Exhibit 10.12
DEVELOPMENT, LICENSE AND HOSTING AGREEMENT
THIS DEVELOPMENT, LICENSE AND HOSTING AGREEMENT (this "Agreement") is made
as of March, 8, 2002 (the "Effective Date"), by and between Northwest Airlines,
Inc., a Minnesota corporation with its principal offices in Eagan, Minnesota
("Airline"), 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 "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.
1.2 "AFFILIATE AIRLINES" means air carriers or other business entities
with which Airline has a formal Code Sharing, marketing, or other cooperative
agreement, and specifically includes KLM Royal Dutch Airlines and Continental
Airlines. "Affiliate Airlines" also includes Airline's corporate parent and any
subsidiaries of Airline or its corporate parent, and specifically includes any
commuter airline partner of Airline that carries the "Airlink" designation.
1.3 "AIRLINE INFORMATION" means booking information and other personally
identifiable information supplied by Airline customers to Orbitz and any other
trade secret, proprietary or confidential information supplied by Airline to
Orbitz under this Agreement.
1.4 "AIRLINE-SPECIFIC SOFTWARE" means the presentation and business
logic/application layer of the Orbitz Software and user databases, as more fully
defined in Exhibit A attached hereto, that will be made available to Airline
pursuant to the terms of this Agreement. The Airline-Specific Software will not
include any booking engine functionality.
1.5 "CHANGE REQUEST" means the form set forth as Exhibit B that will be
used to request any modification of or addition to the Core Software, the
Airline-Specific Software, or the Services obligations.
1.6 "CLAIM" means a third-party claim, demand, proceeding, suit or
action.
1.7 "CODE SHARING" means the industry practice whereby the Airline
markets flights that are not operated by the Airline but which can be sold,
confirmed and ticketed under the Airline's code, which is processed in the same
way as a flight that is operated and marketed by the Airline.
1.8 "COMPETITOR" means any passenger or cargo air transportation carrier.
1.9 "CONFIDENTIAL INFORMATION" has the meaning given to that term in
Exhibit G.
1.10 "CORE SOFTWARE" means the booking engine component of the Orbitz
Software, as more fully defined in Exhibit A attached hereto, that will be made
available to Airline pursuant to the terms of this Agreement.
1.11 "CUSTOM MATERIAL" shall have the meaning ascribed in Section 9.3
herein.
1.12 "DEVELOPMENT COMPLETION DATE" means the mutually agreed upon date for
the completion of the Pre-Launch Development Services.
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1.13 "DOCUMENTATION" means the technical materials and support
documentation that Orbitz delivers to Airline related to the use and operation
of the Orbitz Software.
1.14 "HOSTING AND SUPPORT FEE" means the fee set forth in Exhibit D that
Airline will pay to Orbitz in consideration for the Hosting and Support
Services. The Parties acknowledge and agree that the Hosting and Support Fees
for Hosting and Support Services shall not be separately billed but are included
in the transaction fees set forth in Exhibit D.
1.15 "HOSTING AND SUPPORT SERVICES" means the hosting, operation,
maintenance and support services that Orbitz will provide to Airline, either
directly or though Subcontractors, pursuant to this Agreement. Maintenance
services shall include all Updates to the Orbitz Software.
1.16 "LAUNCH DATE" means such mutually agreed upon date when the Website
will be made available to Airline customers, which will in no event be more than
30 days following the Development Completion Date.
1.17 "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.
1.18 "MATERIAL SERVICE LEVEL FAILURE" means the Monthly System
Availability Commitment (as defined in Exhibit F attached hereto) is missed by
five percent (5%) for any two consecutive calendar month period.
1.19 "ORBITZ SOFTWARE" means the computer programs owned by Orbitz,
including the Airline-Specific Software and the Core Software and any Updates
thereto, that Orbitz makes available to Airline during the term of this
Agreement. "Orbitz Software" is more fully defined in Exhibit A attached hereto.
1.20 "OTHER AIRLINES" means any airline other than Airline or Affiliate
Airlines.
1.21 "PRE-LAUNCH DEVELOPMENT FEE" means the fee set forth in Exhibit D
that Airline will pay to Orbitz in consideration for the Pre-Launch Development
Services.
1.22 "PRE-LAUNCH DEVELOPMENT SERVICES" means the development and migration
services that Orbitz will provide to Airline, either directly or through
Subcontractors, pursuant to this Agreement.
1.23 "PROJECT MANAGERS" means the dedicated employees of Airline and
Orbitz, or their replacements, who will manage specific projects under this
Agreement.
1.24 "RELATIONSHIP MANAGERS" means the senior-level Airline and Orbitz
employees identified in Exhibit E, or their replacements, who will manage the
relationship between Airline and Orbitz and will serve as the single point of
contact within either party responsible for communications and problem
resolution.
1.25 "SCHEDULE" means the timetable for performing and completing the
Pre-Launch Development Services, as set forth in Exhibit C.
1.26 "SERVICES" means the Pre-Launch Development Services, the Hosting and
Support Services and any other services that Orbitz agrees to provide to Airline
under this Agreement (including any Change Request hereunder).
