EXHIBIT 10.17
* TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTION 200.80(B)(4),
200.83 AND 240.24b-2
United Contract No. 163872
AMENDED AND RESTATED
UNITED EXPRESS(R) AGREEMENT
BETWEEN
UNITED AIR LINES, INC.
AND
MESA AIR GROUP, INC.
TABLE OF CONTENTS
ARTICLE TITLE PAGE
------- ----- ----
I. DEFINITIONS................................................. 1
II. SCOPE, TERM, AND CONDITIONS................................. 4
A. SCOPE .................................................. 4
B. TERM ................................................... 5
C. CONDITIONS.............................................. 7
III. SUPPORT SERVICES AND FACILITIES............................. 7
A. GENERAL................................................. 7
B. SPECIAL SUPPORT SERVICES................................ 7
C. COMMUNICATIONS.......................................... 10
D. RESERVATIONS............................................ 10
E. OPERATIONS.............................................. 11
F. STATION SUPPORT SERVICES................................ 14
G. TARIFFS AND SCHEDULE PUBLICATION........................ 14
H. SALES SETTLEMENT........................................ 15
I. ADVERTISING AND PROMOTIONS.............................. 17
J. AUTOMATION.............................................. 17
K. OTHER SUPPLIES.......................................... 20
L. CONTRACTOR ASSISTANCE................................... 21
IV. AIR SERVICES TO BE PROVIDED BY CONTRACTOR................... 21
A. SCHEDULES AND CHARTERS TO BE OPERATED BY CONTRACTOR..... 21
B. AIRCRAFT TO BE USED..................................... 23
C. INVENTORY............................................... 26
D. FLIGHT CREWS TO BE USED................................. 26
E. INFLIGHT SALES.......................................... 27
i
V. OPERATING RESTRICTIONS...................................... 27
A. UNITED EXPRESS OPERATIONS ONLY.......................... 27
B. NO OPERATION OUTSIDE AGREEMENT.......................... 27
C. BREACH OF OPERATING RESTRICTIONS........................ 28
VI. LICENSE..................................................... 28
X. XXXXX OF LICENSE........................................ 28
B. TERMS AND CONDITIONS GOVERNING LICENSE.................. 28
C. INFRINGEMENT............................................ 30
VII. ADDITIONAL UNDERTAKINGS..................................... 30
A. BULK PURCHASES.......................................... 31
B. FUEL ................................................... 00
X. XXXXXXXX XX XXXXXX XX XXXX THROUGH COST ITEMS........... 31
D. UNIFORMS................................................ 31
E. PASSES AND REDUCED RATE TRAVEL.......................... 31
F. SIGNAGE................................................. 32
G. ENVIRONMENTAL........................................... 32
H. START-UP COSTS.......................................... 32
I. AIRCRAFT SUBSTITUTIONS.................................. 33
VIII. RATES PAYABLE TO CONTRACTOR................................. 33
A. RATES .................................................. 33
B. OPERATING GOALS......................................... 36
C. MARKUP ................................................. 37
D. WIRE TRANSFER AND RECONCILIATION........................ 37
IX. FEES PAYABLE TO UNITED...................................... 38
A. GOVERNMENT ASSISTANCE................................... 38
X. MAINTENANCE AND FUELING..................................... 39
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XI. U.S. MAIL................................................... 39
XII. INSURANCE................................................... 39
A. INSURANCE TYPES......................................... 39
B. 30-DAY NOTICE........................................... 40
C. FAILURE TO MAINTAIN INSURANCE........................... 40
XIII. LIABILITY AND INDEMNIFICATION............................... 40
A. EMPLOYER'S LIABILITY AND WORKERS' COMPENSATION.......... 40
B. INDEMNIFICATION BY CONTRACTOR........................... 40
C. INDEMNIFICATION BY UNITED............................... 41
D. CONTRACTOR'S SUPPLIES LIABILITY......................... 41
E. UNITED DEFINITIONS...................................... 43
XIV. REPORTS..................................................... 43
A. CLOSE-OUT ENTRIES....................................... 43
B. BOARDING INFORMATION.................................... 44
C. OPERATING PERFORMANCE................................... 44
D. INSPECTION.............................................. 44
E. FINANCIAL STATEMENTS.................................... 44
F. GOVERNMENT FILINGS...................................... 44
G. COPY OF GOVERNMENT REPORTS.............................. 45
XV. INDEPENDENT CONTRACTORS AND UNAUTHORIZED OBLIGATIONS........ 45
A. INDEPENDENT CONTRACTORS................................. 45
B. UNAUTHORIZED OBLIGATIONS................................ 46
C. CONTRACTOR OPERATED FLIGHTS............................. 46
XVI. DEFAULT AND TERMINATION..................................... 46
A. OPERATIONS DEFAULT...................................... 46
B. COVENANT DEFAULT........................................ 47
iii
C. DEFAULT BY CONTRACTOR................................... 47
D. SIMILAR AGREEMENTS...................................... 48
E. NON-COMPLIANCE WITH STANDARDS........................... 48
F. CONSEQUENCES OF TERMINATION............................. 49
G. UNITED'S LIQUIDATED DAMAGES............................. 49
H. RESTRICTED ACTIONS...................................... 50
XVII. ASSIGNMENT, MERGER AND ACQUISITION.......................... 50
A. ASSIGNMENT.............................................. 50
B. MERGER AND ACQUISITION.................................. 51
XVIII. CHANGE OF LAW............................................... 51
XIX. TAXES, PERMITS AND LICENSES................................. 51
A. TRANSACTION TAXES....................................... 51
B. PAYROLL TAXES........................................... 52
C. PERMITS AND LICENSES.................................... 52
XX. REVIEW...................................................... 52
XXI. JURISDICTION................................................ 53
XXII. NOTICES..................................................... 53
XXIII. APPROVALS AND WAIVERS....................................... 54
XXIV. GOVERNING LAW............................................... 54
XXV. CUMULATIVE REMEDIES......................................... 54
XXVI. FORCE MAJEURE............................................... 55
XXVII. SEVERABILITY AND CONSTRUCTION............................... 55
XXVIII. ACKNOWLEDGMENT.............................................. 55
XXIX. CONFIDENTIALITY............................................. 55
XXX. RELATED AND THIRD PARTY AGREEMENTS.......................... 56
XXXI. ENTIRE AGREEMENT............................................ 56
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XXXII. REFERENCES TO TIME PERIODS................................... 56
APPENDIX A ............................................................. 00
XXXXXXXX X ............................................................. 59
APPENDIX C ............................................................. 60
APPENDIX D ............................................................. 00
XXXXXXXX X ............................................................. 63
APPENDIX F ............................................................. 00
XXXXXXXX X ............................................................. 66
APPENDIX H ............................................................. 68
APPENDIX I ............................................................. 77
APPENDIX J ............................................................. 78
Appendix K ............................................................. 79
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* TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTION 200.80(B)(4),
200.83 AND 240.24b-2
UNITED EXPRESS(R) AGREEMENT
This Agreement, dated as of January 28, 2004, is between UNITED AIR LINES,
INC., a Delaware corporation, with its worldwide headquarters located at 0000 X.
Xxxxxxxxx Xxxx, Xxx Xxxxx Xxxxxxxx, XX 00000 ("UNITED"), and Mesa Air Group,
Inc., a Nevada corporation, having its principal mailing address at 000 X 00xx
Xx., Xxxxx 000 Xxxxxxx, XX 00000 ("CONTRACTOR").
WITNESSETH:
WHEREAS, United holds a certificate of public convenience and necessity
issued pursuant to the Federal Aviation Act of 1958 authorizing United to engage
in air transportation of persons, property and mail, and is a major airline
providing scheduled air service in both national and international markets;
WHEREAS, Contractor is the parent company of a group of air carriers
holding a certificate of public convenience and necessity issued pursuant to the
Federal Aviation Act of 1958 authorizing them to engage in air transportation of
persons and property;
WHEREAS, Contractor is willing to cause one or more of its wholly-owned
subsidiaries to perform service on behalf of United;
WHEREAS, United owns various trademarks, service marks, trade names,
logos, emblems, uniform designs and distinctive exterior and interior color
decor and patterns for its aircraft, including, but not limited to, the service
xxxx United Express (hereinafter referred to individually and collectively as
"UNITED MARKS" or "MARKS");
WHEREAS, United has entered into agreements with several regional carriers
to provide air transportation services under the United Express xxxx for city
pairs where it is generally uneconomic for United to operate such services;
WHEREAS, United will provide Contractor, pursuant to the terms of this
Agreement, a non-exclusive license to use one or more of the United Marks in
connection with Contractor's United Express Services.
NOW, THEREFORE, in consideration of the foregoing premises, mutual
covenants and obligations hereinafter contained, the parties agree as follows:
I DEFINITIONS
A. "Apollo Services" means the computerized Apollo Reservations and
Ticketing Service (or any similar or substitute service offered by or on behalf
of United), which
1
performs flight, hotel, rental car and other travel related services,
reservations and ticket issuance functions.
B. "Contractor Location"
means any airport terminal facility where Contractor provides Contractor's
United Express Services pursuant to this Agreement and Contractor, but not
United, has employees stationed (including any terminal facility where
Contractor provides Contractor's United Express Services pursuant to this
Agreement that is different from the terminal facility from which United
operates in the same airport).
C. "Contractor's United Express Services"
means the services or operations provided and maintained by Contractor or
its affiliates in connection with providing scheduled air transportation service
as a United Express Carrier and related ground and other services to United and
its affiliates pursuant to the terms of this Agreement (including, without
limitation, the services required under ARTICLE IV).
D. "United Express Service Standards" or "Service Standards"
means the procedures prescribed by United that describe United's approved
standards, policies, requirements and procedures for various activities relating
to the provision of air transportation services. These Service Standards are
provided in APPENDIX H.
E. "Default"
means, individually or collectively, a SECTION A DEFAULT, a SECTION B
DEFAULT, a SECTION C DEFAULT, a SECTION D DEFAULT, or a SECTION E DEFAULT, each
as defined in ARTICLE XVI.
F. "Designated Personnel"
means all of Contractor's employees who provide Contractor's United
Express Services in job classifications requiring direct public contact.
Furthermore, this covers all customer service, ramp service, pilots, and flight
attendants.
G. "Effective Date"
shall have the meaning set forth in ARTICLE II.B.
H. "Environmental Laws"
means all federal, state, local and foreign laws and regulations, and
airport rules, regulations and policies relating to pollution or the
environment, including, without limitation, laws and regulations relating to
emissions to the air, discharges to surface and subsurface waters, safe drinking
water, the storage, release, disposal, transport or
2
handling of chemicals, pollutants, contaminants, wastes, hazardous substances,
petroleum and petroleum products, and aircraft noise, vibration, exhaust and
overflight.
I. "Ground Handling Duties"
means the provision of one or more of the following: (1) lavatory service,
(2) overnight cabin cleaning, (3) loading and unloading of baggage, mail and
freight, (4) receipt and dispatch, (5) baggage delivery, and (6) provisioning
personnel and storage space.
J. "Ground Handling Provider" means, for each city in which Contractor
operates flights in Contractor's United Express Services, either United or
another entity selected by United (which, in some cities, will be Contractor) to
provide ground handling services to Contractor in that city.
K. "Joint Location"
means any airport terminal where Contractor provides Contractor's United
Express Services pursuant to this Agreement and both United and Contractor have
employees stationed.
L. "Marks" or "United Marks"
shall have the meaning set forth in the recitals of this Agreement.
M. "Rates"
shall have the meaning set forth in ARTICLE VIII
N. "Related Agreements"
shall have the meaning set forth in ARTICLE XXX.
O. "Revenue Passenger"
means each passenger traveling on Contractor in connection with
Contractor's United Express Services who holds a ticket (electronic or
otherwise), flight coupon, voucher or other form of document that (i) entitles
that passenger to board an aircraft and (ii) is issued pursuant to or in
connection with a published or unpublished fare. Passengers traveling on a
purchased ticket (including ID50 airline industry reduced rate tickets),
wholesaler voucher, or voucher issued as denied boarding compensation, shall be
considered to be Revenue Passengers. In addition, passengers traveling on a free
ticket as (or as part of) a Mileage Plus(R) award or a free ticket issued in
conjunction with a two-for-one fare or other similar fare established by United,
shall be considered to be Revenue Passengers. A passenger traveling on any other
type of free or service charge-based ticket, including, but not limited to, a
site inspection ticket, or wholesaler compensation ticket, any travel agent or
wholesaler traveling on a positive space or space available ticket, and any
employee of United, Contractor or any other carrier traveling on
3
either a positive space or space available ticket, shall not be considered a
Revenue Passenger. All Revenue Passengers shall be considered when calculating
any Monthly Incentive Payment.
P. "Support Services"
means those activities set forth in ARTICLE III which are related to the
operation of airline services except during flight.
Q. "Termination Date"
shall have the meaning set forth in ARTICLE II.B.
R. "United Express Carrier"
means an air carrier which has been contractually given a non-exclusive
license to use the xxxx United Express and one or more other United Marks in
connection with providing air transportation service to United pursuant to an
agreement between United and such air carrier.
S. "United Location"
means any airport terminal facility where Contractor and United both have
operations and United, but not Contractor, has employees stationed.
T. "United's Actual Cost"
means any and all costs or expenses actually incurred by United, not
including any markup by United, any allocation of administrative or overhead
expenses, or any administrative service charge imposed by United.
U. "Aircraft Used in United Express Service"
means any type and amount of aircraft set forth in APPENDIX A.
II. SCOPE, TERM, AND CONDITIONS
A. SCOPE
The scope of this Agreement pertains to type and amount of Contractor's
aircraft set forth in APPENDIX A, and as it may be amended in accordance
herewith from time to time.
4
B. TERM
1. TURBOPROP: This Agreement becomes effective on July 6, 2003 at 1:01
a.m., Chicago, Illinois time, on (the "EFFECTIVE DATE") and shall terminate 10
years from the effective date (the "TERMINATION DATE"), unless it is terminated
at an earlier date by United giving written notice * months prior to the *
anniversary of the Effective Date, or as otherwise set forth under the
provisions of this Agreement. Notwithstanding the preceding sentence, those
provisions of this Agreement that specifically require actions prior to the
Effective Date shall be effective upon execution of this Agreement. * months
prior to the Termination Date, United and Contractor shall engage in discussions
regarding the potential extension of the Agreement or ramp down schedule for
Contractor's United Express operations; provided, however, that the decision to
extend or ramp down the Agreement shall be at United's sole discretion. The
terms of any extension of the Agreement will be mutually agreed upon by
Contractor and United.
(i) DELIVERY OF TURBOPROPS: Turboprops must be delivered and ready
to enter the United Express schedule on the dates described in Appendix A.
(ii) CONSEQUENCES FOR LATE DELIVERY OF TURBOPROPS: If any Turboprop
is delivered later than * after the dates set out in Appendix A other than for
reasons set forth below *. If, upon inspection, an aircraft is determined by
Contractor to have any damage that must be repaired, or if the aircraft is
damaged after takeoff en route to Contractor for delivery, Contractor will have
the choice either to repair or replace the aircraft. If Contractor chooses to
repair the aircraft, the * deadline will be extended by no longer than the time
spent repairing the aircraft after the original * deadline. If Contractor
chooses to replace the aircraft, the * deadline will be extended by no longer
than the time it would have taken to repair the aircraft. The inspection
mentioned above must take place on or before *, regardless of the date of this
contract, and if Contractor determines from such inspection that repairs will be
necessary, Contractor must advise United of this delay by no later than * or
this extension of the delivery deadline will be waived. For no other reason will
the * deadline be extended. In such a case where repairs are required,
Contractor will use commercially reasonable efforts to expedite the repairs to
the aircraft.
2. REGIONAL JET: This Agreement as it relates to the RJ-50 and RJ-70
(collectively, "RJ") fleet becomes effective on August 1, 2003 at 1:01 a.m.,
Chicago, Illinois time (the "RJ START DATE").
a. INITIAL RJ-70: The first * 70-seat or 64-seat Regional Jet
("RJ") aircraft, as the case may be, will be divided into three tranches of *, *
and * aircraft, respectively ("RJ Tranches"). The term of this Agreement for (a)
the first RJ Tranche, which shall consist of the * RJ aircraft having the
earliest lease expiration dates, will expire December 31, 2011, (b) the second
RJ Tranche of * RJ aircraft will expire on December 31, 2012, and (c) the third
RJ Tranche, which shall consist of the * RJ aircraft having the latest lease
expiration dates, will expire on December 31, 2013. Upon expiration of this
Agreement for each RJ Tranche, and if United
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*Confidential Treatment Requested
5
and Contractor do not thereupon extend the term of this Agreement for such RJ
Tranche, then ramp down of the aircraft for such RJ Tranche out of the terms and
conditions of this Agreement will take place gradually over * following
termination at a rate of no more than * aircraft per month, to be mutually
agreed upon by United and Contractor.
(i) DELIVERY OF INITIAL RJ-70s: RJ-70s must be delivered and
ready to enter the United Express schedule on the dates described in Appendix A.
(ii) CONSEQUENCES FOR LATE DELIVERY OF RJ-70S: If any RJ-70
is delivered later than * after the dates set out in Appendix A, *. In the case
where any of the RJ-70s cannot be delivered because of a delay by Bombardier of
RJ-900s to Contractor for reasons wholly related to Bombardier manufacturing
(including Bombardier employee strikes), and in the case that Bombardier can
produce verifiable proof that the delivery of the RJ-900s was a) delayed (and
the period of delay) and b) delayed for reasons wholly related to Bombardier
manufacturing (including Bombardier employee strikes), then *.
b. RJ-50: For * 50-seat Regional Jet ("RJ-50") aircraft, the term
of this Agreement will expire no later than December 31, 2008 and will
correspond to the introduction of the * Replacement RJ 70s as outlined in
ARTICLE FII.B.2.c.
(i) DELIVERY OF FIRST FIVE RJ-50S: First * RJ-50s must be
delivered and ready to enter the United Express schedule on the dates described
in Appendix A.
(ii) CONSEQUENCES FOR LATE DELIVERY OF FIRST FIVE RJ-50S: If
any RJ-50 is delivered later than * after the dates set out in Appendix A *.
(iii) DELIVERY OF LAST TEN RJ-50S: Contractor must provide
delivery dates for each of the Last * RJ-50s at any time at its discretion
before *. Once Contractor has submitted to United the delivery dates for the
Last * RJ-50s, at United's sole discretion United will be entitled to accept or
decline authorization of these aircraft on an aircraft by aircraft basis. If
accepted, Contractor must deliver the RJ50 on the date set out in the Last *
RJ-50 Schedule. If declined, Contractor will no longer be authorized to add the
declined aircraft to United Express' Fleet and no payments or penalties will be
owed by United on such declined aircraft..
(iv) CONSEQUENCES FOR LATE DELIVERY OF LAST TEN RJ-50S: If
any RJ-50 is delivered later than * after the dates set out in Last * RJ-50
Schedule, *.
c. 15 REPLACEMENT RJ 70S: The delivery of * RJ70s will occur no
sooner than the withdrawal of the * short term RJ50s on a one for one basis. *
All Replacement RJ-70 deliveries (and the corresponding RJ-50 retirements) must
be completed by no later than *. The term for the * replacement RJ 70s shall
expire * from the delivery of each individual RJ70, but in any case no later
than December 31, 2018.
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*Confidential Treatment Requested
6
(i) DELIVERY OF REPLACEMENT RJ-70S: Contractor must advise
United of the delivery date of each Replacement RJ-70 no later than * before the
delivery date of each RJ-70. Contractor must advise United of the delivery dates
of all RJ-70s no later than *. Replacement RJ-70s must be delivered and ready to
enter the United Express schedule on these dates.
(ii) CONSEQUENCES FOR LATE DELIVERY OF REPLACEMENT RJ-70S: *.
