or
warranty of this Agreement by American or Carrier (other than a breach of
a payment obligation under Section 2.m. hereof, the failure to pay any
other sums owed hereunder, or any other event separately covered elsewhere
in this Section 8), the non-breaching party may terminate this Agreement
without further liability on providing at least thirty (30) days prior
written notice to the other party, which notice shall describe, with as
much particularity as reasonably practicable, the alleged breach.
Termination under this Section 8.a.i. shall not be effective, however, if
the allegedly breaching party shall, within fifteen (15) days following
receipt of such notice, completely cure such breach.
ii. Payment Obligations. In the event of a breach of a payment
obligation under Section 2.m. or the failure to pay any other sums owed
hereunder, the non-breaching party may terminate this Agreement without
further liability on providing at least
9 CONFIDENTIAL
fifteen (15) days prior written notice to the other party, which notice
shall describe, with as much particularity as reasonably practicable, the
alleged breach and the total sums due and owing. Termination under this
Section 8.a.ii. shall not be effective, however, if the allegedly
breaching party shall, within fifteen (15) days following receipt of such
notice, cure the breach by making the full payment described in the
notice.
iii. Cross Defaults: Cross-Termination.
(1) If (A) any material breach or default (including, without
limitation, the failure to pay any indebtedness or obligations as
they become due) occurs under the RDU Sublease or the AAdvantage
Agreement, and (B) such breach or default is not cured within the
applicable cure period (if any) specified in the relevant agreement
or any other cure period which may be permitted or mutually agreed
upon by the parties to the agreement, then and in any such event,
for a period of thirty (30) days following a party's receipt of
notice of such event or at any time thereafter that such breach or
default may be continuing, Carrier or American, whichever is the
non-breaching party, may elect to terminate this Agreement upon
providing at least thirty (30) days prior written notice to the
other party.
(2) If (A) any breach or default occurs under any other
agreements (not described in Subsection 8.a.iii.(1) above) under
which Carrier may be obligated, directly or indirectly, as borrower,
installment purchaser, lessee, sublessee, guarantor or otherwise,
and which agreements involve: (y) the borrowing of money or the
extension of credit in excess of Two Hundred Fifty Thousand Dollars
($250,000) in the aggregate, or (z) any lease or sublease of real or
personal property pursuant to which Carrier's monetary obligations
in the nature of rent or similar obligations exceed either Twenty
Thousand Dollars ($20,000) per month in the aggregate or Two Hundred
Fifty Thousand Dollars ($250,000) in the aggregate for the remaining
term of the affected lease and/or sublease, (B) such breach or
default consists of failure to pay any indebtedness or other
obligation when due or if such breach or default permits or causes
(or upon notice or lapse of time or both would permit or cause) the
acceleration of any indebtedness or other obligation, or the
termination of any lease, agreement or commitment to lend, and (C)
such breach or default is not cured within the applicable cure
period (Ii any) specified in the relevant agreement, then, in any
such event and at any time thereafter, American may elect to
terminate this Agreement upon providing at least thirty (30) days
prior written notice to Carrier.
(3) If the AAdvantage Agreement is terminated by either party
or expires or terminates for any reason, this Agreement shall
automatically terminate without notice or further act of either
party effective as of the effective date of termination or
expiration of the AAdvantage Agreement.
b. Standard of Service. Subject to Section 8.f., American may, upon not
less than 30 days prior written notice to Carrier, terminate Carrier's right and
obligation to provide AAirpass Carriage with respect to any or all Carrier
Flights or immediately upon written notice with respect to any Codeshare Flight,
if, in American's judgment, the standard of service provided by Carrier
10 CONFIDENTIAL
or a Codeshare Flight carrier to AAirpass members is materially less than the
standard of service provided by American to AAirpass members.
