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EXHIBIT 10.7
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, INC.
Dated as of __________________ __, 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
2.2 Sales to CTMS Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.3 Other Sales Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.4 Territorial Reassignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.5 Trade Names . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3 The Administration of this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.1 GI-Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.2 US Airways . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.3 Meetings and Coordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4 Responsibilities of US Airways . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.1 NTP Sales Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.2 CTMS Sales Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.3 Support Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.4 Responsibilities With Respect to Excluded Subscribers . . . . . . . . . . . . . . . . . . . . . 8
4.5 Sales Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.6 Staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.6.1 Staffing Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.6.2 Review of Staffing Levels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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 GI-Inc Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.1 Marketplace Competitiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.2 GI-Inc Support of Sales Services and Support Services . . . . . . . . . . . . . . . . . . . . . 10
5.3 Services of GI-Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.4 New Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.5 CTMS Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.5.1 Base Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.5.2 Demonstrations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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5.6 Technical Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.7 Technical Assistance Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.8 Help Desk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6 Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7 Other Marketing Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.1 GI-Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.2 US Airways . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
8 Terms of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
9 Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
10 Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
12.1.1 GI-Inc Marks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
13 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
13.1 GI-Inc 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
20 Third Party Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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21 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
22 Relationship of the Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
23 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
24 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
25 Governing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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, INC.
This Marketing Cooperation and Sales Representation Agreement (this
"Agreement") effective as of the ___ day of _______, 1997 (the "Effective
Date"), by and between GALILEO INTERNATIONAL, INC., a Delaware corporation
("GI-Inc") 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 GI-Inc generates computerized reservations services through
GI-Inc'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 GI-Inc desires to appoint Sales Representatives that will be
responsible for the sale of GI-Inc'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 GI-Inc 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, GI-Inc 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
GI-Inc under the terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants set forth in
this Agreement, GI-Inc and US Airways hereby agree as follows:
1 Definitions.
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.
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2 Sales Agency and Territories.
2.1 Sales to NTP Subscribers.
2.1.1 Sales Agency Appointment.
With respect to the Assigned Subscribers, GI-Inc hereby
appoints US Airways as the exclusive limited agent of GI-Inc to obtain
commitments from the Assigned Subscribers to subscribe for and lease
Galileo Services. US Airways will act as the sales agent of GI-Inc
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 GI-Inc.
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. GI-Inc 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
GI-Inc, including for GI-Inc itself.
2.2 Sales to CTMS Customers.
With respect to CTMS Customers and CTMS Agents, GI-Inc 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 GI-Inc has
granted exclusive distribution rights to third parties with respect to Galileo
Services and CTMS Services, as listed in Exhibit E hereto, US Airways may act
as the sales agent of GI-Inc 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 GI-Inc.
2.3 Other Sales Agents.
Subject to this Section 2 and to Section 3 below, GI-Inc may at its
discretion appoint other persons as sales agents of GI-Inc and GI-Inc may act
on its own behalf as sales agent. GI-Inc 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
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Agreements, the compensation arrangements provided by GI-Inc, and in all
associated support functions that are GI-Inc's responsibility hereunder.
2.4 Territorial Reassignment.
A "Territorial Reassignment" shall occur in the event of (i) a
reassignment by GI-Inc 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 GI-Inc and another sales representative of
GI-Inc 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, GI-Inc
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,
GI-Inc 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 GI-Inc 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 GI-Inc shall be free to make
the Territorial Reassignment to any other agent or GI-Inc 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, GI-Inc will market, and US Airways
will sell, the Reservations Services and CTMS Services of GI-Inc under the
"Apollo" trade name. Notwithstanding the foregoing, if, as a result of US
Airways' efforts under this Agreement, a customer of GI-Inc commits to purchase
GI-Inc products or services outside of the Territory then GI-Inc will determine
the trade name for such products or services outside of the Territory. For the
purposes of this Agreement it is assumed, without obligation on GI-Inc's part,
that such trade name outside of the Territory is "Galileo".
3 The Administration of this Agreement.
US Airways and GI-Inc 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 GI-Inc.