C. CONDITIONS
1. RENEWAL OPTION. Upon expiration of this Agreement, for each RJ-70
Tranche and for the RJ-50 fleet, United may renew the term hereof for each RJ
Tranche aircraft and for each RJ-50 aircraft for an additional term of *, on the
then existing terms and conditions, upon at least * written notice prior to the
end of such term.
PILOT CONSIDERATION for 70-seat Regional Jet Employment for Furloughed United
Pilots. Contractor acknowledges that United has been required to furlough some
of its pilots over the past several years. As additional consideration, with the
exception of Paragraph 11 of the Letter 03-22, Contractor has agreed to
provisions outlined in Letter 03-22, Letter 03-23 and Letter 03-24, "Job
Opportunities for Furloughed United Pilots" between United and the Air Line
Pilot Association dated August 21, 2003, August 21, 2003 and September 5, 2003,
which is incorporated herein by reference. United retains the right to recall
furloughed pilots hired by Contractor. Should United decide to recall
aforementioned pilots within * months of any pilot's Contractor hire date,
United will reimburse the aforementioned pilots for Contractor's pilot prorated
training costs of $* per CRJ pilot, $* per Dash-8 pilot and $* per B1900 pilot,
prorated by the number of months remaining until that pilot's * anniversary as
compared to the full cost over *.
III. SUPPORT SERVICES AND FACILITIES
A. GENERAL
1. SUPPORT SERVICES. United and Contractor will provide Support
Services and facilities to the extent and in the manner set forth in the
subsequent provisions of this ARTICLE III. All such Support Services and
facilities set forth in this ARTICLE III will be furnished only with respect to
Contractor's United Express Services.
2. APPROVAL OF SUPPORT SERVICES. United reserves the right to
approve or disapprove the implementation of any Support Services or facilities
offered to Contractor for Contractor's United Express Services by any third
party at any location. Such approval shall not be unreasonably withheld.
B. SPECIAL SUPPORT SERVICES
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*Confidential Treatment Requested
7
In addition to other services to be made available to or provided to
Contractor pursuant to this Agreement, and as summarized in and in accordance
with APPENDIX B (City Pairs and Ground Handling) and APPENDIX C (Contractor
Support Services), United agrees that it or its designees will provide and
Contractor agrees to use the following services and facilities for Contractor's
United Express Services, be they provided by United or its designee:
1. USE OF THE UNITED DESIGNATOR CODE
All scheduled air transportation provided by Contractor as a part of
Contractor's United Express Services will be displayed by United in Apollo
Services, the Official Airline Guide ("OAG") and all other computerized
reservations systems, using the appropriate United designator code, "UA" or
"UA*," and a flight number within a range of flight numbers assigned by United.
2. USE OF APOLLO SERVICES
In selling and providing Contractor's United Express Services,
Contractor will only use Apollo Services, including United's automated check-in,
United's ticketing (including United's electronic ticketing service,
E-Ticket(SM)) and boarding passes, advance seat reservation system and United's
automated baggage tag printing and baggage tracing systems.
3. PARTICIPATING IN UNITED'S MILEAGE PLUS(R) PROGRAM
At United's discretion, all passengers with paid tickets traveling
on a flight segment included in Contractor's United Express Services, whether or
not in conjunction with a United flight segment, will be awarded mileage credits
for United's Mileage Plus Program or any other frequent flyer program as
specifically approved by United. Contractor shall not participate in the
frequent traveler program of any other carrier in connection with Contractor's
United Express Services, unless otherwise mutually agreed between United and
Contractor in writing. United has sole discretion concerning decisions relating
to accrual or redemption of award travel on Contractor's United Express flights.
In addition, United will bear the cost of providing redemption travel and
receive all revenue and benefits from the sale of frequent flyer credits (e.g.
miles) related to Contractor's United Express service.
4. USE OF UNITED TICKET STOCK, BAGGAGE TAGS AND TICKET WALLETS
In selling air transportation of passengers and property, both
on-line and off-line, Contractor will use only United passenger ticket stock,
ticket wallets and baggage tags in connection with Contractor's United Express
Services. Unless otherwise agreed, United will provide to Contractor all United
passenger ticket stock, United airway bills, United cargo bills and other
shipping documentation for all Contractor's United Express Services, and United
will provide to Contractor ticket wallets and baggage tags for Joint Locations
and United Locations only; provided that such quantities do not exceed
reasonable levels. Contractor shall reimburse United, at United's Actual Cost,
for all
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documentation requested by Contractor. Ticket wallets, baggage tags and other
passenger processing documents approved by United will be acquired by Contractor
for all Contractor Locations through a supplier designated by United. Contractor
shall be required to convert to the use of different ticket wallets, baggage
tags and other passenger processing documents upon * prior written notice to
Contractor by United.
5. CREDIT CARD SALES AND REJECTS; BAD CHECKS
Contractor will use only credit-industry or airline-industry
standard credit card vouchers and receipts in connection with credit card sales
for tickets, cargo, excess baggage or other services on Contractor's United
Express Services. * Contractor will reimburse United for the expenses of such
discount fees and credit card rejects. Contractor will absorb the risk of bad
checks used as payment for tickets and vouchers written by Contractor for
passage or freight in connection with Contractor's United Express Services.
6. DENIED BOARDING
a. In the event of voluntary or involuntary denied
boardings, Contractor shall make a good faith effort to rebook United Express
customers on the next available flight operated by one of United's code share
partners, such as US Airways, or a Star Alliance partner, provided that the
routing is logical and does not seriously inconvenience the customer.
b. Contractor is required to provide to United, upon
specific written request from United, specific station information regarding the
weight restrictions and aircraft limitations which could results in Denied
Boardings. Such requests shall be made by United's Revenue Management Department
(WHQIM) and responses from Contractor shall be provided within * weeks of such
request.
c. United will pay Contractor the Unit Rates per completed
passenger for interrupted trip expense (RJ-50 and RJ-70 only) as set forth in
Appendix D. Contractor and United agree to review the interrupted trip expense
six months after execution of this agreement. If Contractor's actual
uncontrollable costs are below $* per passenger, Contractor will reduce this
rate to the actual cost for the remainder of this agreement.
7. TICKET AND BAGGAGE HANDLING FEES
All ticket handling, baggage handling and other service charges and
fees assessed by carriers other than United relating to Contractor's services
(including, but not limited to, Contractor's United Express Services) will be
absorbed directly by United.
8. CUSTOMER SERVICE TRAINING
On a schedule, at a place, to an extent, for a number of persons,
and in a manner determined by United, United will provide training for
Contractor's instructors
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*Confidential Treatment Requested
9
that United deems sufficient to permit Contractor's instructors to be able to
provide and train others to provide customer services for Contractor's United
Express Services. Contractor will have no obligation to pay United for such
training. However, Contractor agrees to adhere to the United Express Standards
of Service as outlined in APPENDIX H for all Customer Service of their United
Express flights.
C. COMMUNICATIONS
1. TELEPHONE AND DATA LINES
United, at its expense, will provide and maintain or arrange for the
provision of reservations telephone lines connecting the cities served by
Contractor in connection with Contractor's United Express Services with United's
Reservations Centers. United, at its expense, will establish, operate and
maintain or arrange for the provision of the data circuits from Contractor's
airport ticket offices and other selected locations linking the United-approved
data processing equipment at those locations with Apollo Services. United, at
its expense, will also provide and arrange for Contractor's SOC Communication
with Apollo Services. United will determine, at its sole discretion, the
necessity and feasibility of installing all such communications equipment. All
other telephone expenses, such as Contractor's long distance expenses shall be
borne by Contractor as a station operating expense.
2. PROTECTION OF CIRCUITS
Contractor will take all necessary precautions to protect the data
circuits provided for Contractor's use pursuant to this Agreement by United or
its designee.
D. RESERVATIONS
1. RESERVATIONS FUNCTIONS
United agrees to provide, at its expense, the following reservations
functions for Contractor's United Express Services:
a. Answering reservations telephones, providing information
regarding schedules and fares, making bookings and providing other services
normally associated with airline reservations services in accordance with
United's established procedures.
b. Providing personnel so that telephone calls are answered
at a service level determined by United.
c. Answering all calls terminating on specified telephone
lines as United or United Express, at United's option.
d. To the extent practicable, re-accommodating and
notifying passengers of confirmation on United, Contractor and other airlines
and clearance from wait-list.
e. Reviewing and processing inbound prepaid ticket advices.
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f. Providing reservations services to the hearing impaired
via a special telephone number during normal business hours.
2. APOLLO SERVICES ACTIVITIES
Contractor agrees to use Apollo Services for the following
activities for Contractor's United Express Services, which are to be provided by
United:
a. Establishment, maintenance, display and change of
passenger name records (PNRs).
b. Confirmation of passengers against seat inventory on
Contractor's United Express Services and United's scheduled flights and on other
airlines where flight availability is maintained in Apollo Services.
c. Maintenance of seat availability for Contractor's United
Express Services scheduled flights.
d. Transmission of availability status messages (AVS) for
Contractor's United Express Services scheduled flights to other airlines with
which United has an agreement in accordance with Standard Industry Passenger
Procedures (SIPP).
e. Process inbound reservations messages received from
ARINC addressed to Contractor.
f. Routing of all inbound messages received from ARINC,
other than as stated in ARTICLE III.A.1.d above, to a computer message queue.
3. CRS FEES
Computer Reservations System ("CRS FEES") charged to Contractor as a
result of passengers booked on Contractor's United Express will be passed
through to United without markup and subject to invoice audit by United. As soon
as possible, United shall pay such CRS fees on behalf of Contractor.
E. OPERATIONS
1. SCHEDULED SERVICE UPDATE
Contractor will provide accurate updates of its flights' planned and
actual departure and arrival times (including updates of irregularities) in
Apollo Services as soon as the planned flight schedule is changed and the flight
departs and arrives or suffers an irregularity. Specifically, this includes
updating the out, off, on and in times for the aircraft within * minutes of the
occurrence of each event. In the event of flight delays, cancellations or other
schedule irregularities affecting Contractor's United Express Service flights,
and as soon as information concerning such irregularities is available,
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Contractor shall update Apollo Services to reflect such information and, when
requested by United, notify the designated United organization. For delayed
flights, Contractor shall provide updates to Customers and Apollo in no less
than * minute intervals. For purposes of this Agreement, such scheduled and
actual departure and arrival and irregularity information shall be known as
"FLIFO." United will notify Contractor in writing as soon as practicable after
United determines that Contractor has failed to update FLIFO in a timely and
accurate manner. If Contractor fails * times in any consecutive * period (the
"FLIFO THRESHOLD") to update FLIFO in a timely and accurate manner as soon as it
becomes evident to Contractor that a schedule deviation shall take place, then
upon notification by United to Contractor, Contractor shall pay United damages
of * for each occurrence over and above the first * occurrences during such *.
United agrees to xxxx Contractor any amount owed under this Section within *
after the end of each calendar * period during which Contractor has exceeded the
FLIFO Threshold. Such damages shall be United's exclusive remedy for
Contractor's non-compliance with this paragraph and may be collected by setoffs
against other amounts owed by United to Contractor hereunder.
2. NO FLIGHT DISPATCH DUTY
Contractor will be solely responsible for, and United will have no
obligations or duties with respect to, the dispatch of Contractor's flights. For
the purposes of this ARTICLE 2, the term "dispatch" will include, but will not
be limited to, all planning of aircraft itineraries and routings, fueling and
flight release.
3. COMPLIANCE WITH STATUTES
Contractor hereby represents, warrants and covenants that all air
transportation services performed by it pursuant to this Agreement or otherwise
will be conducted in full compliance with all applicable statutes, orders, rules
and regulations, whether now in effect or hereafter promulgated, of all
governmental agencies having jurisdiction over Contractor's operations,
including, but not limited to, the Federal Aviation Administration ("FAA") and
the Department of Transportation ("DOT"). Contractor's compliance with such
governmental statutes, orders, rules and regulations will be the sole and
exclusive obligation of Contractor and United will have no obligation,
responsibility or liability, whether direct or indirect, with respect to such
matters except as otherwise expressly provided herein. Additionally, Contractor
will comply during the term of this Agreement with the United/United Express
Safety Standards, as described on APPENDIX G.
4. WEATHER INFORMATION SERVICE
From time to time and upon the request of Contractor or its flight
crews, United may furnish Contractor's flight crews with such U.S. Weather
Bureau information or data as may be available to United; provided that (i) in
furnishing any such weather information or data to Contractor, neither United
nor its employees or agents will be
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responsible or liable for the accuracy thereof and, (ii) any and all costs or
expenses associated with such weather information or data are carrier controlled
costs and will be paid by Contractor.
5. FLIGHT INTERRUPTION MANIFESTS
Contractor shall use United FIMS to rebook customers who are denied
boarding on any United Express flight. Contractor's Customer Service employees
shall rebook the customer based on the ticketed class of service. If
Contractor's employees upgrade the customer inappropriately, United will xxxx
Contractor for the incremental cost of the upgrade. Contractor shall use
reasonable best efforts to rebook customers on United code share (e.g. US
Airways) or Star Alliance partner flights provided it does not seriously
inconvenience the passenger.
6. DIVERSIONS
United will pay Contractor under the terms of this Agreement for all
Contractor United Express diverted flights that are completed within * hours of
the scheduled arrival time. The cost of busing will be borne by the Contractor
at all times and is not reimbursable by United. Contractor will use its best
efforts to assure that no bus segment exceeds * as defined in the Apollo mileage
database. In the event a diverted flight is not completed within the * hour time
frame, United will pay Contractor for the originally scheduled departure
provided that both of the following conditions apply (i) the diversion is
outside of the control of Contractor and (ii) the destination airport was open
for FAR Part 121 flights at the time of departure and forecasted to be open at
the time of arrival. Contractor will pay for any repositioning costs, which
costs shall not be reimbursable by United. Upon request by United, Contractor
and United agree to meet to discuss opportunities to reduce the number of
Contractor diversions and costs associated with such diversions.
7. GROUND DELAY PROGRAM
Contractor will participate in United's ground delay program, which
stipulates that United may request Contractor to cancel, and Contractor shall
cancel, flights to free ATC slots at a hub when the FAA or United's Station
Control Center has initiated a Ground Delay Program ("GDP"). For cancellations
requested by United as part of the GDP, and in accordance with ARTICLE VIII,
United shall pay Contractor only a portion of the amounts normally due had the
flights not been cancelled.
For flights cancelled under the GDP program, United will pay
Contractor only the *. No payments will be made with respect to the * that
correspond to * in these categories. The Ground Delay Program will not affect
payments in the following three categories unless specifically included above:
*.
8. STATION OPERATIONS CENTER (SOC) - HUB LOCATIONS
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At United's request, Contractor shall provide adequate staffing in
the United Airlines SOC of each designated hub city at United's request. If the
number of departures in any single hub exceeds * per day, Contractor will
provide, at Contractor's expense, a full-time representative at United's
request. Such staffing will be provided during all normal hours of operation. If
the number of daily departures does not exceed * per day, then Contractor will
provide a point of contact and make a representative available on a limited
basis as requested by United.
F. STATION SUPPORT SERVICES
United will provide or cause to be provided, at its expense, to Contractor
certain support services as set forth on APPENDIX C, at the United Locations and
Joint Locations set forth in APPENDIX B; provided that United shall have the
right to add, delete or otherwise modify the services described on APPENDIX B if
United provides Contractor with * prior written notice of such modification;
provided, however, United shall use commercially reasonable efforts to notify
Contractor with * prior written notice. United agrees to reimburse Contractor
only for * incurred by Contractor as a result of a United requested location
change within a current station under this Section. *. At Contractor Locations,
Contractor will provide or cause to be provided at least those services and
facilities set forth in APPENDIX C. All such station support services will be
provided as of the Effective Date unless otherwise stated.
G. TARIFFS AND SCHEDULE PUBLICATION
1. GENERAL
United shall have the sole right and power to establish and modify,
from time to time, the fare/rate classes and fare/rate levels (including through
fares) and fare/rate descriptions for all Contractor's United Express Services
in the city pairs operated by Contractor under this Agreement, in a manner
consistent with pricing (including joint fares) established by United. United
shall comply with applicable governmental regulations pertaining to public
disclosure of fares, rates and rules tariffs and shall pay for any fines or
civil penalties incurred by Contractor as a result of violations by United
thereof, and for the cost of defense of such claims of violations including the
cost of defending or negotiating the terms of a consent order or decree.
2. PASSENGER FARE TARIFFS
a. All passenger fare tariffs published for Contractor's
United Express Services shall be included as part of United's tariffs.
b. Contractor shall notify the Airline Tariff Publishing
Company or any successor company performing the same or equivalent services
("ATPCO") that United is authorized to supply, modify or withdraw such rates
with ATPCO. United may file changes to such fares from time to time with ATPCO
as UA fares.
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3. AIR FREIGHT AND MAIL RATES
For all markets operated by Contractor under this Agreement, United
shall have the sole right and power to establish and modify from time to time
all air freight and cargo rates and mail rates covering mail, general commodity,
small package delivery (SPD) and priority air freight shipments and all other
air transportation services (other than mail delivery) for Contractor's United
Express Services in these markets. All such airfreight rates for Contractor's
United Express Services shall be included as part of United's airfreight and
cargo rates tariffs. Contractor shall notify ATPCO that United is authorized to
supply, modify or withdraw such rates with ATPCO.
4. TIMETABLES
United will reflect Contractor's United Express Services in
computerized reservations systems, United's internal reservations system and
Contractor's United Express Services flight connections to United will be listed
as UA connections. United will provide information such that references in
computerized reservations systems, United's internal reservations system and
joint city timetables to Contractor's United Express Services will also contain
notations indicating that such services are performed by Contractor as an
independent contractor under the appropriate United Marks. A similar notation
will be made in the OAG or any successor publication commonly used by the
airline industry for the dissemination of schedule information. Such notations
shall comply with all applicable regulations of DOT.
H. SALES SETTLEMENT
1. PAYMENTS TO UNITED
Contractor will wire transfer to United an amount equal to
Contractor's Total Net Sales Receipts collected at all Contractor Locations.
"TOTAL NET SALES RECEIPTS" equals total gross sales receipts for all passenger
tickets, airway bills, cargo bills, mail fees, reimbursement for operational
denied boarding and other tickets issued by Contractor for Contractor's United
Express Services (less refunds thereon paid out by Contractor), collected by
Contractor during the applicable period. The frequency of the wire transfer will
be *, for all Total Net Sales Receipts collected during the preceding *.
Contractor's wire transfer will be made by 11:00 a.m. local time to the
following bank account:
Bank One
0 Xxxx Xxx Xxxxx
Xxxxxxx, XX 00000
*
Contractor will also require its employees and agents to forward to United, on a
daily basis, all auditors ticket coupons, airway bills, cargo bills, lift
documentation, reports, exchange orders and refund detail issued by Contractor
in connection with Contractor's
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United Express Services during the previous day in accordance with the sales and
reporting procedures specified by United.
2. SET OFF AMOUNTS
In addition to the terms of ARTICLE VIII and the other provisions
hereof, but subject to the terms of ARTICLE XIII, the payment for transportation
furnished by Contractor may be reduced in order to set off:
a. amounts owed by Contractor to United for:
(i) actual loss of revenue resulting from a failure on
the part of Contractor to properly effect a sale pursuant to United's Customer
Service Policies and Procedures applicable to the sale of tickets; and
(ii) fraudulent, grossly negligent or erroneous acts of
employees of Contractor which cause United to suffer a loss;
b. such other adjustments as may be mutually agreed to by
the parties from time to time; and
c. any other undisputed amounts owed by Contractor to
United under this Agreement.
United will provide Contractor with supporting documentation for
such intended adjustments. Contractor shall have the right to object to any such
adjustment by providing United with written notice of its objection, together
with supporting documentation, within * after its receipt of Contractor's
objection. United agrees to negotiate in good faith with Contractor in order to
resolve all such disputes within * after its receipt of Contractor's supporting
documentation.
