CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT
TO A REQUEST FOR CONFIDENTIAL TREATMENT
Exhibit 10.33
FORM OF AMENDED AND RESTATED
ALLIANCE AGREEMENT
This Amended and Restated Alliance Agreement (the "Agreement") is made
this ____ day of ______, 2005, by and between CONTINENTAL AIRLINES, INC.
(together with its Affiliates, "Continental"), a corporation duly organized and
validly existing under the laws of the State of Delaware, U.S.A. with its
principal office at 0000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxx, X.X.X. 00000, and
COMPANIA PANAMENA DE AVIACION, S.A. (together with its Affiliates, "COPA"), a
corporation of the Republic of Panama, with its principal office at Ave. Xxxxx
Xxxxxxxxx y Xxxxx 00, Xxxxxxxx 0000, Xxxxxx 0, Xxxxxx. Continental and COPA are
herein referred to as the "Carriers".
RECITALS
Continental and COPA are each certificated air carriers providing air
transportation services with respect to both passengers and cargo in their
respective areas of operation.
Continental and COPA desire to increase the flow of air passenger traffic
on aircraft operated by both carriers and increase the quantity and quality of
air service available to the traveling public by entering into and maintaining a
cooperative relationship that will include the codesharing of flights, schedule
coordination for connectivity, through check-in, special prorate arrangements
for both passengers and cargo, frequent flyer program participation, joint
marketing programs and other mutually agreed to arrangements.
Continental and COPA are each a party to the "Alliance Agreement" made the
22nd day of May, 1998 and each agree to enter into this Agreement as an amended
and restated version of the Alliance Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein contained, Continental and COPA hereby agree as follows:
A. GOVERNMENTAL APPROVALS
1. Antitrust Immunity.
(a) During the term of this Agreement, Continental and Compania
Panamena de Aviacion, S.A. shall use their commercially reasonable efforts to
maintain unconditional exemption and immunization pursuant to 49 U.S.C. Sections
41308 and 41309 and 41309 from the application of all United States antitrust
laws, as defined therein, for all transactions and activities contemplated in
this Agreement with respect to such Carriers, including, but not limited to,
pricing, route planning, yield management, scheduling, commissions, advertising,
sales and marketing and all ancillary transactions and activities thereto
("Antitrust Immunity"); provided, however, that if the Carriers use their
commercially reasonable efforts to maintain Antitrust
Immunity but Antitrust Immunity is terminated, this Agreement shall not
terminate and shall continue to be a valid and binding agreement of the Carriers
and enforceable against the Carriers but limited by any applicable law, rule,
regulation, ordinance, certificate, governmental permit or license, judgment,
injunction, order or decree or a governmental or regulatory authority, agency,
commission, court or other entity, domestic or foreign.
(b) To the extent that Antitrust Immunity is terminated, a new
application for Antitrust Immunity shall be filed by the applicable Carriers
with the Department of Transportation (the "DOT") as soon as reasonably and
commercially possible after such termination.
(c) Subject to Antitrust Immunity and applicable laws and
regulations, the Carriers shall coordinate their pricing, route planning, yield
management, scheduling, commissions, advertising, sales and marketing and other
activities for the mutual benefit of the Carriers.
2. Codesharing Approval. Within 45 days after the commencement date of
this Agreement (the "Implementation Date"), Continental and COPA shall apply to
the DOT pursuant to Section 212 of the DOT's regulations for authorization to
implement the "Shared Code Segments" (the application for "Statements of
Authorization"), as defined below. Continental and COPA shall use their
commercially reasonable efforts to obtain and maintain such authorization.
3. Filings; Other Action. Subject to the terms and conditions herein
provided the Carriers shall: (i) promptly make any other filings, notices or
applications with any Governmental Entity required in connection with the
consummation of the transactions and acts contemplated by this Agreement; (ii)
promptly seek any necessary consents of, or give any required notices to, third
parties with respect to the transactions and acts contemplated by this
Agreement; (iii) consult reasonably with the other party in connection with, and
keep the other party reasonably informed with respect to, the foregoing; and
(iv) use all reasonable effort to promptly take, or cause to be taken, all other
actions and do, or cause to be done, all other things necessary, proper or
appropriate under applicable laws and regulations to consummate and make
effective the transactions and acts contemplated by this Agreement as soon as
practicable.
B. CODESHARING
1. Schedules to be Operated.
(a) To the extent permitted by law, Continental operated Shared Code
Segments (as herein defined) will be marketed under not only Continental's "CO"
designator code but also under COPA's "CM*" designator code, and COPA operated
Shared Code Segments will be marketed under not only COPA's "CM" designator
code, but also under Continental's "CO*" designator code. Schedule B.1(a)
hereto, which is incorporated herein by this reference, sets forth the flight
segments where shared code segments ("Shared Code Segments") will operate during
the term of this Agreement. It is the intention of the Carriers that
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the Shared Code Segments shall be operated with full reciprocity in a
non-discriminatory manner towards the non-operating Carrier on gateway routes
(i.e., from a non-United States point to another non-United States point or to a
United States domestic routes as applicable and on head-to-head and
non-overlapping markets). Each Carrier will use its commercially reasonable
efforts to commence codeshare operations as soon as regulatory authority to
commence such operations has been obtained ; provided that neither Carrier shall
have an obligation to place its designator code on flights operated by the other
Carrier unless or until such time as the Carrier whose designator code will be
used is reasonably satisfied that the manner in which the codeshare service is
to be provided is substantially comparable to its own service. Except as
expressly set forth herein, no Carrier shall have an obligation to extend Shared
Code Segments to other routes or to maintain operations of its aircraft on any
routes and no such obligation can be created by any oral statements or
representations or course of dealing by a Carrier, but only by an express
written agreement.
(b) The Carriers shall meet together at least twice per year to
discuss the appropriateness of expanding or contracting the Shared Code
Segments. Each Carrier shall have the right to propose changes to the Shared
Code Segments and such proposal must be duly and timely analyzed and the
decision of the other Carrier to reject it must be made on a commercially
reasonably basis.
2. Schedule Changes. For flights operating as Shared Code Segments, each
Carrier shall operate the schedule published by it on the Implementation Date
and either Carrier may change its schedule published by it on the Implementation
Date and either Carrier may change its schedule for Shared Code Segments
operated by it at its own discretion; provided, however, that if a proposed
change in a Carrier's schedule will have a material adverse effect on the other
Carrier's connecting opportunities, the Carrier planning to change its schedule
shall provide the other Carrier with 60 days' written notice (or notice as far
in advance as practical, if 60 days is not practical, but under no circumstances
less than 15 days) of the schedule change. The Carriers recognize that in order
to provide a high level of customer service, the schedule change process must be
synchronized and the Carriers shall endeavor to achieve such synchronization to
such extent and as promptly as is reasonably and legally possible.
3. Revenue Sharing, Codeshare Commission and Proration on Shared Code
Segments.
(a) The revenue from flight itineraries made up of transportation
via a flight (a Shared Code Segment or otherwise) operated by one Carrier
connecting with a flight (a Shared Code Segment or otherwise) operated by the
other Carrier (such flight itineraries are hereinafter referred to as the
"Through Flights") shall be allocated between the Carriers in accordance with a
special prorate agreement between the Carriers, a copy of which is attached
hereto as Exhibit A (the "Special Prorate Agreement"). The tickets for Through
Flights or connecting flights shall be issued such that a separate coupon shall
be utilized for each flight segment. From time to time and in good faith, each
Carrier shall determine which discount coupons or documents of the other Carrier
it shall recognize.
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(b) The Special Prorate Agreement shall be based primarily on
**Material Redacted**. In such selected short-haul markets, the operating
Carrier will provide **Material Redacted**. The Special Prorate Agreement will
also provide for revenue proration for unpublished fares on mutually agreeable
terms. The Special Prorate Agreement shall be modified by mutual agreement of
the Carriers, as necessary, so that it is no less favorable to the non-operating
Carrier on applicable origin and destination itineraries than the most favorable
arrangement offered by the applicable operating Carrier to another non-operating
airline for similar origin and destination itineraries.
(c) The Carriers agree that for tickets sold by the marketing
Carrier on Shared Code Segments, the operating Carrier shall be responsible for
booking fees with respect to segments operated by the operating Carrier assessed
by any CRS vendors, including CRSs operated by third parties and CRSs providing
hosting services to any of the Carriers. The Carriers will request the CRS
vendors to directly xxxx the operating Carrier for such booking fees if
feasible. If such direct billing is not feasible, the Carriers shall xxxx each
other monthly and shall provide documentation that is reasonably acceptable to
the other Carrier of such fees from each CRS vendor.
