exv10w3






Exhibit 10.3



THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE
COMMISSION (THE “COMMISSION”) PURSUANT TO RULE 24B-2 OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO
SELECTED PORTIONS. ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED
FROM THIS EXHIBIT, AND HAVE BEEN FILED SEPARATELY WITH THE COMMISSION.
OMITTED PORTIONS ARE INDICATED IN THIS EXHIBIT WITH “*****”.





 









 








MASTER FACILITIES AGREEMENT



BY AND AMONG



AMERICAN AIRLINES, INC.



AND



AMERICAN EAGLE AIRLINES, INC.



AND



EXECUTIVE AIRLINES, INC.













 





TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	Section 1. Defined Terms
	 	 	1	 
	Section 2. License and Use of American Facilities
	 	 	6	 
	Section 3. Ownership and Use of Contractor Facilities
	 	 	7	 
	Section 4. Adjustments of American Facilities and Contractor Facilities
	 	 	10	 
	Section 5. Repairs and Capital Improvements
	 	 	11	 
	Section 6. Letters of Credit and Cash Deposits
	 	 	11	 
	Section 7. Allocation of Costs and Expenses
	 	 	12	 
	Section 8. Exclusivity
	 	 	13	 
	Section 9. Reserved
	 	 	14	 
	Section 10. Term and Termination
	 	 	14	 
	Section 11. Continuing Obligations Following Termination
	 	 	16	 
	Section 12. Environmental Covenants
	 	 	17	 
	Section 13. Condemnation
	 	 	20	 
	Section 14. Limitation on Damages
	 	 	20	 
	Section 15. Indemnification
	 	 	21	 
	Section 16. Insurance
	 	 	22	 
	Section 17. Resolution of Disputes
	 	 	24	 
	Section 18. Equitable Remedies
	 	 	26	 
	Section 19. Notices
	 	 	27	 
	Section 20. Binding Effect and Assignment
	 	 	28	 
	Section 21. Amendment and Modification
	 	 	28	 
	Section 22. Waiver
	 	 	28	 
	Section 23. Interpretation
	 	 	28	 
	Section 24. Cooperation With Respect to Reporting
	 	 	27	 
	Section 25. Counterparts
	 	 	29	 
	Section 26. Severability
	 	 	29	 
	Section 27. Governing Law
	 	 	29	 
	Section 28. Entire Agreement
	 	 	29	 
	Section 29. Remedies Cumulative
	 	 	29	 
	Section 30. Further Assurances
	 	 	30	 
	Section 31. No Third Party Beneficiaries
	 	 	29	 
	Section 32. Relationship of the Parties
	 	 	29	 
	Section 33. Jurisdiction
	 	 	30	 
	Section 34. Punitive Damages
	 	 	31	 
	Section 35. Survival of Certain Obligations
	 	 	31	 






- i -









 






	 	 	 

	SCHEDULE 1:

	 	Accounting and Auditing Procedures
	SCHEDULE 2:

	 	Contractor Controllable Facilities
	SCHEDULE 3:

	 	American Facilities
	SCHEDULE 4:

	 	Contractor Facilities
	SCHEDULE 5:

	 	American Facilities and Contractor Facilities Maintained by American






- ii -









 






MASTER FACILITIES AGREEMENT




     This Master Facilities Agreement (this “Agreement”) is dated as of the ____ day of
____________, 2011, and effective as of _________, 2011 (the “Effective Date”), by and
among American Airlines, Inc., a Delaware corporation (together with its successors and permitted
assigns, “American”), American Eagle Airlines, Inc., a Delaware corporation (together with
its successors and permitted assigns, “Eagle”), and Executive Airlines, Inc., a Delaware
corporation (together with its successors and permitted assigns, “Executive” and together
with Eagle, jointly and severally, “Contractor”). All capitalized terms used herein that
are not specifically defined when used shall have the meanings set forth under Section 1.



     WHEREAS, the Air Services Agreement requires American to provide or cause to be provided to
Contractor the airport facilities that are reasonably necessary for the provision of Regional
Airline Services, with certain exceptions, and the Master Ground Handling Agreement requires
American to provide or cause to be provided to Contractor the airport facilities that are
reasonably necessary for the provision of Ground Handling Services, with certain exceptions; and



     WHEREAS, American and Contractor desire to establish the terms by which both American and
Contractor will use and share airport and other facilities in furtherance of the provision of the
Regional Airline Services and Ground Handling Services pursuant to the Air Services Agreement and
Master Ground Handling Agreement; and



     WHEREAS, prior to or contemporaneously herewith certain Ancillary Agreements are being
executed that are critical to the purposes of this Agreement, which Ancillary Agreements shall be
deemed consideration for this Agreement; it being understood that without such Ancillary Agreements
this Agreement would not have been executed; and



     WHEREAS, all references to specific schedules, exhibits and appendices in this Agreement shall
be those certain schedules, exhibits and appendices attached hereto, which shall be deemed
incorporated herein by reference and a part of this Agreement for all purposes.



     NOW, THEREFORE, for and in consideration of the mutual covenants and agreements herein
contained, American, on the one hand, and Eagle and Executive, jointly and severally on the other
hand, agree as follows:



     Section 1. Defined Terms. The following terms shall have the meanings set forth below for all
purposes of this Agreement and shall be equally applicable to both the singular and the plural
forms of the terms defined herein.



     “Accounting and Auditing Procedures” shall mean those certain policies and procedures set
forth on Schedule 1.



     “Affiliate” shall mean any Person that directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with, another Person.



     “Air Services Agreement” shall mean that certain Air Services Agreement dated as of August 31,
2011, among American, Eagle and Executive, as it may be amended from time to time in accordance
with the provisions thereof, together with all exhibits, appendices, schedules and annexes thereto.



     “Airport Operator” shall mean any Governmental Authority or any similar authority or governing
board in any domestic or foreign jurisdiction, or any private or quasi-governmental entity,
governing



 









 




board or other Person with authority to lease, convey or otherwise grant or restrict rights to
use or operate any airport facilities associated with this Agreement.




     “American Agent” shall mean any representative or agent of American (and the employees of any
such representative or agent).



     “American Facilities” shall mean those certain airport facilities used in connection with the
performance of the Contractor Services that are owned, leased, subleased or licensed by American at
the Stations specified on Schedule 3, and any airport facilities (i) that replace or are in
addition to such airport facilities, including any Contractor Facilities that are Transferred to
American, and (ii) that are owned, leased, subleased or licensed by American after the date hereof,
in each case that are used for the performance of the Contractor Services, but excluding the
Contractor Facilities and the Contractor Controllable Facilities.



     “American Guaranteed Facilities” shall mean all Contractor Facilities existing as of the date
of termination or expiration of the terms of both the Air Services Agreement and Master Ground
Handling Agreement, or Contractor Facilities at a Station in the case of a Partial Termination
relating to such Station, but in either case only until such time as such Contractor Facilities are
Transferred to American or another Person at the direction of American in accordance with the terms
hereof or until such time as the applicable Prime Agreement relating to such Contractor Facilities
expires in accordance with its terms.



     “American Indemnified Parties” shall mean AMR, American, any American Agent and their
respective Affiliates and each of their respective successors or permitted assigns, and the
directors, officers and employees of each such Person.



     “American Regional Carriers” shall mean any air carrier that provides regional air services to
American under American’s flight designator code or using American’s livery solely in such air
carrier’s capacity as provider of such regional air services to American.



     “AMR” shall mean AMR Corporation, a Delaware corporation, or its successors or permitted
assigns.



     “Ancillary Agreements” shall mean the Air Services Agreement and each of the other Ancillary
Agreements as such term is defined in the Air Services Agreement (excluding in all events this
Agreement).



     “Business Day” shall mean each Monday, Tuesday, Wednesday, Thursday and Friday unless such day
shall be a day when the Federal Reserve Bank of Dallas, or any Governmental Authority then
performing similar functions in or around Fort Worth, Texas, is closed. A Business Day shall be
deemed to end at 5:00 p.m., Central time.



     “Cash Deposit” shall mean any deposit or payment made in cash by any Party for the purpose of
securing obligations under any Prime Agreement with respect to Contractor Facilities.



     “Claims” shall mean all liabilities, judgments, demands, recoveries, awards, settlements,
penalties, fines, losses and expenses of any nature or kind whatsoever, including reasonable costs
and expenses incidental thereto, under the laws, rules or regulations of any Governmental Authority
(whether arising in tort, contract, under the Warsaw Convention, as amended, or the Montreal
Convention, as amended, and related instruments and conventions or otherwise); Claims shall include
the reasonable costs and expenses of investigating, preparing or defending any such Claims
(specifically including post



2









 




judgment and appellate proceedings or proceedings that are incidental to the successful
establishment of a right of indemnification), such as reasonable attorneys’ fees and fees for
expert witnesses, consultants and litigation support services.




     “Consent” shall mean any written authorization, agreement, approval, consent, ratification,
waiver or other authorization, and “Consented” shall mean the act of providing any such Consent.



     “Contractor Agent” shall mean any contractor, subcontractor, representative or agent (and the
employees of any such contractor, subcontractor, representative or agent) retained, directly or
indirectly, by Eagle or Executive and providing Contractor Services or any portion thereof on
behalf of Eagle or Executive.



     “Contractor Controllable Facilities” shall mean those certain facilities that are owned,
leased, subleased or otherwise retained or used by Contractor that are set forth on Schedule 2,
along with any facilities acquired by Contractor after the date hereof (i) that are not to be used
in connection with Contractor Services or (ii) that American does not stipulate are American
Facilities or Contractor Facilities.



     “Contractor Facilities” shall mean those certain airport facilities at the Stations used in
connection with the Contractor Services that are owned, leased, subleased or licensed by Contractor
and are specified on Schedule 4, and any airport facilities (i) that replace or are in addition to
such airport facilities and (ii) that are owned, leased, subleased or licensed by Contractor after
the date hereof for the performance of the Contractor Services at the direction of American
pursuant to Sections 3 or 4, but excluding the American Facilities, the Contractor Controllable
Facilities and any Contractor Facilities after being Transferred to American.



     “Contractor Indemnified Parties” shall mean Eagle, Eagle Holding, Executive, any Contractor
Agent and each of their respective Affiliates, and each of their respective successors or permitted
assigns, and the directors, officers and employees of each such Person.



     “Contractor Services” shall mean the Regional Airline Services and the Ground Handling
Services.



     “Eagle
Holding” shall mean AMR Eagle Holding Corporation, a Delaware corporation, and shall
include its successors and permitted assigns.



     “Environment” shall mean surface waters, groundwater, drinking water supply, land surface, or
subsurface strata, or ambient air.



     “Environmental Law” shall mean any federal, state, Airport Operator or local law, statute,
ordinance code, rule, regulation, license, permit, authorization, decision, order, injunction,
decree, applicable airport tenant guide, or rule of common law (including without limitation, any
regulations or directives of the applicable Airport Operator, and any specifications issued by the
Air Transport Association), and any judicial or agency interpretation of any of the foregoing,
whether now existing or hereafter enacted or promulgated, as may be amended from time to time, that
pertains to health, safety, any Hazardous Material, or the Environment.



     “Exclusive Contractor Space” shall mean those certain airport facilities at each Station
necessary for and used in connection with the provision of Regional Airline Services by Contractor
that American and Contractor agree, from time to time, shall be reserved exclusively for use by
Contractor due to requirements of Contractor collective bargaining agreements as in existence on
the date hereof.



