United Express® Agreement

 

Exhibit 10.76

CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE SYMBOL “[***]” HAS BEEN INSERTED IN PLACE OF THE PORTIONS SO OMITTED.

United Contract:  178101

November 1, 2008

United Express® Agreement

between

United Air Lines, Inc.

and

Colgan Air, Inc.

 

 

UNITED EXPRESS ^® AGREEMENT

WITNESSETH:

 

 

 

 

 

 

 

 

 

 

 

 

II.   SCOPE, TERM, AND CONDITIONS

 

The scope of this Agreement pertains to the type and number of Contractor’s aircraft set forth in Appendix B.  The covenants and other agreements contained herein shall only pertain to Contractor’s use of the aircraft set forth in Appendix B and Contractor’s provision of United Express Services (other than the provisions of Article VI which shall apply to all of Contractor’s operations).

 

 

This Agreement will become effective at 12:01 a.m., Chicago, Illinois time, the Effective Date and shall terminate on December 31, 2011, unless it is terminated at an earlier date pursuant to one or more of the provisions of this Agreement.

 

1.   Support Services.  United and Contractor will provide Support Services and facilities to the extent and in the manner set forth in the subsequent provisions of this Article III.  All such Support Services set forth in this Article III will be furnished only with respect to Contractor’s United Express Services.  United, at its expense, will retain a Ground Handling Provider in the cities specified on Appendix B.  United will cause the Ground Handling Provider to provide Ground Handling Services to Contractor in that city to the extent and in the manner set forth in the subsequent provisions of this Article III.  Appendix C identifies the certain minimum Ground Handling Services to be provided by each Ground Handling Provider.

In addition to other services to be made available to or provided to Contractor pursuant to this Agreement and the applicable Ground Handling Agreement for each city, United agrees that it or its designees will provide and Contractor agrees to use the following services and facilities for Contractor’s United Express Services, be they provided by United or its designee:

 

1.   Use of the United Designator Code.   All scheduled air transportation provided by Contractor as a part of Contractor’s United Express Services will be displayed in Apollo Services, the Official Airline Guide (“OAG”) and all other computerized reservations systems, using the appropriate United designator code, “UA” or “UA*,” and a flight number within a range of flight numbers assigned by United.

 

2.   Use of Apollo Services.   In selling and providing Contractor’s United Express Services, Contractor and the Ground Handling Provider will only use Apollo Services, including United’s automated check-in, United’s ticketing (including United’s electronic ticketing service, E-TicketSM) and boarding passes, advance seat reservation system and United’s automated baggage tag printing and baggage tracing systems.

 

3.   Participating in United’s Mileage Plus Ò Program.   At United’s discretion, all passengers traveling on a flight segment included in Contractor’s United Express Services, whether or not in conjunction with a United flight segment, will be awarded mileage credits for United’s Mileage Plus Program.  Contractor shall not participate in the frequent traveler program of any other carrier in connection with Contractor’s United Express Services, unless otherwise mutually agreed between United and Contractor in any Mileage Plus Participation Agreement or under another writing between the parties.

 

4.   Denied Boarding.   Contractor will provide United, upon specific written request by United, station information regarding any weight restrictions and aircraft limitations that could result in denied boardings.  Such requests will be made by United’s Revenue Management Department (WHQIM) and written responses from Contractor shall be provided within two (2) weeks of such request.  If Contractor fails to provide the information within two weeks of a request by United, Contractor will absorb all denied boarding expenses incurred as a result of Contractor’s failure timely to provide weight restrictions and aircraft limitations.

 

5.   Revenues and Passenger Data.   United will provide Contractor on an as-needed basis passenger and flight related data as is necessary for Contractor to perform its obligations hereunder, including revenue accounting and other financial and operational obligations.

1.   Telephone and Data Lines.   United, at its expense, will provide and maintain or arrange for the provision of reservations telephone lines connecting Contractor’s headquarters with United’s Reservations Centers.  United, at its expense, will establish, operate and maintain, or arrange for the provision of, the data circuits linking the United-approved data processing equipment at the airport facilities of Contractor and the Ground Handling Provider and other selected locations with Apollo Services. United will determine, at its sole discretion, the necessity and feasibility of installing all such communications equipment and backup lines (including ticket printers, CRTs, other monitors, and computers, as applicable), so long as the quantity and quality of such equipment is determined under the same policies, adjusted by passenger volumes or facility requirements, that are applied by United in determining the quantity and quality of communications equipment at United’s airport facilities.

