EXHIBIT 10.13
AGREEMENT
This Agreement ("Agreement") is made and entered into as of the later
of the two signature dates below (the "Effective Date") by and between Pegasus
Solutions, Inc., a Delaware corporation ("PEGASUS"), and Orbitz, LLC, a Delaware
limited liability company ("ORBITZ").
1. DEFINITIONS
1.1 "ACCOMMODATION" means a lodging accommodation for a fixed number of
nights on a pre-paid basis, with such other terms and conditions, including
cancellation policy, as the hotel at which such lodging accommodation is to take
place may determine, and which accommodation is presented to the guest in a
Non-Opaque Manner and is subject to a rate other than a Packaged Rate or a
Restricted Rate.
1.2 "AFFILIATE" means, with respect to any entity, any other entity
that directly or indirectly, controls, is controlled by, or is under common
control with such entity. For purposes of this definition, "control" (including
the terms "controlled by" and "under common control with") means the power,
directly or indirectly, to direct or cause the direction of the management and
policies of such entity, whether through the ownership of voting securities, by
contract or otherwise.
1.3 "CHAIN MARKS" means any Participating Chain's trade names,
trademarks, service marks, domain names and other visual representations
thereof, including logos, designs, symbols, word marks, images, colors and color
combinations, trade dress, characters and other publicity rights, or other
indicia of ownership owned or used by such Participating Chain and provided to
ORBITZ hereunder.
1.4 "CHANGE IN CONTROL" means the occurrence of any of the
following events with respect to a party:
(i) an acquisition by any individual, entity or group of
beneficial ownership of 50% or more of either (1) the then outstanding
equity interests of the party (the "Outstanding Interests") or (2) the
combined voting power of the then outstanding voting interests of the
party entitled to vote in the general election of directors (the
"Voting Interests"); or
(ii) a reorganization, merger, consolidation or sale or other
disposition of all or substantially all of the assets of the party (a
"CIC Event"); excluding, however, a CIC Event pursuant to which the
individuals and entities who are the beneficial owners, respectively,
of the Outstanding Interests and the Voting Interests immediately prior
to such CIC Event beneficially own, directly or indirectly, more than
50%, respectively, of the Outstanding Interests and the Voting
Interests of the entity resulting from such CIC Event.
1.5 "COMPETITIVE ENTITIES" means the following entities that provide
online individual leisure travel services: Sabre Inc. (including Easy Sabre
and Travelocity), HRN, Expedia Inc. (including Travelscape), Xxxxxxxxx.xxx
Incorporated, American Express Company, XxxxxxXxx.xxx, Cendant Corporation
(including XxxXxxx.xxx, XxxxxXxxxxxx.xxx, and Galileo
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International), XxxXxxxx.xxx, Inc., XxxxxxXxxx.xxx, Xxxx00.xxx, Inc., and any
successor entity. ORBITZ may add additional entities that offer online
individual leisure travel services in competition with ORBITZ to the list of
Competitive Entities with the consent of PEGASUS, which consent shall not be
unreasonably withheld; provided, however, that in no event will the following
be considered Competitive Entities: (a) web sites branded under any
Participating Chain's trademark, service xxxx or trade name to customers of
such Participating Chain which contain information about the published rates
and room availability at such Participating Chain, and provide such customers
with the ability to review, make reservations or purchase lodging services
offered by such Participating Chain (each a "Participating Chain Site"), and
(b) computerized systems used by employees of any Participating Chain that
contain information about the published rates, features and room availability
at such Participating Chain, and provide such employees with the ability to
make reservations or sell lodging services offered by such Participating
Chain to its customers.
1.6 "CONFIDENTIAL INFORMATION" shall have the meaning given such term
in Section 14.1 of this Agreement.
1.7 "CUSTOMER DATA" means information regarding Users that is
gathered during a Transaction.
1.8 "FIXED RATE" means the rate charged by a hotel to a third party
intermediary for Accommodations when the compensation to such third party
intermediary is based upon the margin between such rate and the rate charged
to the guest; provided that such intermediary is not the hotel's
Participating Chain.
1.9 "LAUNCH DATE" means the date on which the Services are accepted by
ORBITZ in accordance with Section 2.1 of this Agreement. The current target
Launch Date as agreed to by the parties is anticipated to occur on or before May
31, 2002.
1.10 "MARKED-UP RATE" means the rate charged by a third party reseller
for an Accommodation when the rate charged by the hotel is a Fixed Rate.
1.11 "NET PAID BOOKINGS" means the gross revenue received by PEGASUS
for Reservations for which the applicable cancellation deadline has passed
without cancellation, exclusive of taxes and other government charges, and net
of discounts, refunds, credit card processing fees, and rebates. Net Paid
Bookings shall not include any amounts due to a Participating Chain or
Participating Property because of credit card fraud or bad debt.
1.12 "NON-OPAQUE MANNER" means the provision of information to a user
concerning hotel lodging accommodations where the user is able to see the
identity of the hotel prior to booking the accommodation.
1.13 "ORBITZ MARKS" means ORBITZ's trade names, trademarks, service
marks, domain names and other visual representations thereof, including logos,
designs, symbols, word marks, images, colors and color combinations, trade
dress, characters and other publicity rights, or other indicia of ownership
owned or used by ORBITZ.
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1.14 "ORBITZ WEB SITE" means the consumer-oriented Internet travel site
located at the URL XXX.XXXXXX.XXX or any successor Internet site which primarily
targets customers in the United States.
1.15 "PACKAGED RATE" means the rate provided to a User for a lodging
accommodation which requires the purchase of other products or services and for
which the total price of the package on the date first offered for sale is
higher than the highest price commercially available to the consumer of the
lodging accommodation alone on such date. For clarity, the parties do not intend
that such Packaged Rate shall serve as a means by which a Participating Chain is
able to diminish its obligations under the Preferred Distribution Agreement.
1.16 "PARTICIPATING CHAIN" means any hotel company that has signed a
Preferred Distribution Agreement, and any successor-in-interest to any such
company.
1.17 "PARTICIPATING PROPERTY" means any hotel that is a member of a
Participating Chain which provides lodging accommodations to be sold as Travel
Inventory through the Travel Inventory Datafeed.
1.18 "PREFERRED DISTRIBUTION AGREEMENT" means the distribution
agreement entered into between PEGASUS and each of the Participating Chains to
make Travel Inventory available for sale by PEGASUS.
1.19 "PROPERTY MARKS" means any Participating Property's trade
names, trademarks, service marks, domain names and other visual
representations thereof, including logos, designs, symbols, word marks,
images, colors and color combinations, trade dress, characters and other
publicity rights, or other indicia of ownership owned or used by such
Participating Property.
1.20 "REGULAR INVENTORY" means lodging accommodations offered for
sale by Participating Chains and Participating Properties that are not Travel
Inventory.
1.21 "RESERVATION" means a reserved Accommodation booked at a
Marked-Up Rate utilizing the Travel Inventory Datafeed.
1.22 "RESTRICTED RATE" means a rate that is not generally available
for purchase by the general public, including but not limited to corporate
discounted rates, tour operator rates, group rates, meeting and incentive
rates, or rates targeted to a select group of travelers such as a rate
offered to members of a club, affinity program or other membership
organization (e.g., AAA) where there is a good faith effort by the
Participating Chain (or entity acting on behalf of the Participating Chain)
to limit the availability of such rate to the targeted group.
1.23 "SERVICES" means the activities which PEGASUS undertakes to
provide Travel Inventory to ORBITZ as set forth in EXHIBIT A.
1.24 "TRANSMITTED CUSTOMER DATA" means those elements of Customer
Data that are transmitted by ORBITZ to PEGASUS in connection with this
Agreement.
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1.25 "TRANSACTION" means the electronic booking of a Reservation
that occurs when a User hits the "Buy" button and supplies valid credit card
information, whether accomplished by means of the Internet, email, broadband,
Internet II, wireless and handheld devices, cell phones browser or digital
appliances or other digital interactive means, networks, devices or
transmissions (whether existing now or in the future).
1.26 "TRAVEL INVENTORY" means Accommodations offered for sale by
PEGASUS pursuant to a Preferred Distribution Agreement at a Marked-Up Rate.
1.27 "TRAVEL INVENTORY DATAFEED" means the XML datafeed transmitted
from PEGASUS to ORBITZ containing available Travel Inventory for display on
the ORBITZ Web Site which will allow a User to effectuate a Transaction.
1.28 "USER" means any individual or entity that effectuates
Transactions during the Term.
1.29 "WEB CONFIRMATION PAGE" means a page view displayed immediately
following the completion of a Transaction that confirms such Transaction.
2. PEGASUS OBLIGATIONS
2.1 SERVICES.
(a) PEGASUS shall be responsible for providing the Services
set forth on EXHIBIT A (including all expenses related thereto) in
accordance with the specifications set forth therein.