3









 





     “Governmental Authority” shall mean any federal, state, municipal, local, territorial, or
foreign government, or any governmental department, commission, board, bureau, agency, registry,
regulatory authority, body or instrumentality, or any other court or other judicial body.



     “Ground Handling Services” shall have the meaning set forth in the Master Ground Handling
Agreement.



     “Hazardous Material” shall mean any toxic, radioactive, or hazardous substance, material,
waste, pollutant, emission, or contaminant, including without limitation, (i) asbestos, (ii) urea
formaldehyde, (iii) the group of organic compounds known as polychlorinated biphenyls (PCBs), (iv)
any petroleum product and byproduct including, without limitation, to gasoline, aviation fuel,
motor oil, fuel oil, crude oil, and the various constituents of such products, and (v) pesticides,
fertilizers, and other agricultural chemicals.



     “Letter of Credit” shall mean an irrevocable commitment by a bank or other financial
institution to pay a stated sum of money to a named beneficiary upon satisfaction of certain stated
conditions or a surety bond or other similar form of security for performance.



     “Major Repair and Improvements” shall mean any repair, improvement, addition, alteration or
change to any American Facility or Contractor Facility or any part thereof (such as a building,
improvement, fixture, facility or system) that (i) requires an out-of-pocket expenditure of *****
or more, (ii) arises from American’s direction to change the branding of Contractor from “American
Eagle” or (iii) *****.



     “Master Ground Handling Agreement” shall mean that certain Master Ground Handling Agreement of
even date herewith, among American, Eagle and Executive, as it may be amended from time to time in
accordance with the provisions thereof, together with all exhibits, appendices, schedules and
annexes thereto.



     “Non-Passenger Facilities” shall mean all American Facilities and Contractor Facilities that
are non-passenger facing facilities, spaces or areas, including, but not limited to, bag rooms,
administrative offices, ground support equipment facilities, storage rooms, cargo space,
maintenance facilities and all other non-passenger related facilities, spaces and areas that
passengers do not routinely see or associate with American, Eagle or any American Regional Carrier,
excluding, in all events, Passenger Facilities.



     “Notice” shall mean a written notice, direction or instruction, given in accordance with
Section 19.



     “Ordinary Course of Business” shall mean any action taken by a Person (i) that is consistent
in nature, scope and magnitude with past practices of such Person and is taken in the ordinary
course of the normal, day-to-day operations of such Person and (ii) is similar in nature, scope and
magnitude to actions customarily taken in the ordinary course of the normal, day-to-day operations
of other Persons that are in the same line of business as such Person.



     “Other Airline” shall mean any airline other than American, any Affiliate of American or any
American Regional Carrier.





 




			
	*	 	THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES
AND EXCHANGE COMMISSION (THE “COMMISSION”) PURSUANT TO RULE 24B-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO
SELECTED PORTIONS. ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED
FROM THIS EXHIBIT, AND HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED
PORTIONS ARE INDICATED IN THIS EXHIBIT WITH “*****”.




4









 










     “Party” shall mean any of American, on the one hand, or Eagle, Executive or Contractor, on the
other hand, and “Parties” shall mean American and Contractor, collectively.



     “Passenger Facilities” shall mean all American Facilities and Contractor Facilities that are
passenger facing facilities, spaces or areas, including, but not limited to, all hold rooms,
passenger lounges, baggage service offices, jet bridges, ticketing counters, curbside check-in
facilities and all other passenger related facilities, spaces and areas that passengers may
routinely see or associate with American, Eagle or any American Regional Carrier, excluding, in all
events, Non-Passenger Facilities.



     “Person” shall mean an individual, partnership, limited liability company, corporation, joint
stock company, trust, estate, joint venture, association or unincorporated organization, or any
other form of business or professional entity.



     “Prime Agreement” shall mean (i) any airport operating agreement or other lease, sublease,
agreement, contract, license or other arrangement; (ii) any rules, regulations, licenses,
arrangements, restrictions or other requirements; or (iii) any amendment, modification, extension
or renewal thereof, to the extent entered into by, or binding on or applicable to, American,
Contractor or any of their Affiliates or any other Person and any applicable Airport Operators
pursuant to which such Airport Operators have conferred upon American or Contractor the right to
use or occupy any American Facilities or Contractor Facilities or restricted in any way the use or
operation of such American Facilities or Contractor Facilities.



     “Regional Airline Services” shall have the meaning set forth in the Air Services Agreement.



     “Representative” shall mean the individual agent or representative designated by each Party to
be its formal liaison with or representative to the other Party for matters relating to this
Agreement, having the (non-exclusive) authority and responsibility as described in this Agreement.



     “Release” shall mean any spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, dumping, or disposing into the Environment and “threat of Release”
shall mean a substantial likelihood of a Release that requires action to prevent or mitigate damage
to the Environment that may result from such Release.



     “Separation and Distribution Agreement” shall mean that certain Separation and Distribution
Agreement of even date herewith, between AMR and Eagle Holding, as it may be amended from time to
time in accordance with the provisions thereof, together with all exhibits, appendices, schedules
and annexes thereto.



     “Station” shall mean each airport or other similar location at which there are American
Facilities or Contractor Facilities.



     “Transfer” shall mean any lease, sublease, assignment, disposition, sale or other transfer.



     “Transition Services Agreement” shall mean that certain Transition Services Agreement of even
date herewith, among American, Eagle and Executive, as it may be amended from time to time in
accordance with the provisions thereof, together with all exhibits, appendices, schedules and
annexes thereto.



     Additionally, the following terms shall have the meaning set forth in the corresponding
sections of this Agreement:



5









 





	 	 	 
	Term	 	Defined in Section
	“AA License”

	 	Section 2(a)
	“Absorbed Expenses”

	 	Section 7(a)
	“Agreement”

	 	Introductory Paragraph
	“American”

	 	Introductory Paragraph
	“Communication”

	 	Section 19
	“Contractor”

	 	Introductory Paragraph
	“Controllable Costs”

	 	Section 7(c)
	“Dispute”

	 	Section 17
	“Eagle”

	 	Introductory Paragraph
	“Effective Date”

	 	Introductory Paragraph
	“Executive”

	 	Introductory Paragraph
	“Final Monthly Schedule”

	 	Section 7(d)
	“Indemnified Party”

	 	Section 15(c)
	“Indemnifying Party”

	 	Section 15(c)
	“Insolvency Event”

	 	Section 10(d)(i)
	“Invoiced Pass Through Costs”

	 	Section 7(d)
	“Partial Termination”

	 	Section 10(c)
	“Pass Through Costs”

	 	Section 7(b)
	“Term”

	 	Section 10(a)






     Section 2. License and Use of American Facilities.



          (a) Subject to the terms and conditions hereof and for the Term hereof, American hereby
grants to Contractor the non-exclusive right and license to use and occupy the American Facilities
for the purpose of providing the Contractor Services (the “AA License”).



          (b) Subject to the terms and conditions hereof and only for so long as the AA License
shall be in effect at any Station, Eagle and Executive jointly and severally covenant and agree
that they shall, at or with respect to the American Facilities related to such Station, unless
otherwise directed by American:




     (i) as directed by American, use commercially reasonable efforts to
provide any Person with access at any reasonable time, subject to applicable
security requirements or restrictions;




     (ii) not violate or breach any of the provisions of any applicable Prime
Agreement available to Contractor;




     (iii) timely observe, obey and execute the provisions of any and all
present rules and regulations issued by American, and all reasonable rules and
regulations promulgated in the future by Notice from American to Contractor, in
each case pertaining directly or indirectly to the occupation and use of the
American Facilities;




     (iv) timely observe, obey and execute the provisions of any and all
present and future laws, rules, regulations, requirements, orders and directives
promulgated by any applicable Governmental Authority or Airport Operator that may
apply directly or indirectly to Contractor’s provision of the Contractor Services
on such American Facilities or Contractor’s license, use or occupancy thereof;



6









 






     (v) except as provided in (d) below, procure from all applicable Airport
Operators all licenses, certificates, permits or other authorizations that may be
necessary or required directly or indirectly for the conduct of Contractor
Services;




     (vi) to the extent Contractor may directly or indirectly have the right or
option to vote with respect to or provide oral or written Consent to any action as
a member or participant in any Airport Operator having jurisdiction over such
American Facilities at a Station or pursuant to the terms of any Prime Agreement,
give prompt Notice to American of any such proposed vote or Consent and vote or
Consent in the manner directed by American;




     (vii) conduct their operations in an orderly and proper manner in
accordance with applicable industry standards and in accordance with the Ordinary
Course of Business;




     (viii) control the conduct, demeanor and appearance of Contractor
employees or any Contractor Agents so as to maintain professional standards and
upon Notice of any objection from American or the applicable Airport Operator
concerning the conduct, demeanor, or appearance of any such Person, immediately
take all steps necessary to resolve such objection; and




     (ix) maintain such American Facilities in a clean and orderly manner, free
from dirt, rubbish, trash and other unsightly elements and comply with any Notice
from American relating thereto.


Nothing contained herein with respect to the covenants and agreements of Eagle or Executive with
respect to the American Facilities shall be deemed a recognition or acknowledgment that the costs,
fees and expenses associated therewith shall be the payment obligation of Eagle or Executive; it
being understood and agreed that express terms of this Agreement and the Ancillary Agreements shall
control the allocation of any such costs, fees and expenses to American, on the one hand, and Eagle
and Executive, on the other hand.




          (c) Notwithstanding the provisions of Section 2(a) or 2(b), the Parties agree and
acknowledge that, so long as Contractor is providing any Regional Airline Services at a specified
Station, Contractor shall have the exclusive right and license to use and occupy the Exclusive
Contractor Space at the American Facilities at such Station; provided, that at any time and from
time to time, American and American Agents shall be granted access to any such Exclusive Contractor
Space as directed by American, and any other Person shall be granted access to any such Exclusive
Contractor Space but only to the extent required in any applicable Prime Agreement.



          (d) The Parties acknowledge that the grant of the AA License to Contractor has been made
without obtaining the Consent and approval of any applicable Airport Operators. If any such Airport
Operator subsequently suggests or states that a Consent of any such Airport Operator is required
for the grant of the AA License or for the use of the related American Facilities and American
determines that obtaining such Consent is necessary or advisable, the Parties shall use
commercially reasonable efforts to obtain such Consent and/or to effectuate the AA License on the
terms set forth herein.



     Section 3. Ownership and Use of Contractor Facilities.



