<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(Mark One)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1995
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from __________ to __________
Commission File No. 0-23224
GREAT LAKES AVIATION, LTD.
(Exact name of registrant as specified in its charter)
Iowa 42-1135319
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1965 330th Street
Spencer, Iowa 51301-9211
-----------------------------------------------------------
(Address of principal executive offices including zip code)
Registrant's telephone number, including area code: (712) 262-1000
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock, par
value $.01
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. / /
The aggregate market value of voting stock held by nonaffiliates of the
registrant as of April 8, 1996 was approximately $12,250,000.
As of April 8, 1996, there were 7,586,326 shares of Common Stock of the
registrant issued and outstanding.
<PAGE>
FORM 10-K/A INDEX
Page
----
PART IV. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
AND REPORTS ON FORM 8-K. . . . . . . . . . . . . . . . 1
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
i
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) DOCUMENTS FILED WITH THIS REPORT.
See index to financial statements on page 21 of the Company's report
on Form 10-K for the fiscal year ended December 31, 1995.
(b) REPORTS ON FORM 8-K.
During the quarter ended December 31, 1995, the Company filed no
reports on Form 8-K with the Securities and Exchange Commission.
(c) EXHIBITS.
10.10 Airline Services Agreement, dated August 8, 1995, between
Midway Airlines Corporation and RDU Co. (certain portions
deleted and filed separately with the Commission pursuant to
request for confidential treatment).
1
<PAGE>
SIGNATURES
Pursuant to the requirements of section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
GREAT LAKES AVIATION, LTD.
Dated: September 6, 1996
By /s/Douglas G. Voss
-------------------------------------
Douglas G. Voss,
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ Douglas G. Voss President, Chief Executive Officer and September 6, 1996
- ------------------------------ Director
Douglas G. Voss
/s/ A. L. Maxson
- ------------------------------ Director, Executive Vice President Finance September 6, 1996
A. L. Maxson and Chief Financial Officer
/s/Roberta L. Dircks
- ------------------------------ Vice President, Controller and Chief September 6, 1996
Roberta L. Dircks Accounting Officer
/s/Vernon A. Mickelson Director September 6, 1996
- ------------------------------
Vernon A. Mickelson
/s/Luigi Talarico, Jr.
- ------------------------------ Director September 6, 1996
Luigi Talarico, Jr.
</TABLE>
2
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit
10.10 Airline Services Agreement, dated August 8, 1995, between Midway
Airlines Corporation and RDU Co. (certain portions deleted and
filed separately with the Commission pursuant to request for
confidential treatment).
3
<PAGE>
EXHIBIT 10.10
Airline Services Agreement
between
Midway Airlines Corporation
and
RDU Co.
____________
* Signifies marked portion deleted and filed separately with the Commission
pursuant to request for confidential treatment.
<PAGE>
TABLE OF CONTENTS
ARTICLE TITLE PAGE
I. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
II. SCOPE AND TERM. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
A. Scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
B. Term. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
III. SUPPORT SERVICES AND FACILITIES . . . . . . . . . . . . . . . . . . . 2
A. Special Services. . . . . . . . . . . . . . . . . . . . . . . . . 2
B. Communications. . . . . . . . . . . . . . . . . . . . . . . . . . 3
C. Reservations. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
D. Operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
E. Station Support Services. . . . . . . . . . . . . . . . . . . . . 5
F. Tariffs and Schedule Publication. . . . . . . . . . . . . . . . . 5
G. Settlement. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
H. Advertising and Promotion . . . . . . . . . . . . . . . . . . . . 6
I. Automation. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
J. RDU's Information . . . . . . . . . . . . . . . . . . . . . . . . 7
IV. RDU's SCHEDULED AIR SERVICES. . . . . . . . . . . . . . . . . . . . . 7
A. RDU's Flight Schedules. . . . . . . . . . . . . . . . . . . . . . 7
B. Aircraft and Ramp Operations. . . . . . . . . . . . . . . . . . . 7
C. Flight Crews. . . . . . . . . . . . . . . . . . . . . . . . . . . 8
V. EXCLUSIVITY AND INITIATION OF NEW SERVICE . . . . . . . . . . . . . . 8
*
*
*
VI. FRANCHISE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
A. Grant of Franchise. . . . . . . . . . . . . . . . . . . . . . . . 9
B. Terms and Conditions. . . . . . . . . . . . . . . . . . . . . . . 9
C. Infringement. . . . . . . . . . . . . . . . . . . . . . . . . . . 9
VII. ADDITIONAL UNDERTAKINGS . . . . . . . . . . . . . . . . . . . . . . . 9
A. Purchasing Cooperation. . . . . . . . . . . . . . . . . . . . . . 9
B. Travel Privileges . . . . . . . . . . . . . . . . . . . . . . . . 9
C. Signage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
D. FIDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
VIII. DIVISION OF REVENUE . . . . . . . . . . . . . . . . . . . . . . . . . 9
A. Local Fares . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
B. Through Fares . . . . . . . . . . . . . . . . . . . . . . . . . . 9
____________
* Signifies marked portion deleted and filed separately with the
Commission pursuant to request for confidential treatment.
