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EXHIBIT 10.6
CONFORMED COPY
CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN
OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT
TO A REQUEST FOR CONFIDENTIAL TREATMENT.
THE SYMBOL "[*]" HAS BEEN INSERTED
IN PLACE OF THE PORTIONS SO OMITTED.
MARKETING COOPERATION
AND SALES REPRESENTATION AGREEMENT
between
US AIRWAYS, INC.
and
GALILEO INTERNATIONAL, L.L.C.
Dated as of July 30, 1997
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MARKETING COOPERATION
AND SALES REPRESENTATION AGREEMENT
Table of Headings
Section Page
------- ----
1 Definitions......................................................... 1
2 Sales Agency and Territories........................................ 2
2.1 Sales to NTP Subscribers................................... 2
2.1.1 Sales Agency Appointment.......................... 2
2.1.2 Designated Subscribers............................ 2
2.1.3 Multinational Accounts............................ 2
2.2 Sales to CTMS Customers.................................... 2
2.3 Other Sales Agents......................................... 3
2.4 Territorial Reassignment................................... 3
2.5 Trade Names................................................ 3
3 The Administration of this Agreement................................ 4
3.1 GILLC...................................................... 4
3.2 US Airways................................................. 5
3.3 Meetings and Coordination.................................. 6
4 Responsibilities of US Airways...................................... 6
4.1 NTP Sales Services......................................... 6
4.2 CTMS Sales Services........................................ 7
4.3 Support Services........................................... 8
4.4 Responsibilities With Respect to Excluded
Subscribers................................................ 8
4.5 Sales Planning............................................. 8
4.6 Staffing................................................... 9
4.6.1 Staffing Commitment............................... 9
4.6.2 Review of Staffing Levels......................... 9
4.6.3 Employee Proficiency and Training................. 9
4.6.3.1 Introductory Training.................... 9
4.6.3.2 Employee Proficiency..................... 9
4.6.3.3 Training and Test Materials.............. 10
5 GILLC Responsibilities.............................................. 10
5.1 Marketplace Competitiveness................................ 10
5.2 GILLC Support of Sales Services and Support
Services................................................... 10
5.3 Services of GILLC.......................................... 11
5.4 New Services............................................... 11
5.5 CTMS Products.............................................. 11
5.5.1 Base Products..................................... 11
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5.5.2 Demonstrations.................................... 11
5.6 Technical Support.......................................... 12
5.7 Technical Assistance Offices............................... 12
5.8 Help Desk.................................................. 12
6 Reporting........................................................... 12
7 Other Marketing Rights.............................................. 12
7.1 GILLC...................................................... 12
7.2 US Airways................................................. 12
8 Terms of Payment.................................................... 13
9 Currency............................................................ 13
10 Term................................................................ 14
11 Confidentiality..................................................... 14
11.1 Confidential Information................................... 14
11.2 Service.................................................... 14
12 Service Marks, Patents, Third Party Data............................ 14
12.1 Use of Service Marks.......................................... 15
12.1.1 XXXXX Xxxxx....................................... 15
12.1.2 US Airways Marks.................................. 15
12.2 Patent Indemnity........................................... 15
12.2.1 Actions........................................... 15
12.2.2 Limitation........................................ 15
12.3 Third Party Data........................................... 16
13 Taxes............................................................... 16
13.1 GILLC Responsibilities..................................... 16
13.2 Claims..................................................... 16
14 Limitation of Liability............................................. 16
15 Consequential Damages............................................... 16
16 Termination for Breach.............................................. 17
17 Force Majeure, Delay................................................ 17
18 Indemnification..................................................... 17
19 Guarantee of Performance............................................ 17
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20 Third Party Rights.................................................. 18
21 Assignment.......................................................... 18
22 Relationship of the Parties......................................... 18
23 Severability........................................................ 18
24 Survival............................................................ 18
25 Governing........................................................... 19
26 Notices............................................................. 19
27 Headings............................................................ 19
28 Entirety of Agreement............................................... 19
29 Counterparts........................................................ 20
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Table of Attachments
Appendix I.........................................................Certain Terms
Appendix II.............................................Budgets and Compensation
Attachment A.......................................................Defined Terms
Attachment B........................................Dispute Resolution Procedure
Exhibit A...................................Area of Primary Sales Responsibility
Exhibit B...........................................List of Excluded Subscribers
Exhibit C.................................................Designated Subscribers
Exhibit D...........................................Sales Representative Reports
Exhibit E....................................................Certain Territories
Schedule 1..................................Certain Information Relating to 1997
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MARKETING COOPERATION AND SALES REPRESENTATION AGREEMENT
US AIRWAYS, INC. AND GALILEO INTERNATIONAL, L.L.C.
This Marketing Cooperation and Sales Representation Agreement
(this "Agreement") effective as of the 30th day of July, 1997 (the "Effective
Date"), by and between GALILEO INTERNATIONAL, L.L.C., a Delaware corporation
("GILLC") with offices at Xxxxx 000, 0000 Xxxx Xxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx,
00000, and US AIRWAYS, INC., a Delaware corporation ("US Airways") with offices
at 0000 Xxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000.
RECITALS
WHEREAS US Airways and Apollo Travel Services Partnership, a
Delaware general partnership ("Apollo Partnership"), are parties to a Sales
Representative Agreement, dated as of January 1, 1994 (the "Original
Agreement"); and
WHEREAS GILLC generates computerized reservations services
through GILLC's computer reservation system and distributes such services
worldwide for use by travel-related business entities, by CTMS Customers, and by
individual consumers; and
WHEREAS GILLC desires to appoint Sales Representatives that
will be responsible for the sale of GILLC's reservations services to such
persons and for the provision of ongoing support services to certain of such
persons; and
WHEREAS The parties hereto agree that, because of the
competitiveness of the products and services of GILLC vis-a-vis like products
and services of all other companies within the CRS Industry, US Airways is
desirous of entering into this Agreement; and
WHEREAS The parties hereto agree that, because of US Airways'
knowledge of and contact with a substantial portion of the community of travel
agents within the Territory, GILLC is desirous of entering into this Agreement;
and
WHEREAS US Airways and Apollo Partnership intend to terminate
the Original Agreement and US Airways desires to be a Sales Representative for
GILLC under the terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants set
forth in this Agreement, GILLC and US Airways hereby agree as follows:
1 Definitions.
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Capitalized terms used as defined terms in this Agreement have, unless
otherwise defined elsewhere in this Agreement, the meanings provided for each in
Attachment A hereto.
2 Sales Agency and Territories.
2.1 Sales to NTP Subscribers.
2.1.1 Sales Agency Appointment.
With respect to the Assigned Subscribers, GILLC
hereby appoints US Airways as the exclusive limited agent of
GILLC to obtain commitments from the Assigned Subscribers to
subscribe for and lease Galileo Services. US Airways will act
as the sales agent of GILLC only for the limited purposes of
negotiating and obtaining written commitments from NTP
Subscribers on terms and in a form prepared and approved in
advance by GILLC.
2.1.2 Designated Subscribers.
Exhibit C hereto lists the NTP Subscribers with
locations in the sales territories of more than one sales
representative for whom US Airways is the designated provider
of Sales Services and Support Services. US Airways is the
exclusive provider of Sales Services and Support Services for
all locations of such NTP Subscribers in the Territory. GILLC
may add or delete NTP Subscribers from such Exhibit C only
with US Airways' consent. All NTP Subscribers listed on
Exhibit C are "Excluded Subscribers" for all other sales
representatives of GILLC, including for GILLC itself.
2.1.3 Multinational Accounts.
An NTP Subscriber whose Headquarters is in the
Territory and that has outlets (whether owned, licensed, or
otherwise) for its business in both the Territory and outside
the Territory is, for the purposes of this Agreement, a
"Multinational Account". Subsequent to the Effective Date,
during the term of this Agreement, if any Assigned Subscriber
becomes a Multinational Account, whether by growth, merger,
business combination or otherwise, then GILLC and US Airways
will meet to determine the most appropriate process for
account management for such account.
2.2 Sales to CTMS Customers.
With respect to CTMS Customers and CTMS Agents, GILLC hereby
appoints US Airways as its non-exclusive limited agent to obtain
commitments from CTMS Customers and CTMS Agents to purchase, license,
or lease CTMS Services. Pursuant to Section 4.2 below, and except in
those territories where GILLC has granted exclusive distribution rights
to third parties with respect to Galileo Services
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and CTMS Services, as listed in Exhibit E hereto, US Airways may act as
the sales agent of GILLC worldwide for the limited purposes of
negotiating and obtaining written commitments from CTMS Customers and
CTMS Agents on terms and in a form prepared and approved in advance by
GILLC.
