[DRAFT] EXHIBIT 10.5
MSN / Xxxxxxx.xxx Carriage and Cross Promotion Agreement
This MSN / Xxxxxxx.xxx Carriage and Cross Promotion Agreement
("Agreement"), by and between Microsoft Corporation ("Microsoft"), a Washington
corporation, and Expedia, Inc. ("EI"), a Washington corporation, is effective as
of October 1, 1999 (the "Effective Date").
RECITALS
WHEREAS, EI owns and operates an online travel service on the World
Wide Web; the home page for said network is currently located at
xxxx://xxx.xxxxxxx.xxx;
WHEREAS, Microsoft owns and operates, among other things, a network of
Web sites currently known as "MSN," with a home page currently located at
xxxx://xxx.xxx.xxx, which network includes a variety of topic-specific
offerings;
WHEREAS, the parties desire that EI develop a special, customized
co-branded version of Xxxxxxx.xxx for inclusion as part of MSN's "Travel"
channel; and
WHEREAS, the parties further desire to provide various links among
pages located in Microsoft Online Properties, and among pages located in
Xxxxxxx.xxx and the co-branded version of Xxxxxxx.xxx (as defined below) Web
sites, and to engage in certain activities intended to promote the parties'
respective products and services.
NOW, THEREFORE, in consideration of the mutual promises set forth
herein, the parties hereby agree as follows:
1. Definitions
-----------
1.1 "Channel" shall mean a group of content-related secondary Web Pages
within a Web Site, the top level page of which group is accessed directly from a
Home Page.
1.2 "Xxxxxxx.xxx" shall mean the software code, informational
databases, products, and other components that make up a service which is
operated by or for EI and is marketed for use by individual end users and
enables such end users to shop for, reserve, book and pay for certain travel
services via a personal computer (or other interactive device) connected to the
Internet. EI currently offers such services on the Web under the name
"Xxxxxxx.xxx", but such name may change from time to time. For the purposes of
this Agreement "Xxxxxxx.xxx" shall not include versions of Xxxxxxx.xxx that are
co-branded with third parties in connection with EI's Associate Program (or its
successor or replacement) and shall not include EI's licensing program (or its
successor or replacement) under which EI licenses its travel technologies
platform to third parties.
1.3 "Xxxxxxx.xxx/XXX" shall mean the special, customized co-branded
version of Xxxxxxx.xxx to be developed, hosted and maintained by EI in
accordance with this Agreement.
1.4 "Travel Channel" shall mean a Channel designed, programmed (except
as to Section 3.1) and operated by or for EI (except to the extent set forth in
Section 2.1) for inclusion in MSN relating to travel information, travel booking
and related travel information and having placement and prominence equivalent to
other Channels within MSN.
1.5 "Home Page" shall mean the initial Web Page of a Web Site seen by a
user once the user has directed Web Browsing Technology to access the Web Site's
URL.
1.6 "Travel Channel Home Page" shall mean the top level page of the
Travel Channel on MSN in MSN template, and developed and hosted by EI.
1
1.7 "Link" shall mean an embedded icon, object, graphic or text within
a Web Page that consists of a hypertext pointer to the URL address of a Web
Page.
1.8 "MSN" shall mean the aggregation of Web-based properties (as such
properties may change from time to time in Microsoft's sole discretion) which is
currently marketed by Microsoft as "The Microsoft Network" and/or "MSN", and
accessed through the domain xxxx://xxx.xxx.xxx, and includes international
versions of such Web-based properties.
1.9 "MSN User Air Transaction" shall mean a purchase via
Xxxxxxx.xxx/XXX of an airline ticket for one trip (round-trip, or one way if no
round-trip is purchased) by one person.
1.10 "Specifications" shall mean the content and technical
specifications for Xxxxxxx.xxx/XXX attached hereto as Exhibit A and any
modifications thereto that are made in accordance with Section 2.1 below.
1.11 "User Information" shall mean both Aggregate Information and
Personal Information pertaining to an end user. "Aggregate Information" shall
mean information that describes the habits, usage patterns and/or demographics
of users as a group but does not indicate the identity of any particular end
user, and information about an individual end user presented in a form
distinguishable from information relating to other end users but not in a form
that enables the recipient to personally identify any end user. "Personal
Information" shall mean information about an end user permitting such end user
to be specifically identified and may include, but not be limited to (i) end
user name, (ii) end user address, and (iii) the end user's personally
identifying transaction data.
1.12 "Web Page" shall mean content in the World Wide Web portion of the
Internet accessed via a single URL, and excluding content on other Web Pages
accessed via Links in said content.
1.13 "Web Site" shall mean a collection of Web Pages related in some
manner and interconnected via Links.
1.14 "WebTV" shall mean the television-based Internet access services
provided to consumers by WebTV Networks, Inc.
1.15 Successor Versions of Web Sites. Whenever this Agreement refers to
a Web Site or aggregation of Web Pages, including without limitation MSN, the
Travel Channel, Microsoft Online Properties, and Xxxxxxx.xxx, such reference
will also include successor versions thereof that may evolve throughout the term
of this Agreement, regardless of whether or not marketed or promoted under the
same name.
1.16 "Microsoft Online Properties" shall include MSN portal (U.S. and
International), Hotmail, WebTV, Web Courier, Mobile, and other consumer commerce
online products or services Microsoft may develop or acquire during the term of
the Agreement (e.g., other portals and online products or services) where travel
(small business or leisure) would be a key component. For the purpose of this
Agreement, "Microsoft Online Properties" shall not include third-party Web sites
or services that are either branded or co-branded by Microsoft, or is licensed
by Microsoft to incorporate private-labeled version of all or portions of MSN or
other Microsoft Online Properties.
