Airline Charter Associate Agreement - Orbitz LLC
FORM OF SECOND AMENDED AND RESTATED
AIRLINE CHARTER ASSOCIATE AGREEMENT
This SECOND AMENDED AND RESTATED AIRLINE CHARTER ASSOCIATE AGREEMENT (this
"Agreement") is made and entered into as of this ___ day of December, 2003 (the
"IPO Date"), by and between Orbitz, LLC, a Delaware limited liability company
("Company") and the undersigned airline ("Airline"). For the purposes of this
Agreement, the term "Airline" will include all Affiliates of Airline that
operate Air Travel.
INTRODUCTION
WHEREAS, Company and Airline entered into that certain Amended and Restated
Airline Charter Associate Agreement, dated as of May 9, 2000 (the "Charter
Agreement") in connection with the formation of the Company pursuant to which
Airline agreed to participate in the Company Site as an Airline Charter
Associate on the terms and conditions set forth in the Charter Agreement;
WHEREAS, Company and Airline amended the Charter Agreement pursuant to the
First Amendment to Airline Charter Associate Agreement, dated as of May 19, 2001
to: (1) revise the definition of the term "Launch Date", as set forth in Section
2.3 of the Charter Agreement, to be June 1, 2001; (2) amend and restate Exhibit
C to the Charter Agreement, in its entirety; and (3) revise the definition of
"Effective Date", as set forth in the first paragraph of the Charter Agreement,
to be May 19, 2001;
WHEREAS, in connection with a contemplated initial public offering of
Orbitz, Inc., a Delaware corporation (the "IPO"), Airline will exchange all of
its membership interests in the Company for shares of capital stock of Orbitz,
Inc.; and
WHEREAS, in connection with the IPO, Company and Airline desire to amend
and restate the Charter Agreement in its entirety;
NOW, THEREFORE, it is mutually agreed that:
1. DEFINITIONS. The terms defined in EXHIBIT A will have the meaning assigned
to them for the purposes of this Agreement.
2. AIRLINE PARTICIPATION IN THE COMPANY SITE.
2.1 SCHEDULE, FARE AND SEAT AVAILABILITY INFORMATION.
(a) Airline shall use reasonable commercial efforts to provide
complete, timely, and accurate information on its Schedules, Published Fares,
and Seat Availability (together, "AIR TRAVEL INFORMATION") to Company at no
charge and with the same frequency, and no later than, Airline provides Air
Travel Information to its Airline Internet Site, Airline Internal Reservation
System, or Alliance Partner Site. Airline shall provide Company with
nondiscriminatory access to Seat Availability for Published Fares for passengers
yielding comparable net revenue values in comparable fare classes in the Airline
Internal Reservation System, Airline Internet Site, or Alliance Partner Site.
Airline shall provide Air Travel
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Information in a manner so that all such data is available to Company for
airline bookings on the Company Site without the need for a link to the Airline
Internal Reservation System, Airline Internet Site, or Alliance Partner Site.
(b) To the extent that Airline offers any of the following in
connection with the display or sale of Air Travel fulfilled through an Internet
Travel Provider Site: (i) Published Fares, (ii) Schedules, (iii) Seat
Availability, (iv) Service Enhancements, (v) frequent flyer program account
information, (vi) frequent flyer promotions (including, but not limited to,
mileage promotions), (vii) functionality or processing of frequent flyer
transactions, or (viii) the purchase, sale or redemption of frequent flyer
miles, Airline shall offer Company the same on a MFN Basis.
(c) Company acknowledges and agrees that, as between Company and
Airline, Airline is the owner of (i) all information provided by Airline to
Company pursuant to Sections 2.1(a) and (b), and (ii) all other Airline
information relating to, derived from, or used to create Fares, Schedules, Seat
Availability, Airline reservations, passenger name records (PNRs) relating to
Airline passengers, Airline tickets sold, real time flight information, and all
related data (all such information described in the preceding (i) and (ii)
collectively referred to as the "AIRLINE DATA"). Airline hereby grants to
Company, during the Term, a limited, non-exclusive, non-assignable,
non-transferable license, without the right to sublicense, to use the Airline
Data, solely for purposes of Company advertising and promotions (subject to the
terms of Section 5 hereof) and for operating the Company Site; provided, that
any such use may not involve Company disclosing the Airline Data to any third
party. Airline retains all right, title and interest in and to the Airline Data
and all copyright and other intellectual property rights relating thereto,
subject to the license granted herein to Company. Company shall not sell,
transfer, license, market or otherwise distribute the Airline Data to third
parties without Airline's prior written consent.
(d) Notwithstanding Section 2.1(c), Company may (i) create customer
profiles of Persons purchasing Airline services from the Company and offer
targeted promotions to such Persons, and (ii) offer to Persons purchasing
Airline services other non-Airline products and services such as hotel, rental
car, cruise line, vacation package, insurance, credit card, and other products
and services; provided, however, that in all cases Company shall not (x) offer
the Airline Data directly or indirectly to any other air carrier, (y) use the
Airline Data for the direct benefit of any other air carrier or (z) use the
Airline Data for promotions or customer offers unless the Airline Data is
included as part of a larger generic database of airline customers which
includes all airline customers on the Company Site in a city, city pair, country
pair, region or other demographic market or geographic area, such that the
database could not be used to identify Airline's passengers, Airline's frequent
flyer members or purchasers of Airline's services through the Company Site.