 

2.   Protection of Circuits.   Contractor will take all necessary precautions to protect the data circuits provided for Contractor’s use pursuant to this Agreement by United or its designee.

 

 

1.   Reservations Functions.   United agrees to provide, at its expense, the following reservations functions for Contractor’s United Express Services:

 

a.   Answering reservations telephones, providing information regarding schedules and fares, making bookings and providing other services normally associated with airline reservations services in accordance with United’s established procedures.

 

b.   Providing personnel so that telephone calls are answered at a service level determined by United.

 

c.   Answering all calls terminating on specified telephone lines as United or United Express, at United’s option.

 

d.   To the extent practicable, re-accommodating and notifying passengers of confirmation on United, Contractor and other airlines and clearance from wait-list.

 

e.   Reviewing and processing inbound prepaid ticket advices.

 

f.   Providing reservations services to the hearing impaired via a special telephone number during normal business hours.

 

2.   Apollo Services Activities.   Contractor agrees to use, and United will cause the Ground Handling Provider to use, Apollo Services for the following activities for Contractor’s United Express Services, which are to be provided at no charge to Contractor and the Ground Handling Provider by United:

a.   Establishment, maintenance, display and change of passenger name records (PNRs).

 

b.   Confirmation of passengers against seat inventory on Contractor’s United Express Services and United’s scheduled flights and on other airlines where flight availability is maintained in Apollo Services.

 

c.   Maintenance of seat availability for Contractor’s United Express Services scheduled flights.

 

d.   Transmission of availability status messages (AVS) for Contractor’s United Express Services scheduled flights to other airlines with which United has an agreement in accordance with Standard Industry Passenger Procedures (SIPP).

 

e.   Process inbound reservations messages received from ARINC addressed to Contractor.

 

f.   Routing of all inbound messages received from ARINC, other than as stated in Article III.D.2.e above, to a computer message queue.

 

3.   CRS Fees.   United shall be directly liable to pay, and shall pay, all Computer Reservations System fees (“CRS Fees”) as a result of passengers booked on flights in Contractor’s United Express Services.

 

4.   Travel Agent Commissions.   United will be responsible for all travel agent commissions charged in connection with the sale of tickets or other services on Contractor’s United Express Services.

1.   No Flight Dispatch Duty.   Contractor will be solely responsible for, and United will have no obligations or duties with respect to, the dispatch of Contractor’s flights.  For the purposes of this Article III.E.1 , the term “dispatch” will include, but will not be limited to, all planning of aircraft itineraries and routings, fueling and flight release.

 

2.   Compliance with Statutes.   Contractor agrees that all air transportation services performed by it pursuant to this Agreement or otherwise will be conducted in full compliance with all applicable statutes, order, rules and regulations, whether now in effect or hereafter promulgated, of all governmental agencies having jurisdiction over Contractor’s operations, including, but not limited to, the Federal Aviation Administration (“FAA”) and the Department of Transportation (“DOT”).  Contractor’s compliance with such governmental statues, orders, rules and regulations will be the sole and exclusive obligation of Contractor and United will have no obligation, responsibility or liability, whether direct or indirect, with respect to such matters except as otherwise expressly provided herein.  Additionally, Contractor will comply during the term of the Agreement with the United/United Express Safety Standards, as described on Appendix E.

 

3.   Weather Information Service.   From time to time and upon the request of Contractor or its flight crews, United may furnish Contractor’s flight crews with such U.S. Weather Bureau information or data as may be available to United; provided that (i) in furnishing any such weather information or data to Contractor, neither United nor its employees or agents will be responsible or liable for the accuracy thereof and, (ii) any and all costs or expenses associated with such weather information or data will be paid by Contractor.

 

4.   Diversions.   The following rules shall apply when any scheduled flight operated by Contractor in Contractor’s United Express Services is diverted to a city other than the scheduled destination city.

 

a.   Generally.   All operating statistics (departures, passengers, etc.) will be counted to determine fees payable by Contractor to United.

 

b.   Busing.   The costs of busing passengers to the original destination city will be borne by Contractor.

 

c.   Repositioning Costs.   United will not pay any costs associated with any re-positioning flight required as a result of the diversion of any flight to a city.

 

5.   Ground Delay Program.   Contractor will participate in United’s ground delay program, which stipulates that United may request Contractor to cancel flights to free ATC slots at a hub when the FAA or United’s Station Control Center has initiated a Ground Delay Program (“GDP”).   For the purposes of Contractor’s On Time Performance grade, if for any month, Contractor’s ratio of GDP-caused delays versus scheduled departures is greater than the average United Express ratio of GDP-caused delays versus scheduled departures, then Contractor’s On Time Performance grade will be set equal to goal.

