printer-friendly

Sample Business Contracts

Airline Participation Agreement - priceline.com Inc. and Continental Airlines Inc.

Sponsored Links

                         AIRLINE PARTICIPATION AGREEMENT


         THIS AGREEMENT (this "Agreement"), dated July 16, 1999, is by and
between priceline.com Incorporated, a Delaware corporation with an address at
Five High Ridge Park, Stamford, Connecticut 06905 ("Priceline"), and the
undersigned airline, whose principal place of business is set forth in the
notice provision of this Agreement ("Airline").

                             PRELIMINARY STATEMENT:

         Priceline provides a service that allows consumers to purchase airline
tickets at an offer price determined by the consumer (the "Priceline Service").
The consumer identifies the departure and return dates for travel and the price
the consumer is willing to pay for the airline ticket(s). Priceline then
determines if it is able to fulfill the customer's offer and, if it is able to
do so, Priceline issues a ticket to the customer on the applicable carrier.

         Airline desires to participate in the Priceline Service and, in
connection therewith, will provide Priceline with unpublished fares subject to
the Restrictions (defined herein) for select origin and destination city pairs
(each, an "O&D") identified by Airline in accordance with the terms and
conditions set forth in this Agreement.

         Priceline desires to include Airline as a participating carrier in the
Priceline Service and to have access to such unpublished fares in accordance
with the terms and conditions set forth in this Agreement.

         NOW, THEREFORE, in consideration of the covenants and agreements set
forth in this Agreement, the parties agree as follows:

I.       TICKET RESTRICTIONS AND RELATED MATTERS

         1.   Airline shall make available unpublished fares to Priceline for
              O&Ds identified by Airline in accordance with the terms and
              conditions set forth in this Agreement. Unpublished fares provided
              to Priceline must be issued in accordance with rules and
              restrictions provided to Priceline by Airline from time to time.
              By way of example, unpublished fares on certain O&D's may require
              specific routings or be flight/day specific. At all times during
              the term of this Agreement, Airline will exclusively control and
              determine the unpublished fares and levels of inventory provided
              to Priceline. It is expressly understood and agreed that Airline
              makes no commitment whatsoever regarding the level of inventory,
              number of O&Ds or the level of unpublished fares that will be
              provided to Priceline.

         2.   All tickets issued by Priceline for carriage on Airline (each, a
              "Priceline Ticket") shall be subject to the following restrictions
              (the "Restrictions"):


                                       1

<PAGE>


              (a)  Except as otherwise provided in Section IV.4 hereof, all
                   Priceline Tickets will be non-refundable, non-endorsable and
                   non-changeable;

              (b)  All travel will be round-trip with no stopovers or open-jaw
                   travel permitted;

              (c)  Frequent Flyer mileage and upgrades will not be permitted;
                   provided, Airline may offer such benefits to the extent that
                   it is impractical to impose such frequent flyer restrictions
                   on Priceline Tickets;

              (d)  Priceline customers must agree to (i) make up to one stop or
                   connection on both their departing and return flights, (ii)
                   accept a ticket on any Participating Carrier, and (iii)
                   travel on any flight on the specified date of travel (x) for
                   domestic U.S. flights, departing during the 6 a.m. - 10 p.m.
                   time period unless the customer has specified a request to
                   include flights departing outside those periods, and (y) for
                   international flights, at any time (i.e., 12:01 a.m. to 11:59
                   p.m.);

              (e)  All Priceline travel reservations and bookings shall be made
                   without Priceline customers specifying a preferred (or
                   requested) carrier, flight or time of day travel
                   preference(s) on the specified date(s) of travel;

              (f)  All Priceline Tickets require instant ticketing guaranteed
                   with a major credit card if Priceline is able to provide an
                   airline ticket within the customer's requested price,
                   departure and return date parameters;

              (g)  Priceline Ticket reservations are limited to no more than
                   eight persons traveling in the same itinerary; and

