DEVELOPMENT, LICENSE AND HOSTING AGREEMENT
THIS DEVELOPMENT, LICENSE AND HOSTING AGREEMENT (this "Agreement") is
made as of September 9, 2001 (the "Effective Date"), by and between American
Airlines, Inc., a Delaware corporation with its principal offices in Fort Worth,
Texas ("AA"), and Orbitz LLC, a Delaware limited liability company with offices
in Chicago, Illinois ("Orbitz").
1. DEFINITIONS
The terms defined in this Section or elsewhere in this Agreement may
be used in the singular or plural, as the context requires.
1.1 "AA-COMPETITIVE FUNCTIONALITY" means those portions of the
AA-Specific Functionality that prior to the development of such functionality
are designated as "AA-Competitive Functionality" either in writing by mutual
agreement of the parties or otherwise in accordance with Section 4.2 of this
Agreement.
1.2 "AA INFORMATION" means booking information and other personally
identifiable information supplied by AA customers to Orbitz and any other trade
secret or confidential information supplied by AA to Orbitz under this
Agreement.
1.3 "AA-SPECIFIC FUNCTIONALITY" means that portion of the Orbitz
Software functionality that is made the subject of any Statement of Services or
Change Order and developed pursuant to this Agreement.
1.4 "AFFILIATE" means, with respect to any entity, any other entity
directly or indirectly controlling or controlled by, or 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. When used in this Agreement, the term "party" includes such
party's Affiliate.
1.5 "AIRLINE PARTNER" means any entity that has a codeshare, frequent
flyer alliance, or other similar marketing relationship with AA and/or its
Affiliates.
1.6 "CLAIM" means a third-party claim, demand, proceeding, suit or
action.
1.7 "COMPETITOR" means any passenger or cargo air transportation
carrier, Global Distribution System ("GDS"), or Computer Reservation System
("CRS") company.
1.8 "CHANGE REQUEST" means the form set forth as Exhibit A that will
be used to request any modification of or addition to the Core Functionality,
the AA-Specific Functionality, or the Services obligations.
1.9 "CONFIDENTIAL INFORMATION" has the meaning given to that term in
Exhibit G.
1.10 "CORE FUNCTIONALITY" means that portion of the Orbitz Software
functionality (and any Updates thereto) that is not AA-Specific Functionality
and that is used by Orbitz to provide the Hosting and Support Services,
including without limitation the functionality identified in Exhibit B.
1.11 "CUT-OVER DATE" means, (a) with respect to a merger or
acquisition, the date the transactions of the newly merged or acquired entity
are first booked, including, but not limited, to code sharing transactions,
using the Orbitz Software, and (b) with respect to a Divestiture Transaction,
the date following the effective date of such Divestiture Transaction on which
transactions associated therewith cease to be booked via the Orbitz Software.
1.12 "DATALEX SOFTWARE" means the software, if any, that is licensed
by Datalex Limited to
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Orbitz that Orbitz embeds in or otherwise uses as part of the Orbitz Software,
including but not limited to the booking software product known as BookIt!.
1.13 "DELIVERABLES" means the Orbitz Software, including but not
limited to the Core Functionality, the AA-Specific Functionality, and the
related Documentation, that Orbitz has agreed to deliver or make available to AA
pursuant to this Agreement (including any Statement of Services or any Change
Request accepted in accordance with Section 7.2 of this Agreement).
1.14 "DELIVERY DATE" means the date that the parties have specified
for the delivery of the Orbitz Software, as set forth in Exhibit C and as may be
amended by mutual written agreement.
1.15 "DIVESTITURE TRANSACTION" has the meaning given to that term in
Section 6.3(d).
1.16 "DOCUMENTATION" means the user manuals, technical material and
maintenance, and support documentation that Orbitz delivers to AA and that are
related to the use and operation of the Orbitz Software.
1.17 "HOSTING AND SUPPORT FEE" means a fee to be paid by AA to Orbitz
on an annual basis as specified in Section 6.2 and Exhibit D in consideration
for the Hosting and Support Services.
1.18 "FUTURE DEVELOPMENT SERVICES" means the Requirements definition,
design and development services, other than Initial Development Services, that
Orbitz and AA agree Orbitz will provide to AA, either directly or though
Subcontractors, pursuant to this Agreement.
1.19 "HOSTING AND SUPPORT SERVICES" means the hosting,
implementation, maintenance, support, construction, testing, installation and
initial implementation services that Orbitz has agreed hereunder to provide to
AA, either directly or though Subcontractors, pursuant to this Agreement,
including Article 5 and Exhibit D.
1.20 "INITIAL DEVELOPMENT SERVICES" means the Requirements
definition, design and development services that Orbitz and AA have agreed
Orbitz will provide to AA on or before the Delivery Date, either directly or
though Subcontractors, pursuant to this Agreement.
1.21 "INITIAL INSTALLMENT" has the meaning given to that term in
Section 6.5 of this Agreement.
1.22 "LABOR RATE" means the hourly rate which is calculated by
dividing the annual employment-related direct costs incurred by a party for any
employee performing services under this Agreement by 2,080 hours.
1.23 "LAUNCH DATE" means such date after acceptance by AA of the
Orbitz Software, as agreed upon by the parties, on which the Website will be
made available to AA customers.
1.24 "LOSS" means any liability, obligation, loss, damage,
deficiency, penalty, tax, levy, fine, judgment, settlement, cost, charge,
expense, legal fee and disbursement, or accountants' fee disbursement.
1.25 "MAXIMUM TRANSACTION VOLUME" means the number of Transactions
for each one-year period following the Launch Date as specified in Exhibit D.
1.26 "NOT-TO-EXCEED FEE ESTIMATES" mean the maximum fees chargeable
for development of the AA-Specific Functionality, as specified in an Estimate in
accordance with Section 4.2 of this Agreement.
1.27 "ORBITZ SOFTWARE" means the computer programs necessary to
perform the functionality described in Exhibit B to this Agreement and any
subsequent Statements of Services or Change Orders hereunder.
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1.28 "PROJECT MANAGERS" means the employees of AA and Orbitz, or
their replacements, who will manage specific projects, take responsibility for
project plans, timelines, and deployment of resources, and will serve as the
primary interface points to the development team under this Agreement.
1.29 "RELATIONSHIP MANAGERS" means the senior-level AA and Orbitz
employees identified in Exhibit E, or their replacements, who will manage the
relationship between AA and Orbitz and will serve as the single point of contact
within either party responsible for communications and problem resolution.
1.30 "REQUIREMENTS" means, with respect to any requested
Deliverables, AA's written requirements therefor, including but not limited to
the functional, business logic or Sabre/AA system specific rules or requirements
necessary to develop and test such functionality.
1.31 "SABRE-SPECIFIC CODE" means that portion of the Orbitz Software
which is necessary to interface with, and receive hosting from, the Sabre GDS.
1.32 "SCHEDULE" means the timetable for performing and completing the
Initial Development Services, as set forth in Exhibit C. The Schedule will be
integrated with AA's Fenix Master Schedule.
1.33 "SERVICES" means the Initial Development Services, the Hosting
and Support Services and any other services that Orbitz agrees to provide to AA
under this Agreement (including any Statement of Services or Change Order
hereunder).
1.34 "SPECIFICATIONS" means the functional and technical
specifications of, as the case may be, the Core Functionality or the AA-Specific
Functionality, including without limitation, the timeline for developing such
functionality and procedures for developing testing criteria.
1.35 "STATEMENT OF SERVICES" means a mutually executed document that
describes a specific project, engagement, or assignment for which Orbitz will
provide services to AA.
1.36 "SUBCONTRACTORS" means the subcontractors that Orbitz engages to
provide services under this Agreement.
1.37 "TERM" has the meaning given to that term in Section 16.
1.38 "THIRD PARTY COMPONENTS" means any third party software or
hardware that Orbitz may include in the Orbitz Software or use to provide the
Services.
1.39 "TRANSACTION" means each instance in which (i) a request from a
user of the Website results in creation of a new PNR (regardless of number in
party and number of segments), or (ii) more than 50% of the number of segments
in a previously-existing PNR are cancelled and a new itinerary produced for such
PNR; provided, however, that the cancellation of 100% of the segments of a
previously existing PNR without the creation of a new itinerary does not
constitute a Transaction.
1.40 "UPDATES" means any fix, correction, modification, upgrade,
enhancement or other change to the Orbitz Software that Orbitz makes generally
available from time to time during the Term.
1.41 "WEBSITE" means a website residing on the World Wide Web portion
of the Internet ("Web"), or any successor site(s) thereof, which AA
then-currently uses as a primary channel for directly marketing to the public.
2. GENERAL
2.1 ENGAGEMENT. Orbitz hereby agrees to provide AA, and AA hereby
agrees to receive from Orbitz, the Initial Development Services and the Hosting
and Support Services, pursuant to the terms and conditions of this Agreement.
Orbitz will provide AA with dedicated resources to provide the
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Initial Development Services. Orbitz will commence performance of the Hosting
and Support Services upon the Launch Date.
2.2 SUBCONTRACTORS. Subject to the limitation contained in Section 8,
Orbitz may subcontract its performance of the Services to one or more
Subcontractors. Prior to performing any Services, each Subcontractor must
execute a written agreement with Orbitz containing protections for AA's
confidential information and proprietary rights at least as protective as the
terms and conditions of this Agreement. Notwithstanding the foregoing, Orbitz
may not engage any Subcontractor who is then-currently providing any services to
a Competitor of AA without first obtaining AA's written approval.
2.3 SCHEDULE.
(a) Time is of the essence in the performance of the Initial
Development Services. Orbitz will use its best efforts to perform the Initial
Development Services to meet the Delivery Date.
(b) During the course of performance of the Initial
Development Services, AA and Orbitz may periodically modify the Schedule for
mutual convenience. Any such modification will be effective only if expressly
approved by both Relationship Managers pursuant to Section 7.
(c) As of the Effective Date, the target Launch Date is
March 15, 2002. In the event that AA pays the Initial Installment in advance of
the Launch Date in accordance with Section 6.5 of this Agreement, and the Launch
Date does not occur within seven months following the date of such payment,
which delay is not caused or contributed to by Orbitz, then the parties will
meet to discuss alternative solutions to address Orbitz's out-of-pocket costs,
if any, associated with such delayed Launch Date.
2.4 ANTICIPATED DELAYS. AA and Orbitz will immediately notify each
other if either party anticipates a delay in performing the Initial Development
Services according to the Schedule. Any such notice will identify the source and
expected length of the delay and its potential impact on the Initial Development
Services. Upon receipt of such notice, the Relationship Managers will promptly
seek in good faith to determine the potential impact and take the steps that may
be available to avoid or minimize the anticipated delay and its impact on the
Schedule.
2.5 FACILITIES. AA will provide Orbitz with access to those portions
of AA's offices that Orbitz may reasonably require to perform the Services. Such
access will be provided at mutually convenient times during AA's normal business
hours, unless otherwise agreed by the Relationship Managers. While working at AA
offices, the Orbitz employees and Subcontractors will adhere to AA's internal
rules and regulations; provided such rules and regulations have been
communicated to Orbitz.
3. MANAGEMENT
3.1 RELATIONSHIP MANAGERS. Each party will appoint a Relationship
Manager to act as the primary point of contact between the parties with respect
to this Agreement, and will designate an alternate for its primary Relationship
Manager to act in his or her absence or unavailability. No modification of the
Specifications or the Schedule will be effective unless expressly approved by
the primary or alternate Relationship Managers of both parties pursuant to
Section 7. Each Relationship Manager will appoint Project Managers to manage
specific projects under this Agreement. The Project Managers will serve as the
primary interface points between the parties with respect to such projects.
