EXHIBIT 10.18
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF
THIS EXHIBIT. THE CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND
ARE DENOTED BY {***}. THE CONFIDENTIAL PORTIONS HAVE BEEN
SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
AADVANTAGE(1) PARTICIPATING
CARRIER AGREEMENT
This AAdvantage(1) Participating Carrier Agreement ("Agreement"), dated as
of the 18th day of January, 1995 is made by and between American Airlines, Inc.,
a Delaware corporation having its principal place of business at 0000 Xxxx
Xxxxxx Xxxxxxxxx, Xxxx Xxxxx, Xxxxx 00000 ("American"), and Midway Airlines
Corporation, a Delaware corporation, having its principal place of business at
0000 X. Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 ("Carrier").
WHEREAS, American has developed a promotional program hereinafter known as
the "AAdvantage Program" (as defined below);
WHEREAS, Carrier desires to participate in American's AAdvantage Program
to allow "Members" (as defined below) to earn "AAdvantage Miles" (as defined
below) for travel on Carrier and to provide "Award Travel" (as defined below) to
Members; and
WHEREAS, contemporaneously herewith, Carrier and American have entered
into an Agreement of Sublease regarding certain gates at Raleigh-Durham Airport;
NOW, THEREFORE, in consideration of the mutual covenants and promises in
this Agreement, American and Carrier hereby agree as follows:
Section 1. Definitions
For all purposes of this Agreement, the following capitalized terms shall
have the following meanings:
"AAdvantage Account" means the record maintained by American of a
Member's AAdvantage Program activity, including, without limitation, the accrual
and redemption of AAdvantage Miles by such Member.
"AAdvantage Awards" means the awards or benefits (established by American
from time to time) which Members can receive under the AAdvantage Program in
exchange for the redemption of accrued AAdvantage Miles, and if applicable,
other consideration, which awards includes, among other items, Award Travel.
"AAdvantage Gold and Platinum Member Guides" means the publications
entitled, respectively, "AAvantage Gold(R) Member Guide" and "AAdvantage
Platinum(R) Member Guide," or any successor publications thereto, which set
forth the particular AAdvantage Program Rules applicable to Top Tier Members, as
from time to time modified and issued by American, at its discretion.
--------------
1 AAdvantage is a registered trademark of American Airlines, Inc.
1 CONFIDENTIAL
"AAdvantage Miles" means the points or "miles" (including bonus points or
"miles") earned by Members pursuant to the AAdvantage Program Rules for (i)
travel on American, (ii) travel on, and/or the purchase of goods or services
from, AAdvantage Participants, or (iii) any other reason authorized by American.
"AAdvantage Participant" means any Person which (i) provides goods or
services to Members in exchange for AAdvantage Miles, or (ii) in connection with
the sale of goods or services by such Person to a Member, offers AAdvantage
Miles to such Member, in each instance pursuant to the AAdvantage Program Rules
and the agreement between American and such Person regarding the AAdvantage
Program.
"AAdvantage Program" means the frequent traveler program established and
maintained by American, as such program may from time to time be changed or
modified, pursuant to which Members (i) receive AAdvantage Miles for travel on
American, for certain transactions with an AAdvantage Participant, or for any
other reason authorized by American, and (ii) may exchange accrued AAdvantage
Miles for AAdvantage Awards.
"AAdvantage Program Rules" means the rules, regulations, terms and
conditions established or modified, from time to time, by American, in its sole
judgment and discretion, which shall govern the AAdvantage Program.
"AAdvantage Summary" means the summary Of AAdvantage Program activity
sent to Members from time to time, at intervals determined by American.
"Accrual Miles" means the AAdvantage Miles accrued by a Member for Revenue
Travel on a Carrier Flight, consisting of the AAdvantage Miles calculated as
described in Section 2.a. below on the basis of Actual Miles flown, together
with, if applicable, any Class of Service Bonus Miles, any AAdvantage Miles
earned under the Minimum Mileage Guarantee, or any Promotional Bonus Miles, all
as awarded in accordance with this Agreement and the AAdvantage Program Rules.
"Actual Miles" means the United States Department of Transportation
approved non-stop mileage between origination and destination cities of each
Carrier Flight.
"Affiliate" means, with respect to any Person, any other Person directly
or indirectly controlling or controlled by or under common control with such
Person. For purposes of this definition, "control" (including, without
limitation "controlled by" and "under common control with") shall mean the
power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person whether through the ownership of voting
securities or by contract or otherwise; provided, however, that, notwithstanding
the foregoing, in the case of Carrier, (i) the above definition of "Affiliate"
shall apply for the purposes of Section 6 and only Section 6 of this Agreement,
and (ii) an "Affiliate" of Carrier for all other purposes of this Agreement
shall be any Person controlled by Carrier.
"Agreement" means this AAdvantage Participating Carrier Agreement, as it
may, from time to time, be amended or modified in writing in accordance
herewith.
"American" has the meaning assigned to such term in the preamble to this
Agreement.
2 CONFIDENTIAL
"Applicable Law" means all applicable laws of any jurisdiction,
including, without limitation, securities laws, tax laws, tariff and trade laws,
ordinances, judgments, decrees, injunctions, writs and orders or like actions of
any Competent Authority and the rules, regulations, orders, interpretations,
licenses and permits of any Competent Authority.
"Award Certificate" means the document issued to a Member by American,
that entities such Member to an Award Ticket or other benefits obtained by such
Member in accordance with this Agreement and the AAdvantage Program Rules.
"Award Document" means, with respect to any request by a Member for Award
Travel, either (i) an Award Certificate, or (ii) an Award Ticket which is not
issued from an Award Certificate tendered by a Member, but may be issued from a
pro-forma Award Certificate.
"Award Flight" means (i) any on-line, regularly scheduled, passenger air
travel service operated by Carrier under the "JI" designator code between the
destinations specified on Attachment B, as amended from time to time, and (ii)
each Codeshare Flight specified on Attachment B, if any.
"Award Ticket" means the non-endorsable, non-reroutable ticket issued to
a Member, either directly or in exchange for an Award Certificate, by American
or American's authorized agents, which entities such Member to Award Travel.
"Award Travel" means the roundtrip passenger air transportation received
or obtained by a Member on Award Flights in exchange for the redemption of a
specified number of AAdvantage Miles (and, if applicable, other consideration),
pursuant to this Agreement and the AAdvantage Program Rules, which travel shall
be subject to the Blackout Dates and to other terms and conditions set forth on
Attachment B, as amended from time to time.
"Blackout Dates" shall have the meaning set forth in Section 3.d. below.
"Business Day" means any day other than a Saturday, Sunday or other day
on which banks in Fort Worth, Texas are required or authorized by law,
regulation or executive order to close.
"Carrier" has the meaning assigned to such term in the preamble to this
Agreement.
"Carrier Flight" means (i) any on-line, regularly scheduled, passenger
air travel service operated by Carrier under the "JI" designator code on any one
of the 0 & D city pairs specified in Attachment A, as amended from time to time,
and (ii) any Codeshare Flight specified on Attachment A, if any.
"Carrier Report" means the report to be delivered to American by Carrier
pursuant to Section 5.a., which report shall be substantially in the form of,
and shall have the information specified in and requested by, the Data Flow and
Input/Output Specifications attached hereto as Attachment D.
3 CONFIDENTIAL
"Class of Service Bonus Miles" means Accrual Miles in excess of Actual
Miles flown accrued by a Member for Revenue Travel in First Class (if available)
on a Carrier Flight which are equal in number to the product of the Actual Miles
flown on such flight multiplied by the applicable percentage specified in
Section 2.a. hereof; Class of Service Bonus Miles will not be awarded if Accrual
Miles are awarded pursuant to the Minimum Mileage Guarantee.
"Codeshare Flights" means flights operated by third party air carriers
providing regularly scheduled, commercial passenger air transportation services
and marketed under Carrier's "JI" designator code.
"Competent Authority" means any national, federal, state, county, local
or municipal government body, bureau, commission, board, board of arbitration,
instrumentality, authority, agency, court, department, inspectorate, minister,
ministry, official or public or statutory person (whether autonomous or not)
having jurisdiction over this Agreement or any of the parties to this Agreement.
"Effective Date" means 00:01 Coordinated Universal Standard Time (UTC) on
the later to occur of (1) March 2, 1995, or (ii) the date which is the
"Commencement Date" under the RDU Sublease.
"Expiration Date" means 23:59 Coordinated Universal Standard Time (UTC)
on March 1, 2000, unless extended in accordance with the terms of this
Agreement.
"First Class" means a class of service higher and better than Coach Class
on an aircraft which offers two distinct classes of service, regardless of the
actual name Carrier may assign to such higher class of service.
"Material Adverse Effect" means, with respect to either Carrier or
American, a material adverse effect on (i) the business, assets, operations,
performance, properties, condition or prospects (financial or otherwise, taken
as a whole) of the party, or (ii) the ability of such party to perform its
obligations under this Agreement.
"Member" means, as of any date, any individual who is a member in good
standing of the AAdvantage Program.
"Minimum Mileage Guarantee" means the number of Accrual Miles guaranteed
to be earned by Members on a short haul Carrier Flight which shall be five
hundred (500) Accrual Miles and shall be earned as follows and as otherwise set
forth in Section 2.a.
below:
Actual Miles and Class
Minimum of Service Bonus Miles (if any)
Mileage Guarantee for Carrier Flight
----------------- -------------------------------
500 1-499
"0 & D" when used in the context of city pairs means origination and
destination.
"Original 0 & D City Pair" shall have the meaning described in Section
11.k.
4 CONFIDENTIAL
"Paid Upgrade Sticker" means an Upgrade Sticker for which a Member has
paid consideration, and which complies with such other requirements as American
may provide to Carrier at the time Carrier introduces a First Class service.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or
government or any group or political subdivision thereof.
"Promotional Bonus Miles" means AAdvantage Miles in excess of Actual
Miles, Class of Service Bonus Miles (if any), and Accrual Miles earned under the
Minimum Mileage Guarantee, accrued by a Member pursuant to a special promotion
offered by Carrier and approved by American pursuant to Section 2.b. hereof.
"RDU Sublease" means that certain Agreement of Sublease, dated as of
January 18, 1995, by and between American and Carrier.
"Redeemed Miles" means AAdvantage Miles redeemed under the AAdvantage
Program by Members in exchange for an Award Certificate or Award Ticket, in each
case for Award Travel.
"Revenue Travel" means all travel on a Carrier Flight made by Members for
which monetary payment is made as the sole and complete form of consideration
and which otherwise complies with the terms and conditions set forth in
Attachment A.
"Top Tier Members" means, as of any date, any Member who is enrolled in
American's AAdvantage Gold(R) or AAdvantage Platinum(R) recognition programs for
Members who have achieved certain AAdvantage Mile accrual levels within a
specified period of time, as such requirements may, from time to time, be
determined and modified by American.
"Upgrade Sticker" means a sticker (i) issued by American to Members, on
either a complimentary basis or for consideration, which complies with such
other requirements as American may provide to Carrier at the time Carrier
introduces a First Class service, and (ii) which sticker may be exchanged by a
Member at the time of check-in for a reserved or instantaneous (depending on the
sticker) one-class class of service upgrade from Coach Class on, among other
flights designated by American, any Carrier Right with more than one class of
service, or any two or more such Carrier Flights to be flown consecutively under
a single flight coupon. Upgrade Stickers are further subject to the AAdvantage
Program Rules, and American may discontinue the use of Upgrade Stickers by
Members at any time at its discretion.
"US AAdvantage Summary" means the AAdvantage Summary sent to Members with
mailing addresses in the United States, Canada, Mexico and the Caribbean (and
such other countries as American may determine to include from time to time, at
its discretion).
"$" or "$U.S." means United States Dollars. Unless otherwise specifically
indicated, all such references herein shall refer to United States Dollars.
5 CONFIDENTIAL
Section 2. AAdvantage Mileage Accrual For Travel on Carrier
a. Accrual Miles. Provided that (i) accumulation of Accrual Miles is
otherwise permitted by Applicable Law, and (ii) the Member has not elected to
accrue credits in any other frequent flyer or travel program for the travel,
then, subject to the terms and conditions of this Agreement (including, without
limitation, the additional criteria specified in Attachment A), on and after the
Effective Date and continuing until this Agreement terminates or expires,
American will award each Member Accrual Miles for Revenue Travel of such Member
on a Carrier Flight, as follows:
Class of Service Accrual Miles Credited
Coach Class {***} of Actual Miles
provided, however, that the total Accrual Miles credited for Coach Class
Revenue Travel shall in no event be less than the number of Accrual Miles to
be earned under the Minimum Mileage Guarantee. In addition, if Carrier
introduces a First Class service during the term of this Agreement, American
will award a bonus of {***} more Accrual Miles for Revenue Travel in such
class of service for a total of {***} of Actual Miles under criteria to be
mutually agreed between the parties and to be specified in Attachment A;
provided, however, that the total Actual Miles credited for First Class
Revenue Travel (i.e. the sum of the Actual Miles and Class of Service Bonus
Miles (if any)) shall in no event be less than the number of Accrual Miles to
be earned under the Minimum Mileage Guarantee.
b. Promotional Bonus Miles. Carrier may, from time to time, offer
Promotional Bonus Miles to Members for Revenue Travel on Carrier Flights with
the prior written consent of American.
c. Selection of Program; No Changes. On any particular Carrier Flight,
Carrier passengers can designate only one frequent flyer program for mileage.
Once the Carrier Flight departs, American will not allow a Member who has
elected to accrue mileage in the AAdvantage Program to transfer Accrual Miles to
another frequent flyer program in which American or Carrier participates.
Section 3. AAdvantage Awards For Travel an Carrier
a. Award Travel. Subject to the terms and conditions of this Agreement
(including, without limitation, the additional criteria specified in Attachment
B), on and after January 24, 1995, American may issue Award Certificates and/or
Award Tickets for Award Travel on and after the Effective Date, and subject to
the Blackout Dates, in exchange for a specified number of AAdvantage Miles or to
reaccommodate Members booked for travel on an award under the AAdvantage Program
between destinations listed on Attachment B. All Award Certificates are
non-transferable after issuance pursuant to the terms and conditions of the
AAdvantage Program and are valid for use only as specified in the AAdvantage
Program Rules which, as of the date hereof, provide for use only by (i) the
Member; (ii) the individual whose name is specified on such Award Certificate;
(iii) a family member with the same surname as, or a spouse with a different
surname than, the individual identified in (i) or (ii); or (iv) if and only if
an issued Award Certificate is personally presented to an American ticket
6 CONFIDENTIAL
counter or city ticket office by the claiming Member, a passenger with a
different surname who is designated by the Member. Award Tickets are
non-transferable after issuance. As provided in the current AAdvantage Program
Rules, a Member may have Award Certificates or Award Tickets issued in the name
of another individual, provided that the Member does not sell, barter or
otherwise transfer (in each case, as determined by American) the Award
Certificates or Award Tickets for consideration.
b. Award Reservations. All reservations for Award Travel shall be made by
American, or American's authorized agents, via SABRES(R) Direct Access or any
other reasonable method designated by American.
c. Award Seat Availability.
i. Carrier will make available for Award Travel {***} Coach
Class seats on each Award Flight. Carrier will reserve and maintain the
availability of such seats solely for Award Travel on each Award Flight
until the later of (A) {***} days prior to departure of such flight or
(B) such time as the Coach Class booked load factor for such flight
exceeds {***}; at the later to occur of the events specified in clauses
(A) or (B) of this Subsection, any so reserved which have not been booked
for Award Travel will then become available for other Carrier passengers.
ii. From time to time and upon either party's request, Carrier and
American will, if mutually agreed, specify alternative arrangements
whereby Carrier will provide, for certain 0 & D city pairs or time
periods, more or fewer seats than the number of seats specified in
Subsection 3.c.i above for particular Award Flights.
iii. In the event that a seat for Award Travel specified in
Subsection 3.c.i. above is not available for the specific date and
destination requested by a Member, Carrier will accommodate the Member for
the requested travel within the period of fifteen (15) days before or
fifteen (15) days after the date originally requested. In the event no
such seats are available during such thirty-one (31) day period, Carrier
will accommodate such Member's request on the first Award Flight on or
after the date originally requested on which the desired destination is
available from non-capacity controlled seat inventory, excluding flights
on Blackout Dates.
iv. If Carrier introduces a First Class service during the term of
this Agreement, then Carrier will also make available Award Travel
pursuant to this Agreement certain First Class seats as mutually agreed
upon by Carrier and American.