              (h)  Except as otherwise provided herein, in any seven-day
                   calendar period, a Priceline customer shall be limited to
                   making one offer price for airline ticket(s) for a Trip. A
                   "Trip" is defined as travel between the same airports on the
                   same dates of travel. A Priceline customer may, within a
                   seven-calendar day period, make an offer for travel in a
                   different airport pair or on different dates of travel.
                   Priceline will not knowingly sell a ticket to a Priceline
                   customer in response to a second (or subsequent) offer for a
                   Trip within a seven calendar day period; provided, that
                   Priceline may sell a ticket in connection with a second offer
                   if the Priceline customer (i) accepts, as part of the second
                   offer, (x) a travel package which includes a hotel or rental
                   car offer, or (y) a product or service co-marketed by
                   Priceline such as a credit card or long distance telephone
                   service or other co-marketing program.

         3.   Airline may include, in addition to the Restrictions, other fare
              rules and conditions for Priceline Tickets issued on Airline such
              as advance purchase or Saturday night stay requirements. Priceline
              also reserves the right after written notice to Airline to impose
              additional restrictions on Priceline Tickets, including a Saturday
              night stay requirement, as part of the Restrictions.


                                       2

<PAGE>


         4.   The Restrictions will be communicated by Priceline to the customer
              via the Internet (or through Priceline's customer service
              representatives if the consumer contacts Priceline through its
              toll free customer service number), and will be set forth on
              ticketing and/or itinerary documentation issued by Priceline.

         5.   All Priceline Tickets issued for carriage on Airline shall be
              subject to the published conditions of carriage and the fare rules
              of Airline, to the extent such conditions and fare rules are not
              inconsistent with the Restrictions. Airline will honor all
              Priceline Tickets issued for travel on Airline in accordance with
              the Restrictions and other rules and conditions established by
              Airline for Priceline Tickets.

II.      PRICELINE TICKET RESERVATIONS, BOOKINGS, PAYMENT AND FULFILLMENT

         1.   Airline will file unpublished fares and rules for Priceline
              Tickets with the computer reservation system ("CRS") used by
              Priceline.

         2.   Priceline will determine the price at which tickets are sold based
              on customer offers received through the Priceline Service.
              Priceline shall not advertise prices or fares below Airline's
              published or unpublished fares.

         3.   All unpublished fares made available by Airline for sale through
              the Priceline Service shall not be commissionable and shall be
              inclusive, where applicable, of the applicable domestic federal
              transportation excise tax. All such unpublished fares shall be
              exclusive of any domestic federal segment taxes, and any domestic
              or international fuel, departure, arrival, passenger facility,
              airport, terminal and/or security taxes or surcharges which, when
              applicable, must be added to the fare amount collected from the
              passenger and shown on the Priceline Ticket.

         4.   Upon locating an unpublished fare with inventory availability
              satisfying a Priceline customer's ticket request, Priceline shall
              immediately ticket the customer's ticket price against a valid
              credit card provided by the Priceline customer.

         5.   In all Priceline Ticket transactions, Priceline will be the
              merchant of record and will pay all associated merchant credit
              card fees. All Priceline tickets sold on Airline will be settled
              through Airline Reporting Corporation ("ARC").

         6.   All tickets of Airline issued through the Priceline Service will
              be issued by Priceline using Agency ARC: 07-50854-6. In collecting
              payment for Priceline Tickets, Priceline will act as the agent of
              Airline pursuant to Agent's ARC Agent Reporting Agreement with
              ARC.


                                       3

<PAGE>


         7.   Unless otherwise directed by a Priceline customer, all Priceline
              Tickets issued on Airline will be issued electronically. After
              issuance, Priceline will promptly forward to the customer a
              receipt of proof of purchase, conditions of carriage on Airline
              and a copy of the Restrictions (including any additional
              restrictions imposed by Airline). In the event a Priceline
              customer requests Airline to provide a separate electronic ticket
              receipt for an electronic ticket, the price shown on Airline's
              receipt will reflect that such ticket is a "bulk" electronic
              ticket.