c. Carrier Assignment to Benefit Creditors. If Carrier either (i) makes an
assignment for the benefit of its creditors, (ii) suspends the payment of,
admits in writing its inability to pay, or generally fails to pay its debts as
they become due, (iii) has suspended its transactions with banks and other
financial institutions, (iv) has issued against it any writ, execution, process,
or abstract of judgment which may have a Material Adverse Effect on Carrier and
which is not dismissed, satisfied or stayed within sixty (60) days, or (v) files
a petition for bankruptcy, corporate reorganization, corporate liquidation,
arrangement or special liquidation proceedings under any Applicable Law, then
American may, at its option, immediately terminate this Agreement upon written
notice to Carrier.
d. American Assignment to Benefit Creditors. If American either (i) makes
an assignment for the benefit of its creditors, (ii) suspends the payment of,
admits in writing its inability to pay, or generally fails to pay its debts as
they become due, (iii) has suspended its transactions with banks and other
financial institutions, (iv) has issued against it any writ, execution, process,
or abstract of judgment which may have a Material Adverse Effect on American and
which is not dismissed, satisfied or stayed within sixty (60) days, or (v) files
a petition for bankruptcy, corporate reorganization, corporate liquidation,
arrangement or special liquidation proceedings under any Applicable Law, then
Carrier may, at its option, immediately terminate this Agreement upon written
notice to American.
e. Bankruptcy Petition. In the event (i) either party petitions for or is
granted relief under Title 11 of the United States Code (the "Bankruptcy Code")
or files a petition or initiates analogous proceedings under any similar
Applicable Law, (ii) an involuntary bankruptcy petition is commenced or any
comparable proceeding initiated against either party under the Bankruptcy Code
or any Applicable Law, or (iii) either party exercises its rights under or is
made subject to any federal, state or other bankruptcy, reorganization,
insolvency or analogous laws of any applicable jurisdiction, and if this
Agreement has not otherwise terminated, then the other party may suspend all
further performance of this Agreement until such party assumes or rejects this
Agreement pursuant to Section 365 of the Bankruptcy Code or any successor
statute, or otherwise acknowledges its obligations under this Agreement under
any similar (or successor) provision of Applicable Law. Any such suspension of
further performance by the other party pending assumption, rejection, or other
acknowledgment shall not be deemed a breach of this Agreement and shall not
affect the other party's right to pursue or enforce any of its rights under this
Agreement or otherwise.
f. Effect. On and after expiration or termination for any reason of this
Agreement, Carrier shall, upon request of American in writing, subject to and in
accordance with the terms of this Agreement, honor any one or more AAirpass
Carriage reservations made on or prior to the date of expiration or termination
of this Agreement.
Section 9. Notices
All notices, invoices and other communications required or permitted to be
given hereunder by one party to the other shall be in writing, and shall be
considered as properly given if addressed as provided below and either (i)
delivered in person; (ii) sent by a commercial
11 CONFIDENTIAL
express or overnight courier delivery service which provides a signed
acknowledgment of receipt; (iii) deposited in the U.S. mail, certified or
registered first-class mail, postage prepaid, return receipt requested
(provided, however, that any invoice may be sent by first-class mail alone); or
(iv) transmitted by facsimile (upon receipt by sender thereof of evidence that a
complete transmission of such copy was made to the recipient thereof) and, if
sent by facsimile, confirmed by (a) telephone call contemporaneously made to the
person entitled to receive such notice or to such person's secretary, or (b)
dispatching a hard copy of such notice by first-class U.S. mail, postage
prepaid, or any of the methods set forth in (i), (ii) or (iii) above. Unless
otherwise expressly set forth in this Agreement, all notices shall be effective
upon receipt. For the purposes of notice, the addresses of the parties shall be
as follows; provided, however, that either party shall have the right to change
its address for notice hereunder by giving at least thirty (30) days prior
written notice to the other party in the manner set forth above.
By Mail & By Hand: Midway Airlines Corporation
000 X. Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx Xxxxxxxx 00000
Attention: President
Phone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: Xxxxxxxx X. Xxxxxx
Senior V.P. & General Counsel
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx Xxxxxxxx 00000
Phone: (000) 000-0000
Facsimile: (000) 000-0000
By Mail: American Airlines, Inc.