<PAGE>
ARTICLE TITLE PAGE
C. Joint Fares . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
IX. MAINTENANCE AND FUELING . . . . . . . . . . . . . . . . . . . . . . . 10
X. U.S. MAIL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
XI. INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
A. Comprehensive Airline Liability Insurance . . . . . . . . . . . . 10
B. Aircraft Hull All Risks Insurance . . . . . . . . . . . . . . . . 10
C. Certificates of Insurance . . . . . . . . . . . . . . . . . . . . 10
D. Midway's Insurance. . . . . . . . . . . . . . . . . . . . . . . . 10
XII. LIABILITY AND INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . 10
A. Employer/Employee Liability . . . . . . . . . . . . . . . . . . . 10
B. Performance of the Parties. . . . . . . . . . . . . . . . . . . . 11
C. Midway's Traffic Documents. . . . . . . . . . . . . . . . . . . . 11
D. The Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
XIII. PAYMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
XIV. INDEPENDENT CONTRACTORS AND WAIVER OF CONTROL . . . . . . . . . . . . 12
A. RDU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
B. Midway. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
C. Unauthorized Obligation . . . . . . . . . . . . . . . . . . . . . 12
D. RDU's Flights . . . . . . . . . . . . . . . . . . . . . . . . . . 12
XV. DEFAULT AND TERMINATION . . . . . . . . . . . . . . . . . . . . . . . 12
A. Financial and Operational Default . . . . . . . . . . . . . . . . 12
B. Breach. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
C. Liability at Termination. . . . . . . . . . . . . . . . . . . . . 13
XVI. ASSIGNMENT, MERGER AND ACQUISITION. . . . . . . . . . . . . . . . . . 13
A. Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
B. Merger and Acquisition. . . . . . . . . . . . . . . . . . . . . . 14
XVII. CHANGE OF LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
XVIII. TAXES AND PERMITS . . . . . . . . . . . . . . . . . . . . . . . . . . 14
A. Indemnification for Fees, Taxes and Charges . . . . . . . . . . . 14
B. Indemnification for Employee Taxes and Obligations. . . . . . . . 14
C. Legal Obligations . . . . . . . . . . . . . . . . . . . . . . . . 14
XIX. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
XX. APPROVALS, WAIVERS AND AMENDMENTS . . . . . . . . . . . . . . . . . . 15
ii
<PAGE>
ARTICLE TITLE PAGE
A. Approval Requests and Responses . . . . . . . . . . . . . . . . . 15
B. Waiver of Compliance. . . . . . . . . . . . . . . . . . . . . . . 15
C. Written Amendments. . . . . . . . . . . . . . . . . . . . . . . . 16
XXI. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
XXII. ARBITRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
XXIII. CUMULATIVE REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . 16
XXIV. FORCE MAJEURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
XXV. SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
XXVI. ACKNOWLEDGMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
A. Disclaimer of Warranties. . . . . . . . . . . . . . . . . . . . . 17
B. Understanding . . . . . . . . . . . . . . . . . . . . . . . . . . 17
XXVII. ENTIRE AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . 17
iii
<PAGE>
AIRLINE SERVICES AGREEMENT
This Agreement made and entered into this 8th day of August, 1995, by and
between MIDWAY AIRLINES CORPORATION, a Delaware corporation having its principal
address at 300 W. Morgan Street, Durham, NC 27702 ("Midway"), and RDU Co.,
having its principal mailing address at 190 Norwest Financial Center, 7900
Xerxes Avenue South, Bloomington, MN 55431 ("RDU").
WITNESSETH:
WHEREAS, Midway holds a certificate of public convenience and necessity issued
by the Civil Aeronautics Board authorizing Midway to engage in air
transportation of persons, property and mail, and is a major airline providing
scheduled air service in national markets;
WHEREAS, RDU is a regional air carrier that will be engaged in air
transportation of persons and property pursuant to Department of Transportation
("DOT") Economic Regulations and will provide scheduled service in particular
regions; and
WHEREAS, RDU is an Affiliate (as hereunder defined) of Great Lakes Aviation,
Ltd., an Iowa Corporation, which is also a regional air carrier.
WHEREAS, Midway owns various trademarks, service marks, trade names, logos and
emblems;
WHEREAS, RDU wishes to acquire and Midway wishes to provide RDU with a
non-exclusive franchise to use one or more of the Identifications (as
hereinafter defined) in connection with its scheduled air transportation
services.
NOW, THEREFORE, in consideration of the foregoing premises, mutual covenants and
obligations hereinafter contained, the parties agree as follows:
I. DEFINITIONS
A. "ACTUAL COST" means reasonable costs incurred and paid by Midway,
not including any markup by Midway or any additional administrative service
charge imposed by Midway.
B. "AFFILIATE", with respect to Midway and RDU, means any entity or
person controlling, controlled by or under common control of Midway or RDU,
respectively.
C. "AIRLINES CLEARING HOUSE INC. (ACH)" means the organization through
which airlines customarily settle revenue exchange billings for traffic
documents.
D. "AUTOMATION EQUIPMENT" means a minimum of one terminal and
associated equipment, for printing messages, data, air tickets and boarding
passes.
E. "AUTOMATION INFORMATION" means all instructions, procedures and
manuals provided by Midway in connection with RDU's use of SABRE and Automation
Equipment.
F. "COMPLEMENTARY LOCATION" means any airport where both Midway and RDU
provide scheduled airline service.
G. "DESIGNATOR" means "JI" or such other two-letter designator code as
Midway may specify to identify its flights.
H. "HUB CITY" means Raleigh/Durham, NC.
I. "IDENTIFICATION" means the "Midway Connection" and associated trade
names, trademarks, service marks, graphics, logo, color schemes and other
identification authorized by Midway for use by RDU operating under this
Agreement.
<PAGE>
J. "PRIMARY LOCATION" means any airport where RDU Operations are
provided and Midway does not provide scheduled airline services, as identified
on Exhibit A attached
hereto.
K. "RDU" means RDU Co., using the Midway Designator and Identification
pursuant to this Agreement.
L. "RDU" OPERATIONS means scheduled airline services performed by RDU
Co. using the Designator and Identification pursuant to this Agreement.
M. "RESERVED CITY" means any of those airports identified on Exhibit A,
attached hereto.
N. "SABRE" means the computerized reservations and ticketing service
(or any similar or substitute service used by Midway), which performs flight,
hotel, rental car and/or other travel related services, reservations and/or
ticket issuance functions.
II. SCOPE AND TERM
A. SCOPE
The scope of this Agreement pertains to RDU's Operations to/from
Raleigh/Durham, NC and Chicago Midway Airport, such Chicago Midway Airport
service shall be subject to Midway's prior written approval.
Notwithstanding anything to the contrary contained in this Agreement, RDU
shall be entitled to operate additional scheduled airline services under its own
name or of another airline, provided that such services shall not make use of
any of the services, facilities or licenses provided to RDU by Midway under this
Agreement and that any aircraft used in providing such services shall not bear
any Identification or Designator code and flight number in such market, and
provided further, that RDU will be permitted to use the designator code of
another airline only if (a) the service provided for such airline is operated
under a separate subsidiary or division using separate aircraft, flight crews,
counter-personnel and gate facilities and (b) RDU is not using the designator
code of another airline on any airport-pair route on which RDU uses the
Identification or Designator hereunder.