3.2 STATUS REPORTS. The Orbitz Relationship Manager will provide the
AA Relationship Manager with periodic status reports on Orbitz's progress during
the performance of the Initial Development Services. Each status report will
describe (a) the tasks performed since the prior status report, (b) the tasks
performed as compared to the tasks scheduled, (c) the tasks to be performed
during the next period and (d) any actual or anticipated problems or delays that
may have arisen in the Schedule. Prior to the Launch Date, the Relationship
Managers will meet at least once per month to
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discuss the status of the Initial Development Services. Following the Launch
Date, the Relationship Managers will meet at least once per quarter to discuss
the Hosting and Support Services.
3.3 PROJECT PROBLEMS. In the event of any actual or potential problem
or delay in the Initial Development Services or the Hosting and Support
Services, the Relationship Managers will discuss the relevant sources, possible
remedies and potential impact on the Initial Development Services or the Hosting
and Support Services at the next scheduled status meeting or, at either
Relationship Manager's request, an emergency meeting. To assist in such
discussions, each Relationship Manager may invite any applicable Project
Managers or other persons to the scheduled or emergency meeting. If a
modification of the Specifications or the Schedule is required as a result of
the problem or delay, the Relationship Managers will follow the procedures
specified in Section 7.
4. DEVELOPMENT
4.1 INITIAL DEVELOPMENT SERVICES.
(a) Specifications.
(i) Orbitz will provide AA with (A)
Specifications for the Core Functionality identified in Exhibit B that will be
available on the Delivery Date and (B) dedicated resources to assist AA in
determining the AA-Specific Functionality necessary to implement the Orbitz
Software. AA will thereafter provide Orbitz with a definitive list of the
requested Deliverables, along with any Requirements therefor, within any time
period set forth in the Schedule.
(ii) Orbitz will, within the time period set
forth in the Schedule, review the Requirements described in the preceding
subsection and provide AA with (A) Specifications for the Deliverables, (B) a
Not-To-Exceed Fee Estimate for the development of any requested AA-Specific
Functionality, and (C) a non-binding fee estimate for the development of any
requested AA-Competitive Functionality. The Specifications will include
procedures for developing mutually acceptable, objective criteria for testing
the Deliverables and any applicable requirements specifying the physical
locations where development will occur.
(iii) Following receipt of the Specifications,
the Not-To-Exceed Fee Estimate and the non-binding fee estimate described in the
preceding subsection, within the time period set forth in the Schedule AA will
provide Orbitz with written verification of which portions of the Deliverables
AA requests that Orbitz develop. Thereafter, AA and Orbitz will use reasonable
commercial efforts to agree upon the prioritization of the functionality to be
included in the Deliverables by the date set forth in the Schedule, including
the Core Functionality, the AA-Specific Functionality, and any other Initial
Development Services.
(b) Deliverables. Upon the parties' mutual agreement of
the prioritization of the Specifications in accordance with Section 4.1(a)(iii),
Orbitz will provide AA with dedicated resources to support the development of
the Deliverables. Orbitz will develop the Deliverables requested by AA in
accordance with the development milestone dates set forth in the Schedule.
Sabre-Specific Code will be considered AA-Specific Functionality, for which AA
will pay any applicable License and Development Fees in accordance with this
Agreement; provided, however, that at such time that Orbitz makes Sabre-Specific
Code available to, or uses Sabre-Specific Code for the benefit of, any
Competitor hosted in a Sabre GDS, any subsequent development of Sabre-Specific
Code will be considered Core Functionality, the development of which is not
chargeable to AA. When Orbitz has satisfactorily completed coding and testing of
the Deliverables, Orbitz will: (i) notify AA, (ii) provide the Orbitz test
results to AA, and (iii) make such Deliverables available to AA for acceptance
testing.
4.2 FUTURE DEVELOPMENT SERVICES. Subject to Section 4.8, after the
Launch Date, AA may from time to time during the Term request that Orbitz
develop additional AA-Specific Functionality by submitting a Statement of
Services listing the requested AA-Specific Functionality and any Requirements
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therefor. Orbitz will promptly review such Requirements and provide AA with (a)
Specifications for such AA-Specific Functionality; (b) a Not-To-Exceed Fee
Estimate for the development of such AA-Specific Functionality, including a
non-binding fee estimate for the development of any AA-Competitive
Functionality; (c) in the event Orbitz does not agree to designate any requested
AA-Competitive Functionality as such, a written statement indicating such
denial; and (d) an estimated timetable for commencement and completion of such
additional AA-Specific Functionality (collectively, the "Estimate"). Orbitz will
use commercially reasonable efforts to ensure that the Estimate is based on
assumptions and data that are realistic, reasonable and attainable. The
Specifications will include procedures for developing mutually acceptable,
objective criteria for testing the AA-Specific Functionality and any applicable
Requirements specifying the physical locations where development will occur. In
the event AA elects to proceed with such development in accordance with the
Estimate, Orbitz will take all reasonable steps to make available to AA
sufficient resources to fulfill the request. In the event any aspect of the
Estimate is not reasonably suitable to AA, Orbitz will allow AA to fund
dedicated Orbitz resources to fulfill such request, with such efforts being
provided at the rates set forth in Section 6.1(b) of this Agreement, provided
that such funding commitment is for a duration of not less than six months for
each such dedicated resource.
4.3 ACCEPTANCE TESTING.
(a) Following receipt of Orbitz's notice that a
Deliverable is ready for acceptance testing, AA will test the Deliverable within
the time period set forth in the Schedule (the "Test Period") to determine
whether the Deliverable substantially conforms to the Specifications. AA's
acceptance testing will include unit testing, system testing within the total
Orbitz Software solution, and XX.xxx site integration testing. If AA determines
after such acceptance testing that a Deliverable substantially conforms to the
Specifications, AA will accept such Deliverable and provide Orbitz with notice
that the Deliverable is accepted. Acceptance of a Deliverable will occur on the
later to occur of (i) the date AA successfully completes acceptance tests
demonstrating that the Deliverable substantially conforms to the acceptance
criteria specified in the applicable Statement of Services and AA issues a
written notice of acceptance, or (ii) ten days after the end of the Test Period.
(b) If a Deliverable fails to substantially conform to the
Specifications, AA will provide Orbitz with a written report of the
non-conformity, within ten days after the end of the Test Period, specifying
such non-conformity in reasonable detail. Upon receipt of a non-conformity
report, Orbitz will either correct and resubmit the Deliverable for re-testing
within ten days of AA's notice of non-conformance, or as otherwise set forth in
the Schedule or, if Orbitz reasonably believes that such reported non-conformity
is actually a modification from the agreed upon Specifications, Orbitz will
notify AA that such reported non-conformity is actually a Change Request, to be
handled pursuant to Section 7. In the event that a Deliverable fails to pass
acceptance testing and the failure is due to causes outside the control of
Orbitz, Orbitz agrees to use its commercially reasonable efforts to make its
personnel available to provide assistance to help resolve the problem; such
assistance to be chargeable as Initial Development Services.
4.4 FAILURE TO DELIVER CONFORMING SOFTWARE. In the event that Orbitz
fails to deliver Deliverables substantially in conformance with the
Specifications, including the Requirements, within 30 days of the Delivery Date,
then AA will not be charged for any development efforts performed by Orbitz or
its Subcontractors following such 30 day period with respect to that
non-conforming Deliverable. In the event that Orbitz fails to deliver
Deliverables that are substantially in conformance with the Specifications
within 90 days of the Delivery Date, AA will have the option, at its sole
discretion, to either (a) terminate this Agreement, receive a refund of all the
License and Development Fees paid to Orbitz and be released from any further
payment obligation under this Agreement, including payment of the remaining
[***]% of the Fixed Hosting and Support Fee described in Section 6.2; (b) issue
a partial acceptance of the Deliverables and obtain a refund of any portion of
the License and Development Fees previously paid for
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any rejected Deliverables, including fees paid for any other previously
accepted Deliverables rendered unusable due to the rejected Deliverables; or
(c) extend the Delivery Date while reserving its right to revoke acceptance
pursuant to options (a) and (b) above if corrections to the defective
Deliverables are not completed in a timely manner. In the event AA elects to
issue a "partial acceptance" or extends the Delivery Date pursuant to (b) or
(c) above, AA will not be charged for any subsequent development services
performed by Orbitz or its Subcontractors required to complete such
Deliverables. The remedies available to AA under this Section 4.4 will only
apply to the extent that AA, including its subcontractors, has not caused or
contributed to the delay.
4.5 INSTALLATION AND INTEGRATION. Orbitz will be responsible for the
design, construction, installation and implementation of the Orbitz Software on
its servers or servers under its control. Upon implementation, Orbitz will
provide AA with all supporting documentation for the Orbitz Software as set
forth in the Specifications. Orbitz will not be responsible for any integration
services or for converting or loading any AA data into the Orbitz Software,
unless otherwise agreed in a Statement of Services or pursuant to the Change
Control Procedures.
4.6 INTERFACE TO SABRE. With respect to any connectivity interface
that is required under any Specifications, the parties acknowledge that Orbitz's
obligations to develop such connectivity interface is expressly dependent upon
the cooperation of Sabre and AA. Any such development, to the extent performed
by Orbitz, will be deemed AA-Specific Functionality for purposes of this
Agreement, and Orbitz will be solely responsible for the maintenance, support
and operation of such development. AA will provide Orbitz with any and all
information and assistance reasonably requested by Orbitz to develop and
maintain a connectivity interface with Sabre. Orbitz agrees that it will use
commercially reasonable efforts to cooperate with Sabre for all purposes in
connection with this Agreement. Orbitz will not be responsible for any delay or
failure to meet the Service Level Commitments specified in Exhibit F to the
extent such delay or failure is (a) caused by or related to AA's or Sabre's
failure to cooperate with Orbitz or to provide the information and assistance
that Orbitz may reasonably request to develop and maintain the connectivity
interface with Sabre, or (b) caused by or related to a failure in the Sabre
system.
4.7 LIMITATION. Orbitz will have no obligation to develop or provide
any functionality (including without limitation, coding rules or logic) with
respect to the Orbitz Software or the connectivity interface which is not
specifically requested by AA or included in any Statement of Services,
Specification or Change Order in accordance with this Agreement.
4.8 FURTHER DEVELOPMENT. Each party agrees that development of an
ongoing enhancement prioritization process is necessary to ensure that AA
receives the requisite resources should any Competitor select an Orbitz
solution. After the Delivery Date or upon completion of the Initial Development,
whichever is later, Orbitz will provide development services to AA pursuant to
the change control procedures set forth in Section 7. Any such subsequent
development of additional AA-Specific Functionality is outside the scope of
Orbitz's Hosting and Support Services obligations, and any such requests will be
handled as a new Statement of Services or as a Change Request pursuant to
Section 7.
4.9 ATTRIBUTION. Nothing in this Agreement will be deemed to require
AA to provide attribution for Orbitz or any third party with respect to the
Orbitz Software.
5. HOSTING AND SUPPORT
5.1 HOSTING. Following the Launch Date, during the Term Orbitz will
implement and host the Orbitz Software for AA as part of the Website in
accordance with this Article 5. Orbitz will be responsible for (a) host
connectivity for the Orbitz Software, (b) all hardware and third-party licenses
required to host the Orbitz Software that are identified in the Specifications
for the Orbitz Software, (c) the routine business and administrative expenses
incurred by Orbitz in hosting the Orbitz Software, and (d) development costs to
provide a direct connection link to the host of the Website. Orbitz will host
the Orbitz Software on servers located in Orbitz's primary hosting facility,
unless AA approves or agrees to hosting in another location.
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5.2 SERVICE LEVELS. Orbitz will meet or exceed the service levels set
forth in Exhibit F related to the Orbitz Software and performance of the Hosting
and Support Services (the "Service Level Agreement"). AA will use commercially
reasonable efforts to provide Orbitz with at least 24 hours advance notification
of any marketing events that are expected to create an unseasonably high spike
in the number of booking transactions. Orbitz will satisfy all reasonable
requests by AA for information AA requires to properly evaluate the performance
of Orbitz under this Agreement, including validating Orbitz's compliance with
Exhibit F.
