EXHIBIT (e)(18)
THIS AGREEMENT HAS CONFIDENTIAL PORTIONS OMITTED, WHICH PORTIONS HAVE BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. OMITTED PORTIONS
ARE INDICATED IN THIS AGREEMENT WITH "[TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED]".
FIRST AMENDED AND RESTATED
MARKETING AGREEMENT TO FACILITATE
THE SALE OF NON-PUBLISHED FARES
This agreement ("Agreement") is made and effective as of August 21, 2001 by
and between Xxxxxxxxxxx.xxx L.P. ("Travelocity") and Sabre Inc. ("Sabre").
BACKGROUND FACTS
A. Travelocity is negotiating with air travel suppliers to obtain:
(i) Non-Published Inventory Agreements, and/or
(ii) Commission Agreements, and/or
(iii) Exclusivity Agreements.
B. Certain travel suppliers have refused to provide to Travelocity broadened
distribution rights or improved commission arrangements or exclusive
marketing rights unless Travelocity provides certain financial incentives to
the suppliers.
C. Under the current U.S. Department of Transportation regulations governing
the operation of computer reservation systems, there is no restriction on
Travelocity's entering into commercial arrangements on an individually
negotiated basis with air travel suppliers that require such incentives.
D. Sabre is willing to provide Marketing Fees to Travelocity, in exchange for
the consideration set forth in Sections 4 and 5, in order to facilitate
Travelocity's ability to provide Incentive Payments.
AGREEMENT
In consideration of the mutual promises herein contained, the parties agree
as follows:
1. Travelocity shall promptly seek to obtain various Carrier Marketing
Agreements.
2. Sabre agrees to pay Travelocity the Marketing Fees. Sabre will continue to
pay the Marketing Fees to Travelocity until the expiration of three
(3) years after the date of the first Booking as to which the Sabre was
obligated to pay a Marketing Fee to Travelocity under this Agreement.
This Section 2 shall be subject to the following terms and conditions:
A. The Marketing Fees will be adjusted from time to time by the Adjustment
Amount.
B. Sabre shall pay the Marketing Fees to Travelocity on a monthly basis, in
arrears, for Incentive Payments in the preceding month. In the event of a
Dispute (as defined in the Access Agreement), concerning the amount to be
paid to Travelocity, neither party shall be entitled to set off any
disputed amount against any other obligation between the parties.
C. Travelocity shall provide Sabre with a baseline Five Year Plan.
D. Subject to Sections 4 and 5, Travelocity shall be entitled to retain the
Marketing Fee received from Sabre as to any [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED] month period (each such period beginning on the
quarterly anniversary of the Effective Date) as to each Carrier included
under a Carrier Marketing Agreement with Travelocity (excluding from this
computation any Sabre Bookings by a Carrier when a Carrier Marketing
Agreement was not in effect with such Carrier), so long as during such
period the average number of Incentive Bookings under Carrier Marketing
Agreements meets or exceeds the Incentive Bookings Threshold.
E. Notwithstanding any provision to the contrary in the Access Agreement,
during any period of time during which a Non Published Inventory
Agreement is in effect between Travelocity and any Carrier, Travelocity
shall not promote, provide or facilitate access to direct Bookings (as
such
term is defined in the Access Agreement) with such Carrier; [TEXT
OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
F. Either party shall have the right to terminate this Agreement
immediately in the event that the U.S. CRS rules are revised or
interpreted by the U.S. Department of Transportation in such a manner as
to make unlawful the payment of the Marketing Fee by Sabre to Travelocity
or to require that Sabre or Travelocity make such Marketing Fee available
to any person or entity other than Travelocity.
3. This Agreement shall remain in full force and effect until the earlier of:
(a) termination pursuant to Section 2(F), or (b) termination by written
agreement of the parties.
4. In return for Sabre's payment of the Marketing Fees to Travelocity,
Travelocity shall use commercially reasonable efforts to provide to Sabre
economic value equivalent to the Marketing Fees paid to Travelocity in any
of the following ways, whether individually or in combination:
A. [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
B. [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
C. [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
D. [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
5. [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED] months after the Marketing
Fee is paid or otherwise credited to Travelocity for each calendar quarter,
Sabre and Travelocity shall meet and determine on a rolling
quarter-by-quarter basis, whether Travelocity has provided to Sabre over
such [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED] month period value
equivalent to the Marketing Fee paid in the quarter under review, by any
combination of the methods identified in paragraph 4. In making such a value
determination, the parties will apply the principle that Travelocity shall
not count more than once any value provided to Sabre that could be included
in more than one of the categories identified in paragraph 4.
A. If at any such meeting Travelocity and Sabre mutually agree that
Travelocity has not yet provided such equivalent value for the Marketing
Fees paid in the quarter then under review, taking into account any
overage or shortfall from any preceding quarter, then Sabre shall
determine whether it can reasonably expect Travelocity to provide such
equivalent value during the next succeeding [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED] months.