2.3 Other Sales Agents.
Subject to this Section 2 and to Section 3 below, GILLC may at
its discretion appoint other persons as sales agents of GILLC and GILLC
may act on its own behalf as sales agent. GILLC will treat each of its
sales agents in a fair and nondiscriminatory manner and as appropriate
in a manner proportionate to US Airways' responsibilities hereunder
with respect to the terms and conditions of its appointment as a sales
representative, including, but not limited to, the provision of Sales
Services, Support Services, training, the criteria for approvals of
Form Agreements, the compensation arrangements provided by GILLC, and
in all associated support functions that are GILLC's responsibility
hereunder.
2.4 Territorial Reassignment.
A "Territorial Reassignment" shall occur in the event of (i) a
reassignment by GILLC among its sales representatives of territories
outside of the APR but within the Territory, or (ii) the termination of
any arrangement regarding sales agency between GILLC and another sales
representative of GILLC who is performing as a sales agent within the
Territory but not within the APR (an "Other Agent"). In the event of a
Territorial Reassignment, GILLC will offer to US Airways the right of
first refusal to assume sales agent responsibility within such
reassigned territory or within the territory of such terminated Other
Agent. Before such territories are assigned to US Airways, GILLC and US
Airways will negotiate in good faith to adjust the performance
objectives and the compensation therefor as provided in Appendix II. If
US Airways and GILLC are unable within ninety days (90 days) from the
commencement of such negotiations to agree on the terms of adjustment
for the performance objectives and the compensation then GILLC shall be
free to make the Territorial Reassignment to any other agent or GILLC
may perform such sales function for itself.
2.5 Trade Names.
During the term of this Agreement and except as otherwise
provided in this Agreement, with respect to the APR, GILLC will market,
and US Airways will sell, the Reservations Services and CTMS Services
of GILLC under the "Apollo" trade name. Notwithstanding the foregoing,
if, as a result of US Airways' efforts under this Agreement, a customer
of GILLC commits to purchase GILLC products or services outside of the
Territory then GILLC will determine the trade name for such products or
services outside of the Territory. For the purposes of this Agreement
it is
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assumed, without obligation on GILLC's part, that such trade name
outside of the Territory is "Galileo".
3 The Administration of this Agreement.
US Airways and GILLC agree that the proper and efficient administration
of each party's obligations under this Agreement is essential to meeting the
objectives of the parties hereunder. To this purpose, the parties agree to
dedicate appropriate staff and resources at an executive level, and otherwise,
as follows:
3.1 GILLC.
At all times during the term of this Agreement GILLC will
employ an individual who shall have primary responsibility for meeting
GILLC's obligations under this Agreement, which person shall be a duly
appointed officer of GILLC (the "GILLC Executive"). The GILLC Executive
shall report directly to the President and Chief Executive Officer of
GILLC. The GILLC Executive shall be a person who has experience and
background commensurate with his or her responsibilities. The GILLC
Executive will maintain an office in the Chicago metropolitan region.
The GILLC Executive shall have full authority to bind GILLC in
all matters regarding this Agreement that may arise during the term of
this Agreement, subject to the provisions of the limited liability
company agreement and commitment authorities of GILLC as approved by
GILLC's Managing Member or CEO, including, without limitation:
(i) matters regarding Financial Assistance;
(ii) the approval of agreements with current and potential
customers of GILLC that are negotiated by US Airways
on GILLC's behalf pursuant to this Agreement;
(iii) the negotiation with US Airways of goals and targets
related to GILLC's and US Airways' performance under
this Agreement;
(iv) the compensation owed US Airways by GILLC under this
Agreement, including the negotiation and payment
thereof;
(v) the quantity, quality of performance and training of
personnel provided by GILLC pursuant to its
obligations under this Agreement;
(vi) the coordination of GILLC's role in negotiations with
any third party where such negotiations involve the
participation of parties other than GILLC, US
Airways, and that third party; and
(vii) the coordination and resolution of any issues arising
under this Agreement that, in US Airways' or GILLC's
estimation, are affected by actions that have been or
may be taken by other sales agents of GILLC or by
GILLC.
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The GILLC Executive may delegate to employees of GILLC or to
persons under the control of GILLC such matters that are his or her
responsibility hereunder and as may be, in the GILLC Executive's
discretion, appropriate for delegation provided that, if US Airways
reasonably objects that such delegation will result in a diminishment
of GILLC's performance hereunder or in a detriment to US Airways'
ability to perform its obligations hereunder, or both, then GILLC will
review the proposed delegation and inform US Airways as to how GILLC
will address US Airways' reasonable concerns.
3.2 US Airways.
At all times during the term of this Agreement US Airways will
employ an individual to have primary responsibility for meeting US
Airways' obligations under this Agreement, which person shall be a duly
appointed officer of US Airways (the "US Airways Executive"). The US
Airways Executive shall be a person who has experience and background
commensurate with his or her responsibilities. The US Airways Executive
will maintain an office in the Washington, D.C. metropolitan region.
The US Airways Executive shall have full authority to bind US Airways
in all matters regarding this Agreement that may arise during the term
of this Agreement, subject to the provisions of the corporate by-laws
and commitment authorities of US Airways, Inc., as approved by US
Airways, Inc.'s Board of Directors or CEO, including, without
limitation:
(i) the conduct of US Airways' negotiations with current
and potential customers of GILLC on GILLC's behalf
pursuant to this Agreement;
(ii) the negotiation with GILLC of goals and targets
related to GILLC's and US Airways' performance under
this Agreement;
(iii) the compensation owed US Airways by GILLC under this
agreement, including the negotiation and payment
thereof;
(iv) the quantity, quality of performance and training of
personnel provided by US Airways pursuant to its
obligations under this Agreement;
(v) the coordination of US Airways' role in negotiations
with any third party where such negotiations involve
the participation of parties other than GILLC, US
Airways, and that third party; and
(vi) the coordination and resolution of any issues arising
under this Agreement that, in US Airways' or GILLC's
estimation, are affected by actions that have been or
may be taken by other sales agents of GILLC or by
GILLC.
The US Airways Executive may delegate to employees of US
Airways or to persons under the control of US Airways such matters that
are his or her responsibility hereunder and as may be, in the US
Airways Executive's estimation, appropriate for delegation, provided
that, if GILLC reasonably objects that such
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delegation will result in a diminishment of US Airways' performance
hereunder or in a detriment to GILLC's ability to perform its
obligations hereunder, or both, then US Airways will review the
proposed delegation and inform GILLC as to how US Airways will address
GILLC's reasonable concerns.
3.3 Meetings and Coordination.
The GILLC Executive and the US Airways Executive shall meet
from time to time, whether telephonically or in person and on a
schedule to which they mutually agree, to review the progress of each
party's performance under this Agreement as well as general economic
and travel industry market conditions or factors that may potentially
affect one or the other party performance hereunder.
4 Responsibilities of US Airways.
4.1 NTP Sales Services.
Primarily using US Airways' General Sales Personnel, US
Airways will actively engage in the sale, marketing, and promotion of
Galileo Services to the Assigned Subscribers. To this end, US Airways
will perform the following services for GILLC pursuant to this
Agreement (such services are, collectively, "NTP Sales Services"):
(i) Scope. US Airways will engage in NTP Sales Services regarding
only those Galileo Services as directed or authorized in
advance by GILLC.
(ii) Contact. US Airways will maintain current and establish new
personal and telephone contact and sales relationships,
including, where appropriate, in person or telephone sales
calls. At GILLC's expense, US Airways may, on approval of
GILLC, undertake direct mail solicitations, promotions, and
other sales efforts, with NTP Subscribers within the APR.
GILLC may disapprove any sales promotion or solicitation with
respect to the Galileo Services that GILLC in its reasonable
discretion determines to be contrary to the objectives or
policies of GILLC.
(iii) Commitment Review Procedure. US Airways shall follow the
Commitment Review Procedure described in Appendix I below.
(iv) Support Services. Subject to the NTP Form Agreement and within
the Negotiation Range, US Airways shall offer to NTP
Subscribers within the APR such NTP Support Services as are
approved in advance by GILLC.
(v) Discontinued Services. Upon receipt of a Discontinued Service
Notice, as such term is defined in Section 5.1 below, US
Airways will cease Sales Services regarding such Galileo
Service or feature.