5.3 SUPPORT. AA will perform all customer service related to, and
will be responsible for the fulfillment of, all bookings made through the
Website. Orbitz will provide second and third level technical support for the
Orbitz Software twenty-four hours per day, seven days per week, in accordance
with the second and third level support standards set forth in Exhibit F. At
AA's request and expense, Orbitz will provide first level support for the Orbitz
Software directly to AA customers for an additional fee. Such support will be
provided pursuant to Orbitz's then-current first level support terms and
conditions. Support will extend to, and be provided for, any Core Functionality
or Updates thereto developed during the Term and the connectivity interface
developed pursuant to Section 4.6.
5.4 UPDATES. Orbitz will make available to AA all Updates to the
Orbitz Software in a form which is compatible with the AA-Specific
Functionality, and will use commercially reasonable efforts to provide such
Updates to AA within 30 days of Orbitz's general release thereof. Such Updates
will include third party licensor functionality incorporated into the Orbitz
Software, to the extent permitted by Orbitz's agreements with its licensors.
Notwithstanding the foregoing, in no event will AA be charged an additional fee
for such Updates, unless otherwise agreed by AA. AA will have the right to
refuse, or delay implementation of, any Updates if such Updates: (a) involve an
additional third party license fee; (b) have been observed to cause performance
problems or degradation; or (c) will cause AA to incur additional indirect costs
(such as for related user interfaces) in order to implement the Update. If AA
elects not to implement an Update pursuant to the preceding sentence, Orbitz
will continue to provide support as described in Section 5.3 for the then
currently installed version of the Orbitz Software. Orbitz will use commercially
reasonable efforts to develop and release any Updates that are reasonably
requested by AA to keep the air transportation booking aspects of the Core
Functionality competitive with, and comparable to, similar products in the
marketplace.
5.5 OUT-OF-SCOPE SERVICES. Orbitz is not responsible for profile
databases, Website presentation or design, ITA pricing services, shared use of
other Orbitz partnerships, non-air functionality, customer service (unless
otherwise agreed by the parties in writing), fulfillment, or any and all other
services not specifically identified in this Agreement. The Orbitz Software does
not include the ITA pricing engine and is for air transportation bookings only.
In the event that AA obtains a license to the ITA pricing engine from ITA,
Orbitz will provide AA with support to implement such functionality into the
Orbitz Software. Any such support will be provided as a Change Request pursuant
to Section 7, and the fee for such support will be calculated using Orbitz's
Labor Rate. AA will negotiate the requisite license directly with ITA for such
functionality, or such other future third party licensor, as the case may be.
6. FEES AND PAYMENT
6.1 LICENSE AND DEVELOPMENT FEES.
(a) Initial Development Services. In consideration for the
licenses granted by Orbitz hereunder and the Services related to development of
the AA-Specific Functionality and AA-Competitive Functionality as part of the
Initial Development Services performed by Orbitz personnel, AA will pay Orbitz a
fee (the "License and Development Fee") for such Initial Development Services at
the agreed upon rate of $[***], whether such Initial Development Services were
performed prior to or after the Effective Date.
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(b) Future Development Services. The License and
Development Fee for Services related to development of AA-Specific
Functionality (other than AA-Competitive Functionality) as part of the Future
Development Services performed by Orbitz personnel will be calculated using
Orbitz's Labor Rate. The License and Development Fee for Services related to
development of AA Competitive Functionality as part of the Future Development
Services performed by Orbitz personnel will be calculated using the then
current market rates, as determined by the parties based upon rates then
being charged by Orbitz or its Subcontractor (as the case may be) for similar
services. AA will also reimburse Orbitz the actual costs (without markup)
incurred for any third party professional services; provided, however, that
Orbitz will notify AA of such third party rates in advance of performance of
such services.
6.2 FIXED HOSTING AND SUPPORT FEES. Following the Launch Date, Orbitz
will perform the Hosting and Support Services for an annual Fixed Hosting and
Support Fee, as set forth in Exhibit D.
6.3 FIXED HOSTING AND SUPPORT FEE CHANGES.
(a) In the event that either (i) the United States
Department of Justice or the Department of Transportation initiate formal
proceedings against Orbitz that result in the entry of a final, non-appealable
judgment, or (ii) Orbitz enters into an agreement or consent decree with either
such Department, that prohibits or restricts Orbitz' operation of its online
booking site and such prohibition or restriction is reasonably expected to
impact Orbitz' ability to host the Orbitz Software as contemplated by this
Agreement, then AA will have the option to host, or engage a third party to
host, the Orbitz Software without changing the other obligations of Orbitz set
forth herein. In such event, the annual Fixed Hosting and Support Fee will be
reduced by the cost incurred by AA to host, and establish and maintain the
connectivity required to host, the Orbitz Software for each year (or portion
thereof) remaining in the Term.
(b) The parties acknowledge and agree that the pricing
offered by Orbitz herein is based on AA's current and projected booking
transaction volumes, based on internally generated growth. In the event that AA
is a party, directly or indirectly, to (i) a merger, (ii) an acquisition of all
or substantially all of the assets of a third party, (iii) an acquisition of the
majority of the issued and outstanding voting stock of a third party by AA, or
(iv) the acquisition of assets of a third party by AA, the result of any of
which is an increase in AA's operations by more than [***]% (each, an
"Acquisition Transaction"), and such Acquisition Transaction is reasonably
expected to result in a Booked Volume Increase (as defined in Section 6.3(f)) of
more than [***]%, then the annual Fixed Hosting and Support Fee will be
increased (the "Fixed Hosting and Support Fee Increase") by an amount equal to
(x) the increase in costs incurred by Orbitz due solely to the Booked Volume
Increase, plus (y) [***]% of such costs; provided, however, that the Fixed
Hosting and Support Fee Increase will not exceed an amount equal to the Booked
Volume Increase percentage times the then current annual Fixed Hosting and
Support Fee. One-twelfth (1/12) of the Fixed Hosting and Support Fee Increase
will be added for each month remaining in the then current year of the
Agreement, and for each subsequent year during the Term, to be effective as of
the Cut-over Date and payable in accordance with the Fixed Hosting and Support
Fee schedule.
(c) (Intentionally left blank).
(d) In the event that AA experiences, directly or
indirectly, (i) a merger or divestiture of substantially all of the assets of AA
(defined as [***]% or more of its operations), or (ii) divestiture of the
majority of the issued and outstanding voting stock of AA (each, a "Divestiture
Transaction") that is reasonably expected to result in a Booked Volume Decrease
(as defined in Section 6.3(f)) of more than [***]%, then the annual Fixed
Hosting and Support Fee will be decreased by an amount (the "Fixed Hosting and
Support Fee Decrease") equal to the amount of such Booked Volume Decrease times
the then-current Hosting and Support Fee (the "Hosting and Support Fee
Decrease"); provided, however, that if Orbitz can establish that the costs
incurred by Orbitz solely in connection with the Booked Volume Decrease will
decrease by an amount (the "Cost Decrease") less than the Hosting and Support
Fee Decrease, then the "Hosting and Support Fee Decrease will equal the Cost
Decrease; provided, further, that in any event, the Hosting and Support Fee
Decrease will not exceed the value of the Booked Volume Decrease percentage
applied to then current Hosting and Support Fee. One-twelfth of the Fixed
Hosting and Support Fee Decrease will be subtracted for each month remaining in
the then current year
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CONFIDENTIAL Page 9
of the Agreement and for each subsequent year during the Term, to be effective
as of the Cut-over Date.
(e) In the event that Datalex Software is not used by
Orbitz to provide the Initial Development Services or Hosting and Support
Services, the annual Fixed Hosting and Support Fee will be reduced by $[***] for
each year (or portion thereof) remaining in the Term. In the event that any
Datalex Software is used by Orbitz to provide the Initial Development Services
or Hosting and Support Services, and the sublicense fee paid by Orbitz to
Datalex is less than $[***], then the annual Fixed Hosting and Support Fee will
be reduced by the amount of such fee reduction.
(f) For purposes of this Section 6.3, "Booked Volume
Increase" or "Booked Volume Decrease," will be calculated as (i) the difference
between XX.xxx's average monthly Transactions during the first 90 days following
the Cut-over Date and XX.xxx's average monthly Transactions during the 90 days
immediately preceding the Cut-over Date, divided by (ii) XX.xxx's average
monthly Transactions during the 90 days immediately preceding the Cut-over Date.
(g) In the event that Orbitz, as the result of any cause
other than superseding law or regulation, or court or government agency order,
discontinues hosting, maintenance and/or support of the Orbitz Software, (i) the
Fixed Hosting and Support Fee will thereafter be reduced by the greater of (A)
the amounts shown on the following table, or (B) an amount equal to the cost
incurred by AA to secure comparable replacement services, and (ii) Orbitz will
refund to AA a prorated portion of the then-current quarter's Fixed Hosting and
Support Fee, with such proration equal to one-twelfth of the reduced amount
described in the foregoing clause, multiplied by the number of months remaining
in the then-current contract quarter:
-------------------------------- ---------------------------------------
Discontinued Service Percentage reduction in Fixed Hosting
and Support Fee
-------------------------------- ---------------------------------------
Hosting 33.33%
-------------------------------- ---------------------------------------
Maintenance 33.33%
-------------------------------- ---------------------------------------
Support 33.33%
-------------------------------- ---------------------------------------
6.4 REIMBURSABLE EXPENSES. AA will reimburse Orbitz at cost for the
reasonable, pre-approved travel and lodging and related out-of-pocket expenses
that Orbitz or its Subcontractors may incur in performing the Services (the
"Reimbursable Expenses"). Orbitz or its Subcontractors will use travel
authorization certificates (TACs) for air transportation whenever possible.
Orbitz will furnish AA with appropriate receipts for all Reimbursable Expenses.
6.5 PAYMENT TERMS. The annual Fixed Hosting and Support Fee will be
invoiced in four equal installments at the beginning of each calendar quarter
following the Launch Date. At Orbitz's option, the first installment payment
(the "Initial Installment") may be invoiced in advance of the Launch Date on the
date when the production environment is fully prepared for testing by AA, but no
earlier than November 15, 2001; provided, however, that in such event all
subsequent installments will be invoiced and payable as set forth above starting
with the beginning of the second calendar quarter following the Launch Date.
License and Development Fees and Reimbursable Expenses will be invoiced monthly.
AA will pay all undisputed invoices within 30 days of receipt of a correct
invoice. In the event that AA asserts in good faith that any item or items on an
invoice are not correct, then AA will within 30 days of receipt of such invoice
(i) deliver written notice to Orbitz explaining in detail why AA believes that
an item or items are not correct and (ii) pay to Orbitz all amounts on the
invoice that are not the subject of a good faith
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CONFIDENTIAL Page 10
dispute by AA.
6.6 TAXES.
(a) The License and Development Fees, Fixed Hosting and
Support Fees, and Reimbursable Expenses are exclusive of all sales, services or
other taxes that Orbitz may be legally obligated to charge AA for performing the
Services, and AA will promptly pay, or reimburse Orbitz for the payment of, any
and all such taxes that may be due or payable. Orbitz will honor any tax-exempt
certificates provided by AA.
(b) AA will not be liable for the payment or reimbursement
to Orbitz of any franchise taxes or fees, or any taxes measured by or against
Orbitz's income or property. AA will not withhold taxes or Social Security
payments from any sum paid to Orbitz under this Agreement. Orbitz acknowledges
and agrees that Orbitz is solely responsible for the payment of its federal,
state and local employment taxes. Orbitz agrees to indemnify AA for all tax
liability described in this Section 6.6(b), including interest and penalties, if
any.