d. Blackout Dates. Award Travel will not be permitted during the blackout
dates set forth in Attachment C and as established for subsequent periods
pursuant to this Section 3.d. (the "Blackout Dates"). The Blackout Dates set
forth in Attachment C are, and the Blackout Dates for calendar 1997 and
thereafter shall be, the blackout dates established for the AAdvantage Program
PlanAAhead(R) Awards; provided, however, if American changes the blackout dates
for the AAdvantage Program PlanAAhead Awards at any time during the term of this
Agreement, Carrier agrees that the Blackout Dates under this Agreement will be
changed to correspond with those of the AAdvantage Program PlanAAhead Awards,
and
7 CONFIDENTIAL
Attachment C will be amended to reflect all such changes without further action
on the part of either party. For calendar 1997 and thereafter, American shall
inform Carrier of time dates which shall be the Blackout Dates for the purposes
of this Agreement no later than fifteen (15) months prior to January 1 of the
calendar year to which the dates apply. In addition, Carrier and American may,
from time to time, mutually agree on additional blackout dates for certain time
periods on specified 0 & D city pairs. Notwithstanding the foregoing, Carrier,
in its own discretion, may allow Award Travel on any Blackout Date.
e. Award Certificates and Award Tickets. Unless otherwise mutually agreed
upon by American and Carrier, and regardless of any termination or expiration of
this Agreement, (i) all Award Certificates issued by American in accordance with
the terms of this Agreement shall be valid and shall be honored by American and
Carrier, in accordance with the terms of the Award Certificate, for a period of
one (1) year from the date of issuance, and (ii) all Award Tickets issued in
accordance with the terms of this Agreement shall be valid and shall be honored
by Carrier for a period of one (1) year from the date of issuance. In the event
that Carrier is unable to honor any valid Award Ticket on a flight operated by
Carrier for any reason, Carrier will accommodate Members holding such ticket on
a third party air carrier at Carrier's expense. The provisions of this Section
3e. shall survive the termination or expiration of this Agreement.
f. Non-Discrimination. Carrier shall offer all Members when traveling on
Award Travel the same rights and privileges afforded to revenue passengers of
Carrier traveling in the same class of service. Members shall have at least an
equal right to book capacity controlled inventory on Carrier as do members of
any other program (whether a frequent traveler program of Carrier or another
carrier, or any other program or arrangement) in which Carrier may participate
in the future; and the Blackout Dates under this Agreement shall be no more
restrictive for Members utilizing Award Travel than for such other members.
g. OSI Codes. Consistent with current practice in all reservations for
Award Travel made by American, American will make reasonable efforts to append
the following OSI codes to all Award Travel passenger reservation records:
Free Ticket OSIJIAAAD
American will make commercially reasonable efforts to provide these instructions
to American's authorized agents, but will not be responsible for the omission of
such codes by its agents.
h. Upgrade Stickers
i. If Carrier introduces a First Class service during the term of
this Agreement, and for as long as American permits Members to use Upgrade
Stickers, Carrier will accept all Upgrade Stickers and upgrade the Member
tendering such Upgrade Sticker by one class of service for Carrier Flights
with First Class service, if space is available, pursuant to the
procedures described in Subsection 3.h.ii below; provided, however, that
for the purposes of this Agreement, Accrual Miles for Revenue Travel made
in conjunction with an Upgrade Sticker shall be awarded based only on the
class of service paid for. Carrier will not charge Members for the use of
Upgrade Stickers.
8 CONFIDENTIAL
Carrier will permit American (upon American's providing to Carrier at
least two Business Days' prior written notice) to inspect Carrier's
relevant books and records to verify the numbers and types of Upgrade
Stickers honored by Carrier and the amount owing by American to Carrier
therefor.
ii. If Carrier introduces a First Class service during the term of
this Agreement, Carrier shall accept Upgrade Stickers, in accordance with
the provisions of applicable Upgrade Sticker booklets, the terms and
conditions set forth in the AAdvantage Gold and Platinum Member Guides and
other applicable AAdvantage Program Rules, and such other procedural
guidelines as shall be mutually agreed upon by Carrier and American at the
time Carrier introduces a First Class service.
Section 4. Program Administration
a. Check-in Procedures. To assure minimum inconvenience to Members,
Carrier will establish and maintain procedures whereby Members need only provide
a valid AAdvantage Account number to a reservation agent or to a ticket agent at
check-in for the Carrier Flight to earn Accrual Miles. Carrier will not require
Members to carry or fill out coupons, stickers, or other documentation, or
otherwise employ inconvenient or cumbersome procedures, in order for Members to
receive Accrual Miles.
b. Membership In AAdvantage Program. Members will be enrolled in the
AAdvantage Program in accordance with American's standard procedures, as it
currently exists or as modified from time to time, at the time of Revenue Travel
on the Carrier Flight. No Member will accumulate Accrual Miles for Revenue
Travel until an AAdvantage Account number has been assigned by American.
c. Administration By American. Subject to the terms and conditions of
this Agreement, administration of the AAdvantage Program shall be performed by
American, and all AAdvantage Program Rules shall apply to Carrier's
participation in the AAdvantage Program. American shall issue all Award
Certificates, Award Tickets, AAdvantage Summaries and AAdvantage Program
newsletters in accordance with its procedures (as now existing or which American
may, in its sole discretion, modify from time to time in the future) and at its
sole expense. Inquiries or complaints addressed to Carrier regarding the
AAdvantage Program, Carrier's participation in the AAdvantage Program, and
record keeping in connection therewith shall be referred by Carrier to
American's AAdvantage Customer Service Department which shall be responsible for
resolving such complaints. Inquiries or complaints addressed to American
regarding specific travel in progress or completed on Carrier on an Award Ticket
shall be referred to Carrier which shall be responsible for responding to either
American or the Member regarding such complaints. Inquiries or complaints
addressed to American or Carrier regarding specific travel scheduled on Carrier
on an Award Ticket will be responded to through mutual cooperation of Carrier
and American. Unless specifically agreed to by American, Carrier shall not use
its own records to respond directly to Members' general inquiries regarding the
AAdvantage Program.
d. Carrier Customer Service. At its sole expense, Carrier will designate
customer service individuals in Chicago, Illinois, and Raleigh, North Carolina,
to be available during normal business hours on normal business days in each
city, to assist American's
9 CONFIDENTIAL
AAdvantage Customer Service and Reservation Sales Departments in resolving
Member complaints. For the purposes of this Section 4.d. "normal business days"
in any city shall mean any day other than a Saturday, Sunday, or other day on
which banking institutions in such city are required by law, regulation,
executive order, or common custom to be closed. Such designated customer service
group will be staffed and supported by Carrier so that, in American's opinion,
American will be able to effectively address Members' complaints relating to
Carrier, especially concerning Award Travel. With respect to any customer
dispute, American shall not have authority to make on behalf of Carrier any
monetary commitment or other commitment which would require any action by
Carrier, or to compromise or some any dispute involving Carrier without the
prior consent of Carrier in each instance; provided however, that such consent
shall not be unreasonably withheld or delayed and Carrier shall cooperate with
American to resolve any such dispute.
e. Accrual Miles Credit. Carrier will be responsible for documenting
qualifying travel and incorporating that information into the Carrier Report to
be furnished by Carrier to American pursuant to this Agreement. Carrier
understands and agrees that American will rely on the accuracy of the Carrier
Reports submitted by Carrier to invoice Carrier and to post Accrual Miles credit
to a Members AAdvantage Account, subject to any adjustments provided for in the
balance of this paragraph and in Section 5 below. In addition, American shall
have the right to credit Accrual Miles to a Member's AAdvantage Account for
Revenue Travel on a Carrier Flight for a period of twelve (12) months following
the conclusion of such flight which credit shall be accorded as follows: (i) if
a Member with a valid AAdvantage Account number at the time of Revenue Travel on
a Carrier Flight who has not received Accrual Miles for such travel applies to
American within twelve (12) months after the conclusion of the flight and
submits documentation acceptable to American, and (ii) if American, in its sole
judgment, finds the documentation submitted is acceptable, American will credit
the Member's AAdvantage Account with the Accrual Miles corresponding to such
flight American will then xxxx Xxxxxxx for such Accrual Miles credited. Claims
for Accrual Miles credit on flights operated by Carrier which are not between an
O & D city pair listed on Attachment A or do not comply with the other
requirements specified on Attachment A will be rejected by American's AAdvantage
Customer Service Department and reported back to either Carrier or the Member,
whichever initiated the claim or request, that the travel is not eligible to
receive Accrual Miles. American and Carrier agree to cooperate, and will
establish procedures, to ensure that Members are not claiming Accrual Miles in
more than one frequent flyer program or travel program, whether operated by
American or Carrier, or in which American or Carrier now participates or may in
the future participate.
f. Transfer or Combining Mileage. Mileage accrued in a Members AAdvantage
Account at any time shall not be transferred to such individual's account under
Carrier's own frequent flyer program nor shall mileage from an individual's
account in Carrier's own frequent flyer program be combined with AAdvantage
Miles from his or her AAdvantage Account under any circumstance.
g. Ticketing. Pursuant to ticketing instructions issued by American and
approved in advance by Carrier, American or American's duly appointed and
authorized agents will ticket Award Travel on American's ticket stock in
accordance with American's ticketing rules.
10 CONFIDENTIAL
h. Changes to Program. Except for matters specifically provided for in
this Agreement, American has the absolute right in its sole judgment and
discretion to determine, establish, and/or change the AAdvantage Program and the
AAdvantage Program Rules, at any time and from time to time, without any
liability, compensation or additional obligation to Carrier. This means that
American may in its sole discretion initiate changes to the AAdvantage Program,
including, but not limited to, changes to the rules governing: (i) AAdvantage
Participant affiliations, (ii) the earning of AAdvantage Miles, (iii) the number
of AAdvantage Miles necessary to qualify for, and the rules for use of,
AAdvantage Awards, Upgrade Stickers, and any special AAdvantage privileges, (iv)
the continued availability of AAdvantage Awards, Upgrade Stickers, and any
special AAdvantage privileges, (v) AAdvantage Program blackout dates, (vi)
limited seating for Award Travel on American, (vii) the terms or features of
special offers, and (viii) the award levels at which Award Travel on Carrier
will be offered.
i. Minimum Market Presence. Carrier acknowledges that American's
willingness to enter into this Agreement, and other agreements with Carrier, is
based on Carrier's commitment to maintain a minimum market presence at the
Raleigh-Durham Airport. Accordingly, Carrier hereby covenants that it will
maintain the applicable minimum flight activity levels set forth in Part I of
Attachment E during the times prescribed therein.
j. Carrier New Routes: Discontinued Routes.
i. In the event that Carrier desires to introduce new
Carrier-operated service on an 0 & D city pair or to a destination, or a
new Codeshare Flight, which is not included in Attachments A and/or B of
this Agreement, as applicable, Carrier may request, in writing, that such
now 0 & D city pair or Codeshare Flight be eligible as a Carrier Flight,
or that such new destination or Codeshare Flight be eligible for Award
Flights under this Agreement and added to Attachments A and/or B, as
applicable. American shall have thirty (30) days from the receipt of the
request to evaluate Carrier's request and American shall, at its sole
discretion, decide whether or not to add the 0 & D city pair, destination
or Codeshare Flight to Attachments A and/or B, and under what conditions
(including, without limitation, if an addition to Attachment A, what
price will be paid by Carrier for each Accrual Mile earned by a Member on
such 0 & D city pair or Codeshare Flight); if American approves Carrier's
request, such 0 & D city pair, destination or Codeshare Right would be
made subject to this Agreement, provided, however, that any 0 & D city
pair or Codeshare Flight added to Attachment A pursuant to this Section
4.j. shall not be an Original 0 & D City Pair for the purposes of Section
11.k. without the express written approval of American. Neither party,
however, shall be obligated to make any changes to Attachment A or B to
this Agreement unless mutually agreed to in writing.
ii. In the event that Carrier introduces new Carrier-operated
service on an 0 & D city pair or to a destination, or a new Codeshare
Flight, which is not included in Attachments A and/or B of this Agreement
as applicable, Carrier shall promptly give American written notice
thereof.
11 CONFIDENTIAL
iii. Notwithstanding anything to the contrary in this
Agreement, Carrier shall have the right at any time, in its sole judgment
and discretion, to cease to operate service between any of the 0 & D city
pairs on Attachment A or which includes a destination listed on
Attachment B; provided however, that Carrier shall provide American at
least sixty (60) days prior written notice of the scheduled termination
and the termination date for service between such 0 & D city pair or to
such destination. For the purposes of this Section 4.j.iii., the
off-season suspension of service for seasonal service between an 0 & D
city pair, which service has not otherwise been permanently terminated,
shall not be considered a cessation of service for which notice must be
given.
k. Carrier Participation in Other Frequent Flyer Programs. In the event
that Carrier commences a new frequent flyer program, or enters into an agreement
or other arrangement by which it becomes or will become a participant in another
frequent flyer program, or by which another commercial passenger air carrier
becomes or will become a participant in Carrier's frequent flyer program,
Carrier shall promptly give American written notice thereof, which notice shall
include the name of Carriers new program, the program in which Carrier will
participate, or the new participant in Carrier's program.
l. Principal Place of Business. If either Carrier or American shall
change its principal place of business during the term of this Agreement, such
party shall promptly notify the other party of its new address.
Section 5. Reports
a. Carrier Reports. Carrier will provide American for each semi-monthly
period with a report (the "Carrier Report") consisting of computer tapes or
transmissions listing all Revenue Travel on Carrier by Member name, AAdvantage
Account number, Carrier Flight number, origin and destination, date, class of
service and other items as specified in the Data Flow and Input/Output
Specifications attached hereto as Attachment D. Carrier shall deliver the
Carrier Report to American for the periods ending the 10th and the 26th of each
month. The Carrier Report must be received by American no later than four (4)
Business Days following the last day of the prior reporting period, and must
include all data through the end of such reporting period. Carrier understands
and agrees that all data contained in the Carrier Reports may be merged with
other information contained in the Member database maintained by American.
b. American Reports. American will provide Carrier, on a monthly basis,
with the following reports for use solely in administering the transactions
contemplated by this Agreement.
i. A report summarizing the total Accrual Miles posted by American for
Member Revenue Travel on Carrier Flights during a given calendar month
and any prior Revenue Travel not previously credited to, but submitted
by, a Member and eligible for Accrual Miles credit if any; and
12 CONFIDENTIAL
ii. Until Carrier has elected to convert to the alternative fee
structure described in Section 8.a.ii., a report summarizing the total
number of Award Documents issued and the total number reinstated to
Members' AAdvantage Accounts during a given calendar month, categorized by
award code.
c. Report Procedures. All data exchanged by American and Carrier will be
subject to the procedures outlined in Attachment D, which may be modified upon
the written agreement of the parties.
d. Additional Reports. American will be under no obligation to provide
additional reports, but will consider any request by Carrier for such reports,
and will determine, in its sole discretion, whether to honor such requests.
American may xxxx Xxxxxxx, and if so Carrier will pay American, for any such
additional reports a mutually agreed upon fee.
e. Origin and Destination Table Prior to February 1, 1995, Carrier will
provide to American, in a medium and format mutually acceptable to American and
Carrier, a complete table of all 0 & D city pairs set forth on Attachment A and
any combinations of such 0 & D city pairs to be serviced consecutively and
available for travel on a single flight coupon, which table shall be approved by
American, and once so approved shall be eligible for Accrual Miles as of the
Effective Date. Carrier understands that claims for Accrual Miles credit on
flights between 0 & D city pairs not listed in the then current table will be
rejected by American's AAdvantage Customer Service department and such rejection
will either be reported back to Carrier or to the Member. During the term of
this Agreement, Carrier will promptly, but no later than sixty (60) days prior
to any change relevant to this Agreement and the transactions contemplated
hereunder which has been noticed and approved or agreed upon in accordance with
this Agreement, provide to American an update to the 0 & D city pairs table as
necessary to reflect such changes, which update shall be in a medium and format
mutually acceptable to American and Carrier.
f. Additional Reports by Carrier. During the term of this Agreement,
Carrier shall furnish to American the financial statements, certificates and
other information specified in Part II of Attachment E.
Section 6. Confidentiality
a. Confidential Information. For purposes of this Agreement, confidential
information shall mean any and all (i) trade secrets, (ii) confidential or other
proprietary information of a party or its Affiliates concerning past, present or
future research, development, business activities or affairs, finances,
properties, methods of operation, processes and systems, (iii) customer lists,
(iv) other customer information, or (v) computer procedures and access codes
disclosed by one party hereto to the other at any time in connection with this
Agreement, whether the foregoing is oral or written in form or contained in any
magnetic, electronic or other media ("Confidential Information"); provided,
however, that in order for a party's information to be considered confidential
information hereunder, such information, if non-oral, must be marked or
otherwise indicated by the disclosing party as confidential; and provided,
further, that oral information must be specified as confidential at the time of
disclosure. The parties expressly acknowledge and agree that the terms and
13 CONFIDENTIAL
conditions of this Agreement (other than information which is necessary and
customarily publicized in order to make Members aware of the opportunity to
accrue AAdvantage Miles) and any reports, invoices, or other communications
between American and Carrier given hereunder or in connection herewith
(excluding names, addresses, AAdvantage Account numbers and other information
relating to specific Members) constitute Confidential Information of both
parties, whether or not marked or expressly indicated as confidential, and
American and Carrier agree to keep such information confidential and not to
disclose such information to any third party, except as permitted in Section
6.b. below. Carrier also expressly acknowledges and agrees that American's
Confidential Information also includes all procedures regarding the AAdvantage
Program and any names, addresses, AAdvantage Account numbers and other
information regarding any Member disclosed or made available to Carrier pursuant
to this Agreement whether or not marked or expressly indicated as confidential.