(d) Gain-Sharing. Subject to Antitrust Immunity, the air traffic
revenue gains and cost efficiencies derived from the alliance of the Carriers
shall benefit both Carriers. The Carriers shall periodically assess the relative
benefits and costs of codesharing and other forms of marketing cooperation. If,
after Antitrust Immunity, the gains or costs of the Carrier's coordination of
pricing, route planning, yield management, scheduling, commissions, advertising,
sales and marketing and other activities directly result in benefits to one
Carrier but adversely impact the other, and such adverse impact is not the
result of such other Carrier's action, the Carriers shall negotiate immediately
in good faith to make adjustments so that both Carriers may fairly benefit from
these alliance activities.
4. Issuance of Traffic Documents and Settlement.
(a) Passenger's traffic documents for Shared Code Segments may be
issued by either Carrier, or third parties with whom the Carriers from time to
time have interline traffic agreements, in the same way as for any other flight
of the marketing Carrier or the operating Carrier.
(b) The acceptance of passengers' traffic documents used in
connection with the Shared Code Segments and settlements between the Carriers
shall occur through the IATA Clearinghouse in accordance with the procedures set
forth in the IATA Multilateral Interline Traffic Agreement-Passenger (the `IATA
Interline Agreement), except as specifically set forth in this Section B.4. The
settlement amounts shall be determined using the techniques provided in the IATA
Revenue Accounting Manual. Each Carrier consents to the use by the other Carrier
of sampling techniques in accordance with the IATA Revenue Accounting Manual,
Chapter B1, to determine the settlement amounts. COPA's revenue accounting
system currently does not have the capacity to handle interline sampling. Should
Continental request that COPA install and use interline sampling, Continental
shall pay the reasonablecost to upgrade COPA's revenue accounting system to
accommodate interline sampling. The Carriers recognize that because of
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Continental's size and selling strength relative to COPA's it is probable that a
disproportionate number of COPA operated Shared Code Segments will be ticketed
on Continental's ticket stock or ticketing plate and, therefore, COPA will
suffer negative impact to its cash flow from ticket sales. If a disproportionate
number of COPA operated Shared Code Segments are ticketed, or are reasonably
expected to be ticketed on Continental's ticketed on Continental's ticket stock
or ticketing plate, the Carriers will develop a commercially reasonable method
to neutralize the negative impact, if any, to COPA's cash flow, including, but
not limited to, Continental's providing a cash advance on ticket lifts or a cash
deposit to cover the amount of COPA's delayed cash flow resulting from
Continental's sales of COPA operated Shared Code Segments. Each Carrier shall
remain a member in good standing of the IATA Clearinghouse. If the IATA
Clearinghouse ceases to operate, settlement shall be determined by the internal
accountants of the Carriers in accordance with procedures to be mutually agreed.
(c) Unredeemed Tickets. If either Carrier demonstrates that the
revenue distribution associated with unredeemed tickets is detrimental to it,
the Carriers will discuss ways to correct the problem and, to the extent that it
is commercially reasonable to do so, implement necessary changes.
(d) Employee Pass Travel Agreement. During the term of this
Agreement, the Carriers will maintain a mutually agreeable employee pass travel
agreement which includes benefits for Officers of both Carriers and members of
board of directors of Copa Holdings, S.A. substantially similar to the terms of
the pass travel agreement in place as of the date hereof.
5. Pricing and Yield Management of Shared Code Segments.
(a) Pricing. Each Carrier shall, subject to the following sentences,
independently and at it sole discretion, establish and determine the tariffs and
fares for flights operated on Shared Code Segments that utilize its designator
code (CO or CO* in the case of Continental and CM or CM* in the case of COPA).
Subject to retaining Antitrust Immunity and applicable laws and regulations,
pricing on the Shared Code Segments shall be established as follows: (i) local
fares will be set by the Carrier operating the route if only one Carrier is
operating the route and (ii) through fares on all connecting itineraries and
local fares on routes operated by both carriers shall be established by mutual
agreement. Automatic concurrence shall apply when matching competitive fares.
(b) Yield Management.
(i) Except to the extent necessary to prevent unauthorized
overbooking and subject to applicable laws, each Carrier shall make
available for sale by the other Carrier on a non-discriminatory
basis all of the available seats in each inventory class for Shared
Code Segments and COPA/Continental interline flights subject to
reasonable yield management practices; provided, however, that the
Carriers may negotiate in good faith to establish reasonable
capacity limits on
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the maximum number of seats that may be sold in a particular fare
category on a particular operating flight, and provided that such
capacity limits can be implemented in a commercially reasonable
manner. The Carriers shall map fares into each other's booking
classes ("buckets") in a fully non-discriminatory fashion so that
comparable fares are placed in comparable buckets.
(ii) Each Carrier shall have access to the other Carrier's
inventory through an automated interface, which interface shall be
maintained by both Carriers to permit the sale of inventory on the
Shared Code Segments.
(iii) Subject to the rights of each Carrier to manage the seat
inventory that it controls, including seats on the operational
flight of another Carrier, each Carrier shall maintain its
reservations and yield management systems in good operational
condition to permit the other Carrier, when it is the Marketing
Carrier, to offer the same functionality to its customers as is
enjoyed by the customers of the Operating Carrier, including the
ability to make advance seat assignments, issue advance boarding
passes and access inventory that is available for sale (in the
appropriate inventory class) on the reservations system of the
Operating Carrier, but excluding, until technically practical, the
ability to review seat maps. Each Carrier will be responsible for
its own systems costs for ensuring such functionality.
(iv) Unless the Carriers mutually agree, the Carriers shall
not have any blocked-space arrangements with each other.
6. Marketing Programs.
To the extent permitted by law, the Carriers shall work to develop and implement
mutually agreeable joint marketing programs to help promote the codeshare and
frequent flyer relationship and to increase revenues from traffic on the Shared
Code Segments and the other flights. Where applicable, the Carriers shall
include each other as appropriate in each other's marketing programs, such as
cross-route tie-in's, third-party tie-in's, contests and affinity programs. The
Carriers will, to the extent permitted by law, structure mutually agreeable
agency and corporate incentive compensation programs that provide an incentive
to customers to increase their aggregate business on the Carriers, while
preserving the independent marketing practices of the Carriers, unless (once
Antitrust Immunity is obtained) otherwise agreed. Without limiting the foregoing
and to the extent permitted by law, each Carrier shall include the other in its
travel agent, corporate and related override commission, discounting and sales
incentive programs in a non-discriminatory fashion unless the other Carrier
declines to participate in any such program. The joint marketing programs shall
take into account the following elements:
(i) mutual internal incentive program;
(ii) overall product compatibility;
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(iii) ground and in-flight consistency that promotes both carriers;
(iv) communication planning for travel agencies and corporate
travel departments;
(v) targeted Frequent Flyer Program promotions;
(vi) performance measurements and reporting;
(vii) leisure product development;
(viii) communication plans; and
(ix) hub development.
Details of joint program development and the sharing of the incremental program
costs shall be negotiated by the Carriers based on the relative revenue benefit
obtained by each of the Carriers with respect to the program on a case-by-case
basis. The Carriers shall conduct quarterly joint marketing meetings to discuss
implementing or adding possible marketing programs and strategies.
7. Codesharing Licenses.
(a) CO* License
(i) Grant of License. Subject to the terms and conditions of
this Agreement, Continental shall grant to COPA a nonexclusive,
nontransferable, revocable license to use the CO* designator code on
all of COPA's flights operated as a Shared Code Segment (COPA
flights flown using the CO* code are herein referred to as "CO*
Flights").
(ii) Control of CO* Flights. COPA shall have sole
responsibility for and control over, and Continental shall have no
responsibility for, control over or obligations or duties with
respect to, each and every aspect of COPA's operations including,
without limitation, scheduling (except as provided in Sections B.1
and 2), pricing (except as provided in Section B.5), planning of
flight itineraries and routings, reservations, reservations control,
yield management (except as provided in Section B.5), dispatch,
fueling, weight and balance, flight release, maintenance, and flight
operations and compliance with applicable rules and regulations.
(b) CM* License
(i) Grant of License. Subject to the terms and conditions of
this
7
Agreement, COPA shall grant to Continental a nonexclusive,
nontransferable, revocable license to use the CM* designator code on
all of Continental's flights operated as a Shared Code Segment.
(Continental flights flown using the CM* code are herein referred to
as "CM* Flights").