(vi) Changes to US Airways Organization. US Airways will give GILLC
prompt written notice regarding any significant re-
organization, redeployment or change of responsibilities of
its General Sales Personnel (an "Organization
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Change"). If such Organization Change is likely to result in
an inability of US Airways to perform NTP Sales Services in a
metropolitan area in the APR that provides a significant
portion of Total Revenue then US Airways will notify GILLC as
to whether
(a) US Airways chooses to continue providing services
under this Agreement in such area, in which case US
Airways will propose to GILLC how US Airways will
staff the necessary Sales Force coverage for such
area, and GILLC will review US Airways' proposal in
good faith and determine whether it accepts the
proposal; or
(b) US Airways chooses not to continue providing services
under this Agreement in such area.
In the event of (b), above, or of GILLC's rejection of US
Airways' proposal in (a), above, then GILLC may reassign sales
responsibility in such area to another person, including to
GILLC itself.
4.2 CTMS Sales Services.
US Airways will actively engage in the sale, marketing, and
promotion of CTMS Services to CTMS Customers and CTMS Agents. To this
end, US Airways will perform the following services for GILLC pursuant
to this Agreement (such services are, collectively, "CTMS Sales
Services"):
(i) Scope. US Airways will engage in CTMS Sales Services regarding
only those CTMS Services as directed or authorized in advance
by GILLC.
(ii) Product Licensing. As GILLC's non-exclusive sales agent for
the licensing of CTMS Services, subject to Section 2.2 above,
US Airways may market and license CTMS Services to CTMS
Customers and to CTMS Agents. The parties will work together
to develop marketing plans for CTMS Services, including the
name or names of products.
(iii) Contact. US Airways will maintain current and establish new
personal and telephone contact and sales relationships,
including, where appropriate, in person or telephone sales
calls with CTMS Customers and CTMS Agents. At GILLC's expense,
US Airways may, on approval of GILLC, undertake direct mail
solicitations, promotions, and other sales efforts, with CTMS
Customers and CTMS Agents. GILLC may disapprove any sales
promotion or solicitation with respect to the CTMS Services
that GILLC in its reasonable discretion determines to be
contrary to the objectives or policies of GILLC.
(iv) Commitment Review Procedure. US Airways shall follow the
Commitment Review Procedure described in Appendix I below.
(v) CTMS Support Services. Subject to the CTMS Form Agreement and
within the Negotiation Range, US Airways shall offer to CTMS
Customers or CTMS
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Agents, or both, as the case may be, such CTMS Support
Services as are approved in advance by GILLC.
(vi) Discontinued Services. Upon receipt of a Discontinued Service
Notice, as such term is defined in Section 5.1 below, US
Airways will cease CTMS Sales Services regarding such CTMS
Service.
4.3 Support Services.
In addition to the Sales Services, US Airways will perform the
following services for GILLC pursuant to this Agreement for those NTP
Subscribers with annual HOL Flow in excess of $5 million (such services
are, collectively, "Support Services").
(i) Support Services Calls. Responses to inquiries from, and
regular premises visits and assistance to, NTP Subscribers in
order to establish and maintain good relations and to improve
relations between NTP Subscribers and GILLC, and to aid in
familiarization with and use of Galileo Services and CTMS
Services.
(ii) Technical Questions Received. US Airways will relay promptly
to GILLC any technical questions received by US Airways from
customers of GILLC and, as requested by GILLC, will coordinate
responses thereto.
(iii) Area of Support. US Airways will be responsible for Support
Services for locations of NTP Subscribers within the APR, and
as designated by GILLC outside of the APR (although associated
revenue from non-APR Subscribers designated for support will
be included in Total Revenue).
4.4 Responsibilities With Respect to Excluded Subscribers.
US Airways will not enter into sales negotiations with
Excluded Subscribers except with the prior written approval of GILLC.
GILLC may add or delete NTP Subscribers as Excluded Subscribers on
Exhibit B hereto after consulting with and receiving the consent of all
affected sales representatives, including US Airways. Revenues from all
Assigned Subscribers who become Excluded Subscribers will continue to
be counted for that year in the Total Revenue. US Airways may negotiate
with NTP Subscribers regarding sales commitments outside of the APR (i)
after prior notice to GILLC, (ii) after a reasonable period of time in
which GILLC has had the opportunity to coordinate such sales calls with
its own sales force and with GILLC's other sales representatives, and
(iii) after consent of GILLC. Only those sales outside of the APR
approved in advance by GILLC will be included in Total Revenue totals.
4.5 Sales Planning.
Subject to Appendix II, and in no event later than February 28
of each year, GILLC and US Airways jointly will develop a sales plan
for such year, which sales
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plan will be designed to increase business opportunities, procure
profitable NTP Subscriber accounts for GILLC and attain or exceed the
Revenue Goal.
4.6 Staffing.
4.6.1 Staffing Commitment.
As described in Appendix I, US Airways will staff a
Sales Force who will provide Sales Services to GILLC under
this Agreement.
4.6.2 Review of Staffing Levels.
US Airways will consult with GILLC from time to time
as requested by either party to review the job descriptions,
minimum qualifications, career paths, and other matters in
connection with the Sales Force. US Airways will consult with
GILLC regarding the staffing of Dedicated Personnel and
Administrative Support Personnel positions to be provided
under this Agreement. Such consultations will include review
of job descriptions and necessary qualifications,
consideration of possible applicants from GILLC and US Airways
as well as third parties, and full consultation and review of
proposed training schedules for each Dedicated Personnel and
Administrative Support Personnel.
4.6.3 Employee Proficiency and Training.
4.6.3.1 Introductory Training.
Prior to commencing any Sales Services on
behalf of GILLC hereunder, all Sales Force personnel
of US Airways must attend a five-day introductory
training course and, thereafter, a two-day refresher
training course at least once annually, at a location
or locations to be mutually agreed between US Airways
and GILLC. As new GILLC products or services are
released by GILLC for Sales Services hereunder, GILLC
will provide training with respect thereto to the
Sales Force at a location or locations as agreed by
the parties. GILLC will bear its own expenses in
providing the training and US Airways will bear its
own expenses of the Sales Force in attending such
training.
4.6.3.2 Employee Proficiency.
US Airways will take all reasonable steps to
ensure that all of the Sales Force who are authorized
to sell or support the products and services of GILLC
hereunder have been trained appropriately and are
proficient to provide Sales Services in accordance
with the terms of this Agreement. GILLC shall have
the right to test the proficiency of individual Sales
Force personnel at the time of their refresher
training
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and to require additional training for such
individuals as do not demonstrate minimum
proficiency. GILLC will provide all course materials,
test materials, and training facilities necessary to
provide such additional training, and US Airways and
GILLC will mutually establish a reasonable schedule
for the administration of such additional training.
Sales Force personnel who have completed such
additional training will be again tested and those
who again demonstrate an inability to achieve the
minimum level of proficiency will not be counted
toward the required staffing levels prescribed in
this Section 4.6.
4.6.3.3 Training and Test Materials.
GILLC will provide to US Airways in advance
of their use copies of all introductory training
materials, refresher training materials, and
proficiency test vehicles to he used pursuant to this
Section 4.6.3 (collectively, the "Training
Materials"). The Training Materials will always be
constructed according to the best practices for
Training Materials then employed by U.S. industry and
shall be related solely to the reasonable skills
required of a person engaged in the sales of products
and services such as those of GILLC. US Airways may,
at its request, review such Training Materials in
advance of their use hereunder and GILLC will make
all reasonable changes requested by US Airways to the
Training Materials.
5 GILLC Responsibilities.
5.1 Marketplace Competitiveness.
GILLC will at all times during the term of this Agreement use
its best efforts to ensure that Galileo Services maintain a superior
level of competitiveness in the CRS Industry. GILLC will give US
Airways as much notice as is reasonably practicable if GILLC
discontinues general distribution or provision of any particular
Galileo Service or CTMS Service or major feature thereof (a
"Discontinued Service Notice")
5.2 GILLC Support of Sales Services and Support Services.
With the objective of ensuring the proper level of GILLC
support for Sales Services and for Support Services provided by US
Airways under this Agreement, GILLC will provide the following support
to US Airways (collectively, the "GILLC Support"):
(i) Copies. GILLC will ensure that US Airways at all times has a
current copy of each version of the Form Agreements together
with such commentary or
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explanation of the Form Agreements as may be reasonably
required by US Airways for the comprehension and understanding
of the Form Agreements.
(ii) Changes to Form Agreements. GILLC will provide US Airways with
no less than 30 days written notice in the event that GILLC
modifies or discontinues the use of any of the Form
Agreements.
5.3 Services of GILLC.
GILLC will provide Galileo Services, CTMS Services and New
Services to NTP Subscribers, CTMS Customers and CTMS Agents, subject to
the terms of the Form Agreements as negotiated by US Airways and
approved by GILLC pursuant to this Agreement.