B. TERM
This Agreement becomes effective upon execution and upon securing any and
all necessary governmental approvals (Effective Date), but the operations and
services provided for by this Agreement shall fully commence on OCTOBER 1, 1995
("Implementation Date") and shall continue in effect for 9 years from the
Implementation Date; provided, however, if such governmental approvals are not
secured by the Implementation Date, then this Agreement shall automatically
terminate unless extended by the parties. In addition, either party may
terminate this Agreement by serving, upon the other party, 6 month's prior
written notice of its intent to terminate the Agreement, provided the effective
date of such termination shall not be earlier than the date which is the last
day of the 24th month following the Implementation Date.
III. SUPPORT SERVICES AND FACILITIES
A. SPECIAL SERVICES
Midway shall provide to RDU the following services and facilities:
1. Designator. All of RDU Operations shall be displayed in SABRE,
the Official Airline Guide ("OAG") and all other computerized reservations
systems, using the Designator and flight numbers within a range provided by
Midway.
2. Station Automation. Midway shall provide to RDU its automated
check-in, ticketing, boarding pass, advance seat reservation and baggage tracing
software systems.
2.
<PAGE>
3. Frequent Flyer. RDU shall participate in American Airlines'
frequent flyer program for so long as Midway shall participate in such program
and to the extent that Midway is able to obtain the consent of American Airlines
to allow RDU's participation. Should Midway terminate its participation in
American Airlines' frequent flyer program and subsequently participate in a
different program, Midway shall use its best efforts to include RDU Operations
in such different frequent flyer program. RDU shall pay Midway its Actual Cost
for participation in the frequent flyer program.
4. Ticket Office Forms. Midway shall provide to RDU, at RDU's
expenses, not to exceed Midway's Actual Cost, an adequate supply of ticketing
and baggage forms, including, but not limited to, ticket stock and baggage tags,
with the Identification for use by Midway and RDU.
5. Ticket Handling Fees. Ticket handling fees assessed by
carriers other than Midway relating to passage on RDU's flights shall be paid by
RDU.
6. Dishonored Credit Card and Bad Check Expense. Midway shall pay
all dishonored credit card and bad check expenses for Midway tickets written by
RDU only when RDU has followed Midway's credit card and check acceptance
procedures.
7. Credit Card Fees. RDU shall pay to Midway its Actual Cost for
credit card fees assessed on Midway flight coupons lifted by RDU Operations.
B. COMMUNICATIONS
1. Midway shall provide and maintain or arrange for the provision
of reservations telephone lines connecting cities served by RDU Operations with
Midway's reservations centers. At RDU's expense, Midway shall establish,
operate and maintain or arrange for the provision of communication lines from
RDU's airport ticket offices and other selected locations linking the Automation
Equipment there with SABRE.
2. RDU shall take reasonable precautions to protect the Automation
Equipment installed at RDU's locations.
C. RESERVATIONS
1. Midway shall provide the following reservation functions for
RDU:
a. Answer reservation telephones, provide information,
schedules, fares, make bookings and provide other
services normally associated with airline reservations
services in accordance with Midway's established
procedures.
b. Answer telephone calls at a service level the same as for
Midway's customers.
c. Reaccommodate and notify passengers of confirmation on
Midway, RDU and other airlines and clearance from wait
list.
d. Review and process inbound prepaid ticket advances.
e. Provide tariff interpretation support services to RDU's
employees.
2. Midway shall provide through SABRE the following services for
RDU:
a. Establishment, maintenance, display and change of
passenger name records (PNR's).
b. Confirmation of passenger against seat inventory on RDU's
and Midway's flights and on other airlines where flight
availability is maintained in SABRE.
c. Maintenance of seat availability for RDU's Operations.
d. Transmission of availability status messages (AVS) In
accordance with Standard Interline Passenger Procedures
for RDU Operations.
3
<PAGE>
e. Process inbound reservations messages received from ARINC
directed to RDU Operations.
f. Routing of all inbound messages received from ARINC,
other than stated in Article III.D(2)(e) above, to a
computer message queue.
3. RDU shall pay to Midway its Actual Cost for providing
reservation services, including its Actual Cost for reservations services
performed by third party contractors. Actual Cost shall be determined by
calculating the percentage of RDU's revenue passengers to total revenue
passengers carried on flights using the Designator and applying the resulting
percentage to the total cost of Midway's reservations services.
4. RDU shall pay Computerized Reservations System (CRS) booking
fees, whether billed directly to RDU or through Midway, not exceeding the rate
for which Midway pays booking fees, for all bookings on RDU made by SABRE
subscribers. RDU shall pay to Midway its Actual Cost for all CRS fees charged
to Midway for bookings on RDU received from computerized reservations systems.
5. The reservation services to be provided by Midway under this
Article III.C do not, and are not intended to, preclude RDU from continuing to
handle its own groups, inventory control and yield management.
D. OPERATIONS
1. RDU Operations shall meet or exceed the following performance
standards.
a. RDU shall achieve a *
, or factors equal
to Midway's actual performance, whichever is lower,
unless prevented from doing so by reason beyond RDU's
control including, but not limited to, weather, field
conditions and Air Traffic Control.
b. RDU shall comply with all of Midway's customer service
policies and procedures to achieve the same quality of
airline services provided by Midway, taking into account
the difference in equipment and facilities of Midway and
RDU.
c. RDU, at its expense, shall attire its public contact
personnel in uniforms of a design and color similar to
Midway's uniforms or as otherwise specified by Midway.
2. In the event of flight delays, cancellations or other schedule
irregularities affecting RDU's flights, and as soon as information concerning
such irregularities is available, RDU shall update SABRE to reflect such
information.
3. Midway and RDU represent and warrant one to the other that all
air transportation services performed by each of them pursuant to this Agreement
or otherwise shall be conducted in full compliance with all applicable statutes,
orders, rules and regulations, whether now in effect or hereafter promulgated,
of all governmental agencies having jurisdiction over each of their separate
operations, including, but not limited to, the Federal Aviation Administration
("FAA") and the Department of Transportation ("DOT"). Midway's and RDU's
compliance with such governmental statutes, orders, rules and regulations shall
be the sole and exclusive obligation of Midway and RDU, respectively.
4. From time to time and upon the request of RDU or its flight
crews, Midway may furnish RDU's flight crews with such National Weather Service
information as may be available to Midway, which information shall not be deemed
to have been warranted by Midway.