(e) The inadvertent and infrequent failure by Airline to comply with
its obligations set forth in Section 2.1(a) or (b) shall not be considered a
breach hereof so long as, once discovered by Airline or brought to its
attention, Airline prospectively cures such failure to comply as soon as
reasonably practicable but in any event within twenty-four (24) hours in the
case of obligations set forth in Section 2.1(a) and seven (7) days in the case
of obligations set forth in Section 2.1(b).
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2.2 MARKETING SUPPORT.
(a) Airline shall provide Company with In-Kind Promotions in each
twelve (12) month period in an amount equal to five percent (5%) of Airline's
Travel Revenue during the immediately preceding twelve (12) month period not to
exceed two million U.S. dollars (US$2,000,000) during any twelve (12) month
period. Airline's In-Kind Promotions shall be implemented in accordance with the
valuation methodology set forth in EXHIBIT B. Company and Airline shall mutually
determine the timing and value of each In-Kind Promotion by mutual agreement of
the parties. In the event Company and Airline cannot agree on the timing and
value of each In-Kind Promotion, the timing and values used during the
immediately preceding period will apply. If either party proposes In-Kind
Promotions that are not listed in EXHIBIT B, the parties shall work together in
good faith to value such In-Kind Promotions. Airline's In-Kind Promotions shall
be used solely to promote Company's primary Internet site unless otherwise
agreed by the parties.
(b) The parties shall mutually determine a promotional plan to
implement In-Kind Promotions to satisfy the Airline's obligations and the
schedule for such promotions. Promotional plans shall be prepared on a calendar
quarter basis at least thirty (30) days in advance of each calendar quarter.
Airline shall provide such In-Kind Promotions in accordance with such plans and
schedules.
(c) Company shall provide Airline with a quarterly report of
Airline's In-Kind Promotions completed and the balance of Airline's obligation
to provide In-Kind Promotions as described above.
2.3 Company and Airline shall each assign individuals to serve as account
managers who shall be responsible for the implementation of this Agreement. Each
party may change its account manager upon written notice to the other party.
2.4 For Services provided by Company to Airline, Airline agrees to pay
Company the greater of (i) the amount determined by Airline from time to time or
(ii) the amount per transaction set forth in EXHIBIT C. Company agrees that
during the Term it will not charge any other airline for similar Services any
amounts that are lower than the amounts set forth on EXHIBIT C.
2.5 Notwithstanding paragraphs 2.1(a), 2.1(b), and 2.1(e), in the event
that Airline is legally obligated or compelled by any law, tariff, rule,
regulation, ordinance, order, judgment, decree, injunction, writ, statute,
contract or consent decree (including any amendments thereto) to provide any of
its Fares to an Internet Travel Provider Site, CRS, or computerized reservation
system due to any ownership by Airline of securities of Company or an Affiliate
of Company, then only for the period such legal obligation or compulsion shall
be in force, the term "Published Fares" as used in Sections 2.1(a) and 2.1(b)
shall automatically be deemed to be deleted and changed to "CRS Fares".
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3. OBLIGATIONS OF COMPANY.
3.1 Company agrees to display Airline's Air Travel Information on the
Company Site in accordance with this Section 3.1. Except in response to a
Customer Request, Company shall display all Airline Information in an Unbiased
Manner.
3.2 On a quarterly basis, Company shall pay Airline sixty percent (60%) of
the rebate earned directly or indirectly by Company from its CRS supplier(s) for
transactions relating to Airline tickets sold through the Company Site (the
"QUARTERLY REBATE"). In no event shall the Quarterly Rebate, when divided by the
number of Airline tickets issued by the Company Site during a calendar quarter
period, be (a) less than one U.S. dollar (US$1.00) per ticket or (b) more than
three U.S. dollars (US$3.00) per ticket. Company shall pay the Quarterly Rebate
within sixty (60) days following the close of each calendar quarter period.
Airline has the right to audit the rebate calculation at its expense and in a
commercially reasonable manner at a mutually agreed upon time and location.
3.3 During the Term, Company shall provide Airline and other Airline
Charter Associates with (i) the same terms and conditions for the commercial
arrangements set forth in Section 2 (Airline Participation in the Company Site)
and Section 3 (Obligations of the Company), and (ii) the opportunity to
participate in Company in-kind promotions, opportunities to sell Airline's
tickets on the Company Site through tour or travel packages that bundle air
transportation, car rental and hotel services, Company air travel promotions,
prices charged by the Company for Airline Charter Associates to advertise on the
Company Site and other Company marketing programs and opportunities on
substantially equal commercial terms that are equal to or better than the most
favorable terms offered by Company to any other airline, regardless of sales
volume.
