1
EXHIBIT 10.91 REDACTED VERSION
------------------------------
CODE SHARE AND REVENUE SHARING AGREEMENT
This CODE SHARE AND REVENUE SHARING AGREEMENT (the "Agreement") is made
and entered into to be effective as of July 15, 1998 (the "Effective Date"), by
and between AMERICA WEST AIRLINES, INC., a Delaware corporation ("AWA"), and
MESA AIRLINES, INC., a Nevada corporation ("Mesa").
R E C I T A L S
---------------
A. AWA holds a certificate of public convenience and necessity issued
by the Department of Transportation ("DOT") authorizing AWA to engage in the
interstate and oversees air transportation of persons, property and mail between
all points in the United States, its territories and possessions.
B. Mesa holds a certificate of public convenience and necessity issued
by the DOT authorizing Mesa to engage in the interstate transportation of
persons, property and mail in the United States, its territories and
possessions.
C. AWA owns various trades marks, services marks and logos, including
"America West Airlines," "America West Express," and distinctive exterior color
decor and patterns on its aircraft, hereinafter referred to individually and
collectively as the "AWA Service Marks".
D. AWA and Mesa desire to provide scheduled air transportation services
as America West Express and to share in the revenue and costs of such services
as provided in this Agreement.
NOW, THEREFORE, in consideration of the promises, covenants,
representations and warranties hereinafter set forth, and for other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, AWA
and Mesa agree as set forth below.
A G R E E M E N T
-----------------
1. Rights, Responsibilities and Obligations of Mesa:
1.1 Flight Service. During the term of this Agreement, Mesa shall
operate America West Express air transportation services (the
"Flight Services"), using the fleet of aircraft as set forth
in Section 1.2, to and from the cities and based upon the
schedule [CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] (the "Schedule")
in written notice to Mesa (a "Schedule Notice"). For purposes
of this Agreement, "Flights" means flights operated pursuant
to the Schedule. [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
2
COMMISSION] When creating a Schedule, AWA shall: (i) take into
account Mesa's aircraft maintenance requirements; (ii) create
a Schedule which will permit Mesa to schedule flight crews in
a manner consistent with industry operational practices; (iii)
schedule block times based on AWA's internal block time
policy; (iv) provide for a reasonable time on the ground for
Aircraft between arrivals and departures; (v) take into
account airport facilities available for Aircraft handling;
and (vi) provide for scheduled heavy maintenance on Aircraft
as required from time to time. Mesa shall implement all
changes in the Schedule contained in a Schedule Notice in
accordance with AWA's scheduling requirements but in no event
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] after receipt of a
Schedule Notice. Mesa or any of its affiliates shall not
provide any flight service for any other airline for flights
that originate in or end in Phoenix, Arizona, except that Mesa
may provide such flight service for itself on all essential
air service ("EAS") routes that AWA removes from the Schedule.
Mesa acknowledges that AWA may Schedule Flights using CRJs in
and out of the Columbus, Ohio airport. If such Flights are
Scheduled, Mesa and AWA, in good faith based on prevailing
market costs and expenses, shall adjust the Guaranteed Costs
payable pursuant to Paragraph 6.2 to take into consideration
the increased cost of operating such Flights in such location.
If the Guaranteed Costs are adjusted, then AWA and Mesa shall
execute and attach an addendum to this Agreement supplementing
the Guaranteed Costs Schedule.
1.2 Fleet.
1.2.1 Initial Fleet. Commencing on the Commencement Date
(as defined in Paragraph 7, below), Mesa shall
provide the Flight Services using the following
aircraft (collectively, the "Fleet"; with respect to
any one aircraft type, the "Subfleet"; and
individually, the "Aircraft"):
Number Aircraft Type ("Subfleet")
------ -------------------------
[CONFIDENTIAL PORTION deHavilland DHC-8-200 ("Dash 8")
DELETED AND FILED
SEPARATELY WITH THE
SECURITIES AND EXCHANGE
COMMISSION]
[CONFIDENTIAL PORTION Hawker-Beech 1900 ("Beech 1900")
DELETED AND FILED
SEPARATELY WITH THE
SECURITIES AND EXCHANGE
COMMISSION]
2
3
[CONFIDENTIAL PORTION Canadair Regional Jet-50 ("CRJ")
DELETED AND FILED
SEPARATELY WITH THE
SECURITIES AND EXCHANGE
COMMISSION]
1.2.2 CRJ Fleet Expansion. Mesa is currently obligated to
acquire 16 additional CRJs at a rate of one CRJ per
calendar month commencing in September 1998 and
ending in December 1999 (the "Committed
Acquisitions") and holds options to acquire 16
additional CRJs commencing in June 2000 (the "CRJ
Options").
(a) In each of September, October, November and
December 1998, January, February and March 1999 and a
calendar month during the period of April-December,
1999 as mutually agreed to, in writing, between AWA
and Mesa on or before [CONFIDENTIAL PORTION DELETED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] (the "CRJ Decision Date"), Mesa shall
acquire [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] new CRJ from the Committed Acquisitions
and shall increase the Subfleet of CRJs by
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] new CRJ
(thereby increasing the Subfleet of CRJs to
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] CRJs).
If AWA and Mesa are unable to agree on the month for
the final CRJ delivery required by this Paragraph
1.2.2 timely, then the delivery month proposed by AWA
shall govern.
(b) AWA has the options to expand the CRJ Subfleet by
up to [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] additional CRJs from the Committed
Acquisitions in each of [CONFIDENTIAL PORTION DELETED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] calendar months between April and
December 1999 as mutually agreed to between AWA and
Mesa, in writing, by the CRJ Decision Date (the
"Option Agreement"). If AWA and Mesa are unable to
agree on the [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] delivery months for the options timely,
then the delivery months proposed by AWA shall
govern. On or before the first day of each fourth
calendar month prior to each of the months set forth
in the Option Agreement
3
4
(each a "First Exercise Date"), AWA, by written
notice to Mesa, shall have the option to require Mesa
to increase the CRJ Subfleet by the addition of
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] new CRJ
(the "First CRJ Expansion Options"). Each of the
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] First
CRJ Expansion Options are separate and individual
options and may be exercised or not exercised on a
separate and individual basis.
(c) AWA shall have the options to expand the CRJ
Subfleet by [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] additional CRJs from the CRJ Options. On
or before the dates Mesa is required to give notice
to the Aircraft manufacturer in order to exercise
each of the CRJ Options (each, a "Second Option
Date"), AWA, by written notice to Mesa, shall have
the option to require Mesa to acquire all the CRJ
Aircraft that are the subject of the CRJ Option and
increase the CRJ Subfleet by the addition of such new
CRJ Aircraft, but not to exceed [CONFIDENTIAL PORTION
DELETED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] Aircraft, at the times provided
in such CRJ Option (the "Second CRJ Expansion
Options"). Mesa and AWA acknowledge that each of the
CRJ Options requires Mesa to commit to 4 Aircraft.
Mesa shall be responsible for acquiring all Aircraft
pursuant to each of the CRJ Options, however the CRJ
Subfleet shall only be increased by [CONFIDENTIAL
PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] Aircraft and Mesa
shall be responsible for additional CRJ Aircraft
acquired pursuant to the exercise of the CRJ Options.
AWA shall exercise the Second CRJ Expansion Option
and acquire the CRJ Aircraft pursuant to the CRJ
Expansion Option in groups of [CONFIDENTIAL PORTION
DELETED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION]. The Second Option Dates and the
number of Aircraft which are the subject of those
dates are: [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION]. The Second CRJ Expansion Options are
separate and individual options and may be exercised
or not exercised on a separate and individual basis.
1.2.3 Fleet Expansion. If a change in the Schedule
permitted by Section 1.1, above, requires additional
CRJ or Dash 8 to provide the Flight Services, then
Mesa, not later than [CONFIDENTIAL PORTION
4
5
DELETED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] after receipt of written notice
from AWA, shall increase the number of Aircraft in
the Fleet, subject to Aircraft availability on
commercially reasonable terms, with Aircraft
designated by AWA, to the extent necessary to provide
Flight Services pursuant to this Agreement.
