Exhibit 10.12(a)
FIRST AMENDMENT TO
DEVELOPMENT, LICENSE AND HOSTING AGREEMENT
BETWEEN
NORTHWEST AIRLINES, INC. AND
ORBITZ, LLC
This First Amendment, effective as of December 30, 2003 (the "Amendment
Effective Date"), is by and between NORTHWEST AIRLINES, INC., a Minnesota
company having offices in Xxxxx, Minnesota,("Airline") and ORBITZ, LLC, a
Delaware limited liability company having offices in Chicago, Illinois
("Orbitz"). Airline and Orbitz may be referred to hereinafter together as the
"Parties."
WHEREAS, the Parties entered into a Development, License and Hosting
Agreement with an Effective Date of March 8, 2002 (the "Agreement"). Capitalized
terms not defined herein shall have the respective meanings ascribed to them in
the Agreement, and unless otherwise indicated, all section references are to
sections of the Agreement.
WHEREAS, the Parties are desirous of extending the Initial Term of the
Agreement through December 31, 2007.
WHEREAS, both Parties wish to accordingly modify the Agreement with
this First Amendment.
NOW, THEREFORE, the Parties agree as follows:
1. A new Section 1.34 shall be added as follows:
1.34 "Development Fee" means the fee(s) set forth in Exhibit D that
Airline will pay to Orbitz in consideration for the Development
Services.
2. A new Section 1.35 shall be added as follows:
1.35 "Development Services" means requirements development and
definition, project management, database and networking services,
migration, coding, engineering, testing, implementation, integration
and other work or services that Orbitz will provide to Airline, either
directly or through Subcontractors, pursuant to this Agreement,
including, without limitation, any Pre-Launch Development Services.
3. A new Section 1.36 shall be added as follows:
1.36 "Safe Harbor Event" means either (a) an Act of God, natural
disaster, civil disturbance, strike, labor unrest, act of war (declared
or undeclared), act of terrorism, outbreak or escalation of
hostilities, or other calamity or crisis which has a materially adverse
effect on Airline's business and the travel industry generally, or
[***].
4. The first sentence of Section 16.1 shall be replaced in its entirety
with the following:
"This Agreement shall be in effect as of the Effective Date and shall
continue through December 31, 2007 (the "Initial Term")."
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5. Exhibit D, Section II (Hosting and Support Fees) shall be replaced in
its entirety with the following:
II. Hosting and Support Fees:
As of the 1st day of the calendar month following the Amendment
Effective Date, Airline will pay Orbitz transaction fees based on the
following transaction pricing schedule per Ticket:
o $[***] per transaction for the 1st [***] Tickets per 12-month
calendar year period
o $[***] per transaction for the next [***] Tickets per 12-month
calendar year period
o $[***] per transaction for the next [***] Tickets per 12-month
calendar year period
o $[***] per transaction for the next [***] Tickets per 12-month
calendar year period
o $[***] per transaction for the next [***] Tickets per 12-month
calendar year period
o $[***] per transaction for the next [***] Tickets per 12-month
calendar year period
o $[***] per transaction for Tickets in excess of [***] per
12-month calendar year period
For the period of September 6, 2003 to December 31, 2003, the Hosting
and Support Fee is recalculated at $[***] per transaction, reflecting
the estimated annual Hosting and Support Fee of the Agreement. Any
credits due Airline resulting from this 2003 revised transaction
calculation will be applied to the January 2004 invoice.
Airline will pay Orbitz a minimum transaction fee of $[***] per
month, regardless of the number of Tickets actually processed during
the month.
Subject to the following paragraph, Airline guarantees that the total
annual Ticket revenue for [***] shall meet or exceed $[***], provided
that Airline's payment obligation, if any, pursuant to this guarantee
shall be determined as follows: if the total annual Ticket Revenue for
[***], calculated using the above pricing schedule (the "Amended
Schedule Revenue"), is less than $[***], then total annual Ticket
Revenue for [***] shall be re-calculated using the pricing schedule in
the original Exhibit D, Section II of the Agreement. If the result of
that re-calculation (the "Original Schedule Revenue") is less than
$[***], then no further payment is due hereunder with respect to [***]
transactions; provided, however, if the Original Schedule Revenue is
equal to or greater than $[***], then Orbitz shall invoice Airline on
[***] for the difference between $[***] and the Amended Schedule
Revenue.
In the event that a Safe Harbor Event occurs in [***] and Airline is
unable to reach [***] airline Ticket transactions on the Website, then
the above $[***] annual Ticket revenue [***].
For the avoidance of doubt, the transaction pricing schedule(s) set
forth above shall not apply to hotel and car reservation services
offered through the Website unless Northwest exercises its option under
Section 5.5(a) of the Agreement to provide such reservation services.
In the event Airline exercises its option under Section 5.5(b) of the
Agreement to offer the air transportation services of Other Airlines
for sale through the Website, the transaction pricing schedule set
forth above shall apply to Other Airline tickets sold through the
Website.