 

 

1.   General.   Contractor will be responsible for local pricing for the markets defined in Appendix B.  United will be responsible for pricing for all connecting origins and destinations on flights operated by Contractor..  United shall comply with applicable governmental regulations pertaining to public disclosure of fares, rates and rules tariffs.

a.   United shall comply with applicable governmental regulations pertaining to public disclosure of fares, rates and rules tariffs and shall pay for any fines or civil penalties incurred by Contractor as a result of violations by United thereof, and for the cost of defense of such claims of violations including the cost of defending or negotiating the terms of a consent order or decree.  All passenger fare tariffs published for Contractor’s United Express Services shall be included as part of United’s tariffs.

 

b.   Contractor shall notify the Airline Tariff Publishing Company or any successor company performing the same or equivalent services (“ATPCO”) that United is authorized to supply, modify or withdraw such rates with ATPCO.  United may file changes to such fares from time to time with ATPCO as UA fares.

 

3.   Timetables.   United will reflect Contractor’s United Express Services in computerized reservations systems and United’s internal reservations system as UA flights, and Contractor’s United Express Services flight connections to United will be listed as UA connections.  United will provide information such that references in computerized reservations systems and United’s internal reservations system to Contractor’s United Express Services will also contain notations indicating that such services are performed by Contractor as an independent contractor under the appropriate United Marks.  A similar notation will be made in the OAG or any successor publication commonly used by the airline industry for the dissemination of schedule information.  Such notations shall comply with all applicable regulations of DOT.

 

1.   Travel Certificate Program.   United will allow Contractor to accept, and Contractor agrees to accept, United/United Express Amenities, Promotional Discount(s) and/or Free Travel Certificates on Contractor’s flight segments, whether or not in conjunction with a United flight segment.

 

2.   Right to Advertise Using Marks.   To the extent Contractor is licensed to use the Marks, Contractor may in its capacity as a United Express Carrier and at its sole expense use the marks to advertise Contractor’s United Express Services.  However, any and all such advertisements using one or more of the United Marks will identify United as the owner of those United Marks (including in any state company name registrations required of Contractor), and to the extent that any Mark is registered, will so specify.  Notwithstanding the above, no advertisement, solicitation, document or other material using any United Mark will be published or otherwise promulgated without United’s prior inspection and written approval.  No advertising that relates in any way to United, United Express or Contractor’s United Express Services will be placed by Contractor with an outside advertising agency unless United has given its prior consent regarding copy, layout and the specific media plan.  In addition, where United has agreed to share the costs of any such advertising, Contractor will obtain the prior written consent of United regarding the funds to be expended for such advertising.

 

3.   Prior Approval of United.   Contractor agrees that it will not use (or attempt to register) any United trade name or service mark, including, but not limited to, the names “UNITED AIR LINES, INC.,” “UNITED AIRLINES,” or “UNITED,” or United’s logo in any advertising, or other document or material without first obtaining United’s prior written approval of each such use.

 

 

1.   Generally.   Contractor and United shall determine information technology resources necessary to perform functions required by this agreement, and the parties agree to maintain appropriate levels of confidentiality and care as detailed in this article of all related technology and information.

 

2.   Use and Protection.   Contractor agrees to comply with and abide by all terms and restrictions imposed by United on the use of Apollo Services and associated Automation Equipment.  Automation equipment includes the technology and information used to process reservations, tickets, and revenue. Contractor agrees that all instructions, procedures and manuals provided by United in connection with Contractor’s use of Apollo Services and Automation Equipment (“Automation Information”) are and will remain the property of United.  Contractor acknowledges that Apollo Services contains software which is confidential and proprietary information of United or its affiliates (such as Galileo International) or any successor thereto.  Contractor further agrees that it will not (or cause any third party to) duplicate, copy or otherwise reproduce any such software or Automation Information or furnish or disclose any such software or Automation Information to any other party or to Contractor’s employees other than such employees who have a need to know and who are aware of and understand the confidential and proprietary nature of the software and Automation Information.