          (a) Subject to the terms and conditions hereof and for the Term, with respect to the
Contractor Facilities, Eagle and Executive agree to hold the Contractor Facilities on American’s
behalf



7









 




and solely for the purposes of providing the Contractor Services or as otherwise may be
subsequently directed by American. Without limiting the generality of the foregoing, Eagle and
Executive jointly and severally covenant and agree that that they shall, with respect to the
Contractor Facilities:





     (i) at the direction and cost of American, use their commercially
reasonable efforts to amend, modify, extend, renew, Transfer or terminate any Prime
Agreement for the lease, sublease, occupancy or use of any such Contractor
Facilities or obtain the Consent of the applicable Airport Operator to any such
amendment, modification, extension, renewal, Transfer or termination;




     (ii) not violate or breach any of the provisions of any applicable Prime
Agreement;




     (iii) at the direction and cost of American, use their commercially
reasonable efforts to enter into any lease, sublease or other appropriate agreement
with any applicable Airport Operator for any airport facilities for the replacement
of or addition to any American Facilities or Contractor Facilities for use in
connection with the Contractor Services; provided, that American shall have used
commercially reasonable efforts to enter into such agreement with the applicable
Airport Operator, but shall not have been permitted by the applicable Airport
Operator to enter into any such agreement, or American shall have reasonably
determined that any such agreement may be entered into by Contractor on more
favorable terms than if entered into by American;




     (iv) except as otherwise provided in this Section 3, not Transfer all or
any portion of their interest, nor enter into any lease, sublease or other
agreement relating to such Contractor Facilities, or amend, modify, extend or renew
in any manner any such applicable Prime Agreement, or Consent to any of the same,
without the Consent of American, it being understood that any such Transfer or
other agreement relating to any Contractor Facilities in violation of this Section
3 shall be void and ineffectual ab initio;




     (v) as directed by American, use commercially reasonable efforts to
provide any Person with access at any reasonable time to the Contractor Facilities,
subject to applicable security requirements or restrictions;




     (vi) comply in a timely manner with all of their obligations arising under
the applicable Prime Agreements, including prompt payment and discharge of all
rental obligations in accordance with the terms of such Prime Agreements; it being
understood that American shall reimburse Contractor for the payment of any such
rental obligations in accordance with Section 7, subject, however, to American’s
right to reasonably object to and contest any such obligation in good faith and in
connection therewith to direct Eagle or Executive, as the case may be, to withhold
payment or performance of such obligation pending the outcome of such contest,
provided that American agrees to indemnify Eagle or Executive, as the case may be,
for any cost imposed on it by the applicable Airport Operator due to Eagle or
Executive withholding such payment or performance;




     (vii) timely observe, obey and execute the provisions of any and all
present rules and regulations issued by American, and all reasonable rules and
regulations promulgated in the future by Notice from American to Contractor;



8









 






     (viii) timely observe, obey and execute the provisions of any and all
present and future laws, rules, regulations, requirements, orders and directives
promulgated by any applicable Governmental Authority or Airport Operator that may
apply directly or indirectly to Contractor’s provision of the Contractor Services
on such Contractor Facilities or Contractor’s license, use, or occupancy thereof,
subject, however, to American’s right to reasonably object to and contest any such
obligation in good faith and in connection therewith to direct Eagle or Executive,
as the case may be, to withhold payment or performance of such obligation pending
the outcome of such contest, provided that American agrees to indemnify Eagle or
Executive, as the case may be, for any cost imposed on it by the applicable
Governmental Authority or Airport Operator due to Eagle or Executive withholding
such payment or performance;




     (ix) procure from all applicable Airport Operators all licenses,
certificates, permits or other authorizations that may be necessary or required
directly or indirectly for the conduct of Contractor Services;




     (x) timely pay and discharge any and all costs, fees and other similar
expenses arising from the use or occupancy of such Contractor Facilities, including
all electrical, gas, water or other utility costs, fees or expenses;
it being understood that American shall reimburse Contractor for the
payment of any such utility costs or fees in accordance with Section 7;




     (xi) timely pay and discharge any and all state and local real property
taxes or similar costs or fees related to such Contractor Facilities;

it being understood that American shall reimburse Contractor for the
payment of any such taxes or fees in accordance with Section 7;




     (xii) if Contractor receives any rebates, refunds or other cash
adjustments from the applicable Airport Operator for any time after the Effective
Date, promptly pay such rebates or refunds to American;




     (xiii) to the extent Contractor may, directly or indirectly, have the
right or option to vote with respect to or provide written or oral Consent to any
action as a member or participant in any Airport Operator having jurisdiction over
such Contractor Facilities or pursuant to the terms of any Prime Agreement, use
commercially reasonable efforts to give prompt Notice to American of any such
proposed vote or Consent and vote or Consent in the manner directed by American;




     (xiv) conduct operations in an orderly and proper manner in accordance
with applicable industry standards and in accordance with the Ordinary Course of
Business;




     (xv) control the conduct, demeanor and appearance of Contractor employees
or any Contractor Agents so as to maintain professional standards and upon Notice
of any objection from American or the applicable Airport Operator concerning the
conduct, demeanor, or appearance of any such Person, immediately take all steps
necessary to resolve such objection; and




     (xvi) maintain such Contractor Facilities in a clean and orderly manner,
free from dirt, rubbish, trash and other unsightly elements and comply with any
Notice from American relating thereto.






9









 









Nothing contained herein with respect to the covenants and agreements of Eagle or Executive with
respect to the Contractor Facilities shall be deemed a recognition or acknowledgment that the
costs, fees and expenses associated therewith shall be the payment obligation of Eagle or
Executive; it being understood and agreed that express terms of this Agreement and the Ancillary
Agreements shall control the allocation of any such costs, fees and expenses to American, on the
one hand, and Eagle and Executive, on the other hand.




          (b) Notwithstanding the provisions of Section 3(a), the Parties agree and acknowledge
that, so long as Contractor is providing any Regional Airline Services at a specified Station,
Contractor shall have the exclusive right and license to use and occupy the Exclusive Contractor
Space at the Contractor Facilities at such Station; provided, that at any time and from time to
time, American and American Agents shall be granted access to any such Exclusive Contractor Space
as directed by American, and any other Person shall be granted access to any such Exclusive
Contractor Space but only to the extent required in any applicable Prime Agreement.



          (c) Notwithstanding the provisions of Section 3(a)(iv), prior to the termination or
expiration of any lease, sublease or other agreement relating to the Contractor Facilities,
American shall provide Contractor with reasonable Notice of any decision not to extend or renew
such lease, sublease or other agreement, or of American’s intent that such lease, sublease or other
agreement should terminate or expire, but use of such Contractor Facilities should continue on a
“hold-over” basis or pursuant to another lease, sublease or other agreement. The terms of this
Section 3 shall continue with respect to such Contractor Facilities if American directs that use of
such Contractor Facilities should continue on a “hold-over” basis or pursuant to another lease,
sublease or other agreement. Upon receipt of Notice of American’s decision not to extend or renew
a lease, sublease or other agreement, unless American intends for such lease, sublease or other
agreement to continue on a “hold-over” basis or pursuant to another agreement, Contractor shall
have the right and option to enter into a lease, sublease, amendment or other agreement relating to
such Contractor Facilities on its own behalf. If Contractor enters into such lease, sublease,
amendment or other agreement with respect to such Contractor Facilities on its own behalf, to the
extent such facilities are used to provide Regional Airline Services or Ground Handling Services,
such facilities shall be Contractor Facilities and subject to the terms hereof. Immediately upon
Contractor ceasing to provide any Regional Airline Services or Ground Handling Services at such
Station, such Contractor Facilities shall be deemed Contractor Controllable Facilities and no
longer subject to the terms hereof.



     Section 4. Adjustments of American Facilities and Contractor Facilities.



          (a) American shall have the right and option at any time and from time to time, in its
sole and absolute discretion, to designate any airport facilities to replace or be added to any
American Facilities or Contractor Facilities for the performance of the Contractor Services, or to
designate that a lesser amount of airport facilities be included in the American Facilities or
Contractor Facilities to the extent permitted by the applicable Airport Operator and subject to
American’s obligations under the Air Services Agreement and Master Ground Handling Agreement.



          (b) Eagle and Executive hereby covenant and agree to assist and cooperate with American to
determine the airport and other facilities reasonably necessary for Contractor’s provision of the
Regional Airline Services under the Air Services Agreement and the Ground Handling Services under
the Master Ground Handling Agreement.



          (c) Any performance or financial impacts of replacement or addition to American Facilities
or Contractor Facilities under this Section 4 shall be governed by the Air Services Agreement or
the Master Ground Handling Agreement, as applicable.



10









 





     Section 5. Repairs and Capital Improvements.



          (a) Notwithstanding anything herein to the contrary, and except for those American
Facilities and Contractor Facilities set forth on Schedule 5 and any other American Facilities or
Contractor Facilities designated by American after the date hereof, Contractor shall be required at
its sole cost and expense to maintain and repair the American Facilities and Contractor Facilities
in accordance with its Ordinary Course of Business, including ordinary repairs and maintenance on
any fixtures, furnishings and signs thereon that are necessary to keep the American Facilities and
Contractor Facilities clean and in good operating condition and repair, reasonable wear and tear
excepted, but only to the extent such repair or maintenance is not a Major Repair and Improvement.



          (b) American shall have the right to perform, directly or indirectly, any Major Repair and
Improvements on all American Facilities and Contractor Facilities and shall have the right to
require Contractor following reasonable Notice to perform any Major Repair and Improvements on all
American Facilities and Contractor Facilities. Contractor shall not undertake or commit to any
Major Repair and Improvements on any American Facilities or Contractor Facilities without the
Consent of American. American shall not unreasonably withhold its Consent to any such Major Repair
and Improvements on any of the American Facilities or Contractor Facilities that are necessary for
American or Contractor to comply with the requirements or specifications of the applicable Prime
Agreement; provided, that American shall have the right to object to and contest any such
requirements or specifications in good faith and in connection therewith to direct Eagle or
Executive, as the case may be, to withhold payment or performance of such requirements or
specifications pending the outcome of any such objection or contest, provided that American agrees
to indemnify Eagle or Executive, as the case may be, for any cost imposed on it by the applicable
Government Authority or Airport Operator due to Eagle or Executive withholding such payment or
performance.



          (c) American shall promptly pay, or reimburse Contractor in accordance with Section 7, for
any and all Major Repair and Improvements on the American Facilities and Contractor Facilities and
any federal, state or local taxes accrued or incurred on such Major Repair and Improvements.



     Section 6. Letters of Credit and Cash Deposits.



          (a) If in the Ordinary Course of Business, Contractor has prior to the Effective Date
delivered any Letter of Credit to secure performance of its obligations pursuant to any Prime
Agreement relating to any Contractor Facilities at any Station, then American shall either replace
such Letter of Credit with a Letter of Credit supplied by American, or pay, in accordance with
Section 7, to Contractor the amount of any cash deposit paid by Contractor and then held by the
issuer of such Letter of Credit as security therefore. For any Letters of Credit or Cash Deposits
that may be required after the Effective Date hereof in order to secure Contractor’s performance of
its obligations with respect to any Prime Agreement relating to any Contractor Facilities at any
Station, American shall provide any such Letter of Credit or Cash Deposit; provided, that if an
Airport Operator at any such Station does not permit American to provide such Letter of Credit or
Cash Deposit, then at the direction of American, Contractor shall provide a Letter of Credit or
Cash Deposit satisfactory to such Airport Operator, and American shall pay, in accordance with
Section 7, to Contractor the amount of such Cash Deposit or of any cash deposit required to be paid
by Contractor to the issuer of such Letter of Credit as security therefore and any fees or other
costs payable to the issuer of such Letter of Credit.



          (b) Any Cash Deposits paid by Contractor to the issuer of a Letter of Credit to secure
such Letter of Credit, either in place at the Effective Date or provided after the Effective Date,
shall



11









 







become the property of American and, if returned to Contractor, Contractor shall promptly pay
such Cash Deposits to American.