Managing Director - Marketing Programs
P.O. Box 619616, MD 5321
Dallas/Ft. Xxxxx Xxxxxxx, Xxxxx 00000-0000
By Hand: 0000 Xxxx Xxxxxx Xxxxxxxxx, XX 5321
Xxxx Xxxxx, Xxxxx 00000
Phone: (000) 000-0000
Facsimile: (000) 000-0000
Section 10. Governing Law
a. Choice of Law. This Agreement and the rights and obligations of the
parties hereunder shall be governed by and construed in accordance with the laws
of the State of Texas, without regard to conflict of law principles.
12 CONFIDENTIAL
b. Jurisdiction. Each party hereto hereby irrevocably submits to the
exclusive jurisdiction of the United States District Court for the Northern
District of Texas and, if such court does not have jurisdiction, of the courts
of the State of Texas in Tarrant County for the purposes of any suit, action or
other proceeding arising out of this Agreement or the subject matter hereof
brought by any other party. American and Carrier each agrees that neither of
them will bring any suit, action or other proceeding arising out of this
Agreement, the subject matter hereof, or any of the transactions described
herein, in any jurisdiction other than the jurisdiction described above.
c. Waiver of Defenses. To the extent permitted by Applicable Law, each
party hereby waives and agrees not to assert, by way of motion, as a defense or
otherwise, in any such suit, action or proceeding, any claim (i) that it is not
personally subject to the jurisdiction of the above-named courts, (ii) that the
suit, action or proceeding is brought in an inconvenient forum, (iii) that it is
immune from any legal process with respect to itself or its property, (iv) that
the venue of the suit, action or proceeding is improper, or (v) that this
Agreement or the subject matter hereof may not be enforced in or by such courts.
d. Service of Process. Each party agrees that, even if at any time during
the term of this Agreement Carrier is not qualified to do business as a foreign
corporation in the State of Texas, Carrier shall and does hereby irrevocably
designate and appoint the Secretary of State of the State of Texas as its agent
for service of process in any action, suit or proceeding with respect to any
matter as to which it submits to jurisdiction as set forth above, it being
agreed that any method of service upon such agent, with a copy sent to Carrier
in the manner set forth in Section 9 above, shall constitute valid service upon
Carrier. American designates CT Corporation as its agent for service of process
in Texas. American and Carrier each agrees that the submission to jurisdiction
and designation of an agent for service of process set forth above is made for
the express benefit of the other party and is effective solely for purposes of
this Agreement.
e. Enforcement of Judgment. Final judgment against a party hereto in any
suit in any court of competent jurisdiction shall be conclusive, and may be
enforced in other jurisdictions, to the extent permitted by Applicable Law, by
suit on the judgment, a certified and true copy of which, to the extent
permitted by Applicable Law, shall be conclusive evidence of the fact and the
amount of any indebtedness or liability of the party therein described.
f. Waiver of Immunity. To the extent that any party or any of its property
is or becomes entitled at any time to any immunity on the grounds of sovereignty
or otherwise, from any legal action, suit, arbitration or other proceeding, from
setoff or counterclaim, from the jurisdiction of any competent court (including
the courts referred to above), from service of process, from attachment prior to
judgment, from attachment in aid of execution, from execution prior to judgment,
from judgment, from jurisdiction, or from other legal process in any
jurisdiction, that party for itself and its property does hereby irrevocably and
unconditionally waives, and agrees not to plead or claim, any such immunity with
respect to its obligations, liabilities or any other matter arising out of or in
connection with this Agreement or the subject matter hereof. Such waiver and
agreement regarding immunity shall be irrevocable and not subject to withdrawal
in any and all jurisdictions including under the Foreign Sovereign Immunities
Act of 1976 of the United States of America.