(b) Upon notification to ORBITZ of the availability thereof
for use, ORBITZ shall promptly test the Travel Inventory Datafeed to
determine compliance with the specifications set forth on EXHIBIT A,
and shall promptly notify PEGASUS in writing of any failure of the
Travel Inventory Datafeed to meet such specifications, which
notification shall describe such failures with reasonable specificity,
and following which notification PEGASUS shall use diligent efforts to
correct any such failure. ORBITZ shall be deemed to have accepted the
Services upon the earlier of (i) its giving written notice to PEGASUS
of such acceptance, (ii) its failure to notify PEGASUS of any failure
of the Travel Inventory Datafeed to meet the specifications in all
material respects within 15 days of PEGASUS' delivery to ORBITZ of the
original or any corrected version of the Travel Inventory Datafeed, or
(iii) the first date of availability of the Travel Inventory on the
ORBITZ Web Site. If acceptance occurs pursuant to subsection (i) or
(ii) of the preceding sentence, ORBITZ shall make the Services
available on the ORBITZ Web Site within 30 days of its acceptance of
the Services.
2.2 CONFIRMATIONS. PEGASUS will transmit to ORBITZ confirmations for
all Transactions, which ORBITZ shall promptly display on a Web Confirmation
Page. The parties shall use commercially reasonable efforts to seamlessly
transfer the details of Transactions between PEGASUS and the ORBITZ Web Site so
that Users may view their Transactions on a real-time basis on the ORBITZ Web
Site.
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2.3 PEGASUS REPORTING. PEGASUS shall provide ORBITZ with monthly
reports that set forth, at a minimum, the number of Transactions, the Net
Paid Bookings and the amount of Transaction Fees due to ORBITZ during the
applicable month. In addition, PEGASUS shall provide ORBITZ with daily online
access to the number of Transactions completed during the day the data is
viewed and the Net Paid Bookings accrued for the applicable month to date as
of the day the data is viewed, such data to be subject to subsequent review
and revision by PEGASUS.
2.4 SERVICE LEVELS. PEGASUS shall provide the Services in
accordance with the service levels for the Travel Inventory Datafeed as set
forth on EXHIBIT B hereto.
2.5 PARTICIPATING CHAINS. During the term of the Agreement,
PEGASUS shall enter into and maintain Preferred Distribution Agreements with
no fewer than three of the following hotel companies: Six Continents
Hotels, Inc., Hyatt Corporation, Marriott International Inc., Hilton
Hotels Corporation, and Starwood Hotels & Resorts Worldwide, Inc. or
successors in interest; provided, that in the event of a merger of any
two or more such companies with one another or the acquisition of one such
company by another such company, the parties shall negotiate in good
faith to determine the appropriate minimum number of Participating Chains
applicable to this Section 2.5. PEGASUS shall actively promote to such
Participating Chains the provision of Accommodations for use as Travel
Inventory.
2.6 COMPETITIVE RATES AND PRODUCTS OBLIGATION. During the Term,
PEGASUS will offer Travel Inventory for sale on the ORBITZ Web Site (i) at a
Marked-Up Rate no higher than the Marked-Up Rate at which substantially
identical Accommodations are concurrently offered for sale by any Competitive
Entity, (ii) with Accommodations (including service enhancements to such
Accommodations, including, without limitation, room upgrades) from each
Participating Chain of the same or more favorable type and in the same or
higher volume as the Accommodations such Participating Chain provides to
Competitive Entities, (iii) with product functionality at least as extensive
and comprehensive as that offered by each Participating Chain in connection
with the sale of Accommodations by any Competitive Entity, provided that both
PEGASUS and the ORBITZ Web Site are capable of accepting such product
functionality ((i), (ii) and (iii) collectively, the "Competitive Rates and
Products Obligation"); provided, further, that the parties shall mutually
agree on new product functionality to be implemented by PEGASUS. PEGASUS
shall develop and operate an automated online system for monitoring
compliance with the Competitive Rates and Products Obligation (the
"Monitoring Application").
(a) PEGASUS shall be deemed to be in compliance with the
Competitive Rates and Products Obligation if, during each and every
calendar month, the Monitoring Application demonstrates that the
PEGASUS Marked-Up Rates were no higher than Marked-Up Rates offered to
Competitive Entities for substantially identical Accommodations with
respect to at least 70% of the Accommodations offered on all such
Competitive Entities.
(b) For purposes of this Section 2.6, "substantially identical
Accommodation" shall mean a room in the same hotel of the same room
type with materially identical stay requirements, restrictions and
amenities including, but not limited to, duration of stay, available
dates, cancellation policies and fees.
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3. ORBITZ'S OBLIGATIONS
3.1 DEVELOPMENT OF THE ORBITZ WEB SITE. During the Term,
ORBITZ shall be responsible for the development, operation, and
maintenance of the ORBITZ Web Site.
3.2 DISPLAY OF TRAVEL INVENTORY.
(a) ORBITZ shall make available on the ORBITZ Web Site all of
the Travel Inventory transmitted to the ORBITZ via the Travel Inventory
Datafeed.
(b) ORBITZ may, in its reasonable discretion, determine the
manner in which the Travel Inventory is displayed on the ORBITZ Web
Site (including, but not limited to, determining filtering and sorting
criteria), provided, however, that, (i) except in response to a
customer request, ORBITZ shall display Travel Inventory in an unbiased
manner and (ii) the order of information regarding Travel Inventory
shall be made on the basis of service criteria that do not reflect
hotel identity and that are consistently applied to all Participating
Chains and Participating Properties.
(c) Notwithstanding ORBITZ's exercise of its reasonable
discretion in determining the manner of display of Travel Inventory as
set forth above, this Agreement shall in no event be interpreted to
supercede or modify any arrangements ORBITZ may have with the
Participating Chains and Participating Properties for Regular
Inventory. The parties acknowledge that the parties' general objective
is to provide users of the ORBITZ Web Site with access to the full
range of available lodging accommodations (including Travel Inventory
and Regular Inventory). If a Participating Chain or a Participating
Property has a reasonable concern about the manner in which the Travel
Inventory is displayed, ORBITZ will in good faith consider such
concerns.
3.3 EXCLUSIVITY. During the Term, ORBITZ agrees not to implement an
agreement with any third party for the sale on the ORBITZ Web Site of Fixed Rate
or Marked-Up Rate lodging accommodations; provided, however, that, with respect
to individual properties that are not affiliated with any Participating Chain,
ORBITZ may implement such agreements at any time with (i) individual hotel
properties directly (and not through any intermediary) and/or (ii) entities
offering rental of time share vacation and/villa rental properties.
Notwithstanding the restriction set forth in the first clause of the preceding
sentence, ORBITZ reserves the right to negotiate and enter into such agreements
during the Term, provided that such agreements are not implemented until after
the expiration of the Term. Notwithstanding the foregoing, ORBITZ may implement
agreements at any time (directly or through any intermediary), with any of the
following entities: [***] or third parties whose primary business purpose is to
provide inventory on behalf of the foregoing entities. If, at the end of any
period of six (6) consecutive calendar months after the Launch Date, the
difference between the total Net Paid Bookings for such period and the total of
the Fixed Rates applicable to such Net Paid Bookings is less than [***] percent
([***]%) of such total Fixed Rates, ORBITZ may terminate this Section 3.3 at any
time during the sixty (60) days following the end of such six month period by
providing written notice to PEGASUS; provided, however that during calendar year
0000, XXXXXX will not exercise the
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foregoing right to terminate if the difference between the total Net Paid
Bookings and the total Fixed Rates applicable to such Net Paid Bookings is
less than [***] percent ([***]%) due solely to competitive market conditions
requiring PEGASUS to meet pricing offered by a PEGASUS competitor or
Competitive Entity.
3.4 MARKETING. During the Term, ORBITZ shall actively market and
promote the Travel Inventory available via the Travel Inventory Datafeed in
order to generate the maximum number of Transactions, subject to the
provisions of Section 3.2 relating to Regular Inventory. ORBITZ agrees that,
during the Term, it will not, with respect to the ORBITZ Web Site, co-brand,
grant a sponsorship to or promote or enter into any substantially similar
agreements for the sale by any third party of Fixed Rate or Marked-Up Rate
Accommodations. In the event ORBITZ enters into any agreements with third
parties for the sale on the ORBITZ Web Site of Fixed Rate or Marked-Up Rate
lodging accommodations pursuant to Section 3.3 of this Agreement, ORBITZ
shall promote the Travel Inventory no less prominently than any other such
accommodations.
3.5 REPORTING AND COOPERATION. ORBITZ will use reasonable commercial
efforts to provide PEGASUS, at PEGASUS' reasonable request, with (i) reports
and information relating to the offering for sale of Travel Inventory on the
ORBITZ Web Site, such as Transactions data and trends (e.g., booking
activity, purchasing volume by time periods), site usage and activity data
(e.g., look-to-book ratios, unique visitors, page views, conversion rates),
and results of advertising performed pursuant to this Agreement (e.g.,
impressions, click-throughs), and (ii) reasonable cooperation to facilitate
tracking and reporting by PEGASUS to Participating Chains (e.g., booking
source identification); provided, that ORBITZ is not required to incur
additional material costs in connection therewith.