1.2.4 Fleet Reduction. Except as otherwise permitted by
Paragraph 1.2.5, upon [CONFIDENTIAL PORTION DELETED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] prior written notice from AWA, AWA may
require Mesa to reduce the number of Aircraft in the
Fleet. AWA shall not require Mesa to reduce the
number of Aircraft: (i) in any Subfleet by more than
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] Aircraft
in any [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION]. For purposes of this Agreement,
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] means
each period during the Term (as defined below)
commencing on January 1 and ending on [CONFIDENTIAL
PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] and commencing on
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] and
ending on [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION], with the first [CONFIDENTIAL PORTION
DELETED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] commencing on [CONFIDENTIAL
PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]; (ii) in the
Fleet on the Commencement Date prior to [CONFIDENTIAL
PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]; (iii) in a
Subfleet for a period of 1 year measured from the
last date that an Aircraft is added to the Subfleet;
provided, however, that April 30, 1999 shall be
deemed to be the last date AWA acquires the last of
the CRJs pursuant to Paragraph 1.2.2(b) for purpose
of this subsection and the scheduled delivery date
shall be deemed the date AWA acquires a CRJ pursuant
to Paragraph 1.2.2(c); (iv) in the Dash 8 Subfleet
below 8 Aircraft; and (v) in the CRJ Subfleet below 8
Aircraft.
5
6
1.2.5 Elimination of Beech 1900s. Notwithstanding the
above, AWA by written notice given to Mesa within
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] after
Effective Date (the "Elimination Notice"), may
require Mesa to reduce the Subfleet of Beech 1900s to
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] on the
first anniversary date of the Effective Date. If AWA
elects to eliminate the Beech 1900s from the terms of
this Agreement, then AWA and Mesa shall attempt to
negotiate a code share agreement to provide service
to the destinations serviced by the Beech 1900s on
the Effective Date on economic terms and conditions
substantially similar to the terms and conditions in
the Existing Agreement, as defined in Paragraph 7
(the "Beech Code Agreement"). If AWA and Mesa are
unable to reach an agreement on the terms and
conditions of the Beech Code Agreement within
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] after
AWA provides the Elimination Notice, then AWA may
enter into an agreement with any other flight service
provider to provide flight services to such
destinations on terms and conditions acceptable to
AWA.
1.3 Other Services. In addition to the Flight Services, Mesa, at
its sole cost and expense, shall provide the following
services in connection with the Flight Services (the "Other
Services"): [CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] Mesa, at its
expense, shall provide all facilities, machinery, equipment
and inventory required to [CONFIDENTIAL PORTION DELETED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]
the Other Services. Mesa shall require personnel providing the
Other Services to comply with all rules, regulations and
directives promulgated for all AWA operations from time to
time.
1.4 Personnel; Training. Mesa shall employ and maintain a
sufficient number of competent, trained personnel, including,
but not limited to [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] the
Flight Services and Other Services as required by this
Agreement. In addition, Mesa shall employ and maintain a
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] and [CONFIDENTIAL PORTION
DELETED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] based in the Phoenix Metropolitan area based on
the Flight Services to be provided pursuant to this Agreement.
Mesa shall cause all Mesa personnel providing Flight Services
or Other
6
7
Services to wear uniforms approved by AWA and shall comply
with all appearance guidelines required of all AWA personnel.
Mesa shall provide initial training, recurrent training and
customer service training to personnel reasonably identified
by AWA at programs approved by AWA. AWA shall provide
applicable training materials. Mesa shall pay all training
expenses including AWA instructor travel expenses. In the
event AWA becomes a hazardous materials carrier, Mesa, at
AWA's expense, shall conduct all hazardous materials training
required by AWA or AWA's other code share partners.
1.5 Service Quality and Level. All Flight Services and Other
Services shall be provided by Mesa at a service quality and
level of service (other than first class service) equal to or
greater than the service quality and level of service provided
by AWA to the extent applicable to the type of Aircraft used
to provide the Flight Services. All Aircraft shall be equipped
with service amenities necessary to provide the service
quality and level of service required by this paragraph.
1.6 Maintenance.
1.6.1 Obligation. Mesa, at its own cost and expense, shall
be responsible for the service, repair, maintenance,
overhauling and testing of each Aircraft: (i) in
compliance with the maintenance program for each
Aircraft as approved by the FAA and pursuant to all
applicable aircraft maintenance manuals applicable to
each Aircraft; (ii) so as to keep each Aircraft in
good and safe operating condition; and (iii) so as to
keep the Aircraft in such operating condition as may
be necessary to enable the airworthiness
certification of the Aircraft to be maintained in
good standing. Mesa shall retain full authority and
control over the service, repair, maintenance,
overhauling and testing of each Aircraft. AWA shall
have no obligations or duties with respect to the
service, repair, maintenance, overhauling or testing
of any Aircraft.
1.6.2 Ground Equipment. Mesa, [CONFIDENTIAL PORTION DELETED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION], shall [CONFIDENTIAL PORTION DELETED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] all [CONFIDENTIAL PORTION DELETED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION].
1.6.3 Location. Mesa shall maintain three maintenance
bases, currently located in Fresno, California for
CRJs, Grand Junction, Colorado for Dash 8s, and
Farmington, New Mexico for Beech 1900s. Each Schedule
prepared by AWA shall provide for not less than
7
8
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] of each
Subfleet to remain overnight at the applicable
maintenance base each night. One Aircraft shall
remain overnight for 10 hours and the remainder for
at least 8 hours. Mesa shall not relocate any
maintenance base, without the prior written consent
of AWA, which consent may be withheld if the new
location fails to meet AWA's maintenance base
requirements. Mesa, with the prior written consent of
AWA, may add maintenance bases as necessary to
provide the Flight Services at locations which meet
AWA's maintenance base requirements.
1.7 Emergency Operations. Mesa and AWA shall coordinate to develop
a plan that complies with applicable Regulations (as defined
below) to be implemented in the event of any incident
involving personal injury or death to a passenger or crew
member on a Flight. The emergency response teams of AWA and
Mesa shall coordinate their efforts and shall cooperate fully
in response to such emergency.
1.8 Fleet Configuration, Cleanliness and Appearance.
1.8.1 Configuration. All Aircraft in the Fleet on the
Commencement Date and Aircraft added to the Fleet
shall have a passenger seating configuration and
seating capacity as provided on the Aircraft in the
Fleet on the Commencement Date. AWA, [CONFIDENTIAL
PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION], may require Mesa
to reconfigure or change the seating capacity of an
Aircraft. All such requested changes shall be
implemented within [CONFIDENTIAL PORTION DELETED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] after Mesa's receipt of written request
from AWA.
1.8.2 Cleanliness. Mesa, [CONFIDENTIAL PORTION DELETED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION], shall cause all Aircraft to be cleaned
and maintained in an appearance in accordance with
cleaning standards, requirements and guidelines
promulgated by AWA from time to time and provided to
Mesa in writing. All Aircraft shall meet AWA's
cleaning and appearance standards, requirements and
guidelines within [CONFIDENTIAL PORTION DELETED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] after the Effective Date.
1.9 Post-Departure Procedures. [CONFIDENTIAL PORTION DELETED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
8
9
COMMISSION] shall perform airport post-departure procedures
(as defined in AWA's Customer Service Manual) and be
responsible for securing and controlling all the contents in
the ticket lift envelopes. All ticket lift envelopes should be
forwarded and co-mailed to [CONFIDENTIAL PORTION DELETED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]
within [CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION] after flight
operations. [CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] (including
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]) in [CONFIDENTIAL PORTION
DELETED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION]. [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] shall
be liable for losses to [CONFIDENTIAL PORTION DELETED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]
resulting from [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] or
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] resulting from
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] to [CONFIDENTIAL PORTION
DELETED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] to [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]
policies and procedures.
2. Rights, Responsibilities and Obligations of AWA.
2.1 Exclusivity. Mesa shall have the [CONFIDENTIAL PORTION DELETED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] to fly the following routes as America West
Express: [CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION]. In the event
Mesa's FCF (as defined in Section 4.4 of this Agreement) on
any route for any [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] falls
below [CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION] (the "FCF
Deficiency"), then the exclusivity on such route [CONFIDENTIAL
PORTION DELETED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] on the [CONFIDENTIAL PORTION DELETED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]
of the [CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY
9
10
WITH THE SECURITIES AND EXCHANGE COMMISSION] after the
occurrence of the FCF Deficiency. Notwithstanding the
foregoing to the contrary, the [CONFIDENTIAL PORTION DELETED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] shall not restrict AWA or any affiliate from
flying the [CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION]. For purposes of
this Agreement, "affiliate" of AWA means any person or entity
controlled by AWA or America West Holdings, Inc., a Delaware
corporation.
2.2 Flight Management Items. AWA, [CONFIDENTIAL PORTION DELETED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION], shall: (i) [CONFIDENTIAL PORTION DELETED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION];
(ii) [CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION]; and (iii)
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION].