6.7 MOST FAVORED CUSTOMER. During the Term, the financial terms of
this Agreement will be at least as favorable or more favorable than the
financial terms of any other current or prospective Orbitz customer that engages
Orbitz for a project that is substantially similar to the engagement
contemplated herein. The determination of what is and is not "substantially
similar" will be based on relevant factors such as scope of project, volume of
transactions, amount of integration and custom development work required, and
pricing model. Any change in financial terms pursuant to this clause will only
be applied on a prospective basis, effective as of the effective date of such
other customer's agreement with Orbitz, whether such agreement is effective
before or after the Effective Date.
6.8 REPORTING; AUDIT. Orbitz will create and maintain accurate
records with respect to its performance under this Agreement, including without
limitation the number and substance of all Transactions and the calculation of
the Monthly System Availability. Orbitz will maintain such records during the
Term and for one year following any expiration or termination of this Agreement.
Within five days following the end of each applicable month, Orbitz provide AA
with written reports of such information, which reports will be in such detail
as may be reasonably requested by AA from time to time, including without
limitation detail as to the number and substance of all Transactions (with a
breakdown of new PNRs and modified PNRs) and Monthly System Availability. AA
will have the right, upon not less than five days prior notice, to conduct an
audit of the Transaction information included in such monthly reports. If such
an audit reveals that any of Orbitz's reports submitted overstated amounts owed
by AA, then Orbitz shall pay to AA, within 30 days following the conclusion of
such audit, the amount of any such overpayments.
7. CHANGE REQUESTS
7.1 CHANGE REQUEST. If either party wants to request a modification,
addition or replacement of the Orbitz Software (including, but not limited to,
the Core Functionality and the AA-Specific Functionality) or the Hosting and
Support Services, that party's Relationship Manager will submit a completed
Change Request to the Relationship Manager of the other party. The Change
Request will adequately describe (a) the requested modification, (b) the
estimated resources required to implement the modification, (c) its impact on
the Schedule, (d) its impact, if any, resulting in an increase or decrease to
the License and Development Fees and/or the Fixed Hosting and Support Fees and
(e) its impact on the maintenance requirements of the Orbitz Software.
7.2 CHANGE ACCEPTANCE. Upon receipt of a completed Change Request,
the recipient Relationship Manager will either (a) expressly accept the proposed
modification without qualification within 5 days after its receipt or (b) defer
the request for discussion of the next scheduled or emergency status meeting.
The Relationship Managers will use reasonable commercial efforts to resolve any
deferred proposed modification expeditiously. No proposed Change Request will be
effective unless expressly accepted by the primary or alternate Relationship
Managers of both parties. If so accepted, the
CONFIDENTIAL Page 11
Change Request will be executed by the Relationship Managers of both parties and
will then constitute a formal amendment of this Agreement.
8. CONFIDENTIALITY
The following provisions shall supplement the terms of that certain
Non-Disclosure Agreement that was attached as Exhibit C to the Letter of Intent
between AA and Orbitz executed in April 2001 (the "NDA"), a copy of which is
attached as Exhibit G to this Agreement and incorporated by reference herein.
The NDA shall continue to be in full force and effect during the term of this
Agreement:
8.1 PROTECTION OF CONFIDENTIAL INFORMATION. Each party agrees to
maintain strict confidentiality regarding the subject matter of this Agreement,
in accordance with the NDA. Each party will take such measures that are
necessary to protect against the disclosure or use of the Confidential
Information of the other party as it takes to protect its own proprietary or
confidential information (but in any case no less than reasonable measures).
Each party agrees that the other party will have no adequate remedy at law if
there is a breach or threatened breach of this Section 8 or the NDA and,
accordingly, that either party will be entitled (in addition to any legal or
equitable remedies available to such party) to injunctive or other equitable
relief to prevent or remedy such breach.
8.2 RESTRICTIONS ON DISCLOSURE AND USE. Notwithstanding anything
contained in the NDA, Orbitz will not disclose any Confidential Information
provided to it by AA, including the terms and conditions of this Agreement and
any advanced fare information provided under Section 5.2 of this Agreement or
otherwise, to any equity owners or principals of Orbitz that are employed by a
Competitor of AA except to the extent required by the laws of the State of
Delaware and/or the Orbitz LLC Agreement dated May 9, 2000 (formerly the "DUNC
LLC Agreement"). In the event such disclosure is required pursuant to the laws
of the State of
Delaware, Orbitz will provide advance notice to the Vice
President of Customer Technology at AA and provide AA sufficient time to contest
the need for such disclosure prior to making such disclosure. In the event
disclosure is required pursuant to the Orbitz LLC Agreement, Orbitz will provide
advance notice to, and obtain written approval of such disclosure from, the Vice
President of Customer Technology at AA, which approval will not be unreasonably
withheld.
9. PROPRIETARY RIGHTS
9.1 OWNERSHIP.
(a) As between AA and Orbitz, and to the extent of
Orbitz's prior ownership rights, AA acknowledges that Orbitz will own all
patents (including any business process patents), rights to file for patents,
inventions, copyrights, trademarks, trade secrets and all other right, title and
interest (including any renewals or extensions) in or to the Orbitz Software,
including the AA-Specific Functionality (but excluding the AA-Competitive
Functionality) developed by Orbitz or its employees or Subcontractors during the
performance of this Agreement and any derivative works thereof created by
Orbitz. AA hereby assigns and agrees to assign, and will cause its
Subcontractors to assign, to Orbitz all rights that AA may have or acquire in or
to such works for no additional consideration. No other person will acquire or
retain any rights in or to such works, unless Orbitz otherwise agrees on a
case-by-case basis. At Orbitz's request and expense, AA will cause the execution
of the instruments that may be appropriate to give full legal effect to this
Section for no additional consideration. Orbitz will not subcontract with a
third party developer granting any ownership rights to any AA-Specific
Functionality that would in any way impair AA's ability to have and enjoy full
use of the licenses and rights granted to AA under this Agreement.
(b) Orbitz acknowledges and agrees that it will develop
the AA-Competitive Functionality for AA as a "work-made-for-hire" and that AA
will own the copyright in or to the AA-Competitive Functionality, upon payment
to Orbitz of the applicable License and Development Fees for such AA-Competitive
Functionality. As between Orbitz and AA, Orbitz acknowledges that AA will own
all trademarks, trade secrets and all other right, title and interest (including
any renewals or extensions), excluding patent rights, in or to the
AA-Competitive Functionality and any derivative works thereof created by Orbitz.
Orbitz hereby assigns and agrees to assign, and will cause its Subcontractors to
assign, to AA
CONFIDENTIAL Page 12
for no additional consideration all rights that Orbitz may have or acquires in
or to such works. No other person will acquire or retain any rights in or to
such works, unless AA otherwise agrees on a case-by-case basis. At AA's request
and expense and for no additional consideration, Orbitz will cause the execution
of the instruments that may be appropriate to give full legal effect to this
Section for no additional consideration. Each party agrees that it will not file
a patent application with respect to the AA-Competitive Functionality or any
derivative works thereof without the written consent of the other party.
9.2 LICENSE TO AA.
(a) Upon AA's Acceptance of any Orbitz Software, Orbitz
grants AA the limited, paid-up, non-exclusive, non-transferable, royalty-free,
worldwide right, effective during the Term, to access and use (and permit its
customers to access and use) such Orbitz Software (other than the AA-Competitive
Functionality, which will be owned by AA in accordance with Section 9.1 of this
Agreement) on the terms and conditions set forth in this Agreement. AA
acknowledges and agrees that any access and use by its customers will be subject
to the terms and conditions posted to the Website, which will include
protections for Orbitz at least as protective as the terms and conditions that
AA posts on the Website to protect its own rights, limit its liability, and
disclaim forms of damages. AA will not display or use the Orbitz Software as
part of any third party site or service.
(b) Upon AA's Acceptance of the AA-Specific Functionality
(other than AA-Competitive Functionality, which will be owned by AA in
accordance with Section 9.1 of this Agreement), Orbitz grants AA the perpetual,
royalty-free, worldwide right to access and use such AA-Specific Functionality,
in both source and object code forms, for AA's ordinary and customary business
purposes; provided, however, that AA will not have the right to market or
distribute the AA-Specific Functionality to any third party.
(c) During the Term of this Agreement, AA may access and
use (and allow its customers to use) the Orbitz Software licensed hereunder to
search, view, reserve and/or purchase travel-related products and services
offered by AA, its Affiliates, Airline Partners and other air transportation
companies in accordance with the terms and conditions set forth in this
Agreement.
(d) Agents of AA who are under contract with AA to provide
outsourcing services, including, but not limited to, providing application
development services, data processing or other transactional services for the
benefit of AA and/or its Affiliates and Airline Partners, are authorized to
access and use the Orbitz Software in accordance with the terms and conditions
set forth in this Agreement.
(e) At the expiration or termination of this Agreement, AA
will have the option to purchase from Orbitz, and Orbitz agrees to grant to AA,
a perpetual, non-exclusive license to the compiled and object code for the
Orbitz Software (including the related Documentation) for a [***] fee [***]. If
AA elects not to exercise its option to purchase a license to the Orbitz owned
software, AA will be responsible for the full payment of the fee associated with
such independent third party. If AA decides to exercise its option to purchase a
license to the Orbitz Software, such purchase will be at the price [***]. After
such acquisition, AA will have the right to host and use the Orbitz Software
thereafter in accordance with subsection 9.2(d) of this Agreement.
9.3 LICENSE TO ORBITZ. Effective during the Term, AA hereby grants
Orbitz the non-exclusive, non-transferable, royalty-free, world-wide right to
(a) use the AA Information solely to perform its obligations under this
Agreement; (b) use aggregated customer data derived from the Website bookings
for internal site management purposes, provided that Orbitz will not use or
disclose such customer data for customer tracking or any other purposes
whatsoever; and (c) use, host and display the AA-Competitive Functionality only
to provide the Hosting and Support Services to AA and to modify and adapt the
AA-Competitive Functionality for AA in accordance with this Agreement, either
directly or
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CONFIDENTIAL Page 13
through Subcontractors.
10. ESCROW
10.1 ESCROWED MATERIALS. No later than 60 days after the Effective
Date, and within 30 days after release of each Update, Orbitz will deliver to
Fort Xxxx Escrow Services, as escrow agent, the following: (a) a copy of the
current, fully commented version of the source code of the latest release of the
Orbitz Software that Orbitz owns, (b) the available Documentation related
thereto, and (c) reproducible binary masters of the latest release of the Orbitz
Software (collectively, "Escrowed Material"). A copy of the Escrow Agreement
between Orbitz and Fort Xxxx Escrow Services related to the Escrowed Materials
will be attached hereto as Exhibit H upon execution.
10.2 MAINTENANCE. Orbitz will replace the source code of the Orbitz
Software in the event of a media defect. The nature and completeness of the
Escrowed Materials will be subject to verification by a representative of AA
only at the facilities of the escrow agent in the presence of a representative
of Orbitz. AA may not make any copies, in whole or in part, of the Escrowed
Material, and all such material will be considered to be Confidential
Information regardless of whether they have been marked "confidential". All
expenses associated with establishing and maintaining the Escrowed Materials
will be shared equally between AA and Orbitz.