3.4 Company shall be entitled to suspend the payment of the Quarterly
Rebate to Airline, and withhold from Airline the benefits described in Sections
3.2 and 3.3 above, (i) if Airline has failed to provide Company with In-Kind
Promotions in accordance with Section 2.2, or (ii) if Airline and Company have
been unable to reach agreement on the promotional plan described in Section
2.2(b); provided, that the exercise of Company's right to suspend payment shall
be without prejudice to any other remedies Company may have for breach of this
Agreement.
3.5 At the request of Airline, Company shall, subject to technical and
financial constraints, use its reasonable business efforts to connect directly
to the Airline Internal Reservation System for Published Fares, Schedules and
Seat Availability information so as to eliminate the need for a CRS link for
such data; provided, the presence or absence of any financial incentives to
Company from one or more CRS shall not be considered a technical or financial
constraint or used for purposes of determining reasonable business efforts.
3.6 The parties agree to undertake reasonable commercial efforts to
develop and implement distribution technologies that lower the cost of
distributing Airline's products and services through the Company Site, including
but not limited to electronic ticketing and interline e-ticketing.
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3.7 During the Term, without the prior written consent of Airline, Company
shall not impose any restrictions or conditions with respect to the sale of
Airline's products and services through the Company Site that are not imposed
equally on sales of all other airline products and services and shall not engage
in any other conduct that is intended or is reasonably likely to disparage or
otherwise adversely impact Airline in a disparate manner to other airlines.
4. CONFIDENTIALITY.
Each party shall take reasonable measures to protect the secrecy of and
avoid disclosure and unauthorized use of the Confidential Information of the
other party, including, without limitation, taking at least those measures that
it takes to protect its own highly confidential information. Upon the expiration
or termination of this Agreement, each party shall deliver to the other party
all of such other party's Confidential Information that such party may have in
its possession or control. Neither party shall disclose any terms of this
Agreement to any third party if such disclosure is without the consent of the
other party, except to such party's accountants, attorneys and other
professional advisors, provided such advisors ate bound by a duty of
confidentiality. Upon the execution of this Agreement, each party may issue one
or more press releases disclosing the execution of this Agreement and each party
shall use its reasonable business efforts to coordinate all such press releases
with the other party hereto.
5. PROPRIETARY MARKS.
During the Term, subject to the terms of this Section 5, Company may refer
to the trade name of Airline ("AIRLINE MARKS"), solely for the purpose of fairly
and accurately describing and referring to the Company Site. Without limiting
the foregoing, Company may identify Airline as an Airline Charter Associate by
adding a suitable descriptive explanation on the Company Site, on promotional
material for the Company Site, and in non-advertising textual materials,
including for example press releases, product announcements, and general
corporate communications. Company shall inform Airline of the details of any use
of the Airline Marks. Company agrees not to use the Airline Marks in any manner
that could reasonably be expected to have an adverse impact on the goodwill
attached to such Airline Marks or on the corporate image of Airline. In such
circumstances, Airline shall have the right to reasonably request Company to
cease or to modify any particular use.
6. TERM OF AGREEMENT.
6.1 TERM.
(a) This Agreement will commence on the IPO Date, and will continue
for an initial term through December 31, 2013; PROVIDED, Airline may terminate
this Agreement for any reason or no reason upon thirty (30) days prior written
notice to Company. After the initial term, this Agreement will continue in
effect; PROVIDED, either party may terminate this Agreement for any reason or no
reason upon thirty (30) days prior written notice to the other party.
(b) The effectiveness of this Agreement is contingent upon the
consummation of the IPO. If, for any reason, the IPO is not consummated, this
Agreement shall be null and void and the Charter Agreement, as previously
amended, shall remain in effect in accordance with its terms.
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6.2 TERMINATION FOR BREACH. Either party may terminate this Agreement at
any time if the other party is in breach of its obligations hereunder and has
failed to fully cure such breach within thirty (30) days following the breaching
party's receipt of notice of such breach; provided, that with respect to a
breach of this Agreement by Airline under Section 2.1(a) or (b), the Company may
terminate this Agreement if Airline's breach of Section 2.1(a) or (b) is not
remedied as provided in Section 2.1(e); and provided further that Company's
breach of the Airline Reporting Corporation Agent Reporting Agreement with the
Airline Reporting Corporation or the addendum of Airline to that agreement shall
be automatically deemed a breach of this Agreement permitting Airline to
terminate this Agreement unless such breach is cured by Company within thirty
(30) days following Company's receipt of notice of such breach.
6.3 SURVIVAL. The obligations of the parties under Sections 4 and 8 will
survive the expiration or any termination of this Agreement for a period of five
(5) years. In the event that this Agreement is terminated at a time when Airline
has not satisfied its obligation to provide In- Kind Promotions under Section 2,
such obligation will survive the termination of this Agreement as to the balance
of In-Kind Promotions owed to Company as of the effective date of termination;
provided, that Airline may satisfy such obligation through In-Kind Promotions or
through an equivalent cash payment to Company.