a.   In the event that Contractor uses Apollo Services, Contractor agrees to maintain an effective interconnection between Apollo Services and the Automation Equipment and to prevent misuse thereof, and that it will use and operate Apollo Services and the Automation Equipment (a) in strict accordance with operating instructions provided by United or its affiliates in the Customer Services Policies and Procedures, United’s Computer Security Regulations (Series 5-18), and any other related United or affiliate guidelines, and (b) solely for the performance of the specific business functions designated by United.  Any undesignated business use and all non-business uses are strictly prohibited.  Prohibited uses include, but are not limited to, personal messages, servicing subscribers, travel agencies, or any other third party, training any other party or any other use designated as prohibited in the Apollo Services Manual.  Contractor will maintain a list of all employees and agents who have access to Apollo Services and their assigned file numbers and passwords.  United may at any time deny access to Apollo Services to any employee of Contractor if such employee is found by United to have abused Apollo Services or the Automation Equipment.  Contractor will take all precautions necessary to prevent unauthorized operation or use of Apollo Services and the Automation Equipment.

 

b.   Contractor will not alter or change the Apollo Services display as provided by United or its affiliate without the written consent of United. Contractor may not provide Apollo Services or its database to any other person or entity without the written consent of United.

 

c.   Except as expressly permitted in this Agreement or other written agreement with United, Contractor will not cause any Apollo Services (including, but not limited to, its software, data bases, intellectual property, and customer information) to be used (as a basis for any software development or otherwise), commercially exploited, copied, redistributed, retransmitted, published, sold, rented, leased, marketed, sublicensed, pledged, assigned, disposed of, encumbered, transferred, or otherwise altered, modified or enhanced, without the express written permission of United.

 

d.   Contractor will not engage in any speculative booking or reservation of space for any airline, hotel, rental car company, or any other vendor’s service or product available through Apollo Services.

 

4.   Maintenance, Repair and Modification.

 

a.   United will provide or cause to be provided to Contractor repair and maintenance services required for the Automation Equipment at United’s expense.  To maintain an effective interconnection between the Automation Equipment (including ticket printers, CRTs, other monitors, computers and other passenger related automation equipment) and Apollo Services and to preserve the functional integrity of the Automation Equipment, neither Contractor nor any third party, other than a third party designated by United, will perform or attempt to perform maintenance, repair work, alterations or modifications, of any nature whatsoever, to the Automation Equipment.  Contractor will provide free positive space travel on Contractor’s flights for United’s Computer Terminal Technicians or replacements when such travel is for the purpose of repairing Apollo Services or any Automation Equipment.

 

b.   Contractor will reimburse United for the costs of any such repairs or maintenance attributable to Contractor’s gross negligence.

 

c.   United or its designee will have the right to enter upon any airport terminal facility where Contractor provides Contractor’s United Express Services pursuant to this Agreement during Contractor’s business hours for the purpose of monitoring Contractor’s operation of the Automation Equipment and Apollo Services, inspecting the Automation Equipment, performing such repairs or maintenance as may be necessary or removing the Automation Equipment; provided, however, that United will not during the course of such monitoring, inspection, repair, or removal unreasonably interfere with Contractor’s business.

 

5.   Downtime.   United will notify Contractor of any scheduled or pre-announced downtimes of Apollo Services.

 

6.   No Warranty; Release.

 

a.   UNITED MAKES NO WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE AUTOMATION EQUIPMENT OR APOLLO SERVICES.

 

b.   CONTRACTOR HEREBY WAIVES AND RELEASES UNITED AND ITS AFFILIATES, AND THEIR SUCCESSORS FROM ANY AND ALL OTHER OBLIGATIONS AND LIABILITIES AND ALL RIGHTS, CLAIMS AND REMEDIES OF CONTRACTOR AGAINST UNITED OR ITS AFFILIATES, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, DUE TO ANY DEFECTS, ERRORS (INCLUDING, WITHOUT LIMITATION, ANY ERRORS IN RESERVATIONS AVAILABILITY RECORDS), MALFUNCTIONS OR INTERRUPTIONS OF SERVICE TO APOLLO SERVICES OR THE AUTOMATION EQUIPMENT, INCLUDING ANY LIABILITY, OBLIGATION, RIGHT, CLAIM OR REMEDY IN TORT, AND INCLUDING ANY LIABILITY, OBLIGATION, RIGHT, CLAIM OR REMEDY FOR LOSS OF REVENUE OR PROFIT OR ANY OTHER DIRECT, INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES.

7.   Ownership and Liens.   It is understood and agreed that: (i) all Automation Equipment will remain the sole property of United; (ii) Contractor will not remove any identifying marks from any Automation Equipment; (iii) Contractor will not subject the Automation Equipment to any lien or encumbrance; and (iv) Contractor will return the Automation Equipment to United immediately upon the termination of this Agreement.