____________
* Signifies marked portion deleted and filed separately with the
Commission pursuant to request for confidential treatment.
4
<PAGE>
E. STATION SUPPORT SERVICES
1. At Primary Locations, RDU shall employ its own personnel or a
contract agent to perform the following functions:
i) gate check-in ii) passenger enplaning/deplaning,
iii) aircraft loading/unloading, iv) aircraft servicing,
v) aircraft maintenance, and vi) passenger ticketing.
2. At the Hub City, Midway shall, at its expense, provide ticket
counter and baggage claim services for RDU's flights and RDU shall, at its
expense, provide the personnel and/or a contract agent to perform gate check-in
and ramp operations functions for its flights. Ground handling services at
Complementary Locations shall be negotiated through separate ground handling
agreements between RDU and Midway.
F. TARIFFS AND SCHEDULE PUBLICATION
1. General
RDU shall unilaterally establish fare classes and fare levels for
all services provided solely by RDU. Midway and its employees shall have no
authority to establish RDU's online fares, nor to interfere with RDU's
independent establishment of its fares. RDU shall comply with DOT regulations
pertaining to public disclosure of its tariffs and services.
2. Passenger Fares
a. Upon execution of this Agreement, all such passenger fare
tariffs published for RDU Operations shall be included as
part of Midway's tariff. Prior to the Implementation
Date, RDU shall notify the Airline Tariff Publishing
Company ("ATPCO") or any successor company performing the
same or equivalent services that Midway is authorized to
supply, modify or withdraw RDU's fare information.
b. All additions and changes to RDU's tariffs must be made
through Midway. Midway shall file with ATPCO changes to
such fares as requested by RDU without unreasonable delay
and in a manner and priority consistent with Midway's
filings of its own fares. All such fares shall be filed
with ATPCO and listed as Midway fares.
3. Air Freight Rates
In the event Midway and RDU desire to provide through cargo and/or
small package service, a separate agreement may be negotiated to provide for
such services.
4. Timetables
Midway shall include as Midway flights all RDU's flights in
computerized reservations systems, Midway's internal reservations system, and
joint city and system timetables. All such connections to Midway shall be
listed as Midway connections.
G. SETTLEMENT
1. Sales
*
2. Lift
____________
* Signifies marked portion deleted and filed separately with the
Commission pursuant to request for confidential treatment.
5
<PAGE>
a. Revenue accounting procedures for and costs for the
accounting of lifted flight coupons from RDU Operations
shall be determined by the parties.
b. *
3. Should Midway fail to make payments to RDU as specified in
G.2.b.1 and 2 above, RDU may collect the appropriate amount from Midway via the
ACH with notice to Midway prior to such collection.
4. Modified Procedures
Midway and RDU may establish alternative or modified passenger sales
procedures in order to accommodate tickets and exchange orders issued by air
carriers which are not participants In the ACH.
5. Audits
During normal business hours Midway may conduct on-site audits of
tickets, exchange orders, refunds and other records relating to RDU's sales and
refund activity.
6. Midway may set off against any payment due to RDU hereunder any
amount owed, but not paid, to Midway by RDU hereunder. Midway shall identify
the amount of setoff, if any, and provide supporting documentation for such
setoff, to RDU at the time such setoff is made or as soon thereafter as is
practical.
H. ADVERTISING AND PROMOTION
1. The parties shall promote each other's services through sales,
advertising, and promotional support to enhance the interline exchange of
passengers between the parties. The parties shall confer regularly to determine
the nature and scale of such promotional efforts and to reasonably allocate any
costs associated therewith.
2. During the term of this Agreement, Midway shall grant RDU the
nonexclusive right to use, at RDU's sole expense, the Identification for
advertising RDU Operations. Any and all such advertisements using the
Identification shall identify Midway as the owner of the Identification, and to
the extent that any Identification is registered, shall so specify. No
advertisement, solicitation, document or other material using any Identification
shall be published or otherwise promulgated without Midway's prior inspection
and approval.
I. AUTOMATION
1. At RDU's expense, Midway shall install or cause to be installed
Automation Equipment at all Primary Locations and selected administrative
locations. Any and all modifications, enhancements, improvements or
developments pertaining to the Automation Equipment, or other
____________
* Signifies marked portion deleted and filed separately with the
Commission pursuant to request for confidential treatment.
6
<PAGE>
new related technology, shall be made available by Midway at RDU's expense.
2. Midway shall train RDU's instructor personnel in the proper use
of SABRE and Automation Equipment. RDU shall pay all living and travel expenses
incurred by its personnel in receiving such training.
3. At RDU's expense, Midway shall provide or cause to be provided
to RDU repair and maintenance services required for the Automation Equipment.
4. Midway shall notify RDU of any scheduled or preannounced
downtimes of SABRE.
J. RDU'S INFORMATION
RDU shall furnish to Midway all information as Midway may require to
carry out the services and functions contemplated by this Article III.
IV. RDU's SCHEDULED AIR SERVICES
A. RDU'S FLIGHT SCHEDULES
1. RDU shall coordinate with Midway on the expansion of RDU
Operations to any new airport pairs. RDU and Midway shall endeavor in good
faith to provide optimal coordination of service, except that RDU shall have a
final right of determination, in its sole discretion, as to which Primary
Locations it shall serve. Initial RDU Operations shall be as specified in the
implementation plan as described in Exhibit B attached hereto. RDU Operations
at Complementary Locations and any airport other than Primary Locations shall be
subject to Midway's prior written approval.
2. Midway reserves the right to commence service to any Reserved
City and RDU agrees that it will not commence RDU Operations to any Reserved
City unless it shall have received a prior written waiver from Midway of its
reservation of the Reserved City. If Midway subsequently commences service to a
Reserved City to which it has given RDU a written waiver of its reservation,
then RDU shall assign, and Midway shall assume, all of RDU's rights and
obligations under any airport leases or other airport contracts entered into by
RDU at that city, so long as such leases or contracts have either been approved
by Midway at the time it executed the waiver or subsequent thereto, such
approval not to be unreasonably withheld. If Midway commences service to a
Reserved City as to which a waiver has been given, such Reserved City shall
thereafter be deemed a Complementary Location as long as RDU Operations continue
at that city.