The party which receives Confidential Information agrees to maintain such
information in secrecy at all times, using the same degree of care with respect
to such Confidential Information as it uses in protecting its own proprietary
information, trade secrets and similar terms. Information of either party which
would otherwise be considered Confidential Information shall not be considered
Confidential Information if such information is in the public domain, is placed
in the public domain, through no violation of this Agreement, or is lawfully
obtained from another source free of restriction.
b. Use of Confidential Information. Except as expressly provided below,
neither party shall sell, transfer, publish, disclose, display or otherwise make
available the Confidential Information of the other party to any third party
(and third parties shall be deemed also to include Affiliates of the party so
restricted), except as may be required by Applicable Law (including, without
limitation, requirement by oral questions, interrogatories, subpoenas, civil
investigative demands or similar processes), in which case the party from whom
disclosure is sought (or, if applicable, who is seeking to make disclosure as
required by Applicable Law) shall promptly notify the other party and shall
provide the other party (if the other party so requests) with a copy of the
information proposed to be disclosed and all related descriptions thereof within
a reasonable period (which period shall generally be at least five days) in
advance of the proposed disclosure. To the extent that the other party objects
to disclosure of such Confidential Information, the party from which disclosure
is sought (or, if applicable, who is seeking to make disclosure as required by
Applicable Law) shall (i) use reasonable and lawful efforts to resist making any
disclosure of such Confidential Information, (ii) use reasonable and lawful
efforts to limit the amount of such Confidential Information to be disclosed
(and, in connection therewith, shall reasonably consider all modifications,
deletions and additions to such information, and related descriptions, proposed
by the other party), and (iii) use all reasonable efforts to obtain a protective
order or other appropriate relief to minimize the further dissemination of any
Confidential Information to be disclosed. In addition, neither party shall
disclose the Confidential Information received to any of its directors,
officers, employees, Affiliates, or professional advisors (collectively,
"Representatives") except on a need-to-know basis for the purposes of
implementing and administering this Agreement; provided, however, that prior to
any such disclosure, the party shall inform all such Representatives of the
confidential nature of the information, and that it is subject to this
non-disclosure obligation, and shall further instruct such Representatives to
treat such information confidentially. American and Carrier each agrees to be
responsible for any breach of this Section 6 by their respective
Representatives. Furthermore, neither party shall use the
14 CONFIDENTIAL
Confidential Information of the other party for any purpose other than as
expressly provided in this Agreement.
c. Termination. Upon termination of this Agreement for any cause or
reason, each party shall promptly, but no later than ninety (90) days after
termination, either deliver to the other party, or if instead so instructed by
the other party, shall destroy all of such other party's Confidential
Information (including all copies thereof other than copies of this Agreement)
then in its possession and shall purge any copies thereof encoded or stored on
magnetic or other electronic media or processors; provided, however, that
neither American nor Carrier shall be required to purge or destroy any
Confidential Information that is (i) in the case of American, necessary for the
continued administration and operation of the AAdvantage Program, or (ii)
reasonably necessary in connection with the resolution of any disputes which may
have at the time arisen pursuant to the terms of this Agreement.
d. No Adequate Remedy. Each party acknowledges and agrees that the party
disclosing Confidential Information under this Agreement will have no adequate
remedy at law if there is a breach or threatened breach of this Section 6 and,
accordingly, that the disclosing party shall be entitled to an injunction or
other equitable or preventative relief against the other party or its
Representatives for such breach or threatened breach. Nothing herein shall be
construed as a waiver of any other legal or equitable remedies which may be
available to the disclosing party in the event of a breach or threatened breach
of this Section 6 and the disclosing party may pursue any other such remedy,
including, without limitation, the recovery of damages.
e. Survival. The provisions of this Section 6 shall survive the
termination or expiration of this Agreement.
f. Prior Confidentiality Agreement. Carrier and American have previously
entered into a Non-Disclosure and Confidentiality Agreement dated as of November
11, 1994 (the "1994 Confidentiality Agreement") in connection with the
commencement of exploratory discussions concerning this Agreement and proposed
related transactions. The provisions of Sections 6.a. through e. of this
Agreement are intended by the parties to cover information which may be
communicated from one party to the other in connection with this Agreement and
the implementation and administration of Carrier's participation in the
AAdvantage Program, and, to the extent that any other unrelated information is
covered by both Sections 6.a. through 6.e. of this Agreement and the 1994
Confidentiality Agreement, the provisions of the 1994 Confidentiality Agreement
(including, without limitation, the termination provisions of the 1994
Confidentiality Agreement) shall govern to the exclusion of the provisions set
forth in Sections 6.a. though 6.e. of this Agreement.
Section 7. Promotional Activities and Advertising
a. Materials. Carrier will be identified as an AAdvantage Participant in
appropriate (as determined by American) AAdvantage Program materials as soon as
practicable after the Effective Date at no additional cost to Carrier except as
set forth below. Except as provided in Section 7.h. below, the content of any
AAdvantage newsletter or other promotional materials shall be subject to the
sole discretion, and the sole responsibility, of American.
15 CONFIDENTIAL
b. Announcements. Carrier will be identified as an Advantage Participant
in appropriate (as determined by American) AAdvantage announcements.
c. Inserts. Subject to the guidelines established by American, the
existence of sufficient space to place the insert in the U.S. AAdvantage Summary
envelope, and American's mailing schedule, Carrier may have the option to
include insert(s) in the U.S. AAdvantage Summary pursuant to the terms and
conditions set forth in this Section 7.c. If, in response to request, American
informs Carrier that space is available for a Carrier insert in a specific U. S.
AAdvantage Summary mailing, Carrier, at its sole cost and expense, shall create,
produce and deliver to American any insert(s) no less than five (5) Business
Days prior to the proposed date of mailing of the relevant U.S. AAdvantage
Summary. American shall have the right to approve the form and content of each
Carrier insert. American shall pay the costs associated with incorporating the
proposed Carrier insert into the U.S. AAdvantage Summary envelope, provided the
insert does not increase postal charges or require special handling by the
mailing vendor. In the event that such insert will require extra postage or any
additional or special handling charges (collectively "Extra Charges"), Carrier
shall have the option (i) to pay such Extra Charges, (ii) to reschedule the
insert to another U.S. AAdvantage Summary mailing when no Extra Charges will be
required (provided space is available in such mailing), or (iii) to cancel the
insert in the event Carrier decides to proceed and pay the Extra Charges,
American will provide Carrier with an invoice, itemizing the Extra Charges, and
the total amount of such invoice will be due and payable by Carrier to American
no later than thirty (30) days following the date of the invoice. In the event
Carrier chooses not to include any insert previously requested and accepted for
mailing, then Carrier shall provide American with written notice of such
cancellation not less than sixty (60) days prior to the previously requested
mailing date. Nothing herein shall be construed as giving Carrier the right to
include an insert in any, or any particular, U.S. AAdvantage Summary mailing.
d. Direct Mail. Subject to the terms of this Section 7.d., Carrier may,
from time to time at its option and sole expense, create, produce, and
distribute direct mail promotional materials related to special AAdvantage
Program offers. American will, upon Carrier's request and at Carrier's sole
expense, use reasonable efforts to identify, from among the AAdvantage
membership, recipients for such mailings pursuant to criteria provided by
Carrier. The form and content of all such direct mailings will comply with
American's guidelines therefor and will be further subject to (i) American's
prior written consent and approval, (ii) the terms of this Agreement, and (iii)
American's prior approval of the mailing vendor. Any Member names and addresses
provided hereunder to Carrier shall be deemed Confidential Information of
American, subject to the provisions of Section 6 of this Agreement. All mailing
tapes provided by American to Carrier under this Section 7.d. must be returned
to American within ten (10) days of the direct mailing, and Carrier and its
agents shall simultaneously purge and destroy any and all information obtained
or derived from all copies of such mailing tape(s). The obligation of Carrier
under this Section 7.d. shall be deemed an obligation of confidentiality
described in Section 6 of this Agreement and subject to the same obligation,
rights, and remedies as set forth in Section 6.
e. Special Offers. All special offers made by Carrier through any
AAdvantage Program promotional material, including, but not limited to, articles
or inserts in the applicable AAdvantage Program newsletter or the U.S.
AAdvantage Summary, as well as Carrier direct
16 CONFIDENTIAL
mail promotions, (i) may only be made for the AAdvantage Program, (ii) must
enable the Member to earn Accrual Miles or claim Award Travel as a part of such
offer or promotion, and (iii) must have the AAdvantage logo prominently
displayed, along with the statement that "AAdvantage is a registered trademark
of American Airlines, Inc."
f. Cancellation. Notwithstanding anything in this Agreement to the
contrary, American shall have the right to limit, delay or cancel any AAdvantage
Program materials or mailings at any time, without liability or compensation to
Carrier.
g. Prior Approval - American. Notwithstanding any provision of this
Agreement to the contrary, Carrier shall submit to American, and American shall
have the right to review and approve or disapprove, prior to publication, the
portion of any and all art work, copy, advertising, promotional materials,
direct mail, press releases, newsletters or other public or promotional
communications, or any other publicity published or distributed by Carrier (or
at its direction or authorization) that references this Agreement, the
AAdvantage Program, or American (or any of its Affiliates), or uses any
trademark, service xxxx or trade name of American or any of its Affiliates,
including but not limited to the name "AAdvantage". American will review and
approve or disapprove such publicity materials within five (5) Business Days
after receipt from Carrier, and If requested to do so by Carrier from time to
time under unusual circumstances, will use its reasonable efforts to approve or
disapprove such publicity materials on a more time sensitive basis.
Notwithstanding any provision to this Agreement, Carrier acknowledges and agrees
that all trademarks, service marks, or trade names of American or any of its
Affiliates, including but not limited to the trademark "AAdvantage", are and
shall remain the sole property of American.
h. Prior Approval - Carrier. American shall submit to Carrier, and Carrier
shall have the right to review and approve or disapprove, prior to publication,
the portion of any and all art work, copy, advertising, promotional materials,
direct mail, press releases, Award Certificates, AAdvantage newsletters or other
public or promotional communications, or any other publicity published or
distributed by American (or at its direction or authorization) that specifically
references this Agreement or Carrier (or any of its Affiliates), or uses any
trademark, service xxxx or trade name of Carrier or any of its Affiliates.
Carrier will review and approve or disapprove such publicity materials within
(5) Business Days after receipt from American, and if requested to do so by
American, from time to time under unusual circumstances, will use its reasonable
efforts to approve or disapprove such publicity materials on a more time
sensitive basis; provided, however, that no such approval is required for merely
listing Carrier as an AAdvantage Participant in any publication or promotional
material distributed by American. Notwithstanding any provision of this
Agreement, American acknowledges and agrees that all trademarks, service marks,
or trade names of Carrier or any of its Affiliates are and shall remain the sole
property of Carrier.
Section 8. Charges
a. Fees Payable to American.
{***}
17 CONFIDENTIAL
{***}
18 CONFIDENTIAL
{***}
c. Billing Payments. Regardless of which fee structure applies, if
Carrier has delivered the Carrier Report and other items set forth in Section
5 above, fees will be billed by American monthly by a debit invoice and
supported by detailed transaction reports described in Section 5 of this
Agreement and the information required for the Carrier Report. In the event
that Carrier fails to provide the Carrier Report and American is unable to
post date from either the mid-month or final month-end Carrier Report in time
for the processing of AAdvantage Summaries, then American will be entitled to
xxxx Xxxxxxx Two Hundred Thousand Dollars ($200,000 U.S.) for such month.
This amount shall be credited by American against the subsequent Accrual
Miles Invoice(s) after Carrier provides the appropriate Carrier Report. In
addition to the debit invoice described above in this Section 8.c., American
will xxxx Xxxxxxx monthly by a credit invoice (a "Credit Invoice") for the
fees owed on account of Award Documents issued. Payments under Sections 8.a.
and 8.b. shall be made as follows:
{***}
19 CONFIDENTIAL
{***}
20 CONFIDENTIAL
{***}
d. Payments. All payments to be made under this Agreement shall be
made in United States Dollars, and made by wire transfer or any other method
mutually agreed upon by the parties no later than the due date for payment.
In the case of wire transfer, payment will be made to the applicable party's
account in accordance with the instructions provided by that party. In the
event the date for any payment required under this Agreement is not a
Business Day, such payment shall be due and payable on the next succeeding
Business Day.
{***}
f. Offset
1. Notwithstanding any other provision of this Agreement to the
contrary, if, at any time during the term of this Agreement and the
reconciliation period after termination contemplated by Section 9.d below any
monies are past due and owing under and only under this Agreement from one
party hereto (the "Owing Party") to the other party hereto (the "Owed
Party"), the Owed Party may withhold any monies it may owe to the Owing
Party (whether such monies are owing pursuant to this Agreement or another
agreement between the parties hereto) and may apply all or a portion of such
withheld monies in partial offset and satisfaction (or, if such withheld
monies are sufficient, in total offset and satisfaction) of the monies owed
under this Agreement to the Owed Party by the Owing Party; provided, however,
that the Owed Party shall give written notice to the other party immediately
upon taking such action, which notice shall include a statement of the
amounts so offset.
21 CONFIDENTIAL
ii. Notwithstanding any other provision of this Agreement to the
contrary, if, at any time during the term of this Agreement and the
reconciliation period after termination contemplated by Section 9.d. below,
any monies are past due and owing under and only under the RDU Sublease from
Carrier to American. American may withhold any monies it may owe to Carrier
pursuant to this Agreement and may apply all or a portion of such withheld
monies in partial offset and satisfaction (or, if such withheld monies are
sufficient, in total offset and satisfaction) of the monies owed to American
under the RDU Sublease; provided, however, that American shall give written
notice to Carrier immediately upon taking such action, which notice shall
include a statement of the amounts so offset.
Section 9. Term of Agreement
a. Term. Unless sooner terminated in accordance with this Agreement, this
Agreement shall continue for an initial term extending through the Expiration
Date; provided, however, that so long as the RDU Sublease remains in effect and
no notice (which is then in effect) of termination has been given for that
agreement, this Agreement may thereafter be renewed for one or more successive
two (2) year periods, in each instance only upon the mutual agreement of Carrier
and American. Expiration of this Agreement or termination on any date
established as a termination date pursuant to this Agreement shall be effective
at 23:59 Coordinated Universal Standard Time (UTC) on such date (except for such
liabilities, obligations, duties, rights and powers of the parties which
expressly survive the termination of this Agreement).
b. Public Notice. All required notices to the general public and Members
of the termination of Carrier's participation in the AAdvantage Program will be
the sole responsibility of American and shall be undertaken at American's sole
cost and expense.
c. Effect of Termination. On and after expiration or termination for any
reason of this Agreement:
i. American will not credit, and Carrier will not indicate to any
Member that he or she will receive credit for, Accrual Miles for Revenue
Travel taken after the date on which termination or expiration of this
Agreement becomes effective (except for Accrual Miles earned prior to such
termination or expiration date and credited pursuant to Sections 4.d. or
e.);
ii. American will no longer issue Award Certificates for Award
Travel, except those which have been requested by Members prior to the
termination or expiration date and processed after such date. American
will, however, continue to issue Award Tickets from unexpired, outstanding
Award Certificates which have been issued in accordance with this
Agreement;
iii. American may, at its sole discretion, reinstate Redeemed Miles
to Members' AAdvantage Accounts for unused and unexpired Award
Certificates or Award Tickets tendered by Members for reinstatement;
22 CONFIDENTIAL
iv. Carrier will continue to honor any Award Ticket Issued by
American pursuant to this Agreement for a period of one (1) year from the
date of issuance of such document; and
v. Other than in the case of a termination under Section 11 of this
Agreement, all monies due from or owed by one party to the other through
the date of termination shall become immediately due and payable, and all
monies which may become due from or owed by a party after the termination
date shall be immediately due and payable as such obligations arise.