7. NO EXCLUSIVITY.
The relationship between Airline and Company as set forth in this Agreement
will be non-exclusive. Therefore, subject to Section 2, Airline may participate
in other Internet travel sites similar to the Company Site, and this Agreement
will not confer any rights on one party to restrict the other party's ability to
offer Published Fares or to do business, or choose not to do business, with any
other airline, Internet Travel Provider Site or any other entities.
8. INDEMNITY AND WARRANTIES.
8.1 WARRANTY DISCLAIMER. During the Term, Company shall use reasonable
efforts to maintain the availability of the Company Site but is not responsible
or liable for any interruptions or delays in the operation of the Company Site.
NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND, WHETHER ORAL
OR WRITTEN, WHETHER EXPRESS, IMPLIED OR ARISING BY STATUTE, CUSTOM, COURSE OF
DEALING OR TRADE USAGE, WITH RESPECT TO THE SUBJECT MATTER HEREOF, IN CONNECTION
WITH THIS AGREEMENT. EACH PARTY SPECIFICALLY DISCLAIMS ANY AND ALL IMPLIED
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
8.2 INDEMNITY.
(a) Company will indemnify, defend, and hold harmless Airline, its
directors, officers, employees, and agents (each, an "INDEMNIFIED PARTY") from
and against all Losses connected with the furnishing of any services or data by
Company pursuant to this Agreement (including but not limited to actual or
alleged infringement or misappropriation of any trade name, patent, copyright,
trade secret or other property right based on any software, program, service
and/or other materials furnished by Company hereunder, including the Company
Site);
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provided, the foregoing shall not apply to the extent of claims or liabilities
resulting from the negligence or willful misconduct of Airline, its directors,
officers, employees or agents.
(b) If any action, claim or other proceeding shall be brought against
any Indemnified Party, and it shall notify Company of the commencement thereof,
Company shall be entitled to assume the defense thereof at its own expense, with
counsel satisfactory to such Indemnified Party in its reasonable judgment;
provided, however, that any Indemnified Party may, at its own expense, retain
separate counsel to participate in such defense at its own expense.
Notwithstanding the foregoing, in any action, claim or proceeding in which both
Company, on the one hand, and an Indemnified Party, on the other hand, are, or
are reasonably likely to become, a party, such Indemnified Party shall have the
right to employ separate counsel at the reasonable expense of Company and to
control its own defense of such action, claim or proceeding if, in the
reasonable opinion of counsel to such Indemnified Party, a conflict or potential
conflict exists between Company, on the one hand, and such Indemnified Party, on
the other hand, that would make such separate representation advisable;
provided, however, that Company shall not be liable for the fees and expenses of
more than one counsel to all Indemnified Parties. Company agrees that it will
not, without the prior written consent of the Indemnified Party, settle,
compromise or consent to the entry of any judgment in any pending or threatened
claim, action or proceeding relating to the matters contemplated hereby (if any
Indemnified Party is a party thereto or has been actually threatened to be made
a party thereto) unless such settlement, compromise or consent includes an
unconditional release of the Indemnified Party from all liability arising or
that may arise out of such claim, action or proceeding. Company shall not be
liable for any settlement of any claim, action or proceeding effected against an
Indemnified Party without Company's written consent, which consent shall not be
unreasonably withheld.
9. GENERAL PROVISIONS.
9.1 NONASSIGNMENT/BINDING AGREEMENT. Neither this Agreement nor any rights
under this Agreement may be assigned or otherwise transferred, in whole or in
part; PROVIDED, HOWEVER, either party may assign all of its rights and
obligations hereunder in connection with a sale of all or substantially all of
its assets, or a merger or consolidation, without the prior written consent of
the other party. Subject to the foregoing, this Agreement will be binding upon
and will inure to the benefit of the parties and their respective successors and
assigns. Any assignment in violation of this Section 9.1 will be null and void.
9.2 INDEPENDENT CONTRACTORS. The relationship of the parties under this
Agreement is that of independent contractors. Neither party will be deemed to be
an employee, agent, partner or legal representative of the other for any purpose
and neither will have any right, power or authority to create any obligation or
responsibility on behalf of the other.
9.3 NOTICES. Any notice required or permitted under the terms of this
Agreement or required by law must be in writing and must be (a) delivered in
person, (b) sent by first class registered mail, or air mail, as appropriate or
(c) sent by overnight air courier, in each case properly posted and fully
prepaid to the appropriate address set forth on the signature page of this
Agreement. Either party may change its address for notice by notice to the other
party given in accordance with this Section 9.3. Notices will be considered to
have been given as of the date
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received by the intended recipient. Address for notices shall be as listed for
Company and Airline on the signature page of this Agreement.
9.4 WAIVER. Any waiver of the provisions of this Agreement or of a party's
rights or remedies under this Agreement must be in writing to be effective.