2. Description of Xxxxxxx.xxx/XXX
------------------------------
2.1 Development and Maintenance. EI shall develop, operate, maintain,
and host Xxxxxxx.xxx/XXX in accordance with this Section 2 and the
Specifications attached as Exhibit A (as may be amended by the parties from time
to time during the term of the Agreement). Xxxxxxx.xxx/XXX will be a customized
version of Xxxxxxx.xxx; to the extent reasonably possible, but subject to
specific requirements for Xxxxxxx.xxx/XXX set forth herein, Xxxxxxx.xxx/XXX will
use substantially the same format and templates used by Xxxxxxx.xxx as described
in the Specifications. In particular:
2
(a) EI agrees to provide Microsoft with a development and
implementation plan for Xxxxxxx.xxx/XXX within thirty (30) days after the
Effective Date. Xxxxxxx.xxx/XXX shall enable end user to purchase airline
tickets, reserve hotels and car rental and access other travel-related
information and services.
(b) If MS decides to enhance the Travel Channel by adding
additional content areas, then EI shall have the first right to develop and
provide such content as a part of Xxxxxxx.xxx/XXX. If EI informs MS that EI does
not desire to develop and provide such content, then MS may either develop or
engage a third party to develop the content subject to the terms of this
Agreement, provided, however MS shall be responsible for hosting or managing
such content.
(c) EI agrees to use its best efforts to be in compliance with
the Specifications set forth in Exhibit A by December 1, 1999 ("Start Date").
(d) The parties intend that this Agreement be global in scope
and agree that the UK, Canada and German versions of Xxxxxxx.xxx shall be
customized and co-branded as international versions of Xxxxxxx.xxx/XXX for the
UK, Canada and German versions, respectively, of MSN on the terms set forth in
this Agreement, including the exclusivity provision set forth in Section 3.6.
The parties also agree that to the extent both Xxxxxxx.xxx and MSN develop an
additional international version of their respective sites for a particular
country or region, such international version of Xxxxxxx.xxx (to the extent the
international version of Xxxxxxx.xxx includes comparable technology or services
as offered by other online travel service providers in the particular country or
region) shall be customized and co-branded as the international version of
Xxxxxxx.xxx/XXX for such country or region on the terms set forth in this
Agreement, including the exclusivity provision set forth in Section 3.6.
Provided, however, the Specifications for such international versions of
Xxxxxxx.xxx/XXX may be "localized" as necessary, and Microsoft shall have the
sole discretion of determining not to include a Travel Channel in an MSN
international market. For countries or regions in which EI does not offer or
does not plan to offer in the near reasonable term a version of Xxxxxxx.xxx,
Microsoft may enter into agreements with other online travel sites for the
purposes of creating an MSN Travel Channel for such country or region for such
period only. The parties acknowledge that the terms of Section 3.6 and Section 5
shall not apply in an international country or region in which Xxxxxxx.xxx and
MSN both have not developed an international version of their respective sites
for the particular country or region, or the international version of
Xxxxxxx.xxx is not the MSN Travel Channel in such international version of the
MSN for the reasons permitted in this Section 2.1(d). EI acknowledges that
certain international versions of MSN may be controlled by joint ventures in
which Microsoft participates, and in such instances, Microsoft agrees to use
best efforts to include the applicable international version of Xxxxxxx.xxx as
the Travel Channel in the appropriate international version of MSN operated by
such joint venture.
2.2 Co-Branding. Xxxxxxx.xxx/XXX shall be co-branded by EI and
Microsoft as described in Exhibits A and B hereto, which shall be subject to
periodic changes with the prior approval of both parties. EI agrees to use the
standard MSN co-branded header and footer template that is used by all MSN
network premier partners (as set forth in Exhibits A and B) for Xxxxxxx.xxx/XXX.
2.3 Responsibility for Xxxxxxx.xxx/XXX. As between Microsoft and
EI, except as expressly provided otherwise in this Agreement, or in any related
or support services agreement, EI shall be and remain solely responsible for all
development, operation, maintenance and hosting of Xxxxxxx.xxx/XXX and all
content contained in Xxxxxxx.xxx/XXX, provided however Microsoft shall be
responsible for all reasonable costs relating to the original travel content
developed by EI for Xxxxxxx.xxx/XXX in accordance with Section 3.1.
2.4 User Information
(a) Microsoft and EI may use User Information collected by
Microsoft in connection with the Expedia service prior to the Effective Date of
this Agreement in accordance with the terms of the MSN privacy statement in
effect at the time of collection of such User Information. Microsoft and EI may
use any and all User Information collected by EI from end users of
Xxxxxxx.xxx/XXX during the term of this Agreement, and EI shall provide all
applicable User Information to Microsoft on a monthly basis, provided however
such collection and use shall be in compliance with the applicable
Xxxxxxx.xxx/XXX privacy statement agreed to by the parties (which shall be
approved by TRUSTe or other comparable independent privacy organization and all
applicable laws).
3
Furthermore, EI may not use or store any Xxxxxxx.xxx/XXX Personal Information
except to the same extent it uses and stores Personal Information gathered from
Xxxxxxx.xxx. Microsoft agrees not to use or store any Xxxxxxx.xxx/XXX Personal
Information except to the same extent it uses and stores Personal Information
gathered from XXX.xxx. The parties agree that any promotional emails to end
users of Xxxxxxx.xxx/XXX or Xxxxxxx.xxx shall be sent by EI, provided however,
Microsoft may send up to two (2) promotional emails to end users of
Xxxxxxx.xxx/XXX each year during the term of the Agreement. The parties will
work together on joint promotions, and neither party shall send marketing email
or communications to the registered Xxxxxxx.xxx/XXX end users (unless these same
offers are also sent to all of Xxxxxxx.xxx's registered end users) without first
discussing with the other party.
(b) All uses by EI of Personal Information collected by EI
from end users of Xxxxxxx.xxx during the term of this Agreement shall comply
with the applicable Xxxxxxx.xxx privacy statement (which shall be approved by
TRUSTe or other comparable independent privacy organization and all applicable
laws). Microsoft may use certain User Information collected by EI from
Xxxxxxx.xxx to the extent such use is in compliance with the applicable
Xxxxxxx.xxx privacy statement (e.g., to support Microsoft's ad targeting and
profiling efforts). Except as expressly set forth in this Section 2.4 EI shall
not be obligated to share any customer data with Microsoft.