5.4 New Services.
GILLC will not distribute any Galileo Service (but excluding
enhancements or replacements of any Galileo Service) that did not exist
as of the Effective Date (a "New Service") through any sales
representative in the Territory, and including GILLC itself, without
first offering US Airways the right of first refusal to become the
exclusive sales agent for such New Service for the APR. GILLC and US
Airways shall negotiate on the reasonable terms of such agency,
including the performance objectives and the compensation therefor as
provided in Appendix II. Failing agreement with US Airways within
ninety days (90 days) of the inception of such negotiations, GILLC may,
upon giving notice to US Airways pursuant to Section 26, below, make
the other sales representative arrangements for the New Service within
the Territory.
5.5 CTMS Products.
5.5.1 Base Products.
GILLC has the ultimate role in determining product
specifications and features of any CTMS Service, and GILLC
will ensure that such specifications and product
implementations of such specifications meet prevailing market
needs. To that end, the GILLC Executive shall consult
regularly with the US Airways Executive as to information that
US Airways may gather in the course of its business that US
Airways believes is relevant to ensuring that the CTMS Service
is competitive with like services and products provided by
other service providers.
5.5.2 Demonstrations.
Upon US Airways' request, subject to GILLC's
agreement, GILLC, at its expense, will provide demonstrations
of CTMS Services to CTMS Customers and/or CTMS Agents. GILLC
will coordinate the content and scheduling of such
demonstrations with US Airways.
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5.6 Technical Support.
GILLC will provide in a good and workmanlike manner all
installation, connection, and testing of all Galileo Services, CTMS
Services and any field or technical support or field maintenance
required by NTP Subscribers, CTMS Customers, or CTMS Agents. GILLC will
maintain ongoing and appropriate contact with NTP Subscribers, CTMS
Customers and CTMS Agents to facilitate user operation of the Galileo
Services and CTMS Services. Technical sales consulting support will
also be provided by GILLC to the Sales Force.
5.7 Technical Assistance Offices.
GILLC will maintain regional Tech Offices for the use of its
sales representatives that will be staffed by knowledgeable employees
capable of providing technical assistance regarding Galileo Services
and CTMS Services. Such assistance will be available to US Airways
during normal GILLC business hours.
5.8 Help Desk.
GILLC, at its expense, will maintain a telephone call center
or centers for use by the Sales Force, NTP Subscribers, CTMS Customers,
and CTMS Agents during normal business hours for each of those persons
in their places of business. The call centers will be staffed by
knowledgeable persons under the control of GILLC who are capable of
providing prompt, thorough, courteous, and professional technical
assistance regarding the products and services of GILLC.
6 Reporting.
US Airways will furnish, at no cost to GILLC, the reports and documents
set forth in Exhibit D hereto.
7 Other Marketing Rights.
7.1 GILLC.
GILLC reserves the right to market and to support services in
the Sales APR. During the term of this Agreement, and except as
otherwise provided in this Agreement, GILLC will not designate the
Sales APR of US Airways as the area of primary sales responsibility of
any other sales agent of GILLC, including GILLC itself.
7.2 US Airways.
Subject to the provisions of the Non-Competition Agreement,
while US Airways is the sales agent of GILLC under the terms of this
Agreement, US Airways will not act as a sales agent for the
reservations or accounting services of another
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entity in the CRS Industry in the APR without the prior consent of
GILLC, provided, however, that nothing in this Agreement will prevent
US Airways from:
(i) having US Airways Group Products and Services displayed or
listed in any person's computer reservation system, schedule,
other electronic or paper communications medium, or otherwise;
(ii) providing to any person any technological or computerized
means of delivering information and automation functionality;
(iii) authorizing any person to use US Airways' trademarks and trade
names in connection with advertising US Airways' participation
in such person's computer information or reservation system,
or otherwise;
(iv) endorsing the products or services of another member of the
CRS Industry, provided, however, that US Airways may not
endorse such products or services of such other member of the
CRS Industry as being preferred to those of GILLC, provided,
however, (a) if GILLC does not itself provide such products or
services, or (b) GILLC provides such products or services but
they do not meet US Airways' needs, then, subject to the
provisions of the Non- Competition Agreement, US Airways may
endorse such products or services of such other member of the
CRS Industry in any manner.
8 Terms of Payment.
GILLC will pay US Airways quarterly in arrears, upon receipt and
acceptance by GILLC of US Airways' reports pursuant to Section 6 above for the
preceding quarter and of its invoice therefor, an amount equal to one quarter of
the Base Compensation. Invoices will be prepared and mailed on the first work
day of April, July, October and January of each year. After the end of each
calendar year, following receipt and acceptance by GILLC of US Airways' report
pursuant to Section 6 above with results for the year as a whole, adjustments
will be made as required by Appendix II, and GILLC or US Airways, as
appropriate, will make payment to the other in an amount determined in
accordance with the application of such Section. All payments hereunder will be
made within 30 days of date of invoice by wire transfer, banking instructions to
be given by the recipient thereof in advance of each such transfer. All amounts
due and payable hereunder and not paid within 30 days of date of invoice shall
be subject to late payment interest subject to the following: (i) the Interest
Rate shall be fixed as of the due date of the invoice, and (ii) interest shall
be calculated, on the basis of a 360-day year, from the due date.
9 Currency.
For the purposes of this Agreement all currency calculations shall be
in US Dollars and, to the extent paid in a currency other than US Dollars,
revenue received by GILLC or
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14
expenses incurred by GILLC will be converted to US Dollars at the exchange rate
in effect at the date of the receipt of such revenue or payment of such expense,
as the case may be.
10 Term.
This Agreement is effective as of the Effective Date, and will continue
until the termination of the Non-Competition Agreement. GILLC may issue, no
earlier than July 1 of each year a conditional notice of termination if GILLC
has reasonably determined that US Airways may, as a result of its own failure to
perform and not as a result of a Material Change, not meet its then current
Revenue Goal; if, as of 120 days after such conditional notice, GILLC reasonably
determines that US Airways will not meet such Revenue Goal and so notifies US
Airways, this Agreement will terminate 90 days after such determination (with no
sales exclusivity during the last 30 days of the 90 day period) and US Airways
will be paid for sales services during the last 30 days only at direct labor
cost (adjusted to reflect time devoted to GILLC) and associated expenses.
11 Confidentiality.
11.1 Confidential Information.
Confidential information, including, without limitation,
source code, object code, manufacturing, financial and marketing data,
orders, forecasts, plans, designs, drawings and specifications of
either US Airways or GILLC, which is contained in tangible records
designated as "CONFIDENTIAL", "TRADE SECRET" or "PROPRIETARY", or which
is otherwise communicated on the express basis that the information is
confidential, and which is provided to the other party during the
performance of this Agreement (hereafter "Confidential Information"),
will be treated as confidential and not further disclosed to any third
party without the prior written consent of the providing party, except
as provided under the terms of this Agreement, for five years from the
date such Confidential Information was first received, unless such
Confidential Information was already in the possession of the other
party, is placed in the public domain through no fault of the party
receiving such information, or becomes rightfully available to the
other party through other sources without restriction on disclosure.
11.2 Service.
If either party is served with a subpoena or other legal
process requiring the production or disclosure of any Confidential
Information or US Airways Information, then that party will immediately
notify the owner thereof, and will in good faith attempt to permit the
owner at the owner's expense to intervene and contest such disclosure
or production.
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12 Service Marks, Patents, Third Party Data.
12.1 Use of Service Marks.
12.1.1 XXXXX Xxxxx.
US Airways will use and display the GILLC trade and
service marks in the form specified by GILLC. US Airways will
market the Galileo Services and CTMS Services under product
names established by GILLC and must identify all such Galileo
Services and CTMS Services as the products or services of
GILLC. US Airways may include its name and identifying marks
in association with the name "Galileo" or "Galileo
International". GILLC reserves the right to disapprove any use
of the trade and service marks and other proprietary rights of
GILLC if GILLC determines in its reasonable discretion that
such use is contrary to the objectives or policies of GILLC.
12.1.2 US Airways Marks.
GILLC will not use the trade or service marks of US
Airways without US Airways' prior written consent. US Airways
reserves the right to disapprove any use of the trade and
service marks and other proprietary rights of US Airways if US
Airways determines in its reasonable discretion that such use
is contrary to the objectives or policies of US Airways.
