HomeMy WebLinkAboutRevenue Guarantee Agreement REVENUE GUARANTEE AGREEMENT
This agreement is trade and entered into as of the 23rd of April 2018 by and between JetBlue
Airways Corporation("JetBlue"), a Delaware corporation, having its principal place of business at 27-01
Queens Plaza North, Long Island City, New York, 11101, USA and Gallatin Foundation, Inc. (Gallatin
Foundation)at 2000 Commerce Way,Bozeman, MT 59715.
W ITN ESSETH
WHEREAS,JetBlue operates a commercial airline;and
WHEREAS,Gallatin Foundation desires to increase the number of passengers traveling
to Bozeman, MT,and
WHEREAS,JetBlue desires to introduce air service from long Beach,CA("LGB")to
Bozeman,MT("BZN")
WHEREAS,Gallatin Foundation desires to provide incentives to JetBlue in support of'its
service between L.GB on the one hand,and B7N on the other as further described herein(the"Air
Services"), and
WHI;RI;AS,JetBlue desires to provide the Air Services under the terms and conditions
herein;
NOW,'I'HL'RF.FORE, for and in consideration of the lbregoing premises and the mutual
covenants and agreements herein contained,the parties hereto agree as follows:
I. Term — Seasonal service Im the period December 13. 2018 through December 13, 2020.
2. Air Services—Jetl3lue will operate round trip,non-stop twice weekly scheduled
commercial passenger airline service("Scheduled Service")using an A320 aircraft or
similar aircraft configured with no less titan 150 seats between LGB and BZN during the
Term. Scheduled service shall be provided twice weekly to and from each of LGB and
BZN from ntid-December through April and from mid-June through early September.
Service will not be provided during the months of May,October or November.
Scheduled Service shall take place twice weekly from LGB between 6:00 AM and 12:00
PM Pacific Central Time and on twice weekly from BZN between the local times of
10:30 and 17:30 Mountain Daylight Time,or at such other times as mutually agreed upon
between JetBlue and Gallatin Foundation.
JetBlue reserves the right to add additional services from LGB to BZN as it sees tit which
would not be subject to cost or revenue calculations for the minimum revenue guarantee.
Any services added at the request of Gallatin Foundation will be subject to cost and
revenue calculations f'or the minimum revenue guarantee and will be negotiated and
agreed upon at the time of the requested service.
3. Minimum Guarantee Amount. In exchange ror providing the Air Services specified
herein,Gallatin Foundation shall pay JetBlue,a Minimum Guarantee Amount,which is
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equal to the difference between the total passenger ticket revenue collected by JetBlue for
each round trip operation and $40,000,however,in no event shall Gallatin Foundation
pay more than a total of$400,000 in Minimum Guarantee Amounts over the Tenn. For
avoidance of doubt,if JetBlue passenger ticket revenue for a single round trip operation
between LOB and BLN is$38,000,Gallatin Foundation's Minimum Guarantee
obligation for such operation equals$2,000.Conversely,if the passenger ticket revenue
is greater than the Minimum Guarantee Amount for any round trip operation,then
Gallatin Foundation shall be under no obligation to remit the Revenue Guarantee
Payment to JetBlue and JetBlue shall have no obligation to remit any of the excess
amounts to Gallatin Foundation
Cancelled flights will not be taken into consideration for the Revenue Guarantee Payment
and therefore in any quarter where there are cancelled flights,the total payment will be
revised downward on a pro-rata basis.
4. Calculation of Passenger Ticket Revenues,JetBlue Airways shall detenuine the total
passenger ticket revenues for each round trip operation by determining the aggregate
amount of customer fare charges,net of any and all taxes, fees,charges and surcharges
(for clarification purposes,revenue is defined as the sum of seat ticket and ancillary
revenue,such as change and cancel fees and baggage check revenue). JetBlue will also
indicate the average fuel price each quarter as pail of the invoice,and will adjust the
Minimum Guarantee Amount as set forth above by the change in fuel price.