         8.   Priceline will encourage its customers to accept electronic
              ticketing for all Priceline Ticket requests by imposing an
              additional charge for the issuance of paper tickets and
              maintaining the issuance of electronic tickets as the default
              option on the Priceline Service.

         9.   Subject to the provisions of Paragraph II.5 above, all Priceline
              paper tickets for carriage on Airline will be issued by Priceline
              on standard ARC traffic documents and will be validated with
              Airline's validation in accordance with ARC requirements. The
              passenger coupon will show "bulk" for the fare amount and will
              include all additional collections noted in Paragraph II.3 above.
              The auditor's coupon will show the Airline's unpublished fare
              authorized for Priceline.

         10.  In the event that Priceline is unable to fulfill a Priceline
              ticket request from unpublished fares and seat inventory provided
              from airlines participating in the Priceline Service, Priceline
              reserves the right to sell tickets on Airline using published
              fares used by travel agents generally as reflected in CRSs, in
              accordance with the rules and conditions associated with such
              fares.


III      PRICELINE TICKET ALLOCATION METHODOLOGY

              Priceline shall establish an allocation methodology that
              determines when participating airlines will be given the first
              opportunity to fill a customer ticket request, and may give
              preference to one or more participants in establishing such
              methodology. Priceline will work in good faith with each
              participating airline to assist such airline in achieving its
              objective for the Priceline Service within the context of the
              allocation system.

IV.      PRICELINE CUSTOMER SERVICE

         1.   Priceline will provide twenty-four hour customer support services
              to all Priceline customers through a toll-free number at the
              customer support center designated by Priceline from time to time.
              The customer support center will be adequately staffed with
              personnel trained to take Priceline Ticket requests by phone and
              respond to all customer inquiries for related service and support.


                                       4

<PAGE>


         2.   Priceline will use commercially reasonable efforts to ensure that
              its customer service representatives provide quality customer
              service and support to Priceline customers in a prompt, reliable
              and courteous manner.

         3.   Priceline will respond to Priceline customer questions and issues
              pertaining to special handling requirements for Priceline Tickets
              including processing any special customer handling requirements in
              respect of Priceline Tickets issued on Airline.

         4.   The ticket Restrictions will apply to all tickets issued through
              the Priceline Service on Airline. Airline may waive, at its own
              cost and expense, one or more of the Restrictions set forth in
              Sections I.2 (a)-(f) pursuant to a direct arrangement made by
              Airline with the applicable customer holding a Priceline Ticket.
              On an exception basis where necessary or appropriate to address an
              escalating customer service issue of any individual customer,
              Priceline may refund the price of a Priceline Ticket applicable to
              such customer. At Airlines' request, Priceline shall provide
              Airline with a monthly report detailing the number and amount of
              refunded Priceline Tickets involving air transportation services
              on Airline. Priceline and Airline will jointly develop the
              guidelines upon which such exception refunds will be governed.

V.       CONFIDENTIALITY

         1.   Priceline and Airline will each hold in confidence and, without
              the prior written consent of the other, will not reproduce,
              distribute, transmit, transfer or disclose, directly or
              indirectly, in any form, by any means or for any purpose, any
              Confidential Information of the other party. As used herein, the
              term "Confidential Information" shall mean this Agreement and its
              subject matter, and proprietary information that is provided to or
              obtained from one party to the other party including any
              information which derives economic value, actual or potential,
              from not being generally known to, and not generally ascertainable
              by proper means by, other persons, including the unpublished fares
              provided by Airline to Priceline pursuant to this Agreement. The
              recipient of Confidential Information may only disclose such
              information to its employees on a need-to-know basis.