3. Distribution and Cross Promotion Requirements
---------------------------------------------
3.1 Xxxxxxx.xxx/XXX; Travel Channel Home Page. EI shall develop,
maintain and host the Travel Channel Home Page and the Xxxxxxx.xxx/XXX site in
accordance with the Specifications set forth in Exhibit A. The Travel Channel
Home Page shall include a content module, dedicated and linking to
Xxxxxxx.xxx/XXX as described in the Specifications. Additionally, such content
module will be branded by the applicable Xxxxxxx.xxx brand and will occupy at
least eighty percent (80%) of the programmable screen space on the Travel
Channel Home Page. MS shall provide at most twenty (20%) of the content included
in the programmable space on the Travel Channel Home Page. The above-the-fold
programmable screen space on the Travel Channel Home Page shall be divided at
least eighty percent (80%) to EI content and at most twenty percent (20%) to
Microsoft-supplied content. For the purposes of this Section, "content" means
non-revenue generating material except as expressly agreed to in Section 5 of
this Agreement. Microsoft shall have full discretion in determining what content
to include in its portion of the Travel Channel Home Page, provided however, the
content may not be competitive with any travel related materials or services
offered by EI on Xxxxxxx.xxx/XXX and must be consistent with the restrictions
described in Section 5. EI and Microsoft will cooperate to develop original
travel-related content (not distributed or offered by EI online anywhere else)
for Xxxxxxx.xxx/XXX.
3.2 Links from MSN to Xxxxxxx.xxx/XXX. In addition to the Links
included pursuant to Section 3.1, Microsoft agrees to provide Links to
Xxxxxxx.xxx/XXX, as follows:
(a) The Travel Channel Home Page shall be will be one click
from the MSN default Home Page.
(b) at least two "quick link" text Links above the fold (e.g.,
"air tickets" and "maps") or a comparable driving Links from the XXX.xxx (U.S.
version) default Home Page (and wherever else "quick links" (or their
equivalent) otherwise appear within XXX.xxx (U.S. version)) to the appropriate
Web Page in Xxxxxxx.xxx/XXX or Expediamaps (as applicable). In MSN International
markets (where Travel is applicable as set forth in Section 2.1(d)), Microsoft
will use best efforts to include similar or comparable links to Xxxxxxx.xxx/XXX
and Expediamaps. Both parties agree that Expediamaps will be carried only if
Expediamaps' offerings are comparable in features and functions to commercially
available Web based mapping tools and technologies in the local markets.
Microsoft will provide additional Links to Xxxxxxx.xxx/XXX from MSN or Microsoft
Web Sites other than those specified in clauses (a) and (b) (e.g., HomeAdvisor)
as determined by Microsoft, with the placement, type and position of such Links
being within Microsoft's reasonable discretion. The parties acknowledge that the
format and/or appearance of MSN may change from time to time; however, Microsoft
agrees that the positioning of such quick links shall at all times remain
comparable to other quick links, provided that if quick links are removed from
the default MSN Home Page or other key places, both parties will work in good
faith to provide EI with placement
4
of Links that will provide substantially equivalent traffic to the Travel
Channel Home Page and Xxxxxxx.xxx/XXX, as the case may be.
3.3 MSN Promotions. Microsoft agrees to include Xxxxxxx.xxx/XXX in
general MSN network promotions (such as banner advertising, key initiatives, MSN
network promotion inventory, MSN network info pane, and special editorial
references) and make commercially reasonable efforts to promote Xxxxxxx.xxx/XXX
in offline promotions in a similar manner as it promotes other MSN properties
(e.g., HomeAdvisor). Microsoft agrees that the Xxxxxxx.xxx/XXX online promotions
shall constitute a minimum of four percent (4%) of the total number of
impressions resulting from all MSN network in-house promotions during each of
the first two Years of this Agreement so long as EI is in compliance with the
Specifications set forth in Exhibit A.
3.4 Links from WebTV. Microsoft agrees to cause one or more Links to
Xxxxxxx.xxx/XXX to appear in the appropriate section of WebTV user interface
pages. The location of such link or links will be at Microsoft's sole
discretion.
3.5 Links from Xxxxxxx.xxx or Xxxxxxx.xxx/XXX. EI agrees to provide a
navigation link below the header and above-the-fold on the Xxxxxxx.xxx Home Page
to Microsoft-designated Web Page in MSN. Additionally, EI agrees to include
links or providing access on Xxxxxxx.xxx/XXX to MSN Messenger Service, Search,
Communities/Chat (where appropriate), Hotmail and Yellow Pages to the extent
commercially available and technically viable.
3.6 Exclusivity. The parties agree that Xxxxxxx.xxx/XXX shall be the
exclusive travel transaction service on or promoted by Microsoft Online
Properties, except as expressly agreed to otherwise in Section 2.1(d) and
Section 5 and subject to the terms of certain agreements entered into by
Microsoft, if any, prior to the Effective Date (the terms of such agreements
have been disclosed to EI). Microsoft will use commercially reasonable efforts
to include Xxxxxxx.xxx/XXX in co-branded or private-labeled sites where travel
content and transaction are relevant. In the event a material co-branded or
private-labeled partner elects to use a different travel partner, MS will use
reasonable efforts to notify EI.
3.7 Other Microsoft Internet Technologies. EI agrees it shall
implement Microsoft Passport wallet technology and Microsoft Passport
authentication technology on Xxxxxxx.xxx/XXX and Xxxxxxx.xxx as soon as
commercially available and technically viable (timing to be discussed by the
parties) so that existing registered Passport users may use the services
available on Xxxxxxx.xxx/XXX without having to reenter their username and
password or other relevant personal information; the usage terms and conditions
shall be agreed upon by the parties, provided however, that EI shall be entitled
to "most-favored nations" pricing on the licensing of such Passport
technologies. Upon notice from Microsoft that other technologies are available
for distribution, EI agrees, as soon as commercially available and technically
viable, to make best efforts (when technology is applicable) to include or
implement or adopt on Xxxxxxx.xxx/XXX and/or Xxxxxxx.xxx other Microsoft
Internet services (e.g., ad profiling) or platform (e.g., MSN Mobile) pursuant
to such usage terms and conditions as the parties may agree, provided however,
that EI shall be entitled to "most-favored nations" pricing on the licensing of
such technologies.