Contractor will furnish United with all information in Contractor’s possession or that can be reasonably produced by Contractor that United may require to carry out the services and functions contemplated by this Article III.

1.   Aircraft Types.   Unless otherwise agreed by United, Contractor will provide Contractor’s United Express Services described in this Article IV with Saab 340B turboprop aircraft.  In accordance with the terms and conditions of this Agreement, for each period during the term of this Agreement, Contractor is authorized to operate the number of aircraft of each such type set forth on Appendix B with respect to such period.

a.   The aircraft utilized by Contractor pursuant to this Article IV.A will bear those United Marks which are expressly designated by United, whether included on Appendix A or otherwise established by United.  Technical specifications covering aircraft colors, schemes, United Marks and other elements of exterior and interior aircraft decor will be provided to Contractor by United.  Contractor will have all aircraft used to provide Contractor’s United Express Services, other than those aircraft designated as spare aircraft, painted and decorated with the exterior and interior color decors and patterns specified by United.  In accordance with the technical specifications referenced in this Article IV.A.2 Contractor will be responsible for maintaining all of its aircraft.

 

b.   In addition to the use of the United Marks on its aircraft, Contractor will use and display a suitable sign or insignia on the exterior of its aircraft that identifies Contractor as the operator of the services being provided pursuant to this Agreement. The use and display of such sign or insignia will be subject to the prior written approval of United as to its nature, size and location on Contractor’s aircraft.

 

3.   Spare Aircraft.   Contractor will arrange for and make available for its use the number of spare Saab 340B aircraft as are specified on Appendix B with respect to such period.  Spare aircraft will be maintained in neutral livery, and may include marks identifying the aircraft as that of Colgan Air.

 

4.   Substitute Aircraft.   In addition to the aircraft authorized in Article IV.A.1 above, if requested by United, Contractor will use reasonable efforts to arrange for and make available for its use such substitute aircraft as are required to effectively maintain Contractor’s United Express Services.  If Contractor is unable to operate any flights in its schedule for Contractor’s United Express Services with aircraft bearing United Marks, Contractor will notify United of such event and the circumstances of Contractor’s inability to so operate and Contractor will be permitted to operate an aircraft bearing different elements of aircraft decor than those specified above.  If such operations extend beyond a continuous forty-eight (48) hour period, Contractor must seek and obtain United’s written approval for such aircraft substitutions; provided that if Contractor purchases or leases a used aircraft that does not contain appropriate United Marks, Contractor will notify United and Contractor may, without the approval of United described in this sentence, operate such aircraft without United Marks for up to 60 days after the date of purchase or lease of such aircraft by Contractor, so long as such aircraft does not display the brand name or trademark of any other air carrier (other than Contractor).

1.   United Express Schedule. Contractor, with input from United, will establish schedules for all aircraft available to be operated by Contractor pursuant to this Agreement.  Available aircraft shall exclude any aircraft dedicated for maintenance or spares.

 

2.   United Schedule Consent Required.   Contractor may operate its scheduled air service as a United Express Carrier only with the schedules established in accordance with Article IV.B.1 , so long as each such schedule remains in effect.

 

3.   Charter.   Contractor will not operate charter flights in United Express branded aircraft without the prior written approval of United.  United will respond to such requests in a timely manner.

 

4.   Changes Input to Reservations Systems.   Changes to Contractor’s schedules as set forth in this Article IV.B and which otherwise are in accordance with the terms and conditions of this Agreement will be submitted by Contractor for input into United’s internal reservations system and computerized reservations systems.  At no time may Contractor make any changes to flights operated by United or any other carrier.

 

5.   Operating Commitment.   Contractor agrees to operate Contractor’s United Express Services in order to provide air transportation services scheduled pursuant to this Article IV.B (as modified from time to time) throughout the term of this Agreement.

 

 

United and Contractor will control availability, levels and use of all seat inventory for the aircraft used by Contractor in Contractor’s United Express Services.  Contractor will take all revenue and inventory risk and will maintain inventory and pricing responsibility.  Contractor is prohibited from providing positive space leisure travel, or any other confirmed leisure travel that requires removal of a seat from inventory, to any person other than the people outlined in Appendix M , on Contractor’s United Express flights without the prior written consent of United.  Contractor also agrees to comply with all rules and regulations for travel as outlined in the Related Agreements.