(ii) Control of CM* Flights. Continental shall have sole
responsibility for and control over, and COPA shall have no
responsibility for, control over or obligations or duties with
respect to, each and every aspect of Continental's operations
including, without limitation, scheduling (except as provided in
Sections B.1 and 2), pricing (except as provided in Section B.5),
planning of flight itineraries and routings, reservations,
reservations control, yield management (except as provided in
Section B.5), dispatch, fueling, weight and balance, flight release,
maintenance, and flight operations and compliance with applicable
rules and regulations.
8. Audit.
(a) Continental Audit. Continental shall have the right, at its own
cost, to inspect, review, and observe COPA's operations of CO *Flights, and/or
to conduct a full safety and/or service audit of COPA's operations, manuals and
procedures reasonably related to CO* Flights, at such intervals as Continental
shall reasonably request. In the exercise of such right, Continental does not
undertake any responsibility for the performance of COPA's operations.
Continental shall coordinate its safety and service audits with COPA so as to
avoid disruptions of COPA's operations. Any safety audit may include, without
limitation, maintenance and operation procedures, crew planning, reservations,
passenger and baggage handling, customer service, personnel records, spare
parts, inventory records, training records and manuals, and flight, flight
training and operational personnel records.
(b) COPA Audit. COPA shall have the right, at its own cost, to
inspect review, and observe Continental's operations of CM* Flights, and/or to
conduct a full safety and/or service audit of Continental's operations, manuals
and procedures reasonably related to CM* Flights, at such intervals as COPA
shall reasonably request. In the exercise of such right, COPA does not undertake
any responsibility for the performance of Continental's operations. COPA shall
coordinate its safety and service audits with Continental so as to avoid
disruptions of Continental's operations. Any safety audit may include, without
limitation, maintenance and operation procedures, crew planning, reservations,
passenger and baggage handling, customer service, personnel records, spare
parts, inventory records, training records and manuals, and flight, flight
personnel records, spare parts, inventory records, training records and manuals,
and flight, flight training and operational personnel records.
9. Irregularities in Operations.
(a) COPA shall promptly notify Continental of all irregularities
involving CO* Flight which result in any damage to persons or property as soon
as such information is available and shall furnish to Continental as much detail
as practicable.
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(b) Continental shall promptly notify COPA of all irregularities
involving a CM* Flight which result in any damage to persons or property as soon
as such information is available and shall furnish to COPA as much detail as
practicable.
(c) In the event of any irregularity in Shared Code Segments'
operations, including without limitation, any event causing damage to persons or
property, the Operating Carrier shall identify itself as being operated
independently of the Carrier whose code is being used, and as being solely
responsible for its operations. Either Carrier may state that it holds a
codesharing license from the other Carrier and that it obtains certain services
from, or provides certain services to, as the case may be, the other Carrier if
third parties inquire as to such relationship. COPA shall designate (and notify
Continental of such designation) a contact in each of the cities that COPA
operates CO* Flights that is authorized to speak and comment (and has the
knowledge or immediate access to the knowledge necessary to do so) on behalf of
COPA in relation to its irregular operations and Continental shall designate
(and notify COPA of such designation) a contact in each of the cities that
Continental operates CM* Flights that is authorized to speak and comment (and
has the knowledge or immediate access to the knowledge necessary to do so) on
behalf of Continental in relation to its irregular operations.
10. Reporting Obligation.
(a) Changes of Service. Each Carrier shall give the other Carrier 60
days advance notice (or notice as far in advance as possible if 60 days is
impracticable) of any intended material changes to the manner of conducting its
business or operations or the nature of its product that relate to its operation
of Shared Code Segments.
(b) Correspondence from Governmental Entities.
(i) COPA shall immediately provide Continental copies of any
formal notice of proposed civil penalty, or other similar document,
received from any Governmental Entity which, with respect to CO*
Flights, references (i) any alleged noncompliance with rules or
regulations affecting air transportation, or (ii) any investigation
of COPA performed or proposed by any Governmental Entity, including,
without limitation, any communication issued by a government
authority concerning the airworthiness of COPA's aircraft, the
compliance of COPA's personnel with required operational or training
procedures or any other matter relating to the safe operation of
COPA aircraft.
(ii) Continental shall immediately provide COPA copies of any
formal notice of proposed civil penalty, or other similar document,
received from any Governmental Entity which, with respect to CM*
Flights, references (i) any alleged noncompliance with rules or
regulations affecting air transportation, or (ii) any investigation
of Continental performed or proposed by any Governmental Entity,
including, without limitation, any communication issued by a
government authority concerning the airworthiness of Continental's
aircraft, the compliance of
9
Continental's personnel with required operational or training
procedures or any other matter relating to the safe operation of
Continental aircraft.
(c) Notice of Complaints. COPA shall monthly furnish Continental a
summary of complaints, notices of violation, requests to cease activity or
similar correspondence which reasonably relate to CO* Flights and which are
received by COPA from Continental ticketed passengers, any Governmental Entity
or other parties. Continental shall monthly furnish COPA a summary of
complaints, notices of violation, request to cease activity or similar
correspondence which reasonably relate to CM* Flights and which are received by
Continental from COPA ticketed passengers, any Governmental Entity or other
parties. Each Carrier shall comply with the other Carrier's reasonable requests
for actual copies of any such documents.
(d) Operations. For purposes of monitoring the success of the
codeshare operations, the Carriers shall provide each other with mutually agreed
to monthly reports containing, without limitation, the following data for Shared
Code Segments operated by each Carrier:
(i) the total number of scheduled, actual and canceled
departures for the month, by flight and city pair; and
(ii) completion and on-time performance data, by system and
market.
11. Flight Display.
(a) All Shared Code Segments shall be included in the schedule,
availability and fare displays of all computerized reservations systems in which
Continental and COPA participate, the Official Airline Guide (to the extent
agreed upon) and Continental's and COPA's internal reservation systems, under
the shared code as well as the operator's own code, to the extent possible.
Continental and COPA shall take the appropriate measures necessary to ensure the
display of the schedules of all Shared Code Segments in accordance with the
preceding sentence.
(b) Continental and COPA shall disclose and identify the Shared Code
Segments to the public as actually being a flight of and operated by the
Operating Carrier, in at least the following ways:
(i) a symbol shall be used in timetables and computer
reservation system indicating that Shared Code Segments are actually
operated by the other Carrier;
(ii) to the extent reasonable, messages on airport flight
information displays shall identify the operator of flights shown as
Shared Code Segments;
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(iii) Continental and COPA advertising concerning Shared Code
Segments and Continental and COPA reservationists shall disclose the
operator of each flight; and
(iv) in any other manner prescribed by law.
12. Terms and Conditions of Carriage and Claims Procedures.
(a) In all cases the contract of carriage between a passenger and a
Carrier shall be that of the Carrier whose code is designated on the ticket. As
for handling passenger claims between the Carriers, the conditions of carriage
of the Operating Carrier shall apply to the Shared Code Segments, except as
otherwise mutually agreed by the Carriers. The procedures for claims handling of
the Operating Carrier shall also be applicable to the Shared Code Segments. The
Carriers shall meet as soon as practical prior to commencement of the Shared
Code Segments to identify discrepancies in procedures for claims handling
between the Carriers.
(b) The Carriers shall use existing IATA procedures when handling
and settling claims made by customers in connection with Shared Code Segments.
13. Irregularity Handling.
(a) In the event of flight delays, cancellations or other schedule
irregularities that affect Shared Code Segments, the Operating Carrier shall
inform the Marketing Carrier, if applicable, in accordance with Section B.9, of
all pertinent information concerning an irregularity for customer information
purposes.
(b) The Carriers shall cooperate in all available ways to
accommodate passengers experiencing flight irregularities (including, but not
limited to, schedule changes, flight cancellations, delayed flights, flight
interruptions and delayed, damaged, pilfered or lost baggage) and that neither
shall forbear from providing such assistance because the other may have been
responsible for the flight irregularity. In the event of a flight irregularity,
the Carrier causing or experiencing the irregularity shall bear all related
costs (including costs of the other Carrier) associated with accommodating the
passengers that has been affected by such flight irregularity. The Carriers
shall review existing procedures for handling flight irregularities and
accommodating interline passengers with respect thereto and handling over sales
situations to determine their adequacy for the purposes of this Agreement and
shall make such mutually agreed to adjustments in existing procedures as they
find necessary or appropriate to provide coordinated irregularity handling. In
the absence of such agreement, the written policies and procedures of the
Operating Carrier shall be followed. The Carriers shall meet prior to
commencement of the Shared Code Segments to develop a mishap response plan with
respect to flights operated as Shared Code Segments.
