AMENDED AND RESTATED CHAUTAUQUA JET SERVICE AGREEMENT Between US AIRWAYS, INC. And CHAUTAUQUA AIRLINES, INC.
EXHIBIT
10.4
CONFIDENTIAL
TREATMENT
REQUESTED
PURSUANT TO RULE 24b-2
Execution
Copy
______________________________________________________________________________
AMENDED
AND RESTATED
Between
US
AIRWAYS, INC.
And
CHAUTAUQUA
AIRLINES, INC.
______________________________________________________________________________
Certain
portions of this exhibit have been omitted pursuant to a request for
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934.
The omitted materials have been filed separately with the Securities and
Exchange Commission.
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TABLE
OF CONTENTS
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ARTICLE
1
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COMPLIANCE
WITH REGULATIONS
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2
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ARTICLE
2
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AIR
TRANSPORTATION SERVICES TO BE PROVIDED BY
CHAUTAUQUA
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3
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SECTION
2.1
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SCHEDULE
REQUIREMENTS
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3
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SECTION
2.2
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SCHEDULING
PARAMETERS
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3
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SECTION
2.3
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TECHNICAL
OPERATIONS
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3
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SECTION
2.4
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REGULATIONS
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4
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SECTION
2.5
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OPERATING
PROCEDURES
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4
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SECTION
2.6
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AIRCRAFT
REGISTRATION
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4
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SECTION
2.7
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CHAUTAUQUA
RESPONSIBILITIES
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4
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SECTION
2.8
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SUBSTITUTE
AIRCRAFT
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5
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SECTION
2.9
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SPARE
AIRCRAFT AND SPARE ENGINES
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5
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SECTION
2.10
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JETS
FOR JOBS
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5
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SECTION
2.11
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IN-FLIGHT
SALES
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6
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SECTION
2.12
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PASS
AGREEMENT
|
6
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SECTION
2.13
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PROCESSING
CODE-SHARE PASSENGERS
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6
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ARTICLE
3
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OPERATION
UNDER THE “US AIRWAYS EXPRESS” NAME
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6
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SECTION
3.1
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SERVICEMARKS
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6
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SECTION
3.2
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SIGNAGE
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6
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ARTICLE
4
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US
AIRWAYS’ SUPPORT SERVICES AND FACILITIES
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7
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SECTION
4.1
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FUEL
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7
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SECTION
4.2
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RESERVATIONS
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7
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SECTION
4.3
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STATION
FACILITIES AND GROUND SUPPORT SERVICE
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8
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SECTION
4.4
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CARGO,
COMPANY MATERIALS (“COMAT”) AND MAIL HANDLING SERVICES
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9
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SECTION
4.5
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TERMS
OF TRANSPORTATION, SALES AND PROMOTION
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9
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ARTICLE
5
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PURCHASE
OF AVAILABLE SEAT MILES (“ASMA”)
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10
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SECTION
5.1
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PRICING
MODEL
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10
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SECTION
5.2
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DIRECT
COSTS AND PASS THROUGH COSTS
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10
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SECTION
5.3
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INVOICING
AND PAYMENTS
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11
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SECTION
5.4
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PROFIT
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12
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SECTION
5.5
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PAYMENTS
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12
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SECTION
5.6
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TRUE-UP
INVOICES
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12
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SECTION
5.7
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AUDIT
AND INSPECTION RIGHTS
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12
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ARTICLE
6
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LIABILITY,
INDEMNIFICATION AND INSURANCE
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14
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SECTION
6.1
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CHAUTAUQUA
IS AN INDEPENDENT CONTRACTOR
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14
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SECTION
6.2
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LIABILITY
AND INDEMNIFICATION
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14
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SECTION
6.3
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INSURANCE
COVERAGE
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16
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SECTION
6.4
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CARGO
LIABILITY INSURANCE
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18
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ARTICLE
7
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TERM
AND TERMINATION
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18
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SECTION
7.1
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EFFECTIVE
DATE AND TERM
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18
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SECTION
7.2
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REGULATORY
CHANGES
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19
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SECTION
7.3
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TERMINATION
FOR CAUSE BY US AIRWAYS
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19
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SECTION
7.4
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OTHER
TERMINATION RIGHTS
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21
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SECTION
75
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TERMINATION
BY CHAUTAUQUA
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23
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ARTICLE
8
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PERFORMANCE
ADJUSTMENTS
|
25
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SECTION
8.1
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[INTENTIONALLY
OMITTED]
|
25
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SECTION
8.2
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PERFORMANCE
PLAN METRICS
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25
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SECTION
8.3
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PERFORMANCE
PLAN PENALTIES AND INCENTIVES
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25
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SECTION
8.4
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PERFORMANCE
EXCEPTIONS
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26
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26
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ARTICLE
9
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SERVICE
MARK LICENSE FOR SERVICES PROVIDED_PURSUANT TO THIS
AGREEMENT
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27
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SECTION
9.1
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GRANT
OF LICENSE
|
27
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SECTION
9.2
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TERMS
AND CONDITIONS GOVERNING TRADEMARK LICENSED
|
27
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ARTICLE
10
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FORCE
MAJEURE
|
28
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SECTION
10.1
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FORCE
MAJEURE
|
28
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SECTION
10.2
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RESUMPTION
OF SERVICE
|
28
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ARTICLE
11
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NOTICES
|
29
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ARTICLE
12
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MISCELLANEOUS
|
29
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SECTION
12.1
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ENTIRE
AGREEMENT/AMENDMENTS/COUNTERPARTS
|
29
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SECTION
12.2
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HEADINGS
|
30
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SECTION
12.3
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SEVERABILITY
|
30
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SECTION
12.4
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WAIVER
|
30
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SECTION
12.5
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ASSIGNMENTS
|
30
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SECTION
12.6
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GOVERNING
LAW/JURY TRIAL WAIVER
|
31
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SECTION
12.7
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NO
FRANCHISE
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31
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SECTION
12.8
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ADDITIONAL
US AIRWAYS RIGHTS
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31
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ARTICLE
13
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CONFIDENTIALITY
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31
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SECTION
13.1
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CONFIDENTIALITY
OF AGREEMENT
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31
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SECTION
13.2
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CONFIDENTIAL
INFORMATION
|
32
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SECTION
13.3
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EXCLUSIONS
FROM CONFIDENTIAL INFORMATION
|
33
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SECTION
13.4
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INFORMATION
SHARED WITH US AIRWAYS GROUP, INC
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33
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SECTION
13.5
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INFORMATION
SHARED WITH WEXFORD AND REPUBLIC
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33
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SECTION
13,6
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RETURN
OF DOCUMENTS
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33
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SECTION
13.7
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REMEDIES
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34
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ARTICLE
14
|
DISPUTE
RESOLUTION
|
34
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| 14.1 | CERTAIN DISPUTES | 34 |
| 14.2 | DISPUTE RESOLUTION PROCEEDINGS | 34 |
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EXHIBIT
2.2
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SCHEDULE
REQUIREMENTS
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37
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EXHIBIT
2.7
|
DIVISION
OF RESPONSIBILITIES
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39
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EXHIBIT
5.1
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PRICING
MODEL
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40
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EXHIBIT
7.4
|
TERMINATION
DATES FOR AIRCRAFT IN SERVICE
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42
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AMENDED
AND RESTATED
This
Amended and Restated Chautauqua Jet Service Agreement (this “Agreement”) is made
and entered as of this 26th
day of
April, 2005, by and between US Airways, Inc. (herein referred to as “US
Airways”), a Delaware corporation having its principal place of business at 0000
Xxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000, and Chautauqua Airlines, Inc. (herein
referred to as “Chautauqua”), an Indiana corporation, having a principal place
of business at 0000 Xxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxxxx, Xxxxxxx 00000 (each
of
US Airways and Chautauqua, a “Party” and collectively, the
“Parties”).
WITNESSETH:
WHEREAS,
US
Airways holds a certificate of public convenience and necessity issued by the
Department of Transportation (“DOT”) authorizing US Airways to engage in the
interstate and overseas air transportation of persons, property and mail between
all points in the United States, its territories and possessions;
WHEREAS,
Xxxxxxxxxx holds a certificate of public convenience and necessity issued by
the
DOT authorizing Chautauqua to engage in the interstate air transportation of
persons, property and mail in the United States;
WHEREAS,
US
Airways owns various trademarks, trade dress, service marks and logos,
including, but not limited to, “US Airways,”“US Airways Express,” and
distinctive exterior color decor and patterns on its aircraft (each, a “US
Airways Servicemark” and collectively, the “US Airways
Servicemarks”);
WHEREAS,
Chautauqua and US Airways have entered into that certain Chautauqua Jet Service
Agreement, dated as of March 19, 1999, as amended by the First Amendment, dated
as of September 6, 2000, the Second Amendment, dated as of December 20, 2000,
the Third Amendment, dated as of July 11, 2001, and the Fourth Amendment, dated
as of December 18, 2002 (the “Original Jet Services Agreement”) pursuant to
which Chautauqua operates regional jets under the name “US Airways Express” in
the provision of its air transportation services as provided in the Original
Agreement and acquired a nonexclusive license for use of one or more of US
Airways’ Servicemarks for use in connection with Chautauqua’s operation of such
services;
WHEREAS,
US
Airways and Chautauqua desire to amend and restate the Original Agreement,
as
amended to date, by executing and delivering this Agreement;
WHEREAS,
on
September 12, 2004, US Airways and certain of its affiliates filed voluntary
petitions for reorganization relief pursuant to Chapter 11 of the
Title 11 of the United States Code, 11 U.S.C. § 101 et seq., as
amended (Title 11, the “Bankruptcy Code”) in the United States Bankruptcy
Court for the Eastern District of Virginia, Alexandria Division (the “Bankruptcy
Court”) in the matter entitled, In re US Airways, Inc., et al., Case No.
04-13819 (the “Bankruptcy Proceedings”);
WHEREAS,
US
Airways, US Airways Group, Inc. (“Group”), Wexford Capital LLC and its
affiliated entities (“Wexford”) and Republic Airways Holdings, Inc. and its
affiliated entities (“Republic,” and together with Wexford, the “Investor”) have
entered into that certain Investment Agreement, dated as of March 15, 2005
(as
such agreement may be amended from time to time, or any successor investment
agreement, the “Investment Agreement”), pursuant to which (i) US Airways has the
right, prior to the effective date of US Airways’ plan of reorganization (the
“Plan”) in the current Bankruptcy Proceedings (the “Case”), to sell to and
license back from the Investor certain slots (the “Slot Option”) and gates, (ii)
upon the occurrence of certain events, the Investor will purchase or assume
the
leases of certain EMB-170 aircraft (the “Additional Aircraft”), (iii) the
Investor has agreed to invest, subject to satisfaction of certain conditions,
$125 million in connection with the Plan (the “Equity Commitment”), and (iv)
Republic may purchase additional EMB-170 and EMB-190 aircraft (the “Growth
Aircraft”), which together with the Additional Aircraft will be operated in US
Airways Express service pursuant to a separate jet service agreement (the
“EMB-170/EMB-190 Jet Service Agreement”), in each case subject to the terms and
conditions of the Investment Agreement and to such further documents as the
parties may execute relating to such transactions.
NOW
THEREFORE,
for and
in consideration of the foregoing premises and the mutual covenants and
obligations hereinafter set forth, the Parties hereby agree as
follows:
ARTICLE
1 - COMPLIANCE WITH REGULATIONS
Each
Party agrees that all services, including air transportation services, performed
by it, and any of its agents, pursuant to this Agreement or otherwise shall
be
conducted in full compliance with any and all applicable laws, statutes, orders,
rules and regulations, whether now in effect or hereafter promulgated, of all
applicable governmental agencies or authorities (such laws, statutes, orders,
rules and regulations, “Regulations”), including, but not limited to the Federal
Aviation Administration (the “FAA”), the Transportation Security Administration
(the “TSA”) and the DOT (for purposes of this Agreement, any applicable
governmental agency or authority, whether domestic or foreign, shall be referred
to as a “Regulatory Authority”). Each Party shall be solely and exclusively
responsible for complying with all Regulations in connection with the services
to be provided by it hereunder, and the Parties agree that neither Party shall
have any obligation or responsibility, whether direct or indirect, with respect
to such compliance by the other Party, except that US Airways shall be
responsible for sharing the costs associated with such compliance by Chautauqua
as and only to the extent expressly provided herein, and for fulfilling its
responsibilities for emergency family assistance services as defined in the
Emergency Assistance Agreement, executed by US Airways and Chautauqua in
connection with the Original Jet Services Agreement.