3. RDU Operations shall be determined by RDU.
B. AIRCRAFT AND RAMP OPERATIONS
1. At the Hub City, RDU shall, at its expense, lease gate and ramp
operations space.
2. At Complementary Locations, Midway shall provide RDU's
Operations with adequate and appropriate areas for RDU's use, including ramp
space, gate holding space, and operational office space.
3. a. The existing aircraft and any replacement aircraft
utilized in RDU Operations shall bear the Identification.
Technical specifications and requirements covering
aircraft color, schemes, the Identification and other
elements of exterior and interior aircraft decor and
standards shall be provided to RDU by Midway and RDU
shall comply with such specifications and standards.
7
<PAGE>
b. RDU shall use and display a suitable sign or insignia on
the exterior of its aircraft identifying RDU as the
operator of the RDU Operations being provided hereunder.
The use and display of such sign or insignia shall be
subject to the prior written approval of Midway as to its
nature, size and location on RDU's aircraft.
c. RDU shall utilize only Embraer EMB120 and/or Beechcraft
1900 (Models C and/or D) aircraft in RDU Operations;
provided, however, RDU's use of Beechcraft 1900 aircraft
shall not exceed thirty percent of its fleet used in RDU
Operations after April 1, 1996.
4. If RDU is unable to operate a particular scheduled frequency
with an aircraft bearing the Identification, RDU shall be permitted to operate
substitute aircraft for a reasonable time not exceeding 60 days. RDU shall use
reasonable efforts to secure an aircraft bearing the Identification for RDU's
Operations.
5. Midway may change the Identification. RDU may be required to
use new or different Identification, provided that Midway shall pay all of RDU's
costs of changing the Identification.
C. FLIGHT CREWS
1. All of RDU Operations shall be operated with RDU's crews
consisting of a captain or pilot, and a first officer or co-pilot. All such
crew members shall meet all applicable governmental and insurance requirements,
and shall be fully licensed and qualified for the services to be performed. In
addition, RDU's captains shall hold a current Airline Transport Pilot
Certificate.
2. RDU's flight attendants shall satisfy applicable governmental
requirements.
V. EXCLUSIVITY AND INITIATION OF NEW SERVICE
*
____________
* Signifies marked portion deleted and filed separately with the
Commission pursuant to request for confidential treatment.
8
<PAGE>
VI. FRANCHISE
A. GRANT OF FRANCHISE
RDU's Operations shall be conducted with the Designator and
Identification. Midway grants to RDU, during the term of and in accordance with
this Agreement, a nonexclusive, nontransferable franchise to use the Designator
and Identification in connection with RDU Operations.
B. TERMS AND CONDITIONS
Midway owns the Identification. RDU shall not infringe, abridge, or
challenge the Identification.
C. INFRINGEMENT
Midway, at its expense, shall defend RDU against any claim that RDU's use
of the Identification in connection with RDU Operations pursuant to this
Agreement infringes a registered trademark or service mark of any third party.
Midway shall also indemnify and hold RDU harmless against all costs, damages,
and attorneys' fees that result from such claims.
VII. ADDITIONAL UNDERTAKINGS
A. PURCHASING COOPERATION
Each party shall use its good faith efforts to assist the other in
obtaining goods and services useful to the other party in the most economical
manner including, without limitation, fuel, uniforms, supplies and ground
equipment.
B. TRAVEL PRIVILEGES
Each party shall grant to the employees of the other party travel
privileges that are no less favorable than travel privilege arrangements between
Midway and any other carrier.
C. SIGNAGE
Promptly after the Implementation Date, RDU shall display in all Primary
Locations and Complementary Locations signage specified by Midway. Midway shall
pay for the production of all signage bearing the Identification and Midway
shall thereafter be the owner of such signage. RDU shall pay the reasonable
costs of installation and maintenance of the signage. Upon termination of this
Agreement RDU shall return to Midway all such signage owned by Midway.
D. FIDS
At Hub City and Complementary Locations, RDU Operations shall be
displayed in Midway's Flight Information Display System (FIDS).
VIII. DIVISION OF REVENUE
A. LOCAL FARES
*
B. THROUGH FARES
*
____________
* Signifies marked portion deleted and filed separately with the
Commission pursuant to request for confidential treatment.
9
<PAGE>
C. JOINT FARES
*
IX. MAINTENANCE AND FUELING Midway, shall have no responsibility for the
airworthiness, maintenance or fueling of RDU's aircraft or for the failure of
RDU's aircraft or the operation thereof by RDU to comply with applicable laws,
regulations, orders or the like.
X. U.S. MAIL
In the event that Midway and RDU are required or desire to provide
through mail service, a separate agreement may be negotiated to provides mail
services.
XI. INSURANCE
RDU shall procure and maintain in full force and effect, at its own
expense, a policy or policies of insurance with an insurance company or
companies satisfactory to Midway. At a minimum the insurance shall provide the
following coverages:
A. COMPREHENSIVE AIRLINE LIABILITY INSURANCE
Comprehensive Airline Liability Insurance, including but not limited to
Aircraft Liability, Passenger Liability, Comprehensive General Liability
Insurance and Cargo and Baggage Liability Insurance, with combined single limits
for each and every loss and each aircraft of not less than (a) U.S.
$100,000,000, or (b) U.S. $1,000,000 per available seat or (c) the amount RDU
currently has in place, whichever is greater and with a deductible no greater
than $50,000.
B. AIRCRAFT HULL ALL RISKS INSURANCE
Aircraft Hull All Risks Insurance, including ground and flight coverage
on the Aircraft, including its engines and all its parts when installed or
temporarily detached from the Aircraft, for an amount not less than that
normally carried by similarly situated air carriers.
C. CERTIFICATES OF INSURANCE
On or before the Implementation Date of this Agreement, and not less than
30 days before the expiration or termination date of any insurance required to
be maintained by RDU under Sections XI.A and XI.B above, RDU shall furnish
Midway with certificates of insurance and such certificates shall name Midway as
an additional insured.
D. MIDWAY'S INSURANCE
Midway shall maintain insurance in at least the amounts and coverages
that it carries on the Implementation Date subject, however, to adjustments
which are customary in the industry. Midway shall provide RDU with evidence of
insurance, and Midway shall name RDU as an additional insured.