13 CONFIDENTIAL
Section 11. Miscellaneous.
a. Assignment. Neither party may assign or otherwise convey this
Agreement, or any of such party's rights under this Agreement, or delegate any
of its duties hereunder, without the prior written consent of the other party.
Any attempted assignment or delegation which violates the terms of this Section
10.a. shall be null and void.
b. No Waiver. No failure to exercise and no delay in exercising, on the
part of any party, any right, remedy, power or privilege hereunder, shall
operate as a waiver thereof or be construed as a waiver or relinquishment for
the future of such right, remedy, power or privilege; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges herein provided
are cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law. No waiver by any party of any term or provision of this
Agreement shall be deemed to have been made unless expressed in writing and
signed by an officer of the waiving party.
c. Construction. The captions appearing in this Agreement have been
inserted as a matter of convenience and in no way define, limit or enlarge the
scope of this Agreement or any of the provisions hereto. This Agreement is the
product of negotiations between Carrier and American, and no provision shall be
construed for or against any party by reason of ambiguity in language, rules of
construction against the draftsman, or similar doctrine.
d. Force Majeure. Except with respect to the performance of a party's
payment obligations under this Agreement, neither party shall be liable for a
delay or failure in its performance hereunder to the extent that such delay or
failure of performance is caused by any act of God, war, strike, natural
disaster, lockout, labor dispute, work stoppage, fire, act of government, or any
other cause, whether similar or dissimilar, beyond the control of that party.
e. Independent Contractor. Each of Carrier and American is an independent
contractor. Nothing in this Agreement is intended or shall be construed to
create or establish any agency, partnership, joint venture or fiduciary
relationship between the parties. Neither Carrier nor any of its Affiliates has
any authority to act for or to incur any obligations on behalf of or in the name
of American or any of its Affiliates.
f. Successor and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the permitted successors and assigns of each party
hereto.
g. Entire Agreement. This Agreement (including any attachments hereto)
constitutes the entire agreement between the parties relating to the subject
matter hereof, and, as of the date first written above, terminates and
supersedes all prior or contemporaneous agreements, discussions, undertakings,
and understandings, whether written or oral, express or implied relating to such
subject matter. This Agreement may not be amended or modified except in writing
signed by an authorized officer of each party hereto.
14 CONFIDENTIAL
h. No Third Party Beneficiaries. All rights, remedies and obligations of
the parties under this Agreement shall accrue or apply solely to the parties
hereto or their permitted successors or assigns and there is no intent to
benefit any third parties.
i. Time. Time is of the essence with respect to the performance of the
material provisions hereunder.
j. Further Assurances. Each party hereto shall do and perform such further
acts and execute and deliver such further instruments as may be required by
Applicable Law or reasonably requested by the other party to carry out and
effectuate this Agreement and the transactions contemplated hereunder.
k. Severability. If any clause, sentence, paragraph or part of this
Agreement, or the application thereof to any Person, shall for any reason be
adjudged by a court of competent jurisdiction to be invalid, or determined to be
in violation or contravention of any applicable statutory legislation, then such
clause, sentence, paragraph or part of this Agreement shall be deemed to be
automatically amended only to the extent necessary to bring this Agreement
within said judgment or determination, as applicable, effective as of the date
thereof, and such judgment or determination shall not affect the remainder of
this Agreement which shall continue in full force and effect.
l. Taxes. Carrier shall be responsible for, and shall indemnify and
reimburse American for, all present and future taxes (if any) imposed, assessed,
levied or collected on or in respect of AAirpass Carriage and this Agreement or
any payments made hereunder (including, without limitation, all excise, sales,
use, and value added taxes), excluding, however, any U.S. taxes imposed on or
measured by the net income of American. Such indemnification (if any) shall be
made by Carrier on an after-tax basis, taking into account any income taxes,
including U.S. federal and state taxes, imposed on the amount paid as the
indemnity. Carrier's obligations pursuant to this Section shall survive the
execution, expiration or termination of this Agreement and the consummation of
the transactions contemplated hereunder.