3.8 MSNBC. The parties agree that MSNBC shall be the sole third-party
provider of travel news headline that is integrated into Xxxxxxx.xxx/XXX.
3.9 Material Changes. In the event that there are business changes by
EI or MSN that materially impact this Agreement, both parties agree to
re-evaluate and work together in good faith to reach mutually agreeable terms.
4. Fees and Payments
-----------------
4.1 Annual Fees. EI shall pay to Microsoft an annual fee of two
million dollars ($2,000,000.00) for the first year after the Start Date ("Year
1") and two million two hundred thousand dollars ($2,200,000.00) for the second
year after the Start Date ("Year 2"). Year 1 fees and Year 2 fees shall be paid
as follows:
5
Amount Date
------ ----
$500,000.00 December 1, 1999
$500,000.00 March 1, 2000
$500,000.00 June 1, 2000
$500,000.00 September 1, 2000
$550,000.00 December 1, 2000
$550,000.00 March 1, 2001
$550,000.00 June 1, 2001
$550,000.00 September 1, 2001
The annual fees for Years after Year 2 shall be agreed upon by the parties.
4.2 Incentive Fees. In addition to the Annual Fees set forth in
Section 4.1, EI shall pay to Microsoft three dollars and fifty cents ($3.50) per
MSN User Air Transaction completed on the co-branded site above the applicable
forecast for such year. The Year 1 forecast shall be equal to two hundred
seventy thousand three hundred and twenty (270,320) air ticket sales on MSN
Expedia; the Year 2 forecast shall be equal to twelve times the average of June
00, July 00, and August 00 air ticket sales on Xxxxxxx.xxx/XXX. EI shall pay any
incentive fees at the end of each Year and shall provide with such payment a
report in detail sufficient to determine how the incentive fees for such Year
were calculated. Forecasts for Years after Year 2 shall be agreed upon by the
parties.
5. Ad Sales for Xxxxxxx.xxx/XXX and Xxxxxxx.xxx
--------------------------------------------
5.1 Allocation of Banner Inventory for Xxxxxxx.xxx/XXX and
Xxxxxxx.xxx.
(a) The MSN advertising sales team may sell up to fifty-two
million (52,000,000) advertising banners in Year 1 and fifty-seven million two
hundred thousand (57,200,000) advertising banners in Year 2 from the total
banner inventory for Xxxxxxx.xxx/XXX and Xxxxxxx.xxx ("MSN Ad Sales Allocation")
subject to the restrictions set forth in Section 5.2. For the purposes of this
Section 5, "banner inventory" means (i) non-geo-targeted advertising that runs
at the top of the screen in the 468 x 60 pixels throughout the Xxxxxxx.xxx/XXX
and the Xxxxxxx.xxx sites, and (ii) a 120x60 pixels ad box (or similar) on the
Travel Channel Home Page (above the fold 600x800 pixels) and the top level pages
of each section (below the fold 600x800 pixels) on Xxxxxxx.xxx/XXX. "Banner
inventory" does not include geo-targeted advertising or sponsorships.
(b) EI will allocate one-third (1/3) of the ad banners (468x60
pixels as described in 5.1(a)(i) above) available on Xxxxxxx.xxx and
Xxxxxxx.xxx/XXX to MSN ("MSN Ad Sales Cap") in each of Year 1 and Year 2. EI
will own the remaining banner inventory, geo-targeted inventory, sponsorships
and any other revenue generating ad space for Xxxxxxx.xxx/XXX and Xxxxxxx.xxx
("EI Ad Sales Allocation"). The MSN advertising sales team may sell more than
MSN Ad Sales Cap with the prior approval of EI. In addition, The MSN advertising
sales team may sell geo-targeted banners, sponsorships, and other ad placements
on Xxxxxxx.xxx or Xxxxxxx.xxx/XXX only with EI's approval. Both parties will
work together to assign the banner inventory allocations fairly.
(c) MS shall not be entitled to share in any revenue derived
from EI's sale of the EI Ad Sales Allocation. EI shall not be entitled to share
in any revenue derived from Microsoft's sale of the MSN Ad Sales Allocation,
provided however, that Microsoft shall remit to EI eighty percent (80%) of the
total revenue received by Microsoft for sales of banner inventory in excess of
the MSN Ad Sales Allocation and up to the MSN Ad Sales Cap, and other ad
placements that the parties agree on (geo-targeted banners, sponsorships etc.)
during Year 1 and Year 2, respectively. MS shall make any payments that may be
due to EI within thirty (30) days after the end of Year 1 or Year 2 as
applicable, or on any other payment schedule that may be agreed upon by the
parties.
(d) The calculation of the MSN Ad Sales Allocation and EI Ad
Sales Allocation for both Xxxxxxx.xxx/XXX and Xxxxxxx.xxx shall be done on a
monthly basis based upon monthly banner inventory
6
forecasts. The MSN Ad Sales Allocation and the EI Ad Sales Allocation for Years
after Year 2 shall be agreed upon by the parties.
5.2 Restriction on Ad Sales for Xxxxxxx.xxx/XXX and Xxxxxxx.xxx.
(a) EI agrees that it will not sell or otherwise make available
any banner inventory or otherwise promote on Xxxxxxx.xxx/XXX up to five (5)
competitors of MSN as agreed to by the parties. EI further agrees that it will
not sell or otherwise make available any banner inventory or otherwise promote
on Xxxxxxx.xxx/XXX up to five (5) competitors of each of the MSN vertical sites
(e.g., CarPoint, HomeAdvisor, Money Central) as agreed to by the parties. EI
will promote MSN on Xxxxxxx.xxx in a similar matter as it promotes other major
partners (e.g. other portals).
