Airline Participation Agreement - priceline.com Inc. and Continental Airlines Inc.
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connection therewith, will provide Priceline with unpublished fares subject to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Priceline Service and to have access to such unpublished fares in accordance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 Airline shall make available unpublished fares to Priceline for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 Unpublished fares provided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By way of example, unpublished fares on certain O&D's may require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determine the unpublished fares and levels of inventory provided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number of O&Ds or the level of unpublished fares that will be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"):
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(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.
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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.
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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.
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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;
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(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
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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
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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
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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
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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, 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
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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
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Name: Timothy G. Brier Name: Jeffrey Smisek
Title: Executive Vice President, Travel Title: Executive Vice President
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