3. MODIFIED PROCEDURES
United and Contractor by mutual written agreement may establish
alternative or modified passenger sales procedures in order to accommodate
tickets and exchange orders issued by air carriers which are not participants in
the Airline Clearing House, Inc. ("ACH").
4. AUDITS
During the course of this Agreement, United, or an outside 3rd party
contracted by United, may conduct one (1) on-site audit of all records
(including, but not limited to, work papers of accountants) pertaining only to
Contractor's United Express operations. This will include, but is not limited
to, (i) tickets, air way bills, cargo bills, exchange orders, refunds and other
records relating to sales and refund activity pertaining to Contractor's United
Express Services and (ii) all financial records related only to
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Contractor's United Express Services pertaining to the actual costs for services
provided by Contractor to United as well as the calculation of the rates and
margin payable to Contractor related to Contractor's United Express Services.
Notwithstanding the foregoing, at any time, United, or an outside 3rd party
contracted by United, may conduct on-site audits of all records (including, but
not limited to, work papers of accountants) relating to Pass Through Costs
pertaining to Contractor's United Express Services.
I. ADVERTISING AND PROMOTIONS
1. TRAVEL CERTIFICATE PROGRAM
United will allow Contractor to accept, and Contractor agrees to
accept, United/United Express Amenities, Promotional Discount(s) and/or Free
Travel Certificates on Contractor's flight segments, whether or not in
conjunction with a United flight segment.
2. RIGHT TO ADVERTISE USING MARKS
To the extent Contractor is licensed to use the Marks, Contractor
may in its capacity as a United Express Carrier and at its sole expense, with no
reimbursement from United, use the marks to advertise Contractor's United
Express Services. However, any and all such advertisements using one or more of
the United Marks will identify United as the owner of those United Marks
(including in any state company name registrations required of Contractor), and
to the extent that any Xxxx is registered, will so specify. Notwithstanding the
above, no advertisement, solicitation, document or other material using any
United Xxxx will be published or otherwise promulgated without United's prior
inspection and approval. No advertising that relates in any way to United,
United Express or Contractor's United Express Services will be placed by
Contractor with an outside advertising agency unless United has given its prior
consent regarding copy, layout and the specific media plan. In addition, where
United has agreed to share the costs of any such advertising, Contractor will
obtain the prior consent of United regarding the funds to be expended for such
advertising.
3. PRIOR APPROVAL OF UNITED
Contractor agrees that it will not use (or attempt to register) any
United trade name or service xxxx, including, but not limited to, the names
"UNITED AIR LINES, INC.," "UNITED AIRLINES," or "UNITED," or United's logo in
any advertising, or other document or material without first obtaining United's
prior approval of each such use.
J. AUTOMATION
1. USE AND PROTECTION
Contractor will use internal United Apollo Services automation.
Contractor agrees to comply with and abide by all terms and restrictions imposed
by United on the use of Apollo Services and associated Automation Equipment, as
defined below.
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Contractor agrees that all instructions, procedures and manuals provided by
United in connection with Contractor's use of Apollo Services and Automation
Equipment ("AUTOMATION INFORMATION") are and will remain the property of United.
Contractor acknowledges that Apollo Services contains software that is
confidential and proprietary information of United or its affiliates (such as
Galileo International) or any successor thereto. Contractor further agrees that
it will not (or cause any third party to) duplicate, copy or otherwise reproduce
any such software or Automation Information or furnish or disclose any such
software or Automation Information to any other party or to Contractor's
employees other than such employees who have a need to know and who are aware of
and understand the confidential and proprietary nature of the software and
Automation Information.
2. INSTALLATION AND TRAINING
United shall install or cause to be installed a minimum of one
terminal plus associated equipment for printing messages, data, air tickets,
boarding passes and baggage tags ("AUTOMATION EQUIPMENT") at Contractor's
airport locations and selected administrative locations. United will determine,
in the exercise of its sole discretion and judgment, the necessity and
feasibility of installing and upgrading Automation Equipment, so long as the
quantity and quality of Automation Equipment installed at Contractor's airport
locations are sufficient to permit Contractor to satisfy the standards for
Contractor's United Express Services under this Agreement. Any and all
modifications, enhancements, improvements or developments pertaining to the
Automation Equipment, or other new related technology, may be made available to
Contractor by United, in its sole discretion, under terms and conditions to be
determined by United on a case-by-case basis. United will train Contractor's
instructors, as applicable, in the proper use of Apollo Services and Automation
Equipment as described in the Customer Service/Reservations Handbook or any
other related United guidelines. Contractor agrees to establish a training
program with internal instructors. Only qualified personnel who have
satisfactorily completed a United prescribed training program will be permitted
to operate any Automation Equipment (hereinafter "DESIGNATED USERS"). United
may, at its discretion, monitor or test the proficiency level of Designated
Users. If United determines that their proficiency levels are insufficient for
the proper use of the Automated Equipment or Apollo Services, then Contractor
must arrange for its Designated Users to undertake any further training which
United determines necessary to bring such Designated Users to the desired
proficiency level.
3. STANDARDS OF USE
a. To maintain an effective interconnection between Apollo
Services and the Automation Equipment and to prevent misuse thereof, Contractor
agrees that Apollo Services and the Automation Equipment will be used and
operated (a) in strict accordance with operating instructions provided by United
or its affiliates in the Customer Services Policies and Procedures, United's
Computer Security Regulations (Series 5-18), and any other related United or
affiliate guidelines, and (b) solely for the performance of the specific
business functions designated by United. Any undesignated business use and all
non-business uses are strictly prohibited. Prohibited uses include,
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but are not limited to, personal messages, servicing subscribers, travel
agencies, or any other third party, training any other party or any other use
designated as prohibited in the Apollo Services Manual. Contractor will maintain
a list of all employees and agents who have access to Apollo Services and their
assigned file numbers and passwords. United may at any time deny access to
Apollo Services to any employee of Contractor if such employee is found by
United to have abused Apollo Services or the Automation Equipment. Contractor
will take all precautions necessary to prevent unauthorized operation or use of
Apollo Services and the Automation Equipment.
b. Contractor will not alter or change the Apollo Services
display as provided by United or its affiliate without the written consent of
United. Contractor may not provide Apollo Services or its database to any other
person or entity without the written consent of United.
c. Except as expressly permitted in this Agreement or other
written agreement with United, Contractor will not cause any Apollo Services
(including, but not limited to, its software, data bases, intellectual property,
and customer information) to be used (as a basis for any software development or
otherwise), commercially exploited, copied, redistributed, retransmitted,
published, sold, rented, leased, marketed, sublicensed, pledged, assigned,
disposed of, encumbered, transferred, or otherwise altered, modified or
enhanced, without the express written permission of United.
d. Contractor will not engage in any speculative booking or
reservation of space for any airline, hotel, rental car company, or any other
vendor's service or product available through Apollo Services.
4. MAINTENANCE, REPAIR AND MODIFICATION
a. United will provide or cause to be provided to
Contractor repair and maintenance services required for the Automation Equipment
at United's expense. To maintain an effective interconnection between the
Automation Equipment and Apollo Services and to preserve the functional
integrity of the Automation Equipment, neither Contractor nor any third party,
other than a third party designated by United, will perform or attempt to
perform maintenance, repair work, alterations or modifications, of any nature
whatsoever, to the Automation Equipment. Contractor will provide free positive
space travel on Contractor's flights for United's Computer Terminal Technicians
or replacements when such travel is for the purpose of repairing Apollo Services
or any Automation Equipment.
b. Contractor will reimburse United for the costs of any
such repairs or maintenance attributable to Contractor's willful misconduct,
gross negligence, or persistent, negligent acts or omissions.
c. United or its designee will have the right to enter upon
any Contractor location during Contractor's business hours for the purpose of
monitoring Contractor's operation of the Automation Equipment and Apollo
Services, inspecting the Automation Equipment, performing such repairs or
maintenance as may be necessary or removing the
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Automation Equipment; provided, however, that United will not during the course
of such monitoring, inspection, repair, or removal unreasonably interfere with
Contractor's business.
5. DOWNTIME
United will notify Contractor of any scheduled or pre-announced
downtimes of Apollo Services.
6. NO WARRANTY; RELEASE
a. UNITED MAKES NO WARRANTY, EXPRESS OR IMPLIED, INCLUDING,
WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE WITH RESPECT TO THE AUTOMATION EQUIPMENT OR APOLLO SERVICES.
b. CONTRACTOR HEREBY WAIVES AND RELEASES UNITED AND ITS
AFFILIATES, AND THEIR SUCCESSORS FROM ANY AND ALL OTHER OBLIGATIONS AND
LIABILITIES AND ALL RIGHTS, CLAIMS AND REMEDIES OF CONTRACTOR AGAINST UNITED OR
ITS AFFILIATES, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, DUE TO ANY
DEFECTS, ERRORS (INCLUDING, WITHOUT LIMITATION, ANY ERRORS IN RESERVATIONS
AVAILABILITY RECORDS), MALFUNCTIONS OR INTERRUPTIONS OF SERVICE TO APOLLO
SERVICES OR THE AUTOMATION EQUIPMENT, INCLUDING ANY LIABILITY, OBLIGATION,
RIGHT, CLAIM OR REMEDY IN TORT, AND INCLUDING ANY LIABILITY, OBLIGATION, RIGHT,
CLAIM OR REMEDY FOR LOSS OF REVENUE OR PROFIT OR ANY OTHER DIRECT, INDIRECT,
INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES.
7. OWNERSHIP AND LIENS
It is understood and agreed that: (i) all Automation Equipment will
remain the sole property of United; (ii) Contractor will not remove any
identifying marks from any Automation Equipment; (iii) Contractor will not
subject the Automation Equipment to any lien or encumbrance; and (iv) Contractor
will return the Automation Equipment to United immediately upon the termination
of this Agreement.
K. OTHER SUPPLIES
1. Contractor will pay United, for United's * for all forms,
documents, papers and supplies which are required in the normal course of
Contractor's United Express Services under this Agreement and which are
furnished by United or its designated vendors including;
a. Baggage tags and ticket wallets at Joint Locations and
United Locations, and
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b. Passenger ticket stock, city timetables, United airway
bills, United cargo bills and other shipping documentation at Contractor
Locations, United Locations and Joint Locations.
2. Contractor will provide and only use United's flight
interruption manifests, unless directed to do otherwise, for the rerouting of
passengers resulting from denied boarding or the delay or cancellation of
Contractor's United Express flights.
3. United shall issue an invoice to Contractor for all supplies
purchased from United, however such expenses shall be paid through the ACH and
the invoice to Contractor will be net of cash received by United via ACH.
L. CONTRACTOR ASSISTANCE
Contractor will furnish United with all information in Contractor's
possession or that can be reasonably produced by Contractor that United may
require to carry out the services and functions contemplated by this ARTICLE
III.
IV. AIR SERVICES TO BE PROVIDED BY CONTRACTOR
A. SCHEDULES AND CHARTERS TO BE OPERATED BY CONTRACTOR
1. UNITED EXPRESS SCHEDULE
a. Commencing on the Effective Date of this Agreement,
Contractor will provide Contractor's United Express Services in the markets
determined by United. At least * prior to the start of operations, United will
provide an initial list of city pairs and flight schedules. Contractor and
United will determine a mutually viable ramp-up plan for implementation of
service. United acknowledges that other contractual restrictions limit
Contractor's ability to provide United Express service in Phoenix, Arizona.
b. Subsequently, United will provide at least * notice of
any planned schedule changes. United may under extraordinary circumstances
provide less than * notice on city pairs to be served, which Contractor shall
use reasonable efforts to accommodate.
c. United agrees that all flight schedules for Contractor's
United Express Services will provide sufficient aircraft routings to ensure
Contractor's ability to rotate aircraft in and out of its current or future
maintenance bases for required line maintenance at no additional cost to United.
United acknowledges Contractor may require additional maintenance facilities to
accommodate its maintenance requirements. These facilities, if constructed, will
result in no additional expense to United.
2. CODE SHARE LIMITATION
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As of the date of this Agreement, but subject to Contractor's
existing contractual code-share agreements, Contractor represents that it does
not plan, nor will it, operate pursuant to a marketing or code share
relationship in a hub operation with any party other than United at the
following airports: * for the term any binding Agreement. Contractor may,
however, fly to aforementioned airports under codeshare or marketing
relationships from another carrier's hub (other than from aforementioned
airports) as a `spoke service'. In the event that Contractor acquires another
entity during the course of this agreement with marketing or codeshare
operations at any of the aforementioned airports, United agrees to allow
Contractor to continue operations at such airports at levels of operations
consistent with the acquirees right of operation at the time of acquisition. In
addition, Mesa will use commercially reasonable efforts to amend its existing
contractual commitments to provide for the above Codeshare Limitations.
3. UNITED SCHEDULE CONSENT REQUIRED
United hereby gives its consent for Contractor to operate its
scheduled air service as a United Express carrier only between the cities
mutually agreed upon by Contractor and United. Such city pairs may be changed or
withdrawn by United from time to time subject to (i) a minimum of * prior
written notice to Contractor, and (ii) compliance with any regulatory
requirements with respect to service to affected airports. Contractor will
ensure that any of its requests for changes in the use by Contractor of the "UA"
or "UA*" code on future routes or in the flight frequencies or city pairs, or
any of them, as operated or served by Contractor (whether necessitated by
altered connections, operating experience or other reason) must be submitted to
United at least * prior to the effective date of such change. All such changes
must be approved in advance by United. The requests for such changes, and the
approvals thereof, must be made in writing, by mail, facsimile, telegram,
telecopy or other electronic message transmittal. If upon review of Contractor's
request, the parties mutually agree to make a Contractor requested change, and
the automation equipment needed to implement the change is available, then such
change will be made as soon as reasonably practicable within the aforementioned
* period. Within the operating capability of the aircraft used by Contractor, as
described in ARTICLE IV.B, and subject to the provisions with respect to changes
in city pairs as provided above, Contractor will comply with all requests by
United to increase, decrease or in any other way adjust or terminate the flight
frequencies or city pairs, or both, as operated and served by Contractor
pursuant to this Agreement.
4. CHARTER
Contractor shall be prohibited from providing charter flights in any
aircraft used in Contractor's United Express Services, without the prior written
consent of United, which consent shall not be unreasonably withheld. Contractor
shall be permitted to retain all revenues from such approved charters. However,
Contractor agrees to pay United a fee of $* per block hour for use of any
chartered RJ-50 aircraft, $* per block hour for use of any chartered RJ-70
aircraft, and $* per block hour for use of any chartered TurboProp aircraft
covered under this Agreement (both United liveried and
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spare aircraft). However, in the event that the charter is for a legally
registered, 501-(C)(3) (not for profit) charity, Contractor agrees to provide in
writing to United the name of the charity and United agrees to waive the entire
per block hour fee for up * annual round trips, in the aggregate of charities.
In the case of each such charter, Contractor hereby agrees that it will not (and
it will not permit others to) operate, promote or otherwise market the charter
under the United Express name, the UA or UA* designator code or any other United
Marks or identification (excepting only the unavoidable use of United Express
liveried aircraft and permanent airport signage). Contractor shall provide
written notice to United of any charter flight using aircraft used in
Contractor's United Express Services prior to the later of (i) the * prior to
the date of such charter flight or (ii) * business days after Contractor's
receipt of the request for such charter flight. Contractor agrees not to provide
any charter flight using aircraft used in Contractor's United Express Services
if United provides written notice to Contractor stating that United elects to
require that Contractor not provide such charter flight, so long as Contractor
receives United's notice prior to the * business day after United's receipt of
Contractor's notice.
5. CHANGES INPUT TO RESERVATIONS SYSTEMS
Changes to Contractor's schedules as set forth in this ARTICLE IV
and which otherwise are in accordance with the terms and conditions of this
Agreement will be submitted by Contractor for input into United's internal
reservations system and computerized reservations systems. At no time may
Contractor make any changes to flights operated by United or any other carrier.
6. OPERATING COMMITMENT
Contractor agrees to operate Contractor's United Express Services in
order to provide air transportation services scheduled pursuant to this ARTICLE
IV. (as modified from time to time) throughout the term of this Agreement.
B. AIRCRAFT TO BE USED
1. AIRCRAFT TYPES.
Unless otherwise agreed by United, Contractor will provide
Contractor's United Express Services with the type and amount of aircraft set
forth in APPENDIX A and under the terms and conditions of ARTICLE II.B.2. The
aircraft will be scheduled, taking into account heavy scheduled maintenance
requirements and the spare ratio indicated in ARTICLE IV.B.2 below unless
otherwise outlined in APPENDIX A.
1. In accordance with the terms and conditions of this
Agreement, Contractor is authorized to fly the following aircraft under
Contractor's United Express Services:
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a. * BOMBARDIER DASH-8-200 aircraft, which Contractor
shall cause to be delivered in a consistent with APPENDIX A and under
the terms and conditions of ARTICLE II.B.2;
b. INITIAL * CRJ-700 aircraft, which Contractor shall
cause to be delivered in a timeline consistent with APPENDIX A and under the
terms and conditions of ARTICLE II.B.2;
c. * CRJ-200 aircraft, which Contractor shall cause
to be delivered in a timeline consistent with APPENDIX A and under the terms and
conditions of ARTICLE II.B.2;
d. * REPLACEMENT CRJ-70S aircraft, which Contractor
shall cause to be delivered in a timeline consistent with APPENDIX A and under
the terms and conditions of ARTICLE II.B.2;
e. Options on another * RJ-50s and/or RJ-70s to be
delivered pursuant to a mix and delivery schedule to be agreed upon by
Contractor and United.
2. TECHNICAL SPECIFICATIONS
a. The aircraft and any replacement aircraft utilized by
Contractor pursuant to this ARTICLE IV.B will bear those United Marks which are
expressly designated by United, whether included on APPENDIX A or otherwise
established by United. United acknowledges for operational reasons Contractor
may operate one Contractor TurboProp white tail aircraft under this Agreement.
Any white tail aircraft covered in this Agreement shall be used solely for
United Express service unless another aircraft of equal or greater capability
and capacity is substituted for the white tail. If the substitution is expected
to exceed * days, Contractor shall provide written notice thereof to United.
Technical specifications covering aircraft colors, schemes, United Marks and
other elements of exterior and interior aircraft decor will be provided to
Contractor by United. Except as provided herein, Contractor will have all
aircraft used to provide Contractor's United Express Services painted and
decorated with the exterior and interior color decors and patterns specified by
United at Contractor's sole expense. In accordance with the technical
specifications referenced in this ARTICLE IV.B.1, Contractor will be responsible
for maintaining all of its aircraft.
b. In addition to the use of the United Marks on its
aircraft, Contractor will use and display a suitable sign or insignia on the
exterior of its aircraft that identifies Contractor as the operator of the
services being provided pursuant to this Agreement. The use and display of such
sign or insignia will be subject to the prior written approval of United as to
its nature, size and location on Contractor's aircraft.
3. AIRCRAFT COMMUNICATIONS ADDRESSING AND REPORTING SYSTEM -ACARS.
i. TURBOPROPS: Contractor is required to use an ACARS system on
all United Express regional jet flights for the purpose of providing timely and
accurate Flight
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Information (FLIFO). All aircraft delivered on or after * must be delivered with
ACARS already installed. *.
ii. REGIONAL JETS: Contractor is required to use an ACARS system
on all United Express regional jet flights for the purpose of providing timely
and accurate Flight Information (FLIFO). *.
For each month and each aircraft that Contractor fails to install ACARs in
accordance to the timeline described in this ARTICLE IV.B.3, Contractor shall
pay to United a sum of $* per aircraft per month. Such payment shall be made as
an offset to the monthly reconciliation process.
4. SPARE AIRCRAFT.
TURBOPROPS: Pursuant to this Agreement, a spare or substitute
turboprop aircraft shall be allocated from the aircraft fleet referenced in
Article IV.B.1 such that the ratio of "aircraft in schedule" divided by
"aircraft in fleet" shall not exceed *, unless otherwise indicated in Appendix
A. This is equivalent to a * spare for every * turboprop aircraft. Such spare
aircraft can be used as a last resort to accommodate passengers and may not be
branded in the interior or exterior with the United Express decor or patterns at
the discretion of Contractor.