Failure, neglect, or delay by a party to enforce the provisions of this
Agreement or its rights or remedies at any time will not be construed as a
waiver of such party's rights under this Agreement and will not in any way
affect the validity of the whole or any part of this Agreement or prejudice such
party's right to take subsequent action. No exercise or enforcement by either
party of any right or remedy under this Agreement will preclude the enforcement
by such party of any other right or remedy under this Agreement or that such
party is entitled by law to enforce.
9.5 SEVERABILITY. If any term, condition, or provision in this Agreement
is found to be invalid, unlawful or unenforceable to any extent, the parties
shall endeavor in good faith to agree to such amendments that will preserve, as
far as possible, the intentions expressed in this Agreement. If the parties fail
to agree on such an amendment, such invalid term, condition or provision will be
severed from the remaining terms, conditions and provisions, which will continue
to be valid and enforceable to the fullest extent permitted by law.
9.6 INTEGRATION. This Agreement (including the Exhibits hereto),
contains the entire agreement of the parties with respect to the subject
matter addressed herein and supersede all previous communications,
representations, understandings and agreements, either oral or written,
between the parties with respect to said subject matter. No terms, provisions
or conditions of any purchase order, acknowledgement or other business form
that either party may use in connection with the transactions contemplated by
this Agreement will have any effect on the rights, duties or obligations of
the parties under, or otherwise modify, this Agreement, regardless of any
failure of a receiving party to object to such terms, provisions or
conditions. This Agreement may not be amended, except by a writing signed by
both parties.
9.7 GOVERNING LAW. This Agreement will be interpreted and construed in
accordance with the laws of the State of Delaware and the United States of
America, without regard to conflict of law principles. All disputes arising out
of this Agreement will be subject to the exclusive jurisdiction of the state and
federal courts located in Delaware and each party hereby consents to the
personal jurisdiction thereof.
9.8 COMPLIANCE WITH LAWS. The Company agrees to operate the Company Site
in accordance with all applicable laws and regulations.
9.9 LIMITATION OF LIABILITY. EXCEPT FOR INDEMNIFICATION OBLIGATIONS
PURSUANT TO SECTION 8.2 RELATING TO LIABILITIES TO THIRD PARTIES WITH RESPECT TO
ACTUAL OR ALLEGED INFRINGEMENT OR MISAPPROPRIATION OF ANY INTELLECTUAL PROPERTY
RIGHTS, AND EXCEPT FOR A BREACH OF ANY CONFIDENTIALITY OBLIGATIONS HEREUNDER, NO
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PARTY WILL BE LIABLE FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING LOST
REVENUES, LOST PROFITS, OR LOST PROSPECTIVE ECONOMIC ADVANTAGE, ARISING FROM
THIS AGREEMENT OR ANY BREACH HEREOF.
9.10 ANTI-FRAUD MEASURES. Company agrees to use reasonable commercial
efforts to prevent ticket and payment (including credit card) fraud with respect
to tickets issued by Company for travel on Airline.
9.11 COUNTERPARTS. This Agreement may be executed in counterparts, each of
which so executed will be deemed to be an original and such counterparts
together will constitute one and the same agreement.
(SIGNATURES ON FOLLOWING PAGE)
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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date first above written.
ORBITZ, LLC.: [AIRLINE]
-------------------------------------------- ---------------------------------
By: By:
----------------------------------------- ------------------------------
Its: Its:
----------------------------------------- ------------------------------
ADDRESS FOR NOTICES PURSUANT TO SECTION 9.3:
If to Company: If to Airline:
Orbitz, LLC [NOTICE ADDRESS]
200 South Wacker Drive, Suite 1900
Chicago, Illinois 60606
Attention:__________________
Phone:______________________
Fax:________________________
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EXHIBIT A
For purposes of this Agreement, the defined terms set forth below will have
the meanings assigned to them:
"AFFILIATE" means, with respect to any Person, any other Person that has a
relationship with such Person whereby either of such Persons directly or
indirectly Controls or is Controlled by or is Under Common Control with the
other of such Persons; provided, however, that notwithstanding the foregoing and
regardless of any relationship between them, Airline shall not be deemed to be
an Affiliate of the Company.
"AIR TRAVEL" means scheduled passenger air transportation services (i)
within, between or among the United States, Canada and Mexico, or (ii) from the
United States, Canada or Mexico to a different third country; provided, that the
exit point (origin of travel) is in the United States, Canada, or Mexico.
"AIR TRAVEL INFORMATION" has the meaning set forth in Section 2.1(a).
"AIRLINE CHARTER ASSOCIATE" means Airline, and any other carrier that
enters into an agreement with the Company substantially similar to this
Agreement.
"AIRLINE DATA" has the meaning set forth in Section 2.1(c).
"AIRLINE INFORMATION" means airline schedules, fares, rules, seat
availability or other flight information.
"AIRLINE INTERNAL RESERVATION SYSTEM" means the computerized system used by
Airline employees that contains information about the Schedules, Published Fares
and Seat Availability of Airline, and provides Airline employees with the
ability to make reservations or sell air transportation services offered by
Airline to Airline customers.