12.2 Patent Indemnity.
12.2.1 Actions.
GILLC will defend at its expense any suit or
proceeding against US Airways based on a claim that any
product or service of GILLC ("GILLC Product") constitutes an
infringement of the patent, trademark, or copyright laws of
the United States, provided that GILLC is notified promptly in
writing and given full and complete authority, information,
and assistance for the defense of such suit or proceeding. If
the foregoing provision is complied with, GILLC will pay
damages and costs awarded against US Airways, but GILLC will
not be responsible for any compromise or settlement made
without its prior written consent. If any GILLC Product is
held to constitute infringement of such patent, trademark, or
copyright and its use is enjoined, GILLC will, at its election
and expense, either obtain for US Airways the right to
continue using such GILLC Product, modify such GILLC Product
so that it is not infringing, or remove such GILLC Product.
12.2.2 Limitation.
GILLC will not be liable to US Airways with respect
to any claim of infringement which is based upon (a)
combination or utilization of a GILLC Product with products or
services not supplied by GILLC; (b) the unauthorized
modification by US Airways or a person other than GILLC or its
designated
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representatives of any GILLC Product or (c) the use of any
GILLC Product not in accordance with GILLC's specifications or
recommendations.
12.3 Third Party Data.
GILLC makes no representation or warranty regarding the
accuracy or reliability of any schedule, fare, quote, or other
information provided to GILLC by airlines or by hotels, car rental
companies or other vendors of travel related services. GILLC will not
be responsible for, and US Airways hereby releases and waives any
claims against GILLC conceding, the accuracy or reliability of any such
information provided by such third parties.
13 Taxes.
13.1 GILLC Responsibilities.
GILLC will pay any sales, use, or personal property taxes
(except for any tax levied upon or measured by US Airways' gross
receipts) imposed by any taxing authority and required to be paid by
GILLC or US Airways as a result of services provided to GILLC under
this Agreement. GILLC will not be liable for any tax levied upon or
measured by the income of US Airways.
13.2 Claims.
If a claim is made against US Airways for any taxes that are
to be paid by GILLC, US Airways will timely notify GILLC. If GILLC so
requests in writing, US Airways will, at GILLC's expense, take such
action as GILLC may reasonably direct with respect to such taxes,
including payment of such taxes under protest. If the tax has been
paid, and if requested by GILLC, US Airways will, at GILLC's expense,
take such action as GILLC may reasonably direct, including allowing
GILLC to file a claim or commence legal action in US Airways' name, to
recover such tax payment. In the event of refund or recovery of any
tax, or part thereof, US Airways will pay to GILLC promptly that
portion of the tax paid by GILLC, including any interest received
thereon.
14 Limitation of Liability.
Except as provided under Section 18 below ("Indemnification."), each
party's total liability regarding any claim by the other party for breach of
this Agreement is limited to the amount of compensation earned by US Airways for
the year in which the claim arises or, if based on obligations of a continuing
nature and arising after termination, then the final year of this Agreement, and
each party hereby releases and waives any claims against the other party for
such breach in excess of such amount.
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15 Consequential Damages.
NEITHER PARTY WILL BE LIABLE FOR, AND EACH PARTY WAIVES AND RELEASES
ANY CLAIMS AGAINST THE OTHER PARTY FOR, ANY SPECIAL, INCIDENTAL, OR
CONSEQUENTIAL DAMAGES, INCLUDING DAMAGE TO OR DESTRUCTION OF PROPERTY, LOST
REVENUES, LOST PROFIT, OR LOSS OF PROSPECTIVE ECONOMIC ADVANTAGE, RESULTING FROM
PERFORMANCE OR FAILURE TO PERFORM UNDER THIS AGREEMENT.
16 Termination for Breach.
If either party (the "Defaulting Party") breaches any of its duties or
obligations under this Agreement, and such breach continues for thirty days (ten
days regarding failure to pay amounts due) after written notice of such default
from the other party, then the other party may terminate this Agreement at any
time thereafter, effective immediately upon written notice of termination to the
Defaulting Party, without prejudice to any other rights or remedies the
non-defaulting party may have. Upon notice of such termination, the Defaulting
Party will return immediately to the non-defaulting party any and all
confidential or proprietary information, programs, materials, or other data, and
any copies thereof, in the possession or control of the Defaulting Party.
17 Force Majeure, Delay.
Neither party will be responsible for delays in performance caused by
acts of God or governmental authority, strikes or labor disputes, fires or other
loss of manufacturing facilities, breach by suppliers of supply agreements, or
any other cause beyond the reasonable control of that party.
18 Indemnification.
Each party (the "Indemnitor") will indemnify the other party, its
officers, employees, and agents (collectively "Indemnitees") against and hold
each Indemnitee harmless from all claims, suits, judgments, losses, damages,
fines or costs (including reasonable legal fees and expenses) resulting from any
claim, suit, or demand by any third party for injuries to or deaths of persons
or loss of or damage to property arising out of the Indemnitor's performance or
willful misconduct of the Indemnitor, its employees, officers, or agents in
connection with the Indemnitor's performance of this Agreement, except to the
extent caused by the negligence of any Indemnitee. The Indemnitor's obligations
under this paragraph will survive the termination of this Agreement.
19 Guarantee of Performance.
If either party (the "Insolvent Party") becomes insolvent; if the other
party (the "Insecure Party") has evidence that the Insolvent Party is not paying
its bills when due
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without just cause; if a receiver of the Insolvent Party's assets is appointed;
if the Insolvent Party takes any step leading to its cessation as a going
concern; or if the Insolvent Party either ceases or suspends operations for
reasons other than a strike, then immediately upon receipt of written notice
from the Insecure Party the Insolvent Party will provide adequate assurance,
satisfactory to the Insecure Party, of the future performance of this Agreement.
If bankruptcy proceedings are commenced with respect to the Insolvent Party,
then the Insecure Party may suspend all further performance of this Agreement
until the Insolvent Party assumes or rejects this Agreement pursuant to section
365 of the Bankruptcy Code or any similar or successor provision. Any such
suspension of further performance by the Insecure Party pending the Insolvent
Party's assumption or rejection will not be a breach of this Agreement and will
not affect the Insecure Party's right to pursue or enforce any of its rights
under this Agreement or otherwise
20 Third Party Rights.
Nothing contained in this Agreement establishes or creates, or is
intended or will be construed to establish or create, any right in or any duty
or obligation to any third party.
21 Assignment.
US Airways may assign or transfer this Agreement or any rights granted
or provided for hereunder, in whole or in part, to any person or entity that is
controlled by US Airways, otherwise US Airways may not assign or transfer this
Agreement or any rights granted or provided for hereunder, in whole or in part,
without the written Agreement of GILLC. GILLC may assign or transfer this
Agreement or any rights granted or provided for hereunder, in whole or in part,
to any person or entity that is controlled by GILLC, otherwise GILLC may not
assign or transfer this Agreement or any rights granted or provided for
hereunder, in whole or in part, without the written Agreement of US Airways.
22 Relationship of the Parties.
The relationship of the parties is that of principal and limited agent.
US Airways may bind GILLC only as specifically provided in this Agreement.
23 Severability.
If any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect, then the Agreement shall he construed to exclude
such provision and to be enforceable in all other respects, unless to do so
would prejudice the rights of either party or result in such a material change
as to cause performance by either party to be unreasonable.
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24 Survival.
All provisions of this Agreement which by their terms survive
termination thereof will continue thereafter in full force and effect.
25 Governing Law.
This Agreement, and any dispute arising under or in connection with
this Agreement, including any action in tort, will be governed by the internal
laws of the State of Illinois. Any action brought to (i) preserve the status quo
pending arbitration or (ii) enforce an arbitration proceeding or decision shall
be brought in courts located within Xxxx County, Illinois, the parties hereby
consenting to personal jurisdiction and venue therein.
26 Notices.
All notices to either party under this Agreement must be in writing and
sent to the following addressee and at the following address:
for GILLC:
Galileo International, L.L.C.
Xxxxx 000
0000 Xxxx Xxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: President
for US Airways:
US Airways, Inc.
0000 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn:
Notices will be deemed effective on the date received. Notices by
certified or registered mail (return receipt requested) will be deemed received
on the date shown on the return receipt. Notices sent by telex or facsimile will
be deemed received on the date transmitted if transmitted before 3:30 p.m. time
of recipient, otherwise on the next business day following transmission.
27 Headings.
The section headings and captions used in this Agreement are for
convenience of reference only and do not constitute a part of this Agreement and
will not be deemed to limit, characterize or in any way affect any provision of
this Agreement, and all provisions of this Agreement will be enforced and
construed as if no heading or caption had been used in this Agreement.
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28 Entirety of Agreement.