14. Tariff Filing. Each Carrier shall file the tariffs and fares for
flights operated on Shared Code Segments that utilize its designator code (CO or
CO* in the case of Continental and CM or CM* in the case of COPA).
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15. Transportation Taxes. Each Carrier shall be responsible for collecting
and paying any taxes or fees assessed by any Governmental Entities or airport on
the transportation of passengers or property for transportation utilizing its
travel documents.
16. Flight Coupon Handling.
(a) Continental Authorization. Except as may otherwise be provided
in this Agreement, Continental shall authorize COPA to handle Continental flight
coupons specifying Continental's Through Flights or connecting flights under
this Agreement to and from points in Panama', in the same way as if these
coupons were specifying COPA Through Flights or connecting flights between
Panama', on the one hand, and (i) other points served by COPA beyond
Panama', and (ii) the United States, on the other. Continental shall confirm
this authorization immediately to third parties if COPA so requires.
(b) COPA Authorization. Except as may otherwise be provided in this
Agreement, COPA hereby authorizes Continental to handle COPA flight coupons
specifying COPA Through Flights or connecting flights under this Agreement to
and from points in the United States in the same way as if these coupons were
specifying Continental flights between the United States, on the one hand, and
(i) other points served by Continental beyond the United States and (ii)
Panama', on the other. COPA shall confirm this authorization immediately to
third parties if Continental so requires.
17. Quality of Service.
(a) Subject to Subsection (d) of this Section , each Carrier shall
retain its own identity and determine its own service levels. Each Carrier shall
adopt a smoking policy for flights operated by it that it believes is
appropriate for its services, it being understood that each of the Carriers
intends to continue to ban smoking on flights operated by it.
(b) Each Carrier shall perform its service with respect to its
flights operated under the designator code of the other Carrier in a timely and
professional manner with superior quality in accordance with all applicable
laws, rules and regulations. Without limitation, each Carrier shall maintain its
aircraft in an airworthy, clean, attractive and comfortable condition and strive
to maintain a completion factor of at least 98% (without considering delays
caused by air traffic control or weather). Each Carrier agrees that, in
conducting flight operations under the designator of the other Carrier, it shall
employ prudent safety and loss prevention policies in accordance with applicable
laws, rules and regulations. If either Carrier is in breach of this Section
B.17(b), the non-breaching Carrier may remove its designator code from the
breaching Carrier's flight operations or refuse to allow the breaching Carrier
to place its designator code on the flight operations of the non-breaching
Carrier until such time as the breach is fully cured and such removal by the
non-breaching Carrier of the designator code from the breaching Carrier's flight
operations or refusal to allow the breaching Carrier to place its designator
code on the flight operations of the non-breaching Carrier shall not constitute
a breach of this Agreement or a waiver of its rights under this Agreement by the
non-breaching Carrier.
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(c) To provide customers with the best service and a positive
impression of the cooperative services of the alliance between the Carriers, the
Carriers shall create, to the extent practicable, the following:
(i) Schedule Coordination. The Carriers shall each use all
reasonable efforts, consistent with their respective operational
constraints, to coordinate their schedules to minimize connecting
passenger waiting time and to maximize passenger convenience and
service.
(ii) Seamless Transfer. Subject to operational constraints,
the Carriers shall expedite, to the greatest extent feasible, the
transfer of all passengers and baggage making connections between
the respective networks of the Carriers, and shall cooperate in
communicating efficiently to passengers the benefits and procedures
associated with the cooperative service through ticket inserts,
terminal and gate signage, and flight information displays. In
connection therewith, Continental and COPA shall cooperate to
coordinate and maintain their schedules to minimize the waiting time
and to maximize convenience of passengers who are connecting from a
Continental to a COPA flight segment (or vice versa). Each Carrier
shall provide the other with the airport operational assistance that
is required to assure schedule compatibility for the Through Flights
or the connecting flights where applicable.
(iii) Terminal Facilities. Each Carrier shall use its
commercially reasonable efforts to arrange for terminal facilities
at gateway airports to facilitate passenger handling and connections
between the flights of the Carriers with the objective of achieving
convenience similar to on-line connections.
(iv) In-Flight Announcements. The Operating Carrier shall make
in-flight announcements to all passengers on the Shared Code
Segments to promote the cooperative service.
(d) The customer service standards of the Operating Carrier shall be
followed on Shared Code Segments for both Continental and COPA
passengers; provided that COPA agrees to maintain a standard of
service in all classes of service that is at least substantially
similar to the quality that Continental provides on its flights of
similar stage length.
18. Frequent Flyer Program Participation. Cooperation between the Carriers
with respect to frequent flyer program participation is governed by the "Amended
and Restated Frequent Flyer Program Participation Agreement", dated as of the
date hereof. During the term of this Agreement, Copa will be a participant in
Continental's OnePass program on a co-branded basis as contemplated in the
Amended and Restated Frequent Flyer Program Participation Agreement or pursuant
to a reciprocal frequent flyer program participation arrangement as
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contemplated in the Amended and Restated Frequent Flyer Program Participation
Agreement if COPA ceases to participate in OnePass on a co-branded basis.
C JOINT COOPERATION
To the extent applicable, the initiatives covered by this Section C are
subject to Antitrust Immunity.
1. Procedures and Ground Handling
(a) Harmonizing. The Carriers shall harmonize their physical
operations with respect to components, operations, quality,
appearance, conditions of carriage and any other aspects of the
physical operations as the Carriers agree.
(b) Joint Handling. Without employee dislocation and subject to
competitive pricing and service, COPA will provide below wing
handling services for Continental's operations in Panama.
Compensation for such service shall be the "Incremental Cost" (as
defined in the Amended and Restated Services Agreement entered into
by and between the Carriers on the date hereof (the "Services
Agreement")), of the handling Carrier plus a reasonable profit. To
enhance operations of Shared Code Segments, the Carriers shall make
their airport operations contiguous where practical. In locations
where both Carriers operate, other than Panama, each Carrier shall
give the other Carrier the opportunity to bid on handling services
(above and below wing).
2. Reservations and City Ticket Offices. The Carriers shall consider the
best way to coordinate their reservations and the functions of the city ticket
offices.
3. Joint Advertising and Publicity. The Carriers shall jointly promote
their alliance as part of their ordinary advertising efforts. Each Carrier,
while an Operating Carrier, shall not discriminate against the Marketing Carrier
in its respective advertising, public relations, promotion, distribution and
sales activities.
4. Employee and Corporate Incentives.
(a) Instruction, measurement, and evaluation. Joint targets shall be
established by the Carriers at their annual meeting, as provided under
Section B.1.(b). Applicable employees of each Carrier shall be instructed
that in applicable areas of interaction, the first aim is to maximize the
alliance between the Carriers, not the individual Carrier's position.
(b) Inclusion in incentive programs. Employees bonus, profit-sharing
and other cash and non-cash route specific sales incentive programs should
include Shared Code Segments, revenues, etc. of both Carriers on a
non-discriminatory basis.
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(c) Selection and reciprocal feedback. Employees performing
outsourced or joint service shall be selected on a basis that provides no
favoritism to either Carrier. Their evaluation (and certain personnel
decisions) shall be based on input from both Carriers with ultimate
decision-making by their employer after giving high regard to the input of
the other Carrier.
5. Information Sharing. Subject to applicable laws and regulations, the
Carriers shall share research studies on booking (including marketing
information data tape), revenue, traffic, yield, cost and other data with the
other Carrier as it pertains to their common areas of cooperation. Such
information shall be provided at the providing Carrier's Incremental Cost as
provided in the Services Agreement and, where jointly performed, in proportion
to the size of the Carriers.
6. Joint Selling.
(a) To the extent legally permissible, the Carriers shall sell seats
on each other's aircraft in a non-discriminatory fashion and will establish
mutually agreed to incentives and methods to do so. The Carriers shall consider
establishing joint sales organizations (including inbound and outbound telephone
sales) in countries where COPA currently flies and where it may begin to fly
during the duration of this Agreement.
(b) If a Carrier withdraws its sales personnel from a country where
the other Carrier has a significant presence, the Carrier that has a significant
presence in such country will offer to serve as the other Carrier's general
sales agent ("GSA") in such country in consideration of receiving its
Incremental Costs of providing the services of a GSA for the withdrawing
Carrier, plus a reasonable profit acceptable to both Carriers. If the
withdrawing Carrier chooses, at its option, to employ the other Carrier as its
GSA in such country, the other Carrier will represent the withdrawing Carrier in
a non-discriminatory manner.