4. LICENSE RIGHTS
During the Term, PEGASUS grants to ORBITZ, a limited, non-exclusive,
worldwide, royalty-free right and license to (i) use and display the Travel
Inventory available from the Travel Inventory Datafeed on the ORBITZ Web Site,
and (ii) use any PEGASUS logos and other images and materials ("Pegasus Marks"),
Chain Marks, and Property Marks which PEGASUS provides to ORBITZ hereunder
solely for the purpose of identifying PEGASUS, the Participating Chains, and the
Participating Properties in ORBITZ's promotional materials; provided, however,
that ORBITZ's right to use any Chain Marks or Property Marks shall be subject in
all respects to the terms of the licenses pursuant to which the applicable
Participating Chain or Participating Property granted to PEGASUS the right to
use or sublicense the use of such Chain Marks or Property Marks, as the case may
be. In any event, ORBITZ agrees not to use the Chain Marks and Property Marks in
any manner that could reasonably be expected to have an adverse impact on the
goodwill attached to such marks. In such circumstances, PEGASUS shall have the
right to require ORBITZ to cease or to modify any particular use. ORBITZ
acknowledges that the Pegasus Marks, Chain Marks and Property Marks are owned by
PEGASUS, the Participating Chains and the Participating Properties respectively
and their use by ORBITZ in connection with this Agreement inures to the benefit
of PEGASUS, the Participating Chains and the Participating Properties
respectively. PEGASUS, the Participating
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Chains and the Participating Properties retain all right, title and interest
therein and nothing in this Agreement grants any ownership interest therein
to ORBITZ. Notwithstanding anything in this Agreement to the contrary, to the
extent ORBITZ wishes to use the Chain Marks and the Property Marks on
promotional materials separate from the ORBITZ Web Site, ORBITZ shall provide
such promotional materials to PEGASUS so that it can obtain the review and
approval of the Participating Chains and/or Participating Properties, which
approval shall be a pre-requisite for such use.
5. OWNERSHIP
5.1 PEGASUS OWNERSHIP. PEGASUS shall own all right, title and interest,
including without limitation all copyrights, patents, trademarks, trade secrets
and other intellectual property rights, in and to all versions of the Travel
Inventory Datafeed, exclusive of the ORBITZ Marks, and nothing contained in this
Agreement shall be deemed to transfer any such right, title or interest to
ORBITZ.
5.2 ORBITZ OWNERSHIP. ORBITZ shall own all right, title and interest,
including all copyrights, patents, trademarks, trade secrets and other
intellectual property rights, in and to the ORBITZ Web Site and the ORBITZ
Marks.
5.3 PARTICIPATING ENTITY OWNERSHIP. Each Participating Chain and
Participating Property shall own all right, title and interest, including
without limitation all copyrights, patents, trademarks, trade secrets and other
intellectual property rights, in and to its respective Chain Marks or Property
Marks.
5.4 OWNERSHIP OF USERS AND CUSTOMER DATA.
(a) USERS AND CUSTOMER DATA. The parties acknowledge and agree
that except as set forth in Section 5.4(b), Customer Data shall be
considered proprietary information of ORBITZ. PEGASUS agrees not to use
any Customer Data, except as specifically permitted by this Agreement.
PEGASUS agrees that all ORBITZ terms and conditions, rules, policies
and operating procedures, including, but not limited to, policies
relating to the use of customer personally identifying information will
apply to Customer Data, and PEGASUS agrees not to sell, rent or
otherwise transfer such Customer Data to third parties except as
reasonably necessary to perform its obligations under the terms of this
Agreement. Notwithstanding the foregoing, Participating Chains and all
applicable Participating Properties may use User information which is
collected directly by such Participating Property or Participating
Chain.
(b) TRANSMITTED CUSTOMER DATA. The parties acknowledge and
agree that the Transmitted Customer Data relating to each Transaction
shall be considered proprietary information of ORBITZ and PEGASUS, and
all right, title and interest in such Transmitted Customer Data is
jointly owned by such parties. PEGASUS agrees that during the term of
this Agreement and thereafter, PEGASUS will (i) use such Transmitted
Customer Data only as necessary to perform its obligations under this
Agreement; and (ii) maintain such Transmitted Customer Data in strict
confidence in accordance with the provisions of Section 14 of this
Agreement. In no event may any Transmitted Customer Data be disclosed
to third parties other than the applicable
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Participating Chain or Participating Property by ORBITZ or PEGASUS if
such disclosure would violate either PEGASUS' or ORBITZ's policies
regarding the protection of customer privacy. Notwithstanding anything
to the contrary contained herein, PEGASUS shall have the further right
to grant unrestricted ownership rights in and to Transmitted Customer
Data to the Participating Chain and Participating Property that are
the subjects of the Transaction to which such Transmitted Customer
Data relates.
(c) USE BY PEGASUS. Notwithstanding anything to the contrary
set forth in this Agreement, PEGASUS may use and disclose aggregated,
statistical or trend data derived from Transactions on the ORBITZ Web
Site, provided that the details of any individual Transaction
(including the identity of any User) and the identities of individual
Participating Chains or Participating Hotels are not identifiable or
reasonably ascertainable from such disclosed data; provided, further,
than any such disclosures shall be subject to ORBITZ's prior written
approval, which approval shall not be unreasonably withheld.
6. FEES
6.1 TRANSACTION FEES. No transaction fees shall be due for any
Transactions generated before June 1, 2002. PEGASUS agrees to pay ORBITZ
transaction fees on all Net Paid Bookings with respect to Transactions generated
on or after June 1, 2002, during the Term (the "Transaction Fees") as follows:
(a) If, in a given calendar month, the difference between the
total Net Paid Bookings for such month and the total of the Fixed Rates
applicable to such Net Paid Bookings (such difference, the "Aggregate
Margin") is equal to or greater than [***] percent ([***]%) of such
total Fixed Rates, PEGASUS shall pay Transaction Fees to ORBITZ as
follows:
(i) If the total Net Paid Bookings in a given
calendar month is less than $[***], PEGASUS shall
pay Transaction Fees equal to [***] percent
([***]%) of the total Net Paid Bookings for such
month; and
(ii) If the total Net Paid Bookings in a given
calendar month is equal to or greater than
$[***], but less than $[***], PEGASUS shall pay
Transaction Fees equal to [***] percent ([***]%)
of the total Net Paid Bookings for such month;
and
(iii) If the total Net Paid Bookings in a given
calendar month is equal to or greater than
$[***], PEGASUS shall pay Transaction Fees equal
to [***] percent ([***]%) of total Net Paid
Bookings for such month.
(b) If the Aggregate Margin for a given calendar month is less
than [***]% of the total the Fixed Rates applicable to the Net Paid
Bookings for such month, PEGASUS shall pay a Transaction Fee equal to
one half of such Aggregate Margin.
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(c) Notwithstanding anything to the contrary contained herein,
upon termination of this Agreement for any reason, PEGASUS shall pay
Transaction Fees to ORBITZ as set forth herein with respect to all Net
Paid Bookings for which the Reservation related thereto is made prior
to the date of termination, even if the applicable cancellation
deadline related to such Net Paid Booking does not pass until after
such termination date.
6.2 INITIATION FEE. PEGASUS agrees to pay ORBITZ, in lieu of potential
Transaction Fees from the period from the Effective Date through May 31, 2002, a
fee of [***] Dollars (US$[***]) (the "Initiation Fee"); [***]. Except as set
forth in Section 9.3, the Initiation Fee shall be non-refundable and shall not
be applied as a credit against Transaction Fees.
7. PAYMENTS
Within thirty (30) days after the end of each month during the Term
with respect to which PEGASUS owes ORBITZ any Transaction Fees, PEGASUS shall
furnish ORBITZ with a statement together with payment for any Transaction Fees
shown thereby to be due to ORBITZ. The statement shall contain information
clearly demonstrating how the payment was computed, and shall at a minimum
include Net Paid Bookings, projected Net Paid Bookings for Reservations for
which the applicable cancellation deadline has not passed, and number of
Transactions. PEGASUS shall remit all payments owed to ORBITZ herein to ORBITZ's
address set forth in Section 16.3 (Notices).
8. ADVERTISING
8.1 During each year of the Term occurring after the Launch Date,
PEGASUS agrees that it will purchase online advertising on the ORBITZ Web Site
pursuant to the Advertising Agreement attached as EXHIBIT C hereto in the amount
of [***] Dollars (US$[***]) to promote the availability of the Travel Inventory
to ORBITZ customers (the "Advertising Fees"). Such advertisements will link
directly to such areas of the ORBITZ Web Site where the Travel Inventory is
offered, and any resulting Net Paid Bookings will be subject to the Transaction
Fees set forth in Section 6.1. During the term of the Agreement, PEGASUS may
select advertising placements available on ORBITZ's then current rate card at a
discount off of the then current rate card, or any such lower "most favored
customer" rate offered by ORBITZ for similarly situated advertisers on the
ORBITZ Web Site.