5. invoice and Payment. Within sixty(60)days following December 13 of each year of
the Tenn,JetBlue shall detennine and submit to Gallatin Foundation the total revenue
data for all Air Services provided during the Tenn year,which shall include an invoice
for the Minimum Guarantee Amounts owed for the prior year,if any. Gallatin
Foundation shall remit payment, if any,to JelBlue within 30-days of its receipt of the
quarterly revenue notice described above. Payments not made when due as set i'orth
herein will accrue interest at the greater of 1.5%per month or the maximum permitted by
law.
6. Rights to Audit. JetBlue shall keep complete books and records in accordance with
generally accepted accounting principles regarding economic transactions pertaining to
this Agreement,and Gallatin Foundation shall be penmitted to review and audit such
books at the offices of JetBlue during norntal business hours,at the request of Gallatin
Foundation,but not more than once annually and only upon adequate notice that it
intends to conduct such audit.
7. Aircraft Selection—Flights will be operated by an Airbus A320 aircraft. JetBlue has the
right,at its sole discretion,to substitute other aircraft on the Air Services,however under
no circumstance shall JetBlue provide an aircrali %viih less than 150 seats. Additionally,
the Minimum Guarantee Amount shall not be adiusted if larger aircrali are operated,
unless such substitution has been done at the request of Gallatin Foundation.
R. Limitation on Duty—Notwithstanding anything to the contrary herein,it is agreed that
either party hereto will be relieved of its obligations hereunder,except for a duty to pay
money,(but no Revenue Guarantee Payment shall be due for flights not flown due to a
force majeure event) in the event and to the extent that its perforniance hereof is delayed
or prevented by any cause beyond its control and not caused by the party claiming relief'
hereunder, including,without limitations,acts of God,public enemies,war,insurrection,
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acts or orders of governmental authorities,fire, flood,hurricanes,explosion,riots,strikes
or the recovery from such cause("force mgjeure). Fach party hereto further agrees to
consult with and advise the other of any anticipated delay or failure,as soon as it
becomes aware of such anticipated delay or failure or the possibility(hereof,whether for
force nraje ure or not.
9. Indemnification—Each party(the"Indemnifying Party')agrees and hereby undertakes
to release, indemnify, defend and save harmless the other party("Indemnified Party"). its
directors,officers,employees,and agents from and against all liability,damages,claims,
suits,theft,penalties or actions of every name and description,including any and all costs
and expenses related thereto,including the defense thereof,reasonable attorney fees and
court costs arising out of or resulting from the act or omission of the Indemnifying Party,
its directors,officers and employees except to the extent caused by an act or omission of
the Indemnified Party. Each party agrees to provide reasonable assistance to the other in
the conduct of suits covered by this provision.
10. Termination—The parties shall have the following rights of tennination with respect to
the Agreement:
a. In the event that either party materially breaches(the"breaching party")the
lernns of this agreement,including without limitation,(he failure to make
payment of any Minimum Guarantee Amounts or provide Air Services,or any
portion thereof,then the other party(the"non-breaching party")may terminate
this agreement on thirty(30)days written notice to the breaching party;
provided,however that the non-breaching party must first provide written notice
to the breaching party of the breach or alleged breach and allow the breaching
party fifteen(15)days to cure the alleged breach.
b. In the event JetBlue determines,in its sole and absolute discretion,after no less
than one hundred twenty(120)days prior written notice to Gallatin Foundation to
suspend or tenminate the Air Services,then Gallatin Foundation shall not be
obligated to make any Revenue Guarantee payments for such time as the
suspension lasts or,in(he case of tennination,
c. In the event that Gallatin Foundation determines, in their sole and absolute
discretion,(o terminate this agreement, then Gallatin Foundation will provide a
minimum of 240-days written notice of such tennination to JetBlue Airways. In
the period between notification of tennination and the effective date of
termination. both parties are obligated to perform to the conlract's ternns and
conditions. If Gallatin Foundation is in breach of contract and JetBlue Airways
determines,at its sole discretion, to not terminate the agreement,Gallatin
Foundation remains responsible for all Revenue Guarantee Payments up and until
the effective date of tennination or expiration of this agreement,unless such
responsibility is waived in writing by a duly designated representative of JctBiue
Airways.