This Agreement including any Exhibits or attachments, supersedes all
prior oral or written representations or communications between the parties and
constitutes the entire understanding of the parties regarding the subject matter
of this Agreement. This Agreement supersedes the Sales Representation Agreement
between Apollo Travel Services and US Airways, and the parties hereto agree that
all obligations under that agreement are terminated. This Agreement may be
modified only in a writing signed by both parties.
29 Counterparts.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which shall be considered one and
the same instrument.
26
IN WITNESS WHEREOF, the parties have agreed to and executed this
Agreement by their authorized representatives as of the Effective Date first set
forth above.
GALILEO INTERNATIONAL, L.L.C. US AIRWAYS, INC.
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxx X. Xxxxxx
-------------------------------- --------------------------------
Name: Xxxxx X. Xxxxxxx Name: Xxxx X. Xxxxxx
Title: President and Title: Senior Vice President,
Chief Executive Officer Finance and CEO
27
APPENDIX I
Certain Terms
1. NTP Sales Services.
(i) Quotation. Except as provided in paragraph 1(iii) below, using
the NTP Form Agreement US Airways will quote NTP Subscribers
those terms of the NTP Form Agreement as are appropriately
related to that NTP Subscriber's business.
(ii) Negotiation. On the basis of the NTP Form Agreement US Airways
shall negotiate with NTP Subscribers and attempt to obtain
commitments from NTP Subscribers to purchase Galileo Services
from GILLC.
(iii) [*]
2. CTMS Sales Services.
(i) Quotation. Except as provided in paragraph 2(iii) below, using
the Form Agreements for CTMS Services, US Airways will quote
CTMS Customers or CTMS Agents, or both, as the case may be,
those terms of the CTMS Form Agreement as are appropriately
related to that CTMS Customer's or CTMS Agent's business.
(ii) Negotiation. On the basis of the CTMS Form Agreement US
Airways shall negotiate and attempt to obtain commitments from
CTMS Customers or CTMS Agents, or both, as the case may be, to
purchase, lease or license CTMS Services from GILLC.
(iii) [*]
3. Staffing Commitment.
(i) Dedicated Personnel. US Airways will provide [*] Dedicated
Personnel who will be dedicated [*] percent of their time to
Sales Services; and
(ii) Administrative Support Personnel. US Airways will provide [*]
administrative Support Personnel who will be dedicated [*]
percent ([*]%) of their time to Sales Services.
(APPENDIX I-1)
28
4. GILLC Support of Sales Services and Support Services.
(i) Form Agreements. GILLC shall prepare all form agreements and
terms including, as applicable and without limitation: the
duration of the form agreements; the quantity and quality of
computer and network equipment to be provided, installed and
maintained by GILLC; list prices ("rack rates") such as lease
fees, license fees, penalties and other charges; productivity
credits and other discounts from list prices, related software
licenses or sublicenses, as the case may be; and other terms
as may be determined by GILLC from time to time (the "Form
Agreements"). With respect to CTMS Services, GILLC will
provide the following Form Agreements: (a) a form of product
license as between GILLC and the CTMS Customer, and (b) a form
of product license as between GILLC and a CTMS Agent pursuant
to which the CTMS Agent is permitted to use CTMS Services on
the behalf of the CTMS Customer.
(ii) [*]
(iii) [*]
(APPENDIX I-2)
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Appendix II
Budgets and Compensation
1 General Statement of Method.
With respect to those commitments of customers of GILLC to purchase
products and services from GILLC that, pursuant to this Agreement, US Airways is
instrumental in securing there shall be, by mutual agreement of US Airways and
GILLC, annual revenue plans and annual plans for Financial Assistance spending.
In the course of each year of this Agreement, GILLC will measure and report to
US Airways, at least monthly, actual Total Revenue and Financial Assistance
spending. US Airways shall receive a minimum, guaranteed compensation.
Additionally, US Airways shall receive incentive compensation that is based, for
the year in question, on Total Revenue versus the Revenue Plan and on Financial
Assistance spending versus the FA Budget. Notwithstanding the generality of this
Section 1, the procedure for determining US Airways' compensation under this
Agreement is as described in this Appendix II.
2 Goals.
Subject to Sections 4.5 of this Agreement and Section 3 below, in no
event later than February 28 of each year, US Airways and GILLC will complete
negotiations with respect to the goal for Total Revenue for that year and the
budget for Financial Assistance for that year (respectively, the "Revenue Goal"
and the "FA Budget"). Modifications to the Revenue Goal and the FA Budget are
subject to the provisions of this Agreement. For 1997, the Revenue Goal and the
FA Budget are as shown on Schedule 1 of this Agreement.
3 Financial Assistance.
3.1 FA Budget.
FA Budgets will be determined concurrently with Revenue Goals for
each year during the term of this Agreement and in accordance with the
provisions of Section 2 above. The FA Budget for each year will (i)
include contractual commitments for the payment of Financial Assistance
for that year and for which GILLC is obligated, (ii) include reasonable
estimates and projections as to additional Financial Assistance that
may be required to gain new business or retain existing customers, and
(iii) be commensurate with the Revenue Goal for that year. Subject to
Section 3.2 below, at no time will US Airways be required or requested
to provide Financial Assistance to any person either directly or
through adjustments to, or inclusions in, the FA Budget, the Revenue
Goal, the Base Compensation, the Guaranteed Compensation, the
Performance Compensation, or otherwise.
3.2 Adjustments With Respect to Financial Assistance.
US Airways will not exceed the FA Budget during any year of this
Agreement; [*] percent of all Financial Assistance expenditures by US
Airways in excess of the FA
(APPENDIX II-1)
30
Budget will be deducted from Total Revenue counted toward the Revenue
Goal for that year. If GILLC's Financial Assistance expenditures with
respect to the Total Revenue are under the FA Budget for that year then
the difference between such expenditures and the FA Budget will be
added to Total Revenue counted toward the Revenue Goal for that year.
4 Failure to Agree.
4.1 Dispute Resolution Procedure.
Failing agreement on the Revenue Goal or the FA Budget, or both, the
negotiators will submit their positions to the Dispute Resolution
Procedure as described in Attachment B hereto.
4.2 Carryover Plan.
Until such time as the Dispute Resolution Procedure is completed the
parties shall operate under this Agreement on the basis of a "Carryover
Plan" that shall include, with respect to the calendar year in
question:
(i) a "Carryover Revenue Goal" for that calendar year that will
function for the purposes of this Agreement in lieu of the
Revenue Goal for that year and that equals the Revenue Goal
for the immediately preceding calendar year increased or
decreased, as the case may be, by the FAA Factor;
(ii) a "Carryover FA Budget" for that calendar year that will
function for the purposes of this Agreement in lieu of the FA
Budget for that year and that equals the FA Budget for the
immediately preceding calendar year increased or decreased, as
the case may be, by the FAA Factor; and
(iii) a "Carryover Base Compensation" for that calendar year that
will function for the purposes of this Agreement in lieu of
the Base Compensation for that year and that equals the Base
Compensation for the immediately preceding calendar year
increased by [*].
5 Material Changes.
If a change occurs in the structure of the air transportation industry
or of the CRS Industry, including without limitation changes in the number or
types of competitors, customers, products, or services of either industry, which
change is likely to cause either or both of the following cases (i) a material
change to the flows of revenue through ARC, or (ii) a requirement that entails
the provision of substantial additional Sales Services in the APR (in either
case a "Material Change"), then, as the case may be, (a) either GILLC or US
Airways may request that the parties renegotiate the Revenue Goal or the FA
Budget, or both, for that year, and (b) US Airways will have the right of first
refusal, exercisable within ten business days of written notice from GILLC, to
elect to provide such additional Sales Services in the APR. Failing agreement on
adjustments to the Revenue Goal or the FA Budget, or both, such adjustments to
the Revenue Goal or the FA Budget, or both, will be determined as provided in
Section 4.1 above.
(APPENDIX II-2)
31
6 Base Compensation.
"Base Compensation" shall be the prior year's Base Compensation
increased by an amount equal to [*] of such prior year's Base Compensation
prorated, for increases [*], as the percentage of the prior year's Revenue Goal
attained by US Airways increases from [*]. Base Compensation for 1997 is as
provided on Schedule 1 of this Agreement.
7 Guaranteed Compensation.
US Airways will be paid [*] of Base Compensation ("Guaranteed
Compensation") if US Airways meets the staffing levels as provided in Section 6
above. US Airways will be paid [*] percent of Base Compensation in any event if
US Airways meets its Revenue Goal. [*] of Base Compensation will be at risk
based on the Revenue Goal performance (the "Performance Compensation").