2.3 Marketing/Revenue. AWA, [CONFIDENTIAL PORTION DELETED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]
and [CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION], shall [CONFIDENTIAL
PORTION DELETED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] and [CONFIDENTIAL PORTION DELETED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] shall provide
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] and [CONFIDENTIAL PORTION
DELETED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] shall [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
2.4 Airport Services. [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION],
shall: (i) [CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION]; (ii)
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]; and (iii) [CONFIDENTIAL
PORTION DELETED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION]. To the extent Other Services are
provided by AWA, [CONFIDENTIAL PORTION DELETED AND
10
11
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION].
2.5 Other Code Share Partners. AWA shall have the right to enter
into code share, joint marketing, charter or other
alliance-type agreements with any other flight service
commuter operator to provide flight services to any
destinations or for any routes other than those listed in
Section 2.1 or in the Schedule. AWA may permit any of AWA's
other code share partners to place their code on any Flight.
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION].
2.6 Charters. AWA, [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]. Mesa
shall operate such charter flights provided flight crews and
Aircraft are available and not otherwise subject or committed
to maintenance requirements. Mesa is required to operate the
charters in a manner consistent with the terms of this
Agreement. [CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION].
3. Compliance with Regulations.
3.1 Regulations. Mesa shall perform its obligations and duties
under this Agreement, including, without limitation, all
Flight Services and Other Services in full compliance with any
and all applicable laws, ordinances, codes, statutes, orders,
directives, mandates, requirements, rules and regulations,
whether now in effect or hereafter adopted or promulgated, of
all governmental agencies having jurisdiction over Mesa's
operations, including but not limited to the FAA and the DOT
(collectively, "Regulations").
3.2 Flight Operations. Mesa shall be responsible for the operation
of each Aircraft and the safe performance of the Flights in
accordance with the Regulations and airline industry standard
practice and shall retain full authority, operational control
and possession of the Aircraft to do so. Mesa, its agents or
employees, for the purpose of the safe performance of the
Flights, shall have absolute discretion in and shall have sole
responsibility for all matters concerning the preparation of
each Aircraft for its Flights, and all other matters relating
to the technical operation of the Aircraft. Mesa, insofar as
such relates to the safe operation of a Flight, shall have
sole and absolute discretion as to the load carried and its
distribution and as to the decision whether such Flight shall
be taken. Mesa shall be solely responsible for and AWA shall
have no obligations or duties with respect to the dispatch of
all Flights.
11
12
3.3 Registration. All Aircraft shall remain registered in the
United States of America in accordance with the Regulations.
3.4 Disclosure. Mesa, [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] prior
written request, shall provide AWA the opportunity to review
all operating specifications, operational regulations, manuals
and calculations with respect to all Aircraft and flight
statistics with respect to all Flights at Mesa's corporate or
other relevant offices where such records are located.
3.5 Review/Audit. AWA, [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] prior
written notice, may review, at Mesa's corporate office,
airport ticket offices and other relevant offices, all
records, books, logs, files, documentation and information
maintained by Mesa, or any of its maintenance or service
contracts, in connection with Flight operation, safety and
regulatory compliance, employee training, Flight dispatch,
Aircraft use, operation, maintenance and repair, Flight
incidents and governmental orders, mandates and requirements.
3.6 Reporting. This Agreement shall be treated as a code share for
DOT reporting requirements. AWA shall provide Mesa with such
information necessary for Mesa to make the DOT reports and
disclosures.
4. Operational Performance Criteria, Incentives and Penalties.
4.1 DOT Complaint Rate Criteria. Mesa shall not permit its annual
DOT Complaint Rate (defined below) for Flight Services to
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]. The "DOT Complaint Rat"
is defined as the number of consumer complaints received by
the DOT for a given calendar year expressed in the terms of
the number of complaints per 100,000 passengers flown during
that calendar year by Mesa and AWA; provided, however, that
the DOT Complaint Rate shall exclude consumer complaints
relating solely to (i) [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]; (ii)
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]; (iii) [CONFIDENTIAL
PORTION DELETED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION]; (iv) [CONFIDENTIAL PORTION DELETED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION];
and (v) [CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION]. For purposes of
this Agreement, "AWA's DOT Complaint Rate" shall mean
[CONFIDENTIAL
12
13
PORTION DELETED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION]. DOT [CONFIDENTIAL PORTION DELETED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]
DOT Complaint Rates. If Mesa's DOT Complaint Rate
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION], within [CONFIDENTIAL
PORTION DELETED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] days after receipt of written demand from
AWA, [CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION]. For example, if
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] for a given year is
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] passengers and
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] is [CONFIDENTIAL PORTION
DELETED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] per [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] would
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] the [CONFIDENTIAL PORTION
DELETED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] of [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
4.2 Internal Customer Complaint Rate Criteria. [CONFIDENTIAL
PORTION DELETED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] shall not permit its annual ICCR (defined
below) for Flight Services to [CONFIDENTIAL PORTION DELETED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION]. The "ICCR" is defined as the number of complaints
received by AWA and Mesa for a given year expressed in the
terms of the number of complaints per 100,000 passengers flown
during that calendar year by Mesa and AWA; provided, however,
that the ICCR shall exclude complaints relating solely to (i)
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]; (ii) [CONFIDENTIAL
PORTION DELETED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION]; (iii) [CONFIDENTIAL PORTION DELETED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION];
(iv) [CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION]; and (v) [CONFIDENTIAL
PORTION DELETED AND FILED SEPARATELY WITH
13
14
THE SECURITIES AND EXCHANGE COMMISSION]. For purposes of this
Agreement, "AWA's ICCR" shall mean [CONFIDENTIAL PORTION
DELETED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION]. For example, [CONFIDENTIAL PORTION
DELETED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION].
4.3 On Time Performance Rate Criteria. Mesa shall not permit its
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] (defined below) to
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]: (i) [CONFIDENTIAL PORTION
DELETED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION]; or (ii) [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] (the
"OTP Rate Threshold"). The "OTP Rate" is defined as the
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] (defined below)
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]. For purposes of this
Agreement, "Delayed" means a flight segment that does not
arrive at the destination within [CONFIDENTIAL PORTION DELETED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] after the scheduled arrival time. [CONFIDENTIAL
PORTION DELETED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] To the extent that Mesa's OTP Rate
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] the OTP Rate Threshold for
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION], within [CONFIDENTIAL
PORTION DELETED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] after receipt of written demand, shall
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION], If Mesa's OTP Rate
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] the OTP Rate Threshold in
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION], then Mesa, within
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] after receipt of written
demand, [CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION]: (i)
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]; and (ii) [CONFIDENTIAL
PORTION DELETED AND FILED
14
15
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION], by
which Mesa's OTP Rate [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] the
OTP Rate Threshold. AWA, within [CONFIDENTIAL PORTION DELETED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] after receipt of written demand, shall pay to Mesa
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] for each [CONFIDENTIAL
PORTION DELETED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION], or [CONFIDENTIAL PORTION DELETED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION],
by which Mesa's OTP Rate [CONFIDENTIAL PORTION DELETED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
4.4 Flight Completion Factor. Mesa shall not permit its FCF
(defined below) for [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]. "FCF"
is defined as the percentage of published, scheduled Flights
completed for a calendar month. Flights not completed due to:
(i) [CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION]; (ii) [CONFIDENTIAL
PORTION DELETED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION]; or (iii) [CONFIDENTIAL PORTION DELETED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION]. Mesa, within [CONFIDENTIAL PORTION DELETED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]
after receipt of written demand, shall [CONFIDENTIAL PORTION
DELETED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] for each [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION], or
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION], by which [CONFIDENTIAL
PORTION DELETED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION]. AWA, within [CONFIDENTIAL PORTION
DELETED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] after receipt of written demand, [CONFIDENTIAL
PORTION DELETED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] by which [CONFIDENTIAL PORTION DELETED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION]. For purposes of the bonus, [CONFIDENTIAL PORTION
DELETED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION].
15
16
4.5 Records.
4.5.1 Within [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] the [CONFIDENTIAL PORTION DELETED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] Mesa shall provide to AWA statements
certified by Mesa's chief financial officer as to
Mesa's OTP Rate and FCF for the [CONFIDENTIAL PORTION
DELETED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION], together with such supporting
documentation and information AWA may request. Within
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] after
the end of each calendar year, Mesa, to the extent
not collected by AWA, shall provide to AWA statements
certified by Mesa's chief financial officer as to
Mesa's ICCR for the [CONFIDENTIAL PORTION DELETED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION], together with such supporting
documentation and information AWA may request. AWA,
upon [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] prior written notice, may review, at
Mesa's corporate or other relevant offices, all
records and files maintained by Mesa in connection
with customer complaints, on-time performance and
flight completions. If AWA's review of the records or
files reveals that Mesa has under or overstated, as
applicable, Mesa's OTP Rate, FCF or ICCR, then Mesa,
upon demand, shall pay all sums due based on the
accurate calculations and the costs and expenses of
AWA in completing such review and, if such under or
overstatement is willful or intentional, then Mesa
shall be in default under this Agreement.