REGIONAL JETS: Pursuant to this Agreement, a spare regional jet
aircraft shall be allocated from the aircraft fleet referenced in Article IV.B.1
such that the ratio of "aircraft in schedule" divided by "aircraft in fleet"
shall not exceed * for all jets (RJ50s and RJ70s combined). This is equivalent
to * spare for every * regional jet aircraft (RJ50s and RJ70s combined). For the
purpose of determining when the operational spare shall enter into service,
Contractor shall have at least * of the * aircraft required for each spare in
service, unless otherwise determined by United. In other words, the first and
second spare can not enter service before the * or * aircraft, respectively. All
Regional Jets, including spares, must be branded in the interior and exterior
with United Marks and decor.
MAINTENANCE SPARES: From time to time, Contractor may require an
additional aircraft removed from schedule for heavy maintenance. Contractor
agrees to use commercially reasonable heavy maintenance schedules and agrees to
advise United at least * prior to heavy maintenance commencing for each
aircraft.
5. SUBSTITUTE AIRCRAFT: In addition to the aircraft authorized by
Article IV.B.1 above, if requested by United, Contractor will use reasonable
efforts to arrange for and make available for its use such substitute aircraft
as are required to effectively maintain Contractor's United Express Services. If
Contractor is unable to operate any flights in its schedule for Contractor's
United Express Services with aircraft bearing United Marks, Contractor will
notify United of such event and the circumstances of Contractor's inability to
so operate and Contractor will be permitted to operate an aircraft
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bearing different elements of aircraft decor than those specified above. If such
operations extend beyond a continuous * period, Contractor must seek and obtain
United's approval for such aircraft substitutions; provided that if Contractor
purchases or leases a used aircraft that does not contain appropriate United
Marks, Contractor will notify United and Contractor may, with the approval of
United, operate such aircraft, so long as such aircraft does not display the
brand name or trademark of any other air carrier (other than Contractor).
6. XXXX CHANGE:
United may from time to time change the Marks to be used for United
Express Carriers. At any time during the term of this Agreement, and in the sole
discretion of United, Contractor may be required to use such new or different
Marks, external or internal color decors and patterns on its aircraft and
uniform design as United may determine and to discontinue use of old marks,
external and internal color decors and patterns, and uniform designs. Upon
written notice from United, which will include the specifications for any such
changes in Marks or exterior or interior aircraft decor and patterns or uniform
designs, Contractor will effect such changes in accordance with the schedule
mutually agreed to by the parties. United will pay all costs incurred in
complying with the requirements established in this paragraph.
C. INVENTORY
United will have the sole right to use, set and control availability,
levels and use of all seat inventory for the aircraft used by Contractor in
Contractor's United Express Services. United will take all revenue and inventory
risk and will maintain inventory and pricing responsibility. Contractor is
prohibited from providing positive space leisure travel, or any other confirmed
leisure travel that requires removal of a seat from inventory, to any person
other than the positions outlined in APPENDIX J, on Contractor's United Express
flights without the prior written consent of United. All positive space and
leisure travel must be ticketed on United approved ticket stock with
Contractor's full IATA serial and ticketing numbers. Positive space travel is
permitted for Contractor's and United's employees for actual business purposes,
including deadheading flight crews, and for Contractor's employees and Eligibles
in emergency situations only. Contractor may not issue positive space business
travel to anyone other than Contractor's own employees. If in any way whatsoever
Contractor issues tickets in violation of this provision in any form, within *
years of each such violation, Contractor may be billed via the ACH, and
Contractor will pay United, the full unrestricted fare for the class of service
provided on such route for any such inappropriate ticketing.
D. FLIGHT CREWS TO BE USED
1. FLIGHT CREW
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All of Contractor's United Express Services will be operated with
crews consisting of a captain or pilot, and a first officer or co-pilot. All
such crew members will at all times meet all currently applicable governmental
requirements, as such requirements may be amended from time to time during the
life of this Agreement, and will be fully licensed and qualified for the
services to be performed hereunder. In addition, each of Contractor's captains
will hold a current Airline Transport Pilot Certificate and all Flight Crews to
be used in United Express service must be qualified to fly between all city
pairs on the Effective Date of this Agreement. Crewmembers will also meet all
requirements imposed by the insurance policies that are to be maintained
pursuant to ARTICLE XII.
2. FLIGHT ATTENDANTS.
Contractor's flight attendants will at all times possess all
necessary training and meet all currently applicable governmental requirements,
as such requirements may be amended from time to time during the life of this
Agreement.
E. INFLIGHT SALES
Contractor may, at United's request, be required to sell beer, liquor and
other goods on flights included in Contractor's United Express Service. Any
additional goods or services Contractor would like to sell are subject to
United's approval. Contractor agrees that such in-flight sales shall be
conducted in a manner consistent with in-flight sales provided on United's
flights. For beer and liquor sales only, Contractor will be solely responsible
for the direct costs associated with such in-flight sales and shall be entitled
to all revenues generated from such in-flight sales. For all other products,
services or food put on the aircraft at United's request, United shall be
responsible for the incremental costs of such products, services or food and
shall be entitled to all of the revenue associated with such products, services
or food. United shall use its commercially reasonable efforts to assist
Contractor in securing an economical price for the in-flight items.
V. OPERATING RESTRICTIONS
A. UNITED EXPRESS OPERATIONS ONLY
Other than pursuant to this Agreement and except as set forth in APPENDIX
I, Contractor shall not, and it shall ensure that its subsidiaries do not
directly engage, on its or their own behalf or on behalf of a third party, in
the business of providing air transportation between any of the city pairs set
forth in APPENDIX B.
B. NO OPERATION OUTSIDE AGREEMENT
Without the prior written consent of United, Contractor will not use any
of the services or facilities (excluding maintenance service or facilities)
afforded to Contractor by United to provide air transportation or related
services to other carriers or affiliates of Contractor without the consent of
United. Contractor will not, without United's prior written consent, permit any
third party, whether under a lease arrangement or otherwise,
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to operate any aircraft bearing the United Marks. Furthermore, Contractor shall
comply with the Code Share Limitations in ARTICLE IV.
C. BREACH OF OPERATING RESTRICTIONS
Contractor acknowledges that United has no adequate remedy at law and
would be irreparably harmed were Contractor to breach or threaten to breach the
provisions of this ARTICLE V.C and, therefore agrees that United shall be
entitled to injunctive relief to prevent any breach or threatened breach of this
ARTICLE V.C, and to specific performance of its terms, in addition to any other
legal or equitable remedy it may have; provided, further, that Contractor shall
not raise the defense that United has an adequate remedy at law in any equity
proceeding involving it relating to this ARTICLE V.C.
VI. LICENSE
X. XXXXX OF LICENSE
Contractor will conduct all operations described in ARTICLE IV.A above,
and any additional operations undertaken by subsequent amendment hereto, under
the Marks set forth in APPENDIX A or other marks designated by United pursuant
to this ARTICLE IV.A and subject to ARTICLE IV.B.5. In consideration for the
services to be provided by Contractor under this Agreement, United hereby grants
to Contractor, upon the terms and conditions herein contained, a nonexclusive,
nontransferable right and license to use the United Marks, and Contractor hereby
undertakes the obligation to use the licensed United Marks in connection with
the services to be rendered by Contractor under this Agreement; provided,
however, that at any time during the term of this Agreement, United may alter,
amend or revoke the license hereby granted and require Contractor's use of any
new or different Marks in conjunction with the air transportation services
provided hereunder as United may determine in the exercise of its sole
discretion and judgment.
B. TERMS AND CONDITIONS GOVERNING LICENSE
1. UNITED MARKS.
Contractor hereby acknowledges United's ownership of the United
Marks, further acknowledges the validity of the United Marks and agrees that it
will not do anything in any way to infringe or abridge United's rights in its
marks or directly or indirectly to challenge the validity of the United Marks.
2. SERVICE STANDARDS.
Contractor agrees that, in providing services under this Agreement
in conjunction with one or more of the United Marks, it will comply with all
service quality standards prescribed by United ("UNITED EXPRESS SERVICE
STANDARDS" OR "SERVICE STANDARDS"). United Express Service Standards include,
but are not limited to, United standards for (a) aircraft types, as referenced
in ARTICLE IV, (b) customer service, as set forth in United's Customer Service
Policies and Procedures, (c) minimum customer
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service training requirements consistent with United's customer service
practices and procedures, (d) in-flight amenities and service, (e) aircraft
appearance, (f) Ground Handling Duties, in accordance with ARTICLE III.A.3, (g)
United/United Express safety programs (and Contractor will enter into any
agreements relating to such programs that are similar to those offered to other
United Express Carriers), (h) any other quality control measures designated by
United, as such standards may be prescribed by United from time to time and (i)
customer problem resolution or ("CPR"). As necessary, United will provide
training to Contractor's designated instructors in the requirements of United's
Customer Service Policies and Procedures; provided that United will at its
expense provide a trainer and materials, and United agrees that the Service
Standards prescribed by it will not be unreasonable in light of the facilities
and aircraft available to Contractor. United will have the right, from time to
time, to inspect Contractor's United Express Services to determine if they
conform to the United Express Service Standards. In the event United determines
that Contractor is not in compliance with the Service Standards United will
notify Contractor and Contractor will promptly rectify any such noncompliance.
Failure on the part of United to conduct such inspections will not relieve
Contractor of its obligations to conform to the Service Standards. If Contractor
fails to comply with any part of the Service Standards and such failure is not
corrected as soon as practicable (and, in any event, within *) after
Contractor's receipt of written notice of such failure from United, then United
may, at its discretion, restrict or eliminate Contractor's pleasure travel
privileges, or suspend Contractor's authority to serve city pair markets, or
impose any other nonexclusive remedy, including breach of contract, or other
remedies available to United. Other non-exclusive remedy would include,
requiring Contractor to bear costs in excess of normal guidelines. The United
Express Service Standards are outlined in APPENDIX H, and may be changed by
United upon notice given from time to time.
3. AIRCRAFT GROUND HANDLING PROCEDURES.
In addition, Contractor agrees that in providing Contractor's United
Express Services, it will conform to all of its Aircraft Ground Handling
Procedures. As used herein, Aircraft Ground Handling Procedures include, but are
not limited to, procedures for (a) deicing, (b) handling and (c) other aircraft
servicing measures, as such procedures may be prescribed by Contractor from time
to time. Contractor agrees that all Aircraft Ground Handling Procedures
prescribed by it will be established in compliance with all applicable federal,
state, local and industry regulations as well as any additional procedures which
United may prescribe from time to time. Contractor will obtain any and all
necessary federal, state, local and regulatory approvals of such Aircraft Ground
Handling Procedures. Once all necessary approvals are obtained, Contractor will
provide a copy of its Aircraft Ground Handling Procedures to United. At each
Joint Location and United Location, as necessary, Contractor will train United
employees in the requirements of Contractor's Aircraft Ground Handling
Procedures; provided that Contractor will provide a trainer and materials and
United will pay all other expenses incurred by its employees in connection with
such training. However, Contractor agrees
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to adhere to the United Express Service Standards outlined in APPENDIX H for all
Ground Handing of their United Express flights.
4. LIABILITY FOR OPERATIONS.
Nothing in this ARTICLE VI.B is intended to nor will be construed so
as to relieve Contractor of any liability or to impose any liability on United
for Contractor's United Express Services by virtue of any of United's rights
under ARTICLE VI.B.2 or ARTICLE III.A.3, whether exercised or not.
5. NON-EXCLUSIVITY.
Nothing in this Agreement is intended nor will be construed to give
Contractor the exclusive right to use the United Marks, or to abridge United's
right to use or to license the Marks, and United hereby reserves the right to
continue use of the United Marks and to license such other uses of such Marks as
United may desire.
6. REVERSION OF MARKS.
Upon termination of this Agreement for any reason, the right to use
herein granted for the United Marks will immediately revert back to United, and
Contractor will have no right to use such Marks in any way. Further, Contractor
will, at its sole cost and expense immediately upon termination of this
Agreement, remove all United Marks from its aircraft, its other vehicles, the
uniforms of its personnel, its facilities and from any and all other places or
things controlled or formerly controlled by Contractor.
C. INFRINGEMENT
United will, at its expense, defend, indemnify, release, protect, save and
hold Contractor, its officers, directors, agents and employees harmless from and
against any and all liabilities, damages, expenses, losses, claims, demands,
suits, fines or judgments, including but not limited to attorneys' and
witnesses' fees, costs and expenses incident thereto, which may be suffered by,
accrue against, be charged to or be recovered from Contractor as a result of any
third-party claim that the use by Contractor of any United Xxxx in accordance
with the terms of this Agreement infringes a registered trademark or service
xxxx of any third party in the United States, and will pay all costs, damages
and attorneys' fees that a court finally awards as a result of such claim. To
qualify for such defense and payment, Contractor must (i) give United prompt
written notice of any such claim and (ii) allow United to control the defense of
the claim and all related settlement negotiations and fully cooperate with
United in its defense of the claim and the conduct of any settlement
negotiations. United's obligation hereunder is conditioned on Contractor's
agreement that if any Xxxx becomes, or in United's opinion is likely to become,
the subject of such a claim, Contractor will not dispute that United, at its
option, may either procure the right for Contractor to continue using such Xxxx
or to replace or modify such Xxxx so that it becomes non-infringing. This
ARTICLE VI.C states United's entire obligation to Contractor regarding
infringement or the like.
VII. ADDITIONAL UNDERTAKINGS
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A. BULK PURCHASES
Each party may assist the other in obtaining goods and services useful to
the other party, including, without limitation, fuel, uniforms, supplies and
ground equipment, in a more economical manner. If United identifies
opportunities for cost savings as a result of bulk purchasing on behalf of
Contractor, unless it provides a reasonable reason for not participating
Contractor is obligated to participate in the new cost saving initiative. Prior
to implementing such initiative, Contractor and United shall agree on a
case-by-case basis how to share the benefits of any cost savings initiatives;
provided, however, that absent such agreement in a timely manner and so as to
preclude unnecessary delay in implementation of such initiatives, United and
Contractor shall equally share any monetary savings.
B. FUEL
United, by or through it's subsidiaries, agents or affiliates, shall have
the option to procure fuel and fuel services for or on behalf of Contractor.
Contractor agrees to assist United, its subsidiaries, agents or affiliates in
identifying fuel or fuel service procurement opportunities, to provide data or
analysis pursuant thereto, and to enter into agreements for the provision of
said fuel or fuel services, including any provisions therein, at the direction
of United. United shall use its best efforts to accommodate any operational or
other requirements of Contractor related to fuel or fuel services procured for
or on behalf of Contractor.
C. PURCHASE BY UNITED OF PASS THROUGH COST ITEMS
Pass Through Purchase Rights. United reserves the right to assume the
responsibility for purchasing products and services to be used as Pass Through
Cost items under this Agreement by Contractor.
D. UNIFORMS
Contractor, at its own expense, shall pay for and require all of its
Designated Personnel to wear uniforms which are in the United Express colors and
styles, as approved by United, while performing Contractor's United Express
Services as outlined in APPENDIX H. Contractor agrees that all such Designated
Personnel employed by Contractor shall wear the above-described uniforms. Any
other employees of Contractor who are visible to the public, other than
Designated Personnel, will wear uniforms reviewed and approved by United, which
approval shall not be unreasonably withheld. If United develops or designs new
uniforms for United Express operations, United will cover Contractor's
incremental costs of such new uniforms program.
E. PASSES AND REDUCED RATE TRAVEL
Each party will comply with the terms of a separate agreement between them
under which are granted to the employees of the other party certain passes and
reduced rate pleasure travel privileges. However, United has the right to retain
all revenue
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generated from reduced rate travel, including companion passes, both on United
and United Express operated flights.
F. SIGNAGE
As of the Effective Date, Contractor will display signage advertising its
operations as a United Express Carrier at all Contractor Locations and at those
Joint Locations specified by United. All signage must be approved by United
prior to its use by Contractor, and Contractor shall be responsible for the
acquisition, installation and maintenance of all such signage. The cost of such
signage shall be considered a one-time start up cost for each new station and
shall be considered a Pass Through Cost to be reimbursed by United. Should
United decide to rebrand or change signage requirements beyond the standards
that existed on the Effective Date of this Agreement, United agrees to pay the
incremental costs associated with signage changes as a Pass Through Costs not
subject to Markup.
G. ENVIRONMENTAL
1. With respect to all matters that relate to or may affect the
environment, Contractor agrees to conduct its operations in a prudent manner,
taking reasonable preventive measures to avoid environmental liabilities,
including, without limitations, measures to prevent unpermitted releases to the
environment.
2. Contractor agrees, at its own expense, to conduct its
operations in compliance with all Environmental Laws, including all
environmental rules, regulations, and policies dictated by the applicable
airport authority, including ensuring its employees are trained in the
procedures required to meet all Environmental Laws. United acknowledges that any
Environmental Impact Studies may make it cost prohibitive for Contractor to
operate to certain airports. If flying to certain airports is cost prohibitive
due to Environmental Impact Studies, Contractor may refuse to fly to that
specific airport.
To the extent associated with Contractor's activities
(including those of its agents), Contractor shall be responsible, and will
indemnify United, for any and all environmental liabilities, including, without
limitation, any penalties or costs associated with any enforcement action,
airport authority action, or private claim, any remediation or restoration
costs, any investigation costs, legal or environmental consultant costs, or any
property damage costs.
a. *
H. START-UP COSTS
With regard to Regional Jet aircraft under this Agreement, which are
currently in operation with another airline today, United will pay for those
interior reconfigurations or
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decor changes requested by United. Contractor will pay for the cost of all
exterior changes.
I. AIRCRAFT SUBSTITUTIONS
In the event that a scheduled aircraft is down-gauged to a smaller
aircraft, United will pay the rates hereunder applicable to the smaller aircraft
(i.e. fewer seats) that actually flies the departure. In the event that a
scheduled aircraft is up-gauged to a larger aircraft, United will pay the rates
hereunder applicable to the type of aircraft originally scheduled for departure
for both the originating and any applicable return flight. If United requests in
writing hereunder that a larger aircraft be substituted for a smaller scheduled
aircraft, United will pay the applicable rates for all additional downstream
substitutions that are indirectly a result of the original United requested
substitution. Should such original United Express aircraft substitution result
in indirect substitution downline and United is unwilling to pay for such
indirect substitutions, Contractor has the right to refuse United's original
request for aircraft substitution. Contractor will provide to United copies of
United's requests to substitute aircraft with the normal reconciliation support
materials required from Contractor under the terms of this Agreement.
VIII. RATES PAYABLE TO CONTRACTOR
A. RATES
AS AGREED BY UNITED AND CONTRACTOR:
1. CONSIDERATION
For and in consideration of the transportation services, facilities
and other services to be provided by Contractor hereunder, the right of United
to (i) control all aspects of inventory as described in ARTICLE IV.C, (ii)
receive and retain all air fares, cargo rates and mail charges received by
Contractor and United, and (iii) receive and retain all other revenue received
by Contractor and United as provided in this Agreement, and other valuable
consideration provided under this Agreement, United shall pay Contractor
specified "*" (*) and specified "*" for the * as detailed in APPENDIX D for each
aircraft type.
2. *
Contractor and United agree that the * consists of the cost defined
in Appendix D. All other types of expenses, not defined in APPENDIX D as *
Costs, are considered and defined as *.
3. *
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The * and * are grouped by "*" for each aircraft type in APPENDIX D.
Within each *, are specific kinds or types of expenses as outlined in APPENDIX
D.
4. *
Each *, whether the costs are * or *, is expressed in terms of a
"*." The * express the basic measurement and constitute the driver of costs for
each *. Each * has a specific * as set forth in APPENDIX D.