At all times during the term of this Agreement GI-Inc will
employ an individual who shall have primary responsibility for meeting
GI-Inc's obligations under this Agreement, which person shall be a
duly appointed officer of GI-Inc (the
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"GI-Inc Executive"). The GI-Inc Executive shall report directly to the
President and Chief Executive Officer of GI-Inc. The GI-Inc Executive shall
be a person who has experience and background commensurate with his or her
responsibilities. The GI-Inc Executive will maintain an office in the
Chicago metropolitan region.
The GI-Inc Executive shall have full authority to bind GI-Inc 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 GI-Inc as approved by GI-Inc's Board of Directors
or CEO, including, without limitation:
(i) matters regarding Financial Assistance;
(ii) the approval of agreements with current and potential customers of
GI-Inc that are negotiated by US Airways on GI-Inc's behalf
pursuant to this Agreement;
(iii) the negotiation with US Airways of goals and targets related to
GI-Inc's and US Airways' performance under this Agreement;
(iv) the compensation owed US Airways by GI-Inc under this Agreement,
including the negotiation and payment thereof;
(v) the quantity, quality of performance and training of personnel
provided by GI-Inc pursuant to its obligations under this
Agreement;
(vi) the coordination of GI-Inc's role in negotiations with any third
party where such negotiations involve the participation of parties
other than GI-Inc, US Airways, and that third party; and
(vii) the coordination and resolution of any issues arising under this
Agreement that, in US Airways' or GI-Inc's estimation, are affected
by actions that have been or may be taken by other sales agents of
GI-Inc or by GI-Inc.
The GI-Inc Executive may delegate to employees of GI-Inc or to persons
under the control of GI-Inc such matters that are his or her responsibility
hereunder and as may be, in the GI-Inc Executive's discretion, appropriate for
delegation provided that, if US Airways reasonably objects that such delegation
will result in a diminishment of GI-Inc's performance hereunder or in a
detriment to US Airways' ability to perform its obligations hereunder, or both,
then GI-Inc will review the proposed delegation and inform US Airways as to how
GI-Inc 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
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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 GI-Inc on GI-Inc's behalf pursuant to this Agreement;
(ii) the negotiation with GI-Inc of goals and targets related to GI-Inc's
and US Airways' performance under this Agreement;
(iii) the compensation owed US Airways by GI-Inc 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 GI-Inc, US Airways, and that third party; and
(vi) the coordination and resolution of any issues arising under this
Agreement that, in US Airways' or GI-Inc's estimation, are affected by
actions that have been or may be taken by other sales agents of GI-Inc
or by GI-Inc.
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 GI-Inc reasonably
objects that such delegation will result in a diminishment of US Airways'
performance hereunder or in a detriment to GI-Inc's ability to perform its
obligations hereunder, or both, then US Airways will review the proposed
delegation and inform GI-Inc as to how US Airways will address GI-Inc's
reasonable concerns.
3.3 Meetings and Coordination.
The GI-Inc 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.
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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 GI-Inc 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 GI- Inc.
(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 GI-Inc's expense,
US Airways may, on approval of GI-Inc, undertake direct mail
solicitations, promotions, and other sales efforts, with NTP Subscribers
within the APR. GI-Inc may disapprove any sales promotion or
solicitation with respect to the Galileo Services that GI-Inc in its
reasonable discretion determines to be contrary to the objectives or
policies of GI-Inc.
(iii) Commitment Review Procedure. US Airways shall follow the Commitment
Review Procedure described in Section 5.2 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 GI-Inc.
(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 GI-Inc prompt
written notice regarding any significant re-organization, redeployment
or change of responsibilities of its General Sales Personnel (an
"Organization 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 GI-Inc 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
GI-Inc how US Airways will staff the necessary Sales Force
coverage for such area, and GI-Inc 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.
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In the event of (b), above, or of GI-Inc's rejection of US Airways' proposal
in (a), above, then GI-Inc may reassign sales responsibility in such area to
another person, including to GI-Inc 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 GI-Inc 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 GI-Inc.
(ii) Product Licensing. As GI-Inc'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 GI-Inc's expense, US Airways may, on approval of
GI-Inc, undertake direct mail solicitations, promotions, and other
sales efforts, with CTMS Customers and CTMS Agents. GI-Inc may
disapprove any sales promotion or solicitation with respect to the
CTMS Services that GI-Inc in its reasonable discretion determines to
be contrary to the objectives or policies of GI-Inc.