4.5.2 Within [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] the [CONFIDENTIAL PORTION DELETED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] AWA shall provide to Mesa statements
certified by AWA's chief financial officer as to
AWA's OTP Rate for the [CONFIDENTIAL PORTION DELETED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION], together with such supporting
documentation and information Mesa may request.
Within [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] after the end of [CONFIDENTIAL PORTION
DELETED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION], AWA, to the extent not
collected by
16
17
Mesa, shall provide to Mesa statements certified by
AWA's chief financial officer as to AWA's ICCR for
the [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION], together with such supporting
documentation and information Mesa may request. Mesa,
upon [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] prior written notice, may review, at
AWA's corporate or other relevant offices, all
records and files maintained by AWA in connection
with customer complaints, on-time performance and
flight completions. If Mesa's review of the records
or files reveals that AWA has under or overstated, as
applicable, AWA's OTP Rate or ICCR, then AWA, upon
demand, shall pay all sums due based on the accurate
calculations and the costs and expenses of Mesa in
completing such review and, if such under or
overstatement is willful or intentional, then AWA
shall be in default under this Agreement.
4.6 Setoff. All undisputed sums payable by Mesa to AWA pursuant to
this Paragraph 4 may, at AWA's election, be setoff against
amounts next due by AWA to Mesa pursuant to this Agreement.
5. Irregular Operations. [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]:
5.1 Equipment Change. [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]
5.2 Misconnections. [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]
Mesa and AWA, by written notice to the other given not more frequently
than [CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] for which the other is responsible
pursuant to this Section 5 (the "Denied Boarding Invoice"). Mesa and
AWA shall pay the sums due in each Denied Boarding Invoice within
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION] after receipt. The Denied Boarding Invoice
shall be accompanied by supporting documentation containing reasonable
detail to support the charges set forth in the Denied Boarding Invoice.
6. Payment of Fees/Revenue Sharing. Mesa and AWA hereby agree to pay the
following sums as consideration for this Agreement and the provision of
the Flight Services and Other Services provided for herein:
17
18
6.1 Mesa Actual Costs. AWA, in accordance with Paragraph 6.5,
shall reimburse to Mesa the following actual costs and
expenses actually paid by Mesa with reference to the
performance of the Flight Services and Other Services ("Actual
Costs"):
6.1.1 [CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION]
6.1.2 [CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION]
6.1.3 [CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION]
6.1.4 [CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION]
6.1.5 [CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION]
6.1.6 [CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION]
6.1.7 [CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION]
6.1.8 [CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION]
6.1.9 [CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION].
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] In the event any of the
services or materials for which AWA pays the Actual Costs are
purchased for the Flight Services and Other Services provided
by this Agreement and for other services provided by Mesa and
its affiliates, then the costs of such services and materials
shall be [CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] provided by this
Agreement. Mesa shall use commercially reasonable efforts to
operate the Flight Services and Other Services in an efficient
and cost effective manner to minimize the Actual Costs payable
by AWA while maintaining the quality and quantity of services
required by this Agreement. Mesa shall take all commercially
reasonable actions to minimize the taxes imposed on the Fleet.
If requested by AWA, in writing, AWA on
18
19
behalf of Mesa may pursue [CONFIDENTIAL PORTION DELETED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]
or [CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] on the Fleet or any
Aircraft in the Fleet in the manner prescribed by applicable
law. An "affiliate" of Mesa means any person or entity
controlling, controlled by or under common control with Mesa.
6.2 Mesa Guaranteed Costs. AWA, in accordance with Paragraph 6.5,
shall pay to Mesa the amounts set forth in Exhibit A (the
"Guaranteed Costs Schedule"), as [CONFIDENTIAL PORTION DELETED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] pursuant to Section 6.4 below (the "Guaranteed
Costs"). If the term of this Agreement commences or expires on
other than the first or last day of a calendar month, then the
Guaranteed Costs payable by AWA shall be prorated based on the
actual number of days this Agreement is in effect during such
month and the actual number of days in such month.
6.3 Contract Negotiation. AWA may assist Mesa in the negotiation
of contracts for the provision of materials or services
subject to the Actual Costs and Guaranteed Costs provided Mesa
is not subject to an existing contract for such services or
materials.
6.4 Consumer Price Index Adjustment.
6.4.1 Definition. "CPI" shall mean the Consumer Price
Index, U.S. City Average, Urban Wage Earners and
Clerical Workers, All Items (base index year 1982-84
= 100) as published by the United States Department
of Labor, Bureau of Labor Statistics. If the manner
in which the Consumer Price Index as determined by
the Bureau of Labor Statistics shall be substantially
revised, including, without limitation, a change in
the base index year, an adjustment shall be made by
the parties in such revised index which would produce
results equivalent, as nearly as possible, to those
which would have been obtained if such Consumer Price
Index had not been so revised. If the Consumer Price
Index shall become unavailable to the public because
publication is not readily available to enable the
parties to make the adjustment referred to in this
paragraph, then the parties shall mutually agree to
substitute therefor a comparable index based upon
changes in the cost of living or purchasing power of
the consumer dollar published by any other
governmental agency or, if no such index shall be
available, then a comparable index published by a
major bank or other financial institution or by a
university or a recognized financial publication.
19
20
6.4.2 Adjustment Formula. On each anniversary date
of the Commencement Date (each an
"Adjustment Date"), the [CONFIDENTIAL
PORTION DELETED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION] or
[CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION]. Mesa and AWA shall execute an
amendment to the Guaranteed Costs Schedule
within [CONFIDENTIAL PORTION DELETED AND
FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] after the Adjustment
occurs. The failure to execute such an
amendment shall not affect the effectiveness
of any Adjustment or the bases for any
subsequent Adjustment. The Guaranteed Costs
shall be effective until the next Adjustment
Date.
6.5 Payment of Actual and Guaranteed Costs. Commencing on
the Commencement Date, AWA shall pay to Mesa the
estimated Actual Costs and Guaranteed Costs for each
calendar month based on a [CONFIDENTIAL PORTION
DELETED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] (the "Estimated Costs") as
follows: By the 20th day of each calendar month
commencing August 20, 1998, Mesa shall provide AWA
with a statement of the Estimated Costs for the
following month. On or before the 7th, 14th, 21st and
28th day of each calendar month (or next business day
thereafter if any such dates is other than a business
day), AWA shall pay [CONFIDENTIAL PORTION DELETED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] of the Estimated Costs for such calendar
month.
On or before the 25th day of each calendar month,
Mesa shall submit to AWA a statement of the actual
Guaranteed Costs and Actual Costs (the "Incurred
Costs") payable by AWA for the prior calendar month
(the "Incurred Costs Statement"). If the Estimated
Costs paid by AWA in any calendar month exceed the
Incurred Costs in any calendar month, then Mesa,
together with the Incurred Costs Statement for such
calendar month, shall reimburse AWA the amount by
which the Estimated Costs paid by AWA exceeded the
Incurred Costs. If the Incurred Costs in any calendar
month exceed the Estimated Costs paid by AWA in any
calendar month, then AWA within [CONFIDENTIAL PORTION
DELETED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] after receipt of the Incurred
Costs Statement, shall reimburse and pay to Mesa the
amount by which the Incurred Costs exceed the
Estimated Costs paid by AWA for the subject calendar
month.
6.6 Network Revenue Sharing. Commencing in the first
calendar month after the month in which the
Commencement Date occurs, AWA shall pay to Mesa, by
the 20th day of each calendar month, an amount equal
to
20
21
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]. For purposes of this
Agreement, the following terms have the following definitions:
"Network Revenue" means the [CONFIDENTIAL PORTION DELETED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
For calculating Network Revenue, the [CONFIDENTIAL PORTION
DELETED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION].
"Network Revenue Percentage" means: (i) [CONFIDENTIAL PORTION
DELETED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION]; (ii) [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]; and
(iii) [CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION]. The Network Revenue
Percentage during any calendar month in which the
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] shall be a [CONFIDENTIAL
PORTION DELETED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] of [CONFIDENTIAL PORTION DELETED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]
based on the number of days in effect and the number of days
in such calendar month.