Termination or expiration of this Agreement shall be without prejudice to
any rights or remedies available to a party resulting from breach of this
Agreement by the other party.
d. Survival. Without limiting the effectiveness of any other provision
hereof which expressly states that it shall survive the termination of this
Agreement, the provisions of Sections 5 and 8 shall survive the termination or
expiration of this Agreement and remain in effect following the effective date
of termination or expiration of this Agreement for a period of three (3) years
(or such shorter period as may be mutually agreed upon by the parties) to permit
final reconciliation of the transactions hereunder.
e. Termination of AAdvantage Program. Carrier agrees that, notwithstanding
any other provisions of this Agreement, American has the right, for whatever
reason and in American's sole discretion, to terminate the AAdvantage Program
upon providing at least ninety (90) days prior written notice to Carrier, in
which event this Agreement will terminate in accordance with the foregoing
provisions effective upon the termination of the AAdvantage Program, and without
any liability, compensation or obligation by American to Carrier.
f. Termination of Other Agreements.
i. In the event the RDU Sublease is terminated for any reason,
American shall have the option, exercisable for ninety (90) days
following termination of such agreement, to terminate this Agreement
upon at least ninety (90) days prior written notice to Carrier of
such election.
ii. In the event the RDU Sublease is terminated by American for any
reason, Carrier shall have the option, exercisable for ninety (90)
days following termination of such agreement, to terminate this
Agreement upon at least ninety (90) days prior written notice to
American of such election.
Section 10. Indemnification
a. Carrier Indemnity. Carrier shall indemnify, defend and hold harmless
American, its Affiliates and each of their respective directors, officers,
employees and agents (individually, an "American Indemnified Party") from all
liabilities, losses, damages, claims, suits, actions, recoveries, awards,
judgments or executions of any nature or kind whatsoever (including, without
limitation, costs of investigation, litigation costs, court costs, expert
witness fees, litigation support services costs, settlement costs and reasonable
attorneys' fees) which may be made, asserted, had, brought, or recovered by any
third party against an American
23 CONFIDENTIAL
Indemnified Party by reason of or in any way arising out of (i) travel on
Carrier or any Codeshare Flight, (ii) use of Carrier's facilities, (iii)
Carrier's performance, failure to perform or improper performance of this
Agreement, or (iv) any claims or statements made by Carrier in its advertising
or promotional activities which are in conflict or inconsistent with the terms
of this Agreement.
b. American Indemnity. American shall indemnify, defend and hold harmless
Carrier, its Affiliates and each of their respective directors, officers,
employees and agents (individually, a "Carrier Indemnified Party") from all
liabilities, losses, damages, claims, suits, actions, recoveries, awards,
judgments or executions of any nature or kind whatsoever (including, without
limitation, costs of investigation, litigation costs, court costs, expert
witness fees, litigation support services costs, settlement costs and reasonable
attorneys' fees) which may be made, asserted, had, brought or recovered by any
third party against a Carrier Indemnified Party by reason of or in any way
arising out of (i) travel on American, (ii) use of American's facilities
(excluding the facilities subject to the RDU Sublease),(iii) American's
performance, failure to perform or improper performance of this Agreement, (iv)
any claim or statements made by American in its advertising or promotional
activities which are in conflict or inconsistent with the terms of this
Agreement, or (v) any claim that the use of "AAdvantage" infringes any existing
trademark or other property right.
Hereinafter, any claim which gives rise to a right to indemnification under
Sections 10.a. or 10.b. is referred to as a "10.0 Claim".
c. 10.0 Claims Against American. In the event a 10.0 Claim is made or
asserted, or any action with respect thereto is brought, against an American
Indemnified Party, the appropriate American Indemnified Party shall promptly,
but no later than twenty (20) days after the receipt of any such claim or demand
(including but not limited to notice of any action, suit or proceeding) give
Carrier written notice thereof; provided, however, that the failure to so notify
Carrier shall not relieve Carrier of any liability that Carrier may have to the
American Indemnified Party under Section 10, except to the extent that Carrier
demonstrates that the defense of such 10.0 Claim is prejudiced by such failure
to notify. Upon receipt of such notice (i) Carrier shall assume all
responsibility for such defense, and (ii) the American Indemnified Party shall
provide reasonable assistance and cooperation during the defense or settlement
of such 10.0 Claim; provided, however, that if Carrier does not notify the
American Indemnified Party in writing that it has assumed such defense within
ten (10) Business Days of receipt of such notice of the 10.0 Claim, the American
Indemnified Party may proceed to defend against the 10.0 Claim, the expense of
which defense shall in turn also be deemed an obligation of and an amount due
and payable as incurred to the American Indemnified Party by Carrier if the
claim is ultimately found to be a 10.0 Claim. Except as limited as provided
below, if Carrier assumes the defense, Carrier shall have complete control of
the defense or settlement of such 10.0 Claim; provided, however, that counsel
selected by Carrier shall be reasonably acceptable to American. No compromise or
settlement of any 10.0 Claim may be effected by Carrier without the prior
written consent of the relevant American Indemnified Party, which consent shall
not be unreasonably withheld or delayed; provided, however, such consent shall
not be required if (x) there is no finding or admission of any violation of any
law by any American Indemnified Party or of any violation by any American
Indemnified Party of the rights of any person, (y) such compromise or settlement
does not otherwise adversely affect any claim that may be made by American or
any American Indemnified Party, and (z) such
24 CONFIDENTIAL
compromise or settlement does not provide for any relief from any American
indemnified Party (other than any monetary relief that Carrier expressly agrees
in writing to pay contemporaneously with such compromise or settlement). In the
event Carrier assumes the defense of a 10.0 Claim, each American indemnified
Party shall have the right, but not the duty, at its own expense, to participate
in the defense and settlement of any 10.0 Claim with counsel of its own choosing
without relieving Carrier of any obligations hereunder. Carrier shall cooperate
with the American indemnified Party's or Parties' counsel, but control of the
matter shall remain with Carrier.
d. Claims Against Carrier. In the event a 10.0 Claim is made or asserted,
or any action with respect thereto is brought against a Carrier indemnified
Party, the appropriate Carrier Indemnified Party shall promptly, but no later
than twenty (20) days after the receipt of any such claim or demand (including
but not limited to notice of any action, suit or proceeding) give American
written notice therewith; provided, however, that the failure to so notify
American shall not relieve American of any liability that American may have to
the Carrier Indemnified Party under Section 10, except to the extent that
American demonstrates that the defense of such 10.0 Claim is prejudiced by such
failure to notify. Upon receipt of such notice (i) American shall assume all
responsibility for such defense, and (ii) the Carrier Indemnified Party shall
provide reasonable assistance and cooperation during the defense or settlement
of such 10.0 Claim; provided, however, that if American does not notify the
Carrier Indemnified Party in writing that it has assumed such defense within ten
(10) Business Days of receipt of such notice of the 10.0 Claim, the Carrier
indemnified Party may proceed to defend against the 10.0 Claim, the expense of
which defense shall in turn also be deemed an obligation of and an amount due
and payable as incurred to the Carrier Indemnified Party by American if the
claim is ultimately found to be a 10.0 Claim. Except as limited as provided
below, if American assumes the defense, American shall have complete control of
the defense or settlement of such 10.0 Claim or action; provided, however, that
counsel selected by American shall be reasonably acceptable to Carrier. No
compromise or settlement of any 10.0 Claim may be effected by American without
the prior written consent of the relevant Carrier Indemnified Party, which
consent shall not be unreasonably withheld or delayed; provided, however, such
consent shall not be required if (x) there is no finding or admission of any
violation of any law by any Carrier Indemnified Party or of any violation by any
Carrier Indemnified Party, of the rights of any person, (y) such compromise or
settlement does not otherwise adversely affect any claim that may be made by
Carrier or any Carrier Indemnified Party, and (z) such compromise or settlement
does not provide for any relief from any Carrier Indemnified Party (other than
any monetary relief that American expressly agrees in writing to pay
contemporaneously with such compromise or settlement). In the event American
assumes the defense of a 10.0 Claim, each Carrier Indemnified Party shall have
the right, but not the duty, at its own expense, to participate in the defense
and settlement of any 10.0 Claim with counsel of its own choosing without
relieving American of any obligations hereunder. American shall cooperate with
the Carrier Indemnified Party's or Parties' counsel, but control of the matter
shall remain with American.
e. Survival. The provisions of this Section 10 shall survive the
termination or expiration of this Agreement.
25 CONFIDENTIAL
Section 11. Default and Termination for Cause.
a. Breach.
i. General. In the event of a breach of any term, representation, or
warranty of this Agreement by American or Carrier (other than a breach of
a payment obligation under Section 8 hereof, the failure to pay any other
sums owed hereunder, or any other event separately covered elsewhere in
this Section 11), the non-breaching party may terminate this Agreement
without further liability on pending at least thirty (30) days prior
written notice to the other party, which notice shall describe, with as
much particularity as reasonably practicable, the alleged breach.
Termination under this Section 11.a.i., shall not be effective, however,
if the allegedly breaching party shall, within fifteen (15) days following
receipt of such notice, completely cure such breach.
ii. Payment Obligations. In the event of a breach of a payment
obligation under Section 8 or the failure to pay any other sums owed
hereunder, the non-breaching party may terminate this Agreement without
further liability on providing at least fifteen (15) days prior written
notice to the other party, which notice shall describe, with as much
particularity as reasonably practicable, the alleged breach and the total
sums due and owing. Termination under this Section 11.a.ii. shall not be
effective, however, if the allegedly breaching party shall, within seven
(7) days following receipt of such notice, cure the breach by making the
full payment described in the notice.
iii. Cross Defaults.
(1) If (A) any material breach or default (including, without
limitation, the failure to pay any indebtedness or obligations as they
become due) occurs under the RDU Sublease, and (B) such breach or default
is not cured within the applicable cure period (if any) specified in the
relevant agreement or any other cure period which may be permitted or
mutually agreed upon by the parties to the agreement, then and in any such
event, for a period of thirty (30) days following a party's receipt of
notice of such event or at any time thereafter that such breach or default
may be continuing, Carrier or American, whichever is the non-breaching
party, may elect to terminate this Agreement upon providing at least
thirty (30) days prior written notice to the other party.
(2) If (A) any breach or default occurs under any other agreements
(not described in Subsection 11.a.iii.(1) above) under which Carrier may
be obligated, directly or indirectly, as borrower, installment purchaser,
lessee, sublessee, guarantor or otherwise, and which agreements involve:
(y) the borrowing of money or the extension of credit in excess of Two
Hundred Fifty Thousand Dollars ($250,000) in the aggregate, or (z) any
lease or sublease of real or personal property pursuant to which Carrier's
monetary obligations in the nature of rent or similar obligations exceed
either Twenty Thousand Dollars ($20,000) per month in the aggregate or Two
Hundred Fifty Thousand Dollars ($250,000) in the aggregate for the
remaining term of the affected lease and/or sublease, (B) such breach or
default consists of failure to pay any
26 CONFIDENTIAL
indebtedness or other obligation when due or if such breach or default
permits or causes (or upon notice or lapse of time or both would permit or
cause) the acceleration of any indebtedness or other obligation, or the
termination of any lease, agreement or commitment to lend, and (C) such
breach or default is not cured within the applicable cure period (if any)
specified in the relevant agreement then, in any such event and at any
time thereafter, American may elect to terminate this Agreement upon
providing at least thirty (30) days prior written notice to Carrier.
b. Carrier Assignment to Benefit Creditors. If Carrier either (i) makes an
assignment for the benefit of its creditors, (ii) suspends the payment of,
admits in writing its inability to pay, or generally fails to pay its debts as
they become due, (iii) has suspended its transactions with banks and other
financial institutions (iv) has issued against it any writ, execution, process,
or abstract of judgment which may have a Material Adverse Effect on Carrier and
which is not dismissed, satisfied or stayed within sixty (60) days, or (v) files
a petition for bankruptcy, corporate reorganization, corporate liquidation,
arrangement or special liquidation proceedings under any Applicable Law, then
American may, at its option, immediately terminate this Agreement upon written
notice to Carrier.
c. American Assignment to Benefit Creditors. If American either (i) makes
an assignment for the benefit of its creditors, (ii) suspends the payment of,
admits in writing its inability to pay, or generally fails to pay its debts as
they become due, (iii) has suspended its transactions with banks and other
financial institutions, (iv) has issued against it any writ, execution, process,
or abstract of judgment which may have a Material Adverse Effect on American and
which is not dismissed, satisfied or stayed within sixty (60) days, or (v) files
a petition for bankruptcy, corporate reorganization, corporate liquidation,
arrangement or special liquidation proceedings under any Applicable Law, then
Carrier may, at its option, immediately terminate this Agreement upon written
notice to American; provided, however, that notwithstanding any provision to the
contrary contained herein, Carrier shall continue to honor any Award Tickets for
Award Travel issued in accordance with the terms of this Agreement for a period
of one (1) year from the date of issuance.
d. Bankruptcy Petition. In the event (i) other party petitions for or is
granted relief under Title 11 of the United States Code (the "Bankruptcy Code")
or files a petition or initiates analogous proceedings under any similar
Applicable Law, (ii) an involuntary bankruptcy petition is commenced or any
comparable proceeding initiated against either party under the Bankruptcy Code
or any Applicable Law, or (iii) either party exercises its rights under or is
made subject to any federal, state or other bankruptcy, reorganization,
insolvency or analogous laws of any applicable jurisdiction. and if this
Agreement has not otherwise terminated, then the other party may suspend all
further performance of this Agreement until such party assumes or rejects this
Agreement pursuant to Section 365 of the Bankruptcy Code or any successor
statute, or otherwise acknowledges its obligations under this Agreement under
any similar (or successor) provision of Applicable Law. Any such suspension of
further performance by the other party pending assumption, rejection, or other
acknowledgment shall not be deemed a breach of this Agreement and shall not
affect the other party's right to pursue or enforce any of its rights under this
Agreement or otherwise.
27 CONFIDENTIAL
e. Carrier Corporate Changes. If, during the term of this Agreement:
(i) Carrier ceases its operations or a substantial portion thereof; (ii)
merges with or into or is acquired, in whole or in part, by any other Person
(except any merger in which each of the following conditions is satisfied:
(A) Carrier is the surviving corporation in such merger, (B) the shareholders
of Carrier, as of immediately prior to such merger, receive or retain 80% or
more of the equity securities of Carrier as of immediately after such merger,
and (C) such merger does not cause or result in any other event or condition
specified in this Agreement which would give American the right to terminate
this Agreement); (iii) Carrier sells or otherwise transfers all or
substantially all of its assets to any other Person; (iv) Carrier makes
material changes to Carrier's frequent flyer program, or sells, transfers, or
disposes of any part or all of such program, or merges or otherwise
integrates such program with or into another frequent flyer program(s) (other
than the AAdvantage Program) which is not wholly owned and operated by
Carrier; (v) Carrier commences a new frequent flyer program, or enters into
an agreement or other arrangement by which it becomes or will become a
participant in another frequent flyer program, or by which another commercial
passenger air carrier becomes or will become a participant in Carrier's
frequent flyer program; (vi) any Person (or group of two or more Persons who
have agreed to act or are acting in concert becomes (by stock purchase,
merger or otherwise) the beneficial owner of 20% or more of the outstanding
voting securities of Carrier (for purposes of this Section 11.e.(vi) and
11.e.(vii) below, the terms "group" and "beneficial ownership" shall be
determined in accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended (the "1934 Act"), and the rules and regulations of the
Securities and Exchange Commission ("SEC") promulgated thereunder); (vii) any
Disqualified Investor (as defined below) becomes (by stock purchase, merger
or otherwise) the beneficial owner of ten percent (10%) or more of the
outstanding voting securities of Carrier; (viii) Carrier makes an
acquisition (whether through a stock purchase, asset acquisition, merger or
otherwise) of any business of another Person ("Acquired Business") if (x)
revenues for the four then most recently completed quarters attributable to
the Acquired Business exceed ten percent (10%) of Carrier's revenues for the
comparable period, or (y) the book value of the assets of the Acquired
Business as of the end of the most recently completed quarter exceed ten
percent (10%) of the total assets of Carrier as of the end of the comparable
period, or (z) the total value of the consideration paid or to be paid in
such acquisition by Carrier exceeds Ten Million Dollars ($10,000,000); or
(viii) Carrier, without the prior written approval of American, enters into
or commits to enter into any marketing-oriented collaborative agreement with
another airline (including, without limitation, a frequent traveler program
or codesharing arrangement, but excluding normal Interline agreements) which
American reasonably believes would likely materially adversely affect
American's interests or objectives under any agreements between American (or
any of its Affiliates) and Carrier, then, in each such case, Carrier shall
immediately give American written notice of such event, addressed to the
American officer and given in accordance with the procedure specified below,
and American shall have the right, exercisable for forty five (45) days
following the receipt of such written notice by the American officer
specified below (the "Written Notice Period") (or, if American elects,
following American's actual knowledge gained through pubic information or
otherwise of the occurrence of any such event), to terminate this Agreement
upon providing at least thirty (30) days advance written notice to Carrier;
provided, however, that if Carrier, at its sole option, elects to request in
advance of any contemplated transaction a waiver from American of American's
right to terminate under this Section 11.e. (which request must be submitted
to American according to the procedures filed below), American will notify
Carrier, no later than ten (10) Business Days following the receipt of the
request by the American officer
28 CONFIDENTIAL
specified below, whether it will (i) waive such right, or (ii) require
additional time to decide on the requested waiver, in which case American will
have an additional forty five (45) days to determine and notify Carrier whether
it will waive its right to terminate or whether it would exercise such right if
the proposed transaction were to be undertaken as described; any waiver by
American of this Section 11.e. shall be valid only with respect to the
transaction as described in the written request for waiver. If American has not
responded to Carrier by the end of the forty five day period which is the
Written Notice Period described above, or by the end of the forty five day
period described in clause (ii) of the foregoing sentence, whichever is
applicable, such lack of response shall be deemed to be a waiver of American's
right to terminate with respect to the particular transaction described in
Carrier's written notice or request, as applicable.