8.2 The Advertising Fees shall be paid to ORBITZ in quarterly
installments during each year of the term of this Agreement with the first
installment of [***] Dollars (US$[***]) due upon the Launch Date, and subsequent
installments due on the first day of each calendar quarter thereafter.
8.3 During each year of the Term occurring after the Launch Date,
ORBITZ agrees that it shall allocate advertising in the amount of [***] Dollars
(US$[***]) out of its advertising budget specifically to promote the
availability of the Travel Inventory on the ORBITZ Web Site.
9. TERM AND TERMINATION
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9.1 The term of this Agreement shall commence on the Effective Date
and, unless terminated earlier as provided herein, shall continue for three (3)
years from the Launch Date (the "Initial Term"). After the Initial Term, the
Agreement shall be extended for a period of two additional (2) years (the
"Extended Term"), unless either party provides written notice to the other of
its intention to terminate the Agreement no less than ninety (90) days prior to
the end of the Initial Term. The Initial Term and the Extended Term (unless this
Agreement is terminated at the end of the Initial Term, as provided above),
shall be collectively referred to herein as the "Term".
9.2 In the event either party materially fails to perform or comply
with this Agreement or any provision hereof, including those set forth in the
Exhibits to this Agreement, or fails to make the payments described herein
within sixty (60) days of their due date, and fails to remedy the default within
sixty (60) days after the receipt of written notice to that effect (except in
the case of a material breach as set forth in subsection 9.2(a), in which case
PEGASUS shall have thirty (30) days to remedy the default, after receipt of
written notice to that effect, provided that prior to or contemporaneously with
such notice Pegasus is provided a description of the failures to meet the
specifications as required pursuant to Section 2.1(b) hereof), then the other
party shall have the right, at its sole option and upon written notice to the
defaulting party, to terminate this Agreement. Any notice of default hereunder
shall be prominently labeled "NOTICE OF DEFAULT," and shall be delivered
pursuant to Section 16.3. The rights and remedies provided in this section are
not exclusive and are in addition to any other rights and remedies provided by
law or this Agreement. For clarity, the following shall be considered a material
default by PEGASUS under this Agreement: (a) the Launch Date does not occur by
May 31, 2002 due to the Travel Inventory Datefeed not complying with the
specifications as set forth Exhibit A, (b) PEGASUS is unable to maintain its
obligations under Section 2.5 or (c) PEGASUS fails to comply with its
obligations under Section 2.6 (subject to Section 2.6(a)).
9.3 Notwithstanding anything to the contrary set forth in Section
9.2 of this Agreement,
(a) ORBITZ shall have, as its sole and exclusive remedy, the
right to terminate this entire Agreement at any time prior to the
payment of the Initiation Fee, by giving written notice to PEGASUS, if
PEGASUS fails to pay the Initiation Fee by close of business on
January 7, 2001; and
(b) ORBITZ shall have the right to terminate this entire
Agreement by providing written notice to PEGASUS not later than the
close of business on February 8, 2002, in the event that the Board of
Mangers of ORBITZ (the "Board") directs management to enter into
negotiations with a third party with respect to a proposed transaction
(or series of related transactions) that would result in a Change in
Control of ORBITZ (an "Acquisition") and the Board, in its good faith
business judgment, believes that this Agreement would be detrimental to
its ability to consummate such Acquisition; provided, however, that in
the event ORBITZ exercises this termination right, ORBITZ shall, by
close of business on the first business day following the date on which
it exercises this right, refund to PEGASUS the entire amount of the
Initiation Fee and,
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11
additionally, pay PEGASUS a termination fee of [***] dollars ($[***]).
9.4 Either party shall have the right to terminate this Agreement at
anytime, upon 30 days' prior written notice to the other party, if such other
party:
undergoes a Change in Control (provided that the
right to terminate this Agreement shall expire if
unexercised within 3 months of the closing of the
Change in Control transaction);
9.4.2. goes into voluntary or involuntary liquidation;
is declared insolvent either in bankruptcy
proceedings or other legal proceedings;
is or becomes party to an agreement with creditors
due to such party's failure or inability to pay its
debts as they fall due; or
9.4.5 has a receiver appointed over the whole or part of
such party's business.
9.5 Either party shall have the right to terminate this Agreement at
any time if, (i) either Party or any of its Affiliates, is subject to an
inquiry, subpoena or investigation (the "Investigation") by any state, local
or other (domestic or foreign) governmental entity (a "Governmental Entity")
arising out of or relating to the relationship created by or activities
between PEGASUS (or an assignee of PEGASUS) and ORBITZ contemplated by this
Agreement, and such Investigation could reasonably be expected to involve the
expenditure by the party subject to the Investigation (the "Affected Party")
of significant resources, and (ii) the approval of or decision not to object
to such activity by such Governmental Entity is predicated on termination of
this Agreement or the Affected Party reasonably determines, upon the advice
of counsel, that the scope or duration of the Investigation is likely to be
reduced substantially by the termination of this Agreement.
9.6 Upon termination or expiration of this Agreement for any reason,
(i) ORBITZ shall immediately remove any PEGASUS logo link from the ORBITZ Web
Site and cease any use of any and all PEGASUS marks, Chain Marks and Property
Marks pursuant to this Agreement, and (ii) PEGASUS shall immediately remove
any ORBITZ logo link from the any PEGASUS-owned or operated web site and
cease any use of any and all ORBITZ Marks pursuant to this Agreement.
9.7 The following provisions shall survive termination of this
Agreement: 1, 5, 6 (with respect to amounts due but unpaid as of the
effective date of the termination), 7, 9.3, 9.5, 9.6, 9.7, 10, 11, 12, 13,
14, 15 and 16.
10. REPRESENTATIONS AND WARRANTIES
The representations and warranties and covenants in this Section 10 are
continuous in nature and shall be deemed to have been given by each party at
execution of this Agreement and
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at each stage of performance hereunder. These representations, warranties and
covenants shall survive termination or expiration of this Agreement.
10.1 REPRESENTATIONS AND WARRANTIES OF EACH PARTY. Each party
hereby represents and warrants as follows:
(a) CORPORATE POWER. Such party is duly organized and
validly existing under the laws of the state of its incorporation
and has full corporate power and authority to enter into this
Agreement and to carry out the provisions hereof.
(b) DUE AUTHORIZATION. Such party is duly
authorized to execute and deliver this Agreement and to perform
its obligations hereunder.
(c) BINDING AGREEMENT. To such party's knowledge, this
Agreement is a legal and valid obligation binding upon it and
enforceable with its terms. The execution, delivery and performance of
this Agreement by such party does not conflict with any agreement,
instrument or understanding, oral or written, to which it is a party or
by which it may be bound, nor, to such party's knowledge, violate any
law or regulation of any court, governmental body or administrative or
other agency having jurisdiction over it.
(d) LOGOS AND TRADEMARKS. To such party's knowledge, such
party has the full and exclusive right to grant or otherwise permit the
other party to use the trademarks, logos and trade names as set forth
in this Agreement, and that it is aware of no claims by any third
parties adverse to any of such trademarks, logos and trade names.
10.2 REPRESENTATIONS AND WARRANTIES OF ORBITZ. ORBITZ hereby
represents and warrants that as of the Effective Date, it is not a party to
any agreement with any third party for the sale on the ORBITZ Web Site of
Fixed Rate or Marked-Up Rate Accommodations; provided, however that the sole
remedy for ORBITZ's breach of this Section 10.2 shall be as set forth in
Section 12.4.
11. LIMITATION OF WARRANTY
EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY
MAKES, AND EACH PARTY HEREBY DISCLAIMS, ANY INDEMNITIES, WARRANTIES,
GUARANTEES, OR REPRESENTATIONS OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING,
WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
12. INDEMNIFICATION
12.1 MUTUAL INDEMNITIES. Each party agrees to indemnify, defend, and
hold harmless the other party and its successors, assigns, affiliates,
directors, officers, employees, and agents from and against any and all
claims, actions, damages, liabilities, costs and expenses, including
reasonable attorneys' fees and expenses, arising out of any third party claim
related to:
(a) Any death or personal injury, or any destruction of
or damage to any real or tangible personal property, alleged to have
been caused by or on behalf of the indemnifying party or its employees
or agents.
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(b) Any infringement of a letters patent, a trade secret,
or any copyright, trademark, service xxxx, trade name or similar
proprietary rights conferred by statute, by common law, or by contract
alleged to have occurred as a result of rights conveyed, materials
provided, or work performed by or on behalf of the indemnifying party;
provided, however, that the indemnifying party shall have no liability
for any claim of infringement if: (i) the indemnified party is not
using the latest version of any intellectual property provided by the
indemnifying party ("Current Release"), to the extent such claimed
infringement would have been avoided by use of the Current Release,
(ii) indemnified party is using a form of materials that has been
modified by someone other than the indemnifying party from those
initially provided by the indemnifying party to the extent such claimed
infringement would have been avoided by use of an unmodified form of
such materials, or (iii) the allegedly infringing materials have been
combined, operated, or used with products or data not supplied by the
indemnifying party, to the extent such claimed infringement would have
been avoided by the use of such materials without such products or
data.