5. *
As of the Effective Date, for each aircraft type, the parties have
established and agreed to a * which is the *. Hereafter, such rates shall be set
in accordance with the procedures set forth herein. Except as expressly provided
in this Agreement, the parties do not want to perform, and have not provided
for, any additional rate changes, rate negotiations or rate setting process.
6. ANNUAL ADJUSTMENT FACTORS
Effective as of each *, Contractor and United agree to increase or
decrease all * within the * for the ensuing contract year by *. Contractor and
United agree to review the interrupted trip expense * after execution of this
agreement. If Contractor's actual uncontrollable costs are below $* per
passenger, Contractor will reduce this rate to the actual cost for the remainder
of this agreement.
7. CONSUMER PRICE INDEX
"CONSUMER PRICE INDEX" OR "CPI" shall mean the percentage growth in
the Consumer Price Index, U.S. City Average, Urban Wage Earners and Clerical
Workers, All Items (base index year 1982-1984=100) as published by the United
States Department of Labor, Bureau of Labor Statistics. If the manner in which
the Consumer Price Index as determined by the Bureau of Labor Statistics shall
be substantially revised, including, without limitation, a change in the base
index year, an adjustment shall be made by the parties in such revised index
which would produce results equivalent, as nearly as possible, to those which
would have been obtained if such Consumer Price Index had not been so revised.
If the Consumer Price Index shall become unavailable to the public because
publication is not readily available to enable the parties to make the
adjustment referred to in this Section, then the parties shall mutually agree to
substitute therefore a comparable index based upon changes in the cost of living
or purchasing power of the consumer dollar published by any other governmental
agency or, if no such index shall be available, then a comparable index
published by a major bank or other financial institution or by a university or a
recognized financial publication.
8. EXAMPLE
*
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9. AIRCRAFT OWNERSHIP COSTS
a) RJ-70S. Aircraft ownership costs on the * RJ-70s will be
paid in accordance with the contract rate table in Appendix D with a Markup of
*% and will not be subject to either annual escalations or adjustment based on
Contractor's performance against Operating Goals.
b) RJ-50S. Aircraft ownership costs for the * RJ-50s will
be paid in accordance with the contract rate table in Appendix D with a Markup
of *% and will not be subject to either annual escalations or adjustment based
on Contractor's performance against *.
c) TURBOPROPS. Aircraft ownership costs for all turboprops
will be paid in accordance with the contract rate table in Appendix D with a
Markup subject to adjustment based on Contractor's performance against * as a *.
d) CAP. Under no circumstances will United's total
ownership costs on any aircraft (actual costs) exceed $* per month for an RJ-50
or $* per month for an RJ-70. United also reserves the right to finance any
aircraft allocated for United Express service.
10. CARRIER CONTROLLED COST STABILITY.
Except to the extent that any Markup Points (as established in
APPENDIX E) may apply and the * review of station costs after startup (not to
exceed one-time per station), no other increases or additions to the * element
will be made over the life of this Agreement unless provided for in APPENDIX K,
except for annual CPI adjustments which shall take place on the anniversary of
the Effective Date.
11. COMMERCIALLY REASONABLE EFFORTS
Contractor agrees to use commercially reasonable efforts to control
its * and *. Failure to use commercially reasonable efforts to control * shall
be deemed as negligence on the part of the Contractor and may subject such costs
to rejection of payment by United, in which event Contractor waives its rights
to reimbursement of the applicable * items. The parties agree to discuss any
failure by Contractor to use reasonable efforts to control * and *.
12. NON PAYMENT
a. In the event of a Force Majeure or other disruption
resulting in at least a * suspension of greater than *% of Contractor's United
Express scheduled flights, *. In the event a permanent schedule reduction
results from a disruption, *.
b. In the event that Contractor operates a flight departing
more than * late from the scheduled departure time with a load factor of less
than *% on board,
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Contractor shall not be reimbursed for such flight unless specifically requested
to fly such segment by United.
B. OPERATING GOALS
United and Contractor have developed a * ("*") program ("*") that, with
respect to Contractor's United Express operations, is based upon *. Contractor's
performance is evaluated with respect to *. Contractor's * will be used to
determine the amount of * applicable to the * pursuant to the procedures set
forth herein.
1. OPERATING GOALS METHODOLOGY
For * are set forth on APPENDIX E. For *, the Operating Goals shall
be developed using the predetermined methodology set forth below. * for the
calendar year will be established to be effective on each *. Contractor's * are
determined using the following methodology based on United's * for the same
periods:
a. *.
b. *.
c. *.
b. *.
2. GROUND OPERATIONS. In stations, where Contractor does not
provide ground handling services for itself, performance goals as noted in
Article VIII.B will be adjusted such that mishandled bag goals will not apply to
those departures. Subject to United Ground Operations approval, United agrees to
develop by no later than * a reasonable methodology and associated processes and
procedures to identify, quantify, track and report specific incidents where
non-performance of Controllable Completions and On-Time Zero departures is
primarily due to the fault of the Ground Handling Provider. The aforementioned
report will be shared with Contractor. To the extent that Contractor's
performance in stations, where Contractor is not the Ground Handling Provider
for itself, results in a one or more performance level category (categories
being defined as * levels as outlined in APPENDIX E) reduction in Contractor's
applicable * level for all performance metrics for more than * consecutive
months and such Contractor's performance reduction is caused by the Ground
Handling Provider as outlined in the aforementioned report, United agrees to
provide for an equitable resolution process going forward. United agrees that
after *, Contractor's performance criteria used for the purposes of any SECTION
C DEFAULT will be adjusted to exclude incidents of non-performance of * and *
departures primarily due to the fault of the Ground Handling Provider (as
outlined in the aforementioned report).
3. *
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Contractor's *, as defined above in Paragraph 1a-1.d and adjusted
for seasonality using the * in the table in Paragraph 5 below, define the
minimum performance necessary to achieve at least *.
4. PERFORMANCE GRADE WIDTHS
The operating performance values for determining * Performance
Levels will automatically change each year based on Contractor's *. "*" (*)
remain constant and will not be changed over the duration of this Agreement.
These Grade Widths are set forth in the table below, where * are the
Contractor's *:
*
5. EXAMPLE
*
6. SEASONALITY ADJUSTMENT
At the beginning of each year beginning with 2004 goals, after
Contractor's * for the year have been calculated by the methodology outlined
above but before Contractor's * are finalized, Contractor may create the final *
goals by *.
C. MARKUP
For each * and for Contractor's entire United Express operations, except
as specified herein, Contractor's * shall be measured with respect to each of
the *. For purposes of determining Contractor's actual *, Contractor shall only
be held accountable (*) *. To establish the * to be applied hereunder, add
together *. United agrees to meet and work with Contractor in an attempt to find
solutions to remedy any failure by Contractor to meet * under this Agreement for
the other * to the extent it is caused by non-Contractor Ground Handling
Providers who provide Contractor's ground handling services at Contractor
Locations.
D. WIRE TRANSFER AND RECONCILIATION
1. On a monthly basis, Contractor will provide an estimate of its
*, assuming C Performance Level and assuming a *, plus its * which never have a
*. This estimate will be based upon the schedule to be operated during the
upcoming month and shall be provided no later than * prior to the start of the
month in which the wire transfers shall be made. These total costs will be
divided by the number of * in the month and wire transferred by United to
Contractor each *.
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2. Complete Reconciliation of * (and associated *) according to *
paid under Paragraph 1 above as established in accordance with the terms of this
Agreement, shall be completed by United on a *, but no later than * days after
month's end:
a. * Reconciliation - *. On or before the * day after the
last day of each *, Contractor shall submit to United a report detailing actual
operational statistics pertaining to the payment of *, with a content determined
by United, in a format mutually agreeable to United and Contractor. United shall
review Contractor's submission of operating statistics and compare to United's
internal flight information records. United and Contractor agree to discuss any
discrepancies in the operating data and to make reasonable efforts to resolve
all data discrepancies. Failing an amicable resolution, however, payment shall
be based on the lower level of operating statistics, recorded by Contractor or
United.
b. * Reconciliation - *. On or before the * day after the
last day of each *, Contractor will use reasonable efforts to submit to United
documentation sufficient to support its actual expenses for * items, including
copies of invoices. Upon submission of the information, Contractor must notify
United in writing if any 3rd party information is missing from the submission
information, and provide an explanation for the delay. Under no circumstances
will United pay * more than * months after the expense was incurred.
c. Regional Reconciliation of On Time Performance: At the
end of * or another mutually agreeable timeframe, United and Contractor agree to
readjust the annual operating goals for that previous * based on the actual
amount of flying in each region. If this reconciliation results in any amount
due to Contractor or to United, payment will be made accordingly or offset
against current amounts owing. However, the same seasonality adjustment used at
the beginning of the * shall be applied to the revised regional goals.
IX. FEES PAYABLE TO UNITED
A. GOVERNMENT ASSISTANCE
Any direct or indirect assistance received by Contractor as a result of
government assistance or bail-out plans that cover costs not incurred by the
Contractor or revenues that are generated by passengers carried by Contractor
and pertaining to Contractor's United Express operations will be forwarded
directly to United. That amount pertaining to Contractor's United Express
operations will be remitted to United pursuant to proration among all of
Contractor's code-sharing partners based upon available seat miles ("ASM's") or
whatever unit is used by the Government to disburse such aid. If the
aforementioned direct or indirect assistance to Contractor is not associated
with or related to operations or services provided to, or in behalf of, United
in any way, then the aforementioned direct and indirect assistance shall not be
forwarded to United. Should United receive any direct or indirect assistance
related in whole, or in part, to specific
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costs incurred by Contractor related to its United Express operations or
services, but not reimbursed by United under this Agreement, United agrees to
forward such monetary assistance to Contractor. Such amount forwarded to
Contractor by United will be based upon Contractor's United Express operations
and prorated between Contractor and United based upon ASM's or whatever unit is
used by the Government to disburse such aid.
X. MAINTENANCE AND FUELING
United will have no responsibility under this Agreement for maintenance or
fueling of Contractor's aircraft.
XI. U.S. MAIL
United and Contractor agree to cooperate in making bids for mail carriage.
XII. INSURANCE
A. INSURANCE TYPES
During the term of this Agreement, Contractor agrees to procure and
maintain in full force and effect, at its own expense, policies of insurance
with insurers of recognized reputation and responsibility, which provide, unless
otherwise provided in the Aircraft Leases, at a minimum the following insurance:
1 Comprehensive Airline Liability Insurance, including but not limited
to Aircraft Liability, Passenger Liability, Comprehensive General Liability
Insurance, War Risk and Allied perils, including both passengers and other third
parties, Cargo Liability and Baggage Liability Insurance, with combined single
limits for each and every loss and each aircraft of not less than (i) U.S. $*,
or (ii) U.S. $* per available seat or (iii) the limits that Contractor has in
place, whichever is greatest. Any policies of insurance carried in accordance
with this ARTICLE XI will also contain or be endorsed to contain those
provisions set forth in the attached XXXXXXXX X.
0 Xxxxxxxx Xxxx All Risks Insurance, including ground and flight
coverage on Contractor's aircraft, including its engines and all its parts when
installed or temporarily detached from Contractor's aircraft on a
repair-or-replace basis with a deductible United has reasonably deemed
appropriate.
3 Contractor agrees to maintain Workers' compensation in statutory
amounts required by each state in which any work is performed, in whole or in
part; Employers' Liability, with policy limits not less than $* combined single
limit, for all of Contractor's United Express employees. United shall in no way
be liable for any workers' compensation claims paid by Contractor related to any
of Contractor's operations. The Contractor's insurer agrees to waive rights of
subrogation against United with respect to worker's compensation claims.
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4 Contractor agrees to maintain Commercial Automobile Liability
Insurance covering all owned, non-owned leased, and hired automobiles, trucks
and trailers, with policy limits of not less than $* combined single limit per
occurrence to cover Contractor's entire United Express operation.
5 Contractor will be responsible for the first $* of loss or damage to
all automation equipment provided by United to Contractor. Contractor will
evidence property insurance and name United as loss payee.
B. 30-DAY NOTICE
On or before the Effective Date of this Agreement, and not less than *
days and * days notice with respect to war risk, before the expiration or
termination date of any insurance required to be maintained by Contractor under
ARTICLE III.A above, Contractor will furnish United with certificates of
insurance, substantially in the form of the attached APPENDIX F, evidencing
compliance with the foregoing requirements, unless otherwise provided in writing
between the parties.
C. FAILURE TO MAINTAIN INSURANCE
In the event that Contractor fails to acquire or maintain insurance as
herein provided, United may at its option secure such insurance on Contractor's
behalf at Contractor's expense.
XIII. LIABILITY AND INDEMNIFICATION
A. EMPLOYER'S LIABILITY AND WORKERS' COMPENSATION
Each party hereto assumes full responsibility for its employer's liability
and workers' compensation liability to its own officers, directors, employees or
agents on account of injury or death resulting from or sustained in the
performance of their respective service under this Agreement. Each party, with
respect to its own employees, accepts full and exclusive liability for the
payment of workers' compensation and employer's liability insurance premiums
with respect to such employees, and for the payment of all taxes, contributions
or other payments for unemployment compensation or old age benefits, pensions or
annuities now or hereafter imposed upon employers by the government of the
United States or by any state or local governmental body with respect to such
employees measured by the wages, salaries, compensation or other remuneration
paid to such employees, or otherwise, and each party further agrees to make such
payments and to make and file all reports and returns, and to do everything to
comply with the laws imposing such taxes, contributions or other payments.
B. INDEMNIFICATION BY CONTRACTOR
Contractor hereby assumes liability for and agrees to indemnify, release,
defend, protect, save and hold United and its officers, directors, agents and
employees harmless
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from and against any and all liabilities, damages, expenses, losses, claims,
demands, suits, fines or judgments, including but not limited to, attorneys' and
witnesses' fees, costs and expenses incident thereto, which may be suffered by,
accrue against, be charged to or be recovered from United or its officers,
directors, employees or agents, by reason of any injuries to or deaths of
persons, except for injury or death of United employees, or the loss of, damage
to or destruction of property, including the loss of use thereof, arising out
of, in connection with or in any way related to any act, error, omission,
operation, performance or failure of performance of Contractor or its officers,
directors, employees and agents, or of any Ground Handling Provider, regardless
of any contributory negligence either active, passive or otherwise on the part
of United or its officers, directors, employees or agents (but excluding the
reckless and willful misconduct or gross negligence of United or its officers,
directors, employees or agents), which is in any way related to the services of
Contractor contemplated by or provided pursuant to this Agreement, or otherwise.
United will give Contractor prompt and timely notice of any claim made or suit
instituted against United which in any way results in indemnification hereunder,
and Contractor will have the right to compromise or participate in the defense
of same to the extent of its own interest.
C. INDEMNIFICATION BY UNITED
*
D. INDEMNIFICATION RELATED TO GROUND HANDLING SERVICES
Contractor hereby assumes liability for and agrees to indemnify, release,
defend, protect, save and hold each Ground Handling Provider, and its officers,
directors, agents and employees, harmless from and against any and all
liabilities, damages, expenses, losses, claims, demands, suits or judgments,
including but not limited to, attorneys' and witnesses' fees, costs and expenses
incident thereto, which may be suffered by, accrue against, be charged to or be
recovered from such Ground Handling Provider, or its officers, directors,
employees or agents, by reason of any injuries to or deaths of persons (except
employees of Ground Handling Provider or employees of any agent hired by Ground
Handling Provider), or the loss of, damage to or destruction of property,
including the loss of use thereof, arising out of, in connection with or in any
way related to any act, error, omission, operation, performance or failure of
performance of Contractor or its officers, directors, employees and agents,
regardless of any negligence either active, passive or otherwise on the part of
such Ground Handling Provider, or its officers, directors, employees or agents
(but excluding the reckless and willful misconduct or gross negligence of such
Ground Handling Provider or its officers, directors, employees or agents and
excluding such Ground Handling Provider's negligent operation of ground support
equipment to the extent solely of such Ground Handling Provider's
indemnification obligation therefore under the following paragraph), which is in
any way related to the Ground Handling Services. To be eligible for this
indemnity, each Ground Handling Provider will give Contractor prompt and timely
notice of any
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claim made or suit instituted against it which in any way results in
indemnification hereunder, and Contractor will have the right to compromise or
participate in the defense of same to the extent of its own interest. Contractor
acknowledges and agrees that the Ground Handling Providers are third party
beneficiaries of the indemnities provided herein by Contractor, and may bring
legal actions and proceedings (whether administrative, judicial, or otherwise)
in their own names directly against Contractor.
United will cause each Ground Handling Provider to agree to indemnify
Contractor against any physical loss or damage to any of Contractor's aircraft
caused by such Ground Handling Provider's negligent operation of ground support
equipment, provided that such Ground Handling Provider's liability under this
sentence shall be limited to any loss or damage not exceeding $* in respect of
any incident and shall not extend to any loss or damage below $* in respect of
any incident. In the event that Contractor believes the loss or damage to its
aircraft is excessive, United, Ground Handling Provider and Contractor agree to
meet in order to mitigate such loss or damage.
Notwithstanding the foregoing, United shall require all Ground Handling
Providers procure and maintain, at their sole cost and expense, Commercial
Aviation General Liability Insurance including, but not limited to, bodily
injury liability, property damage liability, public liability, premises
liability, products completed operations liability, hangerkeepers liability and
contractual liability in an amount not less than Combined Single Limit (for any
Part 121 Certificated Air Carrier or affiliate of such carrier providing such
Ground Handling Services) any one occurrence of not less than USD $*. Said
insurance shall (i) name Contractor as Additional Insured as its interests may
appear, (ii) Be primary without right of contribution from any insurance carried
by or available to Contractor, (iii) contain severability of interests, cross
liability and breach of warranty clauses in favor of Contractor, (iv) shall
provide for 30 days prior written notice of any cancellation or material change
adverse to the interests of Contractor, (v) contain a waiver of insurers' rights
of subrogation against Contractor. Upon request, all Ground Handling Providers
shall provide Contractor with a Certificate of Insurance evidencing same.
E. CONTRACTOR'S SUPPLIES LIABILITY
Contractor hereby assumes liability for and agrees to indemnify, release,
defend, protect, save and hold United and its officers, directors, agents and
employees from and against any and all liabilities, damages, losses, claims,
demands, suits, fines or judgments, including but not limited to attorneys' and
witnesses' fees, costs and expenses incident thereto, which may be suffered by,
accrue against, be charged to or be recovered from United or its officers,
directors, employees, or agents by reason of any losses or damages incurred on
account of the loss, misapplication, theft or forgery of passenger tickets,
exchange orders or other supplies furnished by or on behalf of United to
Contractor, or the proceeds thereof, whether or not such proceeds have been
deposited in
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a bank and whether or not such loss is occasioned by the insolvency or
bankruptcy of a bank in which Contractor may have deposited such proceeds, other
than a loss caused by a bank to which funds have been transmitted at the express
direction of United. Contractor's responsibility hereunder for passenger
tickets, exchange orders and other supplies will commence immediately upon the
delivery of said passenger tickets, exchange orders, and other supplies into the
possession of Contractor or any duly authorized officer, agent or employee of
Contractor. United will furnish Contractor prompt and timely notice of any
claims made or suits instituted against United which in any way may result in
the indemnification hereunder, and Contractor will have the right to compromise
or participate in the defense of same to the extent of its own interest.
F. UNITED DEFINITIONS
As used in this ARTICLE XIII for purposes of identifying an indemnified
party, all references to United include United's parent company, and any
subsidiary or affiliate of United or its parent company, and their respective
employees, officers, directors and agents. For purposes of this ARTICLE XIII any
passenger who connects in any city from a flight on United or Contractor (the
"CARRYING PARTY") within four (4) hours after the end of such flight to a flight
of the other party (the "CONNECTING PARTY") become passengers of the Connecting
Party when such passenger enters the hold room or waiting area to which they
were deplaned in such city from the Carrying Party's flight to such on-line
city. A passenger of the Carrying Party who does not have a connecting flight
with the other party hereto and prior to entering the hold room or waiting area
after deplaning from the Carrying Party's flight in the Connection City is a
passenger of the Carrying Party. For purposes of this ARTICLE XIII, neither
loading bridges, hallways, stairways, nor ramp areas will be considered part of
the hold room or waiting area.