ARTICLE
2 - AIR TRANSPORTATION SERVICES TO BE PROVIDED BY
CHAUTAUQUA
Section
2.1 - Schedule Requirements
At
all
times during the Term (as defined in Section 7.1 hereof), Chautauqua will
operate, in accordance with the terms and conditions hereof, US Airways Express
air transportation service between various U.S. domestic city-pairs and between
various U.S.-Canadian city-pairs selected in accordance with Section 2.2
(hereinafter referred to as the “Service”) using a maximum of [*]
Embraer
ERJ-145 fifty (50) seat regional jet aircraft (“ERJ Aircraft”), or such other
aircraft as may be substituted thereto pursuant to the terms of Section 2.8
hereof, (all such aircraft providing the Service pursuant to the terms hereof,
including substitute aircraft used pursuant to Section 2.8, the “Aircraft”). The
ERJ Aircraft shall be configured with such mechanical configuration as has
been
specified by US Airways, bearing the US Airways Express livery.
Section
2.2 - Scheduling Parameters
The
city-pairs from which the Service is to be provided by Chautauqua pursuant
to
this Agreement will be selected by US Airways, in its sole discretion, subject
to operational and safety requirements, minimum and maximum schedule
requirements, and the other parameters set forth in this Section 2.2 and Exhibit
2.2. US Airways may, on sixty (60) days advance written notice to Chautauqua,
designate changes in any or all of the following: city-pairs served, aircraft
routings or flight frequencies, provided that the new city-pairs, aircraft
routings, and flight frequencies shall continue to satisfy the parameters set
forth in this Section 2.2 and Exhibit 2.2. In establishing schedules, US Airways
agrees to take into consideration Chautauqua’s operational requirements for
remain overnight (“XXX”) maintenance and crew productivity and legality. The
Parties shall determine mutually acceptable locations for maintenance bases
and
crew domiciles as provided in Exhibit 2.2. If Chautauqua and US Airways
subsequently agree to any change in the location of any maintenance base or
crew
domicile, then the Parties shall also agree on appropriate compensation by
US
Airways to Chautauqua for effecting such change, including the reimbursement
by
US Airways of costs reasonably incurred by Xxxxxxxxxx that are associated with
the establishment of a new maintenance base or crew domicile and the closing
of
any existing maintenance base or crew domicile.
Section
2.3 - Technical Operations
During
the Term, Chautauqua shall be solely responsible for the technical operation
of
the Aircraft and the safe performance of the flights undertaken in connection
with the Service in accordance with all Regulations. Chautauqua shall retain
full authority, operational control and possession of the Aircraft to enable
it
to perform its obligations under this Section 2.3. In particular, Chautauqua
or
its agents or employees shall, for the purpose of the safe performance of such
flights, have absolute discretion in all matters concerning the preparation
of
the Aircraft for flight, the flight, the load carried and its distribution
in so
far as such matters affect the safety of
the
Aircraft, the decision whether or not such flight shall be undertaken, and
all
other matters relating to the technical operation of the Aircraft. Chautauqua
shall be solely responsible for, and US Airways shall have no liability,
obligation or duty with respect to, the flight dispatch and/or conduct of
Chautauqua’s flights operated pursuant to this Agreement or otherwise. For the
purpose of this Section 2.3, the term “flight dispatch” shall include, but shall
not be limited to, all planning of flight itineraries and flight paths, fueling,
payload capabilities and flight release.
_____
*
Confidential
Section
2.4 - Regulations
The
operation of the Aircraft shall be carried out in accordance with all
Regulations and the standards and practices of Chautauqua approved by the
applicable Regulatory Authority thereunder. Chautauqua shall notify US Airways
in writing within two business days after receipt of any notice from any
Regulatory Authority that asserts any noncompliance by Chautauqua with any
Regulation, initiates an investigation of Chautauqua’s operations or otherwise
asserts any wrongdoing by Chautauqua. Chautauqua shall cooperate promptly and
fully with US Airways in responding to any request for information or data
concerning such non-compliance. For purposes of this Section 2.4, an asserted
noncompliance or other wrongdoing by Chautauqua shall be considered “material”
only if such noncompliance or other wrongdoing, if proven or admitted by
Xxxxxxxxxx, could reasonably be expected to lead to the suspension or revocation
of Chautauqua’s operating certificate.
Section
2.5 - Operating Procedures
Chautauqua
has previously delivered to US Airways and US Airways acknowledges receipt
of a
copy of all relevant operating specifications, operational regulations, manuals
and calculations for all of the Aircraft. Chautauqua shall also deliver to
US
Airways, within ten (10) days after the end of each month during the Term,
a
report of the number of departures, Block Hours, flight hours, passengers,
Available Seat Miles and revenue passenger miles with respect to the flights
operated by the Aircraft during such month in the Service. US Airways agrees
to
facilitate any changes to US Airways or US Airways Express manuals, operating
procedures, or tariffs that may be necessary to support the Chautauqua
operation.
Section
2.6 - Aircraft Registration
During
the Term, Chautauqua shall ensure that the Aircraft remain properly registered
in the United States of America in accordance with all Regulations.
Section
2.7 - Chautauqua Responsibilities
Chautauqua
shall be responsible for providing, at its own cost, in connection with the
Service to be provided by Chautauqua under this Agreement, all services and
materials identified under the heading “To Chautauqua” in Exhibit 2.7 attached
hereto and made a part hereof (collectively, the “Chautauqua Services”).
Section
2.8 - Substitute Aircraft
In
addition to the ERJ Aircraft specified in Section 2.1, Chautauqua may in its
discretion arrange for and utilize substitute ERJ aircraft or another type
of
regional jet aircraft in US Airways Express or neutral livery to provide the
Service under this Agreement during those periods when any ERJ Aircraft may
be
out of service due to unforeseen and irregular maintenance requirements,
provided that Chautauqua may only utilize regional jet aircraft other than
ERJ
Aircraft to the extent that US Airways has permitted such use in advance in
writing. Chautauqua shall be paid for the use of such substitute aircraft in
the
same manner that it is paid for the use of ERJ Aircraft in accordance with
Article 5 hereof. If a substitute aircraft shall be utilized for more
than
two (2) consecutive days, Chautauqua and US Airways shall mutually agree upon
the route that shall be covered by the substitute aircraft. In addition, Direct
Costs (defined in Section 5.2) contained in the Pricing Model with respect
to
any substitute aircraft shall be adjusted (upward or downward) in a manner
consistent with the principles used to reflect the differences between the
costs
of such substitute aircraft and the costs of ERJ Aircraft for such
aircraft-specific items as pilot and flight attendant crew costs, maintenance,
aircraft ownership, insurance, and overheads; provided that the payment of
“Profit” pursuant to Section 5.4 shall not be adjusted in connection with any
such substitution.
Section
2.9 - Spare Aircraft and Spare Engines
(a) Chautauqua
shall designate [*]
of the
ERJ Aircraft as “Spare Aircraft.” The Spare Aircraft may be in neutral livery.
For the purposes of calculating the payment to Chautauqua as described in
Article 5 of this Agreement, Spare Aircraft shall not be included as Aircraft
in
Service, but US Airways shall pay to Chautauqua certain associated Direct Costs
as detailed in the Pricing Model, such as insurance and aircraft ownership
costs. For the purposes of calculating the schedule requirements as described
in
Exhibit 2.2 to this Agreement, the Spare Aircraft shall not be
included.
(b) Chautauqua
shall maintain, with respect to Aircraft flown in the Service, a pool of spare
engines in an amount equal to [*]
of the
total number of engines attached to such Aircraft so flown in the Service
(rounded up or down to the nearest whole number). It being hereby agreed that
Chautauqua shall maintain [*]
spare
engines with respect to a fleet of [*]
Aircraft
flown in the Service.
Section
2.10 - Jets for Jobs
Chautauqua
shall continue to comply with the applicable provisions of the “Jets for Jobs”
protocol as ratified by the US Airways Airline Pilots Association (“ALPA”) in
Letter of Agreement #91 to the US Airways - ALPA Collective Bargaining
Agreement, or as subsequently amended, with respect to the Services to be
provided under this Agreement. All additional, direct and reasonable costs
associated with such compliance (excluding normal pilot costs that would
otherwise be paid as Direct Costs in the absence of requirements associated
with
“Jets for Jobs”) shall be treated as Pass Through Costs under Section 5.2
hereof.
_____
*
Confidential
Section
2.11 - In-flight Sales
US
Airways will be responsible for the direct costs associated with sales of liquor
or other goods on flights included in the Service and shall be entitled to
all
revenues generated from such in-flight sales.
Section
2.12 - Pass Agreement
The
Parties will enter into a separate agreement, consistent with agreements between
US Airways and other US Airways Express Carriers, governing passes and reduced
rate travel privileges.
Section
2.13 -
Processing
Code-Share Passengers
Chautauqua
shall use commercially reasonable efforts to facilitate the handling of
code-share passengers and the processing of alliance partner frequent flyer
miles pursuant to domestic and international code-share alliance relationships
entered into by US Airways.
ARTICLE
3 - OPERATION UNDER THE “US AIRWAYS EXPRESS” NAME
Section
3.1 - Servicemarks
Aircraft
utilized by Chautauqua to provide Service pursuant to this Agreement (other
than
Spare Aircraft or substitute aircraft utilized pursuant to Section 2.8) shall
bear certain US Airways Servicemarks. The Parties acknowledge that as of the
Effective Date, all Aircraft in Service bear US Airways Servicemarks consisting
of the red, white, gray and blue aircraft exterior color décor and pattern
provided by US Airways and the name “US Airways Express”. At any time during the
Term, US Airways may, at its sole discretion, require Chautauqua to use such
new
or different US Airways Servicemarks and exterior color decor and patterns
on
the Aircraft as US Airways may identify to Chautauqua in writing, and Chautauqua
will implement such changes in accordance with a schedule mutually agreed to
by
the Parties. Chautauqua shall only use interior color schemes on the Aircraft
(other than substitute aircraft utilized pursuant to Section 2.8) that have
been
approved in advance in writing by US Airways. Chautauqua shall not be required
to implement changes in the exterior color decor and pattern on the Aircraft
more than once in any consecutive three-year period. Any amounts actually
expended by Chautauqua to repaint or to redecorate the Aircraft or reconfigure
or redecorate the interior of the Aircraft as a result of changes required
by US
Airways, shall be reimbursed by US Airways.
Section
3.2 - Signage
In
addition to use of the US Airways Servicemarks, Chautauqua shall use and display
signs that satisfy applicable Regulations on the interior and exterior of the
Aircraft that identify Chautauqua as the operator of the Services being provided
pursuant to this Agreement. US Airways has previously approved the design and
placement on the Aircraft of all such signs that are currently displayed. In
the
even that after the date hereof, Xxxxxxxxxx seeks to change any such signs,
Chautauqua shall obtain US Airways’ prior written approval (not to be
unreasonably withheld or delayed) of the design and placement on the Aircraft
of
such changed signs displayed pursuant to this Section 3.2.
The
use
of US Airways Servicemarks as set forth in this Article 3 shall be subject
to
the terms and conditions of this Agreement, including Article 9.
ARTICLE
4 - US AIRWAYS’ SUPPORT SERVICES AND FACILITIES
US
Airways shall provide, or at its option shall cause third parties to provide,
at
US Airways’ cost and expense, all services and materials identified under the
heading “To US Airways, Inc.” in Exhibit 2.7 attached hereto and made a part
hereof, and all fuel, marketing, reservations, ground support services, station
facilities, and cargo and mail handling services, to the extent and in the
manner set forth in this Article 4 (collectively, the “US Airways Services”). US
Airways shall provide the US Airways Services with respect to the Chautauqua
Services provided pursuant to and in accordance with the terms of this
Agreement.
Section
4.1 - Fuel
US
Airways, at its sole option, may either (1) reimburse Chautauqua for its actual
cost of fuel as a Pass Through Cost, as detailed in Exhibit 5.1 hereto; or
(2)
provide fuel to Chautauqua for Services provided under this Agreement. To the
extent that US Airways provides fuel to Chautauqua, the cost of such fuel shall
be paid for by US Airways and shall not be considered a Pass Through Cost to
Chautauqua. For purposes of this Agreement the cost of fuel includes the cost
of
all aircraft fuel and oil, plus fuel flow charges, into-plane fees, third party
administrative charges, and de-fueling charges, and all applicable taxes on
any
of the foregoing.
Section
4.2 - Reservations
(a) All
reservations shall be requested and confirmed for passengers traveling on
Aircraft operated by Chautauqua under this Agreement through US Airways’
reservations services. Reservations that connect to other flights operated
by US
Airways or other air carriers (including other flights operated by Chautauqua),
including for travel that originates at locations other than those served
hereunder, shall be requested and confirmed through US Airways’ reservations
system in accordance with methods and procedures utilized by US Airways for
its
passengers as may be in use from time to time. For passengers originating their
travel at points other than those served by Chautauqua under this Agreement,
either using US Airways’ reservations system or the reservations systems of
other airlines, connecting reservations to the Services of Chautauqua shall
also
be made in accordance with methods and procedures utilized by US Airways for
its
passengers. US Airways shall confirm the reservations of passengers traveling
on
Aircraft operated by Chautauqua hereunder through the entire itinerary of their
scheduled trips. When contact information is supplied by the passengers making
such reservations, US Airways shall assume the responsibility of notifying
passengers of any changes in Chautauqua’s schedules or operations, provided that
Chautauqua has provided US Airways with sufficient advance notice of any such
changes.