         2.   The obligations of a recipient party with respect to Confidential
              Information shall remain in effect during and after the term of
              this Agreement (including any renewals or extensions hereof) and
              for a period of one (1) year thereafter, except to the extent such
              data:

              (a)  is or becomes generally available to the public other than as
                   a result of a disclosure by the recipient, or its directors,
                   officers, employees, agents or advisors;


                                       5

<PAGE>


              (b)  becomes available to the recipient on a non-confidential
                   basis from a source other than the disclosing party or its
                   affiliated companies, provided that such source is not bound
                   by any confidentiality obligations to the disclosing party or
                   its affiliated companies (as applicable); or

              (c)  is necessary to comply with applicable law or the order or
                   other legal process of any court, governmental or similar
                   authority having jurisdiction over the recipient. Airline
                   acknowledges that Priceline may be required to file this
                   Agreement with the Securities and Exchange Commission
                   ("SEC"), as required by federal securities laws, and that
                   such filing shall not be deemed a violation of the provisions
                   of this Article V.

         3.   Except as otherwise specifically provided in Section 2(c) of this
              Article V with respect to Priceline's filing requirements with the
              SEC, in the event that the recipient becomes legally compelled to
              disclose any of such Confidential Information by any governmental
              body or court, recipient will provide the disclosing party with
              prompt notice so that the disclosing party may seek a protective
              order or other appropriate remedy and/or waive compliance (in
              writing) with the provisions hereof. In the event that such
              protective order or other remedy is not obtained, or the
              disclosing party waives (in writing) compliance with the
              provisions hereof, recipient will furnish only that portion of
              such Confidential Material which is legally required and will
              exercise its reasonable business efforts to obtain appropriate
              assurance that confidential treatment will be accorded such
              Confidential Information

         4.   The recipient of Confidential Information will exercise reasonable
              commercial care in protecting the confidentiality of the other
              party's Confidential Information.

         5.   Priceline will not disclose (including, without limitation, by
              sale) to any third party information obtained through the
              Priceline Service or otherwise concerning a customer who has
              acquired a ticket on Airline using the Priceline Service.

         6.   Nothing contained herein shall be construed to prevent Airline
              from competing, directly or indirectly, with Priceline. Priceline
              shall not provide any Confidential Information to Airline that
              would in any way prohibit or inhibit such competition.

VI.      PROPRIETARY MARKS

              During the term of this Agreement neither Priceline nor Airline
              shall use the other party's trademarks, trade names, service
              marks, logos, emblems, symbols or other brand identifiers in
              advertising or marketing materials, unless it has obtained the


                                       6

<PAGE>


              prior written approval of the other party. The consent required by
              this Paragraph VI shall extend to the content of the specific
              advertising or marketing items as well as the placement and
              prominence of the applicable trademark, trade name, service mark,
              logo, emblem, symbol or other brand identifier of the other party.
              Priceline or Airline, as applicable, shall cause the withholding,
              discontinuance, recall or cancellation, as appropriate, of any
              advertising or promotional material not approved in writing by the
              other party, that differs significantly from that approved by the
              other party, or that is put to a use or used in a media not
              approved by the other party.

VII.     REPORTING

              Priceline will provide monthly reports in a format designated by
              Airline summarizing (i) information concerning each ticket issued
              by Priceline on Airline; (ii) aggregate information (i.e. non
              airline specific) for all tickets issued by Priceline in each O&D
              that Airline participates; and (iii) aggregate information for all
              Priceline offers from customers not ticketed in each O&D that
              Airline participates.


VIII.    TERM OF AGREEMENT

         1.   Subject to the provisions of this Paragraph VIII, this Agreement
              will commence on the date set forth on the first page of this
              Agreement (the "Commencement Date") and will continue indefinitely
              thereafter. Notwithstanding the foregoing, Priceline or Airline
              may terminate this Agreement with or without cause on 30 days'
              prior written notice to the other party.

         2.   The obligations of the parties under Paragraphs V and IX of this
              Agreement shall indefinitely (except as otherwise limited to a
              certain term therein) survive the termination of this Agreement.