6.7 Cost Sharing. If the [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] paid
by AWA pursuant to the Fixed Cost Schedule (excluding Mesa's
general overhead contained in the "Overhead" heading in the
Guaranteed Costs Schedule) [CONFIDENTIAL PORTION DELETED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]
in the Guaranteed Costs categories set forth in the Guaranteed
Cost Schedule for any calendar quarter, then Mesa, within 30
days after the expiration of the calendar quarter, shall pay
to AWA an amount equal to [CONFIDENTIAL PORTION DELETED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]
of such difference. If the [CONFIDENTIAL PORTION DELETED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]
paid by AWA pursuant to the Guaranteed Cost Schedule, then
AWA, within 30 days after receipt of a written statement from
Mesa, shall pay to Mesa an amount equal to [CONFIDENTIAL
PORTION DELETED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] of such overrun.
6.8 Subsidies. Mesa, within [CONFIDENTIAL PORTION DELETED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]
21
22
after receipt, [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]. AWA
shall not be responsible to the DOT for continuing service in
any EAS market. Notwithstanding the foregoing, [CONFIDENTIAL
PORTION DELETED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION], then [CONFIDENTIAL PORTION DELETED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
6.9 Statements and Audit Rights. All Incurred Costs Statements and
other requests for payment made by Mesa pursuant to this
Section 6 shall be accompanied by such supporting information,
documentation and calculations as AWA may request from time to
time. AWA, upon [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] prior
written notice, may review and audit, or cause its independent
accountants to review and audit, all records and files
(including computer data bases) maintained by Mesa and
relevant to the calculation of the payments required to be
made by AWA pursuant to this Agreement. If AWA's review of the
records and files reveals that Mesa has overcharged AWA or
underpaid AWA, then Mesa shall pay to AWA, upon demand, the
overpayments and/or underpayments and the costs and expenses
of AWA incurred in completing such review and audit and, if
such overcharge or underpayment is willful or intentional or
exceeds more than [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] of the
sums actually payable or receivable by AWA, then Mesa shall be
in default under this Agreement. Mesa shall maintain all
records, files, information, data and documentation (including
computer data bases) used in calculating the sums payable or
receivable by AWA under this Agreement in good condition and
order at Mesa's corporate headquarters. AWA shall not be
required to pay any sums, and shall be entitled to receive a
refund of any sum paid, for which Mesa is unable to provide
supporting information, documentation or data.
7. Term and Termination. The term of this Agreement (the "Term") shall
commence on [CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] (the "Commencement Date") and
expire on [CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] ("Expiration Date"), unless earlier
terminated as provided in this Agreement. AWA, by written notice to
Mesa at least [CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION] AWA, upon [CONFIDENTIAL PORTION
DELETED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] prior to the Expiration Date, may extend the Expiration
Date to [CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH
22
23
THE SECURITIES AND EXCHANGE COMMISSION]. AWA, upon [CONFIDENTIAL
PORTION DELETED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION]. AWA, upon [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] prior written
notice to Mesa ("Termination Notice"), may terminate this Agreement if:
(i) Mesa's OTP Rate falls below the [CONFIDENTIAL PORTION DELETED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]; or (ii)
Mesa's FCF falls below [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] for
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION] (each, a "Cancellation Event"). [CONFIDENTIAL
PORTION DELETED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION]. Such termination right shall be in addition to any penalty
payments set forth in Section 4 and termination rights for an Event of
Default pursuant to Section 12. If AWA elects to terminate this
Agreement pursuant to this Section 7, AWA, in the Termination Notice,
shall establish as the termination date any date between [CONFIDENTIAL
PORTION DELETED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] and [CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION] after delivery of the
Termination Notice. Mesa shall continue to provide the Flight Services
and Other Services required by this Agreement until the termination
date set forth in the Termination Notice. AWA and Mesa shall make all
payments as required by this Agreement for the period through and
including the termination date set forth in the Termination Notice.
Until the Commencement Date, the terms and provisions of that certain
Agreement concerning America West Express Service Agreement, dated
September 4, 1992, between AWA and Mesa, as amended by the following:
Letter Agreement, dated September 3, 1993, re: America West Express
Service Agreement; Amendment to Agreement between AWA and Mesa, dated
March 31, 1993; Second Amendment to the Agreement between AWA and Mesa,
dated July 31, 1993; Letter Agreement, dated October 5, 1993, re:
America West Express Service Agreement; Third Amendment to Agreement
between AWA and Mesa, dated October 7, 1993; Third Amendment to
Agreement between AWA and Mesa, dated August, 1994; Letter Agreement,
dated March 31, 1994, re: America West Express Code-Share Agreement
Addendum; Letter Agreement, dated August 16, 1994, re: America West
Express Code-Share Agreement Addendum; Fourth Amendment, dated October,
1994, to the Agreement between AWA and Mesa; Letter Agreement, dated
March 26, 1998 between AWA and Mesa, Letter Agreement, dated June 30,
1998, between Mesa and AWA and Letter Agreement, dated July 14, 1998,
between Mesa and AWA, shall remain in full force and effect (the
"Existing Agreement"). The Existing Agreement shall terminate at 11:59
p.m., Phoenix time, on the day immediately prior to the Commencement
Date.
23
24
8. Service Xxxx License For Services Provided By Mesa.
8.1 Grant of License. For the payment of [CONFIDENTIAL PORTION
DELETED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION], AWA hereby grants to Mesa a non-exclusive,
non-transferable license to use such AWA Service Marks as AWA
may designate, in writing, from time-to-time in connection
with the Flight Services and Other Services to be rendered by
Mesa; provided, however, that at any time prior to expiration
or termination of this Agreement AWA may alter, amend or
revoke the license hereby granted and require Mesa's use of
any new or different AWA Service Xxxx in conjunction with the
Services provided hereunder as AWA may determine in its sole
discretion and judgment.
8.2 Operation under AWA Service Marks. Mesa shall, at its expense,
cause the Fleet and any replacement Aircraft utilized by Mesa
to provide the Flight Services, within [CONFIDENTIAL PORTION
DELETED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] after the Effective Date, to bear AWA Service
Marks, consisting of AWA aircraft exterior and interior color
decor and pattern provided by AWA and the name "America West
Express." Upon written notice from AWA, which shall include
the specifications for any such changes in AWA Service Marks
and exterior or interior aircraft decor and patterns, Mesa
shall effect changes in the aircraft decor and patterns within
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] from the date of such
notice. [CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION]. Mesa shall use
and display suitable signs on the interior and exterior of
each Aircraft identifying Mesa as the operator of the
Services, such signs shall be subject to the prior written
consent of AWA as to nature, size and location provided that
the signs shall comply with all Regulations. [CONFIDENTIAL
PORTION DELETED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION]. All announcements, displays or
literature used or viewed by Mesa customers on Flights shall
highlight "America West Express." [CONFIDENTIAL PORTION
DELETED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION].
8.3 Terms and Conditions Governing Trademark License.
8.3.1 Mesa hereby acknowledges AWA's ownership of the AWA
Service Marks, further acknowledges the validity of
the AWA Service Marks, and agrees that it shall not
do anything in any way to infringe or abridge upon
AWA's rights in the AWA Service Marks or directly or
indirectly to challenge the validity of the AWA
Service Marks.
24
25
8.3.2 To assure that the production appearance and quality
of the AWA Service Marks is consistent with AWA's
reputation for high quality and the goodwill
associated with the AWA Service Marks, Mesa agrees to
maintain a level of quality consistent with AWA's
quality in the Flight Services and Other Services it
provides pursuant to this Agreement and to follow
AWA's written instructions regarding use of AWA's
Service Marks, as they may be amended from time to
time.
8.3.3 Mesa agrees that, in providing the Flight Services
and Other Services, it shall not advertise or make
use of the AWA Service Marks without the prior
written consent of AWA. AWA shall have absolute
discretion to withhold its consent concerning any and
all such advertising and use of the AWA Service Marks
in any advertising by Mesa. In the event AWA approves
the use of such AWA Service Marks in any advertising,
such advertising shall identify AWA as the owner of
such Service Marks and conform with any additional
requirements specified by AWA.
8.3.4 To the extent that Mesa is licensed to use the AWA
Service Marks, the AWA Service Marks shall be used
only in connection with the Flight Services and Other
Services specifically covered by this Agreement and
not in connection with any other business or activity
of Mesa or any other entity.