10.3 RELEASE CONDITION. If Orbitz (a) generally discontinues hosting,
maintenance and/or support of the Orbitz Software, (b) is in material, uncured
breach of its maintenance and support obligations to the extent that it is in
breach of its support standard commitments for Severity 1 or Severity 2,
including those defined as a "Material Service Level Failure" in Exhibit F, or
(c) is insolvent, files a petition in bankruptcy or has such a petition filed
against it (and fails to lift any stay imposed thereby within 60 days after such
stay becomes effective), has a receiver appointed with respect to all or
substantially all of its assets, makes an assignment for the benefit of
creditors, or ceases to do business in the ordinary course, then AA may demand
the release of the Escrowed Material by simultaneously sending the escrow agent,
with a copy to Orbitz, a written demand for the Escrowed Material by overnight
courier. Orbitz will cause the escrow agent to release the Escrowed Material to
AA within five business days after Orbitz's receipt of the demand notice unless
Orbitz has notified the escrow agent and AA that it disputes that a release
condition has occurred within such five-day period. If Orbitz has not provided
AA with material information within ten days of Orbitz's notification to the
escrow agent which establishes that none of the release conditions set forth
above have occurred, Orbitz's dispute will be deemed withdrawn and the escrow
agent will release the Escrowed Material to AA.
10.4 RIGHTS. In the event the Escrowed Material is released to AA,
Orbitz grants to AA a fully paid up license to use and modify the Escrowed
Material solely to maintain and support the Orbitz Software in accordance with
the terms of this Agreement and for no other purpose. AA will maintain the
Escrowed Material on a secure system with access limited to only those persons
necessary to maintain and support the Orbitz Software. AA may make only such
copies of the Escrowed Material as are reasonably required for archival and
disaster recovery purposes, and AA will keep any such copies under lock and key.
10.5 THIRD PARTY SOFTWARE. If the Orbitz Software includes the
Datalex Software or if Orbitz uses the Datalex Software to provide Hosting and
Support Services, within 60 days following the time that Orbitz decides to use
Datalex Software, Orbitz will use its best efforts to obtain a written agreement
with Datalex, a copy of which will be provided to AA, which provides that (a) in
the event AA receives the Orbitz-owned code as pursuant to this Agreement, the
license to the Datalex Software (including any code developed by Datalex to
support the Website) granted to Orbitz for hosting the Orbitz Software may be
assigned to AA, and (b) AA is a named third-party beneficiary of Orbitz's
agreement with Datalex. In such event, any license fees payable by AA to Datalex
for continued use of the Datalex Software, if any, will not exceed the rates
charged by Datalex to Orbitz to provide the Hosting and Support Services
hereunder. In the event Orbitz does not obtain such a written agreement, then in
the event that AA enters into a direct licensing agreement with Datalex for the
continued use of the Datalex Software, if the license fees payable by AA to
Datalex for such use exceed the rates charged by Datalex to Orbitz to provide
the Hosting and Support Services hereunder, any amounts due by AA to Orbitz
hereunder shall be reduced by an amount equal to the difference between the
rates charged by Datalex to Orbitz to provide the
CONFIDENTIAL Page 14
Hosting and Support Services hereunder and the licensing fees due from AA to
Datalex. Alternatively, in the event Orbitz does not obtain such a written
agreement, Orbitz shall have the option of removing the Datalex Software
provided that such removal does not reduce the functionality of the then-current
Orbitz Software or reduce AA's ability to host and support the Orbitz Software.
11. WARRANTIES AND DISCLAIMERS
11.1 GENERAL WARRANTY. Each party represents and warrants that (a) it
has the full corporate authority to execute this Agreement and perform its
obligations hereunder and (b) execution or performance of this Agreement will
not violate or be considered a breach of any obligation of such party to any
third party. Each party agrees that with respect to any breach of the above
stated warranty, the non-breaching party's sole and exclusive remedy and the
breaching party's sole and exclusive liability will be the indemnity obligations
set forth in Section 12 below.
11.2 SPECIFIC WARRANTIES.
(a) Orbitz represents and warrants that it has, and will
continue to have during the Term, the right to license all Orbitz Software and
sublicense the Datalex Software (if such is used to provide Hosting and Support
Services) in accordance with this Agreement.
(b) Orbitz represents and warrants that it will perform
the Services in a good and workmanlike manner and, when applicable, in
accordance with the Service Level Agreement. In case of breach of warranty,
Orbitz will, as its sole and exclusive liability and as AA's sole and exclusive
remedy, (i) correct or re-perform the defective Services or, at Orbitz's
discretion, (ii) refund the fees actually paid to Orbitz for the defective
Services. In the event Orbitz provides the Hosting and Support Services in
breach of the above stated warranty, AA's sole and exclusive remedy and Orbitz's
sole and exclusive liability will be the service level credits or termination as
set forth in the Service Level Agreement.
11.3 LIMITATION. The warranties and remedies specified in this
Section will not apply to the extent the Deliverables or Services are defective
due to extrinsic causes beyond Orbitz's reasonable control, such as (a) natural
disasters, including without limitation fire, smoke, water, earthquakes or
lightning, (b) electrical power fluctuations or failures, (c) neglect or misuse
by AA, (d) a correction or modification of a Deliverable or Service not
authorized by Orbitz, or (e) the combination of a Deliverable or Service in any
manner not authorized by Orbitz.
11.4 WARRANTY DISCLAIMER. EXCEPT AS EXPRESSLY PROVIDED IN THIS
AGREEMENT, ALL WARRANTIES, CONDITIONS, REPRESENTATIONS, INDEMNITIES AND
GUARANTEES WITH RESPECT TO THE SERVICES, THE DELIVERABLES, THE ORBITZ SOFTWARE
OR ANY COMPONENT THEREOF, INCLUDING WITHOUT LIMITATION THE CORE FUNCTIONALITY
AND THE AA-SPECIFIC FUNCTIONALITY, WHETHER EXPRESS OR IMPLIED, ARISING BY LAW,
CUSTOM, PRIOR ORAL OR WRITTEN STATEMENTS BY ORBITZ, ITS AGENTS OR OTHERWISE
(INCLUDING, BUT NOT LIMITED TO ANY WARRANTY OR CONDITION OF SATISFACTORY
QUALITY, ACCURACY, UNINTERRUPTED USE, TIMELINESS, TRUTHFULNESS, SEQUENCE,
COMPLETENESS, MERCHANTABILITY, FITNESS FOR PARTICULAR PURPOSE OR
NON-INFRINGEMENT AND ANY IMPLIED WARRANTIES ARISING FROM TRADE USAGE, COURSE OF
DEALING OR COURSE OF PERFORMANCE) ARE HEREBY OVERRIDDEN, EXCLUDED AND
DISCLAIMED.
12. INDEMNITY
12.1 GENERAL THIRD-PARTY INDEMNITY.
(a) Orbitz will indemnify, defend and hold harmless AA, as
well as AA's Affiliates and licensees, and each of their officers, shareholders,
directors, employees and agents (collectively, the "AA Indemnified Parties")
from and against any and all Claims, including any related Losses that AA is
required to pay any third party in any way relating to, arising out of or
resulting from: (i) any gross
CONFIDENTIAL Page 15
negligence or willful misconduct of any employee or subcontractor of Orbitz;
(ii) breach of any warranty of Orbitz contained in Section 11.1 of this
Agreement; (iii) any actual or alleged infringement of any patent (other than
with respect to AA-Competitive Functionality), copyright, trademark, trade name,
trade secret or other proprietary or intellectual property right by any software
or service provided pursuant to this Agreement; or (iv) Orbitz's failure to
comply with any and all applicable laws, rules and regulations.
(b) AA will indemnify and hold harmless Orbitz, as well as
Orbitz's subsidiaries, licensees and Affiliates, and each of their officers,
shareholders, directors, employees and agents (collectively, the "Orbitz
Indemnified Parties") from and against any and all Losses in any way relating
to, arising out of or resulting from: (i) any gross negligence or willful
misconduct of any employee or subcontractor of AA; (ii) breach of any warranty
of AA contained in Section 11.1 of this Agreement; (iii) any actual or alleged
infringement of any copyright, trademark, trade name, trade secret or other
proprietary or intellectual property or privacy right by the AA Information; or
(iv) AA's failure to comply with any and all applicable laws, rules and
regulations related to the Website.
12.2 INDEMNIFICATION PROCEDURES.
(a) Promptly after any party entitled to indemnification
under this Section 12 ("Indemnitee") obtains knowledge of the potential
existence or commencement of a Claim, in respect of which Indemnitee is or may
be entitled to indemnification under this Agreement, such Indemnitee will
promptly notify the other party ("Indemnitor") of such Claim in writing;
provided, however, that any failure to give such notice will not waive any
rights of Indemnitee except to the extent that the rights of Indemnitor are
actually prejudiced thereby. Indemnitor will assume the defense and settlement
of such Claim with counsel reasonably satisfactory to Indemnitee at Indemnitor's
sole risk and expense; provided, however, that Indemnitee (i) will be permitted
to join in the defense and settlement of such Claim and to employ counsel at its
own expense; (ii) will reasonably cooperate with Indemnitor in the defense and
any settlement of such Claim; and (iii) will have the right to pay or settle
such Claim at any time in which event Indemnitee will be deemed to have waived
any right to indemnification therefor by Indemnitor. Indemnitor may settle any
Claim without Indemnitee's written consent unless such settlement (A) does not
include a release of all covered claims pending against Indemnitee; (B) contains
an admission of liability or wrongdoing by Indemnitee; or (C) imposes any
obligations upon Indemnitee other than an obligation to stop using any
infringing items.
(b) If Indemnitor fails to assume the defense of such
Claim or, having assumed the defense and settlement of such Claim, fails
reasonably to contest such Claim in good faith, Indemnitee, without waiving its
right to indemnification, may assume the defense and settlement of such Claim;
provided, however, that Indemnitor (i) may join in the defense and settlement of
such Claim and employ counsel at its own expense and (ii) will cooperate with
Indemnitee in the defense and settlement of such Claim. Indemnitee may settle
such Claim without Indemnitor's written consent unless such settlement (A) does
not include a release of all covered Claims pending against Indemnitor; (B)
contains an admission of liability or wrongdoing by Indemnitor; or (C) imposes
any obligations upon Indemnitor other than an obligation to stop using any
infringing items. Indemnitor will be liable to Indemnitee for all costs and
expenses incurred in connection with the defense and settlement of any Claim
pursuant to this Section 12.2(b).
(c) Upon a determination of liability in respect of this
Section 12, Indemnitor will pay Indemnitee the amount so determined within 10
business days after the date of such determination. If there should be a dispute
as to the amount or manner of determination of any indemnity obligation owed
under this Agreement, Indemnitor will nevertheless pay when due such portion, if
any, of the obligation as will not be subject to dispute. Upon the payment in
full of any claim, either by setoff or otherwise, the party or entity making
payment will be subrogated to the rights of Indemnitee against any person, firm,
corporation or other entity with respect to the subject matter of such claim.
12.3 INTELLECTUAL PROPERTY REMEDIES. In the event of a Claim under
Section 12.1(a)(iii) above, and in addition to all other obligations of Orbitz
in this Section 12, Orbitz will either (a) provide AA with reasonable assurances
acceptable to AA that AA will continue to have the right to use the affected
CONFIDENTIAL Page 16
products or services or (b) Orbitz will, at its expense, either (i) procure for
AA the right to continue use of such infringing products or services, or any
component thereof; or (ii) replace or modify the same with non-infringing
products or services satisfactory to AA, provided that Orbitz will provide AA
with a comparable temporary replacement product or reimburse AA for the
reasonable costs incurred by AA in obtaining an alternative product in the event
AA cannot use the affected product. If Orbitz cannot accomplish any of the
foregoing within a reasonable time and at commercially reasonable rates, then
Orbitz will accept the return of the infringing component of the products or
services, along with any other components of any products rendered unusable by
AA as a result of the infringing component, and refund the price paid to Orbitz
for such components.