(iv) Commitment Review Procedure. US Airways shall follow the Commitment
Review Procedure described in Section 5.2 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 Agents, or both, as the case may be, such CTMS Support Services as
are approved in advance by GI-Inc.
(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 GI-Inc pursuant to this Agreement for those NTP
Subscribers with annual HOL Flow in excess of $5 million (such services are,
collectively, "Support Services").
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(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 GI-Inc, and to aid in familiarization with and use of
Galileo Services and CTMS Services.
(ii) Technical Questions Received. US Airways will relay promptly to GI-Inc
any technical questions received by US Airways from customers of GI-Inc
and, as requested by GI-Inc, 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
GI-Inc 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 GI-Inc. GI-Inc 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 GI-Inc, (ii)
after a reasonable period of time in which GI-Inc has had the opportunity to
coordinate such sales calls with its own sales force and with GI-Inc's other
sales representatives, and (iii) after consent of GI-Inc. Only those sales
outside of the APR approved in advance by GI-Inc 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, GI-Inc and US Airways jointly will develop a sales plan for such year,
which sales plan will be designed to increase business opportunities, procure
profitable NTP Subscriber accounts for GI-Inc 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 GI-Inc under this Agreement.
4.6.2 Review of Staffing Levels.
US Airways will consult with GI-Inc 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
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consult with GI-Inc 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 GI-Inc
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 GI-Inc
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 GI-Inc. As new
GI-Inc products or services are released by GI-Inc for Sales Services
hereunder, GI-Inc will provide training with respect thereto to the
Sales Force at a location or locations as agreed by the parties.
GI-Inc 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 GI-Inc hereunder have been trained appropriately and are
proficient to provide Sales Services in accordance with the terms of
this Agreement. GI-Inc shall have the right to test the proficiency
of individual Sales Force personnel at the time of their refresher
training and to require additional training for such individuals as do
not demonstrate minimum proficiency. GI-Inc will provide all course
materials, test materials, and training facilities necessary to
provide such additional training, and US Airways and GI-Inc 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.
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4.6.3.3 Training and Test Materials.
GI-Inc 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 GI-Inc. US
Airways may, at its request, review such Training Materials in advance
of their use hereunder and GI-Inc will make all reasonable changes
requested by US Airways to the Training Materials.
5 GI-Inc Responsibilities.
5.1 Marketplace Competitiveness.
GI-Inc 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. GI-Inc will give US
Airways as much notice as is reasonably practicable if GI-Inc
discontinues general distribution or provision of any particular
Galileo Service or CTMS Service or major feature thereof (a
"Discontinued Service Notice")
5.2 GI-Inc Support of Sales Services and Support Services.
With the objective of ensuring the proper level of GI-Inc support for
Sales Services and for Support Services provided by US Airways under this
Agreement, GI-Inc will provide the following support to US Airways
(collectively, the "GI-Inc Support"):
(i) Copies. GI-Inc will ensure that US Airways at all times has a current
copy of each version of the Form Agreements together with such
commentary or 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. GI-Inc will provide US Airways with no less
than 30 days written notice in the event that GI-Inc modifies or
discontinues the use of any of the Form Agreements.
5.3 Services of GI-Inc.
GI-Inc 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 GI-Inc
pursuant to this Agreement.
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5.4 New Services.
GI-Inc 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 GI-Inc itself, without first offering US
Airways the right of first refusal to become the exclusive sales agent for
such New Service for the APR. GI-Inc 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, GI-Inc 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.
GI-Inc has the ultimate role in determining product
specifications and features of any CTMS Service, and GI-Inc will
ensure that such specifications and product implementations of such
specifications meet prevailing market needs. To that end, the GI-Inc
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 GI-Inc's agreement,
GI-Inc, at its expense, will provide demonstrations of CTMS Services
to CTMS Customers and/or CTMS Agents. GI-Inc will coordinate the
content and scheduling of such demonstrations with US Airways.
5.6 Technical Support.
GI-Inc 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. GI-Inc 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 GI-Inc to the Sales Force.
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5.7 Technical Assistance Offices.
GI-Inc 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 GI-Inc
business hours.
5.8 Help Desk.
GI-Inc, 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 GI-Inc who are capable of providing prompt,
thorough, courteous, and professional technical assistance regarding the
products and services of GI-Inc.