(c) Any use of Customer Data other than as permitted by
this Agreement.
12.2 INDEMNIFICATION PROCEDURES. Any party claiming indemnification
pursuant to this Agreement will give the indemnifying party prompt written
notice of any matters with respect to which this indemnity may apply, will
give the indemnifying party full opportunity to control the response thereto
and the defense thereof, and will provide reasonable cooperation and
assistance in connection with the defense and/or settlement of the claim.
However, the indemnified party may, at its own expense, participate in such
defense and in any settlement discussions, either directly or through counsel
of its choice.
12.3 INTELLECTUAL PROPERTY REMEDIES. In the event of a claim that any
PEGASUS product infringes the intellectual property rights of any third party,
and in addition to all other obligations of PEGASUS in this Section 12, PEGASUS
shall at its option and expense (a) procure for ORBITZ the right to continue use
of such infringing products or services, or any component thereof; or (b)
replace or modify the same with non-infringing products or services reasonably
satisfactory to ORBITZ.
12.4 INDEMNIFICATION OF PEGASUS. ORBITZ agrees to indemnify, defend,
and hold harmless PEGASUS, its successors and assigns, and their respective
affiliates, officers, employees, shareholders and agents from and against any
and all claims, actions, damages, liabilities, costs and expenses, including
reasonable attorneys' fees and expenses, arising out of any action related to
any actual, alleged or anticipated contract between ORBITZ and any of [***].
13. LIMITATION OF LIABILITY.
EXCEPT FOR THE OBLIGATIONS SET FORTH IN SECTION 12 (INDEMNIFICATION)
AND CLAIMS ARISING UNDER SECTION 14 (CONFIDENTIALITY), BOTH PARTIES AGREE THAT
NEITHER PARTY WILL BE
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LIABLE FOR ANY SPECIAL, INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES
(INCLUDING BUT NOT LIMITED TO SUCH DAMAGES ARISING FROM BREACH OF CONTRACT OR
WARRANTY OR FROM NEGLIGENCE OR STRICT LIABILITY), OR FOR INTERRUPTED
COMMUNICATIONS, LOST BUSINESS, LOST DATA OR LOST PROFITS, ARISING OUT OF OR
IN CONNECTION WITH THIS AGREEMENT, EVEN IF SUCH PARTY HAS BEEN ADVISED OF (OR
KNOWS OR SHOULD KNOW OF) THE POSSIBILITY OF SUCH DAMAGES. EXCEPT FOR THE
OBLIGATIONS SET FORTH IN SECTION 12 (INDEMNIFICATION) AND CLAIMS ARISING
UNDER SECTION 14 (CONFIDENTIALITY), UNDER NO CIRCUMSTANCES SHALL EITHER
PARTY, ITS AFFILIATES, OR RELATED COMPANIES BE LIABLE TO THE OTHER PARTY FOR
AN AMOUNT GREATER THAN THE AGGREGATE AMOUNTS PAID BY PEGASUS HEREUNDER DURING
THE TWELVE MONTH PERIOD PRECEDING THE EVENT TO WHICH THE CLAIM RELATES.
14. CONFIDENTIALITY; MEDIA COMMUNICATIONS
14.1 CONFIDENTIALITY.
(a) "Confidential Information" is any information concerning
any of the parties hereto (whether prepared by a party, its advisors or
otherwise) or the performance of this Agreement which is or has been
previously furnished to any party receiving such information (the
"Receiving Party") by or on behalf of a party in connection with the
subject matter of this Agreement, including, but not limited to, any
financial data, notes, summaries, reports, analyses or other materials
derived in whole or in part from such information, and, if in writing,
is either clearly marked "confidential" or the like or is otherwise
identified to the Receiving Party to be non-public and confidential, or
which the Receiving Party would reasonably expect to be considered
confidential and non-public; provided, that notwithstanding any failure
to so identify it, all financial reports, business plans, information
regarding volumes or projections of a party or any information provided
or discussed during a meeting of the parties in connection with the
subject matter of this Agreement will be deemed to be Confidential
Information. Further, any information pertaining to any of the
Participating Chains or Participating Properties, other than
information contained in the Travel Inventory Datafeed, shall be deemed
the Confidential Information of PEGASUS. The term "Confidential
Information" does not include information which (i) is already in the
possession of a Receiving Party prior to disclosure by the party
disclosing such information (the "Disclosing Party"), provided that
such information is not known by such Receiving Party to be subject to
another confidentiality agreement with or other obligation of secrecy
to the Disclosing Party or another party, or (ii) becomes generally
available to the public other than as a result of a disclosure by a
Receiving Party, its employees, agents or advisors, or (iii) becomes
available to a party from a source other than the Disclosing Party or
its advisors, provided that such source is not known to be bound by a
confidentiality agreement with or other obligation of secrecy to such
Disclosing Party with respect to such information, or (iv) which may be
used or disclosed by any party pursuant to the express provisions of
this Agreement.
(b) Each party hereby agrees that the Confidential Information
will be used solely in connection with the performance of this
Agreement, and that Confidential
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15
Information will be kept confidential by each party; provided, however,
that (i) any such information may be disclosed to a Receiving Party's
partners, employees, officers, directors, advisors and the
representatives of its advisors (collectively, "Representatives") who
are involved in the negotiation or performance of this Agreement and
need to know such information for the purpose of evaluating issues
relating to this Agreement (it being understood that a Receiving
Party's Representatives shall be informed by the Receiving Party of
the confidential nature of such information and shall be directed by
the Receiving Party to treat such information confidentially),
(ii) Confidential Information may be disclosed pursuant to subsection
(c) below, and (iii) any disclosure of Confidential Information may be
made to which the Disclosing Party consents in writing.
(c) Each party agrees to be responsible for any breach of this
Agreement by its Representatives. If any Receiving Party or any of its
Representatives are requested or required (by deposition,
interrogatory, request for documents, subpoena, civil investigative
demand or similar process) to disclose any of the Confidential
Information, it shall provide the Disclosing Party with prompt prior
written notice of such requirement so that the Disclosing Party may
seek a protective order or other appropriate remedy and/or waive
compliance with the terms of this Agreement. If such protective order
or other remedy is not obtained or such Disclosing Party waives
compliance with the terms hereof, the Receiving Party agrees to furnish
only that portion of the Confidential Information which Receiving Party
is advised by its counsel is legally required and to exercise its
reasonable efforts to obtain assurances that confidential treatment
will be accorded such Confidential Information.
(d) In addition, without the prior written consent of each
other party, each party agrees not to, and will direct its
Representatives not to, disclose to any person any of the terms,
conditions or other facts with respect to the terms of this Agreement,
except (i) to confirm that such party is a party to this Agreement,
and (ii) as may be necessary or advisable, in confidential
communications with third parties, in order to proceed with the
obligations of either party pursuant to this Agreement.
(e) Each party agrees that the other party shall be entitled
to equitable relief, including injunction, in the event of any breach
of the provisions of this Agreement and that each party shall not
raise as a defense or an objection to the request for or granting of
such relief that any breach of the provisions of this Agreement is or
would be compensable by an award of monetary damages.
(f) No party nor any of their Representatives have made or
make any representation or warranty as to the accuracy or completeness
of the Confidential Information. No party nor any of its
Representatives shall have any liability to any party or any of its
Representatives resulting from the use of the Confidential Information.
14.2 Each party will submit to the other party, for its prior written
approval, any marketing, advertising, press releases or other promotional
materials related to this Agreement and/or referencing the other party and/or
its web site, trade names, trademarks and service marks (the "Promotional
Materials"). Once approved, the Promotional Materials may be used by a party for
the purpose of promoting the services provided under this Agreement, and the
content contained therein can be used for such purpose until such approval is
withdrawn with reasonable
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prior notice. In the event such approval is withdrawn, existing inventories
of Promotional Materials may be depleted.
15. AUDIT
Each of ORBITZ and PEGASUS will maintain complete and accurate
files, books and records with respect to the Transaction Fees and the reports
required under this Agreement for a period of not less than two (2) years
following the effective date of termination of this Agreement. Each of ORBITZ
and PEGASUS agrees to allow a mutually acceptable independent certified
public accountant to audit and analyze its records relating to such
Transaction Fees or reports, provided that such auditor agrees in advance to
maintain all information obtained during such audit in confidence pursuant to
a written agreement that provides no less protection of such information than
the terms of Section 14 of this Agreement. All information received by either
party and/or its auditor in connection with an audit hereunder shall be
deemed Confidential Information subject to the confidentiality provisions of
this Agreement. The expense of any such audit shall be borne by the party
requesting the audit. Any such audit will be permitted by ORBITZ or PEGASUS
within thirty (30) days of the other party's written request, during normal
business hours and at times mutually agreed upon by the parties. If, upon
completion of an audit, the party that requested such audit reasonably
determines that there are discrepancies in the reports provided by the
audited party under this Agreement, the parties shall engage in good faith
discussions with each other regarding such discrepancies. If such
discrepancies are valid, as determined in good faith by the audited party,
then the audited party shall take such actions as are necessary to correct
such discrepancies and to make any payments to the other party that are based
on such discrepancies. Any audit of a party will be made no more than once
during any twelve (12) month period, and will not unreasonably interfere with
the audited party's business activities.