13. NO CONSEQUENTIAL DAMAGES
EXCEPT WITH REGARD TO DAMAGES ARISING OUT OF ANY BREACH OF SECTION 8
OR FOR PERSONAL INJURY, AND THE INDEMNIFICATION OBLIGATIONS CONTAINED IN SECTION
12, WITH RESPECT TO EACH OF WHICH LIABILITY WILL NOT BE LIMITED PURSUANT TO THIS
SECTION 13, UNDER NO CIRCUMSTANCES WILL EITHER PARTY BE LIABLE FOR ANY
CONSEQUENTIAL, INDIRECT, SPECIAL, PUNITIVE OR INCIDENTAL DAMAGES OR LOST
PROFITS, WHETHER FORESEEABLE OR UNFORESEEABLE, AND WHETHER ARISING OUT OF BREACH
OR FAILURE OF EXPRESS OR IMPLIED WARRANTY, BREACH OF CONTRACT,
MISREPRESENTATION, NEGLIGENCE, STRICT LIABILITY IN TORT OR OTHERWISE. EXCEPT FOR
EITHER PARTY'S INDEMNIFICATION OBLIGATIONS EXPRESSLY SET FORTH HEREIN, CLAIMS
UNDER SECTION 8 HEREOF OR AA'S PAYMENT OBLIGATIONS, IN NO EVENT WILL THE
AGGREGATE LIABILITY WHICH EITHER PARTY MAY INCUR TO THE OTHER PARTY IN ANY
ACTION OR PROCEEDING EXCEED THE GREATER OF (X) THE TOTAL FEES PAYABLE BY AA TO
ORBITZ DURING THE 12 MONTH PERIOD PRECEDING THE EVENT THAT RESULTED IN SUCH
LIABILITY, OR (Y) ONE MILLION DOLLARS.
14. INSURANCE
Orbitz will be solely responsible for obtaining and maintaining
appropriate insurance coverage for its activities under this Agreement,
including, but not limited to, comprehensive general liability (bodily injury
and property damage) insurance and professional liability insurance and
requiring its subcontractors to have similar insurance coverage. At AA's
request, Orbitz will provide AA with copies of the certificates of insurance.
15. DISPUTE RESOLUTION
Unless otherwise agreed by the parties, any claim, controversy or
other dispute between the parties relating to this Agreement will, before the
filing of any legal action, be submitted to two senior executives representing
AA and Orbitz, respectively. These executives will promptly meet to explore all
possible ways of resolving the dispute amicably. Any resolution upon which these
executives may agree in writing will be final and binding on the parties. If the
executives do not resolve the dispute within 30 days after the initial request
for an executive meeting, the parties may pursue other legal remedies.
16. TERM AND TERMINATION
16.1 TERM. This Agreement be in effect as of the Effective Date and
will have an initial term of three years following the Launch Date (the "Initial
Term"). AA may renew this Agreement for up to two (2) successive one-year
renewal terms (each, a "Renewal Term") (the Initial Term and any Renewal Terms
are collectively referred to herein as the "Term"), unless it notifies Orbitz of
its intention not to renew this Agreement at least 60 days prior to the
expiration of the then-current term.
16.2 TERMINATION FOR CONVENIENCE. AA may terminate this Agreement at
any time upon 60 days notice to Orbitz. If AA terminates this Agreement prior to
the Launch Date, AA will pay Orbitz for services performed and materials
delivered as of the effective termination as well as any pre-approved, out of
pocket expenses incurred by Orbitz, including, without limitation, pre-approved
expenses related to development services, connectivity services, co-location
leases and travel-related expenses. If AA terminates under this provision and
Orbitz is unable to re-deploy staff that had been hired to support
CONFIDENTIAL Page 17
Orbitz obligations under this Agreement, then AA will additionally pay
termination fees equal to two (2) months salary for each such employee. If AA
terminates pursuant to this subsection after the Launch Date and during the
Initial Term, AA will pay Orbitz for services performed and materials delivered
prior to the effective date of termination, plus 50% of the Fixed Hosting and
Support Fees associated with the remainder of the Initial Term. If AA terminates
pursuant to this subsection during any Renewal Term, AA will only be liable to
pay Orbitz for services performed and materials delivered as of the effective
termination date.
16.3 TERMINATION FOR CAUSE.
(a) Subject to the provisions of Section 4.4 hereof,
either party may terminate this Agreement for cause in the event that the other
party fails to cure a material breach of this Agreement within 30 days after
receiving written notice of such breach from the non-breaching party. AA may
also terminate this Agreement for cause in the event that Orbitz is acquired
and/or ownership changes such that an AA Competitor acquires a controlling
interest in Orbitz. For purposes of this provision, "control" means the power to
direct or cause the direction of the management and policies of Orbitz, whether
through the ownership of voting securities, by contract or otherwise. In the
event that AA terminates this Agreement for cause, AA will only be liable to pay
Orbitz for services performed as of the effective termination date.
(b) AA may terminate this Agreement in accordance with the
provisions of Section 5 of Exhibit F.
16.4 EFFECT OF TERMINATION. If this Agreement terminates or expires
for any reason:
(a) AA will promptly pay Orbitz any undisputed amounts,
provided that AA may offset any amounts due AA pursuant to Sections 6.3(g)(ii),
16.4(b) or 16.4(c).
(b) In the event of any early termination of this
Agreement by AA prior to the Launch Date, Orbitz will refund to AA, within 60
days following such termination, any Initial Installment paid by AA pursuant to
Section 6.5 of this Agreement.
(c) In the event of any early termination of this
Agreement by AA after the Launch Date pursuant to Section 16.3 of this
Agreement, Orbitz will refund to AA a prorated portion of the Fixed Hosting and
Support Fees for the then-current quarter, according to the number of months
remaining in the then-current contract quarter as of the effective date of such
termination.
(d) Except as provided in Sections 9.2(b) and 9.2(e) of
this Agreement, all rights AA may have in or to the Orbitz Software, including
without limitation the Core Functionality and the AA-Specific Functionality (but
excluding the AA-Competitive Functionality, which will be owned by AA in
accordance with Section 9.1 of this Agreement), will immediately cease.
(e) The provisions of Sections 4.9, 6.6, 6.8, 8, 9.1, 12,
13, 15, 16.4, 17, 18, and 19, and any payment obligations pending as of the date
of expiration or termination, will survive the expiration or termination of this
Agreement for any reason. Further, in the event AA elects to purchase a
perpetual license to the Orbitz Software in accordance with Section 9.2(e), then
the provisions of Sections 9.2(b) through (e), 10.3, and 10.4 will also survive
the expiration or termination of this Agreement for any reason.
17. NO PUBLICITY
Neither party will issue a press release, advertisement or public
statement concerning the existence of this Agreement, its contents or the
transactions contemplated by it without the express written consent of the other
for each such event.
18. LEGAL STATUS
CONFIDENTIAL Page 18
Nothing in this Agreement is intended or will be construed to create
or establish any agency, partnership or joint venture relationship between the
parties. The parties expressly disclaim such relationship, agree that they are
acting solely as independent contractors hereunder and agree that the parties
have no fiduciary duty to one another or any other special or implied duties
that are not expressly stated herein. Orbitz has no authority to act as agent
for, or to incur any obligations on behalf or in the name of, AA or its
Affiliates. Orbitz is solely and exclusively responsible for the salaries,
wages, benefits, fees or other compensation that Orbitz, its Subcontractors or
its or their agents or employees may be entitled to receive.
19. MISCELLANEOUS
19.1 NOTICES. Any notice, approval or other communication required or
permitted under this Agreement will be given in writing. Such communications
will be sent to the address specified below or to any other address that may be
designated by prior notice.
If to AA:
American Airlines, Inc.
0000 Xxxx Xxxxxx Xxxx., XX 1627
Xxxx Xxxxx, Xxxxx 00000
Attn: Vice-President, Customer Technology
Telephone: 000-000-0000
Fax: 000-000-0000
With copy to:
American Airlines, Inc.
0000 Xxxx Xxxxxx Xxxx., XX 5223
Xxxx Xxxxx, Xxxxx 00000
Attn: Managing Director, Purchasing
Telephone: 000-000-0000
Fax: 000-000-0000
If to Orbitz:
Orbitz LLC
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxx
Telephone: 000-000-0000
Fax: 000-000-0000
19.2 WAIVER, AMENDMENT AND MODIFICATION. Any waiver, amendment or
other modification of this Agreement will not be effective unless in writing and
signed by both parties. No waiver of breach of any provision of this Agreement
by either party will constitute a waiver of any subsequent breach of the same or
any other provision, and no waiver will be effective unless made in writing and
signed by an officer of the other party.
19.3 SEVERABILITY. 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.
19.4 ASSIGNMENT. Except as set forth in this Agreement, neither party
may assign, delegate, sub-contract or otherwise transfer this Agreement or any
of its rights or obligations without the other party's prior approval, which
will not be unreasonably withheld or delayed. Notwithstanding the foregoing,
either party may assign this Agreement or any of its rights or obligations, upon
notice to the other party, (a) to an Affiliate or (b) to an unrelated company
pursuant to a sale, merger or other consolidation of such party or any of its
operating divisions or offices.
CONFIDENTIAL Page 19
19.5 FORCE MAJEURE. Except to the extent the Services or Orbitz
Software are designed to accommodate such failures or delays, neither party will
be liable for any failure or delay in performing an obligation under this
Agreement that is due to causes beyond its reasonable control, such as natural
catastrophes, governmental acts or omissions, laws or regulations, labor strikes
or difficulties, transportation stoppages or slowdowns or the inability to
procure parts or materials. If any of these causes continue to prevent or delay
performance for more than five days, the non-delaying party may terminate this
Agreement for cause, effective immediately upon notice to the delaying party.
19.6 GOVERNING LAW. This Agreement will be governed by and
interpreted in accordance with the laws of the state of
Delaware, exclusive of
conflict of laws provisions.
19.7 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original and all of which
together will constitute one and the same instrument.
19.8 NON SOLICITATION. During the Term and for a period of one year
thereafter, neither party, either directly or through others, will solicit for
employment any personnel employed by the other with whom that party had contact
during the Term.
19.9 ENTIRE AGREEMENT; AMENDMENT. This Agreement, and its Exhibits,
and the Non-Disclosure Agreement set forth as Exhibit H constitute the complete
and entire statement of all terms, conditions and representations of the
agreement between AA and Orbitz with respect to the subject matter of this
Agreement, and supercede and replace all prior understandings between the
parties, whether oral or in writing.
19.10 EXHIBITS. The following Exhibits, including all subparts
thereof, are attached to this Agreement and are made a part of this Agreement
for all purposes:
Exhibit A:Change Requests
Exhibit B:Core Functionality
Exhibit C:Schedule
Exhibit D:Fixed Hosting and Support Fees
Exhibit E:Relationship Managers
Exhibit F:Service Level Agreement
Exhibit G:Non-Disclosure Agreement
Exhibit H:Escrow Agreement
IN WITNESS WHEREOF, AA and Orbitz have caused this Agreement to be
executed by their duly authorized representatives identified below.
AMERICAN AIRLINES, INC. ORBITZ LLC
By: /s/ Xxxx Xxxxxx By: /s/ Xxxx X. Xxxxxxx
--------------------------- --------------------------
Name: Xxxx Xxxxxx Name: Xxxx X. Xxxxxxx
----------------------- ----------------------
Title: V.P. Customer Technology Title: CFO
-------------------------- ------------------------
Date: September 7, 2001 Date: 9/10/01
------------------------- ------------------------
EXHIBIT A
CHANGE REQUEST
Scope Change Request
1 Title:
2 Requested By:
3 Status: Unapproved, Approved, Rejected, or Implemented.
4 Business Need Detail:
5 Impact on Project:
6 Impact on Schedule:
7 Deliverables Impacted:
8 Classification of Change: (Core, AA Specific, or AA Competitive)
An electronic substitute for this form is available and has been employed by the
American Airlines PMO and the Orbitz PMO. Approvals and communication may occur
electronically.