         3.   In the event of written notice of termination of this Agreement in
              accordance with the terms of this Paragraph VIII, all Priceline
              Tickets issued on Airline prior to the effective date of
              termination specified in such notice will be honored by Airline
              under the terms of this Agreement.

IX.      INDEMNIFICATION

         1.   Priceline will indemnify, defend and hold harmless Airline, its
              officers, directors, employees and agents, from and against all
              damages, losses and causes of action including, without
              limitation, damage to property or bodily injury, to the extent
              caused by Priceline's breach of this Agreement or the ARC Agent
              Reporting


                                       7

<PAGE>


              Agreement, or by the negligence or willful acts of Priceline or
              any of its employees or agents.

         2.   Airline will indemnify, defend and hold harmless Priceline and its
              officers, directors, employees and agents from and against all
              damages, losses and causes of action including, without
              limitation, damage to property or bodily injury, to the extent
              caused by Airline's breach of this Agreement or by the negligence
              or willful acts of Airline or any of its employees or agents.


X.       NO EXCLUSIVITY

              The relationship by and between Airline and Priceline as set forth
              in this Agreement shall be non-exclusive. As such, Airline may
              participate in other programs similar to the Priceline Service or
              in any line of business.

XI.      GENERAL PROVISIONS

         1.   No waiver or breach of any of the provisions of this Agreement
              shall be construed as a waiver of any other breach of the same or
              any other provision.

         2.   If any paragraph, sentence or clause of this Agreement shall be
              adjudged illegal, invalid or unenforceable, such illegality,
              invalidity or unenforceability shall not affect the legality,
              validity or enforceability of this Agreement as a whole or of any
              paragraph, sentence or clause hereof not so adjudged.

         3.   Any notice required or permitted hereunder shall be deemed
              sufficient if given in writing and delivered personally, by
              facsimile transmission, by reputable overnight courier service or
              United States mail, postage prepaid return receipt requested, to
              the addresses shown below or to such other addresses as are
              specified by similar notice, and shall be deemed received upon
              personal delivery, upon confirmed facsimile receipt, two (2) days
              following deposit with such courier service, or three (3) days
              from deposit in the United States mails, in each case as herein
              provided:

              If to Priceline:                  If to Airline:

              Priceline.com Incorporated        Continental Airlines, Inc.
              Five High Ridge Park              1600 Smith Street
              Stamford, CT 06905                Houston TX, 77002


                                       8

<PAGE>


              Attention: Paul Francis            Attention: James Compton
              Chief Financial Officer            Vice President - Pricing

              Phone: (203)-705-3000              Phone: 713-324-6693
              Fax:   (203)-595-8344              Fax:   713-324-2141



              With a copy to:                    With a copy to:
              Priceline.com Incorporated         Continental Airlines, Inc.
              Five High Ridge Park               Dept. HQS-EO
              Stamford, CT 06905                 1600 Smith Street
                                                 Houston, TX  77002

              Attention: Timothy G. Brier        Attention:  General Counsel
              Phone: (203)-705-3000              Phone: 713-324-2948
              Fax:   (203)-595-8343              Fax:   713-324-2687



              A party may change its address and the name of its designated
              recipient of copies of notices for purposes of this Agreement by
              giving the other parties written notice of the new name and the
              address, phone and facsimile number of its designated recipient in
              accordance with this Paragraph XI(3).

         4.   This Agreement supersedes and replaces all previous understandings
              or agreement, whether oral or in any written form, with respect to
              the subject matter addressed herein. The captions in this
              Agreement are for convenience only and do not alter any terms of
              this Agreement.