If American so elects to terminate this Agreement, American may, at
Carrier's expense, take any and all reasonable actions necessary in American's
sole judgment and discretion to provide for air fare and related incidental
travel expenses to ensure that Members at the time holding or traveling on Award
Tickets are able to conclude their planned trip, and all amounts so incurred by
American on Carrier's behalf shall be immediately due and payable to American as
incurred.
As used in Section 11.e. (vii), above, "Disqualified Investor" means
(i) any other airline or airline-related service company, (ii) any Person
offering a frequent traveler program; (iii) any Person that American believes
would likely, by virtue of such person's affiliation with Carrier, materially
adversely affect American's interests or objectives under any agreements
between American (or any of the Affiliates) and Carrier, or (iv) any
Affiliate of a Person identified in clauses (i), (ii) or (iii) of this
paragraph.
For the purposes of this Section 11.e., Carrier's request for a waiver
must be in writing, describing with reasonable specificity the contemplated
transaction and the proposed participating parties. To be effective, any such
request and any other written notice of an event described in this Section 11.e.
must be sent by facsimile with (i) a contemporaneous telephone call by Carrier
to the American officer to whom the request is addressed (or his or her
secretary) confirming receipt by the American officer, and (ii) a hard copy sent
the same day by certified or registered United States Mail, first class postage
prepaid, return receipt requested, addressed to:
American Airlines, Inc.
P.O. Box 619616, MD 5359
Dallas/Ft. Xxxxx Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxxx X. Xxxxxx
Vice President - Marketing Planning
Phone: (000) 000-0000
Facsimile: (000) 000-0000
or to such other person, address, fax or phone number as American may from time
to time provide Carrier in a written notice given in accordance with the
provisions of Section 17 below. Any forty five day Written Notice Period or ten
Business Day period described above in this
29 CONFIDENTIAL
Section 11.e. shall commence as of the day the request is completely faxed and
the confirming telephone call successfully made.
f. American Corporate Changes. If American: (i) permanently ceases its
operations or a substantial portion thereof; (ii) merges with or into or is
acquired, in whole or in part, by any Person (other than an Affiliate) (except
any merger in which (A) American is the surviving entity; or (B) American is not
the surviving corporation, but as a result of the merger the shareholders of
American, as of immediately prior to such merger, receive or retain 80% or more
of the equity securities of American as of immediately after such merger); or
(iii) sells or otherwise transfers all or substantially all of its assets to any
Person (other than an Affiliate), American shall immediately give Carrier
written notice of such event, and Carrier shall have the right in its sole
judgment and discretion to terminate this Agreement upon at least ninety (90)
days written notice to American.
g. Compliance with Start Up Schedule. In the event Carrier has not
complied with any of the following requirements by the date indicated, and
American and Carrier have not otherwise agreed to an extension of the applicable
deadline, American may, at its option, terminate this Agreement, upon giving
five (5) days notice to Carrier of such election to terminate:
i. No later than February 10, 1995, Carrier will provide American
with adequate test data for simulated Accrual Mile postings to demonstrate
to the satisfaction of American functional integration into American's
automated customer service system.
ii. No later than March 15, 1995, Carrier will be capable of
automated transmissions through American's customer service system of
posting information for Accrual Miles.
h. Carrier Performance Requirements.
i. In the event of a failure by Carrier to maintain at all times the
applicable minimum flight activity levels as set forth in Part I of
Attachment E, then, upon the occurrence of such event and at any time
thereafter, American may elect to terminate this Agreement upon providing
at least ninety (90) days prior written notice to Carrier, which notice
shall describe the grounds upon which such election to terminate is based.
Termination under this Section 11.h.i. shall not be effective, however, if
Carrier shall, within sixty (60) days following receipt of such notice,
completely cure such breach.
ii. In the event Carrier, on two or more occasions in any twelve
(12) month period during the term of this Agreement, fails to maintain the
applicable minimum flight activity levels as set forth in Part I of
Attachment E (regardless of whether such breaches are ultimately cured),
then American may elect to terminate this Agreement upon providing at
least thirty (30) days prior written notice to Carrier.
30 CONFIDENTIAL
i. Additional Reports by Carrier. In the event that Carrier fails to
comply with any of the provisions of Section 5.f above in a timely manner,
American may elect to terminate this Agreement upon providing at least ten (10)
days prior written notice to Carrier; provided, however, that such termination
shall not be effective if Carrier cures such noncompliance within five (5) days
after receipt of American's notice.
j. Governmental Approvals. In the event that Carrier fails to obtain and
maintain the authorizations, licenses, approvals, certificates, permits,
registrations and filings from all governmental and regulatory authorities
necessary to conduct its business as an authorized air carrier, American may
elect to terminate this Agreement upon providing at least thirty (30) days prior
written notice to Carrier; provided, however, that such termination shall not be
effective if Carrier cures such noncompliance within fifteen (15) days after
receipt of American's notice.
k. AAdvantage Miles Opportunities. If (i) American enters into an
agreement or other final arrangement by which it agrees to award AAdvantage
Miles for travel on another commercial passenger air carrier (other than
American, American Eagle, or any carrier that is an AAdvantage Participant as of
the date hereof) for non-stop service between any of the O & D city pairs listed
on Attachment A as of the date hereof and designated as an "Original O & D City
Pair" (which shall exclude any O & D city pair which may be added as a Carrier
Flight to Attachment A in the future unless the same is expressly designated as
an Original O & D City Pair by American), and (ii) such Original O & D City Pair
is, at that time, still a Carrier Flight for which Accrual Miles will be
awarded, American shall give Carrier written notice of such event at least
thirty (30) days prior to the first date on which AAdvantage Miles may be
accrued for travel on the other air carrier, and Carrier shall have the right in
its sole judgment and discretion to terminate this Agreement upon at least one
hundred twenty (120) days written notice to American.
l. Payments upon Termination. In the event of termination under this
Section 11 (other than Section 11.k.), all monies owed, or due and payable to
the terminating party from the other party through the date of termination shall
become immediately due and payable, and all monies which may become due or owed
to the terminating party from the other party after the termination date shall
be immediately due and payable as such obligations arise.
Section 12. Representations and Warranties by American
In order to induce Carrier to enter into this Agreement, American makes
the following representations and warranties to Carrier, such representations
and warranties to be effective as of the date hereof:
a. Organization and Qualification. American is a duly incorporated and
validly existing corporation, in good standing under the laws of the State of
Delaware with its principal place of business as reflected in the preamble to
this Agreement, is an air carrier duly authorized to act as such by the
government of the United States of America, holds all licenses, certificates and
permits from all governmental and regulatory authorities necessary to conduct
its business (except where the failure to obtain such licenses and permits would
not have a Material Adverse Effect on American), and has the requisite corporate
power and
31 CONFIDENTIAL
authority to own, operate and lease the properties and assets it now owns,
operates and leases (except where the failure to have such authority would not
have a Material Adverse Effect on American), to conduct its business as it is
now being conducted, and to enter into and perform its obligations under this
Agreement. American is duly qualified or licensed as a foreign corporation to do
business, and is in good standing, in each jurisdiction where the nature of its
activities makes such qualification or license necessary, other than in any
jurisdiction where the failure to so qualify would not have a Material Adverse
Effect on American or its operations.
b. Authority. The execution and delivery of, and the performance by
American of its obligations under, this Agreement have been duly authorized by
all necessary corporate action and no other corporate proceedings are necessary
in conjunction therewith. This Agreement has been duly executed and delivered by
American, and, assuming due authorization, execution and delivery by Carrier,
this Agreement constitutes the legal, valid and binding obligation of American,
enforceable against American in accordance with the terms and conditions hereof,
except as the same may be limited or modified by the effect of bankruptcy,
insolvency, moratorium or other similar laws affecting creditors' rights
generally, and the application of general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or law).
c. No Violation. Neither the execution, delivery or performance by
American of this Agreement nor the consummation by American of any of the
transactions contemplated hereby, will (i) contravene or conflict with or cause
default under (A) any Applicable Law binding on American, or (B) any provision
of the Certificate of Incorporation or the Bylaws of American, (ii) result in
the creation of any lien, mortgage, claim, pledge, or other encumbrance on any
asset of American, or (iii) result in the breach of any agreement or instrument
to which American is a party or by which it is bound.
d. No Approvals. Neither the execution, delivery or performance by
American of this Agreement, nor the consummation by American of any of the
transactions described herein, requires the consent or approval of, or the
giving of notice to, the registration with, the recording or filing of any
documents with, or the taking of any other action in respect of, any Competent
Authority, any trustee or holder of any indebtedness or obligation of American,
any stockholder of American, or any other Person.
e. No Defaults. American is (i) not in default, and no condition exists
that with notice or lapse of time or both would constitute a default, under any
mortgage, deed of trust, indenture, or other instrument or agreement to which it
is a party, or by which it or any of its properties or assets may be bound, and
(ii) not in breach of any Applicable Law, where such default or breach would
have a Material Adverse Effect on it, or a material adverse effect on any of the
transactions described in this Agreement.
f. No Proceedings. American is not involved as a debtor in any bankruptcy,
receivership, insolvency or similar proceeding before any Competent Authority.
g. AAdvantage Participants. As of the date of this Agreement, American
does not award AAdvantage Miles for travel on a commercial passenger air carrier
which is an AAdvantage Participant as of the date hereof (other than American
Eagle) for non-stop service
32 CONFIDENTIAL
on any of the Original O & D City Pairs (as defined in Section 11.k.); provided,
however, that nothing in this Agreement shall be construed as limiting
American's right, or a commitment by American to limit its right, and American
hereby expressly reserves the right, to award AAdvantage Miles for such travel
at any time after the date hereof. American acknowledges that the foregoing
reservation is not intended to limit Carrier's right to terminate this Agreement
pursuant to Section 11.k. above upon the occurrence of an event described in
Section 11.k.
h. Survival. Each of the foregoing representations and warranties shall
survive the execution and delivery of this Agreement, and the termination or
expiration of this Agreement.
Section 13. Representations and Warranties by Carrier
In order to induce American to enter into this Agreement Carrier makes the
following representations and warranties to American, such representations and
warranties to be effective as of the date hereof:
a. Organization and Qualification. Carrier is a duly incorporated and
validly existing corporation, in good standing under the laws of the State of
Delaware with its principal place of business, as of the date hereof, as
reflected in the preamble to this Agreement, is an air carrier duly authorized
to act as such by the government of the United States of America, holds all
licenses, certificates and permits from all governmental and regulatory
authorities necessary to conduct its business, and has the requisite corporate
power and authority to own, operate and lease the properties and assets it now
owns, operates and leases (except where the failure to have such authority would
not have a Material Adverse Effect on Carrier), to conduct its business as it is
now being conducted, and to enter into and perform its obligations under this
Agreement. Carrier is duly qualified or licensed as a foreign corporation to do
business, and is in good standing, in each jurisdiction where the nature of its
activities makes such qualification or license necessary, other than in any
jurisdiction where the failure to so qualify would not have a Material Adverse
Effect on Carrier.
b. Authority. The execution and delivery of, and the performance by
Carrier of its obligations under this Agreement have been duly authorized by all
necessary corporate action and no other corporate proceedings are necessary in
conjunction therewith. This Agreement has been duly executed and delivered by
Carrier, and, assuming due authorization, execution and delivery by American,
this Agreement constitutes the legal, valid and binding obligation of Carrier,
enforceable against Carrier in accordance with the terms and conditions hereof,
except as enforcement may be limited by bankruptcy, insolvency, moratorium or
other laws affecting creditor' rights generally, and the application of general
principles of equity (regardless of whether such enforceability is considered a
proceeding in equity or law).
c. No Violation. Neither the execution, delivery or performance by Carrier
of this Agreement nor the consummation by Career of any of the transactions
contemplated hereby, will (i) contravene or conflict with or cause a default
under (A) any Applicable Law binding on Carrier, or (B) any provision of the
Certificate of Incorporation or the Bylaws of Carrier, (ii) result in the
creation of any lien, mortgage, claim, pledge, or other encumbrance on any asset
33 CONFIDENTIAL
of Carrier, or (iii) result in the breach of any agreement or instrument to
which Carrier is a party or by which it is bound.
d. No Approvals. Neither the execution, delivery or performance by Carrier
of this Agreement, nor the consummation by Carrier of any of the transactions
described herein, requires the consent or approval of, or the giving of notice
to, the registration with, the recording or filing of any documents with, or the
taking of any other action in respect of, any Competent Authority, any trustee
or holder of any indebtedness or obligation of Carrier, any stockholder of
Carrier, or any other Person.
e. No Defaults. Carrier is (i) not in default and no condition exists that
with notice or lapse of time or both would constitute a default, under any
mortgage, deed of trust, indenture, or other instrument or agreement to which it
is a party, or by which it or any of its properties or assets may be bound, and
(ii) not in breach of any Applicable Law, where such default or breach would
have a Material Adverse Effect on it, or a material adverse effect on any of the
transactions described in this Agreement.
f. No Proceedings. Carrier is not involved as a debtor in any bankruptcy,
receivership, insolvency or similar proceeding before any Competent Authority.
g. No Other Program Participation. Carrier has established only one
frequent traveler program (or any other similar program or arrangement), the
"Midway Merits" Program, in which Carrier is the sole participant. Carrier is
not a participant in, nor has it agreed to be a participant in, any frequent
traveler program (or other similar program or arrangement) of any other Person.
h. No Codeshare Flights. As of the date hereof, Carrier currently has no
Codeshare Flights and has not entered into any agreement or arrangement for any
future Codeshare Flights.
i. Survival. Each of the foregoing representations and warranties shall
survive the execution and delivery of this Agreement, and the termination or
expiration of this Agreement
Section 14. Notice to Personnel
American and Carrier will each use reasonable efforts to make all
appropriate personnel of each carrier aware of the fact that Carrier is an
AAdvantage Participant. All necessary and appropriate personnel of Carrier shall
be made fully aware of the contents of Section 3.f. above.
Section 15. AAdvantage Program Abuse
Carrier will cooperate with all reasonable requests of American concerning
any investigation and/or prosecution of anyone engaging in AAdvantage Program
abuse or fraud, including but not limited to verification of AAdvantage Member
status, passenger interviews, Member interviews, ticket confiscation, and
cooperating with any civil or criminal prosecution.
34 CONFIDENTIAL
Section 16. Assignment
Neither party may assign or otherwise convey this Agreement, or any of
such party's rights under this Agreement, or delegate any of its duties
hereunder, without the prior written consent of the other party; provided,
however, that without Carrier's consent, American may assign any and all of its
rights and delegate its obligations hereunder to an Affiliate of American which
(i) is American's wholly-owned subsidiary corporation, or a wholly-owned
subsidiary of American's parent corporation, (ii) has reasonably sufficient or
comparable resources to perform under this Agreement, and (iii) assumes all of
the obligations of American hereunder; provided, however, that such assignment
or delegation shall not relieve American of any of its obligations under this
Agreement. Any attempted assignment or delegation which violates the terms of
this Section 16 shall be null and void.
Section 17. Notices
Except as otherwise expressly set forth in this Agreement, all notices,
reports, invoices and other communications required or permitted hereunder to be
given to or made upon any party hereto shall be in writing, and shall be
considered as properly given if addressed as provided below and either (i)
delivered in person; (ii) sent by a commercial express or overnight courier
delivery service which provides a signed acknowledgment of receipt; (iii)
deposited in the U.S. mail, certified or registered first-class mail, postage
prepaid, return receipt requested (provided, however, that invoices may be sent
by first-class mail alone); or (iv) transmitted by facsimile (upon receipt by
sender thereof of evidence that a complete transmission of such copy was made to
the recipient thereof) and, if sent by facsimile, confirmed by (a) telephone
call contemporaneously made to the person entitled to receive such notice or to
such person's secretary, or (b) dispatching a hard copy of such notice by
first-class U.S. mail, postage prepaid, or any of the methods set forth in (i),
(ii) or (iii) above. Unless otherwise expressly set forth in this Agreement, all
notices shall be effective upon receipt. For the purposes of notice, the
addresses of the parties shall be as set forth below; provided, however, that
either party shall have the right to change its address for notice to any other
location by giving at least thirty (30) days prior written notice to the other
party in the manner set forth above.