XII. LIABILITY AND INDEMNIFICATION
A. EMPLOYER/EMPLOYEE LIABILITY
Each party hereto assumes full responsibility for its employer's
liability and Workers Compensation liability to its own officers, directors,
employees or agents on account of injury, or death resulting from or sustained
in the performance of their respective services under this
____________
* Signifies marked portion deleted and filed separately with the
Commission pursuant to request for confidential treatment.
10
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Agreement. Each party, with respect to its own employees, accepts full and
exclusive liability for the payment of worker's compensation and employer's
liability insurance premiums with respect to such employees, and for the payment
of all taxes, contributions or other payments for unemployment compensation or
old age benefits, pensions or annuities now or hereafter imposed upon employers
by the government of the United States or by any state or local governmental
body with respect to such employees measured by the wages, salaries,
compensation or other remuneration paid to such employees, or otherwise, and
each party further agrees to make such payments and to make and file all reports
and returns, and to do everything to comply with the laws imposing such taxes,
contributions or other payments.
B. PERFORMANCE OF THE PARTIES
Midway and RDU assume liability for and agree to indemnify, release,
defend, protect, save and hold each other, their officers, directors, agents,
and employees harmless from and against any and all liabilities, damages,
expenses, losses, claims, demands, suits, fines, or judgments, including but not
limited to, attorneys' and witnesses' fees, costs and expenses incident thereto,
which may be suffered by, accrue against, be charged to or be recovered from the
other party, its officers, directors, employees or agents, by reason of any
injuries to or deaths of persons or the loss of, damage to, or destruction of
property, including the loss of use thereof, arising out of, in connection with,
or in any way related to any act, error, omission, operation, performance or
failure of performance of Midway or RDU, respectively or of their respective
officers, directors, employees and agents. The party seeking indemnification
shall give the other party prompt and timely notice of any claim made or suit
which in any way results in indemnification, and the indemnifying party shall
have the right to compromise or participate in the defense of same to the extent
of its own interest so long as it has assumed the obligations in respect thereto
and so long as any such compromise will in no event be binding upon the
indemnified party.
C. MIDWAY'S TRAFFIC DOCUMENTS
RDU hereby assumes liability for and agrees to indemnify, release,
defend, protect, save and hold Midway, its officers, directors, agents, and
employees from and against any and all liabilities, damages, losses, claims,
demands, suits, fines or judgments, including but not limited to, attorneys' and
witnesses' fees, costs and expenses incident thereto, which may be suffered by,
accrue against, be charged to, or be recovered from Midway, its officers,
directors, employees, or agents by reason of any losses or damages incurred; (i)
on account of the loss, misapplication, theft or forgery of passenger tickets,
exchange orders, or other supplies furnished by or on behalf of Midway to RDU,
or the proceeds thereof, (whether or not such proceeds have been deposited in a
bank and whether or not such loss is occasioned by the insolvency or bankruptcy
of either the purchaser of the aforesaid passenger tickets, exchange orders, or
other documents or of a bank in which RDU may have deposited such proceeds,
other than a loss caused by a bank to which funds have been transmitted at the
express direction of Midway); or (ii) as a direct or indirect result of RDU's
use of the Designator and/or the Identification in connection with joint fares
described in Article VIII.C above. RDU's responsibility hereunder for passenger
tickets, exchange orders, and other supplies shall commence immediately upon
receipt by RDU of said passenger tickets, exchange orders, and other supplies
into the possession of RDU or any duly authorized officer, agent or employee of
RDU. Midway shall furnish RDU prompt and timely notice of any claims made, or
suits instituted against Midway which in any way, may result in the
indemnification hereunder, and RDU shall have the right to compromise or
participate in the defense of same to the extent of its own interest so long as
it has assumed the obligations in respect thereto and so long as any such
compromise will in no event be binding upon Midway.
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<PAGE>
D. THE PARTIES
As used in this Article XII, all references to Midway include Midway, its
Affiliates and their employees, officers, directors and agents; and all
references to RDU include RDU, its Affiliates and their respective employees,
officers, directors and agents.
XIII. PAYMENTS
All amounts payable between Midway and RDU shall be settled through the
ACH unless otherwise set forth herein or mutually agreed in writing. Midway
may, obtain through the ACH from the account of Great Lakes Aviation, Ltd.,
amounts owed, but not paid, by RDU.
XIV. INDEPENDENT CONTRACTORS AND WAIVER OF CONTROL
A. RDU
The employees, agents, and independent contractors of RDU are employees,
agents, and independent contractors of RDU for all purposes, and under no
circumstances shall they be deemed to be employees, agents or independent
contractors of Midway. RDU is an independent contractor and not an agent for
Midway -- except that RDU acts as an agent of Midway in issuing Midway's ticket
stock and other traffic documents. Midway has no supervisory power or control
over RDU's employees, agents or independent contractors engaged by RDU in
connection with the performance of RDU Operations.
B. MIDWAY
The employees, agents, and independent contractors of Midway are
employees, agents, and independent contractors of Midway for all purposes, and
under no circumstances shall be deemed to be employees, agents, or independent
contractors of RDU. RDU has no supervision or control over any Midway
employees, agents and independent contractors. Midway is an independent
contractor and not an agent for RDU.
C. UNAUTHORIZED OBLIGATION
1. Midway is not authorized to make any contract, agreement,
warranty, or representation on RDU's behalf, or to incur any debt or obligation
in RDU's names; and Midway shall defend, indemnify, save, release and hold RDU,
their officers, directors, employees and agents harmless from any and all
liabilities, claims, judgments and obligations which arise as a result of or in
connection with, or by reason of any such unauthorized obligation made by
Midway, its officers, directors, employees, agents or independent contractors.
2. RDU is not authorized to make any contract, agreement,
warranty, or representation on Midway's behalf, or to incur any debt or
obligation in Midway's name; and RDU shall defend, indemnify, save, release and
hold Midway, its officers, directors, employees and agents harmless from any and
all liabilities, claims, judgments and obligations which arise as a result of or
in connection with, or by reason of any such unauthorized obligation made by
RDU, its officers, directors, employees, agents or independent contractors in
the conduct of RDU's operations.
D. RDU'S FLIGHTS
RDU's flights are operated by RDU. RDU shall advise all third parties,
including passengers, that RDU Operations are not Midway's operations.