8 Approvals:
AMERICAN AIRLINES, INC. ORBITZ LLC
By: By:
-------------------------------- -------------------------------
Name: Name:
---------------------------- ---------------------------
Title: Relationship Manager Title: Relationship Manager
Date: Date:
------------------------------ -----------------------------
Exhibit A- i
EXHIBIT B
CORE FUNCTIONALITY
The Core Functionality is described in the supporting document entitled: "Orbitz
Software Core Functionality: Java Interface Documentation."
The AA Specific Functionality is the result of the work effort required to
convert the Core Functionality so that it can communicate with the SABRE Host
utilizing the Direct Connect solution.
The Orbitz Software is required to support the set of requirements described in
the document entitled: "American Airlines Flight Reservations for XX.xxx: SRS
Document."
Exhibit B- i
EXHIBIT C
SCHEDULE
Task Responsibility Date
---- -------------- ----
Mutual Agreement on Final Java Docs
Specifications of the Orbitz Software AA & Orbitz July 27, 2001
Delivery Date of Booking Engine Orbitz August 17, 2001
Exhibit C- i
EXHIBIT D
FIXED HOSTING AND SUPPORT FEES
AA will pay Orbitz a Fixed Hosting and Support Fee in the amount of [***]. The
initial Fixed Hosting and Support Fee will cover the first year that Orbitz
provides Hosting and Support Services, which will commence on the Launch Date
and end twelve months following the Launch Date. Subsequent years will commence
upon the anniversary of the Launch Date and end twelve months following such
anniversary.
[***].
The Fixed Hosting and Support Fee for each of the five years will be an
all-inclusive fee for Orbitz to provide the Orbitz Software and the Hosting and
Support Services. AA will not be charged any transaction fees, annual
maintenance and support fees, or fees for Third Party Components, in addition to
the Fixed Hosting and Support Fees during the Term unless otherwise agreed by
the parties. The Fixed Hosting and Support Fee will not include ITA, car, hotel
or other functionality for which Orbitz typically charges a separate fee or the
development of AA-Specific Functionality or AA-Competitive Functionality (which
are separately chargeable as described herein) and will only cover Orbitz
Software functionality for air bookings.
To clarify, the Fixed Hosting and Support Fee includes, but is not limited to,
the following:
- Hosting of the Orbitz Software in Orbitz primary facilities
- Any required hardware to support hosting and booking engine
services
- Any third party licenses and sublicenses required to meet the
Launch Date requirements identified as of the effective date of
the definitive agreement.
- 7x24 technical support
- Development costs to build Direct Connect link to AA Host
- Periodic enhancements and upgrades over the Term
- [***].
- Routine business and administrative expenses incurred by Orbitz,
such as telephone, postage, photocopying, etc.
The Fixed Hosting and Support Fee does not include the following:
- Development of AA-Specific Functionality or AA-Competitive
Functionality
- Profile Databases
- Presentation and web design
- ITA pricing services or shared use of other Orbitz partnerships
- Non-air functionality
- Customer service
- Fulfillment
The prices contained in this Exhibit D are based on an anticipated
Maximum Transaction Volume for each year. The Maximum Transaction Volume is: (a)
for the first year after the Launch Date, [***] Transactions, (b) for the second
year after the Launch Date, [***] Transactions and (c) for the third year after
the Launch Date, [***] Transactions. The actual Transaction volume for each year
will be determined at the end of each such year. [***].
[***].
-----------------------
*** Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been requested with
respect to the omitted portions.
Exhibit D - i
08/02/01
EXHIBIT E
RELATIONSHIP MANAGERS
Xxxxx Xxx, VP New Ventures, will be the Relationship Manager for Orbitz. Xxxxx
Xxxxxxxxx, Project Manager, will be an alternate Relationship Manager for
Orbitz.
Xxxxx Xxxxx, Managing Director, Product Management, will be the Relationship
Manager for AA.
Exhibit E - i
08/28/01
EXHIBIT F
SERVICE LEVEL AGREEMENT
A. HOSTING SERVICES
1. GENERAL DEFINITIONS.
"Expected Transaction Volume" means, for each month during the Term,
the number of Transactions as calculated in accordance with Section A(2) of this
Exhibit.
[***].
[***].
[***].
"Monthly System Availability Commitment" means, for each calendar
month, the number of minutes (expressed as a percentage) during such month that
the Orbitz Software is to be operating to specifications, excluding Excluded
Hours Unavailable (as defined in Section A(4)(d) of this Exhibit). The Monthly
System Availability Commitment will be determined in accordance with Section
A(4)(b) of this Exhibit.
"Service Level Period" will mean (i) with respect to the first contract
year, the ten-month period commencing on 60th day after the Launch Date, and
(ii) with respect to each contract year thereafter, each subsequent twelve-month
period that Orbitz is obligated to provide the Hosting Services.
"System Response Time" will mean the total elapsed time added to a
Transaction from initiating a booking engine service call/request to the receipt
of the corresponding response attributed to the Orbitz Software.
2. EXPECTED TRANSACTION VOLUME
(a) Sixty (60) days in advance of the Launch Date, AA will provide
Orbitz with a forecast of the Expected Transaction Volumes by month for the
upcoming Service Level Period. The first month's projected volume should be no
more than 1/12th of the Maximum Transaction Volume.
(b) If the actual Transaction volume exceeds [***] for any particular
calendar month and the Monthly System Availability is adjusted pursuant to
Section A(3)(g) of this Exhibit, the parties may mutually agree to prospectively
adjust the forecast of Expected Transaction Volumes for the upcoming months,
based on historical data and anticipated events. [***].
(c) Notwithstanding the foregoing, at least every six months, the
parties will review the Expected Transaction Volume trend and, if indicated, may
mutually agree to prospectively adjust the forecast of Expected Transaction
Volumes for the upcoming months, based on historical data and anticipated
events. [***].
3. [***].
-----------------------
*** Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been requested with
respect to the omitted portions.
Exhibit F - i
4. SYSTEM AVAILABILITY
(a) Monthly System Availability shall be defined using the following
formula.
[***]
Where AP = Availability Percentage
HM = Total hours in a given month
EHU = Excluded Hours Unavailable (or the fraction thereof)
HU = Total Hours Unavailable (or the fraction thereof)
(b) Monthly System Availability Commitment. Monthly System Availability
Commitment is defined in the table below for each contract year:
----------------------- -----------------------------------------
Contract Year Monthly System Availability Commitment
----------------------- -----------------------------------------
1 [***]%
----------------------- -----------------------------------------
2 [***]%
----------------------- -----------------------------------------
3 [***]%
----------------------- -----------------------------------------
(c) Hours Unavailable. Hours Unavailable shall be calculated from earlier
of: (i) the time an Orbitz Trouble Ticket is opened that the Orbitz
Software is unavailable or (ii) the time Orbitz is notified that the
Orbitz Software is not operating to specifications, and ends when the
Orbitz Software is restored to the extent that the system is operating
substantially in conformance to specifications.
(d) Excluded Hours Unavailable. Hours unavailable shall not include hours
or portion thereof in which the Orbitz Software is unavailable due to (i)
Scheduled Downtime, (ii) hours where actual Transactions exceeded the
Maximum Transaction Per Hour (MTH) threshold (iii) failure of software,
hardware, middleware or systems which are necessary for the delivery of
the Orbitz Software but which are not provided and controlled by Orbitz,
including, but not limited to, 3rd party networks; SABRE hardware,
middleware, software, or systems; availability of the World Wide Web;
software owned or licensed by AA connected to Orbitz Software (excluding
AA-Competitive Functionality); or Orbitz Software modified by AA. [***].
(e) Scheduled Downtime. Inaccessibility of the Orbitz Software as part of
the Website for normal maintenance or upgrades of the Orbitz or its
Subcontractor's network, equipment and systems ("Scheduled Downtime") will
occur during Orbitz's or its Subcontractor's regularly scheduled
maintenance window, which Orbitz or its Subcontractor may, in its or their
reasonable discretion, adjust to best serve the needs of its network and
customer base. The parties will coordinate maintenance schedules and
Orbitz agrees to schedule Scheduled Downtime to coincide with AA's
scheduled maintenance, unless commercially impractical in which case
Orbitz will use commercially reasonable efforts to ensure that Scheduled
Downtime shall not inconvenience AA or its customers. [***].
(f) AA will use commercially reasonable efforts to provide Orbitz with at
least [***] advance notification of any AA-initiated promotional events
that are expected to create a significant increase in the number of
booking Transactions.
(g) [***].
-----------------------
*** Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been requested with
respect to the omitted portions.
Exhibit F - ii
(h) Service Availability Credits. If Orbitz fails to meet the Monthly
System Availability after the Service Level Period commences, Orbitz will credit
AA a prorated amount of the Fixed License and Hosting Fee ("Hosting Credit"),
calculated as follows: AA will be entitled to receive a credit equal to [***] of
the applicable monthly Fixed License and Hosting Fee for each [***] the Service
Level falls below the Monthly System Availability Commitment. The applicable
annual Fixed License and Hosting Fee will be divided by twelve to determine the
applicable monthly Fixed License and Hosting Fee. Such Hosting Credits may be
deducted from the invoice for the next installment of the annual Fixed License
and Hosting Fee or, if there is no subsequent installment due, Orbitz will
refund to AA the amount of such Hosting Credits that have not been applied to
invoices, subject to the limitation set forth in Section C(2) of this Exhibit F.
5. SYSTEM RESPONSE
(a) Orbitz will be responsible for System Response Time; provided,
however, Orbitz will not be responsible for System Response Time in the event
that System Response Time is adversely impacted by factors, occurrences or
circumstances beyond the control of Orbitz. Such factors, occurrences and
circumstances that are deemed to be beyond the control of
Orbitz include, but
are not limited to, 3rd party networks, SABRE system response and hours, or
portions thereof, [***]. Orbitz shall include detailed information as to delays
attributed to Orbitz, Sabre and other causes outside the control of Orbitz in
the monthly System Availability and Performance Report set forth in Section B(4)
of this Exhibit.
(b) Orbitz will provide System Response Time within acceptable limits
for at least [***]% of all booking engine service calls/requests. Specific
metric TBD, however, [***] months of response time data should be gathered and
the metric shall be set as a result of looking at [***] standard deviations from
the mean of this data.
(c) The "System Response Time Commitment" shall [***].
(d) System Response Time Credit. For each month that Orbitz fails to
achieve at least [***]% performance at or below such System Response Time
Commitment, AA shall receive a credit of $[***] subject to the limitation set
forth in Section C(2) of this Exhibit.
(e) If the actual Transaction volume exceeds [***] for any particular
calendar month, the value of the System Response Time Commitment will be
increased by [***] percent ([***]%) for each [***] percent ([***]%) increment
(or portions thereof) that the actual Transaction volume exceeds [***].
6. [***].
7. [***].
8. [***].
B. SUPPORT SERVICES
1. SERVICE DESCRIPTION
(a) First Level Support. AA shall be responsible for providing all
1st level support to consumers using the Software for purposes of investigating
or booking travel and travel related
-----------------------
*** Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been requested with
respect to the omitted portions.
Exhibit F - iii
services. AA shall be responsible for determining if any of AA's own software,
hardware, backend systems, middleware or systems are responsible for any
consumer problems or error reports prior to contacting Orbitz.
(b) Second Level Support. Orbitz shall be responsible for providing
all 2nd level support. This refers to the support provided for facilities
management, maintenance and hosting services required to operate the Orbitz
Software.
(c) Third Level Support. Orbitz shall be responsible for providing
all 3rd level support. This refers to the support provided for Software
modifications or functionality issues.
(d) AA Single Point of Contact (SPOC). AA will provide a SPOC for
Orbitz to contact in the case of outage or downtime or status change. The AA
SPOC will be available twenty-four hours, seven days per week by phone and/or
pager. AA will also provide escalation procedures should the AA SPOC be
unavailable.