(b) As
soon
as reasonably practicable after Chautauqua learns of any flight delay,
cancellation or other schedule irregularity affecting its scheduled services,
Chautauqua shall notify US Airways’ operations control center of the existence,
cause and anticipated duration of such flight delay, cancellation or other
schedule irregularity in a manner prescribed by US Airways with as much detail
as can be reasonably provided. The Parties shall coordinate all schedule changes
as a result of any flight delay, cancellation or other schedule irregularity
affecting the Service, and US Airways shall perform all passenger
re-accommodations for passengers traveling on Aircraft operated by Chautauqua
hereunder in the same manner that US Airways would perform such services for
its
own passengers.
(c) From
time
to time, and solely upon the request of Chautauqua or its flight crews, US
Airways may furnish Chautauqua’s flight crews with such U.S. weather bureau
information or data as may be available to US Airways; provided that, in
furnishing any such weather information or data to Chautauqua, neither US
Airways nor its employees or agents shall be responsible or liable for the
accuracy thereof or the accuracy of the transmission thereof.
Section
4.3 - Station Facilities and Ground Support Service
US
Airways shall provide, or at its option cause third parties to provide, at
US
Airways’ cost and expense, the following services at locations where Chautauqua
provides the Service:
|
(a)
|
check-in and ticketing of passengers that are utilizing the Service
[*]
|
(b)
use
of US
Airways’ passenger facilities [*]
|
(c)
|
[*]
|
|
(d)
|
[*]
|
|
(e)
|
[*]
|
|
(f)
|
[*]
and
|
|
(g)
|
[*]
|
If
US
Airways is unable to provide (or cause third parties to provide) the services
listed in this Section 4.3 at US Airways’ own facilities, US Airways may
provide (or cause third parties to provide) such services at any other
facilities selected and deemed suitable by US Airways. Such alternative
facilities shall be identified with signage and directional marking to be
provided by US Airways to minimize passenger confusion and complaints and shall
provide reasonable working space for Chautauqua personnel.
If
Chautauqua is required to make arrangements for alternative transportation,
meals, lodging, lost baggage delivery or other accommodations for passengers
utilizing the Service due to
schedule
irregularities in Chautauqua’s operations, US Airways agrees to reimburse
Chautauqua for all direct and reasonable costs incurred by Xxxxxxxxxx in
making
such arrangements, provided that Chautauqua furnishes US Airways with an
invoice
and adequate supporting documentation therefor.
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Section
4.4 - Cargo, Company Materials (“CoMat”) and Mail Handling
Services
(a) US
Airways’ personnel, and/or at US Airways’ option third party providers, shall
process tickets and/or bills of lading and US Airways airway bills, accepted
for
transportation, and US Airways personnel and/or third party personnel shall
load
on Aircraft providing the Service, such cargo and U. S. mail as properly
tendered by the United States Postal Service (“USPS”) and by cargo customers;
provided that no Hazardous Materials may be accepted and transported on
Aircraft, except as permitted by Regulations. Chautauqua acknowledges that,
notwithstanding anything to the contrary contained herein, (i) it shall obtain
independent authority for the appropriate Regulatory Authority to carry animals
and (ii) it shall comply with such restrictions as US Airways may impose on
the
carriage of animals in connection with the Service provided that such
restrictions apply to at least one other carrier operating under a US Airways
Servicemark pursuant to a jet services agreement (a “US Airways Express
Carrier”) and are not inconsistent with Regulations.
(b) US
Airways shall process any Chautauqua CoMat that Chautauqua transports on
Aircraft that are providing the Service.
(c) Chautauqua
personnel shall comply with all US Airways’ instructions and procedures with
respect to CoMat packages tendered to US Airways pursuant
to this Agreement.
Section
4.5 - Terms of Transportation, Sales and Promotion
(a) Chautauqua
shall comply with US Airways’ customer service standards and with US Airways’
Terms of Transportation, as modified or amended from time to time in accordance
with this Section 4.5(a), including procedures with respect to schedule change
and passenger re-accommodation procedures, when providing all Services pursuant
to this Agreement. Such Terms of Transportation shall at all times be available
for public inspection at Chautauqua’s corporate offices and at each airport
ticket counter and sales office maintained and operated by US Airways in
connection with the Services provided under this Agreement. US Airways agrees
that its customer service standards and Terms of Transportation, as applicable
to the Service from time to time, shall not be inconsistent with standard
industry practice for regional jet carriers, shall be consistent with those
prescribed for other US Airways Express Carriers, shall comply with all
Regulations, and shall be consistent with this Agreement.
(b) All
tickets issued for air passenger transportation, and all bills of lading, US
Airways airway bills and invoices issued for U. S. mail and cargo shipments
that
are provided on the Aircraft providing the Service shall bear the “US Airways”
airline designator code.
(c) US
Airways shall be responsible [*].
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Confidential
(d) US
Airways shall include the scheduled air services provided by Chautauqua pursuant
to Article 2 in its public timetables (including Chautauqua’s connecting
schedules on the same basis as it does its own), if published. All references
in
US Airways’ public timetables to Chautauqua’s US Airways Express services shall
also contain notations indicating that such scheduled services shall be
performed by Chautauqua as an independent contractor under the appropriate
US
Airways Servicemarks, and all such references shall comply with all
Regulations.
ARTICLE
5 - PURCHASE OF AVAILABLE SEAT MILES (“ASMs”)
Section
5.1 - Pricing Model
US
Airways and Chautauqua have developed that certain cost model set forth in
Exhibit 5.1 hereto (the “Pricing Model”) which shall be used to determine
the compensation to be paid by US Airways for the Service to designated
city-pairs flown by Chautauqua, subject to adjustments pursuant Article
8.
Section
5.2 - Direct Costs and Pass Through Costs
The
Pricing Model, which shall be used to determine compensation due to Chautauqua
hereunder, is divided into two categories, (1) “Direct Costs” and (2) “Pass
Through Costs.” US Airways shall reimburse Chautauqua for “Direct Costs” at the
rates set forth in Exhibit 5.1 in accordance with the following:
(a) with
respect to the Per Aircraft costs, Direct Costs shall be payable with respect
to
the number of Aircraft that have provided the Service and have been placed
into
active revenue service for US Airways Express operation under this Agreement,
as
well as certain costs associated with Spare Aircraft and Spare
Engines;
(b) with
respect to the Per Block Hour costs, Direct Costs shall be payable with respect
to the Block Hours for revenue flights actually flown by the Aircraft to provide
the Service;
(c) with
respect to the Per Flight Hour costs, Direct Costs shall be payable with respect
to the number of Flight Hours for revenue flights actually flown by the Aircraft
to provide the Service under this Agreement;
(d) with
respect to the Per Departure costs, Direct Costs shall be payable with respect
to the number of actual revenue departures by Aircraft to provide the
Service.
(e) with
respect to Fixed Costs set forth therein, the amount of such fixed costs.
In
addition to the costs described above, all airport PFCs, TSA fees or other
similar governmental assessments assessed against Chautauqua for provision
of
the Service shall be considered Pass Through Costs to US Airways under Section
5.2 hereof. US Airways shall also be responsible for all NAV-Canada fees or
assessments as a Pass Through Cost.
Each
cost
component in Exhibit 5.1 shall be adjusted at the appropriate date of
each
calendar year based upon the escalation factors and dates set forth in Exhibit
5.1.
Chautauqua
shall be reimbursed for “Pass Through Costs” set forth in Exhibit 5.1 based upon
the actual costs incurred by Chautauqua, provided Chautauqua furnishes US
Airways with adequate supporting documentation therefor.
Section
5.3 - Invoicing and Payments
(a)
During
the Term, US Airways shall pay to Chautauqua on each of the [*]
days of
each calendar month an amount equal to one third of the Estimated Monthly
Compensation; provided that US Airways receives an invoice for each such payment
not less than [*]
days
prior to the due date therefor. The “Estimated Monthly Compensation” shall be
equal to the amount that Chautauqua estimates in good faith shall result from
application of the Pricing Model to the Service provided during the applicable
month plus the amount of Profit that Chautauqua estimates in good faith will
be
payable pursuant to Section 5.4 with respect to the Service provided during
the
applicable month. If US Airways does not receive an invoice from Chautauqua
at
least [*]
days
prior to the due date for a payment as set forth above, US Airways shall pay
Chautauqua within [*]
days
after actual receipt of such invoice.
(b) As
soon
as reasonably practicable after the end of each calendar month, Chautauqua
shall
calculate the actual amount (the “Actual Monthly Compensation”) that results
from application of the Pricing Model and Section 5.4 to the Service provided
during such month using the actual statistics for such month and the actual
Pass
Through Costs incurred for such month. If the Actual Monthly Compensation
exceeds the total of Estimated Monthly Compensation amounts previously paid
by
US Airways under Section 5.3(a), US Airways shall pay to Chautauqua an amount
equal to such difference as provided in Section 5.5 hereof, without any set
off.
If the total of Estimated Monthly Compensation amounts previously paid by US
Airways under Section 5.3(a) exceeds the Actual Monthly Compensation, Chautauqua
shall refund the overpayment amount promptly as provided in Section 5.5 hereof,
without any set off.
(c) Notwithstanding
the provisions set forth in this Article 5, (i) in the event that Chautauqua
is
unable to provide the Chautauqua Services during any period due to the grounding
of the Aircraft as a result of a defect in the design or manufacture of the
Aircraft, or as a result of a strike by employees of Chautauqua, US Airways
shall only be responsible for payment of Chautauqua’s Fixed Costs and Per
Aircraft Costs as set forth in Exhibit 5.1 during such period for [*]
days;
and (ii) in the event that Chautauqua is unable to provide the Chautauqua
Services as a result of Chautauqua’s failure to properly maintain the Aircraft
or otherwise comply with Regulations associated with the maintenance and/or
operation of the Aircraft, US Airways shall have no obligation to pay any
compensation to Chautauqua pursuant to this Article 5 with respect to
such
period.
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Confidential
(d) In
the
event Chautauqua is unable to provide the Chautauqua Services during any period
due to any cause not described in Section 5.3(c), including action or inaction
by US Airways (including due to a strike by US Airways personnel), US Airways
shall pay Chautauqua [*].
Section
5.4 - Profit
US
Airways shall pay Chautauqua the Profit shown in Exhibit 5.1 per actual
Available Seat Mile (ASM) flown by Chautauqua to provide the Service during
the
month provided that, if during the course of any year during the Term of this
Agreement, the actual number of ASMs flown is less than [*],
Chautauqua shall be paid a Profit for the lesser of (a) [*],
and (b)
[*].
The
Profit will be escalated [*],
by
[*].
Section
5.5 - Payments
All
payments due under this Article shall be paid directly to Chautauqua, or US
Airways, as the case may be. Payments due hereunder shall be made within ten
(10) business days of the calculation of any such payment.
Section
5.6 - True-Up Invoices
The
Parties agree that, insofar as practicable, all true-up invoices for any month
shall be submitted no later than [*]
days
after the last day of such month.
US
Airways shall not be obligated to accept for payment or reimbursement of Pass
Through Costs any invoice not submitted within [*]
days
after the later of (i) the last day of the month in which such Pass Through
Cost
was incurred or (ii) the date on which the amount of such Pass Through Cost
was
invoiced to Chautauqua. All true-up invoices shall be accompanied by appropriate
calculations and adequate supporting documentation for the amounts
invoiced.
Section
5.7 - Audit and Inspection Rights
(a) Upon
not
less than thirty (30) days’ prior written notice, and not more than once each
calendar year, authorized representatives of US Airways, at its cost and
expense, may audit, review and copy Chautauqua’s books, records, accounts and
other documents relating to the Pass Through Costs and to any increase in the
Direct Costs payable by US Airways that is not based on the Consumer Price
Index, provided that if Chautauqua is in default hereunder and such audit
relates to matters giving rise to or otherwise relating to such default, such
audit shall be at Chautauqua's cost and expense and US Airways shall not be
bound by the notice and frequency restrictions set forth above.