"AIRLINE INTERNAL RESERVATION SYSTEM FARES" means Fares that are offered
for purchase by the general public through the Airline Internal Reservation
System, but excluding Unpublished Fares.
"AIRLINE INTERNET SITE" means an Internet site branded exclusively under
Airline's trademark, service mark or trade name to Airline customers which
contains information about the Schedules, Published Fares and Seat Availability
of Airline, and provides Airline customers with the ability to review, make
reservations or purchase air transportation services offered by Airline.
"AIRLINE MARKS" has the meaning set forth in Section 5.
"ALLIANCE PARTNER" means a Person with whom Airline has entered into either
(i) a codesharing arrangement whereby Airline markets and sells tickets using
its two letter designator code in the carrier code box of a flight coupon for a
flight where the other Person has operational control of the aircraft or vice
versa or (ii) a reciprocal frequent flyer program relationship.
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"ALLIANCE PARTNER SITE" means an Internet site branded exclusively by
Airline and any of its Alliance Partners under their airline alliance trademark,
service mark or brand name and which contains information about the Schedules,
Published Fares and Seat Availability of Airline and such Alliance Partners and
provides customers of Airline and such Alliance Partners with the ability to
review, make reservations or purchase air transportation services offered by
Airline and such Alliance Partners.
"AIRLINE SPONSOR" has the meaning set forth in the definition of "Unbiased
Manner."
"COMPANY SITE" means an Internet site branded under Company's trademark,
service mark or brand name to Company customers that contains information about
the Schedules, Published Fares and Seat Availability of Airline and other travel
suppliers and provides Persons with the ability to make reservations or purchase
air transportation services offered by Airline and other travel suppliers.
"CONFIDENTIAL INFORMATION" means any proprietary information disclosed by
either party to the other party pursuant to this Agreement, either directly or
indirectly, in writing, orally or by inspection of tangible objects, 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. Confidential Information will not, however, include any
information which (i) was publicly known and made generally available in the
public domain prior to the time of disclosure by the disclosing party; (ii)
becomes publicly known and made generally available after disclosure by the
disclosing party to the receiving party through no action or inaction of the
receiving party; (iii) is already in the possession of the receiving party
without obligation of confidentiality at the time of disclosure by the
disclosing party as shown by the receiving party's files and records immediately
prior to the time of disclosure; (iv) is obtained by the receiving party from a
third party without a breach of such third party's obligations of
confidentiality; (v) is independently developed by the receiving party without
use of or reference to the disclosing party's Confidential Information, as shown
by documents and other competent evidence in the receiving party's possession;
or (vi) is required by law to be disclosed by the receiving party, provided that
the receiving party gives the disclosing party prompt written notice of such
requirement prior to such disclosure so that the disclosing party may seek an
order protecting the information from public disclosure.
"CONTROLS," "CONTROLLED" and the phrase "UNDER COMMON CONTROL" each means
the possession, directly or indirectly, of the power, whether or not exercised,
to direct or cause the direction of the management or policies of any Person,
whether through ownership of voting securities, partnership interest, equity, by
contract or otherwise.
"CRS" means a "system" within the meaning of 14 C.F.R. Section 255.3.
"CRS FARES" means Fares, excluding Unpublished Fares, that are published by
Airline in all of the CRSs, other than the Company in the event that the Company
is a CRS.
"CUSTOMER" shall mean any (i) individual consumer, (ii) business
traveler or (iii) entity that uses the Company Site to make travel decisions
or purchase travel products or
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services on behalf of its employees, agents, contractors or authorized
representatives for such entity's business travel purposes.
"CUSTOMER REQUEST" means an informed affirmative request by a Customer to
receive information about a specific promotion or sale or certain fares or rates
of an airline carrier, to the exclusion of other airline carriers.
"FARES" means prices charged by Airline for Air Travel where a Person's
purchase of such Fares may be fulfilled through an electronic sales transaction
via a CRS, Airline Internal Reservation System, Airline Internet Site, Alliance
Partner Site or Internet Travel Provider Site.
"IN-KIND PROMOTIONS" means advertising, marketing and promotions mutually
agreed by the parties, including those described in EXHIBIT B.
"INTERNATIONAL CARRIER" means an airline that is not a U.S. Carrier.
"INTERNET" means the world wide web or other similar data transmission or
communications system.
"INTERNET FARES" means Fares that are offered for purchase by the general
public through the Airline Internet Site or Internet Travel Provider Site,
including without limitation, Fares offered to a targeted group of users of its
Airline Internet Site, such as special Fares offered to such users by email, the
Internet or through other electronic transmission where there is NO good faith
effort by Airline (or a Person acting on behalf of Airline) to limit such Fares
to a targeted group, but excluding Unpublished Fares.
"INTERNET TRAVEL PROVIDER SITE" means an Internet site that offers access
to information concerning Airline's Schedules, Published Fares and Seat
Availability, and which is used by Persons to make reservations or purchase air
transportation services offered by Airline in a Non- Opaque Manner. The Internet
Travel Provider Site excludes the Company Site, the Airline Internet Site, the
Alliance Partner Site and the Airline Internal Reservation System.