(e) Orbitz Single Point of Contact (SPOC). Orbitz will provide a SPOC
for AA to contact in the case of outage or downtime. The SPOC will be available
twenty-four hours, seven days per week by phone and/or pager. Orbitz will also
provide escalation procedures should the Orbitz SPOC be unavailable.
(f) Trouble Ticket. Orbitz will create a Trouble Ticket in response
to system abnormalities. Each Trouble Ticket shall contain:
(i) Trouble Ticket reference number.
(ii) A description of the problem or interruption or
degradation of the Hosting and Support Services, (each a
"Service Problem") sufficient to assign a severity level
and initiate an investigation of the Service Problem.
(iii) A description of any actions taken by AA to correct the
reported Service Problem.
(iv) The time and date of the call.
(v) Source of Service Problem report
(vi) An initial severity level designation assigned by Orbitz
based upon agreed upon Severity Level Definitions
(g) Resolution Categories. For each Trouble Ticket, Orbitz will
assign a resolution category for its internal tracking purposes. Initial problem
categories are as follows:
CODE CHANGE: revised source code is required and a patch kit will be
made available to AA.
DUPLICATE: the problem is a duplicate of an existing one.
DOCUMENTATION: the relevant Documentation is in error and no source
code change is needed.
USE: the problem was caused by incorrect usage.
PERMANENT RESTRICTION: the problem can be traced to a problem in the
Orbitz Software that cannot be corrected in this version.
SUGGESTION: the Orbitz Software is operating to specification and the
reported problem is an enhancement or a (non-compliant) suggested
change.
CONFIGURATION: the problem has been caused by use of the Orbitz
Software on an unsupported or invalid configuration.
THIRD PARTY ERROR: the Orbitz Software is operating to specification
and the reported problem is due to an uplink error and/or 3rd party
outside of Orbitz's direct
Exhibit F - iv
control.
(f) Severity Level Classification. The severity level of each
reported problem will be classified in accordance with the following
definitions:
----------------- ---------------------------------------------------------- -----------------------------------------
SEVERITY LEVEL DESCRIPTION SERVICE LEVEL
----------------- ---------------------------------------------------------- -----------------------------------------
1 Critical Impact. The problem or defect in Notification within [***];
the Orbitz Software cannot be reasonably circumvented, commitment to identify and implement
rendering the Orbitz Software unusable steps to fix within [***]
----------------- ---------------------------------------------------------- -----------------------------------------
2 High Impact. As mutually agreed to by the Notification within [***];
parties for each reported problem: An error or defect commitment to identify and implement
in the Orbitz Software has caused incorrect results; steps to fix within [***], with hourly
and/or System Response Time greater than 3 times the updates
agreed upon System Response Time Commitment; and/or a
specific function has been interrupted, significantly
restricting the use of the Orbitz Software, but not
rendering the Orbitz Software unusable
----------------- ---------------------------------------------------------- -----------------------------------------
3 Moderate Impact. An error or defect in the Notification within [***];
Orbitz Software that has caused unexpected behavior or a commitment to identify and implement
minor error where use of the Orbitz Software is not steps to fix within [***], with daily
interrupted, but unexpected results have occurred. updates
----------------- ---------------------------------------------------------- -----------------------------------------
4 Low Impact or Request for Enhancement. The As mutually agreed.
parties agree that the problem encountered requires new
functionality or an enhancement to be added to the
existing Orbitz Software.
----------------- ---------------------------------------------------------- -----------------------------------------
(h) Resolution by Orbitz.
(i) Orbitz will use its commercially reasonable efforts to
provide a Resolution to each problem, within the
specified time periods below in not less than 90% of all
reported cases for Severity Levels 1 and 2, and within
80% of all reported cases for Severity Level 3. The AA
SPOC will use reasonable efforts to assist the Orbitz
SPOC to resolve the problem if problem determination is
unclear and impacts the resolution time frames noted.
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*** Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been requested with
respect to the omitted portions.
Exhibit F - v
(ii) Orbitz will use commercially reasonable efforts to meet
the resolution times (depending on the Severity Level)
set forth above with respect to acknowledging,
formulating an action plan and resolving such problems
by contacting the AA SPOC through e-mail, telephone, fax
or other reliable means of communication. Orbitz will
maintain a log of all incoming problems for tracking
purposes. Orbitz will contact the AA SPOC as soon as
Orbitz discovers that a problem cannot be resolved in
the specified time period.
(iii) In the event that Orbitz reasonably determines that the
problem is not an error in or problem with the Orbitz
Software, Orbitz will promptly notify the AA SPOC with a
detailed explanation. In the event that Orbitz provides
such notice, but the AA SPOC continues to request that
Orbitz remedy the problem, Orbitz may charge AA for such
requests.
2. NOTIFICATION BY ORBITZ
(a) Orbitz will notify AA of (i) any known Orbitz Software or hosted
system errors; (ii) communications failures from Orbitz to the SABRE host; (iii)
availability of the SABRE Gateway, SABRE Host, and SABRE products called by the
Orbitz booking engine within the time frames set forth in Section B(1)(g) of
this Exhibit, depending on the Severity level of such problem. The parties agree
that Orbitz does not have responsibility for resolving the SABRE specific
problems; however, Orbitz has the responsibility for communicating this
information to AA as specified above. [***].
3. ESCALATION
(a) In the event that a Severity 1 or Severity 2 defect or problem is
not resolved within the response time listed above, such defect or problem will
be reported to the applicable Project Managers. If the Project Managers cannot
agree on a resolution and defect remains unresolved for [***] hours, the defect
will be reported to the Relationship Managers. [***].
4. REPORTING
(a) Orbitz will calculate System Availability Credits, System
Response Time Credits, Service Resolution Credits and Notification Credits
(whether or not such calculations result in a Credit due AA) and provide a
report of the results to AA (the "System Availability and Performance Report")
within 15 days after the end of each month.
I. C. TERMINATION OPTION AND LIMITATION OF REMEDIES
1. [***].
2. LIMITATION OF REMEDIES
In no event shall the total of System Availability Credits, System
Response Time Credits, Service Resolution Credits and/or Notification Credits
(individually and collectively, a "Credit") due
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*** Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been requested with
respect to the omitted portions.
Exhibit F - vi
AA during any month exceed the value of [***] percent ([***]%) of the Fixed
License and Hosting Fee for such month. Further, in no event shall the total of
Credits due AA during any Service Level Period exceed the value of [***] percent
([***]%) of the Fixed License and Hosting Fee during that Service Level Period.
Each such Credit owed AA will be calculated within 15 days after each month of
the Service Level Period and applied to the next invoice or scheduled payment
or, if there is no subsequent installment due, Orbitz will refund to AA the
amount of such Hosting Credits that have not been applied to invoices.
3. [***].
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*** Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been requested with
respect to the omitted portions.
Exhibit F - vii
ATTACHMENT 1 TO EXHIBIT F
Orbitz High Availability Booking Engine
SUMMARY
To provide business continuity in event of a complete or partial data center
disaster Orbitz will run the XX.xxx booking engine in two data centers
simultaneously in an active-active configuration. Figure 1 provides a high
level overview of the solution.
CAPACITY, PERFORMANCE & CONNECTIVITY
SERVER CAPACITY - Server capacity will be provided in each site to
accommodate the full projected transaction volumes. Component redundancy
within each site will also be maintained to ensure uninterrupted service.
These improvements can be accomplished within the cost structure of the
original proposal due to the reduction in scale of the staging environment.
Assets originally dedicated to a "production-scale" staging environment will
be used to provide the incremental capacity necessary to accommodate running
two sites.
SABRE CONNECTIVITY - The additional Sabre connectivity required in the event
of a disaster will be provided via cost effective stand-by T1s.
FRONT END TO BOOKING ENGINE CONNECTIVITY - There will be incremental costs
associated with connecting the XX.xxx front end application data center to
two booking engine sites. These costs are borne by AA and estimated to be 1.5
times the cost to connect to a single booking engine site. Although twice as
many circuits will be required between the Exodus data centers, the traffic
sent over any one circuit will be reduced to half the traffic for a single
site scenario.
OPERATIONS
SITE OPERATIONS - The data centers will continue to be operated from a single
location at the Orbitz Network Operations Center (NOC) in Chicago. In the
event of a catastrophic event at the NOC location, the service can be
monitored and operated from either of the data center locations.
LOG FILE CONSOLIDATION - Log files between the two booking sites will be
consolidated on an hourly basis for troubleshooting, reporting and accounting
purposes.
FUTURE CONSIDERATIONS
Orbitz currently has facilities in two Exodus data centers in the Chicagoland
area (Oakbrook and Elk Grove Village). AA will be included in Orbitz's future
plans to enhance both geographic diversity of the data centers and vendor
diversity in providers. AA will be migrated along with Orbitz in any future
plans if the costs remain the same for enhancing the geographic and vendor
diversity.
Attachment 1 to Exhibit F Page i
[STRUCTURE CHART]
Figure 1
Attachment 1 to Exhibit F Page ii
EXHIBIT G
NONDISCLOSURE AGREEMENT
1. CONFIDENTIAL INFORMATION. "Confidential Information" is defined as any
information of either party hereto (the "Disclosing Party"), disclosed in
writing or verbally to, or observed by the other party (the "Receiving Party")
in connection with or as a result of discussions between AA and Orbitz, and
which is at the time of disclosure is either (a) marked as being "Confidential"
or "Proprietary", (b) otherwise reasonably identifiable as the confidential
information of the Disclosing Party, or (c) under the circumstances of
disclosure should reasonably be considered as confidential information of the
Disclosing Party. AA's Confidential Information may include, but is not limited
to its product requirements, business plans and forecasts, customer data, and
similar information of itself, its affiliates and their customers. Orbitz's
Confidential Information may include, but is not limited to its product plans,
specifications, and pricing.
2. RESTRICTIONS ON DISCLOSURE AND USE. Unless expressly authorized in writing by
the Disclosing Party, the Receiving Party agrees to retain the Confidential
Information in confidence and shall not copy or disclose the Confidential
Information to, or use the Confidential Information for, the benefit of any
third party, except as follows. Confidential Information may be disclosed on a
need to know basis to the Receiving Party's employees, affiliates, and
independent contractors who are parties to a written agreement with the
Receiving Party which prohibits the disclosure of Confidential Information, and
limits its use to the benefit of the Receiving Party and its affiliates.
3. EXCLUSIONS. Notwithstanding any other provisions of this Agreement, each
party acknowledges that Confidential Information shall not include any
information which:
(a) Is or becomes publicly known through no wrongful act of the
Receiving Party;
(b) Is at the time of disclosure, already known to the Receiving Party
without restriction on use or disclosure and was not obtained from
the Disclosing Party or its contractors; or
(c) Is independently developed by the Receiving Party without breach of
this Agreement.
4. RELIEF FROM OBLIGATIONS. Either party will be relieved of its confidentiality
obligations hereunder if and to the extent that Confidential Information:
(a) Is disclosed pursuant to the lawful requirement of a governmental
agency, or disclosure is required by operation of law, provided that
the party making the disclosure has given timely notice to the
Disclosing Party and the Disclosing Party has been permitted at its
expense to interpose objections, defenses or obtain a protective
order limiting disclosure and use of the information; or
(b) Is explicitly approved for release by written authorization of the
Disclosing Party.
5. OWNERSHIP OF CONFIDENTIAL INFORMATION. No license, express or implied, in the
Confidential Information is granted to either party other than to use the
information in the manner and to the extent authorized by this Agreement. Each
party shall retain the title and full ownership rights to their respective
Confidential Information. Each party agrees that upon the request of the
Disclosing Party, it shall return to the Disclosing Party all tangible copies of
the Confidential Information in such party's possession.
Exhibit G - i
EXHIBIT H
ESCROW AGREEMENT
To be attached upon execution per Section 10.1 of the Agreement.
Exhibit H - i