11. Joint and Several Liability--Gallatin Foundation shall be liable for any Revenue
Guarantee Payment provided lorherein. To be sure,Gallatin Foundation shall be
collectively,and individually,liable for any payments due to JetBlue hereunder.
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12. Representations and Warranties—Each signatory hereto,represents and warrants that
it has full power and authority to enter into this agreement on behalf of the entity it
represents.
13. Notice—Except where specified elsewhere in this agreement,any and all notices,
approvals or demands required or perntitted to be given by the parties hereto will be
sufficient if made in writing and sent by certified mail,postage prepaid,overnight
courier,or delivered by hand. Where sent by mail,such notices will also be sent by
facsimile. Notices to JetBlue will be addressed to:
JetBlue Airways Corporation
Attn:John Checketts
27-01 Queens Plaza North
Long Island City,NY 1 1101
Facsimile: 718-425-9482
With a copy to the Legal Department
and to Gallatin Foundation addressed to:
Gallatin Foundation, Inc.
Attn: Daryl W. Schliem/Air Transportation BZN
2000 Commerce Way
Bozeman,MT 59715
or to such other addresses as either party may specify for itself by notice to the other as
provided herein. Notices will be deemed served as of actual reccipl. The parties
acknowledge and agree that all communications regarding and in relation to this
Agreement will be in English.
14. Nonexclusive—Nothing in this agreement will be deemed to act as a bar to Jetl3lue or
Gallatin Foundation's solicitation and/or entering comparable agreements with other
parties.
15. Enforceability—If,for any reason,any portion of this agreement is unenforceable or
determined by a court of competent jurisdiction to be in violation of or contrary to any
applicable statute,regulation,ordinance,order,or common law doctrine,then that portion
will be of no effect. Nevertheless,the balance of this agreement will remain in full force
and effect as if such provision were never included.
16. Entire Agreement—'Phis agreement represents the entire agreement between the parties
hereto and any additions,deletions or modification will not be binding on either party
unless accepted and approved in writing by duly authorized representatives of both
parties.
17. Advertising—Neither party will use the name, trademarks,or service marks of the other
party for any purpose, including any hotels World Wide Website,without the prior
written consent of the other in each instance,which consent may be granted,
conditionally granted,withheld or withdrawn in the consenting patty's sole discretion.
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18. Relationship of the Parties—For the purpose of this agreement,neither party will be
deemed to be the franchisee,agent,partner,employee or a joint venturer of the other
party. Furthermore,the"parties",as used in this agreement shall mean JetBlue,on the
one hand,and Gallatin Foundation,on the other hand.
19. Confidentiality—The parties hereto agree to maintain the terms hereof and any other
non-public inforniation provided in connection with this agreement in confidence,and
only share such information within their own organization and/or with third parties as
necessary to accomplish the purpose of this agreement. Notwithstanding the foregoing,
Gallatin Foundation and JetBlue acknowledges that JetBlue and Gallatin Foundation may
share this agreement as reasonably necessary in connection with JetBlue normal business
operation and/or in connection with a merger or proposed merger,including by
acquisition,of JetBlue or Gallatin Foundation or their respective parent corporation.
20. Counterparts—'This agreement may be executed in Iwo or more counterparts,each of
which will be deemed an original for all purposes but all of which together will constitute
one and the same instrument.
21. Choice of law—This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without reference to conflict of laws principles. Any
disputes under this agreement may be brought in the state courts and die Federal courts
located within the State of New York,and the parties hereby consent to the personal
jurisdiction and venue of these courts.
IN WITNESS WIIFRE:OF,JetBlue and Gallatin Foundation have caused this instrument to be
executed by their duly authorized representative on the day and year first above written.
For JetBlue Airways Corporation Gallatin oundation
By:John Checketts By:
Title: Vice President Network Planning Title: Chief Fxe1cutivee Officer
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