By Mail & By Hand: Midway Airlines Corporation
0000 X. Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: President
Phone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: Xxxxxxxx X. Xxxxxx
Xxxxxxxxx & Xxxxxxxxxxx, P.C.
Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
35 CONFIDENTIAL
Phone: (000) 000-0000
Facsimile: (000) 000-0000
By Mail: American Airlines, Inc.
Managing Director - Marketing Programs
P.O. Box 619616, MD 5321
Dallas/Ft. Xxxxx Xxxxxxx, Xxxxx 00000-0000
By Hand: 0000 Xxxx Xxxxxx Xxxxxxxxx, XX 5321
Xxxx Xxxxx, Xxxxx 00000
Phone: (000) 000-0000
Facsimile: (000) 000-0000
Section 18. Governing Law and Dispute Resolution
a. Choice of Law. This Agreement and the rights and obligations of the
parties hereunder shall be governed by and construed in accordance with the laws
of the State of Texas, without regard to choice of law principles.
b. Jurisdiction. Each party hereto hereby irrevocably submits to the
exclusive jurisdiction of the United States District Court for the Northern
District of Texas and, if such court does not have jurisdiction, of the courts
of the State of Texas in Tarrant County for the purposes of any suit, action or
other proceeding arising out of this Agreement or the subject matter hereof
brought by any other party. American and Carrier each agrees that neither of
them will bring any suit, action or other proceeding arising out of this
Agreement the subject matter herein, or any of the transactions described
hereof, in any jurisdiction other than the jurisdiction described above.
c. Waiver of Defenses. To the extent permitted by applicable law, each
party hereby waives and agrees not to assert, by way of motion, as a defense or
otherwise, in any such suit, action or proceeding, any claim (i) that it is not
personally subject to the jurisdiction of the above-named courts, (ii) that the
suit, action or proceeding is brought in an inconvenient forum, (iii) that it is
immune from any legal process with respect to itself or its property, (iv) that
the venue of the suit, action or proceeding is improper, or (v) that this
Agreement or the subject matter hereof may not be enforced in or by such courts.
d. Service of Process. Each party agrees that, even if at any time during
the term of this Agreement Carrier is not qualified to do business as a foreign
corporation in the State of Texas, Carrier shall and does hereby irrevocably
designate and appoint the Secretary of State of the State of Texas as its agent
for service of process in any action, suit or proceeding with respect to any
matter as to which it submits to jurisdiction as set forth above, it being
agreed that any method of service upon such agent, with a copy sent to Carrier
in the manner set forth in Section 17 above, shall constitute valid service upon
Carrier. American designates CT Corporation as its agent for service of process
in Texas. American and Carrier each agrees that submission to jurisdiction and
designation of an agent for service of process set
36 CONFIDENTIAL
forth above is made for the express benefit of the other party and is effective
solely for purposes of this Agreement.
e. Enforcement of Judgment. Final judgment against a party in any suit in
any court of competent jurisdiction shall be conclusive, and may be enforced in
other jurisdictions, to the extent permitted by Applicable Law, by suit on the
judgment, a certified and true copy of which, to the extent permitted by
Applicable Law, shall be conclusive evidence of the fact and the amount of any
indebtedness or liability of the party therein described.
f. Waiver of Immunity. To the extent that any party or any of its property
is or becomes entitled at any time to any immunity on the grounds of sovereignty
or otherwise, from any legal action, suit, arbitration or other proceeding, from
setoff or counterclaim, from the jurisdiction of any competent court (including
the courts referred to above), from service of process, from attachment prior to
judgment, from attachment in aid of execution, from execution prior to judgment,
from judgment, from jurisdiction, or from other legal process in any
jurisdiction, that party for itself and its property does hereby irrevocably and
unconditionally waives, and agrees not to plead or claim, any such immunity with
respect to its obligations, liabilities or any other matter arising out of or in
connection with this Agreement or the subject matter hereof. Such waiver and
agreement regarding immunity shall be irrevocable and not subject to withdrawal
in any and all jurisdictions including under the Foreign Sovereign immunities
Act of 1976 of the United States of America.
Section 19. No Waiver
No failure to exercise and no delay in exercising, on the part of any
party, any right, remedy, power or privilege hereunder, shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law. The failure of
any party to insist upon a strict performance of any of the terms or provisions
of this Agreement, or to exercise any option, right or remedy herein contained,
shall not be construed as a waiver or as a relinquishment for the future of such
term, provision, option, right or remedy, but the same shall continue and remain
in full force and effect. No waiver by any party of any term or provision of
this Agreement shall be deemed to have been made unless expressed in writing and
signed by an officer of the waiving party.
Section 20. Captions
The captions appearing in this Agreement have been inserted as a matter of
convenience and in no way define, limit or enlarge the scope of this Agreement
or any of the provisions hereto.
Section 21. Compliance with Applicable Laws
a. Compliance. Each party will comply with all Applicable Laws with
respect to this Agreement, the performance of its obligations hereunder, its
respective role in connection with the AAdvantage Program, and the products and
services to be provided by such party
37 CONFIDENTIAL
hereunder. Each party will, at its expense. obtain and maintain the governmental
authorizations, licenses, approvals, certificates, permits, registrations and
filings that may be required of it under Applicable Law to execute or perform
this Agreement, which, in the case of Carrier shall include all licenses,
certificates and permits from all governmental and regulatory authorities
necessary to conduct its business as an authorized air carrier.
b. Unlawful Payments. Neither party hereto will offer, promise or pay any
money, gift or any other thing of value to any person for the purpose of
influencing official actions or decisions affecting this Agreement or the
transactions contemplated hereby. while knowing or having reason to know that
any portion of such money, gift, or thing will, directly or indirectly, be
given, offered or promised to (i) an employee, officer or other person acting in
an official capacity for any government or its agencies or instrumentalities, or
(ii) any political party, party official or candidate for political office.
Section 22. Force Majeure
Except with respect to the performance of a party's payment obligations
under this Agreement, neither party shall be liable for delays or failure in its
performance hereunder to the extent that such delay or failure of performance
(i) is caused by any act of God, war, strike, natural disaster, lockout, labor
dispute, work stoppage, fire, act of government, or any other cause, whether
similar or dissimilar, beyond the control of that party, and (ii) is not the
result of that party's lack of reasonable diligence.
Section 23. Independent Contractor
Each of Carrier and American is an independent contractor. Nothing in this
Agreement is intended or shall be construed to create or establish any agency,
partnership, joint venture or fiduciary relationship between the parties.
Neither Carrier nor any of its Affiliates has any authority to act for or to
incur any obligations on behalf of or in the name of American or any of its
Affiliates.
Section 24. Successor and Assigns
This Agreement shall be binding upon and shall inure to the benefit of the
permitted successors and assigns of each party hereto.
Section 25. Entire Agreement
This Agreement constitutes the entire agreement between the parties
relating to the AAdvantage Program and, as of the date first written above,
terminates and supersedes all prior or contemporaneous agreements, discussions,
undertakings, and understandings, whether written or oral, express or implied,
between the parties covering the AAdvantage Program. The attachments, exhibits
and schedules (if any) to this Agreement are incorporated into this Agreement
and form a part hereof for all intents and purposes. This Agreement may not be
amended or modified except in writing signed by an authorized officer of each
party hereto.
38 CONFIDENTIAL
American and Carrier each expressly acknowledges and agrees that the
subject matter of this Agreement is Carriers participation in the AAdvantage
Program, and that this Agreement is in no way intended to limit or affect the
right of either American or Carrier to provide air transportation service on
such routes and to such destinations as each carrier independently determines to
be appropriate for its respective business.
Section 26. Title
Title and full and complete ownership rights to AAdvantage Program
membership data and information developed by American, wherever located, shall
remain the property of American and constitute Confidential information under
Section 6 above. Carrier understands and agrees that all such data and
information constitute American's proprietary information whether or not any
portion thereof is or may be validly copyrighted. Carrier agrees that any
membership lists, labels, reports, data or other compiled membership information
supplied to Carrier in any form by American and any and all copies thereof will
be used by Carrier exclusively in its performance of its obligations under this
Agreement and will not be sold, licensed, leased, transferred, stored in a
retrieval system, duplicated, or transmitted, in any form or by any means, or
used for any other purpose without the prior written consent of American. All
such information is subject to the provisions of Section 6.c. of this Agreement.
Nothing in this Agreement, however, shall prevent Carrier from independently
compiling information regarding its revenue passengers so long as (i) the status
of being an AAdvantage Member, AAdvantage Account numbers, any other AAdvantage
membership data, or any reference to or other association with American is not
identified in, or used as a factor or criteria in compiling, such information,
and (ii) any promotions or communications directed at such revenue passengers,
or any partial grouping thereof, by Carrier or by Carrier jointly with another
Person or Persons, are not directed exclusively to such individuals, and will
not reference such individuals, as Members or travelers on American.
Section 27. No Third Party Beneficiaries
All rights, remedies and obligations of the parties under this Agreement,
shall accrue or apply solely to the parties hereto or their permitted successors
or assigns and there is no intent to benefit any third parties, including,
without limitation, Members.
Section 28. Time
Time is of the essence with respect to the performance of the material
provisions hereunder.
39 CONFIDENTIAL
Section 29. Further Assurances
Each party hereto shall do and perform such further acts and execute and
deliver such further instruments at such party's expense as may be required by
Applicable Law or reasonably requested by any other party to carry out and
effectuate this Agreement and the transactions contemplated hereunder.
Section 30. Severability
If any indication is received in writing by either party from any
Competent Authority to the effect that any part of this Agreement contravenes
any Applicable Law and cannot qualify for any applicable clearance or exemption,
or if any part of this Agreement is, or shall become, or shall be declared
illegal, invalid or unenforceable in any jurisdiction for any reason whatsoever
(including both by reason of the provisions of any legislation and also by
reason of any decision of any Competent Authority, either having jurisdiction
over this Agreement or any party to this Agreement), such part shall be severed
from this Agreement in the jurisdiction in question and such contravention,
illegality, invalidity or unenforceability shall not in any way whatsoever
prejudice or effect the remaining parts of this Agreement which shall continue
in full force and effect provided, always, that if, in the reasonable opinion of
any party to this Agreement, any such severance affects the commercial basis of
this Agreement, such party shall so inform the other party, whereupon the
parties shall negotiate to agree upon an amendment to the Agreement which will
maintain the balance of the commercial interests of the parties under this
Agreement. If, however, such negotiations shall not be successfully concluded
within thirty (30) days, either party shall have the right to terminate this
Agreement upon giving at least ninety (90) days written notice to the other
party.
Section 31. Legal Representation
Each party hereto hereby acknowledges that this Agreement has been
negotiated at arms-length through legal counsel of its own choosing. If a party
has not been represented by legal counsel, it hereby acknowledges that it was
given the opportunity to engage legal counsel and decided to waive that right.
Section 32. Effective Data
The effectiveness of this Agreement and the obligations of Carrier and
American hereunder are subject to, and shall be conditioned upon, the RDU
Sublease becoming effective and commencing.
Section 33. Counterparts
The Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute but one and the same
instrument.
40 CONFIDENTIAL
Section 34. Exclusion of Consequential Damages
EXCEPT FOR INDEMNIFICATION OBLIGATIONS, NEITHER PARTY WILL BE LIABLE FOR
ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING WITHOUT LIMITATION LOST
REVENUES, LOST PROFITS, OR LOST PROSPECTIVE ECONOMIC ADVANTAGE, ARISING FROM ANY
PERFORMANCE OR FAILURE TO PERFORM UNDER THIS AGREEMENT, EVEN IF SUCH PARTY KNEW
OR SHOULD HAVE KNOWN OF THE EXISTENCE OF SUCH DAMAGES, AND EACH PARTY HEREBY
RELEASES AND WAIVES ANY CLAIMS AGAINST THE OTHER PARTY FOR SUCH DAMAGES.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
MIDWAY AIRLINES CORPORATION AMERICAN AIRLINES, INC.
By: /s/ Xxxx Xxxxxxxxx By: /s/ X. X. Xxxx
------------------------ -------------------
Xxxx Xxxxxxxxx X. X. Xxxx
President Senior Vice President - Marketing
41 CONFIDENTIAL
ATTACHMENT A
ACCRUAL MILES
Only regularly scheduled, on-line air travel service operated by Carrier
on each of the following O & D city pairs, in both directions ("Carrier
Flights"), are eligible for Accrual Miles credit for Revenue Travel by Members:
{***}
{***}
{***}
{***}
{***}
{***}
{***}
{***}
{***}
{***}
{***}
{***}
{***}
{***}
The foregoing fourteen (14) O & D city pairs shall each be an
Original O & D City Pair for the purposes of Section 11.k. of
the Agreement
RDU-MDW Provided, however, that on and after July 1, 1995, Carrier
shall pay to {***} Accrual Mile posted for Revenue
Travel on the {***} city pair, which shall be the
applicable fee for the purposes of Section 8.a. of the
Agreement, whether or not Carrier has elected to convert to
the alternative fee structure described in that Section.
A-1 CONFIDENTIAL
No Codeshare Flights shall be eligible for Accrual Miles credit as a Carrier
Flight unless approved for such credit by American pursuant to Section 4.j. of
the Agreement.
Accrual Mile Guidelines
American will award Accrual Miles for Revenue Travel in the following
booking classes pursuant to the terms of Section 2.a. of the Agreement:
Coach Class: Y, B, H, Q, V, K, M (or any surviving codes designated
by Carrier from time to time).
If Carrier introduces a First Class:
F (or any surviving codes designated by Carrier from time to time).
For Revenue Travel which involves consecutive travel under a single flight
coupon on any two or more of the O & D city pairs listed in this Attachment A,
and only the O & D city pairs listed on this Attachment A, Actual Miles and
Accrual Miles will be calculated based on the United States Department of
Transportation approved non-stop mileage between the city were the Member
commenced such travel on the coupon and the city where the Member finished such
travel on the coupon.
Accrual Miles will not be awarded for any travel on free AAdvantage
Awards, Midway Merits Program awards or other free ticket promotions, including
free or reduced rate companion tickets, any industry or agency discount tickets
or passes, charter flight tickets, infant and unpublished fare tickets, or
tickets issued subject to special provisions.
In the case of upgraded travel through the use of an Upgrade Sticker,
Accrual Miles will be awarded based on the paid class of service.
A-2 CONFIDENTIAL
ATTACHMENT B
AWARD TRAVEL
Only regularly scheduled, on-line air travel service operated by Carrier
between any of the following destinations, in any direction ("Award Flights"),
are available to all Members for Award Travel:
{***}
{***}
{***}
{***}
{***}
{***}
{***}
{***}
{***}
{***}
{***}
{***}
{***}
{***}
{***}
{***}
The following Codeshare Flights between the following destinations, in any
direction, are available to all Members for Award Travel, so long as such
Codeshare Flights are operated are marketed under Carrier's "JI" designator
code:
None.
Provided, however, that the above described travel is not available for
Award Travel during the Blackout Dates, or for First Class travel (if offered)
or any other class other than Coach Class.
B-1 CONFIDENTIAL
Award Prices
(The following prices are applicable only until Carrier elects (if over) to
convert to the alternative fee structure described in Section 8.a. of the
Agreement)
The following zone definitions apply for Award Travel on Carrier:
ZONE 1: {***}
ZONE 2: {***}
For each Award Document issued pursuant to this Agreement, American shall
owe Carrier the applicable amount set forth below (all prices are stated and
shall be paid in U.S. Dollars):
Award Price
One Free Round Trip Ticket
------------------------------
Coach First
Class Class
Travel between any destination
within Zone 1 {***} N/A
-----
Travel between Zone 1 {***} N/A
destinations and Zone 2 -----
destinations
All of the above Award Travel is valid for round trip travel between the
applicable destinations, but may be used for one way travel if desired; however,
the award will not be reduced based on a one way trip.