(b) Microsoft agrees that it may sell banner inventory included in
the MSN Ad Sales Allocation only to non-travel accounts as agreed to by the
parties, provided however, that Microsoft may sell such banner inventory to
travel accounts only if (i) the banners on Xxxxxxx.xxx/XXX and Xxxxxxx.xxx do
not link or promote the travel booking engine of any travel related company
(subject to exceptions in (ii)); or (ii) the banners on Xxxxxxx.xxx/XXX may link
to the travel engine of any travel related company only if (A) such promotion or
sponsorship is also included in Xxxxxxx.xxx/XXX (e.g., Microsoft may promote on
Xxxxxxx.xxx/XXX ABC Airlines' flight special so long as ABC Airlines' special is
also included in Xxxxxxx.xxx/XXX'x travel booking service) and (B) the sale is a
part of a larger MSN advertising agreement in which the Xxxxxxx.xxx/XXX banner
inventory does not constitute more than twenty percent (20%) of the total number
of advertising banners sold by MSN under such MSN advertising agreement.
Controversial promotions and sponsorships will be discussed and resolved by the
parties.
(c) Microsoft agrees that it will not sell or otherwise make
available any banner inventory or promote on Xxxxxxx.xxx/XXX or Xxxxxxx.xxx up
to five (5) competitors of EI as agreed to by the parties.
5.3 Restriction on Ad Sales for MSN. Microsoft shall be solely
responsible for advertising sales on MSN, and EI shall not be entitled to share
any revenue derived from such sales. Microsoft agrees, however, that it shall
not sell or otherwise make available any advertisements, sponsorships or
promotions on MSN or the MSN vertical sites (e.g., CarPoint, HomeAdvisor, Money
Central) to any of the five (5) competitors of EI as agreed to by the parties.
Nothing in this Section 5.3 shall be interpreted as limiting Microsoft's ability
to sell advertising or promotions to any travel service other than the five (5)
EI competitors agreed to by the parties.
5.4 Ad Sales Services. EI agrees that if it desires to engage a third
party for general ad sales services, it shall first negotiate with Microsoft
exclusively for a period of one (1) month with respect to engaging the MSN
advertising sales team to provide such services.
6. Proprietary Rights
------------------
The parties agree that except as expressly licensed to EI in this
Agreement or a separate license agreement, Microsoft shall retain all right,
title, and interest in all data, content, technologies and other property
furnished by Microsoft to EI hereunder. The parties further agree that except as
expressly licensed to Microsoft in this Agreement or a separate license
agreement, EI shall retain all right, title and interest in and to
Xxxxxxx.xxx/XXX (except for the MSN brand) all data, content, technologies and
other property furnished by EI to Microsoft hereunder.
7. Confidentiality
---------------
7.1 The parties acknowledge and agree that all of the terms of this
Agreement (including but not limited to its existence) are confidential. Each
party may disclose the terms and conditions of this Agreement to its employees,
affiliates and its immediate legal and financial consultants on a need to know
basis as required in the ordinary course of that party's business, provided that
such employees, affiliates and/or legal and/or financial consultants agree in
advance of disclosure to be bound by this Section 7, and may disclose
Confidential Information
7
as required by government or judicial order, provided each party gives the other
party prompt notice of such order and complies with any protective order (or
equivalent) imposed on such disclosure.
7.2 Each party acknowledges that monetary damages may not be a
sufficient remedy for unauthorized disclosure or use of Confidential Information
and that each party may seek, without waiving any other rights or remedies, such
injunctive or equitable relief as may be deemed proper by a court of competent
jurisdiction.
8. Branding Guidelines
-------------------
8.1 By Microsoft. To the extent that this Agreement requires EI to
use any logo, trademark, tradename or service xxxx owned and/or provided by
Microsoft (collectively "Microsoft Marks"), Microsoft shall provide EI with such
elements and renderings for the agreed upon use of such Microsoft Xxxx in a form
necessary to permit EI's use as contemplated by this Agreement. Microsoft shall
also provide the applicable usage guidelines for the use of Microsoft Marks, and
EI agrees to comply with such guidelines.
8.2 By EI. To the extent that this Agreement requires Microsoft to
use any logo, trademark, tradename or service xxxx owned and/or provided by EI
(collectively "XX Xxxxx"), EI shall provide Microsoft with such elements and
renderings for the agreed upon use of such XX Xxxxx in a form necessary to
permit Microsoft's use as contemplated by this Agreement. EI shall also provide
the applicable usage guidelines for the use of XX Xxxxx, and Microsoft agrees to
comply with such guidelines.
9. Term; Termination
-----------------
9.1 Term. Subject to the other provisions hereof, this Agreement shall
commence on the Effective Date and continue for a period of five (5) years
following the Start Date (the "Term").
9.2 Termination for Cause. In addition to any other rights and/or
remedies that either party may have under the circumstances, all of which are
expressly reserved, either party may terminate this Agreement at any time,
effective immediately upon written notice, if the other party is in material
breach of any warranty, representation, term, condition or covenant of this
Agreement, and fails to cure that breach within thirty (30) days after written
notice thereof.
9.3 Effect of Termination. In the event of termination or expiration
of this Agreement for any reason each and every clause which by its nature is
intended to survive the termination of this Agreement including, without
limitation, Sections 6, 7, 9.3, 10, 11, 13 and 14 shall survive termination.
10. Warranties and Indemnification.
------------------------------
10.1 EI Warranties. EI warrants and represents that: (i) it has
sufficient authority to enter into this Agreement; (ii) all materials delivered
by EI to Microsoft and/or included in Xxxxxxx.xxx/XXX pursuant to this Agreement
(other than those provided by Microsoft) are and will be owned and controlled by
EI and do not and will not infringe the copyrights, trademarks, service marks or
any other personal or proprietary right of any third party; (iii)
Xxxxxxx.xxx/XXX and all actions thereon are and will be in compliance with all
applicable laws.
10.2 Microsoft Warranties. Microsoft warrants and represents that: (i)
it has sufficient authority to enter into this Agreement, (ii) all materials
delivered by Microsoft to EI pursuant to this Agreement (excluding any
trademarks and logos) do not and will not infringe the copyrights, trademarks,
service marks or any other personal or proprietary right of any third party.