     Section 7. Allocation of Costs and Expenses. Except as expressly set forth in this Section 7 or
otherwise provided for in this Agreement, all costs and expenses incurred in connection with the
performance of American’s and Contractor’s respective obligations under this Agreement shall be
classified as “Absorbed Expenses”, “Pass Through Costs” or “Controllable Costs” and shall be
payable as follows:



          (a) Absorbed Expenses. The following costs and expenses shall be paid directly by
American (collectively the “Absorbed Expenses”):




     (i) Rent and other costs of ownership and use of the American Facilities
and Contractor Facilities, to the extent borne by American as provided in Sections
2 and 3, respectively;




     (ii) Cost of any Major Repair and Improvements, to the extent and as
provided in Section 5; and




     (iii) Provision of Letters of Credit and Cash Deposits, to the extent and
as provided in Section 6.


American and Contractor recognize that certain Absorbed Expenses may arise from services provided
by Contractor pursuant to the Ancillary Agreements. The categorization of certain Absorbed
Expenses under this Agreement shall not in any manner whatsoever limit the Parties’
responsibilities under any of the Ancillary Agreements. Any Absorbed Expenses that are paid by
American under this Agreement shall not be paid by American under any Ancillary Agreement.




          (b) Pass Through Costs. The following costs and expenses (the “Pass Through
Costs”) consist of those items or services for which Contractor may periodically incur costs
and expenses under this Agreement; provided, that if American directly pays any Pass Through Costs,
then such Pass Through Costs shall be deemed an Absorbed Expense. Unless otherwise Consented to by
American or otherwise paid directly by American, Pass Through Costs shall not include: Absorbed
Expenses, Controllable Costs, or any fines or other amounts set forth in subsection (e), or any
other costs or expenses not directly related to Contractor’s use of the American Facilities or
Contractor Facilities. Pass Through Costs are:




     (i) Rent and other costs of ownership and use of the American Facilities,
Contractor Facilities and American Guaranteed Facilities to the extent and as
provided in Sections 2, 3 and 11, respectively;




     (ii) Cost of any Major Repair and Improvements, to the extent borne by
American as provided in Section 5, incurred by Contractor at the direction of
American; and




     (iii) Provision of Letters of Credit and Cash Deposits, to the extent
borne by American as provided in Section 6, incurred by Contractor at the direction
of American; and




     (iv) Any other costs and expenses, to the extent borne by American
pursuant to this Agreement, incurred by Contractor at the direction of American.



12









 





          (c) Controllable Costs. American shall not be required to incur any cost or make
any payment pursuant to this Section 7 to the extent that such cost or payment is attributable to
any of the
following costs and expenses incurred by Contractor (collectively the “Controllable
Costs”). Any cost or expense incurred by Contractor that is not a Pass Through Cost or
Absorbed Expense, regardless of whether such costs are described below, shall be considered a
Controllable Cost:




     (i) Rent and other costs of ownership and use of any Contractor
Controllable Facilities;




     (ii) Costs of ownership and use of the American Facilities and Contractor
Facilities, to the extent borne by Contractor as provided in Sections 2 and 3,
respectively;




     (iii) Costs to vacate and surrender facilities upon termination of this
Agreement, termination of the AA License at any American Facility or Partial
Termination of this Agreement with respect to any Contractor Facility, in each case
pursuant to Section 10(f); and




     (iv) Any other costs and expenses not specifically allocated pursuant to
the terms of this Agreement.



          (d) *****



          (e) American shall not be required to incur any cost or make any payment pursuant to this
Section 7 to the extent such cost or payment is attributable to any costs, expenses or losses
(including fines, penalties and any costs and expenses associated with any related investigation or
defense) incurred by Contractor as a result of any violation by Contractor of any law, statute,
judgment, decree, order, rule or regulation of any Governmental Authority. American shall be
liable for all costs, expenses and losses (including fines, penalties and any costs and expenses
associated with any related investigation or defense) incurred by Contractor as a result of any
violation by American or its agents, or by Contractor to the extent performed at the direction of
American, of any law, statute, judgment, decree, order, rule or regulation of any Governmental
Authority.



     Section 8. Exclusivity. During the Term hereof, American and Contractor hereby covenant and
agree that with respect to the American Facilities and Contractor Facilities:



          (a) Each Passenger Facility shall be used by Contractor exclusively for the provision of
the Contractor Services to American or American Regional Carriers, and may not be used by
Contractor for the provision of any services, including ground handling services, regional air
services or any other services, to any Other Airline or for any other purpose without the Consent
of American; it being understood that American shall have sole and absolute discretion to provide
or decline such Consent for any reason whatsoever. The foregoing limitation shall not apply to:




     (i) any Passenger Facilities that are leased or otherwise made available
to all air carriers at such Station on a common-use or joint-use basis; or





 




			
	*	 	THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES
AND EXCHANGE COMMISSION (THE “COMMISSION”) PURSUANT TO RULE 24B-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO
SELECTED PORTIONS. ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED
FROM THIS EXHIBIT, AND HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED
PORTIONS ARE INDICATED IN THIS EXHIBIT WITH “*****”.




13









 











     (ii) any Passenger Facilities that are properly required by an Airport
Authority to be made available for use by others in accordance with any applicable
Prime Agreement.


American shall be deemed to have provided its Consent to the use by Contractor of those Passenger
Facilities that are used as of the Effective Date to provide services to any Other Airline;
provided, that American may revoke any such Consent on ***** prior Notice to Contractor.
*****.




          (b) Each American Facility or Contractor Facility that is a Non-Passenger Facility may not
be used by Contractor for the provision of any services, including ground handling services,
regional air services or any other services to any Other Airline or for any other purpose without
the Consent of American, which Consent shall not be unreasonably withheld *****.



          (c) Contractor must deliver written request for American’s Consent under this Section 8 to
American at least fifteen (15) days prior to the contemplated alternative usage of the American
Facilities and Contractor Facilities pursuant to subsection (b) above. If American fails to
respond to any such request within fifteen (15) days of receipt of such request, American shall be
deemed to have provided its Consent thereto.



          (d) With respect to any American Facilities and Contractor Facilities that American has
provided its Consent for Contractor to use for the provision of services to any Other Airline or
for any other purpose, Eagle and Executive jointly and severally covenant and agree that all such
American Facilities and Contractor Facilities shall be made available first for the provision of
the Contractor Services to American and American Regional Carriers prior to the provision of any
similar or other services to any other third parties.



          (e) Notwithstanding the foregoing, it is understood and agreed that Contractor shall be
permitted to use any Contractor Controllable Facilities, and to obtain additional Contractor
Controllable Facilities at any time, to serve any Other Airline or itself or for any purpose at any
time without the Consent of American.



     Section 9. Reserved.



     Section 10. Term and Termination.



          (a) Subject to any continuing obligations as provided in Section 11, this Agreement shall
commence on, and shall be effective as of, the Effective Date and, unless earlier terminated as
provided in this Section 10, shall continue in full force and effect until the earlier to occur of
(i) the earliest date on which the AA License has terminated with respect to all American
Facilities and this Agreement has terminated with respect to all Contractor Facilities and (ii) the
sixteenth (16th) year anniversary of the Effective Date (the “Term”).



          (b) Notwithstanding Section 10(a), this Agreement shall automatically terminate without
any liability of any Party for breach and be of no further force or effect upon any termination of
the Separation and Distribution Agreement prior to the Distribution Date (as such term is defined
therein).





 




			
	*	 	THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES
AND EXCHANGE COMMISSION (THE “COMMISSION”) PURSUANT TO RULE 24B-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO
SELECTED PORTIONS. ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED
FROM THIS EXHIBIT, AND HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED
PORTIONS ARE INDICATED IN THIS EXHIBIT WITH “*****”.




14









 










          (c) Notwithstanding the foregoing, the AA License and all other rights and obligations of
American, on the one hand, or Eagle and Executive, on the other hand, shall automatically terminate
without any further action of any Party (a “Partial Termination”), subject to any
continuing obligations as set forth in Section 11, as follows:




     (i) those American Facilities and Contractor Facilities at a Station that
are used to provide Ground Handling Services, if Contractor ceases for any reason
to provide Ground Handling Services at such Station in accordance with the terms of
the Master Ground Handling Agreement; and




     (ii) those American Facilities and Contractor Facilities at a Station that
are used to provide Regional Airline Services, if Contractor ceases for any reason
to provide Regional Airline Services at such Station in accordance with the terms
of the Air Services Agreement.



          (d) In addition to the provisions of Sections 10(b) and (c), and subject to any continuing
obligations as set forth in Section 11, upon the occurrence of the following events, either
American, if the non-defaulting Party on the one hand, or Eagle, if Eagle and Executive are the
non-defaulting Parties on the other hand, shall have the right to terminate this Agreement, by
providing Notice to the defaulting Party or, with respect to a termination under Section 10(d)(i)
below, to the Party suffering the Insolvency Event if:




     (i) American, on the one hand, or Eagle, Executive or Eagle Holding, on
the other hand, (1) makes a general assignment for the benefit of creditors or
becomes insolvent, (2) files a voluntary petition in bankruptcy, (3) petitions for
or acquiesces in the appointment of any receiver, trustee or similar officer to
liquidate or conserve its business or any substantial part of its assets, (4)
commences under the laws of any jurisdiction any proceeding involving its
insolvency, bankruptcy, reorganization, readjustment of debt, dissolution,
liquidation or any other similar proceeding for the relief of financially
distressed debtors, (5) becomes the object of any proceeding or action of the type
described in (3) or (4) above and such proceeding or action remains undismissed or
unstayed for a period of at least sixty (60) days, or (6) is involuntarily divested
of a substantial part of its assets for a period of at least sixty (60) days (each
of (1) through (6) above an “Insolvency Event”);




     (ii) American, on the one hand as the defaulting party, or Eagle or
Executive, on the other hand as the defaulting party, refuses, neglects or fails to
perform, observe, or keep any material non-monetary covenants, agreements, terms or
conditions contained herein on their part to be performed, observed, or kept and
such refusal, neglect or failure shall continue for a period of sixty (60) days
after Notice to cure such breach to the defaulting Party thereof;




     (iii) American, on the one hand, or Eagle or Executive, on the other hand,
fails to pay any undisputed amounts owing to the other Party under the terms of
this Agreement, or either Party breaches a monetary provision of this Agreement,
and such failure to pay or monetary breach remains uncured for more than ten (10)
days after receipt of Notice of such failure to pay or monetary breach; or




     (iv) The Air Services Agreement and the Master Ground Handling Agreement
are both terminated for any reason prior to the end of the terms of such
agreements.



15









 





          (e) Termination or Partial Termination of this Agreement for any reason shall not relieve
any of the Parties of rights and obligations with respect to the American Facilities and Contractor
Facilities incurred prior to the end of the Term.



          (f) Upon (i) expiration of the Term, (ii) termination of the AA License at any American
Facility, or (iii) termination or Partial Termination of this Agreement with respect to any
Contractor Facility, Eagle and Executive jointly and severally covenant and agree to, at their sole
cost and expense: (w) promptly remove any and all signs, trade fixtures and any other personal
property that belongs to or relates solely to Eagle, Executive, any of their employees, or any
Contractor Agents at such American Facilities or Contractor Facilities, (x) repair any and all
damage caused by any such removal, (y) immediately surrender such American Facilities or Contractor
Facilities to American in good order and condition, reasonable wear and tear excepted, *****, and
(z) return such American Facilities or Contractor Facilities in the same environmental condition
that existed as of the Effective Date (or to such condition as is otherwise required under the
relevant provisions of the Prime Agreement) and free of any Hazardous Material introduced as a
result of Contractor’s use and occupancy of the American Facilities and Contractor Facilities
pursuant to this Agreement or the performance of the Contractor Services.