XV. DEFAULT AND TERMINATION
A. FINANCIAL AND OPERATIONAL DEFAULT
If any party (the "Defaulting Party") becomes insolvent; if another party
has evidence that the Defaulting Party is not paying without just cause its
bills when due; if the Defaulting Party ceases to
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<PAGE>
be a going concern; makes an assignment for the benefit of creditors or a
similar disposition of the assets of the business; or if the Defaulting Party
either ceases or suspends operations for reasons other than a strike, (the
duration of which shall not exceed 60 days) -- then the Non-Defaulting Party may
immediately terminate this Agreement on notice to Defaulting Party unless the
Defaulting Party immediately gives adequate assurance of the future performance
of this Agreement by establishing an irrevocable letter of credit (issued by a
U.S. bank acceptable to the Non-Defaulting Party, on terms and conditions
acceptable to the Non-Defaulting Party, and in an amount sufficient to cover all
amounts potentially due from the Defaulting Party under this Agreement) that may
be drawn upon by the Non-Defaulting Party if the Defaulting Party does not
fulfill its obligations under this Agreement in a timely manner. If bankruptcy
proceedings are commenced with respect to the Defaulting Party and if this
Agreement has not otherwise terminated, then the Non-Defaulting Party may
suspend all further performance of this Agreement until the Defaulting Party
assumes or rejects this Agreement pursuant to Section 365 of the Bankruptcy Code
or any similar or successor provision. Any such suspension of further
performance by the Non-Defaulting Party pending the Defaulting Party's
assumption or rejection shall not be a breach of this Agreement and shall not
affect the Non-Defaulting Party's right to pursue or enforce any of its rights
under this Agreement or otherwise.
B. BREACH
1. Except as specified in Section XV.,B.,2, below, if either party
(the "Defaulting Party") shall refuse, neglect, or fall to perform, observe, or
keep any material covenants, agreements, terms, or conditions of this Agreement
and such refusal, neglect, or failure shall continue for a period of 30 days
after written notice to cure such default to the Defaulting Party, then the
other party may upon an additional 15 days' notice to the Defaulting Party
terminate this Agreement. If a notice of default is delivered and a notice of
termination is not delivered within 45 days thereafter the other party shall be
deemed to have waived its right to terminate for the particular occurrence of
breach for which the Defaulting Party received notice.
2. If RDU Operations fail to meet the performance criteria
specified in Section III.,D.,1.,a. for any three consecutive month period, then
Midway may terminate this Agreement upon 15 days written notice to RDU.
C. LIABILITY AT TERMINATION
Any termination pursuant to this Agreement shall be without additional
liability to the party initiating such termination and shall not be construed to
relieve any party of any debts or obligations, monetary or otherwise, to the
other party that shall have accrued hereunder prior to the effective date of
such termination. Either party shall be entitled to any and all damages
recoverable under law or in equity against the other for any material breach
hereof.
XVI. ASSIGNMENT, MERGER AND ACQUISITION
A. ASSIGNMENT
This Agreement may be terminated by either Midway or RDU (the
"terminating party") if there is an assignment of this Agreement or of any of
the rights, duties or obligations of the other party (except an assignment of
the right to receive money to be paid hereunder) without the prior written
consent of the terminating party. In the event that this Agreement is assigned,
whether by operation of law or otherwise, without such consent having been given
in writing, the terminating party shall have the right to terminate the
Agreement immediately by written notice to the other party.
13
<PAGE>
B. MERGER AND ACQUISITION
If any party becomes controlled or is acquired by another air carrier,
not owned or controlled by an Affiliate of that party, then the non-acquired
party may terminate this Agreement without liability to the acquired party,
except that all amounts due and payable by either party and all liabilities of
either party shall survive such termination.
XVII. CHANGE OF LAW
If there is a material change in the statutes governing the economic
regulation of air transportation, or in the applicable rules, regulations or
orders or interpretation of any such rule, regulation or order of the DOT or
other department of the government having jurisdiction over air transportation,
which change or changes materially affect the rights or obligations of any
party, then the parties shall consult within 30 days to determine what, if any,
changes to this Agreement are necessary or appropriate. If the parties are
unable to agree whether any change or changes to this Agreement are necessary
and appropriate, or to the terms of such changes, or termination of this
Agreement, and such failure to agree continues for 30 days, then this Agreement
may be terminated by any party upon 30 days prior written notice. Any such
termination shall be without additional obligation or liability to any parties
except that such termination shall not relieve any party of any debt or
obligation accruing prior to the effective date of termination.
XVIII. TAXES AND PERMITS
A. INDEMNIFICATION FOR FEES, TAXES AND CHARGES
RDU and Midway agree to pay on demand and to indemnify and hold each
other harmless from all real and personal property, sales and use, occupational,
gross receipts, value added, income, franchise and any other taxes, customs,
duties, excise taxes, fees, charges, or assessments, of any nature whatsoever
imposed by any federal, state, local or foreign government or taxing authority
together with any liens, or interest thereon ("fees, taxes and other charges")
upon RDU or Midway respectively, with respect to the performance of this
Agreement, or to RDU's or Midway's operations, respectively, or the equipment
contained therein or services provided thereby, or the revenues derived
therefrom. If a claim is made for any fees, tax and other charges referred to
above, the indemnified party shall promptly notify the other party. If the
indemnifying party makes a good faith written request, the indemnified party
shall, upon receipt of evidence that adequate provision for the payment of such
taxes has been made, contest the validity, applicability or amount of such fees,
taxes and other charges at the indemnifying party's expense. Upon demand the
indemnifying party shall pay all expenses (including, without limitation, all
costs, expenses, losses, legal and accountants' fees, penalties and interest) in
making payment, protesting or seeking refund of such fees, taxes and other
charges.
B. INDEMNIFICATION FOR EMPLOYEE TAXES AND OBLIGATIONS
Midway and RDU shall pay to the appropriate authority and shall indemnify
and hold the other party harmless from all Federal or state payroll taxes, FICA,
unemployment tax, state unemployment compensatory contribution, disability
benefit payments, insurance costs, and any other assessments or charges which
relate directly or indirectly to the employment by the indemnifying party of its
employees.
C. LEGAL OBLIGATIONS
Midway and RDU shall comply with all federal, state, and local laws,
rules and regulations, shall timely obtain and maintain any and all permits,
certificates, or licenses necessary for the full and proper conduct of their
operations, and shall pay all fees assessed for airport use including but not
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limited to, landing fees, airport user fees, and prorated airport facility fees.