"IPO" shall mean the initial public offering of Orbitz, Inc., a Delaware
corporation.
"IPO DATE" means the date of this Agreement and the date of the closing of
the IPO.
"LOSSES" shall mean any and all costs, demands, losses, claims (including
any claim by a third party), liabilities, fines, penalties, assessments,
damages, including, without limitation, interest, penalties, reasonable
attorneys' fees and expenses and all amounts paid in proceedings, claims,
complaints, disputes, arbitrations, investigations, defense or settlement of any
of the foregoing.
"MARKET SHARE" means an amount calculated as a fraction, the numerator of
which shall be Airline's available seat miles with a point of origin in North
America for the most recent calendar year, as reported by OAG, and the
denominator of which shall be 1.2 trillion available seat miles
(1,200,000,000,000 ASMs). In the event that Airline does not publicly report the
data to OAG needed to compute its Market Share amount as set forth above, then
Company may
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obtain the necessary data from Airline or substitute another measurement that
result in a comparable measurement of Airline's Market Share.
"MFN BASIS" means that Airline shall offer Company commercial terms and
conditions equal to or better than the most favorable terms and conditions
offered by Airline to any other Internet Travel Provider Site; provided, that
MFN Basis shall not obligate Airline to delay or forego a commercial opportunity
due to Company's inability to proceed with a similar commercial transaction with
Airline for technical, financial or other reasons.
"NON-OPAQUE MANNER" means the provision to a Person of information
concerning Airline products or services where the Person is able to see the
identity, schedules, availability, fares and price offerings of Airline prior to
the purchase of such products or services.
"OPAQUE PRICING SYSTEM" means the provision to a Person through the
Internet of information, reservations, booking and ticketing services concerning
airlines where the Person is unable to identify the specific airline offering
the travel product or service prior to the purchase of such products or
services.
"PERSON " means any individual, entity, firm, corporation, partnership,
association, limited liability company, joint-stock company, trust or
unincorporated organization.
"PRIVATE FARES" means Fares filed in a private area of a CRS, Airline
Internal Reservation System, Airline Internet Site, Alliance Partner Site,
Company Site or Internet Travel Provider Site where access to such Fares is
limited to a select group of travelers and there is a good faith effort by
Airline (or a Person acting on behalf of Airline) to limit the sales of such
Fares to the targeted group.
"PROMOTIONAL FARES" means discounts offered by the Airline to the general
public on Published Fares, including but not limited to dollar (or other
currency) reductions, percentage discounts, fare discounts based on passenger
miles ticketed (excluding frequent flyer or other affinity based promotions),
companion Fares, buy-one-get-one free Fare offers and similar programs.
Promotional Fares include net Fares and consolidator Fares offered by an
Internet Travel Provider Site in a Non-Opaque Manner.
"PUBLISHED FARES" means all Fares (excluding Unpublished Fares), including
without limitation, (i) Fares offered for purchase to the general public through
any CRS, (ii) Airline Internal Reservation System Fares, (iii) Internet Fares
and (iv) Promotional Fares.
"QUARTERLY REBATE" has the meaning set forth in Section 3.1.
"SCHEDULES" means Airline's flight schedules for Air Travel as published in
the Airline Internal Reservation System, the Airline Internet Site, a CRS or an
Internet Travel Provider Site.
"SEAT AVAILABILITY" means information provided with respect to the seats
Airline holds out as available for sale to the general public on a particular
flight in screen displays of the Airline Internal Reservation System or Airline
Internet Site.
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"SERVICE ENHANCEMENTS" means any product or service offered by Airline to
assist Persons in obtaining information about the Schedules, Published Fares,
Seat Availability or other information of Airline, or to assist Persons in
making or changing reservations or purchasing air transportation services
offered by Airline, other than the basic display of information on Schedules,
CRS Fares and Seat Availability available from a CRS.
"SERVICE FEE REDUCTIONS" has the meaning set forth in the definition of
"Unbiased Manner."
"SERVICES" means activities related to Published Fares conducted by Company
to Airline's benefit, including marketing, ticket distribution and customer
service and support.
"TERM" means the term of this Agreement, as described in Section 6.
"TRAVEL REVENUE" means the gross revenue value, exclusive of taxes and
other government charges (including but not limited to, passenger facility
charges, excise taxes, arrival and departure fees and similar government imposed
charges), of ticket sales on the Company Site.
