Sample Business Contracts

Airline Participation Agreement - Inc. and PriceLine Travel Inc. and America West Airline Inc.

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     THIS AGREEMENT (this "AGREEMENT"), dated December 31, 1998, is by and among Incorporated, a Delaware corporation with an address at Five High
Ridge Park, Connecticut 06905 ("PRICELINE INC."), PriceLine Travel, Inc., a
Delaware corporation with an address at 5 High Ridge Park, Stamford, Connecticut
06905 ("PRICELINE TRAVEL" and, together with Priceline Inc., being collectively
referred to herein as "PRICELINE"), and the undersigned airline, whose principal
place of business is set forth on the signature page of this agreement

                             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 Travel issues a ticket to the customer on the applicable

     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therewith, will provide Priceline with unpublished fares subject to the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Priceline Service and to have access to such unpublished fares in accordance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:


     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     Airline shall make available unpublished fares to Priceline for O&Ds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 Unpublished fares provided to Priceline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

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            and restrictions provided to Priceline 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            example, unpublished fares on certain O&D's may require specific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 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"):

            (a)  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)  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 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

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                 Priceline customer (i) raises the offer by a minimum of [**]
                 and (ii) 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; provided further, that
                 Priceline shall limit the number of such second offers to not
                 greater than twenty percent (20%) of first offers.

     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 to impose additional restrictions on Priceline
            Tickets, including a Saturday night stay requirement, as part of the

     4.     The 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 promote customer good will,
            Priceline may refund the price of a Priceline Ticket pursuant to a
            direct arrangement made by Priceline with the applicable customer.
            Priceline shall provide Airline with a monthly report detailing the
            number and amount of refunded Priceline Tickets involving air
            transportation services on Airline.

     5.     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 Travel.

     6.     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
            consistent 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.


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

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     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 satisfying a Priceline customer's
            ticket request, PriceLine Travel 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 Travel 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

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

     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, contract 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
            Travel on standard ARC traffic

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            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 as authorized by 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.

     11.    At the request of Airline, Priceline will incorporate into the
            Priceline Service a "hot link" to the designated Internet site of
            Airline; PROVIDED, HOWEVER, that Priceline will have a reasonable
            period of time following any such request to accomplish any system
            changes, additions or enhancements necessary or appropriate for the
            inclusion of any such "hot link."


            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.


     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.

     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

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            special customer handling requirements in respect of Priceline
            Tickets issued on Airline.


     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 five (5) years 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,

                 (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.

     3.     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) compli-

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            ance 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 concerning a customer who has acquired a ticket on Airline
            using the Priceline Service.

     6.     Priceline will not identify Airline's participation in the Priceline
            Service until a customer is booked and confirmed for ticketing.
            Further, Priceline will not, in any media (including its Internet
            site), indicate that Airline is participating or has participated in
            the Priceline Service except to indicate that as a consumer
            proposition, a Priceline customer must accept a routing on one of
            the major U.S. full service airlines or, in the case of
            international travel, other airline carriers available through the
            Priceline Service. Except as set forth above, Priceline will not
            disclose Airline's participation in the Priceline Service without
            Airline's prior consent. Airline will not disclose its participation
            in the Priceline Service without Priceline Inc.'s prior consent.


            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 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.


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     1.     Priceline will provide monthly reports in a format designated by
            Airline summarizing (i) information concerning each ticket issued
            by PriceLine Travel on Airline; (ii) aggregate information (i.e. non
            airline specific) for all tickets issued by PriceLine Travel 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.

     2.     Priceline will provide to Airline an annual statement by Priceline's
            independent accounting firm or other qualified third-party
            concerning Priceline's compliance with the Priceline Ticket
            Allocation Methodology specified in Section III and all reporting
            obligations required by this Agreement.

     3.     Airline may, upon reasonable notice to Priceline and during normal
            business hours, audit the financial books and records of Priceline
            and the information specified in Sections VII.1 and 2. Any such
            audit shall be at the sole cost and expense of Airline and shall be
            conducted in a manner that does not unduly disrupt or interfere with
            the normal business operations of Priceline.


     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 for any reason 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 survive the expiration or any
            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.


     1.     PriceLine Travel and Priceline Inc. will jointly and severally
            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 Inc.'s
            or PriceLine Travel's breach of this Agreement or the ARC Agent
            Reporting Agree-

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            ment, or by the negligence or willful acts of either party or any of
            their respective employees or agents.

     2.     Airline will indemnify, defend and hold harmless Priceline, Inc. and
            PriceLine Travel, and their respective 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.


     The relationship by and among Airline, Priceline Inc. and PriceLine Travel
     as set forth in this Agreement shall be non-exclusive. As such, Airline may
     participate in other programs similar to the Priceline Service.


     1.     No waiver or breach of any of the provisions of this Agreement shall
            be construed as a waiver of any succeeding 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 Travel or to       If to Airline:
            Priceline Inc.:

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   Incorporated     America West Airlines, 4000 East Sky
            Five High Ridge Park           Harbor, Phoenix, Arizona 85034
            Stamford, CT 06905             

            Attention: Paul Francis        Attention: J. Scott Kirby
            Chief Financial Officer        Vice President-Revenue
            Phone: (203)-705-3027          Phone: (602)-693-5757
            Fax:   (203)-595-8344          Fax:   (602)-693-5854

            WITH A COPY TO:                WITH A COPY TO:

            Attention: Timothy G. Brier    Attention:
            Phone: (203)-705-3087          Phone:_____________________
            Fax:   (203)-595-8343          Fax: ______________________

            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 Airline's participation in the Priceline Service or any other
            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

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            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. PriceLine Travel 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

     9.     Priceline agrees to notify Airline promptly, in writing, in the
            event there is a change of control in the ownership of PriceLine
            Inc. For purposes of this Agreement, a "change of control" with
            respect to a party 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 such 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 a 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 parties.

     11.    This Agreement shall not be deemed to create any partnership or
            joint venture between Airline and Priceline, nor 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.


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            ANY BREACH HEREOF.


     14.    Each party has participated jointly 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.

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


/s/ Thomas D'Angelo                     /s/ J. Scott Kirby
-----------------------------------     ---------------------------------------
By:  Thomas D'Angelo                    By: J. Scott Kirby
Title: Vice President & Controller      Title: Vice President - Revenue Manage-

                                        AIRLINE PRINCIPAL PLACE OF BUSINESS:


/s/ Paul E. Francis
By: Paul E. Francis
Title: Chief Financial Officer

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