D GENERAL PROVISIONS
1. Compliance with Laws and Regulations and Changes in Laws.
(a) Each of Continental and COPA represents, warrants, and agrees
with the other that performance of its respective obligations under this
Agreement shall be conducted and all of its personnel shall at all times meet,
be in full compliance with and have all required licenses under any and all
applicable laws, statutes, orders, rules and regulations of any country or
territory with jurisdiction over the Shared Code Segments, including without
limitation, those laws, statutes, orders, rules and regulations promulgated by
the United States of America or Panama. Each Carrier shall be responsible, at
its own cost, for obtaining any regulatory authorizations necessary to operate
its flights or utilize its designator code on the Shared Code Segments, provided
that, the other Carriers shall render such assistance as a reasonably requested
in order to obtain such regulatory authorizations. No provision of this
Agreement that would
15
violate applicable antitrust laws without Antitrust Immunity having first been
obtained shall be applicable unless and until Antitrust Immunity is obtained.
(b) If, during the term of this Agreement, there is any change in
treaties, statutes or regulations of air transportation (and legally binding
interpretations thereof) that prevents Continental or COPA of both from
operating the CO* or CM* Flights or carrying out the arrangements contemplated
by this Agreement or attaches conditions or restrictions on the operation of CO*
or CM* Flights that have a material adverse effect on a carrier's other services
or operations not contemplated by this Agreement, the Carriers shall consult
within 30 days after any of the occurrences described herein. The purpose of
such consultations shall be to assess such change or changes and to seek, in
good faith, mutual agreement on what changes, if any, to this Agreement are
necessary or appropriate. Any such changes to this Agreement shall be made in
accordance with Section D.13.
2. Independent Parties.
(a) Independent Contractors. It is expressly recognized and agreed
that each Carrier, in its performance and otherwise under this agreement, is and
shall be engaged and acting as an independent contractor and in its own
independent and separate business; that each Carrier shall retain complete and
exclusive control over its staff and operations and the conduct of its business;
and that each Carrier shall bear and pay all expenses, costs, risks and
responsibilities incurred by it in connection with its obligations under this
Agreement. Neither Continental nor COPA nor any officer, employee
representative, or agent of Continental or COPA shall in any manner, directly or
indirectly, expressly or by implication, be deemed to be in, or make any
representation of take any action which may give rise to the existence of, any
employment, agent, partnership, of other like relationship as regards the other,
but each Carrier's relationship as respects the other Carrier in connection with
this Agreement is and shall remain that of an independent contractor.
(b) Status of Employees. The employees, agents and/or independent
contractors of COPA shall be employees, agents, and independent contractors of
COPA for all purposes, and under no circumstances shall they be deemed to be
employees, agents or independent contractors of Continental. The employees,
agents and independent contractors of Continental shall be employees, agents and
independent contractors of Continental for all purposes, and under no
circumstances shall they be deemed to be employees, agents or independent
contractors of COPA. Continental shall have no supervisory power or control over
any employees, agents or independent contractors employed by COPA, and COPA
shall have no supervisory power or control over any employees, agents and
independent contractors employed by Continental.
(c) Liability For Employee Costs. Each Carrier, with respect to its
own employees (hired directly or through a third party), accepts full and
exclusive liability for the payment of worker's compensation and/or employer's
liability (including insurance premiums where required by law) and for the
payment of all taxes, contributions or other payments for unemployment
compensation, vacations, or old age benefits, pensions and all other benefits
now or hereafter imposed upon employers with respect to its employees by any
government or agency
16
thereof or provided by such Carrier (whether measured by the wages, salaries,
compensation or other remuneration paid to such employees or otherwise) and each
Carrier further agrees to make such payments and to make and file all reports
and returns, and to do everything necessary to comply with the laws imposing
such taxes, contributions or other payments.
3. Term and Termination.
(a) Term. The term of this Agreement, unless earlier terminated as
provided in this Section D.3, shall continue until either Carrier gives the
other Carrier three years' written notice of termination: provided, however,
that neither Carrier may give such notice on or before May 22, 2012. The terms
and conditions of this Amended and Restated Alliance Agreement are effective as
of the date first written above.
(b) Other Termination Rights. In addition to the termination
provisions of paragraph (a) of this Section D.3, this Agreement may be
terminated as follows:
(i) By a Carrier, if the other Carrier has materially breached
any material provision of this Agreement and such breach shall
remain unremedied for more than 180 days after delivery of written
notice by the non-defaulting Carrier. During such 180-day period,
the Carriers shall consult in good faith to ensure that each of the
Carriers understands the nature of the alleged breach and what steps
are required to effect a cure;
(ii) By a Carrier immediately on notice, if the other Carrier
(i) shall be dissolved or shall fail to maintain its corporate
existence, or (ii) shall have its authority to operate as a
scheduled airline suspended or revoked, or shall cease operations as
a scheduled airline, in each case for a period of 30 or more days;
(iii) In the event of a breach of any payment obligation under
this Agreement, the non-breaching Carrier shall be entitled to
terminate this Agreement on providing 60 days prior written notice,
which notice shall describe, with as much specificity as reasonably
practicable, the breach and the total sums due and owing.
Termination under this paragraph (iii) shall not be effective,
however, if the allegedly breaching Carrier shall, within 45 days of
receiving such notice, correct the breach by making the full payment
due together with interest thereon at 10% per annum from the date of
such notice, provided that in the event the breaching Carrier
disputes the obligation to pay the amounts claimed owing, it may
satisfy its obligations pursuant to this sentence by paying, within
such 45 day period, the disputed amounts into escrow during the
pendency of the dispute;
(iv) By a Carrier immediately on notice if the other Carrier
shall (A) commence any case, proceeding or other action (1) under
any existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief
17
entered with respect to it, or seeking to adjudicate it a bankrupt
or insolvent, or seeking reorganization, arrangement, adjustment,
winding up, liquidation, dissolution, composition or other relief
with respect to it or its debts, or (2) seeking appointment of a
receiver, trustee, custodian, conservator or other similar official
for it or for all or any substantial part of its assets, or shall
make a general assignment for the benefit of its creditors; or (B)
there shall be commenced against the other Carrier any case,
proceeding or other action of a nature referred to in clause (A)
above that (1) results in the entry of an order for relief or any
such adjudication or appointment or (2) remains undismissed or
undischarged for a period of 60 days; or (C) there shall be
commenced against the other Carrier any case, proceeding or other
action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of
its assets that results in the entry of an order for any such relief
that shall not have been vacated, discharged, or stayed or bonded
pending appeal within 60 days from the entry thereof; or (D) the
other Carrier shall take any action in furtherance of, or indicating
its consent to, approval of, or acquiescence in, any of the acts set
forth in clause (A), (B), or (C) above; or (E) the other Carrier
shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they become due;
(v) By a Carrier immediately on notice if the other Carrier
fails to maintain the insurance coverage that is required to be
maintained pursuant to Section D.4(b) and such failure remains
unremedied for 60 days after the breaching Carrier's receipt of
written notice of such failure from the other Carrier, provided that
the marketing Carrier may cease displaying its code on the breaching
Carrier's Shared Code Segments during the period such failure
continues;
(vi) By Continental immediately on notice if, unless agreed
otherwise by the Carriers, COPA shall have a system wide completion
factor (completed flights, regardless of time of departure or
arrival, divided by scheduled flights) of less than 95% during any
90 day period (including in such calculations all flights canceled
less than one week prior to the date of its scheduled operation, but
excluding flights not completed due to weather or air traffic
control);
(vii) By COPA immediately on notice if, unless agreed
otherwise by the Carriers, Continental shall have a system wide
completion factor (completed flights, regardless of time of
departure or arrival, divided by scheduled flights) of less than 95%
during any 90 day period (including in such calculations all flights
canceled less than one week prior to the date of its scheduled
operation, but excluding flights not completed due to weather or air
traffic control);
(viii) By either Carrier immediately on notice if the other
Carrier fails to maintain its membership in the Airline Clearing
House (ACH) or the International
18
Air Transport Association Clearing House for a period of ten (10)
consecutive days; and
(ix) By a Carrier on thirty (30) days' prior written notice if
it shall have duly terminated the Amended and Restated Services
Agreement pursuant to Section 6(b)(i) thereof as a result of an
unremedied breach of the terms and conditions of such agreement by
the other Carrier;
(x) By a Carrier on sixty (60) days' prior written notice if
the other Carrier materially breaches (or, in the case of
Continental's right to terminate, Corporacion de Inversiones Aereas,
S.A. materially breaches) the terms and/or conditions of the Amended
and Restated Shareholders Agreement or the Registration Rights
Agreement, each entered into on the date hereof, and fails to cure
such breach within such sixty (60)-day notice period; provided that
during such 60-day period, the Carriers shall consult in good faith
to ensure that each of the Carriers understands the nature of the
alleged breach and what steps are required to effect a cure;
(xi) By either Carrier immediately on notice if the Amended
and Restated Frequent Flyer Program Participation Agreement is
terminated and the Carriers do not enter into a new reciprocal
frequent flyer participation arrangement within three months after
such termination as contemplated by the Amended and Restated
Frequent Flyer Program Participation Agreement;
(xii) **Material Redacted**;
(xiii) **Material Redacted**;
(xiv) By either Carrier, with respect to any Affiliate of the
other Carrier, immediately on notice, if such Affiliate is no longer
an Affiliate of the other Carrier; and
(xv) By either Carrier on thirty (30) days' prior written
notice if the other Carrier rejects the Services Agreement and/or
Frequent Flyer Program Participation Agreement in a bankruptcy
proceeding.