"UNBIASED MANNER" means the display of Airline Information in an integrated
display, with the order of information in such integrated display determined on
the basis of service criteria that do not reflect airline carrier identity and
that are consistently applied to all airline carriers, including Airline, and to
all markets and, for the avoidance of doubt, such order of information shall not
be determined on the basis of any incentive payments or arrangements,
commissions, fees or other consideration received directly or indirectly by or
on behalf of the Corporation; PROVIDED, HOWEVER, that such order of information
may take into account a reduction in the service fee charged by the Company to
Customers purchasing an airline travel product (the "SERVICE FEE REDUCTION") if
the Service Fee Reduction is paid or otherwise funded by such airline (the
"AIRLINE SPONSOR") pursuant to an agreement between the Airline Sponsor and the
Company so long as (a) the Airline Sponsor reimburses the Company for the full
cost of the Service Fee Reduction; (b) all other airline carriers have the same
opportunity to provide the Service Fee Reduction to their respective Customers;
(c) in the air display, the Company notifies Customer that the total fare
displayed reflects the Service Fee Reduction; and (d) Service Fee Reductions are
not eligible for credit toward the Airline Sponsor's marketing support
obligations described in Section 2.2 hereof.
"UNITED STATES" means the fifty (50) states of the United States of America
plus the District of Columbia.
"UNPUBLISHED FARES" means (i) Private Fares, (ii) Fares offered through an
Opaque Pricing System and (iii) Fares not generally available for purchase by
the general public, including but not limited to corporate discounted Fares,
tour operator Fares, off-tariff Fares, group Fares, meeting and incentive Fares,
Fares that require the purchase of another product or service, or any other
Fares targeted to a select group of travelers such as Fares offered to members
of a club, frequent flyer program or other membership organization where there
is a good faith effort by Airline (or a Person acting on behalf of Airline) to
limit the sale of such Fares to the targeted group. Unpublished Fares include
net Fares and consolidator Fares offered
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through an Opaque Pricing System. It shall be presumed that such a good faith
effort has been made where the purchase of such Fares requires that a purchaser
enter a non-public password or code number provided to the targeted group in
order to access the Fares.
"U.S. CARRIER" means a person, corporation or other entity that holds air
transportation certificate authority issued by the United States Department of
Transportation (or its predecessor, the Civil Aeronautics Board) pursuant to 49
U.S.C. Section 41102 or Section 41103 to operate flights within the United
States.
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EXHIBIT B
IN-KIND PROMOTIONS AND THEIR VALUATION METHOD
In-Kind Promotions may include any of the following, in which event they
will be valued as described in the table below:
<Table>
<Caption>
Method of Valuation (In the event that
there is no independent or third party cost
valuation available, then the mutual
In-Kind Promotion agreement method of valuation will apply)
<S> <C>
COMPANY NAME/LOGO INCLUDED IN ADVERTISEMENTS PRINT:
- Print (e.g. newspaper, magazine, billboard) [(ad space allocated to COMPANY) / (total ad space)]
- Television and cable X cost of ad space
- Radio
- Internet (e.g. banner ads, button ads, links) TELEVISION:
[(ad space allocated to COMPANY per frame) / (total
ad space per frame)] X (total cost per frame) X
(number of frames)
Note: If voice-over is provided, rate will be
increased 50% from the schedule above.
RADIO:
(duration of COMPANY mention) X (cost of ad time)
INTERNET:
[(ad space allocated to COMPANY) / (total ad space)]
X cost of ad space; or Value of ad space or link
provided, as determined by cost to other third parties;
or Mutually agreed on value; subject to independent
verification
COMPANY NAME/LOGO INCLUDED ON IN-FLIGHT COLLATERAL Value of ad space provided, as determined by cost to
- Ticket jackets other third parties (e.g., through standard rate
- In-flight magazine cards or pricing); or
- Destination guides
- In-flight video Mutually agreed on value; subject to independent
- Timetables verification
- Insert car with meal
- Boarding passes
- Napkins
- Menus
COMPANY NAME/LOGO INCLUDED IN DIRECT MAIL Value of ad space provided, as determined by cost to
- Affinity program newsletter or statement other third parties (e.g., through standard rate cards or
- Direct marketing campaigns pricing); or
- Tickets sent by mail
- Co-marketing promotions Mutually agreed on value; subject to independent
verification
</Table>
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<Table>
<S> <C>
AFFINITY PROGRAM SUPPLEMENTS If discounted, value of discount to total cost of
- Free/discounted points/miles equivalent product to other third parties; or
- Free/discounted inventory (e.g. tickets)
- Free/discounted upgrades or other services If free, value of product provided, as determined by
cost to other third parties; or
Mutually agreed on value; subject to independent
verification
PASSENGER DATABASE INFORMATION Value of data provided, as determined by cost to
- Affinity program names other third parties (e.g. cost per name X number of
- Competitive purchaser names (e.g. passengers names provided); or
who booked travel through another on-line
agency) Mutually agreed on value; subject to independent
- Other names, data, or contact information verification
SPECIAL PROMOTIONS (Value of discount to next lowest published fare) X
- Exclusive promotions or fares available only on (number of discounted transactions booked through
Company Site Company Site); or
Mutually agreed on value; subject to independent
verification
- Promotions or fares available only on Company (Value of discount to next lowest published fare) X
Site or Airline Site (number of discounted transactions booked through
Company Site) X (75%); or
Mutually agreed on value; subject to independent
verification
- Other The value of special promotions credited by Company
towards in-kind promotions will not exceed $1M in any
12 months period
</Table>
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EXHIBIT C