         5.   This Agreement may be amended or modified only by a written
              amendment executed by the parties.

         6.   The formation, construction, performance and validity of this
              Agreement shall be governed by the internal laws of the State of
              Delaware . Each party agrees that any civil suit or action brought
              against it as a result of any of its obligations under this
              Agreement may be brought against it either in the state or federal
              courts of the principal place of business of either party, and
              each party hereby irrevocably submits to the jurisdiction of such
              courts and irrevocably waives, to the fullest extent permitted by
              law, any objections that it may now or hereafter have to the
              laying of the venue of such civil suit or action and any claim
              that such civil suit or action has been brought in an inconvenient
              forum, and each party further agrees that final judgment in any
              such civil suit or action shall be conclusive and binding


                                       9

<PAGE>


              upon it and shall be enforceable against it by suit upon such
              judgment in any court of competent jurisdiction.

         7.   This Agreement may be executed in counterparts, each of which
              shall be deemed an original, and together, shall constitute one
              and the same instrument. Execution may be effected by delivery of
              facsimiles of signature pages (and the parties shall follow such
              delivery by prompt delivery of originals of such pages).

         8.   No party will in any manner or by any device, either directly or
              indirectly, act in violation of any applicable law, governmental
              order or regulation, including, but not limited to, those
              concerning advertisement of air transportation services. Priceline
              shall comply at all times with the provisions of Airline's tariffs
              (except where such tariffs are specifically amended by Airline
              under the terms of this Agreement) and the terms of the ARC Agent
              Reporting Agreement and any addenda thereto.

         9.   Priceline agrees to notify Airline promptly, in writing, in the
              event there is a change of control in the ownership of Priceline.
              For purposes of this Agreement, a "change of control" means (i)
              the acquisition by any other person or group (within the meaning
              of Section 13(d)(3) of the Securities Exchange Act (except an
              employee group of such party, any of its subsidiaries or a holding
              company of such party)), of the beneficial ownership of securities
              representing 20% or more of the combined voting power of the
              securities entitled to vote generally in the election of the board
              of directors of the applicable party, or (ii) the sale, mortgage,
              lease or other transfer of assets or earning power constituting
              more than 50% of the assets or earning power of such party (other
              than ordinary course financing); provided that in no event shall a
              "change of control" be defined to include (i) an initial public
              offering of shares of the party's capital stock, (ii) the
              formation by a party of a holding company, or (iii) an
              intra-corporate transaction with a company under common control
              with a party.

         10.  No party hereto shall assign or transfer or permit the assignment
              or transfer of this Agreement without the prior written consent of
              the other party.

         11.  This Agreement shall not be deemed to create any partnership or
              joint venture between Airline and Priceline, or to create any
              rights in favor of any person or entity other than the parties
              hereto. This Agreement is for the sole benefit of the parties and
              nothing herein expressed or implied shall give or be construed to
              give any other person any legal or equitable rights hereunder

         12.  NO PARTY WILL BE LIABLE TO THE OTHER FOR ANY OF THE OTHER PARTY'S
              INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING LOST REVENUES, LOST
              PROFITS, OR LOST PROSPECTIVE ECONOMIC


                                       10

<PAGE>


              ADVANTAGE, ARISING FROM THIS AGREEMENT OR ANY BREACH HEREOF.

         13   The Parties agree that irreparable damage would occur in the event
              any provision of this Agreement is not performed in accordance
              with the terms hereof and that the Parties shall be entitled to an
              injunction or injunctions to prevent breaches of this Agreement
              and to enforce specifically the terms and provisions of this
              Agreement.

         14.  Each party has participated in the negotiation and drafting of
              this Agreement. In the event any ambiguity or question of intent
              or interpretation arises, this Agreement shall be construed as if
              drafted jointly by the parties, and no presumption or burden of
              proof shall arise favoring or disfavoring any party by virtue of
              the authorship of any of the provisions of this Agreement.


         IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement on the date indicated above.


PRICELINE.COM INCORPORATED                 CONTINENTAL AIRLINES, INC.


By: /s/ Timothy G. Brier                   By: /s/ Jeffrey Smisek
   ---------------------------------------    -------------------------------
   Name:  Timothy G. Brier                    Name:  Jeffrey Smisek
   Title: Executive Vice President, Travel    Title: Executive Vice President


                                       11