16. GENERAL
16.1 GOVERNING LAW; VENUE; ATTORNEYS FEES. This Agreement shall be
construed and controlled by the laws of the State of Illinois, and each party
further consents to jurisdiction by the state and federal courts sitting in
the City of Chicago, Illinois. Process may be served on either party by U.S.
Mail, postage prepaid, certified or registered, return receipt requested, or
by such other method as is authorized by law.
16.2 FORCE MAJEURE. Except to the extent the services contemplated
herein are designed to accommodate for service disruptions and failures as
outlined in EXHIBIT B, if the performance of this Agreement or any obligation
hereunder is prevented, restricted or interfered with by any act or condition
whatsoever beyond the reasonable control of the affected party, the party so
affected, upon giving prompt notice to the other party, shall be excused from
such performance, except for the making of payments hereunder, to the extent
of such prevention, restriction or interference.
16.3 NOTICES; REQUESTS. All notices and requests in connection with
this Agreement shall be deemed given as of the day they are (a) deposited in
the U.S. mails, postage prepaid, certified or registered, return receipt
requested; or (b) sent by overnight courier, charges prepaid, with a
confirming fax; to the following address. Either party may change such
address at any time by written notice to the other party.
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If to ORBITZ:
ORBITZ, LLC
000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attn: General Counsel
Fax: 000-000-0000
Phone: 000-000-0000
If to PEGASUS:
Pegasus Solutions, Inc.
0000 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Attn: General Counsel
Tel: 0 (000) 000 0000
Fax: 0 (000) 000 0000
16.4 ASSIGNMENT.
(a) Neither party may assign this Agreement, or any portion
thereof, to any third party unless the other party expressly consents
to such assignment in writing.
(b) Notwithstanding the foregoing, PEGASUS, in its sole
discretion at any time prior to the Launch Date, upon notice to ORBITZ,
may assign this Agreement and all of its rights and obligations
hereunder to any joint venture or similar entity formed by at least
three (3) of the hotel companies listed in Section 2.5 hereof and
currently known as "Hotel Outlet"; provided that (i) such entity offers
Travel Inventory as part of its ordinary course of business, (ii) the
Preferred Distribution Agreements are assigned to such entity by
PEGASUS, and (iii) such entity agrees, in writing, to be bound by,
observe, perform and fulfill all the terms and conditions of this
Agreement to the same extent as if it had been originally named as a
party to this Agreement and to assume every obligation and liability of
PEGASUS to the same extent as though it had been named as a party to
this Agreement. Any such assignment shall be deemed a novation of this
Agreement and shall release PEGASUS from any and all obligations and
liabilities relating hereto.
(c) All terms and provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and each
of their permitted transferees, successors and assigns.
16.5 SEVERABILITY. In the event that any provision of this Agreement
is found invalid or unenforceable pursuant to judicial decree or decision,
the remainder of this Agreement shall remain valid and enforceable according
to its terms. The parties intend that the provisions of this Agreement be
enforced to the fullest extent permitted by applicable law. Accordingly, the
parties agree that if any provisions are deemed not enforceable, they shall
be deemed modified to the extent necessary to make them enforceable.
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16.6 ENTIRE AGREEMENT; MODIFICATION; NO OFFER. The parties hereto
agree that this Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof and merges all prior and
contemporaneous communications. Notwithstanding the foregoing, the Third
Party Private Label Interface entered into between the parties as of December
15, 2000 (the "Interface Agreement") shall remain in full force and effect
and shall not be superseded by this Agreement, except that to the extent of
any inconsistency or conflict between the terms of the Interface Agreement
and this Agreement, this Agreement shall have precedence; provided, however,
that, in the event this Agreement is assigned pursuant to Section 16.4
hereof, any assignee of this Agreement shall not assume or be otherwise bound
to the Interface Agreement. This Agreement shall not be modified except by a
written agreement dated subsequent hereto signed on behalf of each party by
its duly authorized representatives. Neither this Agreement nor any written
or oral statements related hereto constitute an offer, and this Agreement
shall not be legally binding until executed by both parties hereto.
16.7 BINDING EFFECT. Subject to the limitations set forth herein,
this Agreement will inure to the benefit of and be binding upon the parties,
their successors, administrators, heirs, and permitted assigns.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by a duly authorized representative as of the dates indicated
below.
PEGASUS
PEGASUS SOLUTIONS, INC. ORBITZ, LLC
By: /S/ XXXX X. XXXXX III By: /S/ XXXXX XXXXXX
--------------------- ------------------------
Name: XXXX X. XXXXX III Name: XXXXX XXXXXX
--------------------- ------------------------
Title: CHAIRMAN/CEO Title: VP, BUSINESS DEVELOPMENT
--------------------- ------------------------
Date: 1/7/02 Date: 1/7/2002
--------------------- ------------------------
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EXHIBIT A
SERVICES & FUNCTIONALITY
PEGASUS shall provide the following Services:
A. Development, operation and maintenance of the Travel Inventory
Datafeed, in accordance with the following specifications, for use by
Users via the ORBITZ Web Site:
1. DATABASE. PEGASUS will provide ORBITZ with access to a database
identifying Participating Properties. All updates to such database
will be provided to ORBITZ through a nightly automated batch
processing service, and will include all property information and
images loaded into such database.
2. HOTEL RATES AND AVAILABILITY. PEGASUS will provide ORBITZ with
access to real-time rate and availability data relating to
Participating Properties and will provide ORBITZ with the ability
to search across Participating Properties with respect to rates
and availability. Functionality provided by PEGASUS to ORBITZ will
include the ability to search and display Marked-Up Rates, room
categories and availability status with respect to Travel
Inventory.
3. RESERVATION FUNCTION. PEGASUS will enable functionality to
allow Users to make real-time Reservations and cancellations
thereof. Each confirmation of a Transaction transmitted by
PEGASUS to ORBITZ will include a confirmation number.
4. MERCHANT PROCESSING. PEGASUS will transmit for processing, on a
real-time, secure basis, online credit card charges authorized by
Users purchasing Transactions on ORBITZ. PEGASUS will manage all
aspects of the implementation, development and support of such
processing and will provide mutually-agreed upon support to ORBITZ
Customer Services for the purpose of resolving issues associated
with such processing.
5. IMPLEMENTATION SUPPORT. PEGASUS will use commercially reasonable
efforts to provide dedicated development, technical and product
support to ORBITZ as reasonably necessary to facilitate successful
implementation of the Travel Inventory Datafeed on the ORBITZ Web
Site.
B. Development and implementation of the following functionality with
respect to the Travel Inventory Datafeed, for use by customers via the ORBITZ
Web Site no later than December 31, 2002, or such other date as the parties
mutually agree upon:
1. MODIFICATIONS. PEGASUS will enable functionality to allow Users
to make real-time modifications of Reservations (including
addition or reduction of room nights or guest rooms) to the
extent such functionality is available from the Participating
Chains.
C. Maintenance of Preferred Distribution Agreements as set forth in
Section 2.5.
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EXHIBIT B
SERVICE LEVELS AND SERVICE LEVEL CREDITS
System Availability
REQUIREMENT
Minimal downtime, optimal system availability:
--------------------------------------------------
SERVICE LEVEL MEASUREMENT
--------------------------------------------------
Minimum Standard [***]%
--------------------------------------------------
DEFINITION
System availability is defined as having access to the Travel Inventory and
the functionality of the Travel Inventory Datafeed, as such access and
functionality are described in the Agreement and Exhibit A. ORBITZ must
provide notification to PEGASUS within [***] minutes of when system
availability has been interrupted, as reflected in the logs of ORBITZ's
monitoring systems, in order for such interruption to be included in the
calculation of the service level; provided, however, that such service level
calculation, and any service level credit calculation, shall be based upon
the time that system availability has been interrupted, not upon the time
that ORBITZ notified PEGASUS of such interruption, so long as ORBITZ has
provided PEGASUS with proper notification.
MEASUREMENT
System availability shall be measured every [***] minutes and averaged over
each calendar month.
CALCULATION OF SERVICE LEVEL CREDIT:
The system availability requirements set forth in this Exhibit B shall be
suspended during the first full calendar month and any partial calendar month
immediately following the Launch Date.