          (g) It is understood and agreed that each Party’s right of termination under this Section
10 shall be in addition to any other rights such Party may have under this Agreement or the
Ancillary Agreements or otherwise, and the exercise of any such right of termination shall not be
deemed an election of remedies. If this Agreement is terminated because of a breach of this
Agreement, the Master Ground Handling Agreement, or the Air Services Agreement by the
non-terminating Party, the terminating Party’s right to pursue all legal remedies shall survive any
such termination or Partial Termination of this Agreement.



     Section 11. Continuing Obligations Following Termination.



          (a) In the event of any termination or Partial Termination of this Agreement or expiration
of the Term in accordance with the provisions of Section 10, American and Contractor shall, as soon
as reasonably practicable following such termination, Partial Termination or expiration, use their
commercially reasonable efforts to Transfer any American Guaranteed Facilities to American or any
other Person at American’s direction; provided, that if the applicable Airport Operator does not
Consent to any such Transfer, Eagle and Executive jointly and severally covenant and agree to
comply with the following provisions with respect to such American Guaranteed Facilities until such
time as the Transfer of such American Guaranteed Facilities may be effectuated or the applicable
Prime Agreement expires in accordance with its terms:




     (i) as directed by American, use their commercially reasonable efforts to
amend, modify, extend, renew, Transfer or terminate the applicable Prime Agreement
for the lease, sublease, occupancy or use of such American Guaranteed Facilities or
obtain the Consent of the applicable Airport Operator to any such amendment,
modification, extension or renewal, Transfer or termination;




     (ii) except as otherwise directed by American, not Transfer all or any
portion of their interest, nor enter into any lease, sublease or other agreement
relating to such American Guaranteed Facilities, or amend, modify, extend or renew
in any manner any





 




			
	*	 	THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES
AND EXCHANGE COMMISSION (THE “COMMISSION”) PURSUANT TO RULE 24B-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO
SELECTED PORTIONS. ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED
FROM THIS EXHIBIT, AND HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED
PORTIONS ARE INDICATED IN THIS EXHIBIT WITH “*****”.




16









 











applicable Prime Agreement, or Consent to any of the same,
without the Consent of American, it being understood that any such Transfer or
other agreement relating to such American Guaranteed Facilities in violation of
this Section 11 shall be void and ineffectual ab initio;




     (iii) comply in a timely manner with all payment obligations arising under
the applicable Prime Agreements, including prompt payment and discharge of all
rental obligations in accordance with the terms of such Prime Agreements; it being
understood that American shall reimburse Contractor for the payment of any such
rental obligations in accordance with Section 7, subject, however, to American’s
right to reasonably object to and contest any such obligation in good faith and in
connection therewith to direct Eagle or Executive, as the case may be, to withhold
payment or performance of such obligation pending the outcome of such contest,
provided that American agrees to indemnify Eagle and Executive, as the case may be,
for any cost imposed on it be the applicable Airport Operator due to Eagle or
Executive withholding such payment or performance;




     (iv) timely pay and discharge any and all costs, fees and other similar
expenses arising from the use or occupancy of such American Guaranteed Facilities,
including all electrical, gas, water or other utility costs, fees or expenses; it
being understood that American shall reimburse Contractor for the payment of any
such utility costs or fees in accordance with Section 7;




     (v) timely pay and discharge any and all state and local real property
taxes or similar costs or fees related to such American Guaranteed Facilities; it
being understood that American shall reimburse Contractor for the payment of any
such taxes or fees in accordance with Section 7;




     (vi) in the event Contractor receives any rebates, refunds or other cash
adjustments from the applicable Airport Operator with respect to such American
Guaranteed Facilities, promptly pay such rebates or refunds to American;




     (vii) to the extent Contractor may, directly or indirectly, have the right
or option to vote with respect to or provide oral or written Consent to any action
as a member or participant in any Airport Operator having jurisdiction over such
American Guaranteed Facilities or pursuant to the terms of any Prime Agreement, use
commercially reasonable efforts to give prompt Notice to American of any such
proposed vote or Consent and vote or Consent in the manner directed by American;
and




     (viii) as directed by American, use commercially reasonable efforts to
provide American, American Regional Carriers or any other Person with access at any
time, subject to applicable security requirements or restrictions.



          (b) Notwithstanding anything herein to the contrary, Section 1 and Sections 11 through 35
shall apply to the American Guaranteed Facilities following termination or expiration of the Term
or Partial Termination of this Agreement, and shall continue in full force and effect, but solely
with respect to such American Guaranteed Facilities.





17









 






Section 12.
Environmental Covenants.





          (a) Subject to the terms and conditions hereof and for the Term, Eagle and Executive
jointly and severally covenant and agree that that they shall, with respect to the American
Facilities and Contractor Facilities:




     (i) comply with all applicable requirements regarding Hazardous Material
and environmental conditions set forth in the applicable Prime Agreement and shall
not cause American to be in violation of any requirements contained therein;




     (ii) observe and comply with, and cause the Contractor Agents to observe
and comply with, all Environmental Laws;




     (iii) timely perform the following tasks to the extent they may relate to
or result from Contractor’s use and occupancy of the American Facilities and
Contractor Facilities pursuant to this Agreement and performance of the Contractor
Services:




	 	(A)	 	obtain and comply with all
environmental and safety registrations, permits, authorizations,
and licenses applicable to Contractor or performance of the
Contractor Services;






	 	(B)	 	conduct all necessary or
appropriate testing, monitoring, inspection, or related
activities applicable to the use, storage, disposal or
distribution of Hazardous Material, as required under applicable
Environmental Law;






	 	(C)	 	submit promptly to
appropriate Governmental Authorities, any notices or reports
applicable to the use, storage or distribution of Hazardous
Material, as required under applicable Environmental Law; and






	 	(D)	 	ensure that all American
Facilities and Contractor Facilities, equipment, piping, hydrant
pits, containers, tanks, and vehicles used by Contractor to
store, distribute, or supply Hazardous Materials in connection
with the American Facilities and Contractor Facilities are
maintained in a safe, efficient, and orderly manner, and in
accordance with all applicable Environmental Laws, without
regard to the ownership of such American Facilities and
Contractor Facilities, equipment, piping, hydrant pits,
containers, tanks, or vehicles.






     (iv) not cause, allow or permit the Release or threatened Release of any
Hazardous Materials into the Environment to, on, under or about the American
Facilities and Contractor Facilities.



          (b) Releases or threatened Releases of any Hazardous Material into the Environment
resulting from Contractor’s use and occupancy of the American Facilities and Contractor Facilities
or relating to the Contractor Services including, without limitation, any Releases or threatened
Releases of Hazardous Material from the American Facilities and Contractor Facilities, equipment,
piping, hydrant pits, containers, tanks, or vehicles used to store, distribute, or supply fuel,
shall be reported immediately by Contractor to American and as required under Environmental Laws to
all necessary or appropriate Governmental Authorities with jurisdiction under applicable
Environmental Laws.



18









 





          (c) Upon discovery of a Release or threatened Release of a Hazardous Material into the
Environment resulting from or related to Contractor’s use and occupancy of the American Facilities
and Contractor Facilities pursuant to this Agreement or arising from the Contractor Services,
Contractor shall immediately initiate all necessary or appropriate procedures to report,
investigate, mitigate, and remediate
the same, and immediately report the same to American. All such actions shall conform with
all applicable Environmental Laws. Contractor shall be responsible for undertaking and completing
the investigation and/or prevention of any such Releases or threatened Releases, as well as the
complete removal, remediation, and proper disposal of any actual Release, in accordance with
applicable Environmental Laws and to the satisfaction of American and all Governmental Authorities
with jurisdiction over such Releases or threatened Releases and shall use reasonable efforts to
obtain written acknowledgment from the applicable Governmental Authorities that no further action
is required with respect to such Release. To the extent American or any Governmental Authority may
determine that remediation is required, Contractor shall coordinate such remediation with
American’s operations and ensure that such remediation does not unduly interfere with American’s
operations. Contractor also shall ensure that upon the conclusion of such remediation, the
condition of the affected property complies with applicable Environmental Laws and that such
remediation has been completed to the satisfaction of American. Contractor shall sign all waste
manifests related to the remediation and/or disposal of any Hazardous Material that has been
Released in relation to, or as a result of, the Contractor Services, as the generator thereof.
Contractor shall promptly submit to American copies of all remediation and/or disposal work plans,
reports, sampling data, and analytical results, manifests and correspondence with Governmental
Authorities in connection with Contractor’s activities as described in this subsection (c).



          (d) Should Contractor fail to comply with any applicable Environmental Laws as required
under this Agreement or if Contractor fails to conduct remediation or related activities as
required under Section 12(c) in a timely manner, American reserves the right, but shall have no
obligation, to take all reasonable and necessary actions to conduct such remediation or related
activities and to correct such non-compliance with Environmental Laws. Contractor shall reimburse
American for costs incurred by American in taking such actions under this Section 12(d) within
thirty (30) days after American’s demand for reimbursement.



          (e) American reserves the right, but shall have no obligation, to conduct multi-media
environmental audits, including the taking of samples, from time to time of Contractor’s
operations, the American Facilities and Contractor Facilities, or of equipment, piping, hydrant
pits, containers, tanks, or vehicles used to store, distribute, or supply fuel at such American
Facilities and Contractor Facilities. Nothing in this provision shall be deemed or construed to
diminish or extinguish any of Contractor’s environmental obligations contained herein.



          (f) In the event of any claim, demand, action, complaint or notice made against Contractor
regarding Contractor’s failure or alleged failure to comply with any Environmental Laws with
respect to the performance of Contractor Services or Contractor’s use and occupancy of the American
Facilities or the Contractor Facilities, Contractor shall immediately notify American and provide
American with copies of any such claim, demand, action, complaint or notice.



          (g) Nothing contained herein shall diminish Contractor’s obligations to investigate,
prevent, remove, remediate and/or dispose of all Hazardous Materials that may be Released or
threatened to be Released at or about the American Facilities and Contractor Facilities in
connection with or arising from the Contractor Services. Notwithstanding the above, Contractor
shall have no obligations under this Section 12 with respect to any Release or threatened Release
of Hazardous Materials which, as between the Parties, was caused solely by the actions of American,
an American Affiliate or an American Agent.



19









 






	 	 	Section 13. Condemnation.





          (a) If during the Term, all or a substantial part of the American Facilities or Contractor
Facilities at any Station should be taken for any public or quasi-public use under any governmental
law, ordinance or regulation or by right of eminent domain, or should be sold to the condemning
authority
under threat of condemnation, this Agreement shall terminate, but solely with respect to the
American Facilities or Contractor Facilities at such Station, effective from the date of taking of
such American Facilities or Contractor Facilities by the condemning authority.



          (b) If less than a substantial part of the American Facilities or Contractor Facilities at
any Station is taken for public or quasi-public use under any governmental law, ordinance or
regulation, or by right of eminent domain, or is sold to the condemning authority under threat of
condemnation, American, at its option, may by Notice terminate this Agreement, but solely with
respect to the American Facilities or Contractor Facilities at such Station, or shall forthwith at
its sole expense restore such portion of the American Facilities or Contractor Facilities at such
Station (other than leasehold improvements made by Contractor), in order to make the same
reasonably tenantable and suitable for the provision by Contractor of the Contractor Services.