m. Counterparts. This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute but one and the
same instrument. Confirmation of the execution of this Agreement by a telefax of
a facsimile signature page or pages executed by Carrier and American shall be
binding upon the parties hereto.
n. Exclusion of Consequential Damages. EXCEPT FOR THE INDEMNIFICATION
OBLIGATIONS SET FORTH IN SECTION 4 ABOVE (INCLUDING, WITHOUT LIMITATION, ANY
DAMAGES ARISING THEREUNDER OR IN CONNECTION THEREWITH) WHICH SHALL NOT BE
LIMITED BY ANY PROVISION OF THIS AGREEMENT, NEITHER PARTY WILL BE LIABLE FOR ANY
INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING WITHOUT LIMITATION LOST REVENUES,
LOST PROFITS, OR LOST PROSPECTIVE ECONOMIC ADVANTAGE, ARISING FROM ANY
PERFORMANCE OR FAILURE TO PERFORM UNDER THIS AGREEMENT, EVEN IF SUCH PARTY KNEW
OR SHOULD HAVE KNOWN OF THE EXISTENCE OF SUCH DAMAGES, AND EACH PARTY HEREBY
RELEASES AND WAIVES ANY CLAIMS AGAINST THE OTHER PARTY FOR SUCH DAMAGES.
15 CONFIDENTIAL
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
March 2, 1995.
MIDWAY AIRLINES CORPORATION AMERICAN AIRLINES, INC.
By: /s/ X. X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxx
Name: XXXXXXXX X. XXXXXX Name: XXXXXXX X. XXXXXX
Title: SENIOR VICE PRESIDENT Title: AAIRPASS SALES MANAGER
GENERAL COUNSEL
16 CONFIDENTIAL
ATTACHMENT A TO AAIRPASS AGREEMENT
{***} (2 pages omitted)
A-1 CONFIDENTIAL
EXHIBIT F
FIRST AMENDMENT TO AAIRPASS
AGREEMENT
This First Amendment to AAirpass Agreement ("First Amendment"), dated as
of February 10, 1997, by and between American Airlines, Inc. ("American") and
Midway Airlines Corporation ("Carrier").
WHEREAS, American and Carrier have entered into an AAirpass Agreement (the
"Agreement") dated as of the March 2, 1995, pursuant to which American has
granted Carrier the right to carry AAirpass members and their companions on
Carrier Flights in accordance with the terms of the Agreement; and
WHEREAS, concurrently herewith, American and Carrier are entering into a
certain Letter Agreement providing the terms and conditions under which American
has agreed to participate in a financial restructuring of Carrier; and
WHEREAS, in connection with such restructuring, Carrier has requested and
American has agreed to make certain amendments to the Agreement, subject to the
terms and conditions set forth in this First Amendment.
NOW, THEREFORE, in consideration of the mutual covenants and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, American and Carrier agree to amend the Agreement as follows:
1. Section 7 is amended in its entirety to read as follows:
"Unless sooner terminated in accordance with this Agreement, this
Agreement shall terminate on April 30, 2001."
2. This First Amendment together with the Agreement constitutes the entire
agreement of the parties with respect to its subject matter and supersedes all
prior agreements or understandings, whether written or oral, if any, concerning
the subject matter. All defined terms used herein without definition shall have
the meanings set forth in the Agreement. As modified hereby, the Agreement is
ratified and confirmed and shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have caused this First Amendment to be duly
executed and delivered as of the date and year first above written.
MIDWAY AIRLINES CORPORATION AMERICAN AIRLINES, INC.
By: /s/ X. X. Xxxxxx By: /s/ Xxxxxx X. Xxxxx
------------------------- --------------------------------
Xxxxxxxx X. Xxxxxx Xxxxxx X. Xxxxx
Managing Director
Its: Senior Vice President Airline Management Services, Inc.