Notwithstanding any other provisions of this Exhibit B, during the [***]
through the [***] full calendar months following the Launch Date PEGASUS
shall pay to ORBITZ, with respect to each calendar month during which system
availability is less than [***]%, the following amounts:
During the [***] through the [***] full calendar months following the Launch
Date:
-----------------------------------------------------
SYSTEM AVAILABILITY DURING AMOUNT PAID
THE CALENDAR MONTH
-----------------------------------------------------
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-----------------------------------------------------
Less than [***]% but more $[***]
than [***]%
-----------------------------------------------------
Less than or equal to [***]% $[***]
but more than [***]%
-----------------------------------------------------
Less than or equal to [***]% $[***]
-----------------------------------------------------
During the [***] through the [***] month following the Launch Date:
--------------------------------------------------
SYSTEM AVAILABILITY AMOUNT PAID
DURING THE CALENDAR MONTH
--------------------------------------------------
Less than [***]% but $[***]
more than [***]%
--------------------------------------------------
Less than or equal to $[***]
[***]% but more than
[***]%
--------------------------------------------------
Less than or equal to $[***]
[***]%
--------------------------------------------------
After the [***] full month following the Launch Date, PEGASUS shall pay to
ORBITZ, with respect to each calendar month during which system availability is
less than [***]% an amount equal to the greater of (A) the product of (i) the
number of Transactions occurring during such month, multiplied by (ii) $[***] or
(B) $[***].
CONTINUOUS NON-PERFORMANCE
Notwithstanding anything to the contrary in the Agreement, during the first
twelve months following the Launch Date ORBITZ shall be entitled to terminate
the Agreement, without financial penalty, and as its sole and exclusive remedy,
after [***] or more consecutive months during which system availability is less
than [***]%; provided that ORBITZ shall be entitled to exercise such right only
during the [***] days following the end of the [***] such month.
Notwithstanding anything to the contrary in the Agreement, after the [***] of
the Launch Date ORBITZ shall be entitled to terminate the Agreement, without
financial penalty, and as its sole and exclusive remedy, after [***] or more
consecutive months during which system availability is less than [***]%,
provided that ORBITZ shall be entitled to exercise such right only during the
[***] days following the end of the [***] such month.
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EXCEPTIONS
Outages due to the following circumstances shall not be considered an
interruption in system availability for the purposes of measurement or
calculation of the Service Level:
- Failures outside of PEGASUS' facilities or reasonable control,
including, but not limited to, server hardware or software,
network software or hardware, communications lines and domains not
resolved by PEGASUS-controlled DNS servers
- ORBITZ-supplied materials, including, but not limited to,
failures in any front-end HTML or Javascript supplied by ORBITZ
- Scheduled maintenance within the specified maintenance windows in
this Agreement or other written agreements between ORBITZ and
PEGASUS
- Anything beyond the reasonable control of PEGASUS
SCHEDULED MAINTENANCE
Unless agreed upon in writing between ORBITZ and PEGASUS, regularly scheduled
maintenance and updates of the Travel Inventory Datafeed shall occur only upon
no less than 5 business days advance notice from PEGASUS to ORBITZ. In advance
of any scheduled maintenance, PEGASUS will notify ORBITZ no less than 48 hours
in advance of the start of the maintenance period for the planned outage.
PEGASUS shall use commercially reasonable efforts to schedule such maintenance
and updates during hours in which minimal User access occurs.
ESCALATION PROCEDURES
PEGASUS will use commercially reasonable efforts to promptly log, research and
resolve Travel Inventory Datafeed performance issues reported by ORBITZ to
PEGASUS. ORBITZ shall report Travel Inventory Datafeed performance issues to
PEGASUS by telephone to the PEGASUS Help Desk. In the event of a Severity 1 or
Severity 2 issue as defined below, PEGASUS will contact ORBITZ by telephone
within the time periods indicated below to initiate the parties' attempts to
research and resolve each Travel Inventory Datafeed performance issue reported
by ORBITZ. ORBITZ agrees to take such commercially reasonable actions within its
control as are required to resolve any reported Travel Inventory Datafeed
performance issues.
Severity 1: Travel Inventory Datafeed not available or serious business
impact. PEGASUS shall contact ORBITZ within thirty (30)
minutes of receiving ORBITZ's report of the performance issue.
PEGASUS and ORBITZ will each use commercially reasonable
efforts to provide resources as reasonably necessary without
regard to normal business hours to research and resolve the
performance issue.
Severity 2: Substantial business impact - e.g., slow site response
time. PEGASUS shall contact ORBITZ within sixty (60) minutes
of receiving ORBITZ's report of the performance issue. PEGASUS
and ORBITZ will use commercially reasonable
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efforts to provide such resources as reasonably necessary
during normal business hours to research and resolve the
performance issue.
Severity 3: Nuisance - operational performance of the Travel Inventory
Datafeed is impaired while most business operations remain
functional. PEGASUS and ORBITZ will each use commercially
reasonable efforts to provide such resources as reasonably
necessary during normal business hours to research and resolve
the performance issue.
Severity 4: Information. PEGASUS and ORBITZ will provide resources
during normal business hours to provide information assistance.
CONTINUOUS NON-PERFORMANCE
Notwithstanding anything to the contrary in this Agreement, ORBITZ shall be
entitled to terminate this Agreement, without financial penalty, and as its sole
and exclusive remedy, upon PEGASUS' failure in [***] or more instances in any
[***] to contact ORBITZ within the timeframes set forth above following ORBITZ's
report of a Severity 1 or Severity 2 performance issue, provided that ORBITZ
shall be entitled to exercise such right only if (i) ORBITZ notifies PEGASUS in
writing of each such failure within [***] business days of the occurrence of
each such failure, and (ii) ORBITZ exercises such right within [***] days
following the end of such quarter.
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EXHIBIT C
ADVERTISING AGREEMENT
ADVERTISING TERMS AND CONDITIONS
1. INSERTION ORDERS.
These terms and conditions ("Standard Terms") shall govern any insertion order
("IO") submitted by the advertiser or its agency (collectively, "Advertiser").
Advertiser and its agency (if applicable) shall be jointly and severally
responsible under the IO and Standard Terms (collectively, "Agreement"). Subject
to these Standard Terms, Orbitz agrees to make commercially reasonable efforts
to display the Advertisements set forth in the IO on the dates specified in the
IO.
2. TERMS OF PAYMENT.
If Orbitz has not extended credit to Advertiser (in its sole discretion),
Advertiser will pay Orbitz before the Start Date set forth in the IO. If Orbitz
approves a credit request, Orbitz will invoice Advertiser as set forth in the IO
and Advertiser will pay Orbitz within thirty (30) days of the invoice date. Any
late payment will accrue interest at the lesser of the U.S. Prime Rate of
interest plus 3% per month or the maximum interest allowable under applicable
law. If Advertiser fails to make payment, Advertiser will be responsible for all
reasonable expenses (including attorneys' fees) incurred by Orbitz in collecting
such amounts. All payments due hereunder are in U.S. dollars and are exclusive
of any applicable taxes, for which Advertiser shall be responsible.
3. SUBMISSION OF ADVERTISING.
Advertiser will deliver all Advertisements to Orbitz no later than 10 business
days before the scheduled Start Date. Advertiser hereby grants to Orbitz a
non-exclusive, worldwide, fully paid license to use, perform, reproduce,
display, transmit and distribute the Advertisement and all contents therein,
including Advertiser's trademarks and logos, in accordance herewith.
4. POSITIONING.
Except as otherwise expressly provided in the IO, the timing and positioning of
Advertisements within the Orbitz web site or on any page of the Orbitz web site
is at the sole discretion of Orbitz.
5. RIGHT TO REJECT ADVERTISEMENT.
Orbitz reserves the right to reject, suspend, or cancel any Advertisement (a)
for failure to comply with its then-current generally applicable policies
concerning the technical specifications for and content of advertising, (b) if
directed to do so by any law enforcement agency, court, or other governmental
agency, or (c) if it determines, in its sole discretion, that the Advertisement
may subject Orbitz to criminal or civil liability for any reason. Orbitz'
remedies under this Section shall be in addition to and not in exclusion of any
other remedy set forth in this Agreement.
6. STATISTICS.
Orbitz makes no representations regarding usage statistics, impressions,
click-throughs or other statistical measurements (collectively, "Measurement
Units") other than those expressly set forth in the IO. Advertiser acknowledges
that delivery statistics provided by Orbitz are the official and definitive
measurements of Orbitz' performance on any delivery obligations provided in the
IO. No other measurements or usage statistics (including those of Advertiser or
any third party) shall be accepted by Orbitz or have any effect on this
Agreement. An "impression" means each occurrence of a display of an
Advertisement and a "click through" means each time an Orbitz web site user
("User") clicks on an Advertisement.