8 [*]
9 Advance Credit.
Notwithstanding anything to the contrary contained in this Appendix II,
in the event US Airways attains [*] of the Revenue Goal for a year then US
Airways may, at its option, be credited, for purposes of determining its
compensation under this Appendix II, with the amount (the "Advance Credit")
necessary to achieve [*] of its Revenue Goal for such year. US Airways shall
exercise its option hereunder to take an Advance Credit by written notice to
GILLC received no later than the fifth business day of the next succeeding year.
The amount of the Advance Credit shall be deducted from Total Revenue otherwise
attributable to US Airways for any purpose under this Agreement during January
of such succeeding year. No such Advance Credit shall be taken into account in
setting the Revenue Goal. US Airways may not exercise the option under this
Section 9 in two successive years.
10 Penalties: US Airways.
If US Airways meets the staffing minimums provided in Section 4.7 of
this Agreement, US Airways will receive its Guaranteed Compensation as set forth
in this Appendix II. If US Airways fails to meet such staffing minimums and
fails to meet its Revenue Goal, then
[*]
Notwithstanding the foregoing, so long as US Airways meets its Revenue
Goal for the year, US Airways will receive its Base Compensation for such year
regardless of staffing goals attained.
(APPENDIX II-3)
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Attachment A
Defined Terms
As used in this Agreement, including the Attachments, Exhibits and Schedules
hereto, the terms listed in this Attachment A have the meanings ascribed to
them. The use of a term in the singular that is defined herein in the plural is
understood in this Agreement to signify a single instance of such defined
matter.
"Accounting Services" means those travel agency accounting services that are
provided by GILLC to customersof GILLC.
"Administrative Support Personnel" means those General Sales Personnel who
perform primarily administrative or management functions in the provision of
Sales Services pursuant to this Agreement.
"Advance Credit" has the meaning ascribed to that term in Section 9 of Appendix
II.
"APR" means "Area of Primary Sales Responsibility" as defined herein.
"ARC" means Airlines Reporting Corporation.
"Area of Primary Sales Responsibility" means the exclusive geographic area of
primary sales responsibility assigned to US Airways as described in Exhibit A
hereto and as such geographic area may be amended from time to time in
accordance with the provisions of this Agreement.
"Assigned Subscribers" means (i) all NTP Subscribers within the APR and (ii) the
Designated Subscribers, but excluding the Excluded Subscribers.
"Base Compensation" has the meaning ascribed to that term in Section 6 of
Appendix II and, in the event that there is a Carryover Base Compensation, means
such Carryover Base Compensation.
"BSP" means an entity, including, without limitation, IATA, that performs
accreditation, revenue reporting and clearing functions such as those performed
by ARC.
"Cancelled Deal" has the meaning ascribed to that term in Section 5.2 above.
"Carryover Base Compensation" has the meaning ascribed to that term in Section
4.2 of Appendix II.
(ATTACHMENT A-1)
33
"Carryover FA Budget" has the meaning ascribed to that term in Section 4.2 of
Appendix II.
"Carryover Plan" has the meaning ascribed to that term in Section 4.2 of
Appendix II.
"Carryover Revenue Goal" has the meaning ascribed to that term in Section 4.2 of
Appendix II.
"Commitment Review Procedure" has the meaning ascribed to that term in Section
5.2 above.
"Corporate Direct System" means a computerized travel reservations system that
is integrated with desktop travel management software including, for example,
travel policy enforcement, expense management, and management reporting
functionality and is (i) selected by a CTMS Customer for use by its employees,
or (ii) selected for use by a CTMS Agent retained by a CTMS Customer to service
the travel planning and management requirements of such CTMS Customer.
"CRS Industry" means the group of business entities who provide products and
services alike to the products and services of GILLC.
"CTMS Agent" means a Travel Agent, NTP Subscriber, service bureau, or other
person with whom a CTMS Customer has an agreement pursuant to which the CTMS
Agent performs services related to the use of a CTMS and other aspects of that
CTMS Customer's travel planning and travel management requirements.
"CTMS Customer" means a corporation, partnership, or other person who is an
existing or a potential purchaser of CTMS Services from GILLC.
"CTMS Form Agreement" means a Form Agreement that relates to CTMS Services.
"CTMS Sales Services" has the meaning ascribed to that term in Section 4.3
above.
"CTMS Services" means any portion of a Corporate Direct System provided by
GILLC, whether itself, or through an arrangement or arrangements between GILLC
and a third party or third parties.
"CTMS" means a CTMS Service.
"Designated Subscribers" means those NTP Subscribers listed on Exhibit C hereto
and as amended pursuant to this Agreement.
(ATTACHMENT A-2)
34
"Dedicated Personnel" means General Sales Personnel of at least Account
Executive level who will be dedicated full-time (100 percent of work time) to
the provision of Sales Services pursuant to this Agreement.
"Discontinued Multinational Account" has the meaning ascribed to that term in
Section 2.1.3 above.
"Discontinued Service Notice" has the meaning ascribed to that term in Section
5.1 above.
"Dispute" means any dispute, disagreement, claim, or controversy arising in
connection with or relating to this Agreement, or the validity, interpretation,
performance, breach, or termination of this Agreement, including any claim of
breach of representation or warranty or of non-performance.
"Dispute Resolution Procedure" means the procedure described in Attachment B
hereto.
"Dispute Summary" means, with respect to a Dispute and with respect to the party
to the Dispute who shall prepare a Dispute Summary, a written declaration
presenting (i) a statement expressing the issue(s) in Dispute, (ii) facts
relevant to the understanding of the issue(s) in Dispute, and (iii) a statement
expressing the resolution of the Dispute that is sought by the party who
prepares the Dispute Summary.
"Excluded Subscribers" means those NTP Subscribers listed on Exhibit B pursuant
to this Agreement.
"FAA Factor" means, with respect to the Carryover Plan year in question, the
change, expressed as a percentage, in forecast domestic revenue passenger
enplanements for that Carryover Plan year versus the immediately preceding year,
where "forecast domestic revenue passenger enplanements" shall be as provided in
the then-current (as of the time the Carryover Plan is created) "FAA Aviation
Forecasts" issued by the U.S. Department of Transportation, Federal Aviation
Administration, Office of Aviation Policy and Plans.
"Financial Assistance" means the provision by GILLC, and at GILLC's expense, to
any one or more of (i) the Assigned Subscribers, (ii) CTMS Customers, and (iii)
CTMS Agents, of any one or more of: (a) cash payments; (b) indemnification
payments; (c) revenue sharing; (d) booking fee rebates; (e) lease fee waivers;
(f) license fee waivers; (g) productivity or efficiency fee waivers; (h) airline
tickets or other airline, car or hotel perquisites; (i) computer or other
hardware; and (j) other benefits.
(ATTACHMENT A-3)
35
"FA Budget" means the amount of Financial Assistance established in accordance
with the provisions of Section 3 of Appendix II and, in the event that there is
a Carryover FA Budget, means such Carryover FA Budget.
"Form Agreements" has the meaning ascribed to that term in Section 5.2 above.
"Galileo Board" means the Board of Directors of GILLC.
"Galileo Services" means, collectively, Reservations Services and Accounting
Services, as provided by GILLC in the APR, excluding CTMS Services.
"General Sales Personnel" means regular, full-time employees of US Airways who
either are in training for or are actively engaged in the sale of air
transportation on US Airways, or other persons as may be agreed by GILLC and US
Airways, including Administrative Support Personnel as provided above, but
excluding employees of US Airways engaged primarily in administrative or
management positions that supervise sale planning or implementation policies or
processes of US Airways.
"GI Corp Executive" has the meaning ascribed to that term in Section 3.1 above.
"GILLC Lead" has the meaning ascribed to that term in Section 4.2 above.
"GILLC Support" has the meaning ascribed to that term in Section 5.2 above.
"Guaranteed Compensation" has the meaning ascribed to that term in Section 7 of
Appendix II.
"Headquarters" means, with respect to the corporation or partnership in
question, the city or place in which that corporation or partnership maintains
its principal offices.
"HOL Flow" means, with respect to an individual NTP Subscriber, the annual sales
of air transportation revenue, as measured by ARC and BSPS, for all locations of
that NTP Subscriber.
"IATA" means the International Air Transport Association.
"Independent Directors" means the members of the Galileo Board who are neither
nominated by an airline owner of GILLC or are members of the executive
management of GILLC.
(ATTACHMENT A-4)
36
"Interest Rate" means the mathematical average of the prevailing
dollar-denominated 30 day and 90 day London Interbank Offered Rates (LIBOR), as
reported in the Wall Street Journal for a specified business day, plus 200 basis
points.