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Confidential
(b) In
the
event that US Airways has a reasonable basis for a concern with respect to
the
quality or adequacy of Chautauqua’s Aircraft maintenance program or crew
training program or Chautauqua’s compliance with Regulations, upon not less than
five (5) days’ prior written notice, authorized representatives of US Airways,
at its cost and expense, may inspect Chautauqua’s aircraft maintenance and crew
training facilities and review and copy Chautauqua’s aircraft maintenance
records with respect to the Aircraft or crew training records, and such other
records as relate to Xxxxxxxxxx’s compliance with Regulations, at reasonable
times during Chautauqua’s normal business hours and in a manner that does not
materially disrupt Xxxxxxxxxx’s business or operations; provided that if
Chautauqua is in default hereunder and such inspection relates to matters giving
rise to or otherwise relating to such default, such inspection shall be at
Chautauqua’s cost and expense and US Airways shall not be bound by the notice
requirements set forth above. Chautauqua shall make available to US Airways’
authorized representatives knowledgeable representatives of Chautauqua to answer
questions and otherwise assist in any such inspection, review, and upon the
conclusion of such review US Airways shall provide Chautauqua with a written
report of its material findings,
with
recommendations for corrective actions to be taken by Chautauqua specifying
the
reasons for such corrective action, including any alleged non-compliance with
Regulations. Chautauqua may object to such recommendations by providing US
Airways with a detailed written objection within five (5) days after
Chautauqua’s receipt of such report. If Chautauqua so objects, the Parties shall
negotiate in good faith to determine appropriate action to be taken by
Chautauqua. US Airways’ recommendations may address any matter related to
Chautauqua’s provision of the Service so long as such recommendations are not
inconsistent with standard industry practice for regional jet carriers, are
consistent with those prescribed for other US Airways Express Carriers, with
all
Regulations, and with this Agreement. All proprietary information of Chautauqua
provided to or observed by US Airways in connection with any audit, review
or
inspection under this Section 5.7 shall be treated as Confidential Information
under Article 13.
ARTICLE
6 - LIABILITY, INDEMNIFICATION AND INSURANCE
Section
6.1 - Chautauqua is an Independent Contractor
(a) In
its
performance under this Agreement, Chautauqua shall act, for all purposes, as
an
independent contractor and not as an agent for US Airways, and nothing in this
Agreement is intended or shall be deemed to create an association, partnership,
joint venture, agency or employer and employee relationship between the Parties.
The employees, agents, and/or independent contractors of Chautauqua engaged
in
performing any of the Services Chautauqua is to perform pursuant to this
Agreement shall be employees, agents, and independent contractors of Chautauqua
for all purposes, and under no circumstances shall be deemed to be employees,
agents or independent contractors of US Airways. US Airways shall have no
supervisory power or control over any employees, agents or independent
contractors engaged by Chautauqua in connection with its performance hereunder,
and all complaints or requested changes in procedures shall, in all events,
be
transmitted by US Airways to a designated officer of Chautauqua. Nothing
contained in this Agreement is intended to limit or condition Chautauqua’s
control over its operations or the conduct of its business as an air carrier
and
Chautauqua assumes all risks of financial losses which may result from the
operation of the air transportation services to be provided by Xxxxxxxxxx
xxxxxxxxx.
(b) The
employees, agents, and/or independent contractors of US Airways engaged in
performing any of the services US Airways is to perform pursuant to this
Agreement shall be employees, agents, and/or independent contractors of US
Airways for all purposes, and under no circumstance shall they be deemed to
be
employees, agents, and/or independent contractors of Chautauqua. Chautauqua
shall have no supervision or control over any such US Airways employees, agents,
and/or independent contractors and any complaint, discipline or requested change
in procedure shall be transmitted by Chautauqua to US Airways’ designated
representative.
Section
6.2 - Liability and Indemnification
(a) Each
Party assumes full responsibility for any and all liability to its own
directors, officers, employees, or agents arising from property damage or bodily
injury, or death resulting from or sustained in the performance of its
respective services under this Agreement, including the Services.
(b) Chautauqua
shall indemnify, defend, protect, save, and hold harmless US Airways, its
affiliates, directors, officers, employees, and agents (the “US Airways
Indemnitees”) from and against any and all liabilities, claims, demands, suits,
settlement payments, judgments, damages, expenses, fines and losses (including,
without limitation, reasonable attorneys’ fees, other professionals’ fees, and
costs and expenses incurred in connection therewith) caused by, resulting from
or arising out of any goods or services, including the Services, furnished
or to
be furnished by Chautauqua under or pursuant to this Agreement, whether or
not
arising in tort or occasioned in whole or in part by the negligence of any
US
Airways Indemnitee, except for claims to the extent resulting from the gross
negligence or willful misconduct of a US Airways Indemnitee. Chautauqua
shall further indemnify, defend, protect, save, and hold harmless US Airways
from and against all fines or civil penalties incurred by US Airways that relate
to US Airways’ actual or alleged non-compliance with Regulations to the extent
such non-compliance results from any action or inaction by
Chautauqua.
(c)
US
Airways shall indemnify, defend, protect, save, and hold harmless Chautauqua,
its affiliates, directors, officers, employees, and agents (the “Chautauqua
Indemnitees”) from and against any and all liabilities, claims, demands, suits,
settlement payments, judgments, damages, expenses, fines and losses (including,
without limitation, reasonable attorneys’ fees, other professionals’ fees, and
costs and expenses incurred in connection therewith) caused by, resulting from
or arising out of any goods or services, furnished or to be furnished by US
Airways under or pursuant to this Agreement, whether or not arising in tort
or
occasioned in whole or in part by the negligence of any Chautauqua Indemnitee,
except for claims to the extent resulting from the gross negligence or willful
misconduct of a Chautauqua Indemnitee. US Airways shall further indemnify,
defend, protect, save, and hold harmless Chautauqua from and against all fines
or civil penalties incurred by Xxxxxxxxxx that relate to Xxxxxxxxxx’s actual or
alleged non-compliance with Regulations to the extent such non-compliance
results from any action or inaction by US Airways.
(d) A
person
claiming indemnification (the “Indemnitee”) shall give the Party from which
indemnification is sought (the “Indemnitor”) written notice of any claim or
demand made or suit instituted against the Indemnitee which may give rise to
indemnification hereunder, provided that failure to provide such written notice
shall not relieve the Indemnitor of its indemnification obligations hereunder,
except to the extent of actual damage or prejudice to the Indemnitor directly
resulting from the failure to provide such notice. The Indemnitor, at its sole
expense, shall handle, resolve, settle or refer any and all claims, demands
or
suits resulting or arising from the performance by the Indemnitor of its
obligations under or pursuant to this Agreement. The Indemnitor shall be liable
for the reasonable fees and expenses of one counsel selected and employed by
the
Indemnitee in its sole discretion for any period during which the Indemnitor
has
not assumed the defense of any third-party claim, demand or suit (other than
during any period in which the Indemnitee shall have failed to provide written
notice of such third-party claims, demands or suits as provided above). The
Parties agree to consult and cooperate in the handling, opposition, settlement
or defense of such claims, demands or suits but the final claims, demands or
suits handling authority rests with the Indemnitor and its insurers; provided
however, that, without the prior written consent of the Indemnitee, the
Indemnitor shall not consent to the entry of any judgment or enter into any
settlement that (i) by its terms fails to discharge the Indemnitee from the
full
amount of liability in connection with such third-party claim, demand or suit,
(ii) provides for injunctive or other non-monetary relief affecting the
Indemnitee or (iii) does not include as an unconditional term thereof the
release of the Indemnitee that are or may be the subject of such third-party
claim, demand or suit from all liability with respect to such claim, demand
or
suit by each claimant or plaintiff. The Parties’ obligations under this Section
6.2 shall survive the expiration or termination of this Agreement.
(e) Each
Party shall be responsible for all employee-related tax, levy, benefit, pension,
withholding, accrual, payment, reporting, and other obligations of employers
pursuant to Regulations or contractual obligations for its respective employees,
including: (i) personal income, wage, earnings, occupation, social security,
workers’ compensation, unemployment, sickness and disability insurance taxes;
(ii) payroll levies; (iii) employee medical coverage benefit requirements;
(iv)
air transportation travel pass benefits; and (v) pension requirements, whether
under ERISA, state law, or otherwise.
Section
6.3 - Insurance Coverage
(a) Chautauqua
shall, at all times during the Term and, provided that US Airways pays in
advance the additional cost of such coverage as a Pass Through Costs, for a
“tail” period of one year after termination of this Agreement, maintain in full
force and effect, policies of insurance of the types of coverage, and in the
minimum amounts stated below with insurers reasonably satisfactory to US
Airways, including coverage on all Aircraft from or upon which Chautauqua
Services are to be provided pursuant to this Agreement. Unless otherwise
specified, the minimum amounts of insurance coverage required under this Section
shall be [*],
combined single limit for all coverage required under this paragraph.
|
Type
of Insurance Coverage
|
Minimum
Amount of Insurance Coverage (U.S. Currency-Per
Occurrence)
|
| Comprehensive Airline Liability Insurance (including Premises)Liability Products and Completed Operation Liability Insurance | |
| Bodily Injury Passengers and Non-Passengers | $[*] Each Occurrence /Aggregate |
| Personal Injury- Passengers | $[*] Each Occurrence /Aggregate |
| Personal Injury - Non-Passengers | $[*] Each Offense/Aggregate |
| Property Damage | $[*] Each Offense/Aggregate |
|
Worker’s
Compensation Insurance
(Chautauqua’s
Employees)
|
[*]
|
|
Employer’s
Liability
(Chautauqua’s
Employees)
|
$[*]
|
|
“All
Risk Hull and Aviation Hull War and
Associated
Perils (or equivalent) insurance on Aircraft performing Chautauqua
Services hereunder
|
[*]
or
such lesser amount as may be consented to by US
Airways
|
(b) US
Airways may require Chautauqua to maintain amounts different from those set
forth in paragraph (a) above, should US Airways reasonably deem such changes
to
be appropriate.
(c)
Chautauqua
agrees, in addition, that all policies of insurance that it maintains pursuant
to this Agreement (other than worker’s compensation insurance)
shall:
(i) name
all
US Airways Indemnitees as additional assureds thereunder with respect to
Chautauqua Claims for which Chautauqua is obligated to indemnify such US Airways
Indemnitees hereunder;
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(ii) ensure
that that
all
such policies are primary without right of contribution by any insurance carried
by US Airways;
(iii) cover
US
Airways’ costs (including reasonable legal fees and expenses) of defending
against any insured claims to the extent that such a defense is not otherwise
provided to US Airways;
(iv) provide
cross-liability and severability of interests clauses acceptable to US Airways,
and a specific contractual liability insurance provision covering liability
assumed by Chautauqua under this Agreement, and provide that US Airways shall
have no responsibility for premiums, commissions, assessments or calls and
the
insurers issuing the policies shall waive their rights to any set-off or counter
claim or any other deduction, whether by attachment or otherwise, in respect
of
any liability to or on behalf of US Airways with respect to such insurance
required under this Section 6.3;
(v) provide
that any waiver of rights of subrogation against other parties by Chautauqua
shall not affect the coverage provided hereunder with respect to US Airways
Indemnitees;
(vi) with
respect to all services performed by the Parties pursuant to this Agreement,
provide that Chautauqua’s underwriters shall waive any and all subrogation
rights against all US Airways Indemnitees, except for claims based solely upon
the gross negligence or willful misconduct of US Airways Indemnitiees;
and
(vii) provide
that US Airways shall be given written notice at least [*]
or such
lesser period as may from time to time be applicable in the case of any war
risks and allied/associated hull coverage) in advance of any cancellation,
termination or material modification of any coverage contemplated by this
Section 6.3.
(d) With
respect to Comprehensive Airline Liability and All Risk Hull and Aviation Hull
War and Associated Perils policies described in Section 6.3(a) of this
Agreement, a breach of warranty clause reasonably acceptable to US Airways
must
be provided by Chautauqua’s insurers.
(e) All
aircraft hull insurance provided pursuant to this Section 6.3 shall be provided
on an agreed value basis, and, except with the consent of US Airways, shall
not
be subject to more than the standard market deductibles as are agreed to in
advance in writing by US Airways, and as certified by a recognized broker that
in the event of loss, settled on the basis of a total loss, all losses shall
be
payable in full.
(f)
In
the
event that any of Chautauqua’s insurance policies under this Agreement are
obtained directly from foreign underwriters, US Airways must be allowed to
maintain against such foreign underwriters, a direct action in the United States
upon said insurance policies and to provide for service of process to an
attorney located within the United States, who maintains an office in
Washington, D.C., or New York, New York.
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(g)
Upon the
Effective Date, and from time to time thereafter upon request by US Airways,
Chautauqua shall furnish to US Airways certificates of insurance satisfactory
to
US Airways endorsed to show the aforesaid insurance coverage, limits and
endorsements. In addition to the certificates of insurance, Chautauqua’s
insurance broker shall provide its written opinion that the policy or policies
of insurance carried by Chautauqua are in full compliance with the requirements
set forth herein and are in full force and effect. In the event of a change
of
broker by Chautauqua, Chautauqua will promptly notify US Airways of such new
broker. Thereafter, such certificates shall be supplied to US Airways by such
new broker.
In
the
event Chautauqua fails to maintain in full force and effect any of the insurance
and endorsements described in this Section 6.3, US Airways shall have the right
(but not the obligation) to procure and maintain such insurance or any part
thereof. The cost of such insurance shall be for the account of Chautauqua
and
shall be payable by Chautauqua to US Airways upon demand by US Airways. The
procurement of such insurance or any part thereof by US Airways does not
discharge or excuse Chautauqua’s obligation to comply with the provisions of
this Section 6.3. Chautauqua shall not cancel, terminate or materially alter,
change or amend any of the policies required to be obtained and maintained
under
this Section 6.3 without the prior written consent of US Airways, unless such
policy is replaced by another policy conforming to the requirements of this
Section 6.3.