(c) Tickets Issued Prior to Termination. With respect to tickets
issued but unused prior to termination of this Agreement:
(i) If this Agreement is terminated as provided herein by the
Marketing Carrier, the Marketing Carrier shall endorse all Marketing
Carrier tickets to the Operating Carrier. The Operating Carrier
shall accept all confirmed reservations for passengers traveling on
such tickets as if such reservations had been booked through the
Operating Carrier using ordinary interline procedures but
19
giving effect to the ticket pricing methodology as provided by
IATA's standard procedures.
(ii) If this Agreement is terminated as provided herein by the
Operating Carrier, the Marketing Carrier, at its sole discretion,
shall have the option to endorse Marketing Carrier tickets to the
Operating Carrier or any other carrier. The Marketing Carrier shall
also have the option to transfer confirmed reservations for
passengers traveling on such tickets to the Operating Carrier or any
other carrier.
(d) Force Majeure and Termination. Except with respect to the
performance of a Carrier's payment obligations under this Agreement, neither
Carrier shall be liable for delays or failure in its performance hereunder to
the extent that such delay or failure of performance (a) is caused by any act of
God, war, [terrorism], natural disaster, strike, lockout, labor dispute, work
stoppage, fire, serious accident, epidemic, quarantine restriction, act of
government, or any other cause, whether similar or dissimilar, beyond the
control of that Carrier, and (b) is not the result of that Carrier's lack of
reasonable diligence (an "Excusable Delay"). In the event an Excusable Delay
continues for sixty (60) days or longer, the non-delayed Carrier shall have the
right, at its option, to terminate this Agreement by giving the delayed Carrier
at least thirty (30) days prior written notice of such election to terminate.
(e) Duties upon termination. If this Agreement is terminated
pursuant to this Section D.3, the Carriers will cooperate with each other to
achieve an orderly termination and wind-down of the codeshare relationship so as
not to inconvenience customers or cause undue hardship to either of the
Carriers. No termination of this Agreement will release the parties from any
liability for breach of this Agreement or from any moneys or other duties owed
at the time of such termination.
(f) Termination for Change of Control. Notwithstanding any other
provision of this Agreement in the event of a Change of Control involving a
Carrier, the Carrier not involved in the Change of Control shall have the right
to terminate this Agreement on six (6) months' prior written notice without
liability or penalty to the Carrier involved in the Change of Control; provided,
however, the right of a Carrier to give notice to terminate with respect to a
Change of Control involving the other Carrier shall expire on the six month
anniversary of the later to occur of (i) the date the terminating Carrier
receives notice of such Change of Control from the other Carrier or (ii) the
date of the consummation of such Change of Control transaction. The following
definitions apply to the following terms used in this Section D.3(f):
"AIRLINE ASSETS" means those assets used, as of the date of
determination, in the relevant Person's operation as an air
carrier.
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"BENEFICIAL OWNERSHIP" has the meaning given such term in
Rules 13d-3 and 13d-5 under the Securities Exchange Act of
1934, as amended.
"CAPITAL STOCK" of any Person means any and all shares,
interests, rights to purchase, options, warrants,
participation or other equivalents of or interests in (however
designated) the equity of such Person, including any preferred
stock.
"CARRIER AFFECTED COMPANY" means as to the applicable Carrier
(a) such Carrier and its successor, (b) any Holding Company of
such Carrier or its successor, or (c) any Subsidiary of such
Carrier or its successor or of any Holding Company of such
Carrier or its successor, that in any such case owns, directly
or indirectly, all or substantially all of the Airline Assets
of such Carrier or its successor, such Holding Companies of
such Carrier and such Subsidiaries, taken as a whole.
"CHANGE OF CONTROL" shall mean, with respect to a Carrier, the
consummation of:
(1) a merger, reorganization, share exchange, consolidation,
tender or exchange offer, private purchase, business
combination, recapitalization or other transaction as a result
of which (A) a Competing Carrier or a Holding Company of a
Competing Carrier and a Carrier Affected Company are legally
combined, (B) a Competing Carrier, any of its Affiliates or
any combination thereof acquires, directly or indirectly,
Beneficial Ownership of 50% or more of the Capital Stock or
Voting Power of a Carrier Affected Company, or (C) a Carrier
Affected Company acquires, directly or indirectly, Beneficial
Ownership of 50% or more of the Capital Stock or Voting Power
of a Competing Carrier;
(2) the sale, transfer or other disposition of all or
substantially all of the Airline Assets of a Carrier (or its
successor) and its Subsidiaries on a consolidated basis
directly or indirectly to a Competing Carrier, any Affiliate
of a Competing Carrier or any combination thereof, whether in
a single transaction or a series of related transactions;
(3) the execution by a Carrier Affected Company of bona fide
definitive agreements, the consummation of the transactions
contemplated by which would result in a transaction described
in the immediately preceding clauses (1) or (2).
"COMPETING CARRIER" means an air carrier that competes
(internationally and/or domestically) on a significant and
material basis with the Carrier that is not involved in the
Change of Control.
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"HOLDING COMPANY" means, as applied to a Person, any other
Person of whom such Person is, directly or indirectly, a
Subsidiary.
"SUBSIDIARY" of any Person means any corporation, association,
partnership, joint venture, limited liability company or other
business entity of which more than 40% of the total Voting
Power thereof or the Capital Stock thereof is at the time
owned or controlled, directly or indirectly, by (1) such
person, (2) such person and one or more Subsidiaries of such
Person, or (3) one or more Subsidiaries of such Person.
"VOTING POWER" means, as of the date of determination, the
voting power in the general election of directors, managers or
trustees, as applicable.
4. Indemnification and Insurance.
(a) Indemnification.
(i) Except as otherwise provided herein, each Carrier (the
"Indemnifying Carrier") shall indemnify and hold harmless the other
Carrier and its directors, officers, employees, agents, consultants
and contractors from all liabilities, damages, losses, claims,
suits, judgments, costs, and expenses, including reasonable
attorneys' fees, directly or indirectly incurred by the other
Carrier as the result of any claims that arise out of or in
connection with the breach of this Agreement by the Indemnifying
Carrier or performance or failure of performance of the Indemnifying
Carriers' obligations under this Agreement, including, but not
limited to, the operation of the aircraft by the Indemnifying
Carrier. In addition, each Indemnifying Carrier shall indemnify and
hold harmless the other Carrier and its directors, officers,
employees, agents, consultants and contractors from all liabilities,
damages, losses, claims, suits, judgments, costs and expenses,
including reasonable attorneys' fees, directly or indirectly
incurred by the other Carrier as the result of any claims by third
parties that arise out of or in connection with any products or
services received from or supplied by the Indemnifying Carrier in
connection with this Agreement, except with respect to the products
or services provided pursuant to Section C hereof and the Services
Agreement (which will be subject to indemnification obligations as
separately agreed). The indemnification provision under this
paragraph (i) shall be valid and enforceable as of the
Implementation Date whether or not Antitrust Immunity or other
regulatory approvals are obtained.
(ii) The indemnified Carrier has no right under this Section
D.4 to be indemnified for claims that arise out of such Carrier's
gross negligence or willful misconduct.
(iii) In the case of each indemnified Carrier:
22
A. it shall promptly notify the Indemnifying Carrier in
writing of any claim for indemnification hereunder;
B. it shall cede to the Indemnifying Carrier, if the
latter so requests, sole control of the defense and any
related settlement negotiations of any matter covered by
indemnification hereunder (provided that any settlement shall
contain a complete and unconditional release of all claims
against the indemnified Carrier);
C. it shall provide to the Indemnifying Carrier, at the
latter's expense, all reasonable information and assistance
for such defense or settlement; and
D. the Indemnifying Carrier shall not be liable for any
settlement of any such claim or suit entered into by the
indemnified Carrier without the former's consent (which
consent shall not be unreasonably withheld).