1.   Flight Crew.   All of Contractor’s United Express Services will be operated with crews consisting of a captain or pilot, and a first officer or co-pilot.  All such crew members will at all times meet all currently applicable governmental requirements, as such requirements may be amended from time to time during the life of this Agreement, and will be fully licensed and qualified for the services to be performed hereunder.  In addition, each of Contractor’s captains will hold a current Airline Transport Pilot Certificate.  Crewmembers will also meet all requirements imposed by the insurance policies that are to be maintained pursuant to Article XII.

 

2.   Flight Attendants.   Contractor’s flight attendants will at all times possess all necessary training and meet all currently applicable governmental requirements, as such requirements may be amended from time to time during the life of this Agreement.

 

 

Contractor may, with United’s approval, offer to sell beer, liquor and other goods or services on flights included in Contractor’s United Express Services.  Contractor agrees that such in-flight sales shall be conducted in a manner consistent with in-flight sales provided on United’s flights, so long as the price for all such in-flight sales provides adequate compensation to Contractor to cover all incremental costs and a reasonable profit.  Contractor will be solely responsible for the direct costs associated with such in-flight sales and shall be entitled to all revenues generated from such in-flight sales from beer, liquor and other goods.  United will be entitled to retain any commissions payable as a result of any SkyMall sales to passengers on flights included in Contractor’s United Express Services.

 

V.   OPERATING RESTRICTIONS

 

 

Except as expressly provided in Article V.B, nothing in this Agreement shall restrict the ability of Contractor or any of its subsidiaries or affiliates, directly or indirectly, from engaging in any other business, including the business of providing air transportation on behalf of one or more other carriers.

1. Without the prior written consent of United, Contractor will not use any of the services or facilities afforded to Contractor by United or its affiliates under this agreement for any air transportation or related services provided by Contractor or its affiliates other than Contractor’s United Express Services and charters permitted by this Agreement.

 

2. Under no circumstances will Contractor or its affiliates be permitted to operate aircraft bearing the United Marks in city pairs other than those specified by United pursuant to Article IV, without the prior written consent of United. Contractor will not, without United’s prior written consent, permit any third party, whether under a lease arrangement or otherwise, to operate any aircraft bearing the United Marks.

 

 

1.   If the restrictions set forth in Article V.B or any part thereof should, for any reason whatsoever, be declared invalid by a court of competent jurisdiction, the validity or enforceability of the remainder of such restrictions shall not thereby be adversely affected.  In the event that any time, scope or territorial limitation is deemed to be unreasonable by a court of competent jurisdiction, then Contractor agrees and submits to the reduction of either said time, scope or territorial limitation to such a time period, scope or area as said court shall deem reasonable.  In the event the Contractor shall be in violation of the aforementioned restrictive covenants, then the time limitation thereof shall be extended for a period of time equal to the period of time during which such breach or breaches should occur.

 

2.   Contractor acknowledges that United has no adequate remedy at law and would be irreparably harmed were Contractor to breach or threaten to breach the provisions of Article V.B hereof and, therefore, agrees that United shall be entitled to injunctive relief to prevent any breach or threatened breach of Article V.B hereof, and to specific performance of the terms of Article V.B, in addition to any other legal or equitable remedy it may have.  Contractor also agrees that it shall not raise the defense that United has an adequate remedy at law in any equity proceeding involving it relating to Article V.B hereof.  Nothing in this Agreement shall be construed as prohibiting United from pursuing any other remedies at law or in equity that it may have or any other rights that it may have under any other agreement.

 

2.   Standards of Service.   Contractor agrees that, in providing services under this Agreement in conjunction with one or more of the United Marks, it will comply with the United Express Service Standards.  The United Express Service Standards include, but are not limited to, United standards for (a) aircraft types, as set forth in Article IV, (b) customer service, as set forth in United’s Customer Service Policies and Procedures, (c) minimum customer service training requirements consistent with United’s customer service practices and procedures, (d) in-flight amenities and service, (e) aircraft appearance, (g) United/United Express safety programs (and Contractor will enter into any agreements relating to such programs that are similar to those offered to other United Express Carriers), and (h) any other quality control measures designated by United, as such standards may be prescribed by United from time to time.  As necessary, United will provide training to Contractor’s designated instructors in the requirements of United’s Customer Service Policies and Procedures; provided that United will at its expense provide a trainer and materials, and United agrees that the United Express Service Standards prescribed by it will not be unreasonable in light of the facilities and type of aircraft available to Contractor.  United will have the right, from time to time, to inspect Contractor’s United Express Services to determine if they conform to the United Express Service Standards.  In the event United determines that Contractor is not in compliance with the United Express Service Standards, United will notify Contractor and Contractor will promptly rectify any such noncompliance.  Failure on the part of United to conduct such inspections will not relieve Contractor of its obligations to conform to the United Express Service Standards.  If Contractor fails to comply with any part of the United Express Service Standards and such failure is not corrected as soon as practicable (and, in any event, within 30 days) after Contractor’s receipt of written notice of such failure from United, then United may, at its discretion, restrict or eliminate Contractor’s pleasure travel privileges, or suspend Contractor’s authority to serve city pair markets as a United Express Carrier, or impose any other nonexclusive remedy or remedies available to United.