8.3.5 Nothing in this Agreement shall be construed to give
Mesa the exclusive right to use the AWA Service Marks
or abridge AWA's right to use and license the AWA
Service Marks, and AWA hereby reserves the right to
continue to use the AWA Service Marks and to license
such other uses of the AWA Service Marks as AWA may
desire.
8.3.6 No term or provision of this Agreement shall be
construed to preclude the use of the AWA Service
Marks, including "America West Express," or the
aircraft exterior color decor and patterns by other
individuals or entities not covered by this
Agreement.
8.3.7 Upon the termination or expiration of this Agreement,
the license and use of the AWA Service Marks by Mesa
shall cease and such use shall not thereafter occur.
9. Liability and Indemnification.
9.1 Relationship Between the Parties. Nothing contained in this
Agreement will be deemed to create any agency or partnership
or similar relationship between AWA and Mesa. Nothing
contained in this Agreement will be deemed to authorize either
AWA or Mesa to bind or obligate the other. Mesa
25
26
and its employees engaged in performing the Flight Services
and Other Services shall be employees of Mesa for all
purposes, and under no circumstances shall be deemed to be
employees, agents or independent contractors of AWA. AWA and
its employees engaged in performing the obligations of AWA
under this Agreement shall be employees, agents and
independent contractors of AWA for all purposes, and under no
circumstances shall be deemed to be employees, agents or
independent contractors of Mesa. Pursuant to this Agreement,
Mesa shall act, for all purposes, as an independent contractor
and not as an agent for AWA. AWA shall have no supervisory
power or control over any employees engaged by Mesa in
connection with its performance hereunder, and all complaints
or requested changes in procedures shall be transmitted by AWA
to a designated officer of Mesa. Nothing contained in this
Agreement shall be intended to limit or condition Mesa's
control over its operations or the conduct of its business as
an air carrier, and Mesa and its principals assume all risks
of financial losses which may result form the operation of the
Flight Services and Other Services to be provided by Mesa
hereunder.
9.2 Indemnification by Mesa. Mesa agrees to indemnify, defend and
hold harmless AWA, its directors, officers, employees, agents,
parent corporation, subsidiaries and affiliates for, from and
against any and all loss, liability, claim, damage, penalty,
fine, charge, cause of action, demand, cost and expense
(including attorneys' and consultants' fees and costs)
whatsoever (collectively, "Damages"), as incurred, arising out
of, resulting from or incurred in connection with: (i) the
provision of the Flight Services and Other Services by Mesa;
(ii) Mesa's breach of this Agreement; (iii) damage or
destruction of property of any person, or injury or death of
any person, caused by, arising out of, or in connection with
any act or omission of Mesa, its employees, agents, licensees,
contractors, suppliers, officers or directors; (iv) any taxes,
impositions, assessments or other governmental charges
incurred by Mesa in providing the Flight Services or Other
Services or imposed on any revenue generated by this Agreement
(except as set forth in Section 6.1.3); (v) passenger
complaints or claims by passengers using the Flight Services;
(vi) the failure or discontinuance of service to any EAS
Market (except as specified in Section 6.7); and (vii) failure
to comply with any Regulations. Mesa shall reimburse AWA or
other Indemnified Party (as defined below) for any legal and
any other expenses reasonably incurred in investigating,
preparing or defending against any claim or action arising out
of or relating to any of the foregoing.
9.3 Indemnification by AWA. AWA agrees to indemnify, defend and
hold harmless Mesa, its directors, officers, employees,
agents, parent corporation, subsidiaries and affiliates for,
from and against any and all Damages, as incurred, arising out
of, resulting from or incurred in connection with: (i) AWA's
breach of this Agreement; (ii) damage or destruction of
property of any person, or injury or death of any person,
caused by, arising out of, or in
26
27
connection with any act or omission of AWA, its employees,
agents, licensees, contractors, suppliers, officers or
directors in performing AWA's obligations under this
Agreement; and (iii) any taxes, impositions, assessments or
other governmental charges incurred by AWA for revenue
received by AWA under this Agreement. AWA shall reimburse Mesa
or other Indemnified Party (as defined below) for any legal
and any other expenses reasonably incurred in investigating,
preparing or defending against any claim or action arising out
of or relating to any of the foregoing.
9.4 Conduct of Indemnification Proceedings. The person or entity
claiming indemnification hereunder is referred to as the
"Indemnified Party" and the party against whom such claims are
asserted hereunder is referred to as the "Indemnifying Party".
Each Indemnified Party shall give reasonably prompt notice to
the Indemnifying Party of any action or proceeding or
assertion or threat of claim commenced against it in respect
of which indemnity may be sought hereunder, but failure to so
notify the Indemnifying Party (i) shall not relieve the
Indemnifying Party from any liability which it may have under
the indemnity agreement provided in this Agreement, unless and
to the extent it did not otherwise learn of such action,
threat or claim and the lack of notice by the Indemnified
Party results in the forfeiture by the Indemnifying Party of
substantial rights and defenses and (ii) shall not, in any
event, relieve the Indemnifying Party from any obligations to
the Indemnified Party other than the indemnification
obligation provided under Sections 9.2 and 9.3 above. If the
Indemnifying Party elects within a reasonable time after
receipt of notice, the Indemnifying Party may assume the
defense of the action or proceeding at Indemnifying Party's
own expense with counsel chosen by the Indemnifying Party and
approved by the Indemnified Party; provided, however, that, if
the Indemnified Party reasonably determines upon advice of
counsel that a conflict of interest exists where it is
advisable for the Indemnified Party to be represented by
separate counsel or that, upon advice of counsel, there may be
legal defenses available to it which are different from or in
addition to those available to the Indemnifying Party, then
the Indemnified Party shall be entitled to separate counsel at
the Indemnifying Party's expense, which counsel shall be
chosen by the Indemnified Party in its sole discretion. If the
Indemnifying Party does not assume the defense, after having
received the notice referred to in the second sentence of this
paragraph, the Indemnifying Party will pay the reasonable fees
and expenses of counsel for the Indemnified Party. Unless and
until a final judgment that an Indemnified Party is not
entitled to the costs of defense under the foregoing
provision, the Indemnifying Party shall reimburse, promptly as
they are incurred, the Indemnified Party's costs of defense.
The Indemnifying Party shall not settle or compromise any
claim for which an Indemnified Party is entitled to indemnity
without the prior written consent of the Indemnified Party.
27
28
9.5 Insurance.
9.5.1 Mesa, at all times during the Agreement, shall have
and maintain in full force and effect, policies of
insurance satisfactory to AWA, of the types of
coverage, and in the minimum amounts stated below
with insurance companies satisfactory to AWA and
under terms and conditions satisfactory to AWA,
including insurance coverage on all Aircraft used to
provide Flight Services. Unless otherwise specified,
the minimum amounts of insurance coverage required
hereunder shall be per occurrence, combined single
limit for all insurance coverage required hereunder.
1. Aircraft Liability [CONFIDENTIAL
and Ground Liability PORTION DELETED AND
Insurance (including FILED SEPARATELY
Commercial General WITH THE SECURITIES AND
Liability) EXCHANGE COMMISSION] per
Occurrence Combined Single
Limit of Liability for CRJs
and commencing September
15, 1998, for Dash 8s and
[CONFIDENTIAL PORTION
DELETED AND FILED
SEPARATELY WITH THE
SECURITIES AND EXCHANGE
COMMISSION] per Occurrence
Combined Single Limit of
Liability for Beech 1900s
a. Bodily Injury and [CONFIDENTIAL
Personal Injury - PORTION DELETED AND
Passengers FILED SEPARATELY
WITH THE SECURITIES
AND EXCHANGE
COMMISSION]
b. Bodily Injury and [CONFIDENTIAL
Personal Injury - PORTION DELETED AND
Third Parties FILED SEPARATELY
WITH THE SECURITIES
AND EXCHANGE
COMMISSION]
28
29
c. Property Damage [CONFIDENTIAL
PORTION DELETED AND
FILED SEPARATELY
WITH THE SECURITIES
AND EXCHANGE
COMMISSION]
Per Accident
2. Worker's Compensation Statutory
Insurance (Company
Employees)
3. Employers' Liability [CONFIDENTIAL
(Company Employees) PORTION DELETED AND
FILED SEPARATELY
WITH THE SECURITIES
AND EXCHANGE
COMMISSION]
4. All Risk Hull [CONFIDENTIAL
Insurance on Aircraft PORTION DELETED AND
Performing Services FILED SEPARATELY
Hereunder WITH THE SECURITIES
AND EXCHANGE
COMMISSION]
5. Baggage Liability [CONFIDENTIAL
PORTION DELETED AND
FILED SEPARATELY
WITH THE SECURITIES
AND EXCHANGE
COMMISSION]
6. Cargo Liability [CONFIDENTIAL
PORTION DELETED AND
FILED SEPARATELY
WITH THE SECURITIES
AND EXCHANGE
COMMISSION]
[CONFIDENTIAL
PORTION DELETED AND
FILED SEPARATELY
WITH THE SECURITIES
AND EXCHANGE
COMMISSION]
9.5.2 The parties hereby agree that from time to time
during the Term of this Agreement, AWA may require
Mesa to have and maintain amounts of insurance
coverage different from those amounts set forth
29
30
in Section 9.5.1, should AWA, in its reasonable
judgment, deem the circumstances and conditions of
the Flight Services and Other Services to require
increases in any or all of the foregoing minimum
insurance coverages.