(b) Insurance Coverage.
(i) Each Carrier shall, at all times during the term of this
Agreement, maintain in full force and effect policies of
insurance as follows:
A. Comprehensive Airline Liability Insurance, including
Aircraft Third Party, Passenger, including Passengers'
Baggage and Personal Effects, Cargo and Mail Legal
Liability for a Combined Single Limit (CSL) of not less
than **Material Redacted** for B737 aircraft; provided
that if the number of U.S. origin passengers increases
in a material manner, the carriers will reevaluate the
coverage levels. In respect of Personal Injury (per
clause AVN 60 or its equivalent) the maximum limit is
**Material Redacted** per offense and in the aggregate.
B. Workmen's Compensation or Government Social Insurance
Insurance Per Accident
(Company Employee) Statutory
C. Employers' Liability (**Material Redacted** combined
single limit)
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(ii) Subject to Section D.4(b)(i), the Operating Carrier
shall, as applicable, cause the policies of insurance described in
such Section D.4(b)(i) with respect to flights operated as Shared
Code Segments by it to be duly and properly endorsed by that
Carrier's insurance underwriters as follows:
A. to provide that the underwriters shall waive any and
all subrogation rights against the other Carrier, its
directors, officers, agents, employees and other
authorized representatives, except for gross negligence
or willful misconduct;
B. to provide that the other Carrier, its directors,
officers, agents, employees and other authorized
representatives shall be endorsed as additional insured
parties thereunder, except for gross negligence or
willful misconduct of any of the additional insureds;
C. to provide that said insurance shall be primary to
and without right of contribution from any other
insurance which may be available to the additional
insureds;
D. to include a breach of warranty provision in favor of
the additional insureds;
E. to accept and insure the Operating Carrier's hold
harmless and indemnity undertaking under Section D.4(a),
but only to the extent of the coverage afforded by the
policy or policies; and
F. to provide that said policy or policies or any part
or parts thereof shall not be canceled, terminated or
materially altered, changed or amended until 30 days
(but seven days or such lesser period as may be
available in respect of war and allied periods) after
written notice thereof shall have been sent to the other
Carrier.
iii) From time to time, upon request by either Carrier, the
other Carrier shall furnish to the requesting Carrier evidence
reasonably satisfactory to the requesting Carrier of the aforesaid
insurance coverage and endorsements, including certificates
certifying that the aforesaid insurance and endorsements are in full
force and effect.
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iv) In the event either Carrier fails to maintain in full
force and effect any of the insurance and endorsements required
hereby, the other Carrier 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 the first
Carrier to the other Carrier upon demand b the other Carrier. The
procurement of such insurance or any part thereof by the other
Carrier shall not discharge or excuse the first Carrier's obligation
to comply with the provisions of Sections D.4(b)(i) and (ii).
v) Notwithstanding the above provisions, it shall not be a
breach of the Agreement to maintain the insurance described in
subsection (i) above to the extent the failure to maintain such
insurance is caused by a change or condition generally affecting the
availability of insurance in the aviation industry in a material
manner in the countries or regions in which such Carrier operates.
(c) Survival of Rights and Obligations. The rights and obligations
of this Section D.4 shall survive the expiration or termination of this
Agreement.
5. Trademarks.
(a) COPA shall have nonexclusive, nontransferable, revocable license
to use the Continental Service Marks (as defined below) in its marketing
programs for the purpose of promoting Shared Code Segments. All advertising
programs using any Continental Service Marks shall be subject to Continental's
prior approval. In general, COPA's use of the Continental Service Marks shall do
no more than identify the codeshare relationship between Continental and COPA,
and advertise that schedules are coordinated to provide convenient connections.
Any marketing program, advertising brochures, schedules, signs or information
disseminated to the public or intended to be disseminated to the pubic
("Advertising Material") shall reflect that Continental and COPA are operated
separately and shall comply with any DOT policy on airline designator
codesharing. COPA is specifically prohibited from using any of the Continental
Service Marks and agrees that it shall not do anything that would infringe,
abridge, and adversely affect, impair or reduce the value or validity of the
Continental Service Marks. In no event shall COPA allow the use of any
Continental Service Marks in marketing, selling, promoting or otherwise
identifying or referencing any flight that is not a Shared Code Segment.
(b) Continental shall have nonexclusive, nontransferable, revocable
license to use the COPA Service Marks (as defined below) in its marketing
programs for the purpose of promoting Shared Code Segments. All advertising
programs using any COPA Service Marks shall be subject to COPA's prior approval.
In general, Continental's use of the COPA Service Marks shall do no more than
identify the codeshare relationship between Continental and COPA, and advertise
that schedules are coordinated to provide convenient connections. Any
Advertising Material shall reflect hat Continental and COPA are operated
separately and shall comply with any DOT policy on airlines designator
codesharing. Continental is specifically prohibited from using any of the COPA
Service Marks on its aircraft or other equipment, on its stationery, or
elsewhere unless Continental has received prior specific authorization in
writing from COPA.
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Continental hereby acknowledges COPA's exclusive ownership of the COPA Service
Marks and agrees that it shall not do anything that would infringe, abridge or
adversely affect, impair or reduce the value or validity of the COPA Service
Marks. In no event shall Continental allow the use of any COPA Service Marks in
marketing, selling, promoting or otherwise identifying or referencing any flight
that is not a Shared Code Segment.
(c) As used herein the term "Service Marks" shall include, without
limitation: (i) with respect to Continental: "Continental", the "CO" and "CO*"
designator codes, "Business First" and "OnePass", and (ii) with respect to COPA:
"COPA" and the "CM" and "CM*" designator codes.
6. Confidential Information. Neither COPA nor Continental shall disclose
to the other Carrier or be required to disclose by the other Carrier any
information relating to its scheduling (except as provided in Section B.1 and
..2), pricing (except as provided in Section B.5), inventory control or flight
profitability. Neither COPA nor Continental shall disclose the terms of this
Agreement or any proprietary information with respect to the other obtained as a
result of this Agreement, either during the term hereof or thereafter; provided,
however, that such disclosure may be made if required by applicable law,
regulation or stock exchange rule, or by any order of a court or administrative
agency, and then only upon ten days' written notice by the disclosing Carrier to
the other Carrier. The Carriers recognize that, in the course of the performance
of each of the provisions hereof, each Carrier may be given and may have access
to confidential and proprietary information of the other Carrier. The Carriers
recognize that, in the course of the performance of each of the provisions
hereof, each Carrier may be given and may have access to confidential and
proprietary information of the other Carrier, including proposed schedule
changes, promotional programs and other operating and competitive information
("Confidential Information"). Each Carrier shall preserve, and shall ensure that
each of its officers, agents, consultants and employees who receive Confidential
Information preserve, the confidentiality of the other Carrier's Confidential
Information and shall not disclose Confidential Information to a third Carrier,
without prior written consent from the other Carrier or use of Confidential
Information to a third Carrier, without prior written consent from the other
Carrier or use Confidential Information except as contemplated by this
Agreement. This Section D.6 shall survive two years after the termination or
expiration of this Agreement.
7. Management and Initial Dispute Resolution. This Agreement shall be
governed and managed by a steering committee composed of senior officers of each
Carrier (the "Committee"). Said Committee shall be responsible for identifying
profit maximizing activities to be undertaken by the Carriers in furtherance of
the codeshare relationship. In addition, the Committee shall attempt to resolve
all disputes that occur between the Carriers that arise under this Agreement.
Disputes that cannot be resolved by the Committee shall be referred to the Chief
Executive Officers of the two Carriers. If the Chief Executive Officers of the
two Carriers cannot resolve the dispute, it shall be finally settled by
arbitration in accordance with Section D.8.
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8. Arbitration
(a) Any controversy or claim arising out of or relating to this
Agreement, or the breach thereof, shall be settled by arbitration
administered by the Conciliation and Arbitration Center (the "CAC") an
affiliate of the Panama Chamber of Commerce in accordance with the
International Arbitration Rules of the International Chamber of Commerce
Court of International Arbitration. Judgment on the awarded rendered by
the arbitrator may be entered in any court having jurisdiction thereof.