 

3.   Liability for Operations.   Nothing in this Article VI.B is intended to nor will be construed so as to relieve Contractor of any liability or to impose any liability on United for Contractor’s United Express Services by virtue of any of United’s rights under Article VI.B.2 , whether exercised or not.

 

4.   Non-Exclusivity.   Nothing in this Agreement is intended nor will be construed to give Contractor the exclusive right to use the United Marks, or to abridge United’s right to use or to license the Marks, and United hereby reserves the right to continue use of the United Marks and to license such other uses of such Marks as United may desire.

 

5.   Reversion of Marks.   Upon termination of this Agreement for any reason, the right to use herein granted for the United Marks for the purpose of providing air transportation services for United will immediately revert back to United, and Contractor will have no right to use such Marks for that purpose.  Further, upon termination of this Agreement, Contractor will, at its sole cost and expense, remove all United Marks from its aircraft and any related items used specifically for providing air transportation for United and from any and all other places or things controlled or formerly controlled by Contractor as soon as commercially reasonable, but in any event within 10 days after such termination.

1.   Contractor shall assure that its employees successfully complete all United and Carrier required training specified for the performance of Services assigned under this Agreement.  Contractor further agrees to designate at least one individual who will be responsible for training the Contractor’s employees at each airport station awarded.  Contractor’s trainer(s) will receive initial training from United, in a “Train-the-Trainer” type format.  Contractor’s trainer is responsible for serving as the central point of contact between United and Contractor for all training related issues.  United shall provide all applicable training materials related to United policies and procedures, in order for the Contractor to accomplish initial training of its employees who will perform Services under this Agreement.

 

2.   United will provide training for Contractor’s instructors that United deems sufficient to permit Contractor’s instructors to be able to train Contractor’s employees as required by this Agreement.  Contractor will bear all costs related to the United trainer(s), including all travel, hotel, and per diem expenses incurred during initial training.

 

3.   Unless otherwise mutually agreed in writing, Contractor agrees to bear all training costs, including but not limited to employee labor costs, transportation costs, hotel, and associated per diem charges required to accomplish initial and recurrent training of their employees.  Contractor agrees to schedule and provide subsequent training, as required, resulting from changes in personnel in order to meet performance expectations of the Agreement.  United is not responsible for any training costs resulting from employee turnover at the Contractor’s locations.  Any “House Calls” provided by United for training related issues will be charged to the Contractor.

 

4.   Contractor’s employees shall periodically review, as necessary, materials supplied by United in order to maintain competency in United’s policies, procedures, and standards.  Contractor agrees to provide recurrent training, as necessary, and train their employees on any new products, processes, procedures, or initiatives as directed by United.  United may, at is discretion, monitor or test the proficiency level of Contractor’s employees.  If United determines that their proficiency levels are insufficient, Contractor must arrange, at Contractor’s sole expense, for such employees to undertake any further training which United determines necessary to bring Contractor’s employees to the required proficiency level.

 

5.   Training must be specific to the employee’s job function and task assignment.  An employee may not work in an area in which he or she has not been properly trained.

 

VIII.   AMOUNTS PAYABLE TO CONTRACTOR

 

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1.   United shall be responsible for collecting all data from the United Express Carriers that is necessary to enable United to calculate Contractor’s Goals under this Article. United shall retain all such data, and all data regarding United’s operating performance that is necessary to normalize such data, during the term of this Agreement and for a period of two years thereafter.  United shall use commercially reasonable efforts to ensure that all data furnished by United Express Carriers (including Contractor) that is used to determine Contractor’s Goals under this Article is accurate and complete, and United shall take appropriate steps to verify the accuracy and completeness of all data furnished to it by other United Express Carriers.

 

2.   Within thirty days after the end of each calendar month, United will calculate Contractor’s Goals for the month and send Contractor written notice of United’s calculation, accompanied by a statement of all operating statistics underlying United’s calculation and a certificate to the effect that, to the best of United’s knowledge, the data used by United to calculate the Goals was accurate and complete and that United has taken appropriate steps to verify the accuracy and completeness of such data.