XIV. REPORTS
A. CLOSE-OUT ENTRIES
Upon departure of each Contractor flight from Contractor Locations and
Joint Locations, close-out entries shall be made by Contractor in Apollo
Services as required by United and as specified in the Standards of Service.
United will use good faith efforts to notify Contractor in writing as soon as
practicable after United determines that Contractor has failed to perform flight
close-out, as outlined above. If Contractor fails * times in any consecutive *
period to perform flight close-out, as outlined above, where such occurrence is
caused by or arises out of an act or omission of Contractor, then upon
notification by United to Contractor, Contractor shall pay United damages of *
for each occurrence over and above the first * occurrences in such * period.
Contractor is accountable for only the flights which are handled at the ticket
counter and gate by Contractor. Such damages shall be United's exclusive remedy
for Contractor's non-compliance with this paragraph. If United fails to notify
Contractor of its intent to seek damages pursuant to this paragraph within four
months after the end of the * period,
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United shall be deemed to have waived its right to seek such damages for
Contractor's non-compliance with this paragraph during such * period.
B. BOARDING INFORMATION
Information reports containing data covering boarding, and other
information agreed to by the parties for Contractor's operations hereunder will
be produced from the close-out entries and provided by United to Contractor on a
monthly basis * after the month end.
C. OPERATING PERFORMANCE
Contractor will furnish to United within * after the end of each month a
detailed report of its operating performance, which report will include
information on Contractor's performance during the preceding month for each of
the items designated by United, including, but not limited to, Operating
Performance Standards and aircraft appearance.
D. INSPECTION
United may inspect Contractor's corporate records and accounts solely
related to Contractor's United Express Services, from time to time, upon
reasonable notice during the life of this Agreement; provided that such
inspections do not unreasonably interfere with Contractor's business.
E. FINANCIAL STATEMENTS
Contractor will furnish to United, (i) within the time frame determined by
the Securities Exchange Commission (SEC) for financial reporting after the end
of the each calendar quarter, unaudited financial statements, including
Contractor's then current corporate balance sheet and profit and loss statement,
and (ii) within * after the end of the Contractor's fiscal year, Contractor's
then current, audited financial statements including, either separately or on a
consolidated basis, the balance sheet and the profit and loss statement,
together with associated footnotes, and a copy of the independent auditor's
report.
F. GOVERNMENT FILINGS
Contractor will be responsible for filing all reports relating to its
operations with the DOT, FAA and other applicable government agencies (other
than any such reports for which United has assumed the responsibility to file
them on Contractor's behalf), and Contractor will promptly furnish United with
copies of all such reports and such other available traffic and operating
reports as United may request from time to time during the life of this
Agreement. To the extent only United is in possession of relevant statistics
used in such reports, United will provide such available statistics to
Contractor as necessary for Contractor to complete these filings. If United
fails to provide such
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statistics to Contractor sufficiently in advance of the applicable deadline for
such filings, and Contractor is unable to submit such filings by the deadline
because of such delay, United will reimburse Contractor for any fines or
penalties incurred by Contractor as a result of its failure to submit such
filings by the deadline.
G. COPY OF GOVERNMENT REPORTS
Contractor will promptly furnish United with a copy of every final report
that Contractor prepares, whether or not such report is filed with the FAA, NTSB
or any other governmental agency, relating to any accident or incident involving
an aircraft used by Contractor pursuant to this Agreement, when such accident or
incident is claimed to have resulted in the death or injury to any person or the
loss of, major damage to or destruction of any property.
H. BENCHMARKING
No greater that once per calendar year, Contractor agrees to participate
in a detailed benchmarking process to be determined by United similar to the one
completed in 2003. United agrees that any aforementioned information, as well as
the one-time audit in ARTICLE III.H.4 will be used for informational purposes
only and not in any manner to become the basis of, or provide justification for,
any rate adjustment not associated with adjustments noted in other parts of this
Agreement.
XV. INDEPENDENT CONTRACTORS AND UNAUTHORIZED OBLIGATIONS
A. INDEPENDENT CONTRACTORS
1. The employees, agents and independent contractors of each
party hereto (the "Employer") engaged in performing any of the services the
Employer is to perform pursuant to this Agreement are employees, agents, and
independent contractors of the Employer for all purposes and under no
circumstances will be deemed to be employees or agents or independent
contractors of the other Party (the "non-Employer"). The Non-Employer will have
no supervision or control over any such Employer's employees, agents and
independent contractors and any complaint or requested change in procedure made
by the Non-Employer will be transmitted by it to the Employer's designated
representatives. In its performance under this Agreement, each party will act
for all purposes, as an independent contractor and not as an agent for the other
party.
2. Notwithstanding the fact that Contractor has agreed to follow
certain procedures, instructions and United Express Service Standards pursuant
to this Agreement, United will have no supervisory power or control over any
employees, agents or independent contractors engaged by Contractor in connection
with its performance hereunder, and all complaints or requested changes in
procedures made by United will, in all events, be transmitted by United to
Contractor's designated representatives. Nothing contained in this Agreement is
intended to limit or condition Contractor's control over its operations or the
conduct of its business as an air carrier, and Contractor and its principals
assume all risks of financial losses which may result from the operation of the
air services to be provided by Contractor hereunder.
45
B. UNAUTHORIZED OBLIGATIONS
1. Nothing in this Agreement authorizes United to make any
contract, agreement, warranty or representation on Contractor's behalf, or to
incur any debt or obligation in Contractor's name ("CONTRACTOR UNAUTHORIZED
OBLIGATION"); and United hereby agrees to defend, indemnify, save, release and
hold Contractor and its officers, directors, employees and agents harmless from
any and all liabilities, claims, judgments and obligations which arise as a
result of or in connection with or by reason of any such Contractor Unauthorized
Obligation made by United or its officers, directors, employees, agents or
independent contractors (other than Contractor) in the conduct of United's
operations.
2. Nothing in this Agreement authorizes Contractor to make any
contract, agreement, warranty or representation on United's behalf, or to incur
any debt or obligation in United's name ("UNITED UNAUTHORIZED OBLIGATION"); and
Contractor hereby agrees to defend, indemnify, save, release and hold United and
its officers, directors, employees and agents harmless from any and all
liabilities, claims, judgments and obligations which arises as a result of or in
connection with or by reason of any such United Unauthorized Obligation made by
Contractor or its officers, directors, employees, agents or independent
contractors (other than United) in the conduct of Contractor's operations.
C. CONTRACTOR OPERATED FLIGHTS
The fact that Contractor's operations are conducted under the United Marks
and listed under the UA designator code will not affect their status as flights
operated by Contractor, and Contractor and United agree to advise all third
parties, including passengers, of this fact.
XVI. DEFAULT AND TERMINATION
A. OPERATIONS DEFAULT
1. If either party becomes insolvent; if the other party is not
regularly paying its bills when due without just cause; if either party takes
any step leading to its cessation as a going concern; makes an assignment of
substantially all of its assets for the benefit of creditors or a similar
disposition of the assets of the business; or if either party either ceases or
suspends operations for reasons other than an ARTICLE XXVI Force Majeure
condition (a "SECTION A DEFAULT"), then the other party (the "INSECURE PARTY")
may terminate this Agreement on not less than * written notice (the "Notice
Period") to such party (the "SECTION A DEFAULTING PARTY") unless the Section A
Defaulting Party immediately gives adequate assurance of the future performance
of this Agreement within the Notice Period by establishing an irrevocable letter
of credit -- issued by a U.S. bank acceptable to the Insecure Party, on terms
and conditions acceptable to the Insecure Party, and in an amount sufficient to
cover all amounts potentially due from the Section
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A Defaulting Party under this Agreement -- that may be drawn upon by the
Insecure Party if the Section A Defaulting Party does not fulfill its
obligations under this Agreement in a timely manner.
2. If bankruptcy proceedings are commenced with respect to the
Section A Defaulting Party and if this Agreement has not otherwise terminated,
then to the extent permitted by the Bankruptcy Court, the Insecure Party may
upon * prior written notice suspend all further performance of this Agreement
until the Section A Defaulting Party assumes or rejects this Agreement pursuant
to Section 365 of the Bankruptcy Code or any similar or successor provision. Any
such suspension of further performance by the Insecure Party pending the Section
A Defaulting Party's assumption or rejection will not be a breach of this
Agreement and will not affect the Insecure Party's right to pursue or enforce
any of its rights under this Agreement or otherwise.
B. COVENANT DEFAULT
If either party (the "SECTION B DEFAULTING PARTY") shall refuse, neglect
or fail to perform, observe, or keep any material covenants, agreements, terms
or conditions contained herein on its part to be performed, observed, and kept
(other than any such covenant or agreement for which this Agreement provides an
exclusive remedy and other than the covenants described in ARTICLE XV.E), and
such refusal, neglect or failure (individually and collectively, a "BREACH")
shall continue for a period of * after written notice to cure such Breach to the
Section B Defaulting Party thereof or such longer period as may be demonstrably
necessary to complete the cure of such failure (but such longer period may not
exceed * after the receipt of the notice to cure) (a "SECTION B DEFAULT") then
the other party may upon * notice to the Section B Defaulting Party terminate
this Agreement. If a notice of Breach is delivered and a notice of termination
is not delivered within * after the end of the * cure period, as applicable, the
other party shall be deemed to have waived its right hereunder to terminate for
the particular occurrence of Breach for which the Section B Defaulting Party
received notice. Notwithstanding the foregoing, if United shall permanently
cease operations as a certificated air carrier, Contractor may give written
notice and terminate the Agreement effective immediately after such cessation of
operations.
C. DEFAULT BY CONTRACTOR
If Contractor shall refuse, neglect or fail to cure or perform any one of
the following conditions, United may give Contractor written notice to correct
such condition or cure such breach, and if any such condition or breach shall
continue for *, or, in the case of ARTICLE XV.C.1 below, * after notice to
Contractor thereof (a "SECTION C DEFAULT"), then United may terminate this
Agreement upon * written notice to Contractor if:
1. Contractor's operations fall below any of the following three
levels for * (in other words, Contractor will not have failed to comply with the
condition in this
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paragraph if it does not fall below any one or more of the following three
levels at any time during a period of *):
a. less than *% Controllable Flight Completion (excluding
cancellations resulting from weather, Air Traffic Control, labor actions, or
from causes solely attributable to United or the station designated ground
service provider);
b. greater than * Mishandled Bags per * passengers
(excluding stations where Contractor does not handle the ramp operations); and
c. less than *% of flight departures are On-Time zero; or
2. Contractor knowingly maintains falsified books or records or
submits false reports of a material nature
If notice of breach is delivered under this Section and a notice of
termination is not delivered within * thereafter, then United shall be deemed to
have waived its right to terminate under this Section for only the particular
occurrence for which Contractor received notice.
D. SIMILAR AGREEMENTS
United may terminate this Agreement with * prior notice (i) if Contractor
or any of its affiliates is in breach of the terms of ARTICLE 0 (Operating
Restrictions) or (ii) if Contractor or any of its affiliates is in breach of the
terms of ARTICLE IV.A.2 (Code Share Limitations) (a "SECTION D DEFAULT"), and
Contractor has failed to cure such breach within * after it occurs. If notice of
breach is not provided within * after United becomes aware of such breach,
United shall be deemed to have waived its right to terminate under this Section
for the particular occurrence of breach for which Contractor received notice.
E. NON-COMPLIANCE WITH STANDARDS
1. If Contractor shall refuse, neglect, or fail to perform or
observe the provisions of the United Express Service Standards or Aircraft
Ground Handling Procedures to be performed, observed, and kept with regard to
one or more city pairs under this Agreement, and such refusal, neglect or
failure shall continue for a period of * after United delivers written notice to
cure such default to Contractor thereof (a "SECTION E DEFAULT") then United may
upon * notice to Contractor terminate this Agreement with regard to the city
pairs involved or as to the entire Agreement at United's discretion. United
acknowledges that except as set forth in Appendix B, United will contract with
the Ground Handling Provider and United shall ensure such Ground Handling
Provider complies with the standards set forth by United.
2. Contractor warrants that it shall maintain compliance with the
requirements of APPENDIX G for the term of this Agreement. Any failure to
maintain such compliance shall immediately be brought to United's attention
together with
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corrective actions taken by Contractor or a correction action plan. In the event
that United or any governmental agency with jurisdiction over the safety
requirements referenced in APPENDIX G provides written notice to Contractor that
it is not in compliance with such requirements (including any new requirements
published by the government from time to time) or any corrective action plan
related thereto (a "SECTION E SAFETY DEFAULT"), and in the absence of any
immediate threat to the safety of persons or property (a "CRITICAL SAFETY
EVENT"), Contractor shall have * (or such shorter period directed by the
relevant governmental agency) within which to cure such default. Should
Contractor fail to cure the Section E Safety Default within the cure period, or
if there exists a Critical Safety Event, United may, in whole or part, suspend
or terminate this Agreement or any terms or conditions impacted by such failure
or Event, without further liability; but, with reservation of all other rights
and remedies available to United.
F. CONSEQUENCES OF TERMINATION
Any termination pursuant to one or more of the provisions of this
Agreement will be without additional liability to the party initiating such
termination and will not be construed so as to relieve either party hereto of
any debts or obligations, monetary or otherwise, to the other party that accrued
hereunder prior to the effective date of such termination. Each party will be
entitled to any and all damages recoverable and remedies under law or in equity
against the other for any breach by the other party of this Agreement,
regardless of whether the non-breaching party elects to terminate this
Agreement;
G. UNITED'S LIQUIDATED DAMAGES
1. If United terminates this Agreement pursuant to the terms of
this ARTICLE XVI, including for Contractor's breach, then Contractor will pay to
United as liquidated damages, and not as a penalty, the *, for each *; provided,
however, that if United secures another carrier to replace Contractor in the
city pairs served by Contractor under this Agreement as a United Express Carrier
at any of the affected stations, or if United determines that United could
replace Contractor without increasing its damages in these city pairs, then the
liquidated damages will be adjusted as follows:
a. *
b. *
c. *
2. For purposes of this Article XV.G,
a. "*" means the *.
b. "*" shall equal *.
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c. The amount of the "*" shall equal the sum *.
d. "*" means the *.
e. "*" means the *.
3. If this Agreement is terminated in a manner such that United
shall have the right to damages under this Article XV.G, United shall, in good
faith and in a commercially reasonable manner, secure another carrier to replace
Contractor and take such other reasonable actions so as to mitigate the damages
owed to United hereunder.
4. The inclusion of this Article XV.G, is not intended to modify,
waive or restrict Contractor's rights to exercise any and all remedies available
at law or in equity for United's breach of this Agreement.
5. The provisions of this Article XV.G, shall not be applicable
to a termination of this Agreement by United pursuant to Article III.C as a
result of Contractor's failure to meet the conditions referenced in Article
XV.C.1; provided, that the exclusion of the applicability of this Article XV.G
to Article XV.C.1 shall not be deemed to be a waiver of any right which United
may have for remedies at law or in equity.
Not withstanding the above, total liquidated damages shall in no case
exceed $* aggregate.
H. RESTRICTED ACTIONS
Contractor shall not take, nor agree to take, any of the following actions
without United's prior written consent: (a) dispose of any of United's assets,
or (b) enter into any agreements with third parties which create liens, claims
or encumbrances on any of United's assets. To the extent that Contractor engages
in, invests in or otherwise is responsible (financially or otherwise) for any
business, activity or operation other than Contractor's United Express Services,
and unless otherwise expressly agreed in writing with United, Contractor will
ensure that the costs and expenses associated with or allocable to such other
businesses, activities or operations are not charged to or recovered from United
in any way.
XVII. ASSIGNMENT, MERGER AND ACQUISITION
A. ASSIGNMENT
This Agreement may be terminated by either United or Contractor (the
"FIRST PARTY") if the other party assigns this Agreement or any of its rights,
duties or obligations under this Agreement (except an assignment of the right to
money to be received hereunder and except to any affiliate of Contractor)
without the prior written consent of the First Party. In the event that this
Agreement is assigned in violation of this ARTICLE
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XVI, without such consent having been given in writing, the First Party will
have the right to terminate this Agreement immediately by telegraphic or written
notice to the other party; provided, however, that a corporate reorganization
that does not result in a material change in the ultimate ownership of
Contractor from the ownership that existed prior to such transaction will not be
considered an assignment as long as all of the entities succeeding to any of the
assets or liabilities of Contractor prior to such corporate reorganization agree
to be bound by this Agreement.
B. MERGER AND ACQUISITION
In the event Contractor merges with, or if control of Contractor is
acquired by, another air carrier, or a corporation directly or indirectly owning
or controlling or directly or indirectly owned or controlled by another air
carrier (a "HOLDING COMPANY"), or a corporation directly or indirectly owned or
controlled by any such Holding Company, United will have the option to terminate
this Agreement without liability to Contractor. Should United elect not to
terminate the Agreement, the Holding Company shall be obligated to comply and
perform under the full terms of this Agreement.
XVIII. CHANGE OF LAW
Notwithstanding anything herein to the contrary, in the event there is any
change in the statutes governing the economic regulation of air transportation,
or in the applicable rules, regulations or orders or interpretation of any such
rule, regulation or order of the DOT or other department of the government
having jurisdiction over air transportation, which change or changes materially
affect the rights or obligations of either party hereto under the terms of this
Agreement, then the parties hereto will consult, no later than * after any of
the occurrences described herein, in order to determine what, if any, changes to
this Agreement are necessary or appropriate, including but not limited to the
early termination of this Agreement. If the parties hereto are unable to agree
whether any change or changes to this Agreement are necessary and proper, or as
to the terms of such changes, or whether this Agreement should be terminated in
light of the occurrences described above, and such failure to reach agreement
continues for a period of * following the commencement of the consultations
provided for by this ARTICLE XVIII, then this Agreement may be terminated by
either party immediately upon providing the other party * prior written notice
of such termination. Any such termination will be without additional obligation
or liability to both parties except that such termination will not relieve
either party of any debt or obligation, monetary or otherwise, accruing
hereunder prior to the effective date of termination.
XIX. TAXES, PERMITS AND LICENSES
A. TRANSACTION TAXES
Contractor agrees to indemnify and hold United harmless from any and all
penalties or interest arising out of any real and personal property, sales and
use,
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occupational, gross receipts, value added, income, franchise and any other
taxes, customs, duties, excise taxes, fees, charges or assessments, of any
nature whatsoever imposed by any federal, state, local or foreign government or
taxing authority upon Contractor or United with respect to Contractor's
performance of this Agreement, or to Contractor's operations, or the equipment
contained therein or services provided thereby, or the revenues derived there
from (except for penalties or interests arising out of any tax upon or measured
by United's revenues, net income or any franchise tax). If a claim is made
against United for any penalties or interest referred to above, United will
promptly notify Contractor and request payment of such claim. If requested by
Contractor in writing, United will upon receipt of indemnity and evidence that
Contractor has made adequate provision for the payment of such penalties or
interest, reasonably satisfactory to United, contest the validity, applicability
or amount of such penalties or interest, taxes and other charges at Contractor's
expense. Contractor shall pay United upon demand for all expenses incurred
(including, without limitation, all costs, expenses, losses, legal and
accountants' fees, penalties and interest) in making payment, in protesting or
seeking refund of such penalties or interest.
B. PAYROLL TAXES
Contractor acknowledges that it is responsible for and will pay to the
appropriate authority, and will indemnify and hold United harmless from, any and
all federal or state payroll taxes, FICA, unemployment tax, state unemployment
compensation contribution, disability benefit payments, insurance costs and any
other assessments or charges which relate directly or indirectly to the
employment by Contractor of Contractor's employees. United acknowledges that it
is responsible for and will pay to the appropriate authority, and will indemnify
and hold Contractor harmless from, any and all federal or state payroll taxes,
FICA, unemployment tax, state unemployment compensation contribution, disability
benefit payments, insurance costs and any other assessments or charges which
relate directly or indirectly to the employment by United of United's employees.