7. NO WARRANTY.
ORBITZ HEREBY DISCLAIMS ALL WARRANTIES, CONDITIONS, REPRESENTATIONS, INDEMNITIES
AND GUARANTEES WITH RESPECT TO ANY MATTER HEREUNDER, INCLUDING WITHOUT
LIMITATION, PLACEMENT OF ADVERTISING AND ANY OTHER SERVICES PROVIDED, WHETHER
EXPRESS OR IMPLIED, ARISING BY LAW, CUSTOM, PRIOR ORAL OR WRITTEN STATEMENTS BY
ORBITZ, OR OTHERWISE (INCLUDING, BUT NOT LIMITED TO ANY WARRANTY OF SATISFACTORY
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QUALITY, MERCHANTABILITY, FITNESS FOR PARTICULAR PURPOSE, TITLE AND
NON-INFRINGEMENT).
8. LIMITATIONS OF LIABILITY.
a. Remedy. If Orbitz fails to publish an Advertisement in accordance with the
schedule provided in the IO, fails to deliver the number of Measurement Units
specified in the IO (if any) by the End Date specified in the IO, or in the
event of any other failure, technical or otherwise of such Advertisement to
appear as provided in the IO, the sole liability of Orbitz, if any, and
exclusive remedy of Advertiser shall be limited to, at Orbitz' sole discretion,
placement of a mutually agreeable substitute Advertisement at a later time in a
comparable position, extension of the End Date specified in the IO until the
total Measurement Units are delivered, or a pro rata refund of pre-paid
advertising fees (if any) attributable to undelivered Measurement Units for the
then-current Term. C. NO CONSEQUENTIAL DAMAGES. UNDER NO CIRCUMSTANCES WILL
ORBITZ BE LIABLE FOR CONSEQUENTIAL, INDIRECT, SPECIAL, PUNITIVE OR INCIDENTAL
DAMAGES OR LOST PROFITS, WHETHER FORESEEABLE OR UNFORESEEABLE, BASED ON CLAIMS
OF ADVERTISER, ITS APPOINTEES OR ITS OR THEIR CUSTOMERS (INCLUDING, BUT NOT
LIMITED TO, CLAIMS FOR LOSS OF GOODWILL, USE OF OR RELIANCE ON THE SERVICES
PROVIDED HEREUNDER, STOPPAGE OF OTHER WORK OR IMPAIRMENT OF OTHER ASSETS),
ARISING OUT OF BREACH OR FAILURE OF EXPRESS OR IMPLIED WARRANTY, BREACH OF
CONTRACT, MISREPRESENTATION, NEGLIGENCE, STRICT LIABILITY IN TORT OR OTHERWISE.
IN NO EVENT WILL THE AGGREGATE LIABILITY THAT ORBITZ MAY INCUR IN ANY ACTION OR
PROCEEDING EXCEED THE GREATER OF THE TOTAL AMOUNT ACTUALLY PAID TO ORBITZ BY
ADVERTISER DURING THE PRECEDING YEAR OR $1000. THE LIMITATIONS, EXCLUSIONS AND
DISCLAIMERS SET FORTH IN THIS SECTION WILL NOT APPLY ONLY IF AND TO THE EXTENT
THAT THE LAW OR A COURT OF COMPETENT JURISDICTION REQUIRES LIABILITY UNDER
APPLICABLE LAW BEYOND AND DESPITE THESE LIMITATIONS, EXCLUSIONS AND DISCLAIMERS.
c. Limitations. Without limiting the foregoing, Orbitz shall have no liability
for any failure or delay resulting from any governmental action, fire, flood,
insurrection, earthquake, power failure, riot, explosion, embargo, strikes
whether legal or illegal, labor or material shortage, transportation
interruption of any kind, work slowdown, actions or inaction of Advertiser or
third parties, Advertiser's equipment or software and/or any third party
equipment not within the sole control of Orbitz, or any other condition
affecting production or delivery in any manner beyond the control of Orbitz.
Advertiser acknowledges that Orbitz has entered into this Agreement in reliance
upon the limitations of liability set forth herein and that the same is an
essential basis of the bargain between the parties.
9. ADVERTISER'S WARRANTIES
a. Authority. Author represents and warrants to Orbitz that: (i) it has the
authority to enter into this Agreement, and (ii) Advertiser holds all necessary
rights, licenses and consents to permit the use of the Advertisements by Orbitz
for the purposes of this Agreement. b. Content. Advertiser represents and
warrants to Orbitz that the use, reproduction, distribution, transmission or
display of Advertisements, any data regarding Users, and any material to which
Users can link, or any products or services made available to Users, through
Advertisements: (i) is not and will not be defamatory, libelous, obscene,
indecent, or illegal, (ii) does not and will not violate any right of
confidentiality, privacy or publicity of any third party, and (iii) does not and
will not violate any copyright, trade-xxxx, trade secret, or other intellectual
property right of any third party.
10. INDEMNIFICATION.
Advertiser agrees to indemnify, defend and hold Orbitz harmless from and against
any and all liability, loss, damages, claims or causes of action, including
reasonable legal fees and expenses, arising out of or related to (i) any breach
of the representations and warranties in Section 9, or (ii) any third party
claim arising from: (a) use of or access to the Advertisements, (b) any material
to which the Advertisements link, or (c) any products or services made
available, promoted, or advertised through the Advertisement. Advertiser shall
not, without the prior written consent of Orbitz, settle, compromise or consent
to the entry of any judgment with respect to any pending or threatened claim
unless the settlement, compromise or consent provides for and includes an
express, unconditional release of all claims, damages, liabilities, costs and
expenses, including reasonable legal fees and expenses, against Orbitz.
11. TERM AND TERMINATION.
a. Term. The term of this Agreement ("Term") commences on the Acceptance Date
set forth in the IO and terminates on the End Date set forth in the IO, unless
earlier terminated pursuant to this Section. Except as
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expressly set forth in the IO, any renewal of the IO and acceptance of any
additional advertising order shall be at Orbitz' sole discretion. b.
Termination. Except as otherwise expressly provided in the IO and this
Section, the IO is non-cancelable by Advertiser, and Orbitz may, in its sole
discretion and for any reason whatsoever, terminate this Agreement upon 30
days' notice to Advertiser. Either party may terminate this Agreement
immediately if the other party is in material breach and fails to cure within
thirty (30) days of written notice from the other party. c. Suspension of
Advertising. If Advertiser fails to make any payment or otherwise breaches
the Agreement, Orbitz may at its sole discretion and option suspend all
services for Advertiser until Advertiser remedies the breach. Any failure by
Advertiser to deliver acceptable Advertisements to Orbitz in accordance with
Sections 3 and 5 shall result in a pro-rata reduction in any commitment by
Orbitz to deliver a specific number of Measurement Units commensurate with
Advertiser's delay, but will not excuse Advertiser from its obligation to pay
for such reserved inventory or result in any right to a refund or credit for
Advertiser. Any action taken pursuant to this paragraph will not limit or
exclude any other claims or remedies that Orbitz may assert under this
Agreement or by law or constitute a breach of any provision of this
Agreement. d. Termination Consequences. Upon the expiration or termination of
this Agreement for any reason, any rights granted to Advertiser will
immediately cease and all fees and other charges for Advertisements placed
through the date of termination will be due. If Orbitz terminates this
Agreement for material breach or Advertiser fails to provide acceptable
Advertisements for Orbitz to display pursuant to this Agreement, Advertiser
will remain liable for all fees due hereunder without right of refund or
credit. The provisions of Sections 7, 8, 9, 10, 11, and 12 will survive the
expiration or termination of this Agreement.
12. MISCELLANEOUS.
a. Confidentiality. Advertiser shall protect Orbitz' confidential information
with reasonable care, and shall not disclose it without Orbitz' prior written
permission, unless legally compelled to do so. "Confidential information" is
nonpublic information that Orbitz designates as being confidential or that,
under the circumstances surrounding receipt, Advertiser should know is treated
as confidential by Orbitz, including Orbitz' business policies or practices,
usage statistics and other related statistics, technical information, and the
terms of this Agreement. b. Assignment. Advertiser may not assign this Agreement
or any of its rights or obligations without Orbitz' prior written approval. Any
attempt to do so without Orbitz' approval will be void. Orbitz may assign this
Agreement or any of its rights or obligations, upon notice to Advertiser, to an
affiliated company or to any other company or entity pursuant to a merger,
acquisition, sale, corporate reorganization or other similar transaction. c.
Interpretation. These Standard Terms and the IO, together with any exhibits
attached thereto, constitute the entire agreement between the parties with
respect to the subject matter thereto and supersedes all proposals, warranties,
prior agreements, or any other communications between the parties relating to
the subject matter. In the event of any inconsistency between the IO and the
Standard Terms, the Standard Terms shall control. This Agreement will be
governed by and interpreted in accordance with the law of the state of
Illinois,
excluding its conflict of law principles, and the parties hereby consent to the
jurisdiction of the federal and state courts located in Xxxx County,
Illinois,
waiving any objection to forum non conveniens. Except as otherwise provided
above, any waiver, amendment or other modification of this Agreement will not be
effective unless in writing and signed by the party against whom enforcement is
sought. If any provision of this Agreement is held to be unenforceable, in whole
or in part, such holding will not affect the validity of the other provisions of
this Agreement.
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