8
10.3 Indemnification. Each party (the "Indemnifying Party") will hold
harmless and indemnify the other party (the "Indemnified Party") from and
against any loss, claim, liability, damage, action or cause of action
(including, without limitation, reasonable attorneys' fees) brought against the
Indemnified Party by a third party and arising from or related to any alleged
act or omission which, if the allegation were true, would be a breach by the
Indemnifying Party of this Agreement, provided that the Indemnified Party
cooperates as set forth in Section 10.4. In addition, EI will hold harmless and
indemnify Microsoft from and against any loss, claim, liability, damage, action
or cause of action (including, without limitation, reasonable attorneys' fees)
brought against Microsoft by a third party and arising from or related to
Xxxxxxx.xxx/XXX (unless such claim would be covered by the immediately preceding
sentence), provided that Microsoft cooperates as set forth in Section 10.4.
10.4 Indemnification Process. If any action shall be brought against
either party (the "Indemnified Party") in respect to which indemnity may be
sought from the other party (the "Indemnifying Party") pursuant to the
provisions of Section 10.3, the Indemnified Party shall promptly notify the
Indemnifying Party in writing, specifying the nature of the action and the total
monetary amount sought or other such relief as is sought therein. The
Indemnified Party shall cooperate with the Indemnifying Party at the
Indemnifying Party's expense in all reasonable respects in connection with the
defense of any such action. The Indemnifying Party may upon written notice to
Indemnified Party undertake to control and conduct all proceedings or
negotiations in connection therewith, assume and control the defense thereof,
and if it so undertakes, it shall also undertake all other required steps or
proceedings to settle or defend any such action, including the employment of
counsel which shall be reasonably satisfactory to Indemnified Party, and payment
of all reasonably incurred expenses. Indemnified Party shall have the right to
employ separate counsel and participate in the defense, at Indemnified Party's
sole cost and expense. The Indemnifying Party shall reimburse Indemnified Party
upon demand for any payments made or loss suffered by it at any time after the
date of tender, based upon the judgment of any court of competent jurisdiction
or pursuant to a bona fide compromise or settlement of claims, demands, or
actions, in respect to any damages to which the foregoing relates.
10.5 PRODUCTS OR SERVICES DELIVERED UNDER THE TERMS OF THIS AGREEMENT
SHALL BE SUBJECT TO THE TERMS OF THE LIMITED WARRANTY STATEMENT, IF ANY,
SPECIFIED BY THE DELIVERING PARTY FOR THE SPECIFIC PRODUCT OR SERVICE. CERTAIN
SOFTWARE PRODUCTS MAY BE PROVIDED TO THE OTHER PARTY "AS IS" WITHOUT WARRANTY OR
CONDITION OF ANY KIND, IF SO DESIGNATED BY THE LICENSOR. FOR SUCH PRODUCTS, THE
ENTIRE RISK AS TO THE RESULTS AND PERFORMANCE OF SUCH SOFTWARE IS ASSUMED BY THE
RECEIVING PARTY AND ITS CUSTOMERS AND SUBLICENSEES, IF ANY. THE WARRANTIES SET
FORTH IN SECTIONS 10.1, 10.2, AND THIS SECTION 10.5 ARE THE ONLY WARRANTIES MADE
BY THE PARTIES. EACH PARTY DISCLAIMS ANY AND ALL OTHER WARRANTIES OR
REPRESENTATION EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED
WARRANTIES OF MERCHANTABILITY, TITLE, NON-INFRINGEMENT AND FITNESS FOR A
PARTICULAR PURPOSE. NEITHER PARTY WARRANTS THAT ACCESS TO OR USE OF THE SITES OR
CHANNELS WILL BE UNINTERRUPTED OR ERROR-FREE, OR THAT ANY SOFTWARE OR SERVICES
WILL MEET ANY PARTICULAR CRITERIA OF PERFORMANCE OR QUALITY.
11. Limitation Of Liabilities NEITHER PARTY SHALL BE LIABLE TO THE OTHER
-------------------------
FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES,
ARISING OUT OF OR RELATED TO THIS AGREEMENT INCLUDING, WITHOUT LIMITATION,
DAMAGES FOR LOSS OF BUSINESS PROFITS, BUSINESS INTERRUPTION, LOSS OF BUSINESS
INFORMATION, AND THE LIKE, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. THIS SECTION SHALL NOT APPLY TO EITHER PARTY'S (A)
ABILITY TO OBTAIN INJUNCTIVE OR OTHER EQUITABLE RELIEF; (B) CONFIDENTIALITY
OBLIGATIONS UNDER SECTION 7; AND (C) INDEMNIFICATION OBLIGATIONS AS TO THIRD
PARTY DAMAGES ASSESSED AGAINST THE INDEMNIFIED PARTY IN CONNECTION WITH
INDEMNIFIED CLAIMS UNDER SECTION 10.
12. Press Releases
--------------
9
Neither Microsoft nor EI will issue any press release or make any
public announcement(s) relating in any way whatsoever to this Agreement or the
relationship established by this Agreement without the express prior written
consent of the other party, which consent shall not be unreasonably withheld.
However, the parties acknowledge that this Agreement, or portions thereof, may
be required under applicable law to be disclosed, as part of or an exhibit to a
party's required public disclosure documents.
13. Taxes
-----
13.1 Liability for Taxes. The amounts to be paid by Expedia to
Microsoft herein do not include any foreign, U.S. federal, state, local,
municipal or other governmental taxes, duties, levies, fees, excises or tariffs,
arising as a result of or in connection with the transactions contemplated under
this Agreement including, without limitation, any state or local sales or use
taxes or any value added tax or business transfer tax now or hereafter imposed
on or with respect to the provision of goods and services to Expedia by
Microsoft under this Agreement, regardless of whether the same are separately
stated by Microsoft. Except as provided in section 13.4 below, all such taxes
(and any penalties, interest, or other additions to any such taxes), with the
exception of taxes imposed on Microsoft's net income or with respect to
Microsoft's property ownership, shall be the financial responsibility of
Expedia. Expedia agrees to indemnify, defend and hold Microsoft harmless from
any such taxes or claims, causes of action, costs (including, without
limitation, reasonable attorneys' fees) and any other liabilities of any nature
whatsoever related to such taxes.