          (c) American and Eagle shall be entitled to receive and retain such separate awards and
portions of lump sum awards as may be allocated to their respective interests in any condemnation
proceedings. The termination of this Agreement shall not affect the rights of the respective
Parties to such awards.



     Section 14. Limitation on Damages. CONTRACTOR AGREES THAT NEITHER AMERICAN NOR ANY AMERICAN
INDEMNIFIED PARTY SHALL BE LIABLE TO CONTRACTOR OR ANY EAGLE INDEMNIFIED PARTY FOR (a) ANY LOSS OR
DAMAGE TO ANY PROPERTY OF ANY PERSONS (INCLUDING PROPERTY OF THE CONTRACTOR INDEMNIFIED PARTIES),
OCCASIONED BY THEFT, FIRE, ACTS OF GOD, OR ANY GOVERNMENTAL AUTHORITY OR BODY, RIOT, WAR, OTHER
TENANTS OF THE AMERICAN FACILITIES AND CONTRACTOR FACILITIES OR THE PREMISES OF WHICH THE AMERICAN
FACILITIES AND CONTRACTOR FACILITIES ARE A PART, OR (b) ANY CLAIMS FOR DIRECT, INDIRECT,
INCIDENTAL, CONSEQUENTIAL, PUNITIVE, SPECIAL OR EXEMPLARY DAMAGES, INCLUDING LOST REVENUES, LOST
PROFITS OR LOST PROSPECTIVE ECONOMIC ADVANTAGE ARISING OUT OF OR RELATED TO (i) THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY, OR (ii) ANY INCONVENIENCE WHICH MAY ARISE THROUGH REPAIR OR
ALTERATION OF THE AMERICAN FACILITIES AND CONTRACTOR FACILITIES, INCLUDING ANY MAJOR REPAIR AND
IMPROVEMENTS, OR (iii) FAILURE TO MAKE REPAIRS IN A TIMELY MANNER, OR (iv) THE UNAVAILABILITY OF
UTILITIES, OR FOR ANY OTHER CAUSE, REGARDLESS OF WHETHER SUCH A CLAIM IS BASED ON CONTRACT, TORT
(INCLUDING NEGLIGENCE), STRICT LIABILITY, VIOLATION OF ANY APPLICABLE DECEPTIVE TRADE PRACTICES ACT
OR SIMILAR LAW, RULE OR REGULATION OF A GOVERNMENTAL AUTHORITY OR ANY OTHER LEGAL OR EQUITABLE
PRINCIPLE, EXCEPT TO THE EXTENT CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF AMERICAN OR
ANY AMERICAN AFFILIATE. CONTRACTOR RELEASES AMERICAN AND ITS AFFILIATES FROM LIABILITY FOR ANY
SUCH DAMAGES. AMERICAN AGREES THAT ANY WAIVERS OF CLAIMS FOR DAMAGES CONTAINED IN THE RESPECTIVE
PRIME AGREEMENT RELATING TO THE AMERICAN FACILITIES MADE BY ANY GOVERNMENTAL AUTHORITY THEREUNDER
SHALL INURE TO THE BENEFIT OF EAGLE TO THE EXTENT PERMITTED BY THE APPLICABLE PRIME AGREEMENT AND
APPLICABLE LAW. NEITHER PARTY SHALL BE ENTITLED TO RESCISSION OF THIS AGREEMENT AS A RESULT OF
BREACH OF THE OTHER



20









 







PARTY’S REPRESENTATIONS, WARRANTIES, COVENANTS OR AGREEMENTS, OR FOR ANY OTHER
MATTER; PROVIDED, THAT NOTHING IN THIS SECTION 14 SHALL RESTRICT THE RIGHT OF EITHER PARTY TO
EXERCISE ANY RIGHT TO TERMINATE THIS AGREEMENT PURSUANT TO SECTION 10.



     Section 15. Indemnification.



          (a) CONTRACTOR AND EAGLE HOLDING SHALL EACH JOINTLY AND SEVERALLY INDEMNIFY, DEFEND AND
HOLD HARMLESS THE AMERICAN INDEMNIFIED PARTIES FROM AND AGAINST ANY AND ALL CLAIMS ARISING OUT OF,
CAUSED BY OR OCCURRING IN CONNECTION WITH (OR ALLEGED TO ARISE OUT OF, BE CAUSED BY OR BE OCCURRING
IN CONNECTION WITH) (i) THE DEATH OF OR INJURY TO PERSONS (INCLUDING ALL INVITEES, GUESTS,
PASSENGERS, SHIPPERS, EMPLOYEES, ANY OPERATOR OF AIRCRAFT AND AGENTS OF CONTRACTOR), OR DELAY OR
LOSS OF OR DAMAGE TO PROPERTY (INCLUDING PROPERTY OF CONTRACTOR AND ITS INVITEES, GUESTS,
PASSENGERS, EMPLOYEES AND AGENTS AND PROPERTY OF EACH INDEMNIFIED PARTY, INCLUDING AIRCRAFT,
AIRFRAMES, ANY ENGINE, ANY PART OF ANY THEREOF, BAGGAGE OR CARGO) RESULTING FROM OR ARISING OUT OF
CONTRACTOR’S USE OR OCCUPANCY OF THE AMERICAN FACILITIES OR CONTRACTOR FACILITIES, EXCEPT TO THE
EXTENT CAUSED BY THE WILLFUL MISCONDUCT OF AMERICAN, ANY AMERICAN AFFILIATE OR AMERICAN AGENT; (ii)
NEGLIGENT ACTS OR NEGLIGENT OMISSIONS OF CONTRACTOR, ANY CONTRACTOR AFFILIATE OR ANY CONTRACTOR
AGENT THAT ARE IN ANY WAY RELATED TO CONTRACTOR’S USE OR OCCUPANCY OF ANY AMERICAN FACILITIES OR
CONTRACTOR FACILITIES; AND (iii) THE PERFORMANCE, IMPROPER PERFORMANCE OR NONPERFORMANCE, DIRECTLY
OR INDIRECTLY, OF ANY COVENANT OR AGREEMENT OF CONTRACTOR IN THIS AGREEMENT.



          (b) AMERICAN SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS THE CONTRACTOR INDEMNIFIED PARTIES
FROM AND AGAINST ANY AND ALL CLAIMS ARISING OUT OF, CAUSED BY OR OCCURRING IN CONNECTION WITH (OR
ALLEGED TO ARISE OUT OF, BE CAUSED BY OR OCCURRING IN CONNECTION WITH) (i) THE PERFORMANCE,
IMPROPER PERFORMANCE OR NONPERFORMANCE, DIRECTLY OR INDIRECTLY, OF ANY COVENANT OR AGREEMENT OF
AMERICAN IN THIS AGREEMENT; (ii) NEGLIGENT ACTS OR NEGLIGENT OMISSIONS OF AMERICAN, ANY AMERICAN
AFFILIATE OR ANY AMERICAN AGENT THAT ARE IN ANY WAY RELATED TO AMERICAN’S USE OR OCCUPANCY OF ANY
AMERICAN FACILITIES OR CONTRACTOR FACILITIES, EXCEPT FOR CLAIMS OF THE TYPE REFERRED TO IN SECTION
15(a)(i) ARISING FROM THE DEATH OF, OR INJURY TO, PERSONS, OR DELAY OR LOSS OF OR DAMAGE TO
PROPERTY RESULTING FROM OR ARISING OUT OF CONTRACTOR’S USE OR OCCUPANCY OF THE AMERICAN FACILITIES
OR CONTRACTOR FACILITIES (IN WHICH EVENT CONTRACTOR AND EAGLE HOLDING SHALL EACH JOINTLY AND
SEVERALLY INDEMNIFY AND REIMBURSE THE AMERICAN INDEMNIFIED PARTIES, NOTWITHSTANDING SUCH NEGLIGENT
(BUT NOT WILLFUL) ACTS OR OMISSIONS OF AMERICAN, ANY AMERICAN AFFILIATE OR ANY AMERICAN AGENT); AND
(III) THE PERFORMANCE, IMPROPER PERFORMANCE OR NONPERFORMANCE, DIRECTLY OR INDIRECTLY, OF ANY
COVENANT OR AGREEMENT OF AMERICAN IN THIS AGREEMENT.



          (c) A Party (the “Indemnified Party”) entitled to indemnification from another
Party under the terms and conditions of this Agreement (the “Indemnifying Party”) shall
provide the Indemnifying Party with prompt Notice of any Claim that the Indemnified Party believes
gives rise to a



21









 







claim for indemnity against the Indemnifying Party. Notwithstanding the foregoing,
the failure of an Indemnified Party to promptly provide Notice shall not constitute a waiver by the
Indemnified Party of any right to indemnification or otherwise relieve such Indemnifying Party from
any liability hereunder unless and only to the extent that the Indemnifying Party is materially
prejudiced as a result thereof, and in any event shall not relieve such Indemnifying Party from any
liability that it otherwise has on account
of this Section 15. The Indemnifying Party shall be entitled, if it accepts financial
responsibility for the third party Claim, to control the defense of, to pay for or to settle any
such third party Claim at its own expense and by its own counsel; provided, that the Indemnified
Party’s prior Consent (which may not be unreasonably withheld or delayed) must be obtained prior to
settling any such third party Claim. The Indemnified Party shall provide the Indemnifying Party
with such information as the Indemnifying Party shall reasonably request to defend or resolve any
such third party Claim and shall otherwise cooperate with the Indemnifying Party in the defense or
resolution of any such third party Claim. If the Indemnifying Party does not accept financial
responsibility for the third party Claim or fails to defend against the third party Claim that is
the subject of a Notice under this Section 15(c) within (30) thirty days of receiving such Notice
(or sooner if the nature of the third party Claim so requires), or otherwise contests its
obligation to indemnify the Indemnified Party in connection therewith, the Indemnified Party may,
upon providing Notice to the Indemnifying Party, pay, compromise or defend such third party Claim.
In the latter event, the Indemnified Party, by proceeding to defend itself or settle the matter,
does not waive any of its rights hereunder to later seek indemnification from the Indemnifying
Party. Except as set forth in this Section 15(c), the Indemnified Party shall not enter into any
settlement or other compromise or Consent to a judgment with respect to a third party Claim as to
which the Indemnifying Party has an indemnity obligation hereunder without the prior Consent of the
Indemnifying Party (which may not be unreasonably withheld or delayed), and the entering into of
any settlement or compromise or the Consent to any judgment in violation of the foregoing shall
constitute a waiver by the Indemnified Party of its right to indemnity hereunder to the extent the
Indemnifying Party is prejudiced thereby. Any Indemnifying Party shall be subrogated to the rights
of the Indemnified Party to the extent that the Indemnifying Party pays for any loss, damage or
expense suffered by the Indemnified Party hereunder. Notwithstanding anything contained in this
Section 15(c) to the contrary, Contractor and American shall cooperate in the defense of any Claim
imposed jointly against them.



          (d) Each Party shall bear 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 obligations under this
Agreement. Each Party, with respect to its own employees, hereby accepts full and exclusive
liability for the payment of workers’ 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 any Governmental Authority, including state, local or foreign, with respect to such
employees measured by the wages, salaries, compensation or other remuneration paid to such
employees, or otherwise, and each Party further shall 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.