Section
6.4 - Cargo Liability Insurance
US
Airways shall maintain cargo liability insurance coverage consistent with
applicable law, in such types and amounts it deems appropriate in its sole
discretion, for all air freight transported by Chautauqua under a US Airways
airway bill as part of the Service.
ARTICLE
7 - TERM AND TERMINATION
Section
7.1 - Effective Date and Term
(a) The
effectiveness of this Agreement shall be conditioned on and subject to the
entry
of a final order (the “Order”) of the Bankruptcy Court (a) authorizing and
directing US Airways to assume the Agreement under Section 365 of the Bankruptcy
Code, and (b) approving the terms of the Agreement and authorizing and directing
US Airways to enter into and be bound by the Agreement. The Order shall provide
that, except as provided herein, US Airways’ obligations under the Agreement
shall be post-petition, administrative obligations of US Airways under Section
503 of the Bankruptcy Code. Notwithstanding the foregoing, in the event that
(i)
US Airways consummates a chapter 11 plan of reorganization in the Cases,
including a liquidating chapter 11 plan, and neither it nor its successor under
the plan continues to operate as an airline, and substantially all of US
Airways’ flight operations are, therefore, discontinued, or (ii) US Airways’
Case is dismissed or converted to a case under chapter 7 of the Bankruptcy
Code,
or US Airways is otherwise liquidated, and as a result of such dismissal,
conversion or liquidation, substantially all of US Airways’ flight operations
are discontinued, US Airways may reject or terminate this Agreement by providing
ten (10) business days prior written notice to Chautauqua and US Airways shall
be deemed to have breached this Agreement as of the effective date of the notice
(the “Breach Date”) and Chautauqua shall have, subject to objection as provided
below: (x) administrative expense claims under sections 503 and 507 of the
Bankruptcy Code for any obligations arising prior to the Breach Date with
respect to this Agreement, and (y) general unsecured pre-petition claims under
section 502(g) of the Bankruptcy Code for future damages resulting from such
rejection or termination and for obligations that arise after the Breach Date
with respect to this Agreement. In each case the amount of the respective claims
shall be subject to the ordinary claims process, including the right of parties
in interest to object to the amount (but only the amount) of such claims. In
addition, Chautauqua agrees to refund to US Airways any amounts paid on account
of services to be performed after the Breach Date within 5 business days after
receipt of written demand from US Airways.
(b) The
term
of this Agreement with respect to Aircraft scheduled in the Service shall
commence upon entry of the Order approving this Agreement and the assumption
hereof by US Airways (the “Effective Date”) and shall continue until
[*]
except
to the extent that the term with respect to one or more Aircraft is terminated
on an earlier date pursuant to the provisions of this Article 7 (the
“Termination Date,” and the period from the date of the Order until the
expiration or termination of this Agreement pursuant to this Article 7, the
“Term”).
Section
7.2 - Regulatory Changes
In
the
event of any change in the Regulations governing the provision of the Services
to be provided pursuant to this Agreement that materially and adversely affects
the economic value of this Agreement, taken as a whole, to either US Airways
or
Chautauqua, or both, then the Parties hereto shall consult within thirty (30)
days after any of the occurrence of such Regulatory change in order to determine
what, if any, changes to this Agreement are necessary or appropriate to preserve
the essence of the Agreement. If the Parties hereto are unable to agree whether
any change or changes to this Agreement are necessary and proper, or as to
the
terms of such change or changes, or whether this Agreement should be canceled
in
light of the occurrences as described above, and such failure to reach agreement
continues for a period of thirty (30) days following the commencement of the
consultations provided for by this Section 7.2, then this Agreement may be
canceled by the Party materially and adversely affected by such Regulatory
change upon providing the other Party a minimum of ninety (90) days written
notice of such cancellation.
Section
7.3 - Termination for Cause by US Airways
US
Airways may terminate this Agreement for cause, upon not less than ninety (90)
days written notice to Chautauqua, or on such shorter notice as may be specified
below, should any of the events set forth in subparts (a) through (h) of this
Section 7.3 (each a “Termination Event”) occur during the Term,
subject
to Chautauqua’s rights to cure such Termination Event as set forth herein. After
notice of termination is given, US Airways shall meet with Chautauqua for the
purpose of resolving the Termination Event. Should such Termination Event not
be
cured or corrected within ninety (90) days after Chautauqua’s receipt of the
notice of termination (or
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action
diligently undertaken to cure or correct the Termination Event if cure or
correction cannot be completed within ninety (90) days), then the termination
shall be effective on the ninetieth day following delivery of such notice.
If
the Termination Event is cured or corrected (or all steps to remedy the
situation were promptly taken if the cure or correction cannot be completed
reasonably within ninety (90) days), the termination notice shall be deemed
rescinded.
Each
of
the following events is a Termination Event:
(a) Chautauqua
materially fails to perform or observe any material covenant or condition or
agreement to be performed or observed by it hereunder, provided that if
Chautauqua breaches any payment obligation, US Airways shall have the right
to
terminate this Agreement on ten (10) days’ prior written notice unless
Chautauqua has cured such breach prior to the expiration of such period.
(b) For
any
six month period that commences on January 1 or July 1 of any calendar year,
with the first such period commencing January 1, 2005 (a “Performance
Measurement Period”), Chautauqua’s Controllable Completion Percentage (as
defined in Section 8.2) is below [*]
and no
Performance Exception or Force Majeure Event has occurred.
(c) Chautauqua’s
Controllable On-Time Departure Percentage (as defined in Section 8.2) is below
[*]
for any
Performance Measurement Period and no Performance Exception or Force Majeure
Event has occurred.
(d)
Chautauqua
admits liability or is found liable for safety infractions (other than routine
ministerial fines) by the Federal Aviation Administration which could reasonably
be expected to lead to the suspension or revocation of Chautauqua’s operating
certificate; provided that US Airways’ right to terminate this Agreement under
this paragraph shall be stayed for so long as Chautauqua is negotiating in
good
faith with the FAA to return to compliance and maintain its operating
certificate.
(e) In
US
Airways’ reasonable opinion, Chautauqua is not complying in any material respect
with applicable safety and operational Regulations or with safety and safety
related operational requirements imposed by US Airways pursuant to this
Agreement.
(f) Chautauqua
fails to comply with the applicable provisions of the “Jets for Jobs” protocol
as ratified by US Airways ALPA in Letter of Agreement #91 to the US Airways
-
ALPA Collective Bargaining Agreement, or as subsequently amended, as and to
the
extent applicable to Chautauqua as provided in Section 2.10 hereof, provided
that US Airways provides Chautauqua with any such amendments within fifteen
(15)
business days of execution, and further provided that Chautauqua shall not
be
required to use more than commercially reasonable efforts to comply with any
such amendments.
(g) Chautauqua’s
operating certificate is suspended or revoked.
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(h) In
the
event that (1) Republic or an Affiliate (as defined in the Investment Agreement)
of Republic (the "170/190 Operator") shall have commenced the provision of
flight services under the EMB 170/190 Jet Service Agreement and the EMB 170/190
Jet Service Agreement shall have been terminated by US Airways in accordance
with the terms of such agreement or (2) the Investment Agreement shall have
been
terminated pursuant to Section 9.01(c)(i) (or any similar successor provision)
or (3) the 170/190 Operator or Wexford shall have committed a Material Breach
under the Slots/Gates Transaction Agreements (as defined in Section 7.5 (a)
hereof) or the Aircraft Transaction Agreements (as defined in Section 7.5(a)
hereof) resulting in either a failure to consummate the transactions
contemplated by either the Slots/Gates Transaction Agreements or the Aircraft
Transaction Agreements or a termination of the Specified Slots/Gates Transaction
Agreements or the Specified Aircraft Transaction Agreements (as defined in
Section 7.5 (a) hereof). A termination under this subsection (h) shall be
effective at the time US Airways provides notice of termination to Chautauqua.
“Material Breach” with respect to the 170/190 Operator or Wexford shall have the
respective meanings set forth in the Slots/Gates Transaction Agreements and
Aircraft Transaction Agreements, as applicable.
Section
7.4 - Other Termination Rights
(a) If
US
Airways does not exercise the Slots Option (as defined in the Recitals of this
Agreement), US Airways shall have the one time right, upon sixty (60) days’
advance written notice to Chautauqua, to terminate up to five (5) Aircraft
hereunder. Such written notice shall be delivered prior to the effective date
of
the Plan (after which date such right shall expire) and shall specify the
termination dates for each Aircraft so terminated.
(b) If
US
Airways does exercise the Slots Option, US Airways shall have the right to
terminate five (5) Aircraft hereunder. One (1) Aircraft may be terminated on
the
date that is the later of (x) the date each fifth Additional Aircraft (as
defined in the Recitals of this Agreement), collectively, is placed into service
under the EMB-170/EMB-19 Jet Service Agreement or (y) the applicable date for
such termination rights set forth in Exhibit 7.4 attached hereto.
(c) If
US
Airways exercises its option to cause Republic to acquire the Growth Aircraft
(as defined in the Recitals of this Agreement) and such Growth Aircraft are
actually placed into service under the EMB-170/EMB-190 Jet Service Agreement,
US
Airways shall have the right, to terminate two (2) Aircraft hereunder for every
five (5) Growth Aircraft placed in service under the EMB-170/EMB-190 Jet Service
Agreement. For each such group of five (5) Growth Aircraft, one (1) Aircraft
may
be terminated on the date that is the later of (i) the date that the third
Growth Aircraft in such group is placed into service under the EMB-170/EMB-190
Jet Service Agreement, and (ii) the applicable date set forth in Exhibit 7.4
attached hereto, and one (1) Aircraft may be terminated on the date that is
the
later of (iii) the date that the fifth such Growth Aircraft is placed in service
under the EMB-170/EMB-190 Jet Service Agreement and (iv) the applicable date
set
forth in Exhibit 7.4 attached hereto.
(d) If
(i)
the Company exercises its option to require the Investor to purchase New Common
Stock under Section 2.01 of the Investment Agreement and in connection
therewith, exercises the Slot Option, to be consummated upon the Investor’s
purchase of the New Common Stock, (ii) the Investor has not consummated the
purchase of New Common Stock other than as a result
of
a
failure of a condition to be satisfied or waived by the Investor under Section
8.01 of the Investment Agreement (other than the condition that the Investor
shall have approved the Initial Business Plan and any Amended Business Plan,
or
the condition that Group shall have consummated the Slot Option, to the extent
that such failure to consummate the Slot Option results from the Investor’s
election not to consummate the purchase of the New Common Stock), (iii) the
sale
of New Common Stock is completed with a third party investor in connection
with
the consummation of the Plan on terms and conditions substantially identical,
in
all material respects, or on terms more favorable to the investor to those
contained in the Investment Agreement and, if more favorable, that were offered
to the Investor under Section 6.09(c) of the Investment Agreement and that
the
Investor declined to accept, and (iv) the Slot Option is not and has not been
consummated with the Investor, then US Airways shall have the one time right
to
terminate up to ten (10) additional Aircraft, subject to six (6) month’s prior
written notice to Chautauqua, which notice shall specify the number of aircraft
to be terminated and the dates of such terminations, and upon US Airways’
exercise of such aircraft termination right, US Airways shall have no further
right to exercise or consummate the Slot Option.
(e) At
any
time until such time as US Airways no longer has the right to terminate any
Aircraft under Sections 7.4(a), (b), (c) or (d), Chautauqua shall have the
right
to deliver to US Airways written notice (a “Preliminary Chautauqua Termination
Notice”) that it desires to terminate up to an aggregate number of Aircraft that
does not exceed fifteen (15) less any Aircraft that have been previously
terminated under Sections 7.4(a), (b), (c) or (d) or this Section 7.4(e). Within
10 Business Days after receipt of a Preliminary Chautauqua Termination Notice,
US Airways shall have the right to notify Chautauqua as to whether it accepts
or
rejects (which acceptance or rejection may be as to all, some or none of the
Aircraft designated for termination in such Preliminary Chautauqua Termination
Notice) such Preliminary Chautauqua Termination Notice. The failure of US
Airways to deliver such notification within such 10 Business Day period shall
be
deemed an acceptance of Chautauqua’s Preliminary Chautauqua Termination Notice.