9.5.3 Mesa shall cause all policies of insurance which it
maintains pursuant to this Agreement, to be duly and
properly endorsed by Mesa's insurance underwriters as
follows:
9.5.3.1 To provide that any waiver of rights
of subrogation against other parties
by Mesa shall not affect the
coverage provided hereunder with
respect to AWA.
9.5.3.2 To provide that Mesa's underwriters
shall waive any and all subrogation
rights against AWA, its directors,
officers, agents and employees
without regard to any breach of
warranty by Mesa or to provide other
evidence of such waiver of recourse
against AWA, its directors,
officers, agents, or employees as
shall be acceptable to AWA.
9.5.3.3 Be duly and properly endorsed to
provide that each such policy or
policies or any part or parts
thereof shall not be canceled,
terminated, or materially altered,
changed or amended by Mesa's
insurance underwriters, until after
[CONFIDENTIAL PORTION DELETED AND
FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION] written
notice to AWA which [CONFIDENTIAL
PORTION DELETED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE
COMMISSION] written notice shall
commence to run from the date such
notice is actually received by AWA.
9.5.4 With respect to policies of insurance described as
Aircraft Liability and Ground Liability Insurance,
Mesa will provide that such policies:
9.5.4.1 Endorse AWA, its directors,
officers, agents, parents,
subsidiaries and employees as
Additional Insureds thereunder.
9.5.4.2 Constitute primary insurance for
such claims and acknowledge that any
other insurance policy or policies
of AWA will be secondary or excess
insurance;
30
31
9.5.4.3 Cover AWA's [CONFIDENTIAL PORTION
DELETED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE
COMMISSION] including, without
limitation, [CONFIDENTIAL PORTION
DELETED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE
COMMISSION]; and
9.5.4.4 Provide a [CONFIDENTIAL PORTION
DELETED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE
COMMISSION], and a [CONFIDENTIAL
PORTION DELETED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE
COMMISSION] assumed by Mesa under
this Agreement.
9.5.5 With respect to policies of insurance for coverage
described as Aircraft Liability and General
Liability Insurance and All Risk Hull Insurance,
Mesa shall cause its insurance underwriters to
provide a breach of warranty clause.
9.5.6 All aircraft hull insurance provided pursuant to
this Agreement shall be provided on [CONFIDENTIAL
PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] and, except
with the consent of AWA, shall not be subject to
more than the standard market deductibles. In the
event of loss, settled on the basis of a total
loss, all losses shall be payable in full.
9.5.7 Upon the Commencement Date and from time to time
thereafter upon request by AWA, Mesa shall furnish
to AWA evidence satisfactory to AWA of the
aforesaid insurance coverage and endorsements,
including certificates certifying that the
aforesaid insurance policy or policies with the
aforesaid policy limits are duly and properly
endorsed as aforesaid and are in full force and
effect.
9.5.8 With respect to policies of insurance obtained
directly from foreign underwriters, Mesa shall
cause such insurance underwriters to provide that
AWA may maintain against Mesa's underwriters a
direct action in the United States upon such
insurance policies and to this end to provide a
standard service of suit clause designating an
agent for service of process in the United States
of America.
9.5.9 In the event Mesa fails to maintain in full force
and effect any of the insurance and endorsements
described in Section 9.5, AWA 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 payable by Mesa to AWA upon
demand by AWA. The procurement
31
32
of such insurance or any part thereof by AWA shall
not discharge or excuse Mesa's obligation to comply
with the provisions of Section 9.5. Mesa agrees not
to cancel, terminate or materially alter, change or
amend any of the policies referred to in Section
9.5 without [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] prior written notice to AWA of its
intent to cancel, terminate or materially alter,
change or amend said policies or insurance which
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] notice
period shall commence to run from the date notice
is actually received by AWA.
9.5.10 AWA shall maintain cargo liability coverage, in
types and amounts required by law, for all air
freight transported by Mesa under an AWA airbill on
any Flights.
10. Confidentiality.
10.1 AWA and Mesa agree that the terms of this Agreement shall be
treated as confidential and shall not be disclosed to third
parties without the express written consent of AWA and Mesa,
or as required by law. In the event of disclosure required by
law, only those portions of this Agreement required to be
disclosed shall be disclosed. 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 for 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 to provide the other party an
opportunity to contest the disclosure of any terms of this
Agreement.
10.2 "Confidential Information" means any information in any form,
including, without limitation, the terms of this Agreement,
written documents, oral communications, recordings, videos,
software, data bases, business plans, and electronic and
magnetic media, provided to or observed by AWA or Mesa
pursuant to this Agreement, including information owned or
provided by either party to the other party, except for
information generally available to the public. AWA and Mesa
agree that they shall maintain all Confidential Information in
confidence and use such Confidential Information solely for
purposes of performance under this Agreement. Such
Confidential Information shall be distributed within each
party's company only to personnel and to its legal counsel,
auditors and other consultants on a need-to-know basis for
purposes related to this Agreement or in compliance with a
court order or statutory or regulatory requirements. Except
for legal counsel and auditors, and as permitted by Section
10.1, in no event shall either party disclose Confidential
Information to any third parties except
32
33
subcontractors and independent consultants and then only if
approved by both parties in writing in advance of such
disclosure. Confidential Information does not include
information that is available to the general public other than
as a result of disclosure by the disclosing party or
information that was known or independently developed by the
receiving party prior to disclosure, as evidenced by records
kept in the ordinary course of business.
10.3 Mesa acknowledges and agrees that any Confidential Information
shared or given to AWA pursuant to this Agreement may be
shared by AWA on a confidential basis with America West
Holdings Corporation, The Leisure Company and other
subsidiaries and affiliates of AWA. AWA acknowledges and
agrees that any Confidential Information shared or given to
Mesa pursuant to this Agreement may be shared by Mesa on a
confidential basis with Mesa Air Group, Inc. and other
subsidiaries or affiliates of Mesa.
11. Taxes. [CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION] shall pay, prior to
delinquency, all airport, property, sales, use, excise or any other
taxes, impositions, assessments or other governmental charges incurred
in connection with the provision of the Flight Services and Other
Services under this Agreement and all taxes imposed or any sums paid by
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION] to [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] under this
Agreement. [CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] shall pay, prior to delinquency,
all taxes imposed on any sums paid by [CONFIDENTIAL PORTION DELETED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] to
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION] under this Agreement.
12. Defaults and Remedies.
12.1 Default by Mesa. The occurrence of any one or more of the
following events shall constitute a material default and
breach of this Agreement by Mesa (an "Event of Default"):
12.1.1 The failure of Mesa to make any payment required to
be made by Mesa to AWA hereunder, as and when due,
and such failure continues for [CONFIDENTIAL
PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE
COMMISSION];
12.1.2 If Mesa is required by the FAA or DOT to suspend a
substantial portion of its operations for any
safety reason and has not resumed
33
34
such operation within [CONFIDENTIAL PORTION DELETED
AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] of the suspension or if Mesa
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] of the
Flight Services for any other reason, except as a
result of an emergency airworthiness directive from
the FAA affecting all aircraft similarly equipped
to the Aircraft (not just those owned or operated
by Mesa);
12.1.3 The failure of Mesa to observe or perform any of
the covenants, conditions or provisions of this
Agreement to be observed or performed by Mesa,
other than as described in Sections 7 or 12.1.1 or
12.1.2 above, and such failure shall continue for a
period of 15 days after written notice thereof from
AWA to Mesa;
12.1.4 (i) the cessation of Mesa's business operations as
a going concern; (ii) the making of Mesa of any
general assignment, or general arrangement for the
benefit of creditors; (iii) the failure of Mesa to
generally pay Mesa's debts as they come due or
Mesa's written admission of its inability to pay
its debts as they come due; (iv) the filing by or
against Mesa of a petition to have Mesa adjudged
bankrupt or a petition for reorganization or
arrangement under any law relating to bankruptcy
(unless, in the case of petition filed against
Mesa, the same is dismissed, stayed or vacated
within 60 days); (v) an adjudication of Mesa's
insolvency; (vi) appointment of a trustee or
receiver to take possession of substantially all of
Mesa's assets which is not dismissed, stayed or
vacated within 60 days; or (vii) the attachment,
execution or other judicial seizure of all of
Mesa's assets.