6. Exhibit D, Section III (Airline-Specific Development Service Fees) shall
be replaced in its entirety with the following:
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III. Airline-Specific Development Service Fees
For Development Services above and beyond those provided by the
dedicated developers described in Section 7 of the First Amendment to
this Agreement, the Development Fee for Development Services provided
pursuant to Change Requests, or otherwise arising out of this Agreement
during the Term of this Agreement shall be as follows:
Development Services relating to the Orbitz Software: $[***] per hour
Development Services relating to the Custom Material: $[***] per hour
Such Development Services shall include, without limitation, any work
or services performed by Orbitz in connection with the design,
development, implementation, and testing of Airline-Specific Software
or the Custom Material.
Orbitz reserves the right to increase these rates on an annual basis,
provided, however, that any such adjustment shall not exceed the fee
charged by Orbitz for the prior year by more than the increase in the
Consumer Price Index for All Urban Consumers (CPI-U) for the U.S. City
Average for All Items, 1982-1984 = 100, published by the U.S.
Department of Labor, Bureau of Labor Statistics, for the previous year.
7. As of the Amendment Effective Date, Orbitz provides Development
Services to Airline with a team consisting of [***]. As of January 1,
2004, Orbitz shall provide [***] dedicated to providing Development
Services supporting the Website. [***] shall be provided by Orbitz on
or before February 1, 2004. During calendar year 2004, [***] shall
be provided by Orbitz at an annual cost to Airline not to exceed
$[***]. As of January 1, 2005, [***] shall be provided by Orbitz at an
annual cost to Airline not to exceed $[***].
Any amounts paid by Airline for such Orbitz-supplied developers shall
be paid in monthly installments in arrears. Orbitz reserves the right
to increase these rates on an annual basis, provided, however, that any
such adjustment shall not exceed the fee charged by Orbitz for the
prior year by more than the increase in the Consumer Price Index for
All Urban Consumers (CPI-U) for the U.S. City Average for All Items,
1982-1984 = 100, published by the U.S. Department of Labor, Bureau of
Labor Statistics, for the previous year.
8. Effective as of [***], and notwithstanding anything else to
the contrary in the Agreement, Airline grants to Orbitz and its
Affiliates a limited, non-exclusive, non-transferable, worldwide, fully
paid up, perpetual and irrevocable (except as expressly provided
herein) license to copy, modify, display, perform, make derivative
works of, and otherwise use any [***] in conjunction with the Orbitz
website only, currently with the URL of xxx.xxxxxx.xxx, and any
successor website on the terms and conditions set forth in this
Agreement. Orbitz acknowledges and agrees that any access and use by
its customers will be subject to the terms and conditions posted to the
Orbitz website, which will include reasonable protections for Airline
at least as protective as the terms and conditions that Orbitz posts to
protect its own rights, limit its liability, and disclaim forms of
damages. For the purposes of this paragraph, the term [***].
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Orbitz and/or its Affiliates will not display or use the [***] as part
of any third party site or service. No right of sublicense is granted
to Orbitz or its Affiliates; provided, however, that Orbitz or its
Affiliates may permit third-party vendors, contractors, outsourcers
and other service providers to exercise the rights granted hereunder
on behalf, and for the benefit, of Orbitz or its Affiliates.
9. The Parties agree to negotiate in good faith a mutually acceptable
agreement regarding the development, integration, transition, and
hosting of Airline's [***] business (collectively, "[***]") to an
Orbitz-developed platform operated in conjunction with the Website (the
"Orbitz-Developed Platform").
10. Subject to Section 5.6 and other applicable provisions set forth in the
Agreement, Orbitz agrees to provide reasonable support to Airline, as
mutually agreed to by the Parties, in connection with the migration of
the Website to the [***] engine utilized by Orbitz.
11. This First Amendment must be signed by both Parties on or before
December 31, 2003.
12. All other terms of the Agreement remain unchanged.
13. Except as expressly set forth herein, the terms and provisions of the
Agreement are hereby restated in their entirety. From and after the
execution and delivery of this First Amendment by both Parties, all
references to the Agreement contained in other agreements and
instruments executed and delivered pursuant to or in connection with
the Agreement shall hereinafter mean and refer to the Agreement as
amended hereby. In the event of any contradiction(s) between this First
Amendment and the Agreement, the terms and conditions of this First
Amendment shall govern and control.
14. This First Amendment may be executed in counterparts, both of which
shall constitute one and the same instrument. A facsimile transmission
of this signed First Amendment bearing a signature on behalf of a party
hereto shall be binding on such party.
15. This First Amendment is subject to approval by the Orbitz Board of
Directors.
IN WITNESS WHEREOF, the Parties have caused this First Amendment to be
executed by their respective duly-authorized officers and effective as of the
Amendment Effective Date set forth above.
NORTHWEST AIRLINES, INC. ORBITZ, LLC
By: /s/ A. M. Xxxxx By: /s/ Xxxx Xxxxx
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Name: A. M. Xxxxx Name: Xxxx Xxxxx
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Title: 12/30/03 Title: VP Business Services
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VP, Distribution and E-Commerce 12/30/03
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