          (e) Notwithstanding any other provision of this Agreement, Eagle and Executive shall be
jointly and severally responsible for the performance of any obligations required to be performed
by Contractor and shall be jointly and severally liable for any of their respective obligations
under this Agreement, whether to be performed individually or jointly.



     Section 16. Insurance.



          (a) Throughout the Term, in addition to any insurance required to be maintained by
Contractor or Eagle Holding on behalf of Contractor by any applicable Airport Operator or



22









 







Governmental Authority, Contractor shall maintain, or cause to be maintained, in full force and
effect policies of insurance with insurers of recognized reputation and responsibility, in each
case to the extent available and of the type usually carried by corporations engaged in the same or
similar business, similarly situated and providing similar ground handling or regional airline
services and covering risks of the kind customarily insured, as follows:




     (i) Commercial General Liability insurance, including airport liability,
comprehensive general liability (including premises, products and completed
operations, contractual liability and personal injury coverage) and automobile
liability covering all Ground Handling Services performed by Contractor under the
Ground Handling Agreement, including the ownership, operation or use of all
licensed and unlicensed vehicles used at each Station. Such coverage shall be in
an amount of not less than ***** for bodily injury and property damage combined,
with ***** annual aggregate in respect of personal injury.




     (ii) Workers’ compensation providing the statutory coverage required by
the appropriate jurisdiction and employer’s liability with a limit of not less than
***** each accident for bodily injury by accident or ***** each employee for bodily
injury by disease.




     (iii) Automobile liability insurance covering all owned, non-owned, leased
and hired vehicles with policy limits of not less than ***** combined single limit
per occurrence.




     (iv) Other property and liability insurance coverages (including, without
limitation, property damage liability insurance, exclusive of any manufacturer’s
product liability insurance) of the types and in the amounts that would be
considered reasonably prudent for a business organization of Contractor’s size and
nature, under the insurance market conditions in effect at the time of placement,
but in any event of the type and the amount that American may reasonably require to
prevent or minimize disruption in use or occupancy of the American Facilities or
Contractor Facilities resulting from a casualty or liability incident related to
any of Contractor’s operations.




     (v) All coverages described in this Section 16 shall be placed with
deductibles reasonably prudent for a business organization of Contractor’s size and
nature, under the insurance market conditions in effect at the time of placement.



          (b) Contractor shall cause the liability policies described in Section 16(a) to be duly
and properly endorsed by Contractor’s insurance underwriters, as follows:




     (i) To provide that the underwriters shall waive subrogation rights
against American, except for its gross negligence or willful misconduct;




     (ii) To provide that American and its Affiliates shall be named as
additional insured parties;





 




			
	*	 	THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES
AND EXCHANGE COMMISSION (THE “COMMISSION”) PURSUANT TO RULE 24B-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO
SELECTED PORTIONS. ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED
FROM THIS EXHIBIT, AND HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED
PORTIONS ARE INDICATED IN THIS EXHIBIT WITH “*****”.




23









 











     (iii) To provide that such insurance shall be primary to and without right
of contribution from any other insurance which may be available to the additional
insureds;




     (iv) To include a “breach of warranty” provision in favor of the
additional insureds insuring their interest regardless of any breach or violation
by Contractor of any warranties, declarations or conditions contained in such
insurance policies; and




     (v) With respect to all of the insurance policies described in Section
16(a), to provide that such policies shall not be canceled, terminated or the
limits or coverage required hereunder be reduced (adverse change) until thirty (30)
days after receipt by American of Notice from such insurers of such cancellation,
termination or reduction (but seven (7) days or such lesser period after Notice
shall have been sent to American if the cancellation or adverse change is a result
of Contractor’s failure to pay the applicable workers compensation or property
insurance premiums).



          (c) On the Effective Date and on each anniversary during the Term, Contractor shall
furnish to American a certificate of insurance certifying that such insurance and endorsements are
in full force and effect. If Contractor fails to acquire or maintain insurance as herein provided,
then American may at its option secure such insurance on Contractor’s behalf and Contractor shall
take all actions requested or directed by American and cooperate with American in connection with
obtaining or maintaining such coverage.



     Section 17. Resolution of Disputes. Except as specifically provided in Section 18, prior to any
Party’s right to seek any remedy in a court of competent jurisdiction, the Parties hereby agree
that they shall resolve any dispute, claim or controversy arising out of or relating to this
Agreement or the breach, termination, enforcement, interpretation or validity thereof (each a
“Dispute”) as follows:



          (a) With respect to any Disputes relating to any invoice or billing matter, American and
Eagle shall in good faith use commercially reasonable efforts to resolve such Dispute as follows:




     (i) Within thirty (30) days following receipt of any bill or invoice,
either American or Eagle, as the case may be, if disputing such bill or invoice,
shall provide Notice to the other of the amount in question and submit payment for
all amounts not in Dispute as set forth in the bill or invoice in accordance with
Schedule 1.




     (ii) If American and Eagle have not resolved the Dispute within ten (10)
days of Notice of such a Dispute, then American and Eagle shall submit the Dispute
to a mutually agreed independent auditor for prompt resolution. The costs and
expenses associated with such independent auditor shall be borne equally by
American and Eagle.




     (iii) If the amount of the Dispute is equal to or less than *****, the
decision of the independent auditor shall be binding on all Parties for all
purposes hereof and shall not be subject to further objection or appeal, including
pursuant to any other provision set forth in this Section 17 or otherwise.





 




			
	*	 	THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES
AND EXCHANGE COMMISSION (THE “COMMISSION”) PURSUANT TO RULE 24B-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO
SELECTED PORTIONS. ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED
FROM THIS EXHIBIT, AND HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED
PORTIONS ARE INDICATED IN THIS EXHIBIT WITH “*****”.




24









 











     (iv) If the amount of the Dispute exceeds *****, then either American or
Eagle may within ten (10) days following the decision of the independent auditor,
implement the following:




	 	(A)	 	Either American or Eagle may
give Notice to the Representatives of American and Eagle of the
Dispute, which Notice shall identify the Dispute to be
discussed. The designated Representatives shall meet as promptly
as possible to negotiate in good faith to resolve the Dispute.






	 	(B)	 	If the Representatives do not
resolve the Dispute within ten (10) days following the date of
the Notice specified in subparagraph (A) above or such longer
period as may be mutually agreed to by the Representatives, then
the Dispute shall be referred (by either or both of the
Representatives) to American’s Vice President of Network
Planning and Eagle’s Chief Financial Officer for resolution.






	 	(C)	 	The Vice President of Network
Planning of American and the Chief Financial Officer of Eagle
shall meet within ten (10) days following any referral to them
by either of the Representatives and negotiate in good faith to
resolve the Dispute.






	 	(D)	 	If the Vice President of
Network Planning of American and the Chief Financial Officer of
Eagle are unable to resolve the Dispute within such specified
period, then either may refer the Dispute to the Senior Vice
President of Marketing and Planning of American and the Chief
Executive Officer of Eagle and they shall meet as promptly as
possible to negotiate in good faith to resolve the Dispute.






	 	(E)	 	Failure to resolve the
billing or invoice Dispute with thirty (30) days following any
referral to the Senior Vice President of Marketing and Planning
of American and the Chief Executive Officer of Eagle shall give
either American or Eagle the right to seek applicable remedies
under this Agreement in a court of competent jurisdiction.






     (v) The Parties agree to continue to perform their respective obligations
under this Agreement while a billing or invoice Dispute is being resolved pursuant
to this Section 17(a).




     (vi) In the event there is no officer holding the title Vice President of
Network Planning or the Senior Vice President of Marketing and Planning at
American, then the duties under this Section 17(a) shall be performed by an
executive performing similar duties and functions.





 




			
	*	 	THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES
AND EXCHANGE COMMISSION (THE “COMMISSION”) PURSUANT TO RULE 24B-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO
SELECTED PORTIONS. ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED
FROM THIS EXHIBIT, AND HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED
PORTIONS ARE INDICATED IN THIS EXHIBIT WITH “*****”.




25









 










          (b) With respect to any other Disputes, the Parties hereto agree that, except as provided
in Section 18 below, before seeking any remedy in a court of competent jurisdiction, the following
procedures shall apply:




     (i) The Parties shall comply with the meet and confer procedures set forth
in Section 17(c) hereof.




     (ii) If the Parties’ Representatives are not able to resolve the Dispute
pursuant to Section 17(c) within ten (10) days of the Notice provided under Section
17(c), or such longer period as may be mutually agreed to by the Representatives,
then the Dispute shall be referred (by either or both of the Representatives) to
the Vice President of Network Planning of American and the Chief Financial Officer
of Eagle.




     (iii) The Vice President of Network Planning of American and the Chief
Financial Officer of Eagle shall meet within ten (10) days following any referral
to them by either of the Representatives and negotiate in good faith to resolve the
Dispute.




     (iv) If the Vice President of Network Planning of American and the Chief
Financial Officer of Eagle are unable to resolve the Dispute within such specified
period, then either may refer the Dispute to the Senior Vice President of Marketing
and Planning of American and the Chief Executive Officer of Eagle and they shall
meet as promptly as possible to negotiate in good faith to resolve the Dispute.




     (v) Failure to resolve the Dispute with thirty (30) days following any
referral to the Senior Vice President of Marketing and Planning of American and the
Chief Executive Officer of Eagle shall give either Party the right to seek
applicable remedies under this Agreement in a court of competent jurisdiction.




     (vi) The Parties agree to continue to perform their respective obligations
under this Agreement while a Dispute is being resolved pursuant to this Section
17(b).




     (vii) If there is no officer holding the title Vice President of Network
Planning or Senior Vice President of Marketing and Planning at American, then the
duties under this Section 17(b) shall be performed by an executive performing
similar duties and functions.



          (c) To the extent that this Agreement requires that the Parties meet and confer in any
circumstance, any Party may give Notice to both Parties’ Representatives of the issue or matter to
be discussed and, except to the extent another representative of a Party is designated in
accordance with the terms of this Agreement, the Parties’ Representatives shall meet within ten
(10) days to promptly negotiate in good faith. The Parties agree to continue to perform their
respective obligations under this Agreement while the matter or issue is being resolved pursuant to
this Section 17.



     Section 18. Equitable Remedies. American and Contractor each acknowledges and agrees that under
certain circumstances (x) the breach by American or Contractor of this Agreement or some other
action being taken or proposed to be taken by the other Party will materially and irreparably harm
the other Party; or (y) a Dispute or issue may not be resolved or be capable of resolution under
Section 17. Notwithstanding Section 17, in addition to its rights under this Agreement and any
other remedies it may have at law or in equity, a Party may apply to any court of law or equity of
competent jurisdiction in Tarrant County, Texas for (a) specific performance and/or other
injunctive relief in order to enforce or prevent any breach of this Agreement or enjoin other such
action being taken or proposed to be taken by



26









 







the other Party; or (b) to address a Dispute or issue
that is not resolved or capable of resolution under Section 17.



     Section 19. Notices. All Notices, Consents or amendments under this Agreement shall be in writing
and shall be deemed given to American or Contractor, as the case may be, upon (i) confirmation of
receipt of a delivery in person, (ii) a transmitter’s confirmation of a receipt of a facsimile or
e-mail transmission (but only if followed by confirmed delivery the following Business Day (a) by a
nationally
recognized overnight courier or (b) by hand), or (iii) confirmed delivery by a nationally
recognized overnight courier, to the Parties at the following addresses:


if to American, to:



American Airlines, Inc.

