Please do enlighten us. It's my understanding United owners the a/c, we sublease the aircraft and pay for maintenance. In turn we get paid by block hour and other performance bonuses. This is a snippet from the 2015 modified Capacity Purchase Agreement when we were held by INC. Obviously being a private company now, that info isn't public. But it may be buried in a United filing, I just don't feel like looking, these things aren't easy to find. There were provisions in the old CPA that said due to mass grounding the payment is abated but I'm not sure what the new one entails.

https://www.sec.gov/Archives/edgar/d...1zex-10_22.htm

Covered Aircraft Sublease — means the Amended and Restated Covered Aircraft Sublease (or a lease) substantially in the form of the Exhibit B (or as otherwise agreed or amended) between United and Contractor, pursuant to which Contractor subleases (or leases) a Covered Aircraft from United.

Aircraft Sublease for each Covered Aircraft in the form attached hereto as Exhibit B. Until Contractor and United enter into a Covered Aircraft Sublease, the currently applicable lease or sublease for a Covered Aircraft shall be deemed amended to conform to the form of Covered Aircraft Sublease attached hereto as Exhibit B together with such changes thereto as necessary to conform to the applicable head lease, including without limitation the identity of the owner trustee, owner participant, financing parties, amount of basic rent and stipulated loss value; provided, that any such conforming changes shall not increase the obligations of Contractor under such Covered Aircraft Sublease as otherwise provided in the form of agreement attached hereto as Exhibit B. In connection with the entry into each Covered Aircraft Sublease for a Covered Aircraft, United shall use commercially reasonable efforts to assign to Contractor the warranties of the aircraft and engine manufacturers available to United with respect to such Covered Aircraft. If United is unable to assign the foregoing warranties and is not otherwise able to provide for an agreement directly between Contractor and the applicable manufacturer providing for warranty coverage of such Covered Aircraft, then United shall act on behalf of Contractor in dealing with the applicable manufacturer to enable Contractor to obtain the benefit of such warranties as if United had been able to make such assignment. United further covenants and agrees not to accelerate the “Head Lease Expiration Date” as provided on Schedule 1 hereto with respect to any aircraft being operated by Contractor pursuant to this Agreement as of the time of determination without the prior written consent of Contractor if such acceleration would result in the Head Lease Expiration Date occurring prior to the end of the Term or the sublease expiration date for such Covered Aircraft as set forth in Schedule 1.

(b) Basic Rent payable under each Covered Aircraft Sublease shall be entirely abated unless and until (A) such Covered Aircraft has been withdrawn from this Agreement and no longer constitutes a Covered Aircraft, or (B) the occurrence of a Labor Strike, in which case such Basic Rent shall be payable until (x) such aircraft, and all other items required to be returned pursuant to such Covered Aircraft Sublease and this Agreement pertaining to such Covered Aircraft, shall have been returned to United in accordance with the terms of such Covered Aircraft Sublease and this Agreement, or (y) such Labor Strike shall have ended, as the case may be. In addition, in connection with the return of aircraft to United pursuant to Sections 2.08, 8.02(b)(x) or 8.02(c)(i), or in connection with the repossession of a Covered Aircraft by a lessor, lender or other financing party under a head lease for or mortgage of such aircraft (other than a repossession resulting from a breach of the Covered Aircraft Sublease by Contractor), Basic Rent shall continue to be entirely abated for the following period:

(i) for the return of aircraft pursuant to Section 8.02(b)(x), with respect to any such aircraft, (A) the duration (if any) of the grounding applicable to such aircraft (but only if such grounding is a complete grounding, as opposed to a grounding for passenger service only), plus (B) such period as is reasonably necessary for Contractor to return such aircraft in compliance with the provisions of the applicable Covered Aircraft Sublease, but in any event for not more than a period of four weeks after the later of the applicable Termination Date or the end of the Wind Down Period for such aircraft, if any, for the first *** such Covered Aircraft being returned, eight weeks after such date for the next *** such Covered Aircraft being returned, *** weeks after such date for the next *** such Covered Aircraft being returned, and *** weeks after such date for the remaining such Covered Aircraft being returned (such periods to run concurrently); and

27


(ii) for the return of aircraft pursuant to Sections 2.08 or 8.02(c)(i) or in connection with the repossession of a Covered Aircraft by a lessor, lender or other financing party under a head lease for or mortgage of such aircraft (other than a repossession resulting from a breach of the Covered Aircraft Sublease by Contractor), such period as is reasonably necessary for Contractor to return such aircraft in compliance with the provisions of the applicable Covered Aircraft Sublease, but in any event for not more than a period of *** weeks after the applicable Termination Date for the first *** such Covered Aircraft being returned, *** weeks after such date for the next such *** Covered Aircraft being returned, *** weeks after such date for the next such *** Covered Aircraft being returned, and *** weeks after such date for the remaining such Covered Aircraft being returned (such periods to run concurrently);

provided, that Basic Rent shall in each case cease to be abated with respect to any aircraft to be returned on the day following the day, if any, on which United waives any unsatisfied return conditions with respect to such aircraft. In addition, the provisions of Section 2.09 shall apply to the Covered Aircraft subject to a Covered Aircraft Sublease being returned to United.

(c) No periodic rent shall be payable under any Storage Sublease; provided that, with respect to any Deferred Obligations (as defined in the applicable Covered Aircraft Sublease), if Contractor (for all purposes of this proviso, as Sublessee in such Storage Aircraft Lease and the applicable Covered Aircraft Sublease) does not perform one or more of such Deferred Obligations, then United (for all purposes of this proviso, as Sublessor in such Storage Sublease and the applicable Covered Aircraft Sublease) shall be entitled to seek damages arising under this Agreement and/or the Covered Aircraft Sublease (but not under the Storage Sublease), including without limitation Basic Rent (but excluding Basic Rent for any period for which the Deferred Obligations have been deferred), against Contractor in an amount and type equivalent to the damages (arising under this Agreement and/or the Covered Aircraft Sublease) it would have been entitled to seek against Contractor had such obligations arisen under, and such non-performance occurred with respect to, the Covered Aircraft Sublease rather than the Storage Sublease.


(d) Neither Contractor nor any of Contractor’s Affiliates shall lease, sublease or otherwise obtain the use of any aircraft formerly subject to a Covered Aircraft Sublease for the six months following the termination of such sublease, unless Contractor has received prior written notice from United that United is not attempting to lease, sublease or otherwise obtain or retain the use of such aircraft (which notice, if true, shall be given by United upon Contractor’s request).


(e) Notwithstanding anything else contained herein to the contrary, if and when a Covered Aircraft Sublease terminates in accordance with its terms, then the aircraft subject to such sublease shall no longer constitute a Covered Aircraft effective on the date on which the term of such Covered Aircraft Sublease ends, regardless of whether the event giving rise to such sublease termination also constitutes an independent termination or withdrawal event hereunder. Any withdrawal occurring upon such a termination of a Covered Aircraft Sublease shall be separate and distinct from, and shall not limit or supersede, any other withdrawal rights of United contained in this Agreement.