(b) The number of arbitrators shall be three, one of whom shall be
appointed by each of the Carriers and the third of whom shall be selected
by mutual agreement, if possible, within 30 days of the selection of the
second arbitrator and, if no agreement on the third arbitrator is
possible, by the CAC; provided that unless otherwise agreed the CAC may
only choose an arbitrator that is from a country other than Panama or the
United States. The place of arbitration shall be Miami, Florida. The
language of the arbitration shall be English, but documents or testimony
may be submitted in any other language if a translation is provided.
(c) The arbitrators shall have no authority to award punitive
damages or any other damages not measured by the prevailing Carrier's
actual damages, and may not, in any event, make any ruling, finding or
award that does not conform to the terms of this Agreement.
(d) Either Carrier may make an application to the arbitrators
seeking injunctive relief to maintain the status quo until such time as
the arbitration award is rendered or the controversy is otherwise
resolved. Either Carrier may apply to any court having jurisdiction hereof
and seek injunctive relief in order to maintain the status quo until such
time as the arbitration award is rendered or the controversy is otherwise
resolved.
9. Certain Definitions:
(a) Commercially Reasonable Efforts. As used in this Agreement, the term
"commercially reasonable efforts" shall not require a Carrier to make any cash
outlays, to accept adverse contracts terms, to limits its operations, to impair
any right with respect to the use of its assets, or to otherwise adversely
affect the Carrier.
(b) Affiliate. As used in this Agreement, the term "Affiliate" means, as applied
to a Person, any other Person directly or indirectly controlling, controlled by,
or under common control with, that Person. For purposes of this definition
"control" (including, with correlative meanings, the terms "controlling",
"controlled by" and "under common control with"), as applied to any Person,
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of that Person, whether through the
ownership of voting securities, by contract or otherwise.
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(c) Person. As used in this Agreement, the term "Person" means an individual,
partnership, corporation, business trust, joint stock company, limited liability
company, unincorporated association, joint venture or other entity of whatever
nature.
10. Alliance Development. COPA and Continental will explore areas of
cooperation that will produce revenue and cost synergies for the Carriers and to
the extent reasonable will implement such cooperation. Neither Carrier
guarantees that any such cooperation is possible nor that any such synergies
will be obtained. In order to facilitate the development of their commercial
agreement to the maximum extent possible, the Carriers agree, subject to the
proviso at the end of this Section:
a) **Material Redacted**
b) **Material Redacted**
c) **Material Redacted**
d) Continental shall use its commercially reasonable efforts to cause
COPA, at COPA's election, to be included as a commercial partner
(e.g. an airline with whom Continental has a Commercial Agreement)
with each of Continental's commercial partners and to be invited to
join the SkyTeam global alliance or any other branded global
alliance group which Continental is a member.
e) **Material Redacted**
f) **Material Redacted**
g) **Material Redacted**
h) **Material Redacted**
Provided, however, nothing in this Section shall preclude COPA and
Continental from fully performing their obligations, participating in,
maintaining and renewing the code-share or alliance agreements that either
of them may have entered into prior to the date hereof or from complying
with their obligations pursuant to SkyTeam membership. Provided, further,
nothing in this Section shall preclude either Carrier from performing
obligations arising under, participating in, maintaining or renewing any
Commercial Agreement to which such Carrier may become a party or to which
it may otherwise succeed after the date hereof by virtue of any merger,
reorganization, consolidation, business combination or similar transaction
involving such Carrier.
11. Governing Law. This Agreement shall be construed and enforced in
accordance with, and governed by, the laws of the State of New York.
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12. Taxes. Each Carrier shall be responsible for paying any and all taxes
assessed on its income or revenue derived pursuant to this Agreement and shall
hold harmless and indemnify the other Carrier from all and all claims based on
such assessments.
13. Entire Agreement, Waivers and Amendments. This Agreement, together
with the Services Agreement and the Amended and Restated Frequent Flyer Program
Participation Agreement to the extent such agreements concern the matters
covered in this Agreement, constitutes the entire understanding of the carriers
with respect to the subject matter hereof superseding all prior discussions and
agreements, written and oral. This Agreement may not be amended, nor may any of
its provision be waived, except by writing signed by both carriers. No delay on
the part of either shall any waiver operate as a continuing waiver of any right,
power of privilege.
14. Notices. All notices given hereunder shall be in writing delivered by
hand, certified mail, telex, or telecopy to the carriers at the following
addresses:
If to Continental:
Continental Airlines, Inc.
0000 Xxxxx Xxxxxx Telecopier No.: (000) 000-0000
Xxxxxxx, Xxxxx 00000
Attention: Senior Vice President- Asia/Pacific and Corporate Development
With copy to:
Continental Airlines, Inc.
0000 Xxxxx Xxxxxx Telecopier No.: (000) 000-0000
Xxxxxxx, Xxxxx 00000
Attention: Senior Vice President
And General Counsel
If COPA:
Compania Panamena de Aviacion, S.A.
Ave. Xxxxx Xxxxxxxxx y Calle 39
Apdo. 1572
Xxxxxx 0, Xxxxxx
Attention: Xxxxx Xxxxxxxx
Facsimile No.: 000-000-0000
With copy to:
Xxxxxxx, Xxxxx x Xxxxx
Xxxx. Xxxxxx
Xxxxxxxx 0000
Panama 5, Panama
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Attention: Xxxxx X. Xxxxx C.
Facsimile No.: 000-000-0000
15. Successors and Assigns. Neither carrier may assign its rights or
delegate its duties under this Agreement and any such purported assignment or
delegation shall be void. This Agreement shall be binding on the lawful
successors of each carrier.
16. Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
17. Headings. The headings in this Agreement are for convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.
18. Counterparts. This Agreement may be executed in counterparts, all of
which taken together shall constitute one agreement.
19. Equal Opportunity. To the extent applicable, EEO clauses contained at
41 C.F.R. Sections 60-1.4,60-250.4 and 60-741.4 are herby incorporated by
reference. Each Carrier shall comply with all equal opportunity laws and
regulations that apply to or must be satisfied by that Carrier as a result of
this Agreement.
20. Nondiscrimination on the Basis of Disability. COPA shall make all
reasonable efforts not to discriminate against Continental's customers on the
basis of disability in activities performed on behalf of Continental in
connection with Shared Code Segments, consistent with 14 CFR Part 382,
Nondiscrimination on the Basis of Disability in Air Travel. In connection
therewith, COPA shall make all reasonable efforts to comply with directives
issued by Continental's complaints resolution officials (CROs).
21. Privacy Obligations. If a Carrier ("Accessing Party") processes and/or
has access to personally identifiable information obtained by the other Carrier
("Collecting Party") from the data subject ("Personal Data") that is provided to
it by the Collecting Party, it agrees that the Collecting Party owns all such
Personal Data provided to it pursuant to this Agreement. The Accessing Party
will at all times comply with all applicable laws and regulations, including but
not limited to data privacy laws, in its use of Personal Data provided by the
Collecting Party that will be processed under this Agreement that relates to, or
is about, an identified or identifiable person. Without limiting the foregoing,
the Accessing Party represents and warrants that it has appropriate security
measures in place to protect any Personal Data provided by the Collecting Party
pursuant to this Agreement. The Accessing Party will indemnify, defend and
protect the Collecting Party from any claims arising out of the Accessing
Party's failure to comply with the foregoing.
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IN WITNESS WHEREOF, the parties hereto, being duly authorized, have caused this
Agreement to be executed as of the date written below.
CONTINENTAL AIRLINES, INC.
By: _________________________________
Name: _________________________________
Title: _________________________________
COMPANIA PANAMENA DE AVIACION,S.A.
By: _________________________________
Name: _________________________________
Title: _________________________________
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Schedule B.1(a)
SHARED CODE SEGMENTS
Shared Code Segments shall be operated on the following routes:
Subject to the terms and conditions of the Agreement, Shared Code Segments will
be operated on the following routes:
CO* Flights
Flights operated by COPA between the Republic of Panama or the Republic of
Colombia and cities located in the United States (except New York/Newark,
Houston or Cleveland) and, to the extent legally permissible, (i) between cities
within the Republic of Panama or the Republic of Colombia and (ii) between the
Republic of Panama or the Republic of Colombia and cities located beyond the
Republic of Panama or the Republic of Colombia will operate as CO* Flights.
CM*/P5* Flights
Flights operated by Continental between the United States and cities
located in the Republic of Panama or the Republic of Colombia, between the
Republic of Panama and the Republic of Colombia and, to the extent mutually
agreed and legally permissible, (i) between cities within the United States and
(ii) between the United States and cities located beyond the United States will
operate as CM* or P5* Flights.