B-2 CONFIDENTIAL
ATTACHMENT C
AWARD TRAVEL BLACKOUT DATES
Blackout dates for Award Travel:
1995 1996
---- ----
January l, 2 January l
November 22, 26 March 8-10, 15-17
December 23, 24, 31 April 5-7
November 27, December 1, 2
December 20-22, 24, 27-29
C-1 CONFIDENTIAL
ATTACHMENT D
DATA FLOW AND INPUT/OUTPUT SPECIFICATIONS
Carrier
Table of Contents
Data Flow:
1.0 Data Posting-AAdvantage Transactions
2.0 Data Reconciliation
3.0 Definitions and Record Layouts
4.0 Monthly Billing-Mileage Postings
5.0 Monthly Billing-Mileage Redemption
6.0 Allowable Characters
7.0 Check Digit Routine
8.0 Transmittal Form
D-1
01/17/95
CONFIDENTIAL
DATA FLOW AND INPUT/OUTPUT SPECIFICATIONS
Carrier
1.0 Data Posting - AAdvantage Transactions
1.1 Carrier will provide transmissions listing by AAdvantage number,
Members with qualified flights for posting to the AAdvantage
database. The transmission will include the following data elements:
(See Section 3.0 for record format and definitions)
Transaction Type Board Point
Partner ID Off-point
Partner Service Term Code Scheduled Departure Time
Member ID Scheduled Arrival Time
Member Last Name Cabin Purchased
Member First initial Booking Class
Flight Date Input Record Number
Carrier ID Flight Number
1.1.1 Accurate name and AAdvantage number data transfer is
paramount. See Sections 6 and 7 of Data Flow.
1.2 Carrier will provide weekly transmissions to the AAdvantage
department.
1.2.1 Each transmission will include the previous period's data and
any corrected data from earlier posting tapes.
1.2.2 The weekly transmission must be delivered by the Tuesday
following the reporting period.
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CONFIDENTIAL
DATA FLOW AND INPUT/OUTPUT SPECIFICATIONS
Carrier
2.0 Data Reconciliation
2.1 All Member flight information that is rejected during the
autoposting procedure (outlined in Section 1.0) will be displayed in
an error file. The report will list only Carrier data.
2.2 The AAdvantage Customer Service Department will review this error
file and make any reasonable corrections on a manual basis to the
Member name and/or AAdvantage number only. The error report of
uncorrected errors will be sent to Carrier for reconciliation.
2.3 The error report will include the following data elements:
AAdvantage Number Flight Number
Last Name Class of Service
First Initial Board Point
Transaction Code Off Point
Flight Date Type of Error
2.4 Carrier will research any records that the AAdvantage department is
unable to manually correct. These records will be retransmitted on a
subsequent transmissions within a thirty (30) day period.
D-3
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CONFIDENTIAL
DATA FLOW AND INPUT/OUTPUT SPECIFICATIONS
Carrier
3.0 Data Element Definitions - AAdvantage Transactions
Transaction Type One character (alpha).
The allowable transaction codes is "A".
Partner ID Three characters (alpha).
Industry standard airline code ("{XX}").
Left justified, blank filled.
Partner Service Five characters (alpha/numeric).
Term Code Value provided by American ("{XX001}").
Member ID Seven character AAdvantage number
(alpha/numeric).
Member Last Name Twenty characters
Left justified, blank filled.
See Allowable Characters in Section 6.
Member First One character (alpha).
Flight Date Eight characters (numeric).
Formatted YYYYMMDD.
Carrier ID Three characters (alpha).
Industry standard airline code.
Left justified, blank filled.
Flight Number Four characters (numeric).
Right justified, leading zeroes.
Board Point Three characters (alpha).
IATA Airport Code
Off-point Three characters (alpha).
IATA Airport Code.
Scheduled Departure Four characters (numeric).
24 - Time hour clock (Optional).
Scheduled Arrival Four characters (numeric).
24 - Time hour clock. (Optional).
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DATA FLOW AND INPUT/OUTPUT SPECIFICATIONS
Carrier
3.0 Data Element Definitions - AAdvantage Transactions (cont.)
Cabin Purchased Four characters (alpha).
Left justified, trailing spaces.
Booking Class One character (alpha).
Input Record Five characters (numeric).
Number
D-5
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CONFIDENTIAL
DATA FLOW AND INPUT/OUTPUT SPECIFICATIONS
Carrier
3.1 Flight Posting Transmission Format
Field No. Field Title Length From - To Type Notes
--------- ----------- ------ --------- ---- -----
1 Trans. Type 1 001-001 Char 'A'
2 Partner ID 3 002-004 Char '{XX}'
3 Part. Svc Term 5 005-009 Char '{XX001}'
Code
4 Member ID 7 010-016 Char AAdvantage Number
5 Member Last 20 017-036 Char Left justified;
Name trailing spaces
6 Member First 1 037-037 Char
Initial
7 Flight Date 8 038-045 Num YYYYMMDD
8 Carrier ID 3 046-048 Char '{XX}'
9 Flight Number 4 049-052 Num Right justified;
leading zeroes.
00 Xxxxx Xxxxx 3 053-055 Char IATA Airport Code
11 Filler 2 056-057 Char Reserved: spaces.
12 Off Point 3 058-060 Char IATA Airport Code
13 Filler 2 061-062 Char Reserved; spaces.
14 Scheduled 4 063-066 Num 24-hour clock
Departure Time
15 Scheduled 4 067-070 Num 24-hour clock
Arrival Time
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CONFIDENTIAL
DATA PLOW AND INPUT/OUTPUT SPECIFICATIONS
Carrier
3.1 Flight Posting Transmission Format (cont.)
Field No. Field Title Length From - To Type Notes
--------- ----------- ------ --------- ---- -----
16 Class of Svc 4 071-074 Char Y=Coach;
C=Business;
F=First
17 Filler 1 075-075 Char Reserved; spaces.
18 Filler 1 076-076 Char Reserved; spaces.
19 Filler 1 077-077 Char Reserved; spaces.
20 Input Record 5 078-082 Num Batch Sequence
Number Number
21 Filler 16 083-098 Char Reserved; spaces
22 Filler 7 099-105 Char Reserved; spaces
23 Filler 5 106-110 Char Reserved; spaces
Transmission LRECL=110 BLKSIZE=27940 RECFM=FB
D-7
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CONFIDENTIAL
DATA FLOW AND INPUT/OUTPUT SPECIFICATIONS
Carrier
4.0 Monthly Billing - Mileage Posting
4.1 On a monthly basis, American will provide supporting detail
for all transactions for which Carrier is being billed,
including all data provided by Carrier and data posted
manually by the AAdvantage department.
4.2 An invoice and a mileage posting summary report (hard copy)
are sent monthly. The mileage posting detail is provided via
transmission..
4.2.1 The billing detail includes the following
Member Information
o AAdvantage number (sorted in numeric sequence)
o Last Name
o First Initial
Flight Information
o Flight Date
o Flight Number
o Transaction Code
o Board Point
o Off Point
o Class of Service
o Base Miles
o Bonus Miles (Class of Service, and Promotional)
o Total Miles
o Source code (V,D) (V=Vendor or {XX} and
D=Manual or AA)
4.2.2 The summary report (hard copy) includes the following by
Class of Service
o Base Miles
o Class of Service Bonus Miles
o Promotional Bonus Miles
o Credited miles for each of the four mileage
categories listed above.
4.2.3 Additionally the summary report includes a trip grid by
Class of Service
o Number of accounts with trips
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CONFIDENTIAL
o Number of trips
D-9
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CONFIDENTIAL
DATA FLOW AND INPUT/OUTPUT SPECIFICATIONS
Carrier
4.0 Monthly Billing - Mileage Postings (continued)
4.3 Mileage fields may be negative values if credits are posted.
4.4 No other mileage posting reports will be generated.
4.5 All paper reports will include totals for all applicable
columns.
5.0 Monthly Billing - Mileage Redemption
5.1 On a monthly basis, American will provide a summary of all the
AAdvantage awards claimed for travel on Carrier.
5.2 The awards summary report (hard copy) includes the following
data:
o Award Code
o Award Description
o Awards Issued
o Awards Reinstated
o Net Awards Issued
5.3 No other mileage redemption reports will be generated
6.0 Allowable characters with the Name Fields
The only acceptable characters within the name fields are:
- All alpha characters.
- ' (apostrophe).
- # (pound sign) [used only to designate blanks
embedded in the name field].
- - (hyphen).
D-10
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CONFIDENTIAL
DATA FLOW AND INPUT/OUTPUT SPECIFICATIONS
Carrier
7.0 Check Digit Routine
7.1 The last digit of the AAdvantage number is a check digit to be
used by Carrier to verify the validity of the number before
providing it to American. American will also perform a last
name/number match before posting mileage to a Member's
account.
7.2 The check digit is equal to the first digit of the remainder
of the following q calculation.
(A1 + A3) x 2 +(A3 + A5) x 2 + (A4 + A6) x 2
--------------------------------------------
10
Where Al is the value of the first position of the AAdvantage
number and A3 is the value of the third position, etc. The
value of a position is determined using the decimal equivalent
of the EBCDIC code as defined in the IBM system 370 reference
summary code translation table, as shown below.
Character Value Character Value
--------- ----- --------- -----
0 240 I 201
1 241 J 209
2 242 K 210
3 243 L 211
4 244 M 212
5 245 N 213
6 246 O 214
7 247 P 215
8 248 Q 216
9 249 R 217
A 000 X 000
X 194 T 227
C 195 U 228
D 196 V 229
E 000 X 000
F 198 X 231
X 000 X 000
X 000 X 000
X-00
01/17/95
CONFIDENTIAL
DATA FLOW AND INPUT/OUTPUT SPECIFICATIONS
Carrier
7.0 Check Digit Routine (continued)
7.2 (continued)
Example: For the AAdvantage number AX65266 the calculation is
(193 + 246) x 2 + (246 + 242) x 2 + (245 + 246) x 2
---------------------------------------------------
10
=283.6
Therefore, the check digit is 6, confirming that the AAdvantage
number is valid as it equals the last digit of the AAdvantage
number.
7.3 The following parameters are also applicable in determining
the validity of an AAdvantage number:
o The letters G and S may appear only in the first
position of a valid AAdvantage number.
o The letters I, O, Q and Z never appear in any position
of a valid AAdvantage number.
D-12
01/17/95
CONFIDENTIAL
DATA FLOW AND INPUT/OUTPUT SPECIFICATIONS
Carrier
8.0 Transmittal Form
Transaction/Bonus Transmission
To be completed by Carrier
Starting Flight Date:_______
Ending Flight Date:_____
Record Count:___________
Submitted by:
Date:______
Telephone number:_______
Fax copy of this form to:
American Airlines
Manager AAdvantage Administration
MD 1395 CP2
0000 Xxxx Xxxxxx Xxxx.
Xxxx Xxxxx, XX 00000
Fax Number: (000) 000-0000
Phone number: (000) 000-0000 - Mr. Xxx Xxxxxx
D-13
01/17/95
CONFIDENTIAL
ATTACHMENT E
SUPPLEMENTAL PROVISIONS
Part I. Minimum Flight Activity Levels:
The following minimum flight activity level shall be required of Carrier
during the term of this Agreement:
(i) From the Effective Date through and including July 15, 1995,
Carrier will operate a minimum of twenty (20) daily non-stop jet
departures (in the aggregate) from Raleigh/Durham International Airport
(RDU) on the O & D city pair routes set forth on Attachment A.
(ii) From July l6,1995 through and including the date the Agreement
expires or terminates, Carrier will operate a minimum of thirty-five (35)
daily non-stop jet departures (in the aggregate) from Raleigh/Durham
International Airport (RDU) on the O & D city pair routes set forth on
Attachment A.
Part II. Additional Reports by Carrier:
During the term of this Agreement, Carrier shall furnish to American (to
4333 Xxxx Xxxxxx Boulevard, MD 5566, Xxxx Xxxxx, Xxxxx 00000, Attention: Vice
President - Corporate and Fleet Planning) the following:
A. As soon as available and in any event within one hundred eighty
(180) days after the close of each fiscal year of Carrier, copies of
the financial statements of Carrier for the fiscal year then ended
including, without limitation, a balance sheet of Carrier as of the
close of such fiscal year and statements of income, shareholders
equity and cash flows for such fiscal year.
B. As soon as available, and in any event within fifty (50) days after
the end of each fiscal quarter of Carrier, copies of the financial
statements of Carrier for the fiscal quarter then ended including,
without limitation, a balance sheet of Carrier as of the end such
quarter and statements of income, shareholders equity and cash flows
for such quarter and for the portion of the fiscal year ending with
such quarter, all in reasonable detail, and certified by the chief
financial officer of Carrier as being true and correct and as having
been prepared in accordance with generally accepted accounting
principles ("GAAP") and as fairly presenting the assets,
liabilities, financial condition and results of operations of
Carrier.
Each such financial statement shall be accompanied by a certificate signed
by the chief financial officer of Carrier certifying as to whether Carrier is in
default under this Agreement any other agreement with American or its
Affiliates, or any material agreement to which Carrier is a party or by which it
or any of its properties are bound. Further, each of the
E-1 CONFIDENTIAL
annual financial statements shall be accompanied by a certificate from Xxxxxx
Xxxxxxxx & Co., Carrier's independent certified public accountants, or such
other "Big Six" independent certified public accounting firm chosen by Carrier,
stating that (x) such financial statements have been prepared in accordance with
GAAP and fairly present the financial position, results of operations and cash
flows of Carrier, (y) the examinations of Carrier's accounts in connection with
such financial statements have been made in accordance with generally accepted
auditing standards and included such tests of the accounting records and such
other auditing procedures as were considered necessary in the circumstances and
(z) nothing has come to the attention of such accountants in the course of their
audit that caused them to believe there exists any set of circumstances which
would constitute a default by Carrier under this Agreement, any other agreement
with American or its Affiliates, or any material agreement to which Carrier is a
party or by which it or any of its properties are bound, (and, with respect to
this Subparagraph (z), such certificate may also state that such accountants
have not expanded the scope of the procedures performed in the course of their
audit in order to deliver such certificate).
If at any time any monies owed by Carrier under this Agreement are past
due and owing, then upon the request of American, Carrier shall also furnish to
American, as soon as available on a continuing basis, and in any event within
twenty (20) days after the end of each calendar month, copies of the summary
financial statements of Carrier as of the end of in month most recently
completed which are produced for the use of management of Carrier, including,
without limitation, a balance sheet of Carrier as of the end of such month and
statements of income, shareholders equity and cash flows for such month and for
the portion of the fiscal year ending with such month, all in reasonable detail,
and certified by the chief financial officer of Carrier as being true and
correct and as having been prepared in accordance with GAAP and as fairly
presenting the assets, liabilities, financial condition and results of
operations of Carrier.
Carrier shall be required to give American immediate notice of any
default, event of default, right of termination, suspension, acceleration,
breach or other similar event (or any event or set of circumstances which with
notice or the lapse of time or both, would constitute any of the foregoing)
under this Agreement or with respect to any material indebtedness of Carrier.
Carrier's chief financial officer shall be required to provide a certificate
with each set of annual and quarterly financial statements and, if provided,
monthly financial statements that (i) Carrier has not received any notice of a
default, event of default, right of termination, suspension, acceleration,
breach or similar event (or any event or set of circumstances which with notice
or the lapse of time or both, would constitute any of the foregoing) regarding
this Agreement, any other agreement with American or its Affiliates, or any
agreement or instrument involving any material indebtedness of Carrier, and (ii)
there exists no set of circumstances which would constitute or give rise to any
event or set of circumstances specified in claim (i) above.
E-2 CONFIDENTIAL
CONFIDENTIAL
FIRST AMENDMENT TO
AADVANTAGE(R) PARTICIPATING CARRIER AGREEMENT
This First Amendment to AAdvantage Participating Carrier Agreement (this
"Amendment"), dated as of October 1, 1995, is made by and between American
Airlines, Inc., a Delaware corporation having its principal place of business at
0000 Xxxx Xxxxxx Xxxxxxxxx, Xxxx Xxxxx, Xxxxx 00000 ("American"), and Midway
Airlines Corporation, a Delaware corporation, having its principal place of
business at 000 X. Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxx Xxxxxxxx 00000
("Carrier")
WHEREAS, American and Carrier are parties to that certain AAdvantage
Participating Carrier Agreement, dated as of January 18, 1995 (the "Agreement");
and
WHEREAS, American and Carrier desire to amend the Agreement to provide for
(i) an expanded description of the reports required to be provided by Carrier in
connection with the acceptance of Upgrade Stickers; (ii) the addition of certain
O & D city pairs as Carrier Flights and Award Flights: and (iii) the addition of
certain Codeshare Rights as Carrier Flights and Award Flights, all upon the
terms and subject to the conditions of this Amendment;
NOW THEREFORE, in consideration of the mutual covenants and promises in
this Amendment, American and Carrier agree as follows:
1. The definition of "Paid Upgrade Sticker" in Section 1 of the Agreement
is hereby amended and restated in its entirety to read as follows:
"Paid Upgrade Sticker" means an Upgrade Sticker for which a Member
has paid consideration to American and which bears one of the following
sticker codes: AP, SG, GP or SR.