In the event US Airways gives timely written notice to Chautauqua that it
rejects Chautauqua’s Preliminary Chautauqua Termination Notice as to any or all
of the Aircraft designated for termination, then the total number of Aircraft
that US Airways may terminate under Section 7.4(a), (b), (c) or (d) shall be
reduced by the number of Aircraft so rejected by US Airways (it being understood
and agreed that the Aircraft shall be reduced in the chronological order in
which they are then eligible for termination under any of Section 7.4(a), (b),
(c) or (d)). In the event US Airways accepts (or is deemed to accept)
Chautauqua’s Preliminary Chautauqua Termination Notice, then Chautauqua shall
have the right to give US Airways a further written notice (a “Final Chautauqua
Termination Notice”), within not more than sixty (60) days from the date of
acceptance or deemed acceptance of the Preliminary Chautauqua Termination
Notice, specifying the date(s) on which some or all of the Aircraft designated
for termination in the Preliminary Chautauqua Termination Notice will be removed
from Service under this Agreement, and the number of such Aircraft to be removed
on each such date, provided, however, that the removal of the first of such
Aircraft shall commence no earlier than sixty (60) days, and no later than
one
hundred twenty (120) days, from the date of the Final Chautauqua Termination
Notice, and this Agreement shall terminate as to each such Aircraft on the
date
of removal of such Aircraft from the Service. If Chautauqua does not give such
Final Chautauqua Termination Notice within the required sixty (60) day period,
then Chautauqua may not terminate the Aircraft subject to the Preliminary
Chautauqua Termination Notice unless it again
complies
with the provisions of this Section 7.4(e). In the event Chautauqua issues
a
timely Final Chautauqua Termination Notice, then the total number of aircraft
that US Airways may terminate under Section 7.4(a), (b), (c) or (d) shall be
reduced by the number of Aircraft specified in such Final Chautauqua Termination
Notice (it being understood and agreed that the Aircraft shall be reduced in
the
chronological order in which they are then eligible for termination under any
of
Section 7.4(a), (b), (c) or (d)). In the event that Chautauqua exercises its
right under this Section 7.4(e), US Airways will not be required to terminate
more than two (2) Aircraft in any thirty (30) day period.
(f) US
Airways shall not have the right to terminate any Aircraft pursuant to
sub-clauses (b) and (c) of this Section 7.4 if and for so long as US Airways
is
then flying regional jet aircraft directly or indirectly owned or operated
by
any regional jet provider flying as “US Airways Express” other than (x) Air
Wisconsin Airlines Corporation (“Air Wisconsin”), under that certain Air
Wisconsin Jet Service Agreement, effective as of February 28, 2005, between
US
Airways and Air Wisconsin (but only with respect to up to 70 regional jets
or
such lesser number as Air Wisconsin irrevocably commits to operate for US
Airways prior to the Effective Date), or (y) any other such regional jet
provider flying 50 seat regional jet aircraft that has made an equity investment
in US Airways which equates to at least $3.57 million in each aircraft in such
regional jet provider’s fleet then flying for US Airways; provided, however,
that with respect to any such other regional jet provider, at such time as
US
Airways has reduced the size of such other regional jet provider’s 50 seat
regional jet aircraft fleet being operated by US Airways to a point where such
other regional jet provider’s investment in US Airways equates to at least $3.57
million per aircraft, then US Airways may thereafter terminate Aircraft pursuant
to sub-clauses (b) and (c) of this Section 7.4 in proportion to the rate at
which US Airways terminates the remaining 50 seat regional jet aircraft fleet
of
such other regional jet provider.
(g) Notwithstanding
anything in this Section 7.4 or Schedule 7.4 to the contrary, (i) in no event
may US Airways terminate, in the aggregate, more than two (2) Aircraft in any
thirty (30) day period and (ii) Chautauqua will have the right to designate
the
specific Aircraft to be terminated by either party.
(h) All
capitalized terms used in this Section 7.4, but not defined in this Agreement,
shall have the meanings set forth in the Investment Agreement.
Section
7.5 - Termination by Xxxxxxxxxx
(a) Chautauqua
may terminate this Agreement for cause, upon the occurrence of any of the
following events:
(i) upon
written notice to US Airways, if US Airways fails to perform any payment
obligation to be performed or observed by it hereunder, provided that the
failure by US Airways to make a payment under Section 5.3(a) hereof or any
other
payment or payments in excess of [*]
in the
aggregate shall require [*]
days
written notice, and that the failure by US Airways to make any other payment
shall require [*]
days
written
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notice,
and further provided that in the event of a bona fide dispute as to an amount
due, the parties will engage in good faith efforts to resolve such dispute
in
not less than [*]
days and
Chautauqua shall not deliver such notice based upon US Airways’ failure to pay
such amount subject to bona fide dispute (but only such amount), if within
such
[*]
day
period (x) the parties agree on the amount due and payable and US Airways pays
such amount to Chautauqua, or (y) US Airways escrows any amount that remains
subject to bona fide dispute with a third party escrow agent pursuant to an
escrow agreement reasonably satisfactory to Chautauqua, and the parties seek
an
expedited resolution of such dispute pursuant to Section 14.2 hereof, without
requirement that the parties comply with the provisions of Section 14.1
hereof;
(ii) upon
not
less than ninety (90) days written notice to US Airways, if US Airways
materially fails to perform or observe any other material covenant or condition
or agreement to be performed or observed by it hereunder, subject to US Airways’
rights to cure such breach as set forth herein;
(iii) upon
written notice in the event that (1) the 170/190 Operator shall have commenced
the provision of flight services under the EMB 170/190 Jet Service Agreement
and
the EMB 170/190 Jet Service Agreement shall have been terminated by the 170/190
Operator in accordance with the terms of such agreement, or (2) US Airways
shall
have exercised the Slot Option and either (A) the 170/190 Operator shall have
terminated the Specified Slot/Gates Transaction Agreements (as defined in
Section 7.5(a)(iv) below) as a result of a Material Breach (as defined in
Section 7.5(a)(iv) below) by US Airways, or (B) the 170/190 Operator shall
have
terminated the Specified Aircraft Transaction Agreements (as defined in Section
7.5(a)(iv) below) as a result of a Material Breach by US Airways, provided
that
a termination under this subsection (iii) shall be effective at the later of
(y)
the date of such notice, and (z) the date of such termination of the EMB 170/190
Jet Service Agreement, the Specified Slots/Gates Transaction Agreements or
the
Specified Aircraft Transaction Agreements, as the case may be; and
(iv) For
purposes of Section 7.3(h) and subsection (iii) of this Section 7.5(a), (1)
the
Slots/Gates Transaction Agreements shall mean those agreements to which US
Airways or an affiliate is a party relating to the Slot Option, the Gates
Option, the Slots License, the Repurchase Option (as defined in the Investment
Agreement) and the other transactions related thereto, (2) the Aircraft
Transaction Agreements shall mean those agreements to which US Airways or an
affiliate is a party relating to the Republic Aircraft Transaction, including
without limitation, purchase of the Owned Aircraft, the Owned Aircraft
Leaseback, the assignment of leases relating to the Leased Aircraft (as defined
in the Investment Agreement) and the other transactions related thereto, (3)
Material Breach with respect to US Airways shall have the meaning provided
in
the Slots/Gates Transaction Agreements or Aircraft Transaction Agreements,
as
the case may be, (4) Material Breach with respect to the 170/190 Operator or
Wexford shall have the
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meaning
provided in such Slots/Gates Transaction Agreements or Aircraft Transaction
Agreements, as the case may be, (5) Specified Slot/Gates Transaction Agreements
shall have the meaning provided in the Slots/Gates Transaction Agreements,
and
(6) Specified Aircraft Transaction Agreements shall have the meaning provided
in
the Aircraft Transaction Agreements.
(b) After
notice of termination is given, US Airways shall meet with Chautauqua for the
purpose of resolving the breach. Should such breach not be cured or corrected
prior to the effective date of such notice, or action diligently undertaken
to
cure or correct the breach if cure or correction cannot be completed prior
to
such effective date, then the termination shall be effective on the date
specified in the notice of termination. If the breach is cured or corrected
in a
timely manner (or all steps to remedy the situation were timely taken), the
notice of termination shall be deemed rescinded.
ARTICLE
8 - PERFORMANCE ADJUSTMENTS
Section
8.1 - [Intentionally
Omitted]
Section
8.2 - Performance Plan Metrics
Chautauqua’s
operating performance for the fleet of Aircraft in the Service under this
Agreement shall be tracked by US Airways each day based upon the following
metrics:
(a) Controllable
Fleet Launch:“Controllable
Fleet Launch Percentage” is defined as the percentage of the Aircraft fleet
departing from the gate within [*]
minutes
of the scheduled departure time on its first flight of the day, excluding
[*].
(b) Controllable
On Time Departure Percentage:“Controllable
On-Time Departure Percentage” is defined as the percentage of Aircraft
departures completed within [*]
minutes
of its scheduled departure time, excluding [*].
Any
departure delay greater than [*]
shall be
considered a cancellation for purposes of calculating Controllable On-Time
Departure Percentage, and a “departure” will not be deemed to have occurred if a
flight returns to the gate without leaving the air field.
(c) Controllable
Completion Percentage:“Controllable
Completion Percentage” is defined as the percentage of scheduled Aircraft
departures completed[*].
Within
[*]
days
after the end of each calendar month during the Term, US Airways shall compute
the metrics defined above and provide to Chautauqua a summary statement showing
the operating performance of Chautauqua.
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Section
8.3 - Performance Plan Penalties and Incentives
(a) Performance
Penalties.
Upon
the occurrence and continuance of [*]
or more
of the following events for a period of [*]
or more
consecutive calendar months during the Term in which Chautauqua operates
twenty-five (25) or more Aircraft in the Service, and no Performance Exception
or Force Majeure Event has occurred for any such month, then Chautauqua shall
pay to US Airways [*]
each
calendar month during such period:
(i)
Chautauqua’s
Controllable Fleet Launch Percentage is less than [*];
(ii) Chautauqua’s
Controllable On-Time Departure Percentage is less than [*];
(iii)
Chautauqua’s
Controllable Completion Percentage is less than [*].
(b) Performance
Incentives.
Upon
the occurrence and continuance of [*]
of the
following events for any period of two consecutive calendar months during the
Term, then US Airways shall pay to Chautauqua [*]
for each
calendar month during such period:
(i)
Chautauqua’s
Controllable Fleet Launch Percentage is greater than [*];
(ii) Chautauqua’s
Controllable On-Time Departure Percentage is greater than [*];
(iii)
Chautauqua’s
Controllable Completion Percentage is greater than [*].
Section
8.4 - Performance Exceptions
A
“Performance Exception” with respect to the failure on the part of Chautauqua to
achieve the performance metrics of Controllable Fleet Launch Percentage,
Controllable On-Time Departure Percentage and Controllable Completion Percentage
as defined in Section 8.3(a) and 8.3(b) shall be deemed to have occurred if
any
of the following conditions are met:
(a) Chautauqua’s
performance, [*].
(b) The
failure to achieve the performance metric is directly attributable to
[*],
Chautauqua shall promptly notify US Airways in writing of such event and each
party shall promptly take steps to coordinate a commercially reasonable cure
for
such event. If US Airways receives written notice of an event within its control
to correct, US Airways shall promptly provide written notice to Chautauqua
of
the date by which such event is expected to be cured and shall adjust
Chautauqua’s affected performance metrics to the extent affected by such event
during the period prior to such cure taking effect.
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ARTICLE
9 - SERVICE MARK LICENSE FOR SERVICES PROVIDED PURSUANT
TO THIS AGREEMENT
Section
9.1 - Grant of License
US
Airways hereby grants to Chautauqua a nonexclusive, nontransferable license
to
use such US Airways Servicemarks as US Airways designates from time-to-time
in
connection with the services to be rendered by Chautauqua under this Agreement;
provided, however,
that at
any time during the term of this Agreement, at US Airways sole discretion,
US
Airways may alter, amend or revoke the license hereby granted. US Airways may
require, at US Airways’ expense, Chautauqua’s use of any new or different US
Airways Servicemarks in conjunction with the air transportation services
provided hereunder as US Airways may determine in the exercise of its sole
discretion and judgment.
Section
9.2 - Terms and Conditions Governing Trademark
License
(a) Chautauqua
acknowledges that its use of the US Airways Servicemarks creates in Chautauqua
no rights in those marks and that all use of the US Airways Servicemarks by
Chautauqua inures to the benefit of US Airways.
Chautauqua
recognizes that US Airways has over the years built up a reputation as a
provider of the highest quality services and that US Airways’ reputation and
goodwill associated with the US Airways Servicemarks extend throughout the
United States and internationally. Use of the US Airways Servicemarks by
Chautauqua and the Services provided by Chautauqua shall conform in manner
and
style with quality standards specified by US Airways, so long as such quality
standards are not inconsistent with standard industry practice for regional
jet
carriers, are consistent with those prescribed for other carriers operating
under US Airways Servicemarks, comply with all Regulations, and are consistent
with this Agreement.
(b) Xxxxxxxxxx
agrees that, in providing the Services it shall not advertise or make use of
the
US Airways Servicemarks without the prior written approval of US Airways. US
Airways shall have absolute discretion to withhold its consent concerning any
and all such advertising and use of the US Airways Servicemarks in advertising
by Chautauqua. In the event US Airways approves the use of such US Airways
Servicemarks in any advertising, such advertising shall identify US Airways
as
the owner of such servicemarks, and conform with any additional requirements
specified by US Airways.