 

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5.   Any dispute between United and Contractor concerning the accuracy and completeness of any data or whether United has taken appropriate steps to verify the accuracy and completeness of any data shall, at the election of either United or Contractor, be resolved by arbitration in Chicago, Illinois by a single arbitrator in accordance with the rules of the American Arbitration Association.  The costs of any such arbitration shall be borne one-half by each party.

 

 

Subject to the terms of Article XIII, the payment for transportation furnished by Contractor may be reduced in order to set off any of the following amounts owed by Contractor to United and arising after the Effective Date:

 

1.   amounts owed by Contractor to United for:

 

a.   fraudulent, grossly negligent or erroneous acts of employees of Contractor which cause United to suffer a loss; and

 

b.   unreported sales on United tickets assigned to Contractor;

 

2.   such other adjustments as may be mutually agreed to by the parties from time to time;

 

3.   any other amounts owed by Contractor to United under this Agreement; and

 

 

United will notify Contractor of any such adjustment that it intends to make at least fourteen days prior to the date of the payment to which the adjustment relates.  United will provide Contractor with supporting documentation for such intended adjustments.  Contractor shall have the right to object to any such adjustment by providing United with written notice of its objection, together with supporting documentation, within 30 days after its receipt of the notice provided by United describing such adjustments.  United agrees to negotiate in good faith with Contractor in order to resolve all such disputes within 30 days after its receipt of Contractor’s notice to United.  If Contractor objects to any adjustment, the amounts payable to Contractor may be reduced by any part of the adjustment not in dispute and no more than [***] of any portion of the adjustment that is in dispute until the dispute between Contractor and United is resolved.

 

 

 

 

 

1.   Program Fees, Fixed Fees, and Ground Handling Fees are subject to annual rate escalations.  Annual rate escalations will be effective on the anniversary of the date of the ratified agreement.  Escalations will be applied using the preceding 12-month year-over-year change in average CPI and will be capped at no more than a [***] increase per year.

 

2.   “CPI” shall mean the Consumer Price Index, U.S. City Average, Urban Wage Earners and Clerical Workers, All Items (base index year 1982-1984=100) as published by the United States Department of Labor, Bureau of Labor Statistics.  If the manner in which the Consumer Price Index as determined by the Bureau of Labor Statistics shall be substantially revised, including, without limitation, a change in the base index year, an adjustment shall be made by the parties in such revised index which would produce results equivalent, as nearly as possible, to those which would have been obtained if such Consumer Price Index had not been so revised.  If the Consumer Price Index shall become unavailable to the public because publication is not readily available to enable the parties to make the adjustment referred to in this Section, then the parties shall mutually agree to substitute therefore a comparable index based upon changes in the cost of living or purchasing power of the consumer dollar published by any other governmental agency or, if no such index shall be available, then a comparable index published by a major bank or other financial institution or by a university or a recognized financial publication.

 

E.   Sales Settlements.   Contractor will cause Total Net Sales Receipts to be deposited in a bank account specified by United.  “Total Net Sales Receipts” equals total gross sales receipts collected by Contractor for all passenger tickets, airway bills, cargo bills, mail fees and other tickets issued for Carriers’ flights (less refunds thereon paid out by Contractor).  The frequency of the deposit will be once a week, on Wednesdays, for all Total Net Sales Receipts collected during the preceding week.  Contractor’s deposit will be made to the following bank account:

Contractor will also require its employees and agents to forward to United, on a daily basis, all auditors ticket coupons, airway bills, cargo bills, lift documentation, reports, exchange orders and refund detail issued by Contractor in connection with Carriers’ flights during the previous day in accordance with the sales and reporting procedures specified by United.

 

 

1.   During the term of this Agreement, Contractor agrees to procure and maintain in full force and effect, at its own expense, with insurers of recognized reputation and responsibility,

 

a.   Comprehensive Airline Liability Insurance, including, but not limited to, Aircraft Liability, Passenger Liability, Comprehensive General Liability Insurance, War Risk and Allied Perils, including both passengers and other third parties, Cargo Liability and Baggage Liability Insurance, with combined single limits for each and every loss and each aircraft of not less than [***].

 

b.   Aircraft Hull All Risks Insurance, including ground and flight coverage on Contractor’s aircraft, including its engines and all its parts when installed or temporarily detached from Contractor’s aircraft on a repair-or-replace