4333 Amon Carter Blvd.

Mail Drop 5675

Ft. Worth, TX 76155

Attn: Corporate Secretary

Facsimile No.: ________________

Telephone No.: _______________

____________________________



if to Eagle, Executive or Contractor, to:



American Eagle Airlines, Inc.

4333 Amon Carter Blvd.

Mail Drop 5494

Ft. Worth, TX 76155

Attn: General Counsel

Facsimile No.: ________________

Telephone No.: _______________

____________________________



with a copy to:



Executive Airlines, Inc.

4333 Amon Carter Blvd.

Mail Drop 5494

Ft. Worth, TX 76155

Attn: General Counsel

Facsimile No.: ________________

Telephone No.: _______________

____________________________




     or, in each case, to such other address as a Party has furnished to the other
Party by a Notice in accordance with this Section 19.



     Where in this Agreement the words “request,” “instructed,” “directed,” “inform,”
“furnish,” “designate” or “approved” or similar phrases, expressions or derivatives thereof are
used rather than the terms Notice or Consent, such instruction to receive such communication shall
be sufficient if done orally (and not in writing) (each a “Communication”) so long as it is
provided



27









 







(i) in accordance with past practices or, if there are no past practices, in accordance
with customary industry practices, (ii) the Person providing the Communication reasonably believes
that the Person receiving such Communication is authorized to receive such Communication and (iii)
the Person receiving such Communication reasonably believes the Person providing such Communication
has the apparent or actual authority to undertake the action in question.



     Section 20. Binding Effect and Assignment. The terms and conditions of this Agreement shall
inure to the benefit of and be binding and enforceable upon the Parties and their respective
successors and permitted assigns. Except with respect to (i) a merger, reorganization, or
consolidation of American with or into another Person, (ii) an assignment of this Agreement or any
rights pertaining thereto, in whole or in part, by American to an Affiliate, (iii) a transaction,
or series of transactions, by American involving the sale, pledge, lease, transfer or exchange of
substantially all of the assets of American, or (iv) any pledge or creation of any security
interest in American’s rights under this Agreement, neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by either Party without the prior Consent of
the other Party. In the event of (iii) above, Contractor shall be deemed to have released (without
further action on the part of Contractor) American from any and all duties, obligations and
liabilities (including assignor liability) arising under this Agreement after the date of
assignment.



     Section 21. Amendment and Modification. This Agreement may not be amended or modified in any
respect except by a written agreement signed by both Parties.



     Section 22. Waiver. The performance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively) by the Party entitled to
enforce such term, but such waiver shall be effective only if it is in writing signed by the Party
against which such waiver is to be asserted. Unless otherwise expressly provided in this Agreement,
no delay or omission on the part of any Party in exercising any right or privilege under this
Agreement shall operate as a waiver thereof, nor shall any waiver on the part of any Party of any
right or privilege under this Agreement operate as a waiver of any other right or privilege under
this Agreement nor shall any single or partial exercise of any right or privilege preclude any
other or further exercise thereof or the exercise of any other right or privilege under this
Agreement.



     Section 23. Interpretation. The table of contents and the section and other headings and
subheadings contained in this Agreement and in the exhibits and schedules hereto are solely for the
purpose of reference, are not part of the agreement of the Parties, and shall not in any way affect
the meaning or interpretation of this Agreement or any exhibit or schedule hereto. All references
to days, months or years shall be deemed references to calendar days, months or years. All
references to “$” shall be deemed references to United States dollars. Unless the context otherwise
requires, any reference to a “Section,” “Schedule” or an “Exhibit” shall be deemed to refer to a
section of this Agreement or an exhibit or schedule to this Agreement, as applicable. The words
“hereof,” “herein” and “hereunder” and words of similar import referring to this Agreement refer to
this Agreement as a whole and not to any particular provision of this Agreement. Whenever the words
“include,” “includes” or “including” are used in this Agreement, unless otherwise specifically
provided, they shall be deemed to be followed by the words “without limitation.” This Agreement
shall be construed without regard to any presumption or rule requiring construction or
interpretation against the Party drafting or causing the document to be drafted. With regard to
all dates and time periods set forth or referred to in this Agreement, time is of the essence.



     Section 24. Cooperation With Respect to Reporting. Each Party shall use its commercially
reasonable efforts to cooperate with the other Party in providing necessary data, to the extent in
the possession of the first (1st) Party, required by such other Party to meet any reporting



28









 







requirements to, or otherwise in connection with any filing with or provision of information to be
made to, any regulatory agency, stock exchange or other Governmental Authority.



     Section 25. Counterparts. This Agreement may be executed in two (2) or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument. This Agreement may be executed by facsimile signature or portable document format
(pdf).



     Section 26. Severability. Any provision of this Agreement that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.



     Section 27. Governing Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York (excluding New York conflict of laws principles that might call
for the application of the law of another jurisdiction) as to all matters, including matters of
validity, construction, effect, performance and remedies.



     Section 28. Entire Agreement. This Agreement embodies the entire agreement between the Parties
concerning the subject matter hereof and such agreements terminate and supersede all prior or
contemporaneous agreements, discussions, undertakings and understandings, whether written or oral,
express or implied, concerning the subject matter hereof, including, without limitation, any
sublease entered into between American and Contractor with respect to American Facilities or
Contractor Facilities. The effectiveness of this Agreement shall not be deemed a waiver by either
Party of any disclosed or undisclosed breach, default, event of default or termination event under
such other agreements.



     Section 29. Remedies Cumulative. The rights and remedies of the Parties are cumulative and not
alternative. Neither the failure nor any delay by either Party in exercising any right, power, or
privilege under this Agreement or the documents referred to in this Agreement will operate as a
waiver of such right, power, or privilege, and no single or partial exercise of any such right,
power, or privilege will preclude any other or further exercise of such right, power, or privilege
or the exercise of any other right, power, or privilege.



     Section 30. Further Assurances. The Parties agree to take such further actions and execute and
deliver such other documents, certificates, agreements and other instruments as may be reasonably
necessary or desirable in order to implement the transactions contemplated by this Agreement.



     Section 31. No Third Party Beneficiaries. Nothing in this Agreement or any Ancillary Agreement,
expressed or implied, is intended to confer upon any party, other than the Parties and their
respective permitted assigns, any rights, privileges, remedies, duties, obligations or liabilities
under or by reason of this Agreement and no person who is not a Party may rely on the terms hereof.
Notwithstanding the foregoing, (a) each American Indemnified Party shall be a third party
beneficiary with respect to Section 15(b) and shall have all rights, benefits and privileges of a
third party beneficiary with respect to Section 15(b); and (b) each Contractor Indemnified Party
shall be a third party beneficiary of Section 15(a) and shall have all rights, benefits and
privileges of a third party beneficiary with respect to Section 15(a).



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     Section 32. Relationship of the Parties.



          (a) Any Contractor employees and any Contractor Agents engaged in providing any of the
Contractor Services are employees, agents, and independent contractors of Contractor for all
purposes, and under no circumstances will be deemed to be employees, agents or independent
contractors of American. In its performance under this Agreement, Contractor shall act, for all
purposes, as an independent contractor and not as an agent for American. Notwithstanding the fact
that Contractor has agreed to follow certain procedures, instructions and standards of service of
American pursuant to this Agreement, American shall have no supervisory power or control over any
Contractor employees or any Contractor Agents engaged by Contractor in connection with its
performance hereunder, and all
complaints or requested changes in procedures made by American shall, in all events, be
transmitted by American to Contractor’s Representative. Except as otherwise provided in this
Agreement, nothing contained in this Agreement is intended to limit or condition Contractor’s
control over its operations or the conduct of its business as an air carrier or a ground handling
company, and Contractor and its principals assume their risks of financial losses which may result
from the operation of the air services to be provided by Contractor hereunder.



          (b) Any American employees and any American Agents engaged in performing any of the acts
American performs pursuant to this Agreement are employees, agents and independent contractors of
American for all purposes and under no circumstances will be deemed to be employees, agents or
independent contractors of Contractor. Contractor shall have no supervision or control over any
such American employees or any American Agents and any complaint or requested change in procedure
made by Contractor shall be transmitted by Contractor to American’s Representative. In its
performance under this Agreement, American shall act, for all purposes, as an independent
contractor and not as an agent for Contractor. Nothing contained in this Agreement is intended to
limit or condition American’s control over its operations or the conduct of its business as an air
carrier.



          (c) Nothing in this Agreement shall be interpreted or construed as establishing between
the Parties a fiduciary relationship, partnership, joint venture or other similar arrangement.
Nothing in this Agreement authorizes either Party to make any contract, agreement, warranty, or
representation on the other’s behalf, or to incur any debt or obligation in the other’s name.



     Section 33. Jurisdiction. Each Party irrevocably submits to the exclusive jurisdiction of the
United States District Court for the Northern District of Texas and, if such court does not have
jurisdiction, of the courts of Texas sitting in Tarrant County, Texas for the purposes of any suit,
action or other proceeding arising out of this Agreement or the subject matter hereof brought by
the other Party. To the extent permitted by applicable laws, rules or regulations of a
Governmental Authority, each Party waives and agrees not to assert, by way of motion, as a defense
or otherwise, in any such suit, action or proceeding, any claim (i) that it is not subject to the
jurisdiction of the above-named courts; (ii) that the suit, action or proceeding is brought in an
inconvenient forum; or (iii) that the venue of the suit, action or proceeding is improper. Each
Party further waives any right to a trial by jury.



     Section 34. Punitive Damages. Except to the extent a Party may be required to pay in connection
with any Claim for indemnification under Section 15, neither Party nor its Affiliates shall be
liable to the other Party or its Affiliates for Claims for incidental, indirect, consequential,
punitive, special or exemplary damages, including lost revenues, lost profits or lost prospective
economic advantage, arising out of or relating to this Agreement or the transactions contemplated
hereby, regardless of whether a Claim is based on contract, tort (including negligence), strict
liability, violation of any applicable deceptive trade practices act or similar law, rule or
regulation of a Governmental Authority or any other legal or equitable principle, and each Party
releases the other and its Affiliates from liability for any such damages. Neither Party shall be
entitled to rescission of this Agreement as a result of breach of the other Party’s
representations, warranties, covenants or agreements, or for any other matter; provided, that



30









 







nothing in this Section 34 shall restrict the right of either Party to exercise any right to
terminate this Agreement pursuant to Section 10.



     Section 35. Survival of Certain Obligations. Except as set forth in the following sentence, all
representations, warranties, covenants and agreements of the Parties set forth herein shall
terminate and expire, and shall cease to be in full force and effect following the Term. All
covenants and agreement of Eagle and Executive to American that contemplate actions to be taken or
obligations in effect after the Term or Partial Termination shall survive the Term or Partial
Termination in accordance with the terms
and to the extent contemplated thereby, including those described in Sections 10 through 35
and Schedule 1.



[Remainder of Page Intentionally Left Blank; Signature Page Follows]







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     IN WITNESS WHEREOF, the Parties have entered into this Agreement effective as of the date set
forth above.



	 	 	 	 	 
	 	AMERICAN AIRLINES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	AMERICAN EAGLE AIRLINES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	EXECUTIVE AIRLINES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




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