(c) To
the
extent that Chautauqua is licensed to use the US Airways Servicemarks, such
Servicemarks shall only be used in conjunction with the Services and may not
be
used in connection with any other businesses or activities of Chautauqua or
any
other entity.
(d) Nothing
in this Agreement shall be construed to give Chautauqua the exclusive right
to
use the US Airways Servicemarks, or to abridge US Airways’ right to use and/or
license its Servicemarks, and US Airways hereby reserves the right to continue
use of the US Airways Servicemarks and to license such other uses of said
Servicemarks as US Airways may desire.
(e) No
term
or provision of this Agreement shall be construed to preclude the use of the
Servicemarks “US Airways Express” or the aircraft exterior color decor and
patterns by other individuals or entities not covered by this
Agreement.
(f) Upon
the
cancellation or termination of this Agreement, the license and use of the US
Airways Servicemarks by Chautauqua shall cease, and Chautauqua shall not be
permitted to use such Servicemarks thereafter, except as may be appropriate
in
any phase-out of service of this Agreement as determined by US Airways in US
Airways’ sole discretion.
ARTICLE
10 - FORCE MAJEURE
Section
10.1 - Force Majeure
Notwithstanding
anything to the contrary herein contained, neither party shall be liable to
the
other for loss, injury, damage or failure to perform under this Agreement caused
by any of the following; provided that such events are beyond the reasonable
control of such party (such events are referred to herein as “Force Majeure
Events”): acts of God; acts of terrorism; governmental sanctions; war; strikes;
labor disputes (whether causing such loss, injury, damage or failure to perform
directly or indirectly); work stoppage; natural disaster, earthquake, fire,
flood, or other weather-related reason; subject to each party’s obligation to
use its commercially reasonable efforts to obtain and maintain the governmental
authorizations, licenses, approvals, registrations and filings required under
Regulations in order to execute or perform its obligations under this Agreement,
failure or refusal on the part of any government or governmental agency to
grant
or issue necessary approvals or authorizations or the revocation of any such
approvals; mechanical difficulties with, or damage to or destruction of, flight
equipment; grounding of a substantial number the Aircraft by any governmental
agency; revocation of such party’s operating certificate; activation of the U.S.
Civil Reserve Air Fleet; or other acts of government or any other cause which
is
beyond the reasonable control of such party and which shall materially disrupt,
delay, suspend, limit, curtail or prevent performance of such Party’s
obligations under this Agreement; provided, however, that Force Majeure Events
shall not excuse the obligations of the Parties under Article 5 or Article
6 of
this Agreement.
Section
10.2 - Resumption of Service
The
party
prevented from complying with its obligations hereunder as a result of a Force
Majeure Event shall promptly notify the other party thereof and, at the request
of the other Party, the Parties shall make all reasonable efforts to meet within
48 hours of receipt of such notice by the other Party to discuss the
circumstances and potential solutions to such Force Majeure Event, including
mitigation of such Force Majeure Event. If either Party relies on the occurrence
of a Force Majeure Event as a basis for being excused from performance of its
obligations hereunder, the Party relying on the Force Majeure Event shall:
(i)
provide an estimate of the expected duration of the Force Majeure Event and
its
probable impact on the performance of such Party’s obligations under this
Agreement, (ii) exercise commercially reasonable efforts to continue to perform
its obligations under this Agreement, (iii) promptly use commercially reasonable
efforts to correct or cure the Force Majeure Event and mitigate any damages
related thereto and (iv) provide prompt notice to the other Party of the
cessation, if any, of the Force Majeure Event.
ARTICLE
11 - NOTICES
Except
where specified elsewhere in this Agreement, any and all notices, approvals
or
demands required or permitted to be given by the Parties hereto (a) shall be
effective upon receipt, (b) shall be made in writing and (c) may be sent by
certified mail, postage prepaid, overnight courier, hand delivery, facsimile
or
electronic mail. When sent by mail, such notices shall also be sent by facsimile
and by electronic mail. Notices to US Airways shall be addressed
to:
| US Airways, Inc.: | Chautauqua Airlines, Inc.: |
| N. Xxxxx Xxxxx | Xxxxx Xxxxxxx |
| EVP, Marketing & Planning | Chief Executive Officer |
| US Airways, Inc. | Chautauqua Airlines Inc. |
| 0000 Xxxxxxx Xxxxx | 0000 Xxxxxx Xxxx, Xxxxx 000 |
| Arlington, VA 22227 | Indianapolis, IN 46268 |
| Email: xxxxx.xxxxx@xxxxxxxxx.xxx | |
| Telephone: 000- 000-0000 | Telephone: (317) _000-0000 |
| Facsimile: 000-000-0000 | Facsimile: (317) _484-6060 |
| with copies delivered at the same address | with copies delivered to: |
| to the attention of: | Xxxxxx Xxxxx |
| Xxx XxXxxxxx | Principal and General Counsel |
| US Airways Express, | WExford Capital LLC |
| Managing Director Finance | 000 Xxxx Xxxxxx Xxxxxx |
| Telephone 000-000-0000 | Greenwick, CT 06830 |
| Facsimile: 000-000-0000 | Telephone 000-000-0000 |
| Facsimile: 000-000-0000 | |
| Xxxxxxxxx X. Xxxxxx | |
| EVP, General Counsel | |
| US Airways, Inc. | |
| Email: xxx_xxxxxx@xxxxxxxxx.xxx | |
| Telephone: 000-000-0000 | |
| Facsimile: 000-000-0000 | |
ARTICLE
12 - MISCELLANEOUS
Section
12.1 - Entire Agreement/Amendments/Counterparts
This
Agreement constitutes the entire agreement between the parties hereto. This
Agreement may be amended only in writing, executed by a duly authorized
representative of each party. This Agreement may be executed by the Parties
hereto in one or more 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.
Section
12.2 - Headings
The
division of this Agreement into Articles, Sections and subsections are for
convenience of reference only and shall not affect the construction or
interpretation hereof.
Section
12.3 - Severability
Any
provision of this Agreement which may be determined by a court of competent
jurisdiction to be invalid or unenforceable in such jurisdiction shall, as
to
such jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without invalidating or rendering unenforceable any remaining
terms and provisions hereof, and any such invalidity or unenforceability in
any
jurisdiction shall not invalidate or render unenforceable such provision in
any
other jurisdiction. The Parties shall negotiate in good faith to replace such
provision with an appropriate legal provision. To the extent permitted by
Regulations, the Parties hereto hereby waive any provision thereof that renders
any term or provision hereof invalid or unenforceable in any
respect.
Section
12.4 - Waiver
Except
as
otherwise specifically provided in this Agreement, a waiver by either party
of
any breach of any provision of this Agreement by the other party, or either
party’s election not to exercise any remedy or enforce any right under this
Agreement, shall not be deemed a waiver of any subsequent breach or of any
right
to exercise any remedy or enforce any right in the future under this Agreement,
and all provisions of this Agreement shall remain in full force and effect.
Section
12.5 - Assignments
The
Parties agree that this Agreement and the rights and obligations established
hereunder, may not be assigned, in whole or in part, without the prior written
consent of the other, where such consent shall not be unreasonably withheld,
except as follows:
(a) US
Airways may assign its rights and delegate its obligations hereunder, without
any prior approval of Chautauqua, to US Airways Group, Inc., or any subsidiary
or affiliate of that company, or any successor through merger, sale of
substantially all of its assets, or by operation of law.
(b) Chautauqua
may assign its rights and delegate its obligations hereunder, without any prior
approval of US Airways, (i) to any certificated air carrier owned or controlled
by Republic or Wexford, or (ii) to any certificated air carrier that is a
subsidiary or affiliate of Chautauqua, Republic or Wexford. Any such assignment
by Xxxxxxxxxx shall be to an entity in compliance with US Airways “Jets for
Jobs” protocol as ratified by US Airways ALPA in Letter of Agreement #91 to the
US Airways - ALPA Collective Bargaining Agreement, or as further amended before
the date of such assignment, provided that neither Chautauqua nor any such
assignee shall not be required to exert other than its commercially reasonable
efforts to comply with any such further amendments. The parties recognize that
US Airways is obligated to pay as a Pass Through Cost any additional cost
incurred as a result of such compliance. Notwithstanding any such assignment,
the Parties agree that they shall remain responsible for their financial
obligations under this Agreement.
Section
12.6 - Governing
Law / Jury Trial Waiver
This
Agreement shall be governed by, construed and enforced in accordance with the
laws of the United States and the State of New York, as though the entire
contract were made and to be performed in New York and without regard to New
York’s conflict of laws, rules, or statutes. The Parties further agree that they
consent to the exclusive jurisdiction of the Courts of New York or the federal
courts located within the State of New York and waive any objection to
jurisdiction, including any objection based on forum
non conveniens.
The
Parties further agree to waive any right to trial by jury in any action or
proceeding relating to this Agreement or seeking to enforce any rights under
this Agreement.
Section
12.7 - No Franchise
Nothing
is this Agreement is intended to imply or confer upon the arrangements
contemplated hereunder, any status as a “franchise” as recognized under any
state law. Accordingly, no franchiser-franchisee relationship exists between
US
Airways and Chautauqua as a result of this Agreement.
Section
12.8 - Additional US Airways Rights
US
Airways shall have the right, on ninety (90) days prior written notice, to
provide Aircraft Hull and Liability Insurance at the levels specified in Section
6.3 hereof and on terms otherwise reasonably acceptable to Chautauqua, its
lenders and aircraft lessors instead of paying Chautauqua for such
coverage.
ARTICLE
13 - CONFIDENTIALITY
Section
13.1 - Confidentiality of Agreement
The
Parties agree that the terms of this Agreement and any other Confidential
Information (as defined in Section 13.2 hereof) furnished hereunder shall be
treated as confidential and shall not be disclosed to any other person or entity
without the express written consent of the other party; provided that each
party
may, without the consent of the other party, disclose Confidential Information
as expressly permitted below:
(a) to
directors, officers, employees, permitted assigns and agents of each party
and
their respective Affiliates (as defined in Section 13.4 or 13.5 hereof);
or
(b) to
prospective financial institutions for the purposes of providing financing
of
Aircraft; or
(c) to
subcontractors, auditors, accountants or legal and financial advisors of such
party and its Affiliates; or
(d) to
such
other parties as may be required by any Regulations, by subpoena or by any
other
legal process, including in connection with any SEC or other regulatory filing
by the Parties or their affiliates, including the filing of an S-1 registration
statement and any related documents; or
(e) to
any
Regulatory Authority in connection with Chautauqua’s certification process,
including representatives of the DOT and FAA if requested by any such parties;
or
(f) to
prospective financial investors conducting due diligence with respect to the
business and operations of US Airways in connection with the Bankruptcy
Proceeding.
In
the
event that a disclosure becomes necessary, as provided in this sub-clause (d)
or
(e) of this Section 13.1, each party shall consult and cooperate with the other
party to limit (to the extent permissible) the scope and form of such
disclosure. In the event of such disclosure required by law, only those portions
of this Agreement required to be disclosed shall be released. The disclosing
party shall make good faith efforts to minimize the portions to be disclosed
and
shall seek confidential treatment by the receiving party or agency or any
portions disclosed. In the event of one party being served a subpoena or
discovery request, prior to responding to the subpoena or request, the party
served shall notify the other party, so that the other party shall have an
opportunity to contest, if it chooses to do so, the disclosure of the content
of
this Agreement.
Section
13.2 - Confidential Information
“Confidential
Information” means all restricted information having business value, regardless
of the form in which it exists, including, without limitation, the terms of
this
Agreement, written documents, oral communications, recordings, videos, software,
databases, business plans, and electronic/magnetic media, provided to or
observed by either Party pursuant to this Agreement, including information
owned
or provided by either Party to the other Party, except otherwise as expressly
provided in Section 13.3 hereof. Each Party agrees that it shall maintain all
Confidential Information in confidence using the same degree of care with
respect to such Confidential Information as it uses in protecting its own
proprietary information, and each Party shall use it solely for purposes of
its
own business operations in accordance with the terms hereof. Such Confidential
Information shall be distributed within each Party’s company only to personnel
with a need to know such information for permitted purposes or in compliance
with a court order or statutory or regulatory requirements; provided, however,
that prior to any such latter disclosure, the Party shall inform all such
persons of the confidential nature of the information, and that it is subject
to
this non-disclosure obligation, and shall further instruct such persons to
treat
such information confidentially. The Parties expressly acknowledge and agree
that the terms and conditions of this Agreement and any reports, invoices,
or
other communications between US Airways and Chautauqua given hereunder or in
connection herewith constitute Confidential Information of both
Parties.