2. The first sentence of Section 3.c.i. of the Agreement is hereby amended
and restated in its entirety as follows:
{***}
3. Section 3.h.i. of the Agreement is hereby amended and restated in its
entirety to read as follows:
"i. If Carrier offers a First Class service during the term of this
Agreement, and for as long as American permits Members to use Upgrade
Stickers, Carrier will accept all Upgrade Stickers and upgrade the Member
tendering such Upgrade Sticker by one class
1 CONFIDENTIAL
of service for Carrier Flights with First Class service, if space is
available, pursuant to the procedures described in Subsection 3.h.ii
below; provided, however, that for the purposes of this Agreement, Accrual
Miles for Revenue Travel made in conjunction with an Upgrade Sticker shall
be awarded based only on the class of service paid for. Carrier will not
charge Members for the use of Upgrade Stickers. Carrier will permit
American (upon American's providing to Carrier at least two Business Days'
prior written notice) to inspect Carrier's relevant books and records to
verify the numbers and types of Upgrade Stickers honored by Carrier and
the amount owing by American to Carrier therefor."
4. Section 8.c.iii. of the Agreement is hereby amended and restated in its
entirety to read as follows:
"iii. American will pay Carrier for Paid Upgrade Stickers accepted
and honored by Carrier (if any) in a given month, no later than thirty
(30) days following receipt of an invoice (if any) from Carrier for the
month in question, which invoice shall be supported by a detailed report
listing, for each segment for which a Paid Upgrade Sticker was accepted
and an upgrade provided, (i) the date of travel, (ii) the Carrier Flight
number, (iii) the O&D city pair flown, (iv) the ticket number, (v) the
sticker code of the Paid Upgrade Sticker used, and (vi) the applicable
price (as set forth in Section 8.b. above) for the Paid Upgrade Sticker
being reported. The report will present such information grouped and
totaled by Paid Upgrade Sticker code, and will also show the total due for
all Paid Upgrade Stickers being reported."
5. Section 17 of the Agreement is hereby amended by deleting the address
of Midway Airlines Corporation and that of Xxxxxxxx X. Xxxxxx in their entirety
and by inserting in lieu thereof the following information:
Midway Airlines Corporation
000 X. Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx Xxxxxxxx 00000
Attention: President (and)
Attention: General Counsel
Phone: (000) 000-0000
Fax: (000) 000-0000
6. Attachment A and Attachment B of the Agreement are hereby amended and
restated in their entireties to read as set forth in Exhibit A and Exhibit B to
this Amendment.
7. The Agreement is hereby amended to add a new Attachment F which reads
as set forth in Exhibit C to this Amendment.
8. Unless the context otherwise requires, all capitalized terms used in
this Amendment but not herein defined shall have the meanings ascribed such
terms in the Agreement. Carrier and American agree that, except for those
modifications expressly set forth in this Amendment, all terms and provisions of
the Agreement shall remain unchanged and in full force and effect. No waiver or
modification of the terms or provisions of the Agreement is
2 CONFIDENTIAL
intended or is to be inferred, except as expressly provided in this Amendment.
This Amendment and the Agreement shall hereafter be read and construed together
as a single document, and all references in the Agreement to the Agreement shall
hereafter refer to the Agreement as amended by this Amendment. This Amendment is
intended for the sole benefit and use of Carrier and American or their permitted
successors or assigns and is not intended to confer rights upon any third
parties, including, without limitation, Members.
9. This Amendment may be executed by Carrier and American in separate
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute but one and the same
instrument. Confirmation of the execution of this Agreement by a telefax of a
facsimile signature page or pages executed by Carrier and American shall be
binding upon the parties hereto.
IN WITNESS WHEREOF, American and Carrier have executed this Amendment as
of the date and year first above written.
MIDWAY AIRLINES CORPORATION AMERICAN AIRLINES, INC.
By: /s/ Xxxxxx Xxxxx By: /s/ Xxxxx X. Xxxxxx
-------------------------- ------------------------------------
Name: Xxxxxx Xxxxx Name: Xxxxx X. Xxxxxx
------------------------ ----------------------------------
Title: Senior Vice President Title: Vice President Marketing Planning
------------------------ ---------------------------------
3 CONFIDENTIAL
EXHIBIT A
{***}
A-1 CONFIDENTIAL
Effective as of October 1,1995, and subject to the terms and conditions of
this Agreement (including, without limitation, the terms and conditions set
forth in Attachment F to this Agreement), the Codeshare Flights operated between
each of the following O & D city pairs (in both directions) by Great Lakes
Aviation, Ltd. or its wholly-owned subsidiary, d/b/a Midway Connection
("Commuter"), will be Carrier Flights eligible for Accrual Miles credit for
Revenue Travel by Members, all according to the terms of this Agreement: All O &
D city-pairs listed above as eligible for Accrual Miles credit for Revenue
Travel by Members.
Carrier will be solely responsible for, and will pay American for, Accrual
Miles awarded for Member's Revenue Travel on the above Codeshare Flights, all in
accordance with the terms and conditions of this Agreement. For the purposes of
the transactions contemplated by the Agreement, Carrier will be responsible for
all of the above Codeshare Flights as if they were flights operated by Carrier.
Except as otherwise provided in this Agreement, the above Codeshare Rights will
be treated in accordance with the terms and conditions of this Agreement as
Carrier Flights.
Except for the Codeshare Flights listed above, no other Codeshare Flights
shall be eligible for Accrual Miles credit as a Carrier Flight unless approved
for such credit by American pursuant to Section 4.j. of the Agreement.
Accrual Mile Guidelines
American will award Accrual Miles for Revenue Travel in the following
booking classes pursuant to the terms of Section 2.a. of the Agreement:
Coach Class: Y, B, H, Q, V, K, M, Z
(or any surviving codes designated by Carrier from time to time).
First Class (where available): F
(or any surviving codes designated by Carrier from time to time).
For Revenue Travel which involves consecutive travel under a single flight
coupon on any two or more of the O & D city pairs listed in this Attachment A,
and only the O & D city pairs listed on this Attachment A, Actual Miles and
Accrual Miles will be calculated based on the United States Department of
Transportation approved non-stop mileage between the city were the Member
commenced such travel on the coupon and the city where the Member finished such
travel on the coupon.
Accrual Miles will not be awarded for any travel on free AAdvantage
Awards, Midway Merits Program awards or other free ticket promotions, including
free or reduced rate companion tickets, any industry or agency discount tickets
or passes, charter flight tickets, infant and unpublished fare tickets, or
tickets issued subject to special provisions.
In the case of upgraded travel through the use of an Upgrade Sticker or
any similar promotions, Accrual Miles will be awarded based on the paid class of
service."
A-2 CONFIDENTIAL
EXHIBIT B
"ATTACHMENT B
AWARD TRAVEL
Only regularly scheduled, on-line air travel service operated by Carrier
between any of the following destinations, in any direction, either connecting
through RDU or as a non-stop to or from RDU ("Award Flights"), are available to
all Members for Award Travel: All O & D city-pairs listed on Attachment A as
eligible for Accrual Miles credit for Revenue Travel by Members.
Effective as of October 1,1995, and subject to the terms and conditions of
this Agreement (including, without limitation, the terms and conditions set
forth in Attachment F to this Agreement). the Codeshare Flights operated between
the following destinations, in any direction either connecting through RDU or as
a non-stop to or from RDU by Commuter (as defined in Attachment A of this
Agreement), will be Award Flights for the purposes of the Agreement, available
to all Members for Award Travel according to the terms of this Agreement: All O
& D city-pairs listed on Attachment A as eligible for Accrual Miles credit for
Revenue Travel by Members.
Provided, however, that the above described travel is not available for
Award Travel during the Blackout Dates, or for First Class travel (if offered)
or any other class other than Coach Class.
Award Prices. (The following prices are applicable only until Carrier elects
(if ever) to convert to the alternative fee structure described
in Section 8.a. of the Agreement.)
The following zone definitions apply for Award Travel on Carrier and Commuter:
ZONE 1: All O & D city-pairs eligible for Award Travel on Carrier and
Commuter that are not listed under Xxxx 0 xxxxx.
XXXX 2: {***}
For each Award Document issued pursuant to this Agreement, American shall
owe Carrier the applicable amount set forth below (all prices are stated and
shall be paid in U.S. Dollars):
Award Price
One Free Round Trip Ticket
--------------------------
Coach First
Class Class
Travel between any destination
within Zone 1 $50 N/A
-----
Travel between Zone 1 $60 N/A
destinations and Zone 2 -----
destinations
B-1 CONFIDENTIAL
All of the above Award Travel is valid for round trip travel between the
applicable destinations, but may be used for one way travel if desired; however,
the award price will not be reduced based on a one way trip."
B-2 CONFIDENTIAL
EXHIBIT C
ATTACHMENT F
TERMS AND CONDITIONS REGARDING THE INCLUSION
OF CERTAIN CODESHARE FLIGHTS
In addition to all other rights of termination and cancellation provided
under this Agreement, American may terminate the inclusion of all of the
Codeshare Flights operated by Commuter (as defined in Attachment A of this
Agreement) ("Commuter Codeshare Flights") as Carrier Flights or Award Flights
under this Agreement, at any time, for any reason (with or without cause), and
without any liability or obligation to Carrier or Commuter (except for payment
of amounts due and owing and performance of obligations accrued, in each case on
or prior to the date of termination of inclusion of the above Codeshare Flights)
by providing at least thirty (30) days prior written notice to Carrier.
In addition to all other rights of termination and cancellation provided
under this Agreement, inclusion of the above Codeshare Flights as Carrier
Flights or Award Flights under this Agreement may be canceled by either American
or Carrier (at their respective options), for all purposes under this Agreement,
simultaneously with the termination or expiration of (i) the Airline Services
Agreement, dated as of August 8, 1995, between Carrier and Commuter and (ii) the
Agreement of Sublease, dated as of January 18, 1995, between American and
Commuter relating to RDU.
American and Carrier (i) acknowledge and agree that Commuter is not a
third party beneficiary under this Agreement (pursuant to Section 27 or
otherwise), and (ii) acknowledge receipt of the letter, dated effective October
1, 1995 signed by Commuter and confirming Commuter's agreement to and acceptance
of the same.
C-1 CONFIDENTIAL
October 26, 1995
Great Lakes Aviation, Ltd.
190 Norwest Financial Center
0000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Re: First Amendment to AAdvantage Participating Carrier Agreement (the
"Amendment") between American Airlines, Inc. ("American") and Midway
Airlines Corporation ("Midway")
Dear Sir or Madam:
As you know, the Amendment addresses coverage of certain Codeshare Flights
of Great Lakes Aviation, Ltd. or any wholly-owned subsidiary thereof, d/b/a
Midway Connection ("MC"), under the AAdvantage Participating Carrier Agreement,
dated as of January 18, 1995, between American and Midway, as amended (the
"Agreement"). Prior to entering into the Amendment, American will require that
MC confirm the following points:
1. MC has read and understands the Amendment (in the attached form);
and
2. MC is not a third party beneficiary of any kind to or under the
Agreement or the Amendment.
Please confirm your agreement to and acceptance of the foregoing by
countersigning the enclosed originals of this letter and returning one such
original to the undersigned.
Sincerely,
AMERICAN AIRLINES, INC.
By: /s/ Xxxxx X. Xxxxxx
---------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President Marketing Planning
CONFIRMED (as of the date first written above):
GREAT LAKES AVIATION, LTD., on its own behalf and on behalf of and as authorized
agent for Northern Star Airlines, Inc., a wholly owned subsidiary of Great Lakes
Aviation, Ltd., and for RDU, Inc., a wholly-owned subsidiary of Great Lake
Aviation, Ltd.
By: /s/ Xxxxxx X. Xxxxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxxxx
-------------------------------
Title: Exec. V.P. Cust Svc & Admin.
------------------------------
cc: Midway Airlines Corporation
000 Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx Xxxxxxxx 00000
ATTN: Xxxxxx Xxxxx
SECOND AMENDMENT TO
AADVANTAGE PARTICIPATING CARRIER AGREEMENT
This Second Amendment to AAdvantage Participating Carrier Agreement (this
"Second Amendment"), dated as of December 10,1996, is by and between AMERICAN
AIRLINES, INC., a Delaware corporation having its principal place of business at
0000 Xxxx Xxxxxx Xxxxxxxxx, Xxxx Xxxxx, Xxxxx 00000 ("American"), and Midway
Airlines Corporation, a Delaware corporation, having its principal place of
business at 000 X. Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxx Xxxxxxxx, 00000
("Carrier").
WHEREAS, American and Carrier are parties to that certain AAdvantage
Participating Carrier Agreement, dated January 18, 1995 ("the Agreement"), as
amended; and
WHEREAS, American and Carrier desire to amend the Agreement to provide for
an alternative fee structure upon the terms and subject to the conditions of
this Second Amendment; and
NOW, THEREFORE, in consideration of the mutual covenants and promises in
this Second Amendment, the parties hereto agree as follows:
1. Carrier will exercise the option (per Section 8a.ii.A. of the Agreement) to
convert on a permanent basis (without retroactive application) to the following
alternative fee structure in lieu of the fees set forth in Section 8.a.i.
effective December 1,1996.
A. Carrier shall pay American on a monthly basis, for every Accrual
Mile posted to a Member's AAdvantage Account as follows:
{***}
{***}
{***}
B. American shall not owe Carrier any amounts for Award Documents
issued for Award Travel.
2. Except for the modifications expressly set forth in this Second Amendment,
all provisions of the Agreement will remain unchanged and in full force and
effect.
IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment
as of the date first written above.
Signed for and on behalf of Signed for and on behalf of
MIDWAY AIRLINES CORPORATION AMERICAN AIRLINES, INC.
By: /s/ Xxxxxx Xxxxx By: /s/ Xxxxx X. Xxxxxx
----------------------- ------------------------
Xxxxxx Xxxxx Xxxxx X. Xxxxxx
Senior Vice President Vice President
Marketing Marketing Planning
EXHIBIT E
THIRD AMENDMENT TO AADVANTAGE
PARTICIPATING CARRIER AGREEMENT
This Third Amendment to AAdvantage Participating Carrier Agreement ("Third
Amendment"), dated as of February 10, 1997, by and between American Airlines,
Inc. ("American") and Midway Airlines Corporation ("Carrier).
WHEREAS, American and Carrier have entered into an AAdvantage
Participating Carrier Agreement (the "Agreement") dated as of the 18th day of
January, 1995, amended pursuant to the Amendment to AA Agreements dated as of
April 25,1996 (the "First Amendment") and as of December 10,1996 (the "Second
Amendment") (for ease in drafting the Agreement, the First Amendment and the
Second Amendment are collectively referred to herein as the Agreement), pursuant
to which Carrier participates in American's AAdvantage Program; and
WHEREAS, concurrently herewith, American and Carrier are entering into a
certain Letter Agreement providing the terms and conditions under which American
has agreed to participate in a financial restructuring of Carrier; and
WHEREAS, in connection with such restructuring, Carrier has requested and
American has agreed to make certain Amendments to the Agreement, subject to the
terms and conditions set forth in this Third Amendment.
NOW, THEREFORE, in consideration of the mutual covenants and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, American and Carrier agree to amend the Agreement as follows:
1. Section 1 is amended to change the definition of "Expiration Date" in its
entirety to read as follows:
"Expiration Date" means 23.59 Coordinated Universal Standard Time (UTC) on
April 30, 2001, unless this Agreement is extended or terminated earlier in
accordance with the terms of this Agreement, in which case the last day of
the extended term of the date on which this Agreement is earlier
terminated shall be the Expiration Date."
2. Section 8.a.ii.A. shall be amended in its entirety to read as follows:
"Carrier shall pay to American on a monthly basis, for every Accrual Mile
posted to a Member's AAdvantage Account as follows (except as otherwise
specified on Attachment A attached hereto):
{***}
{***}
{***}
In addition, Carrier shall pay American, on a monthly basis, for the
reinstatement in a given month of any Award Certificate and/or Award
Ticket which was issued prior to the effective date of Carrier's
conversion (if any) to the alternative fee structure."
3. This Third Amendment, together with the Agreement, First Amendment and Second
Amendment, constitutes the entire agreement of the parties with respect to its
subject matter and supersedes all prior agreements or understandings, whether
written or oral, if any, concerning the subject matter. All defined terms used
herein without definition shall have the meanings set forth in the Agreement. As
modified hereby, the Agreement is ratified and confirmed and shall remain in
full force and effect.
IN WITNESS WHEREOF, the parties have caused this Third Amendment to be duly
executed and delivered as of the date and year first above written.
MIDWAY AIRLINES CORPORATION AMERICAN AIRLINES, INC.
By: /s/ Xxxxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxx
-------------------------- -----------------------------
Xxxxxx X. Xxxxx
Its: Senior Vice President Managing Director
------------------------- Airline Management Services, Inc.
2