C. PERMITS AND LICENSES
Contractor will comply with all federal, state and local laws, rules and
regulations, will timely obtain and maintain any and all permits, certificates
or licenses necessary for the full and proper conduct of its operations, and
will pay all fees assessed for airport use including but not limited to landing
fees, user airport fees and prorated airport facility fees. Upon sufficient
notice by United, Contractor further agrees to comply with all mandatory
resolutions issued by the Air Transport Association of America ("ATA") and all
non-binding recommended resolutions of the ATA which are adopted by United.
XX. REVIEW
During the term of this Agreement United may, at any time at its
discretion, require a joint review of Contractor's aircraft and facilities to
determine whether Contractor's United Express Services are meeting the
requirements of this Agreement. Such review can include an obligation for
Contractor to respond to reasonable
52
information requests and to provide relevant documents. This review is not
intended nor shall it be construed to relieve Contractor of its responsibility
to provide a quality and airworthy aircraft that satisfies all FAA regulations.
In addition, upon request by United, within * after each calendar quarter United
and Contractor will meet to review Contractor's United Express Services during
the preceding calendar quarter.
XXI. JURISDICTION
With respect to any lawsuit, action, proceeding or claim relating to this
Agreement or any other agreement between United and Contractor (hereinafter, any
such lawsuit, action, proceeding or claim is referred to as a "LAWSUIT"), each
of the parties hereto irrevocably (i) submits to the exclusive jurisdiction of
the courts of the State of Illinois and the United States District Court located
in the City of Chicago, Illinois, and (ii) waives any objection which it may
have at any time to the laying of venue of any Lawsuit brought in any court,
waives any claim that any Lawsuit has been brought in any inconvenient forum,
and further waives the right to object, with respect to any Lawsuit, that such
court does not have jurisdiction over such party. Nothing in this Agreement
precludes either party hereto from bringing Lawsuits in any other jurisdiction
in order to enforce any judgment obtained in any Lawsuit referred to in the
preceding sentence, nor will the bringing of such enforcement Lawsuit in any one
or more jurisdictions preclude the bringing of any enforcement Lawsuit in any
other jurisdiction.
XXII. NOTICES
Any and all notices, approvals or demands required to be given in writing
by the parties hereto will be sufficient if sent by certified mail, postage
prepaid, overnight delivery by a nationally recognized delivery company or hand
delivery, to United, addressed to:
United Air Lines, Inc.
0000 X. Xxxxxxxxx Xxxx
Xxx Xxxxx Xxxxxxxx, Xxxxxxxx 00000
Attn: - Director, United Express
Fax: 000-000-0000
and to Contractor, addressed to:
Mesa Air Group, Inc.
000 X. 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Chief Financial Officer
Fax: 000-000-0000
With a copy to:
Mesa Air Group, Inc.
000 X. 00xx Xxxxxx, Xxxxx 000
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Xxxxxxx, Xxxxxxx 00000
Attn: Vice President & General Counsel
Fax: 000-000-0000
or to such other addresses in the continental United States as the parties may
specify in writing.
XXIII. APPROVALS AND WAIVERS
A. Whenever this Agreement requires the prior approval or consent of
United, Contractor will make a timely request to United therefore and the
consent will be obtained in writing. United will also consider, in its sole
discretion, other reasonable requests individually submitted in writing by
Contractor for United's consent to a waiver of any obligation imposed by this
Agreement.
B. United assumes no liability or obligations to Contractor by
providing any waiver, approval, consent or suggestion to Contractor in
connection with this Agreement, or by reason of any neglect, delay or denial of
any request therefor.
C. Except as otherwise provided for in this Agreement, no failure by
either party to execute any power reserved to it by this Agreement, or to insist
upon strict compliance by the other party with any obligation or condition
hereunder, and no custom or practice of the parties at variance with the terms
hereof will constitute a waiver of such party's right to demand exact compliance
with any of the terms herein. Waiver by such party of any particular default by
the other party will not affect or impair such party's rights with respect to
any subsequent default of the same, similar or different nature, nor will any
delay, forbearance or omission of such party to exercise any power or right
arising out of any breach or default by the other party of any of the terms or
provisions hereof will affect or impair such party's right to exercise the same
or constitute a waiver by such party of any right hereunder or the right to
declare any subsequent breach or default and to terminate this Agreement prior
to the expiration of its term. Subsequent acceptance by such party of any
payments due to it hereunder will not be deemed to be a waiver by such party of
any preceding breach by the other party of any terms, covenants or conditions of
this Agreement.
XXIV. GOVERNING LAW
This Agreement and any dispute arising hereunder, including any action in
tort, will be governed by and construed and enforced in accordance with the
internal laws of the State of Illinois.
XXV. CUMULATIVE REMEDIES
Unless and to the extent as may be otherwise expressly stated in this
Agreement, no right or remedy conferred upon or reserved to Contractor or United
by this Agreement is intended to be, nor shall be deemed, exclusive of any other
right or remedy herein or by law or equity provided or permitted, but each will
be cumulative of every other right or remedy.
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XXVI. FORCE MAJEURE
Neither party shall be liable for delays or failure in performance
hereunder caused by acts of God, acts of terrorism or hostilities, war, strike,
labor dispute, work stoppage, fire, act of government, court order or any other
cause, whether similar or dissimilar, individually or collectively, "Force
Majeure" events beyond the control of Contractor or United. At any time
following a Force Majeure event, United retains the right to reduce *. After *
from the date of the qualifying Force Majeure event, margins shall return to the
originally scheduled amount. Should such a Force Majeure event occur and Mesa's
margins be reduced, United will agree to extend the term of the Agreement by *
from the date of original termination for *.
XXVII. SEVERABILITY AND CONSTRUCTION
A. Each term or provision of this Agreement will be considered
severable, and if, for any reason, any such term or provision herein is
determined to be invalid and contrary to, or in conflict with, any existing or
future law or regulation by a court or agency having valid jurisdiction, such
will not impair the operation of, or have any other effect upon, other terms or
provisions of this Agreement as may remain otherwise enforceable, and the latter
will continue to be given full force and effect and bind the parties hereto, and
said invalid terms or provisions will be deemed not to be a part of this
Agreement.
B. The captions appearing in this Agreement have been inserted for
convenience only and will not control, define, limit, enlarge or affect the
meaning of this Agreement or any of its provisions.
XXVIII. ACKNOWLEDGMENT
A. Each party expressly disclaims the making of, and acknowledges that
it has not received, any warranty or guarantee, express or implied, as to the
potential volume, profits or success of the business venture contemplated by
this Agreement.
B. Each party acknowledges that it has received, read and understood
this Agreement and the Appendices hereto.
XXIX. CONFIDENTIALITY
A. Except as required by law (including federal or state securities
laws or regulations) or by the rules and regulations of any stock exchange or
association on which securities of either party or any of its affiliates are
traded, or in any proceeding to enforce the provisions of this Agreement, United
and Contractor hereby agree not to publicize or disclose to any third party the
terms or conditions of this Agreement or any of the Related Agreements without
the prior written consent of the other parties thereto.
B. Except as required by law (including federal or state securities
laws or regulations) or by the rules and regulations of any stock exchange or
association on
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which securities of either party or any of its affiliates are traded, or in any
proceeding to enforce the provisions of this Agreement, United and Contractor
hereby agree not to disclose to any third party any confidential information or
data, both oral and written, received from the other and designated as such by
the other without the prior written consent of the party providing such
confidential information or data.
C. If either party is served with a subpoena or other process requiring
the production or disclosure of any of the agreements, information or data
described in ARTICLE XXVIII.A or ARTICLE XXVIII.B, then the party receiving such
subpoena or other process, before complying with such subpoena or other process,
shall immediately notify the other party of same and permit said other party a
reasonable period of time to intervene and contest disclosure or production.
D. Upon termination of this Agreement, each party must return to the other
any confidential information or data received from the other and designated as
such by the party providing such confidential information or data which is still
in the recipient's possession or control.
XXX. RELATED AND THIRD PARTY AGREEMENTS
United and Contractor shall enter into agreements listed below in this
ARTICLE XXX (the "RELATED AGREEMENTS"). All such Related Agreements will
automatically terminate contemporaneously with the termination of this Agreement
unless termination shall otherwise be effected in accordance with the terms of
such Related Agreements.
a. Interline/Space Available Employee and Eligible Travel Agreement
(United Contract No. 163648).
b. Emergency Response Services Agreement. (United Contract No.
163649)
c. United Express/Positive Space Employee Travel Agreement (United
Contract No. 163467)
XXXI. ENTIRE AGREEMENT
This Agreement, together with the Related Agreements, including any
Appendices, Attachments and Exhibits attached hereto and thereto, contains the
complete, final and exclusive agreement between the parties hereto with respect
to the subject matter hereof, and supersedes all previous agreements and
understandings, oral and written, with respect to such specific matter and said
Agreement will not be modified, amended or terminated by mutual agreement or in
any manner except by an instrument in writing, executed by the parties hereto.
XXXII. REFERENCES TO TIME PERIODS
All references to the term "YEAR" in this Agreement shall mean contract
year unless specifically stated otherwise. All references to the term "MONTH" in
this
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Agreement shall mean a full calendar month; provided that if the Effective
Date shall be other than the first day of a calendar month, then the first
"MONTH" of this Agreement shall commence on the Effective Date and end on the
last day of the month in which the Effective Date occurs. All references to the
term "QUARTER" in this Agreement shall mean a calendar quarter; provided that
the first "QUARTER" of this Agreement shall commence on the Effective Date and
terminate on the last day of the calendar quarter in which the Effective Date
occurs. Calendar quarters shall be January 1 through March 31, April 1 through
June 30, July 1 through September 30, and October 1 through December 31.
IN WITNESS WHEREOF, the parties hereto have by their duly authorized
officers caused this Agreement to be entered into and signed as of the day and
year first above written.
MESA AIR GROUP, INC. UNITED AIR LINES, INC.
By: By:
--------------------------- ----------------------
Name: Name: Xxxx X. Xxxxxx
------------------------
Title: Title: Sr. Vice President
------------------------
Planning
--------------------
Date: Date:
---------------------- -------------------
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k
APPENDIX A
UNITED MARKS & AIRCRAFT USED IN UNITED EXPRESS SERVICE
UNITED MARKS
UNITED EXPRESS
Stylized UNITED EXPRESS lettering
UNITED EXPRESS colors
Stylized letters UA
Uniform Design
Aircraft exterior and interior color decor
Other United Marks approved by United for use by Contractor
*********
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XXXXXXXX X
CITY PAIRS AND GROUND HANDLING
GROUND HANDLING***
CUSTOMER
SERVICE/TICKET CUSTOMER GROUND
COUNTER* SERVICE/GATES** HANDLING/RAMP RECEIPT/DISPATCH
-------- --------------- ------------- ----------------
ASE Air Wisconsin Air Wisconsin Air Wisconsin Air Wisconsin
COS United United United United
CPR SkyWest SkyWest SkyWest SkyWest
DEN United Contractor Contractor Contractor
DRO Contractor Contractor Contractor Contractor
EGE Contractor Contractor Contractor Contractor
GJT SkyWest SkyWest Contractor Contractor
GUC Contractor Contractor Contractor Contractor
HDN Contractor Contractor Contractor Contractor
JAC Contractor Contractor Contractor Contractor
RAP SkyWest SkyWest SkyWest SkyWest
SAF Contractor Contractor Contractor Contractor
* Includes Small Package Dispatch (SPD)(TM) service.
** Any unique ground equipment which is needed to service Contractor's
aircraft will be provided by Contractor.
*** For purposes of the table above, Contractor, United, or a designated third
party as applicable, shall provide or cause to be provided the designated
services as shown in the table.
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APPENDIX C
CONTRACTOR SUPPORT SERVICES
At all locations not set forth on APPENDIX B where Contractor operates
scheduled air transportation as a United Express Carrier (i.e., Contractor
Locations), Contractor will provide the following minimum services:
(a) Contractor's employees shall be fully qualified personnel to handle
Contractor's operations.
(b) Posting of signage and decor appointment as specified by United.
(c) Adequate check-in areas including passenger waiting room facilities.
(d) Security facilities, personnel and passenger screening procedures as
are required by applicable orders, rules and regulations of the FAA or other
government agencies and those standards specified by United.
(e) Capability of operating Automation Equipment (Apollo Services) for
the purpose of providing passenger processing and operations in the
configuration and under the procedures specified by United.
(f) Baggage handling, delivery and tracing in accordance with procedures
issued by United.
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APPENDIX D
REIMBURSEMENT CATEGORIES & RATES PAYABLE TO CONTRACTOR
* ******
PASS-THROUGH UNIT RATES
********
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DEFINITIONS
FLYING COST DESCRIPTIONS
DESCRIPTIONS OF CARRIER CONTROLLED COSTS
* ******
DESCRIPTIONS OF PASS-THROUGH COSTS
******
GROUND HANDLING COST DESCRIPTIONS
DESCRIPTIONS OF CARRIER CONTROLLED COSTS
******
CATEGORIES OF PASS-THROUGH COSTS
******
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XXXXXXXX X
INCENTIVE PROGRAM & 2003 OPERATING GOALS
* *****
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APPENDIX F
LIABILITY INSURANCE
Issued by:
Date of Issue:
THIS IS TO CERTIFY TO: UNITED AIR LINES, INC.
that Insurers are providing 100% of the following Aircraft Hull & Liability
Insurances:
NAME INSURED:
PERIOD OF INSURANCE:
INSURERS:
POLICY NUMBER:
GEOGRAPHICAL LIMITS: Worldwide Hull War limited to Western
Hemisphere with commercial
insurance; territorial limitations
not defined in FAA policy.
AIRCRAFT INSURED: All aircraft owned or operated by the
Named Insured.
DESCRIPTION OF COVERAGE: Comprehensive Airline Liability
Insurance, Contractual Liability,
including Aircraft Liability,
Passenger , Liability War Risk should
the FAA stop carrying it, including
both Passengers and Other Third
Parties, Cargo Liability and
Comprehensive General Liability,
including Hangarkeepers, Excess
Automobile,Host Liquor Liability,
Personal Injury, and Products
Liability/Completed Operations
coverage. All Risk Physical Damage
Hull Coverage
LIMIT OF LIABILITY Combined Single Limits to be
specified consistent with ARTICLE
III.1. Aircraft Hull All Risk per the
Agreed Value,or up to $* per added
aircraft.
SPECIAL PROVISIONS:
The insurers agree that coverage under this policy, by formal endorsement or
otherwise, is extended to insure all relevant terms and conditions of the United
Express Agreement, subject to the policy terms, conditions, limitations and
exclusions, between Contractor and United concerning Contractor's Aircraft,
(hereinafter referred to as "Agreement"), including, inter alia:
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1. The Insurers accept and insure the Indemnity and Hold Harmless
provisions of the Agreement, subject to the policy terms, conditions,
limitations and exclusions.
2. United, its affiliates, and their respective directors, officers,
employees, agents and indemnitees are named as additional insureds to the extent
of the liability assumed by Contractor under the Agreement, subject to the
policy terms, conditions, limitations and exclusions.
3. The Insurers agree that United shall not be liable for, nor have any
obligation to pay any premium due hereunder, and Insurers further agree that
they shall not offset or counter-claim any unpaid premium against the interest
of United.
4. The Insurers agree that all provisions of this insurance, except for
the limits of liability, shall operate in the same manner as if there were a
separate policy issued to each Insured.
5. The Insurers agree that this insurance shall be primary insurance
without any right of contribution from any other insurance which is carried by
United.
6. The Insurers agree to waive their rights of subrogation against
United, its officers, directors, employees and indemnitees, to the extent the
Contractor has waived and released its rights under the Agreement.
7. The Insurers agree that as respects the interest of United, its
directors, officers, employees and indemnitees, this insurance shall not be
invalidated by any action or inaction of the Contractor, its officers, directors
or employees, and shall insure United, its directors, officers, employees and
indemnitees regardless of any breach or violation of any warranties,
declarations, conditions or exclusions contained in the policy by the
Contractor, its officers, directors or employees.
8. In the event of cancellation for any reason whatever or if any
change of a restrictive nature is made affecting the insurance certified
hereunder, or if this insurance is allowed to lapse due to non-payment of
premium, such cancellation, change or lapse shall not be effective as to United,
its directors, officers, employees and indemnitees for at least * (* in the case
of non-payment of premiums, * notice of cancellation with respect to war risk)
after written notice by registered mail of such cancellation, change or lapse
shall have been mailed to United.
9. With respect to claims or causes of action in favor of United or its
directors, officers, agents or employees, they shall not be considered as
additional insured thereunder.
DATED:
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AUTHORIZED REPRESENTATIVE:
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APPENDIX G
SAFETY STANDARDS FOR UNITED AIRLINES AND UNITED EXPRESS CARRIERS
We have developed common safety standards to evaluate and effectively manage
safety. We will commit to:
Contractor represents and warrants that it is in compliance with the U.S.
Department of Defense (DoD) Quality and Safety Requirements (and any other
applicable governmental quality or safety requirement) and continues to comply
with all applicable Federal Aviation Regulations (F.A.R.). Contractor further
warrants that it shall maintain compliance with these requirements for the term
of this Agreement. Additional safety reviews and audits may be required at
United's discretion and Contractor shall cooperate with all such reviews and
audits.
In addition, Contractor agrees to the following:
- Mutual support of one another in implementing these standards by sharing
safety data, information and expertise.
- Quality maintenance and operations training programs
- A carrier internal evaluation program to monitor key safety issues,
including maintenance practices, required inspection items, technical
document control, dangerous goods handling, training records and
qualifications for all personnel.
- Quality programs to manage outsourcing of services.
- A formalized maintenance quality assurance program.
- Implementation of a program to rectify FAA inspection findings.
- Presence of a voluntary disclosure program.
- Formal process to routinely bring safety and compliance issues to
the attention of carrier's senior management.
- Anonymous safety hazard reporting system.
- A Senior Management policy statement supporting open safety
reporting by employees.
- Director of Safety, reporting to the highest levels of management,
overseeing the carrier's safety programs.
- Process for managing required corrective actions from FAA and
internal audit program as well as employee disclosure.
- Ongoing flight safety education/feedback program.
- Ground safety program in airport operating areas.
- Incident investigation process that includes accountability,
recommendations and actions taken.
- Establishment and maintenance of emergency response procedures and
manual.
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- Participation in UAL/industry safety information exchange forum.
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APPENDIX H
UNITED EXPRESS SERVICE STANDARDS
These Service Standards are meant to provide an overview for United
Express carriers of the service expectations established by United Airlines for
the day-to-day delivery of United's product. This document is not intended to be
an all inclusive manual of regulations, but to instead serve as a simple,
helpful source of information. The Service Standards outlined herein may change
from time to time, subject to the needs of the operation and our product
delivery. Any changes to these standards are at the sole discretion of United
Airlines and are not subject to contractual negotiations. Provided, however, the
parties have agreed to specific performance goals in this Agreement and nothing
shall be altered or changed that otherwise affects the economics of the
Agreement.
It is the responsibility of each United Express carrier to maintain an
adequate number of employees at each location and support group or department
and to operate in a safe and reliable manner, which serves the customer at the
levels of service outlined by these Service Standards.
I. CUSTOMER SERVICE
Uniforms: United Express employees are required to wear the United designated
uniform for Customer Service personnel. There is to be no deviation from this
uniform and it is to be worn at all times while on duty. Employees in uniform,
on or off duty are not allowed to drink intoxicating beverages, give the
appearance of being intoxicated or visit any establishment whose primary purpose
is to dispense liquor (e.g. bars, saloons, cocktail lounges, liquor stores).