13.2 Collected Taxes. Expedia will pay all applicable value added,
sales and use taxes and other taxes levied on it by a duly constituted and
authorized taxing authority on the software, services, hardware, equipment or
other product provided under this Agreement or any transaction related thereto
in each country in which the services and/or property are being provided or in
which the transactions contemplated hereunder are otherwise subject to tax,
regardless of the method of delivery. Any taxes that are owed by Expedia, (i) as
a result of entering into this Agreement and the payment of the fees hereunder,
(ii) are required or permitted to be collected from Expedia by Microsoft under
applicable law, and (iii) are based upon the amounts payable under this
Agreement (such taxes described in (i), (ii), and (iii) above the "Collected
Taxes"), shall be remitted by Expedia to Microsoft, whereupon, upon request,
Microsoft shall provide to Expedia tax receipts or other evidence indicating
that such Collected Taxes have been collected by Microsoft and remitted to the
appropriate taxing authority. Expedia may provide to Microsoft an exemption
certificate acceptable to Microsoft and to the relevant taxing authority
(including without limitation a resale certificate) in which case, after the
date upon which such certificate is received in proper form, Microsoft shall not
collect the taxes covered by such certificate. Microsoft agrees to take such
steps at Expedia's request and expense to minimize Collected Taxes or other
taxes paid by Expedia in accordance with all relevant laws.
13.3 Tax Withholding. If, after a determination by foreign tax
authorities, any taxes are required to be withheld on payments made by Expedia
to Microsoft, Expedia may deduct such taxes from the amount owed Microsoft and
pay them to the appropriate taxing authority; provided however, that Expedia
shall promptly secure and deliver to Microsoft an official receipt for any such
taxes withheld or other documents necessary to enable Microsoft to claim a U.S.
Foreign Tax Credit. Expedia will make certain that any taxes withheld are
minimized to the extent possible under applicable law.
13.4 Taxes Resulting from Microsoft Ad Sales. Notwithstanding section
13.1 and 13.2 hereof, all taxes (and any penalties, interest, or other additions
to any such taxes), arising as a result of or in connection with the sale by
Microsoft for its own account of its MSN Ad Sales Allocation as set forth in
Section 5.1 of this Agreement, shall be the financial responsibility of
Microsoft. Microsoft agrees to indemnify, defend and hold Expedia harmless from
any such taxes or claims, causes of action, costs (including, without
limitation, reasonable attorneys' fees) and any other liabilities of any nature
whatsoever related to such taxes.
10
13.5 Tax Provision Governs. This tax section shall govern the treatment
of all taxes arising as a result of or in connection with this Agreement
notwithstanding any other section of this Agreement.
14. General Provisions
------------------
14.1 Independent Contractors. The parties are independent contractors
with respect to each other, and nothing in this Agreement shall be construed as
creating an employer-employee relationship, a partnership, agency relationship
or a joint venture between the parties.
14.2 Governing Law. This Agreement shall be governed by the laws of the
State of Washington as though entered into by Washington residents and to be
performed entirely within the State of Washington. The parties agree to
exclusive jurisdiction and venue in the state and federal courts sitting in King
County, Washington. In any action or suit to enforce any right or remedy under
this Agreement or to interpret any provision of this Agreement, the prevailing
party shall be entitled to recover its costs, including reasonable attorneys'
fees.
14.3 Assignment. Neither party may assign this Agreement or any rights
and/or obligations hereunder without the other party's prior written approval.
14.4 Construction. In the event that any provision of this Agreement
conflicts with governing law or if any provision is held to be null, void or
otherwise ineffective or invalid by a court of competent jurisdiction, (i) such
provision shall be deemed to be restated to reflect as nearly as possible the
original intentions of the parties in accordance with applicable law, and (ii)
the remaining terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect. This Agreement has been negotiated by the
parties and their respective counsel and will be interpreted fairly in
accordance with its terms and without any strict construction in favor of or
against either party. The section headings used in this Agreement are intended
for convenience only and shall not be deemed to affect in any manner the meaning
or intent of this Agreement or any provision hereof.
14.5 Notices. All notices and requests in connection with this
Agreement shall be given in writing and shall be deemed given as of the day they
are received either by messenger, delivery service, or in the United States of
America mail, postage prepaid, certified or registered, return receipt
requested, and addressed as follows:
To Expedia, Inc.: To Microsoft:
Expedia, Inc. Microsoft Corporation
0000 000xx Xxx. XX Xxx Xxxxxxxxx Xxx
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000-0000
Attention: President Attention: MSN Business Development
Phone: 000.000.0000 Phone: 000.000.0000
Fax: 000.000.0000 Fax: 000.000.0000
Copy to: Copy to:
General Counsel (same address and fax) Law & Corporate Affairs, US Legal
Fax: 000.000.0000
or to such other address as the applicable party may designate pursuant to this
notice provision.
14.6 Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior and contemporaneous agreements or communications. This Agreement shall not
be modified except by a written agreement dated subsequent to the date of this
Agreement and signed on behalf of EI and Microsoft by their respective duly
authorized representatives. No waiver of any breach of any provision of this
Agreement shall constitute a waiver of any prior, concurrent or subsequent
breach of the same or any other provisions hereof, and no waiver shall be
effective unless made in writing and signed by an authorized representative of
the waiving party.
11
The parties have caused this Agreement to be executed by their duly
authorized representatives as of the Effective Date.
MICROSOFT CORPORATION EXPEDIA, INC.