Section
13.3 - Exclusions from Confidential Information
Notwithstanding
the foregoing, Confidential Information shall not be considered confidential
and
each party and their respective Affiliates may disclose any item of Confidential
Information without restriction in any of the following circumstances if such
item:
(a) is
publicly available (either to the general public or to any relevant trade or
industry) prior to either Party’s receipt of it from the other Party
hereto;
(b) is
thereafter made publicly available (either to the general public or to any
relevant trade or industry) by another Party hereto or by a third party which
is
entitled to make such item publicly available;
(c) becomes
available to either Party hereto on a non-confidential basis from a source
which
has represented to such Party that such source is entitled to disclose it;
or
(d) was
known
to either Party hereto on a non-confidential basis prior to its disclosure
to
such party by another Party hereto. The provisions of this Article 13 shall
survive any termination of this Agreement for a period of three (3)
years.
Section
13.4 - Information Shared with US Airways Group, Inc.
Notwithstanding
anything to the contrary herein, Chautauqua acknowledges and agrees that any
Confidential Information shared or given to US Airways pursuant to this
Agreement may be shared by US Airways on a confidential basis with US Airways
Group, Inc., and US Airways Affiliates, where US Airways Affiliates is defined
as subsidiaries of US Airways Group, Inc., each of which shall be deemed an
“Affiliate” of US Airways for purposes of this Article 13.
Section
13.5 - Information Shared with Wexford and Republic
Notwithstanding
anything to the contrary herein, US Airways acknowledges and agrees that any
Confidential Information shared or given to Chautauqua pursuant to this
Agreement may be shared by Chautauqua on a confidential basis with Wexford
and
Republic and entities that are wholly owned or controlled, directly or
indirectly, by Wexford or Republic, each of which shall be deemed an “Affiliate”
of Chautauqua for the purposes of this Article 13.
Section
13.6 - Return of Documents
(a) Upon
the
reasonable request of either Party, each party shall immediately return to
the
other Party, at its own expense, all documents of the requesting Party and
all
copies of such documents in its possession or under the control either directly
or indirectly of its agents. Each Party acknowledges and agrees that the other
Party shall have the right to exercise this right as many times as it deems
necessary throughout the term of this Agreement.
(b) Upon
termination of this Agreement, with or without cause and for any reason, each
Party shall, within ninety (90) days of such termination, either deliver to
the
other Party, or
destroy,
all of such other Party’s Confidential Information (including copies thereof
encoded or stored on magnetic or other electronic media or processors; provided,
however, that neither Party shall be required to purge or destroy any
Confidential Information for so long as such Confidential Information is
reasonably necessary in connection with the resolution of any disputes which
may
have at the time arisen pursuant to the terms of this Agreement; provided,
further, that any Confidential Information not purged or destroyed pursuant
to
the preceding proviso shall be purged or destroyed as soon as it is no longer
reasonably necessary for resolution of disputes.
Section
13.7 - Remedies
Each
party acknowledges and agrees that the Party disclosing Confidential Information
under this Agreement shall have no adequate remedy at law if there is a breach
or threatened breach of this Article 13 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 Article 13 and the disclosing
Party may pursue any other such remedy, including the recovery of
damages.
Section
13.8 - Survival
The
confidentiality obligations of the Parties contained in this Article 13 shall
survive the termination of this Agreement.
ARTICLE
14 - DISPUTE RESOLUTION
Section
14.1 - Certain Disputes
The
Parties shall attempt to resolve any dispute, difference, controversy or claim
arising out of or relating to this Agreement through mutual negotiations,
consultation and discussions for a period of thirty (30) days.
Section
14.2 - Dispute Resolution Proceedings
In
the
event that the Parties are unable to settle their differences or disputes which
may arise between them under Section 14.1, above, then either Party may submit
such dispute (“Dispute”) for binding arbitration with the following
conditions:
(a)
the
proceeding shall be held before a panel of three arbitrators where each Party
shall choose one arbitrator and the third shall be selected jointly by the
two
appointed arbitrators and, where such agreement cannot be reached, by
appointment of the Administrator of the American Arbitration Association or
his
or her designee;
(b) except
as
modified by this Article, the Arbitration Rules of the American Arbitration
Association shall govern the arbitration;
(c) the
proceeding shall be conducted in the State of New York;
(d) the
law
of the United States and the State of New York shall be applied without regard
to New York conflict of laws statutes;
(e) the
proceeding shall be closed except to the Parties, their attorneys,
representatives, witnesses and experts, all of whom must agree to maintain
the
confidentiality of the dispute;
(f) the
existence, proceeding and resolution of the Dispute shall be kept confidential
by the Parties and shall only be disclosed as permitted by Article
13;
(g)
the
arbitration shall be binding upon the parties unless mutually agreed otherwise
in writing; and
(h) each
Party shall be responsible for its own costs and expenses incurred as a result
of, or in connection with the arbitration, including the costs, fees, and
expenses of its own representatives and designated arbitrator, in the
proceeding, except that the costs of the third arbitrator shall be shared
jointly by the Parties.
IN
WITNESS WHEREOF, US
Airways and Chautauqua have caused this Agreement to be executed by their duly
authorized representatives on the day and year first above written.
CHAUTAUQUA
AIRLINES, INC. US
AIRWAYS, INC.
| /s/ Xxxxx Xxxxxxx | /s/ Xxxxx Xxxxx | ||
|
By:
Xxxxx Xxxxxxx
Title:
Chief Executive Officer
|
By:
Xxxxx Xxxxx
Title:
Executive Vice President - Marketing &
Planning
|
Exhibit
2.2 - Schedule Requirements
The
weekly schedules for the Aircraft specified by US Airways must meet the
following minimum and maximum schedule parameters.
|
Minimum
|
Maximum
|
|
| Scheduled Block Hours per Aircraft per Day |
[*]
|
[*] |
| Scheduled Departures per Aircraft per Day |
[*]
|
[*] |
| Available Seat Miles per Aircraft per Day |
[*]
|
[*] |
Note:
the
above minimum and maximum schedule parameters apply only to those Aircraft
scheduled in revenue service, not to spare aircraft.
US
Airways shall meet the following criteria in devising the schedule:
1. Aircraft
Turn Times
For
operations at US Airways designated hubs (for purposes of this Agreement only,
Pittsburgh, Boston, Washington-National, New York XxXxxxxxx, Xxxxxxxxx,
Philadelphia, and Dulles and any other hubs that US Airways may establish)
the
minimum turn time (defined as the time from Aircraft blocking to Aircraft
unblocking) shall be [*]
minutes.
For operations at a non US Airways hub, the minimum turn time shall be
[*]
minutes.
2. Aircraft
Maintenance Requirements
[*]
of the
Aircraft (rounded up to the nearest whole number) shall be scheduled for a
minimum of [*]
hours of
overnight maintenance per Aircraft for [*]
days per
week. The Parties will agree to a reasonable number of Aircraft that shall
be
scheduled for [*]
hours of
continuous maintenance time per Aircraft each week beginning on Saturday
afternoon.
3.
Maintenance
Base Operations
US
Airways will provide at all times during the term of this Agreement a schedule
of regional jet departures, including frequencies and overnight turnarounds,
that operate on behalf of US Airways from Columbus, Ohio (CMH), Indianapolis,
Indiana (IND) and Louisville, Kentucky (SDF) to all other US Airways service
points sufficient to support required maintenance activity for the Aircraft
at
Chautauqua’s primary maintenance based in CMH, IND and SDF.
4. Maintenance
Base
The
schedule will allow for the establishment by Chautauqua of primary maintenance
bases in IND, CMH and SDF.
5. Crew
Overnights
The
schedule shall allow for [*]
of crews
in outstations and shall not require Chautauqua to schedule [*].
Any
additional costs associated with continuous duty overnights or high-speed
overnights shall be for the account of US Airways and shall be invoiced
separately by Chautauqua as a Pass Through Cost.
_____
*
Confidential
6. Crew
Bases
The
schedule shall allow for the operation by Chautauqua of the following crew
bases: [*].
7. Hub
Arrivals/Departures
At
least
[*]
of the
scheduled flights will arrive at or depart from a hub or from SDF, IND or CMH.
7. Consent
to Schedule Changes
To
the
extent that US Airways’ schedule falls outside of the criteria set forth herein,
US Airways shall request Chautauqua to consent to such schedule and Chautauqua
shall not unreasonably withhold such consent provided that the schedule being
requested shall not impose additional costs upon Chautauqua and/or make
Chautauqua’s compliance with its performance requirements more difficult,
further provided that US Airways shall have the right to reimburse Chautauqua
for such additional costs and/or adjust the performance criteria so that the
immediately proceeding proviso shall no longer be applicable to the schedule
request in question.
_____
*
Confidential
Exhibit
2.7 - DIVISION OF RESPONSIBILITIES
(1) The
parties shall be responsible for providing, at their own cost, service and
materials, as set forth below, Assignment of services and materials to
categories shall be according to generally accepted accounting principals and
in
keeping with Airline Industry Standard Functional Classifications as required
for reporting Form 41 data to the Department of Transportation. Except as
otherwise provided in Articles 4 and 5, the assignment of responsibility shall
be as follows:
| To Chautauqua | To US Airways, Inc. |
| 5100 Flying Operations | 5500 Passenger Service1 |
| 5200 Direct Maintenance | 6200 Traffic Servicing |
| 5300 Maintenance Burden2 | 6300 Related to Traffic Servicing |
| 6100 Aircraft Servicing 3 | 6500 Reservations and Sales |
| 6300 Related to Aircraft Servicing | 6600 Advertising and Publicity |
| 6800 Related to Aircraft Operations | 6800 Related to Passengers & Revenue |
| 7000 Depreciation and Amortization related to aircraft and maintenance equipment | 7000 Depreciation and Amortization related airport facilities and ground facilities and equipment |
| 7100 Transport Related Expenses as they relate to the above referenced items | 7100 Transport Related Expenses as they relate to the above referenced items |
(2) Chautauqua
shall be responsible for providing, fuel (into plane), airport landing fees,
passenger catering, passenger liability insurance, and property tax. Chautauqua
shall be fully reimbursed for these items (the “Pass Through Costs”) as
described in Section 5.4.
___________________________________
1
Except
Flight Attendants which shall be the responsibility of Chautauqua
2 Except
Station Ground Equipment which shall be the responsibility of US
Airways
3 De-icing
costs and overnight aircraft parking shall be the responsibility of US
Airways
Exhibit
5.1 - Pricing Model
Direct
Costs:
|
[*][*]
|
[*]
|
|
|
[*]
|
||
|
[*]
|
[*]
|
[*]
|
|
[*]
|
[*]
|
[*]
|
|
[*]
|
[*]
|
|
|
[*]
|
[*]
|
|
|
[*]
|
[*]
|
|
|
[*]
|
||
|
[*]
|
[*]
|
[*]
|
|
[*]
|
[*]
|
[*]
|
|
[*]
|
[*]
|
[*]
|
|
[*]
|
[*]
|
|
|
[*]
|
||
|
[*]
|
[*]
|
[*]
|
|
[*]
|
[*]
|
[*]
|
|
[*]
|
[*]
|
[*]
|
|
[*]
|
[*]
|
|
|
[*]
|
||
|
[*]
|
[*]
|
[*]
|
|
[*]
|
[*]
|
[*]
|
|
[*]
|
[*]
|
[*]
|
|
[*]
|
[*]
|
|
|
[*]
|
||
|
[*]
|
[*]
|
[*]
|
|
[*]
|
[*]
|
|
|
[*]
|
||
|
[*]
|
[*]
|
|
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[*]
|
[*]
|
|
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[*]
|
||
|
[*]
|
[*]
|
|
|
[*]
|
[*]
|
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|
[*]
|
||
|
[*]
|
[*]
|
[*]
|
|
[*]
|
[*]
|
|
_____
*
Confidential
[*][*][*][*][*][*][*][*][*][*][*][*]
_____
*
Confidential
Exhibit
7.4 - Termination Dates for Aircraft in Service
|
Aircraft
Type
|
End
of Term Date
|
Early
Termination Date for
Growth
Aircraft
|
Early
Termination Date for Owned/Leased Aircraft
|
|
ERJ-145
|
March
1, 2013
|
120
days after effective date of POR
|
|
|
ERJ-145
|
March
1, 2013
|
||
|
ERJ-145
|
March
1, 2013
|
150
days after effective date of POR
|
|
|
ERJ-145
|
March
1, 2013
|
||
|
ERJ-145
|
March
1, 2013
|
180
days after effective date of POR
|
|
|
ERJ-145
|
March
1, 2013
|
270
days after effective date of POR
|
|
|
ERJ-145
|
March
1, 2013
|
||
|
ERJ-145
|
March
1, 2013
|
360
days after effective date of POR
|
|
|
ERJ-145
|
March
1, 2013
|
||
|
ERJ-145
|
March
1, 2013
|
390
days after effective date of POR
|
|
|
ERJ-145
|
March
1, 2013
|
||
|
ERJ-145
|
March
1, 2013
|
420
days after effective date of POR
|
|
|
ERJ-145
|
March
1, 2013
|
||
|
ERJ-145
|
March
1, 2013
|
450
days after effective date of POR
|
|
|
ERJ-145
|
March
1, 2013
|
Chautauqua
has the right to select the particular Aircraft that are subject to
termination.