6 Reporting.
US Airways will furnish, at no cost to GI-Inc, the reports and documents set
forth in Exhibit D hereto.
7 Other Marketing Rights.
7.1 GI-Inc.
GI-Inc 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, GI-Inc will not designate the Sales APR of US Airways as the
area of primary sales responsibility of any other sales agent of GI-Inc,
including GI-Inc itself.
7.2 US Airways.
Subject to the provisions of the Non-Competition Agreement, while US Airways
is the sales agent of GI-Inc under the terms of this Agreement, US Airways
will not act as a sales agent for the reservations or accounting services of
another entity in the CRS Industry in the APR without the prior consent of
GI-Inc, 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;
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(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 GI-Inc, provided, however, (a) if GI-Inc does not
itself provide such products or services, or (b) GI-Inc 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.
GI-Inc will pay US Airways quarterly in arrears, upon receipt and acceptance
by GI-Inc 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 GI-Inc 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 GI-Inc 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 GI-Inc or expenses incurred by GI-Inc 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. GI-Inc may issue, no earlier
than July 1 of each year a conditional notice of termination if GI-Inc 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, GI-Inc
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
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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 GI-Inc) 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 GI-Inc, 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.
12 Service Marks, Patents, Third Party Data.
12.1 Use of Service Marks.
12.1.1 GI-Inc Marks.
US Airways will use and display the GI-Inc trade
and service marks in the form specified by GI-Inc. US Airways will
market the Galileo Services and CTMS Services under product names
established by GI-Inc and must identify all such Galileo Services and
CTMS Services as the products or services of GI-Inc. US Airways may
include its name and identifying marks in association with the name
"GI-Inc". GI-Inc reserves the right to disapprove any use of the
trade and service marks and other proprietary rights of GI-Inc if
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GI-Inc determines in its reasonable discretion that such use is
contrary to the objectives or policies of GI-Inc.
12.1.2 US Airways Marks.
GI-Inc 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.
GI-Inc will defend at its expense any suit or
proceeding against US Airways based on a claim that any
product or service of GI-Inc ("GI-Inc Product") constitutes an
infringement of the patent, trademark, or copyright laws of
the United States, provided that GI-Inc 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, GI-Inc will pay
damages and costs awarded against US Airways, but GI-Inc will
not be responsible for any compromise or settlement made
without its prior written consent. If any GI-Inc Product is
held to constitute infringement of such patent, trademark, or
copyright and its use is enjoined, GI-Inc will, at its
election and expense, either obtain for US Airways the right
to continue using such GI-Inc Product, modify such GI-Inc
Product so that it is not infringing, or remove such GI-Inc
Product.
12.2.2 Limitation.
GI-Inc will not be liable to US Airways with
respect to any claim of infringement which is based upon (a)
combination or utilization of a GI-Inc Product with products
or services not supplied by GI-Inc; (b) the unauthorized
modification by US Airways or a person other than GI-Inc or
its designated representatives of any GI-Inc Product or (c)
the use of any GI-Inc Product not in accordance with GI-Inc's
specifications or recommendations.
12.3 Third Party Data.
GI-Inc makes no representation or warranty regarding the
accuracy or reliability of any schedule, fare, quote, or other
information provided to GI-Inc by airlines or by hotels, car rental
companies or other vendors of travel related services. GI-Inc will not
be responsible for, and US Airways hereby releases and waives any
claims against GI-Inc conceding, the accuracy or reliability of any
such information provided by such third parties.
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13 Taxes.
13.1 GI-Inc Responsibilities.
GI-Inc 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
GI-Inc or US Airways as a result of services provided to GI-Inc under
this Agreement. GI-Inc 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 GI-Inc, US Airways will timely notify GI-Inc. If GI-Inc
so requests in writing, US Airways will, at GI-Inc's expense, take
such action as GI-Inc 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 GI-Inc, US Airways will, at GI-Inc's
expense, take such action as GI-Inc may reasonably direct, including
allowing GI-Inc 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 GI-Inc
promptly that portion of the tax paid by GI-Inc, 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.
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.
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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 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
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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 GI-Inc. GI-Inc 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 GI-Inc, otherwise GI-Inc 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 GI-Inc 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.
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
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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 GI-Inc:
Galileo International Incorporated
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.