B. If Sabre does not reasonably expect Travelocity to provide such
equivalent value during the next succeeding [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED] months, then Sabre and Travelocity shall establish a
written plan under which Travelocity shall provide such equivalent value.
C. If by [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED] months after each
monthly Marketing Fee is paid or otherwise credited to Travelocity,
Travelocity has not provided to Sabre over such [TEXT OMITTED -
CONFIDENTIAL TREATMENT REQUESTED] month period value equivalent to the
Marketing Fee for the quarter under review, by any combination of the
methods identified in
paragraph 4, then Travelocity shall deliver to Sabre such equivalent
value shortfall in cash or agreed value.
D. If by [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED] months after the
last monthly Marketing Fee is paid or otherwise credited to Travelocity,
Travelocity has provided to Sabre over the term of this Agreement
equivalent value to all Marketing Fees, then Travelocity shall have no
further obligation to Sabre hereunder.
E. In the event that the parties shall mutually agree to terminate this
Agreement pursuant to Section 3(b), they shall first determine whether
Travelocity has provided to Sabre over the term of the Agreement
equivalent value to all Marketing Fees, and if not, agree upon the amount
of any final payment from Travelocity to Sabre.
6. The Dispute Resolution provisions of the Access Agreement are hereby
incorporated by reference, as if fully set forth herein, and made applicable
to this Agreement.
In witness whereof the parties have executed this Agreement below by and through
their authorized representatives.
XXXXXXXXXXX.XXX L.P., A DELAWARE LIMITED SABRE INC., A DELAWARE CORPORATION
PARTNERSHIP
By: Travelocity Holdings Inc.
As General Partner
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxx Xxxxx
---------------------------- ------------------------
Name: Xxxxxxx X. Xxxxx Name: Xxxx Xxxxx
Title: President and Chief Executive Officer Title: Executive Vice President
Date: October 16, 2001 Date:
EXHIBIT A
DEFINITIONS
"ACCESS AGREEMENT" means the Amended and Restated Access Agreement, effective
as of March 7, 2000, between Sabre and Travelocity.
"ADJUSTMENT AMOUNT" means (a) the Marketing Fee will be reduced by the same
amount per segment as Sabre reduces the Booking Fee per segment that it charges
such Carrier for Bookings, and (b) if after any such reduction Sabre increases
the Booking Fee per segment that it charges such Carrier for Bookings by any
amount in excess of [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED] annually
on a cumulative basis, the Marketing Fees will be increased by such excess
amount.
"BOOKING" means a travel segment reservation on a Carrier that is created in
the Sabre CRS by a consumer located in the United States using the Travelocity
Web Sites and as to which Sabre is paid a Booking Fee by the relevant Carrier.
"BOOKING FEE" means the fee per Booking that is payable to Sabre by the
relevant air travel supplier, as specified in Sabre's then current
participation agreement with the air travel supplier.
"CARRIER" means an air travel supplier with which a Carrier
Marketing Agreement
is executed by Travelocity within [TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED] days of the effective date of this agreement.
"CARRIER
MARKETING AGREEMENT(S)" means any or all of: Non-Published Inventory
Agreement(s), Commission Agreement(s) and/or Exclusivity Agreement(s).
"COMMISSION AGREEMENT" means an agreement with a Carrier setting Travelocity's
commission as an amount per Booking, or as a percentage of the gross sales
price for Bookings, made on such supplier through the Travelocity Web Sites.
"EXCLUSIVITY AGREEMENT" means a contract providing to Travelocity certain
exclusive marketing rights for all or a significant portion of a Carrier's
Non-Published Inventory.
"FIVE YEAR PLAN" means the baseline 5-year financial plan provided by
Travelocity which shall, among other things, include a forecast of the total
number of Bookings through the Travelocity Web Sites using Non-Published
Inventory.
"INCENTIVE BOOKINGS THRESHOLD" means not less than [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED] of the total number of all Bookings on the Carriers covered
under such Carrier
Marketing Agreements via Travelocity Web Sites during a
quarterly measurement period.
"INCENTIVE PAYMENTS" means payments paid by Travelocity to Carriers pursuant to
Carrier
Marketing Agreements.
"MARKETING FEES" means an amount reimbursable to Travelocity, up to a maximum
amount of [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED] per Booking, for
amounts that Travelocity actually pays to or credits to Carriers as Incentive
Payments.
"NON-PUBLISHED INVENTORY AGREEMENT" means a contract with a Carrier allowing
Travelocity to distribute for sale through the Travelocity Web Sites all or a
significant portion of such Carrier's Non-Published Inventory.
"NON-PUBLISHED INVENTORY" means an air travel supplier's net fares, opaque
inventory, wholesale and bulk inventory, Internet fares and/or other fares that
are not available to Travelocity other than pursuant to a Non-Published
Inventory Agreement.
"SABRE CRS" means the global travel distribution and computer reservations
system provided by Sabre.
"TRAVELOCITY WEB SITES" means travel distribution and booking services
offered by Travelocity principally to consumers via the Internet (or via other
distribution channels) either directly by Travelocity or through portal sites or
co-branded sites.