Further, Midway and RDU shall comply with all mandatory resolutions issued by
the Air Transport Association of America ("ATA") and all non-binding recommended
resolutions of the ATA regarding, but not limited to, baggage claim processing.
XIX. NOTICES
All notices, approvals, requests or demands shall be in writing and shall
be deemed to have been given if sent by certified mail, postage prepaid, to
Midway, addressed as follows:
Midway Airlines Corporation
300 West Morgan Street
Durham, NC 27702
Attn: President
and to RDU, addressed as follows:
RDU Co.
190 Norwest Financial Center
7900 Xerxes Avenue South
Bloomington, MN 55431
Attn: President
Fax # 612/767-7002
or to such other addresses in the continental United States as the parties may
specify in writing. Notices may be sent by fax to the above fax numbers and
shall be deemed to be received 2 hours after the time of their proper
transmission.
XX. APPROVALS, WAIVERS AND AMENDMENTS
A. APPROVAL REQUESTS AND RESPONSES
Whenever this Agreement requires prior approval or consent, the party
seeking consent shall make a timely request therefore. All consent or approvals
shall be in writing. The parties may also consider other reasonable written
requests to waive any obligations. If prior approval is required and requested
under any provision in this Agreement, then the absence of a denial within 10
days after a request shall be deemed to be an approval thereof.
B. WAIVER OF COMPLIANCE
No failure by either party to exercise any power reserved to it by this
Agreement, or to insist upon strict compliance with this Agreement, and no
custom or practice of the parties at variance with the terms hereof, shall
constitute a waiver of a party's right to demand exact compliance with this
Agreement. Waiver by such party of any particular default by the other party
shall not affect or impair such party's rights with respect to any subsequent
default of the same, similar or different nature, nor shall any delay,
forbearance or omission of such party to exercise any power or right arising out
of any breach or default by the other party of any of the terms, provisions or
covenants hereof, affect or impair such party's right to exercise the same, nor
15
<PAGE>
shall such constitute a waiver by such party of any right hereunder, or the
right to declare any subsequent breach or default and to terminate this
Agreement prior to the expiration of its term. Subsequent acceptance by either
party of any payments due to it shall not be deemed to be a waiver by such party
of any preceding breach by the other party of this Agreement.
C. WRITTEN AMENDMENTS
All amendments to this Agreement shall be in writing and signed by both
parties.
XXI. GOVERNING LAW
This Agreement shall be governed by Minnesota law.
XXII. ARBITRATION
If there shall be any dispute between the parties hereto with respect to
either the terms of, or the parties obligations or performances under this
Agreement, or any other agreement between the parties executed pursuant to this
Agreement, then the same shall be submitted to the American Arbitration
Association (the "AAA") for resolution pursuant to the rules and procedures of
the AAA and the parties shall seek to cause AAA to make a determination within
thirty (30) days of such submission. The determination of the AAA shall be
conclusive and binding on each party. The fees of the AAA shall be allocated
and paid by Midway and RDU, or divided between them, on a basis determined by
the AAA to be fair taking into account the correctness of the positions asserted
by each of them with respect to the disputed matters resolved by the AAA.
XXIII. CUMULATIVE REMEDIES
No right or remedy conferred upon or reserved to RDU or Midway by this
Agreement is intended to be, nor shall be deemed, exclusive of any other right
or remedy herein or by law or equity provided or permitted, but each shall be
cumulative of every other right or remedy.
XXIV. FORCE MAJEURE
Except for any payments due hereunder, neither party shall be liable for
delays or failure in performance (including, without limitation, RDU's failure
to meet the performance standards of Article III.D.I.a. above) directly caused
by the other party's failure to perform hereunder or by acts of God, acts of
terrorism or hostilities, war, fire, general acts of governmental entities or
the issuance of court orders (i.e. those taken or issued with respect to either
RDU and/or Midway's industry or aircraft generally and not specifically RDU or
Midway), weather, field conditions, Air Traffic Control operations or any other
cause, whether similar or dissimilar, but in each case beyond the control of the
party charged with such delay or non-performance.
XXV. SEVERABILITY
Each non-material term or provision of this Agreement is considered
severable. If a non-material term or provision is declared to be invalid by a
court or agency having jurisdiction, such declaration shall not impair the
operation of, or have any the other effect upon the valid terms or provisions of
this Agreement, and the valid terms and provisions shall remain in effect and
binding.
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XXVI. ACKNOWLEDGMENTS
A. DISCLAIMER OF WARRANTIES
There have been no express or implied warranties or guarantees by either
party regarding the potential volume, profits or success of the business venture
contemplated by this Agreement.
B. UNDERSTANDING
Each party has received, read and understood this Agreement and its
Exhibits.
XXVII. ENTIRE AGREEMENT
This Agreement is the complete, final and exclusive agreement between
Midway and RDU.
IN WITNESS WHEREOF, the parties have caused this Agreement to be entered into
and signed by their authorized officers, as of August 8, 1995.
RDU, Co. MIDWAY AIRLINES CORPORATION
By: /s/Douglas G. Voss By: /s/John N. Selvaggio
---------------------- --------------------------
Name: Douglas G. Voss Name: John N. Selvaggio
---------------------- --------------------------
Title: President Title: President
---------------------- --------------------------
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EXHIBIT A
PRIMARY LOCATIONS
AVL * *
BWI * *
CAE GSP ORF
* HHH *
CHS IAD *
CMH ILM RIC
* * *
MYR *
RESERVED CITIES
* * SAV
* *
____________
* Signifies marked portion deleted and filed separately with the
Commission pursuant to request for confidential treatment.
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EXHIBIT B
Implementation Schedule
Phase 1
MONTH AIRCRAFT SERVICE COMMENCEMENT
October 1, 1995 2 B1900 *, *
October 15, 1995 2 EM2 *, *
October 29, 1995 2 B1900 *, *
November 15, 1995 2 EM2 MDT, CLE
December 14, 1995 2 EM2 CLT, *
Understanding that opportunities with the November directional bank schedules
will change from the current Midway schedule, service to the following cities
could commence during Phase 1 of the Midway Connection schedule implementation:
*
____________
* Signifies marked portion deleted and filed separately with the
Commission pursuant to request for confidential treatment.
19