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 may be modified only in a writing
signed by both parties.
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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, INC. US AIRWAYS, INC.
By:___________________________ By:___________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
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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 GI-Inc.
(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 GI-Inc.
(iii) [*]
(APPENDIX I-1)
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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.
4. GI-Inc Support of Sales Services and Support Services.
(i) Form Agreements. GI-Inc 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 GI-Inc; 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 GI-Inc from time to time (the "Form
Agreements"). With respect to CTMS Services, GI-Inc will
provide the following Form Agreements: (a) a form of product
license as between GI-Inc and the CTMS Customer, and (b) a
form of product license as between GI-Inc 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)
29
[*]
(APPENDIX I-3)
30
Appendix II
Budgets and Compensation
1 General Statement of Method.
With respect to those commitments of customers of GI-Inc to purchase
products and services from GI-Inc that, pursuant to this Agreement, US Airways
is instrumental in securing there shall be, by mutual agreement of US Airways
and GI-Inc, annual revenue plans and annual plans for Financial Assistance
spending. In the course of each year of this Agreement, GI-Inc 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 GI-Inc 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 GI-Inc 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)
31
Budget will be deducted from Total Revenue counted toward the Revenue
Goal for that year. If GI-Inc'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 GI-Inc
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
GI-Inc, 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)
32
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 [*]
(APPENDIX II-3)
33
[*]
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 GI-Inc 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-4)
34
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 GI-Inc to customers of GI-Inc.
"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)
35
"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 GI-Inc.
"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 GI-Inc.
"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
GI-Inc, whether itself, or through an arrangement or arrangements between
GI-Inc 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)
36
"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 GI-Inc, and at GI-Inc'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)
37
"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 GI-Inc.
"Galileo Services" means, collectively, Reservations Services and Accounting
Services, as provided by GI-Inc 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 GI-Inc 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.
"GI-Inc Lead" has the meaning ascribed to that term in Section 4.2 above.
"GI-Inc 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 GI-Inc or are members of the executive
management of GI-Inc.
(ATTACHMENT A-4)
38
"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.
"Material Change" has the meaning ascribed to that term in Section 5 of
Appendix II.
"Multinational Accounts" means those Excluded Subscribers listed under "(A)
Multinational Accounts" on Exhibit B hereto.
"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 GI-Inc, US Airways and USAM Corp. dated as of _____________
___, 1997.
"Non-Vendor Revenue" means all revenue received by GI-Inc 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 GI-Inc.
"Other Agent" has the meaning ascribed to that term in Section 2.4 above.
(ATTACHMENT A-5)
39
"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 GI-Inc 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 GI-Inc'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 GI-Inc with personnel
proficient in all technical aspects of the use by end-users of GI-Inc 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.
"Training Materials" has the meaning ascribed to that term in Section 4.7.3.3
above.
(ATTACHMENT A-6)
40
"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 GI-Inc from Vendors with respect
to booking fees and other service charges or fees as a result of bookings and
other transactions for which GI-Inc 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)
41
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 GI-Inc Executive shall be
the representative of GI-Inc. 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 GI-Inc, modified as necessary with respect to
defined terms in this Agreement.
(ATTACHMENT B-1)
42
Exhibit A
AREAS OF PRIMARY RESPONSIBILITY
[*]
[Two Pages Omitted]
(EXHIBIT A-1)
43
Exhibit B
List of Excluded Subscribers
[*]
[ONE PAGE OMITTED]
(EXHIBIT B-1)
44
Exhibit C
Designated Subscribers
[*]
[ONE PAGE OMITTED]
(EXHIBIT C-1)
45
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 GI-Inc's request,
contains account alignments and assignments.
(EXHIBIT D-1)
46
Exhibit E
Certain Territories
[This Exhibit E is to contain a list of territories for which Galileo has
granted exclusive distribution rights for products to a third party and in
which US Airways may not sell CTMS Services so long as the exclusivity
provision(s) of Galileo's agreement with that third party is in effect.]
(EXHIBIT E-1)
47
Schedule 1
Certain Information Relating to 0000
XXXXXX XXXXXX APR
1997 REVENUE GOAL $[*]
1997 BASE COMPENSATION $[*]
1997 FA BUDGET $[*]
(Schedule 1-1)