By By
---------------------------------- ----------------------------------
Name (Print) Xxxxxxx X. Xxxxxx Name (Print) Xxxxxxx X. Xxxxxx
------------------------- -------------------------
Title Chief Financial Officer Title President and Chief
-------------------------------- --------------------------------
Executive Officer
--------------------------------
12
Exhibit A
---------
Specifications
--------------
I. EI will develop, maintain and host the Xxxxxxx.xxx/XXX and the version of
ExpediaMaps to which the MSN "Maps quick link" links ("ExpediaMaps"), in
accordance with the requirements specifications below: (For the purpose of this
Specification, Xxxxxxx.xxx/XXX and ExpediaMaps may be collectively referred to
as "EI/MSN Sites").
. The Network Template includes the following components:
. The Network headers and footers. It will be included on each
-------------------------------
non-transaction page within Xxxxxxx.xxx/XXX and ExpediaMaps in the
manner provided by Microsoft. A lighter MSN branding header will be
included above the fold on all transaction pages within the
Xxxxxxx.xxx/XXX site.
. The Network Promotion Inventory. It will be included on the
-------------------------------
Travel Channel Home Page and on the top page of each section within
Xxxxxxx.xxx/XXX and on the top two levels of the ExpediaMaps pages
in the manner provided by Microsoft. The Network Promotion
Inventory is currently defined as the right hand, white column
space on an 800x600 screen resolution of pixels.
. Any layout or technical changes to the Network Template must be
preceded by a detailed specification and sample code, and an
implementation period of approximately a month following delivery of
said specs and sample code. EI will use best efforts to implementation
the behavior and look-and-feel of the Network Template. If EI may not
replicate the exact code and functionality of the Network Template due
to the technical architecture of the EI/MSN Sites, EI will implement
comparable and mutually agreed MSN co-branding and promotion inventory
on the EI/MSN Sites.
. Microsoft will not promote in The Network Promotion Inventory the five
(5) competitors of EI to be agreed upon by the parties. Both parties
will work together to minimize conflicts with EI's premier sponsors.
EI will notify MSN if any serious ad conflicts occur, and MSN will
make best efforts to eliminate such conflict within 10 business days.
. EI will supply content to scheduled network wide promotions and
campaigns.
. Microsoft will make best efforts to promote Xxxxxxx.xxx/XXX, EI's ETN
and Premier partners (e.g. Disney) via the Network Promotion
Inventory.
EI will make available all materials and content in the Xxxxxxx.xxx web site to
be included in the Xxxxxxx.xxx/XXX Site.
. Microsoft requires that EI maintain certain minimum standards for
connectivity and availability which shall be not more restrictive than
the standards required by MSN with respect to any other MSN premier
partner; these requirements may be updated by Microsoft with
reasonable input from EI from time to time by written notice from
Microsoft to EI, and EI will implement any required modifications to
the service on a timely basis.
. All pages of the EI/MSN Sites must have the same performance standard
as the regular Xxxxxxx.xxx and XxxxxxxXxxx.xxx including but not
limited to up time, availability, rendering speed, and page loading.
Both EI and Microsoft will attempt a standard of performance to match
any leading web site.
. The parties will provide each other with mutually agreed maintenance
reports, system alerts, and other communications related to site
performance. In addition, each party will provide the other with any
reasonable reporting that may be requested by the other party, and the
parties shall work together to develop reasonable reporting
requirements. The parties shall also share their respective
international product development plans on an annual basis.
. EI agrees that the EI/MSN Sites, as served by EI servers, will be
easily viewable on all popular browsers, including but not limited to
Internet Explorer, Netscape Navigator and WebTV. Also, users of
Windows, Macintosh, Linux and Unix systems should all be able to view
pages served by EI. In no event will EI make any technology decision
that renders the content viewing experience of Internet Explorer users
on the EI/MSN Sites to be inferior to the viewing experience of users
elsewhere on the Microsoft Online Properties.
1
. The parties shall work together to implement the procedures as
reasonably necessary to ensure that Microsoft is notified of all site
failure(s) or significant decline(s) in performance.
. EI agrees to support the following activities as soon as the MSN
profiling technology is commercially available and technically viable:
EI will store user information in MSN User Profile Store. EI will
implement EI's web pages to provide real time events logging to the
MSN User Profile Store. EI will also provide click stream information
to MSN IDSS nightly. EI will tag content pages using MSN's taxonomy.
MSN agrees to provide EI reasonable consulting support to assist in
the implementation process. MSN agrees to deliver targeted advertising
in a similar manner as it treats other premium partners on MSN who
participate in the profiling initiative.
II. EI will make updates, modifications or changes to the EI/MSN Sites, in
accordance with the requirements specifications below:
. Changes to Network Template (i.e. header or footer text) or graphic
content changes shall be implemented by EI within 10 business days
upon receipt of final MS elements (i.e. copy, graphics, code).
. Changes to daily tree content shall be made within 10 business days
upon receipt of final elements.
. Changes to World Guide upon receipt of final MS elements - content
changes will be implemented within 10 days, code changes will be
implemented within 30 days.
. Changes to Promotional modules upon receipt of final MS elements -
content changes will be implemented within 10 days, code changes will
be implemented within 30 days.
Changes involving substantial interpreted code modification (e.g. javascript,
VBScript, whether client-side or ASP) can add unpredictability to customization
and modification time. Such requests will require at least an additional week or
more above the heretofore mentioned turnaround schedules, time which Expedia
will in good faith try to minimize. As for changes that require Expedia to
recompile transactional-path.dlls or hotfix qscript or HTX files, these will
need to be synchronized with MTT development and testing schedules, whose timing
will dictate implementation dates.
2
Exhibit B
---------
Co-Branding
-----------
Initially, the Travel Channel Home Page shall be branded MSN Travel Channel
"with Xxxxxxx.xxx" (which shall include the EI logo). The Xxxxxxx.xxx/XXX Site
(except for the Travel Channel Home Page) shall be branded MSN Travel Channel
"by Xxxxxxx.xxx" (which shall include the EI logo). The EI branded logo ("with
Xxxxxxx.xxx" and "by Xxxxxxx.xxx") will be 125x22 pixels, located on the right
side of the MSN network header.
A sample co-branded header for MSN premium partners is included below:
[GRAPHIC]
3