"Uniform" refers to any uniform apparel bearing the United brand or insignia, or
which can be in any way identified with United Airlines or United Express.
Because the actions and appearance of employees influence, to a considerable
extent, the public's opinion of the United brand, uniformed employees must be
mindful of this and conduct themselves accordingly. For complete information on
the uniform and accessory items, review the Customer Service Uniform Appearance
Guidelines.
Training: Each United Express carrier is responsible to train all Customer
Service Representative (CSR) employees, including employees of another carrier
who may be contracted to perform these duties, using the same training modules
and computer assisted training provided by United Airlines. This training will
include, but is not limited to, all functional aspects for customer handling at
the ticket counter, gate, or baggage service.
- United Airlines will provide the necessary "Train the Trainer"
support, but it is the responsibility of each United Express carrier
to maintain trainer proficiency, knowledge and skill level.
- Each new hire CSR, or newly assigned CSR, must receive formal United
Express customer service training as soon as possible, but not later
than 30 days after the
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date of employment or date of assignment. In either case, training
must be specific to the employee's job function and task assignment.
An employee may not work in an area in which he or she has not been
properly trained.
- Each CSR must maintain proficiency in product knowledge, delivery
and skill level.
- Each United Express carrier may add to the United training
curriculum to meet its individual carrier needs, but it may not
delete any portion of the United designated curriculum without
written approval by United Airlines.
- All CSRs must complete TL17/17 lessons each week within 7 days of
issuance.
Service Delivery: In the most basic interaction with the customer, United's
service standards encompass the foundation of service, which is: 1) Greet the
customer. 2) Use the customer's name. 3) Listen to the customers and respond to
their needs. 4) Give direction to the next step. 5) Acknowledge the customer's
importance to United and thank them for flying United Express.
Goals:
- Lobby line wait time: 10 minutes
- Jet bridge delivery time: 1 minute
- Meet the inbound aircraft (non-jet bridge locations) and open
aircraft passenger door within 2 minutes of block time.
Service Tools: Customer Problem Resolution, or CPR, was created as a means to
provide customer service employees with the ability to resolve customer problems
on the spot, as they occur. CPR may include certificates for a free drink, a
credit of Mileage Plus miles to a customer's Mileage Plus account, or a Travel
Certificate to be used towards the purchase of future airline tickets. Other
tools may also include accommodation vouchers for hotels, cab/bus, or meals. It
is the responsibility of the United Express carrier to use and manage these
tools within United Airlines guidelines. The United Express carrier is
accountable for the safeguarding and appropriate use of these very important
customer tools. The United Express carriers are responsible for cost associated
with any accommodation vouchers written as a result of Contractor's failure to
complete a flight within 3 hours of scheduled completion time as a result of
mechanical issues or crew delays.
Flight Close Out: All flights must be closed out in Apollo/ACI immediately after
departure. This includes making the appropriate PB, PFS and PD entries. All
passenger counts, including revenue and non-revenue passengers, denied
boardings, as well as an accounting of any bags held off due to weight/space
restrictions, should be noted in the open comments field of the flight close out
message. Flight close out must be completed within 10 minutes of flight
departure.
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Flight Information (FLIFO): All flights must be updated with OUT/OFF/ON/IN times
within ten (10) minutes of actual occurrence to ensure accurate information to
customers and to employees making operational decisions. ETAs and ETDs must also
be entered within ten (10) minutes of the scheduled departure/arrival, and at
every 10 minute interval thereafter for ongoing or rolling delayed flights.
Customer Service Supplies: Each carrier must maintain an adequate amount of
Customer Service supplies to conduct its day-to-day business operation. Each
United Exprss carrier will use United Airlines designated supplies and vendors
and is responsible for the purchase of those supplies, except where United
handles that carrier.
II. RAMP SERVICE
Uniforms: United Express employees are required to wear the United designated
uniform for Ramp Service personnel. There is to be no deviation from this
uniform and it is to be worn at all times while on duty. Employees in uniform,
on or off duty are not allowed to drink intoxicating beverages, give the
appearance of being intoxicated or visit any establishment whose primary purpose
is to dispense liquor (e.g. bars, saloons, cocktail lounges, liquor stores).
"Uniform" refers to any uniform apparel bearing the United brand or insignia, or
which can be in any way identified with United Airlines or United Express.
Because the actions and appearance of employees influence, to a considerable
extent, the public's opinion of the United brand, uniformed employees must be
mindful of this and conduct themselves accordingly.
- In a line station, employees may combine pieces of the customer
service uniform with pieces of the ramp uniform as long as the shirt
or blouse is either the customer service shirt or blouse, or the
ramp knit shirt.
- In a hub station, ramp personal must wear combinations of the United
ramp uniform only.
For a review of the Ramp Service uniform, review the Ramp Service Uniform Guide.
Training: It is the responsibility of each United Express carrier to train its
Ramp Service employees, including employees of another carrier who may be
contracted to perform these duties. This training will include, but is not
limited to, load planning, baggage handling, ramp safety and security, ramp
driving, aircraft familiarization, aircraft servicing, receipt and dispatch of
aircraft, baggage make-up, baggage transfer, claim area delivery, baggage
scanning, live animal handling, dangerous goods, aircraft de-icing, Small
Package Delivery ("SPD") and mail handling.
- Each new hire, or newly assigned Ramp Service employee, must receive
formalized training as soon as possible, but not later than 30 days
after his or her date of employment or date of assignment.
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- Each Ramp Service employee must maintain product and delivery
proficiency, knowledge and skill level.
Baggage Transfer: In a Hub or connecting station, each United Express carrier is
responsible for the transfer of all baggage/mail/cargo to United and other
airlines. Transferred bags are delivered as follows:
- Carry-on (security checked) bags placed in the pit/hold, are to be
removed and delivered to the customers immediately at planeside.
- `City Bags' are to be delivered directly to the baggage claim area.
- `Hot Bags', whose window of time is determined on a local level by
United Airlines, are to be delivered to the connecting flight at the
gate. The gate drop point is to be determined locally by United.
- `Cold Bags', bags outside the Hot Bag window, are to be delivered to
the designated sorter belt or transfer point.
- `Interline Bags' are to be delivered to the designated interline
drop point.
Goals:
- Claim Area Baggage Delivery: Priority Bags delivered First; Last
City bag delivered within 20 minutes of flight Block time
- Scanning: [97%] scanning rate uploaded within 10 minutes of
departure of each flight
- MBTA (Mishandled Baggage Trend Analysis or the ratio of passengers
mishandled per 1000 boarded.): Rates are determined in conjunction
with United's corporate goal on an annual basis
- Message or meter to downline station with the transfer bag loading
placements referred to as XBUE (Express Baggage loading message):
Sent within 10 minutes of the departure of each flight
- Baggage Loading Audits:[ 95%] compliance
Ground Handling: United Express carriers are responsible for obtaining all
applicable federal, state, and local regulatory approvals for conducting
business at each location from which they operate. In addition, carriers will
ensure their ground handling procedures will satisfy all federal, state, and
local regulations. Each carrier will provide United with a copy of its station
and ground handling procedures.
From time to time, it may become necessary for United to ground handle United
Express, or on very limited occasions for United Express carriers to ground
handle United. It is the responsibility of the operating carrier to train the
ground handling carrier in all aspects of the required work to be performed.
Such work may include, but is not limited to:
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- Receipt and dispatch of aircraft, ramp safety, ramp driving,
aircraft differences, aircraft servicing (potable water and
lavatory), aircraft cleaning, towing, baggage handling, baggage
loading and transferring, live animal handling, deicing, weight and
balance, and dangerous goods.
Required training may be done one-on-one, group, or train-the-trainer. In the
case of train-the-trainer, it is then the responsibility of the ground-handling
carrier to train other additional personnel. The ground handling carrier will
ensure that proper training records are initiated, retained and current.
The ground-handling carrier will ensure that all required licenses and logs are
maintained and retained as necessary.
Each carrier is responsible for acquiring its required licenses.
The ground handling carrier will cooperate with any required governmental or
corporate inspection or audit, and will promptly correct any deficiencies found.
The operating carrier is responsible for managing all performance related
criteria. However, the ground handling carrier will make every "best faith"
effort to ensure that all performance requirements are met.
The ground handling carrier agrees to keep the operating carrier informed of any
deficiencies, irregularities and breach of procedures or problems of any type
that may negatively impact the operating carrier or its operating certificate.
The ground handling carrier will immediately advise the operating carrier of any
material change in space, parking location, manpower, or any other shortcoming
that may impact either carrier's operation or costs.
The ground handling carrier will use its own ground equipment wherever possible.
III. IN FLIGHT
Uniforms: United Express Flight Attendants are required to wear the United
designated uniform. There is to be no deviation from this uniform and it is to
be worn at all times while on duty. Employees in uniform, on or off duty are not
allowed to drink intoxicating beverages, give the appearance of being
intoxicated or visit any establishment whose primary purpose is to dispense
liquor (e.g. bars, saloons, cocktail lounges, liquor stores). "Uniform" refers
to any uniform apparel bearing the United brand or insignia, or which can be in
any way identified with United Airlines or United Express. Because the actions
and appearance of employees influence, to a considerable extent, the public's
opinion of the United brand, uniformed employees must be mindful of this and
conduct themselves accordingly. For complete information on the uniform and
accessory items, review the Customer Service Uniform Appearance Guidelines.
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Training: It is the responsibility of each United Express carrier to train its
own Flight Attendants in accordance with its FAA-certified program.
In Flight Service:
- Wherever possible, snack and beverage items should be consistent
with the products served by United Airlines. United acknowledges
that Contractor has priced its rates for inflight service on soda
and pretzel-like snacks. Any changes to this level will require an
adjustment to the catering cost category.
- All in-flight service items, including but not limited to napkins,
cups, and food items, if branded, shall be branded as United
Express. Contractor may, with the prominent use of the United
Express logo, also indicate that the flight is operated by
Contractor.
- Each United Express aircraft will be supplied by United with an
adequate supply of Hemispheres and SkyMall Magazines. United Express
carrier must place these two magazines in the designated seat pocket
of each seat. Hemisphere and SkyMall magazines are the only
magazines authorized in the seat pockets. Exceptions must be
approved in writing by United.
- In all on board announcements, it is appropriate to announce the
United Express carrier's name, but the name "United Express" must be
included. For example, "On behalf of Mesa Airlines, we would like to
thank you for flying United Express today."
- While a contracted carrier provides basic announcements, United may
request that the United Express carrier make promotional
announcements on behalf of United from time to time. Such requests
will be honored and executed by the United Express carrier.
IV. OPERATIONAL GOALS
There are four (4) primary operational Goals that each United Express carrier is
expected to achieve: On-time-zero; Completion (less Weather/ATC/UA Requested
Cancellations); MBTA, and Repurchase Intent. These goals are set at the
beginning of each calendar year and may be adjusted year over year. In addition,
other target goals may be added to help improve the operation, such as: STAR,
Arrival: 14, Block Time, etc. It is expected that each carrier will use
commercially reasonable, but diligent, efforts to achieve these goals, whether
contractual or otherwise. Such goals may be changed or added to by United, as
operational needs demand.
- Controllable Completion: The Controllable flight completion goal
shall be defined as to exclude all cancellations due to weather, ATC
restrictions, acts or omissions caused by United or its employees or
agents, cancellations resulting from emergency airworthiness
directives, and requests made by United to cancel flights to free up
ATC slots. Actual Controllable Completion is the actual number of
completed departures / (divided by) (Total scheduled departures -
(less)
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cancels due to weather ATC, air worthiness directives, acts of
omissions of United and United Requested Cancels )
- On Time Zero: The On Time Zero goal is the carriers system wide On
Time Performance. Actual On Time Zero is the number of On Time
Departures divided by the Total Scheduled Departures.
- Mishandled Baggage-MBTA: (See above definition)
Repurchase Intent (RPI) - Marketrak: United Airlines receives feedback from our
customers through the "Marketrak" survey program on their satisfaction in flying
United Express flights. Each United Express carrier must participate fully in
this program. Ratings for RPI are not compared between carriers. Each carrier's
individual rating is compared to its own historical performance.
Repurchase Intent (RPI): RPI is based upon customer response to their intent to
repurchase or use again United Express services as reflected in the Marketrak
survey. Actual RPI shall be determined by the percentage of customer who
responded on customer surveys that they would "Definitely" or "Most Likely" buy
another ticket on United or United Express.
V. MISCELLANEOUS
ACARS: Each United Express carrier is to use an ACARS system on all United
Express flights for the purpose of providing timely and accurate Flight
Information (FLIFO).
Signage: It is the responsibility of each United Express carrier to provide
appropriate and adequate brand signage, which is designated and approved by
United Airlines. Brand name(s) to be used on signage is as follows:
- United Handled City: All signage will reflect the United Airlines
brand. United Express signs may be used at the departure gate for
United Express flights at the discretion of United.
- Shared United/United Express Handled City: All signage at the ticket
counter will reflect the United Airlines brand. Signage at the
United Express handled gate(s) will reflect the United Express
brand. Signage on the approach to the airport and on the curb to the
airport terminal will primarily reflect United Airlines, but may, if
appropriate, reflect United Express as well.
- United Express Handled City: All signage will reflect the United
Express brand.
It is the responsibility of the United Express carrier to ensure that all
federally mandated signage is in place in accordance with regulations.
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Small Package Dispatch (SPD): United Express carriers will participate in
United's SPD program, accepting SPD shipments at the ticket counter up to 1 hour
prior to the departure of each flight and returning SPD shipments to the
designated delivery point within 30 minutes of the arrival of each flight.
Carrier will accomplish all necessary input of data into United AFIS
system, within required input standards of the following:
BSPD Build Air Waybill - SPD Within 1 hour of acceptance
RAFT Shipment on hand - SPD Within 30 minutes of flight arrival
U.S. Mail: United Express carriers will participate with United in the
transportation of U.S. Mail in accordance with applicable guidelines. Each
United Express carrier will work with United in obtaining USPS Air System
Contracts for United designated market.
Effective 9/28/2003 carriers participating in the CAIR 2003 contract will
be required to scan individual pieces of mail at the following touch points:
possession, load, transfer (if applicable) and delivery. The scanning will be
required for payment and will be the basis for measuring performance.
Performance is by class of mail:
First Class Mail 92%
Priority Mail 95%
Express Mail 98%
Station Operations Center (SOC) - Hub Locations: Each United Express carrier
will provide adequate staffing in the United Airlines SOC of each designated hub
city. Such Staffing will be provided during all normal hours of operation.
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REMAIN-OVERNIGHT ("XXX") CLEANING STANDARDS
WORK TASKS AND STANDARDS MATRIX
AREA - OVERNIGHT CLEAN TASK - OVERNIGHT CLEAN APPEARANCE
------------------------------------- ------------------------------------------------------- --------------------------------
FLIGHT DECK - Remove and replace trash bag - Windshield and glare
- Vacuum the floor and seats shield are clear
- Damp mop non-carpeted floor - Floors, seats,
- Damp wipe inside and outside of dashboard and center console
windshield and glare shield with water free of dust and debris
- Remove debris - New trash bag
- Spot clean ceiling/cockpit door - Clean cup
holders,ceilings,doors
GALLEY - Floor - vacuum and/or mop - Free of dirt and debris
- Remove and dispose of all trash and - Hard surface floors and
leftover service items from storage drains are dry
areas.
- Wash all hard surfaces in galleys:
WATER ALL-PURPOSE CLEANER DISINFECTANT
Coffee Makers Floors, walls, counters Mist
Storage areas Counters & Floors, trash
Drawers receptacles &
compartments
SEATS/JUMPSEATS - Brush crumbs and debris from seat area and floor - Seat area is free of
(Includes all seat parts, i.e., seat - Remove dirt and debris from personal property areas dirt and debris
pocket, tray tables, etc.) - Damp wipe phones - Clean personal property
- Wipe arm and shroud of video screen areas
- Cross seat belts - Seat belts are crossed
- Wash tables with cleaner, dry & disinfect - Tables and hard
- Cross seat belts surfaces are free of dirt and
- Seat back pocket: CORRECT SAFETY CARD placed residue
first in seat back pocket. Replace missing or - Materials are orderly
damaged seat back pocket materials. and in like new condition
- Straighten contents with CORRECT SAFETY CARD in
front
LAVATORY - Wash all hard surfaces with cleaners - Free of dirt, dust and
and mist with disinfectant debris floor to ceiling
- Scrub and clean toilet bowl with - Mirror is clean and
brush and cleaner and reset splash pan streak free
- Wipe all mirrors with glass cleaner - New odor end (if nec.)
- Empty trash, wash container & compartment - Trash compartment and
with cleaner, mist with disinfectant and chute free of debris and door
latch door is latched
- Replace odor end if necessary (fragrance missing)
- Mop floor
OVERHEAD BINS - Remove all debris - Free of debris
- Damp wipe exterior surfaces - Clean exterior surfaces
WALLS, CEILINGS, AIRCRAFT DOOR, - Damp wipe/dry with all-purpose cleaner - Clean, visible surfaces
CONSOLES, WINDOWS
BLANKETS AND PILLOWCASES - Clean in plastic or neatly folded - Clean
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APPENDIX I
Intentionally left blank.
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APPENDIX J
OFFICER POSITION'S ENTITLED TO POSITIVE SPACE LEISURE TRAVEL ON CONTRACTOR'S
UNITED EXPRESS FLIGHTS
* ****
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* Confidential Treatment Requested
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APPENDIX K
REIMBURSEMENT FOR MANDATED CHANGES
GOVERNMENTAL REQUIREMENTS. If any governmental rule, order, regulation, or
requirement affecting: (i) all aircraft similarly equipped as the Aircraft
referenced in Appendix B; or (ii) all airlines flying similar equipment as the
Aircraft referenced in Appendix B (a "MANDATED CHANGE" or "MC"), results in an
incremental increase in any of the Carrier Controlled Costs, per Aircraft, then
United shall bear a part (the "UNITED MC COST") of the per Aircraft cost of
implementing the MC (the "MC COST"), where the MC is issued after the Effective
Date and performed during the Term of this Agreement, but only to the extent as
computed as follows, and where:
1. If MC Cost is equal to or less than $*, Contractor pays *% of MC
Cost, and the formula below is inapplicable.
2. If MC Cost is equal to or greater than $*, the United MC Cost shall
be determined by applying the formula below, where C shall be equal
to the MC Cost * $*.
3. If MC Cost is more than $*, but less than $*, the United MC Cost
shall be determined by (a) first applying the formula below, where C
shall be equal to the MC Cost minus $*, then (b) multiplying this
formula-derived * by the unadjusted MC Cost (stated in $*) and
dividing by *, to yield the final United MC Cost
*****
* is (*) of the total number of (*);
* is the number of (*) (a) starting from either (i) for Mandated
Changes which are to be complied during or prior to the * month
anniversary of this Agreement, of the Term of the Agreement or (ii)
for Mandated Changes which are to be complied with after the * month
anniversary of this Agreement, *, and (b) ending in the month in
which the Mandated Change is complied with;
* is the considered life of the MC in months;
* is the cost of the MC (i.e., the MC Cost), as adjusted in
subparagraphs 2 and 3 above;
* is United's MC Cost.
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* Confidential Treatment Requested
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If a Mandated Change, as issued, has a specific limited life less than *, then
the number of months limiting the life of the Mandated Change shall be
substituted for * in the formula set out above. If the life of the Mandated
Change is related to flight hours and aircraft cycles then a flight-time related
life shall be computed for such Mandated Change as issued based on the average
utilization of the Aircraft.
Contractor shall advise United of each single Mandated Change compliance
requirement, the incremental cost of which is expected to exceed $* per Mandated
Change. United and Contractor agree that the cost of complying with any Mandated
Change shall be based on Contractor's direct (out of pocket) cost therefore and
that United and Contractor shall exercise their best joint efforts to minimize
the cost of such compliance and, if any Mandated Change is proving to be
financially burdensome to either party, to find a mutually agreeable solution to
such financial burden.
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* Confidential Treatment Requested
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