"Level One Bonus" has the meaning ascribed to that term in Section 8 of Appendix
II.
"Level Two Bonus" has the meaning ascribed to that term in Section 8 of Appendix
II.
"Managing Member" means the member of GILLC who shall manage GILLC in accordance
with the limited liability company agreement of GILLC, which member is Galileo
International, Inc., a Delaware corporation.
"Material Change" has the meaning ascribed to that term in Section 5 of Appendix
II.
"Negotiation Range" has the meaning ascribed to that term in Section 5.2 above.
"Neutral Travel Provider" means any Travel Agent that sells the products and
services of Vendors and holds itself out as a neutral source of information
regarding Vendors and their services or products.
"New Service" has the meaning ascribed to such term in Section 5.2 above.
"Non-Competition Agreement" means the Amended and Restated Non- Competition
Agreement among GILLC, US Airways and USAM Corp. dated as of July 30, 1997.
"Non-Vendor Revenue" means all revenue received by GILLC from NTP Subscribers,
CTMS Customers, CTMS Agents, and other persons and including, without
limitation, lease and license payments, install/deinstall charges, variable
charges (including but not limited to charges for tickets, itineraries and
invoice documents), and backroom lease and license fees, net of discounts, but
not including Vendor Revenue.
"NTP" means Neutral Travel Provider, as defined herein.
"NTP Form Agreement" means a Form Agreement that relates to Galileo Services,
but excluding CTMS Services.
"NTP Sales Services" has the meaning ascribed to that term in Section 4.1 above.
"NTP Subscriber" means a Neutral Travel Provider who is an existing or a
potential purchaser of Galileo Services from GILLC.
(ATTACHMENT A-5)
37
"Other Agent" has the meaning ascribed to that term in Section 2.4 above.
"Performance Compensation" has the meaning ascribed to that term in Section 7 of
Appendix II.
"Reporting Number" means an account number issued by the Airline Reporting
Corporation or by the International Air Transport Association, or both, to an
individual or entity for the purpose of authorizing such individual or entity to
operate as a travel agency.
"Reservations Services" means the computerized display, reservation, ticketing,
or sale of the services or products of Vendors including the availability and
price thereof, as generated by GILLC to any person other than Vendors.
"Revenue Goal" has the meaning ascribed to that term in Section 2 of Appendix
II.
"Sales Services" means, collectively, NTP Sales Services, and CTMS Sales
Services.
"Sales Force" means, collectively, the Administrative Support Personnel and
Dedicated Support Personnel.
"Senior Review Committee" means a committee consisting of GILLC's President and
US Airways' Senior Vice President - North America.
"Support Services" has the meaning ascribed to that term in Section 4.4 above.
"Tech Office" means a technical support center (at times referred to
colloquially as a "TN" office) operated and staffed by GILLC with personnel
proficient in all technical aspects of the use by end-users of GILLC products
and services.
"Territorial Reassignment" has the meaning ascribed to that term in Section 2.4
above.
"Territory" means, collectively, the United States of America together with its
territories and protectorates, and the Republic of Mexico.
"Total Revenue" means the sum of Non-Vendor Revenue and Vendor Revenue, with
respect to the APR plus such revenue generated from Designated Subscribers less
such revenue generated from Excluded Subscribers, provided that any such revenue
generated from the location of an Excluded Subscriber in the calendar year in
which such location commences purchasing Galileo Services shall be included in
the Total Revenue only for the sales representative who was responsible for such
sale of Galileo Services.
(ATTACHMENT A-6)
38
"Training Materials" has the meaning ascribed to that term in Section 4.7.3.3
above.
"Travel Agent" means an individual or entity, that has been assigned a Reporting
Number.
"US Airways Executive" has the meaning ascribed to that term in Section 3.2
above.
"US Airways Group Products and Services" means with respect to US Airways and
any carrier that uses US Airways' airline designator code in the display of
certain designated flights (collectively, the "group carriers") the schedule,
seat availability, and price thereof of the group carriers, including, without
limitation, air and/or non-air travel packages that may include ancillary air
segments on non-group-carrier airlines.
"US Dollar" means the lawful currency of the United States of America.
"Vendor" means a vendor of travel-related services, such as an airline, hotel,
or rental car company, tour package, cruise operator, or travel insurance
company, that has purchased or subscribed for Reservations Services.
"Vendor Revenue" means all revenue received by GILLC from Vendors with respect
to booking fees and other service charges or fees as a result of bookings and
other transactions for which GILLC charges a fee to Vendors, which such bookings
and other transactions are generated by NTP Subscribers, CTMS Customers, CTMS
Agents, and other persons.
(ATTACHMENT A-7)
39
Attachment B
Dispute Resolution Procedure
1. General Procedure.
Except as otherwise stated in the Agreement, the parties hereto shall
resolve all Disputes in accordance with this procedure:
(a) Each party shall instruct its appropriate representative to promptly
negotiate in good faith with the other party's appropriate
representative to resolve the Dispute. The GILLC Executive shall be the
representative of GILLC. The US Airways Executive shall be the
representative of US Airways.
(b) If the representatives do not resolve the Dispute within ten business
days (or such longer period as the Representatives may agree) after the
date of referral of the Dispute to them, the representative of each
party will prepare a Dispute Summary with respect to that party's
position in the Dispute. The Dispute shall be referred (by either or
both of the representatives) to the Senior Review Committee for
resolution on the basis of the Dispute Summaries prepared by each
party.
(c) If the Senior Review Committee does not resolve the Dispute within ten
business days (or such longer period as that Committee may agree) from
the date of referral to it, either party may submit the Dispute to
binding arbitration in accordance with Section 2 of this Attachment.
2. Arbitration Procedure
The Arbitration Procedure shall be the "baseball" arbitration procedure provided
in Section 5.04 of the Amended and Restated Computer Services Agreement between
US Airways and GILLC, modified as necessary with respect to defined terms in
this Agreement.
(ATTACHMENT B-1)
40
Exhibit A
AREAS OF PRIMARY RESPONSIBILITY
[*]
[TWO PAGES OMITTED]
(EXHIBIT A-1)
41
Exhibit B
List of Excluded Subscribers
[*]
[ONE PAGE OMITTED]
(EXHIBIT B-1)
42
Exhibit C
Designated Subscribers
[*]
[ONE PAGE OMITTED]
(EXHIBIT C-1)
43
Exhibit D
Sales Representative Reports
1) Staffing Report. A quarterly written advice of staffing levels.
2) Account Activity Reports setting forth: Gains (signed contracts/OA's);
Losses, Renewals; Changes/Updates to target lists - due on last day of
each month.
3) Redistricting Reports and Administrative Files. On GILLC's request,
contains account alignments and assignments.
(EXHIBIT D-1)
44
Exhibit E
Certain Territories
PARTNER HOME NATIONAL TERRITORIES
Austria
Canada
Greece
Ireland
Italy
Japan
Portugal
The Netherlands
United Kingdom
ASSOCIATE DISTRIBUTOR TERRITORIES
1. ARABI
Algeria
Bahrain
Djibouti
Egypt
Iraq
Jordan
Kuwait
Lebanon
Libya
Mauritania
Morocco
Oman
Qatar
Saudi Arabia
Somalia
Sudan
Syria
Tunisia
United Arab Emirates
Yemen
(EXHIBIT E-1)
45
2. SOUTHERN CROSS
Australia
New Zealand
Papua New Guinea
Islands in the South Pacific Ocean (other than dependencies of
the USA)
3. GALILEO DANMARK
Denmark
4. GALILEO NORDISKA
Finland
Norway
Sweden
5. XXXXX
Xxxxxxx
0. SAA
South Africa
Independent Homelands
Namibia
Botswana
Lesotho
Swaziland
7. AVENSA
Venezuela
8. THY
Turkey
9. INTERGLOBE
India
(EXHIBIT E-2)
46
10. PHATARAPRASIT
Thailand
11. RELIANCE
Malaysia
12. MERCATOR (Signed but not yet effective)
Pakistan
13. GETS
Cambodia
Vietnam
Malawi
Mauritania
Papua New Guinea
Tanzania
Croatia
Ukraine
Netherlands Antilles
Aruba
Guyana
Nigeria
Ethiopia
Benin
Burundi
Eritrea
Zaire
Djibouti
Ghana
Gambia
Kenya
Mozambique
Sudan
Cape Verde
Uganda
(EXHIBIT E-3)
47
Schedule 1
Certain Information Relating to 0000
XXXXXX XXXXXX APR
-----------------
1997 REVENUE GOAL $[*]
1997 BASE COMPENSATION $[*]
1997 FA BUDGET $[*]
(Schedule 1-1)