12.1.5 Upon an Event of Default, AWA may: (a) by written
notice to Mesa (a "Default Termination Notice")
terminate this Agreement effective as of the date
set forth in the Default Termination Notice which
date [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] not be [CONFIDENTIAL PORTION DELETED
AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] unless the event in 12.1.2
occurs, [CONFIDENTIAL PORTION DELETED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION]; and/or (b) pursue all other rights and
remedies available at law or in equity to AWA for
the Event of Default, including, without
limitation, injunctive relief, specific performance
and damages. After receipt of a Default Termination
Notice, Mesa shall continue to provide the Flight
Services and Other Services in accordance with this
Agreement until the termination date set forth in
the Default Termination Notice. No remedy or
34
35
election by AWA hereunder shall be deemed
exclusive, but shall, wherever possible, be
cumulative with all other rights and remedies at
law or in equity.
12.2 AWA Default. The occurrence of any one or more of the
following events shall constitute a material default and
breach of this Agreement by AWA (an "AWA Event of Default"):
12.2.1 The failure of AWA to make any payment required to
be made to Mesa by AWA hereunder, as and when due,
and such failure continues for [CONFIDENTIAL
PORTION DELETED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE
COMMISSION];
12.2.2 The failure of AWA to observe or perform any of the
covenants, conditions or provisions of this
Agreement to be observed or performed by AWA, and
such failure shall continue for a period of
[CONFIDENTIAL PORTION DELETED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] after
written notice thereof from Mesa to AWA;
12.2.3 (i) the cessation of AWA's business operations as a
going concern; (ii) the making of AWA of any
general assignment, or general arrangement for the
benefit of creditors; (iii) the failure of AWA to
generally pay AWA's debts as they come due or AWA's
written admission of its inability to pay its debts
as they come due; (iv) the filing by or against AWA
of a petition to have AWA adjudged bankrupt or a
petition for reorganization or arrangement under
any law relating to bankruptcy (unless, in the case
of petition filed against AWA, the same is
dismissed, stayed or vacated within 60 days); (v)
an adjudication of AWA's insolvency; (vi)
appointment of a trustee or receiver to take
possession of substantially all of AWA's assets
which is not dismissed, stayed or vacated within 60
days; or (vii) the attachment, execution or other
judicial seizure of all of AWA's assets which is
not dismissed, stayed or vacated within 60 days.
12.2.4 Upon the occurrence and continuance of an AWA Event
of Default, Mesa may: (a) by written notice to AWA
(an "AWA Default Notice") terminate this Agreement
effective as of the date set forth in the AWA
Default Notice which [CONFIDENTIAL PORTION DELETED
AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] Event of Default; and/or (b)
pursue all other rights and remedies available at
law or in equity to Mesa for the AWA Event of
Default, including, without limitation, injunctive
relief, specific performance and damages. After
receipt of an AWA
35
36
Default Notice, AWA shall continue to perform its
obligations under this Agreement until the
termination date set forth in the AWA Default
Notice. No remedy or election by Mesa hereunder
shall be deemed exclusive, but shall, wherever
possible, be cumulative with all other rights and
remedies at law or in equity.
13. Records and Reports.
13.1 Retention of Records. Mesa shall keep accurate and complete
books and records of all Flight Services and Other Services
performed under this Agreement as well as any additional
records that the parties agree may be required in accordance
with AWA's procedures and the Regulations. Mesa shall retain
such records in accordance with applicable law, AWA's
procedures and the Regulations.
13.2 Provision of Financial Records. Upon AWA's request, and until
such time as AWA advises Mesa that such reports are no longer
necessary, Mesa shall furnish to AWA, within [CONFIDENTIAL
PORTION DELETED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] following the close of the first three
fiscal quarters of Mesa, unaudited financial statements
including Mesa's current corporate balance sheets and profit
and loss statements, and within [CONFIDENTIAL PORTION DELETED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] after the close of its fiscal year, Mesa shall
furnish AWA with audited financial statements of Mesa (or its
parent company) including, either separately or on a
consolidated basis, the balance sheet and profit and loss
statements of that party. The appropriate reports filed on
Form 10-Q and 10-K shall be satisfactory to fulfill such
obligation.
13.3 Provision of Additional Records. Mesa shall promptly furnish
AWA with a copy of every report that it prepares and is
required to submit to the DOT, FAA, National Transportation
Safety Board ("NTSB") or any other governmental agency,
relating to any accident or incident involving an Aircraft
used in performing Flight Services under this Agreement, when
such accident or incident is claimed to have resulted in the
death of or substantial injury to any person or the loss of,
damage to, or destruction of any property.
13.4 Additional Reports. Mesa shall promptly notify AWA in writing
of (i) any change in or relinquishment of control of Mesa,
(ii) any agreement contemplating such a change or
relinquishment with a copy of such agreement, if in writing,
to AWA, or (iii) any change or contemplated change in the
Chief Executive Officer position Mesa.
36
37
14. Miscellaneous Provisions.
14.1 Notices. All notices, consents, approvals or other instruments
required or permitted to be given by either party pursuant to
this Agreement shall be in writing and given by (i) hand
delivery, (ii) facsimile, (iii) express overnight delivery
service or (iv) certified or registered mail, return receipt
requested. Notices shall be provided to the parties and
addresses (or facsimile numbers, as applicable) specified
below and shall be effective upon receipt, except if delivered
by facsimile outside of business hours in which case they
shall be effective on the next succeeding business day:
If to AWA: America West Airlines, Inc.
0000 X. Xxx Xxxxxx Xxxx.
Xxxxxxx, Xxxxxxx 00000
Attn: Vice President and
General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Mesa: Mesa Air Group
0000 Xxxx 00xx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attn: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
14.2 Waiver and Amendment. No provisions of this Agreement shall be
deemed waived or amended except by a written instrument
unambiguously setting forth the matter waived or amended and
signed by the party against which enforcement of such waiver
or amendment is sought. Waiver of any matter shall not be
deemed a waiver of the same or any other matter on any future
occasion.
14.3 Captions. Captions are used throughout this Agreement for
convenience of reference only and shall not be considered in
any manner in the construction or interpretation hereof.
14.4 Attorneys' Fees. In the event of any judicial or other
adversarial proceeding between the parties concerning this
Agreement, the prevailing party shall be entitled to recover
its attorneys' fees and other costs in addition to any other
relief to which it may be entitled.
14.5 Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject
matter hereof, and there are no other representations,
warranties or agreements, written or oral, between AWA and
Mesa with respect to the subject matter of this Agreement.
37
38
14.6 Jurisdiction; Choice of Law. For purposes of any action or
proceeding arising out of this Agreement, the parties hereto
hereby expressly submit to the jurisdiction of all federal and
state courts located in the State of Arizona. This Agreement
shall be governed by and construed in accordance with the laws
of the State of Arizona.
14.7 Severability. If this Agreement, any one or more of the
provisions of this Agreement, or the applicability of this
Agreement or any one or more of the provisions of this
Agreement to a specific situation, shall be held invalid,
illegal or unenforceable or in violation of any contract or
agreement to which Mesa or AWA are a party, then AWA and Mesa
shall in good faith amend and modify this Agreement,
consistent with the intent of Mesa and AWA, as evidenced by
this Agreement, to the minimum extent necessary to make it or
its application valid, legal and enforceable and in accordance
with the applicable agreement or contract, and the validity or
enforceability of all other provisions of this Agreement and
all other applications of any such provision shall not be
affected thereby.
14.8 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original.
14.9 Binding Effect. This Agreement shall be binding upon and inure
to the benefit of AWA and Mesa and their respective successors
and permitted assigns.
14.10 No Assignment. The rights, obligations and duties of AWA and
Mesa under this Agreement may not be assigned or delegated,
except as may otherwise be mutually agreed by AWA and Mesa,
in their sole and absolute discretion.
AWA:
America West Airlines, Inc.,
a Delaware corporation
By: /s/ J. Xxxxx Xxxxx
------------------------------------------
Name: J. Xxxxx Xxxxx
Title: Vice President, Revenue Management
38
39
MESA:
Mesa Airlines, Inc.,
a Nevada corporation
By: /s/ Xxxxxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Title: Chief Executive Officer
39