1.27 "SPECIFICATIONS" means the functional and technical specifications of
the Orbitz Software, as set forth in Exhibit A. The Specifications will include
a detailed description of the Services and Orbitz Software, a performance
schedule (including all major deliverables and milestones), Airline
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and Orbitz responsibilities in conjunction with the performance of the Services
and delivery of the Orbitz Software, and any applicable Service Acceptance
Criteria or Service Levels. In addition, the Specifications may include items
such as account and project management requirements, performance reporting and
any other special provisions or requirements related to the Services and/or
Orbitz Software.
1.28 "SUBCONTRACTORS" means the subcontractors that Orbitz engages to
provide Services under this Agreement.
1.29 "TERM" has the meaning given to that term in Section 16.
1.30 "THIRD PARTY COMPONENTS" means any third party software or hardware
that Orbitz may use to provide the Services.
1.31 "TICKET" means an airline passenger itinerary (in the itinerary
portion of a passenger name record (PNR)) ticketed to a customer of Airline, an
Affiliate Airline, and/or Other Airlines and associated with a reservation made
through the Website for air transportation on Airline's flights or Code Sharing
flights or Other Airline flights, but not including any refunded or exchanged
Tickets. All Tickets shall be in electronic form except as expressly agreed by
the parties in writing. For clarification purposes: (i) one passenger on a
one-way or round-trip direct flight shall be counted as one issued Ticket, (ii)
one passenger on a one-way or round-trip connecting flight shall be counted as
one issued Ticket, (iii) one passenger on a one-way or round-trip combination of
direct and or connecting flights shall be counted as one issued Ticket and (iv)
multiple passengers within the same PNR constitute multiple Tickets.
1.32 "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.
1.33 "WEBSITE" means a website operating in conjunction with the Orbitz
Software that conforms with the requirements set forth in the Specifications and
which is used primarily for the specific purpose of selling Airline's, Airline
Affiliate's and/or Other Airline inventory to the public.
2. GENERAL
2.1 ENGAGEMENT. Orbitz hereby agrees to provide Airline, and Airline
hereby agrees to receive from Orbitz, the Pre-Launch Development Services and
the Hosting and Support Services, pursuant to the terms and conditions of this
Agreement. Orbitz will use its commercially reasonable efforts to provide
Airline with dedicated resources to provide the Pre-Launch Development Services
upon the Effective Date of this Agreement. Orbitz will commence performance of
the Hosting and Support Services upon the Launch Date.
2.2 SUBCONTRACTORS. Orbitz may subcontract its performance of the
Services to one or more Subcontractors, upon thirty (30) days' prior written
notice to Airline. Airline may object to use of such Subcontractor by providing
written notice to Orbitz within ten (10) days of receipt of notice from Orbitz
that it intends to use such Subcontractor. In such event, the Relationship
Managers will meet to resolve any issue related to such Subcontractor. Should
the Relationship Managers be unable to resolve any issue related to such
Subcontractor, Orbitz shall either perform the Services itself or select a
different Subcontractor to perform the Services. Prior to performing any
Services, each Subcontractor must execute a written agreement with Orbitz
containing protections for the Airline Information the terms of which are at
least as protective as the terms and conditions set forth in this Agreement.
Orbitz shall remain primarily liable for work performed by any Subcontractor.
2.3 SCHEDULE. Orbitz will use its commercially reasonable efforts to
perform the Pre-Launch Development Services in accordance with the Schedule.
During the course of performance of the Pre-Launch Development Services, Airline
and Orbitz may periodically modify the Schedule for mutual convenience upon the
mutual written agreement of the parties. Any such modification will be effective
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only if expressly approved in writing by both Relationship Managers pursuant to
Section 7. Airline acknowledges that modifications to the Schedule may result in
additional costs or charges for any agreed upon modifications to the Pre-Launch
Development Services.
2.4 ANTICIPATED DELAYS. Airline and Orbitz will immediately notify each
other if either party anticipates a delay in completing the Pre-Launch
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
Pre-Launch 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. Airline will provide Orbitz with access to those portions
of Airline's facilities that Orbitz may reasonably require to perform the
Services. Such access will be provided at mutually convenient times during
Airline's normal business hours, unless otherwise agreed by the Relationship
Managers. While working at Airline offices, the Orbitz employees and
Subcontractors will adhere to Airline's internal rules and regulations; provided
such rules and regulations have been communicated to Orbitz.
2.6 COMPLIANCE. Airline agrees not to use and will take reasonable
measures to prevent its end users from using the Orbitz Software or the Services
(i) to disseminate (A) unsolicited, unlawful, harassing, defamatory, abusive,
threatening, obscene, harmful, tortious, or libelous messages, e-mail
communications or other information, (B) any messages, e-mail communications or
other information that infringe or violate any other party's proprietary rights,
(C) any personally identifiable information belonging to minors or (D) any
messages, e-mail communications or other information that Airline is not
authorized to disseminate, (ii) for any illegal, unlawful, harassing,
defamatory, abusive, threatening, obscene, harmful, tortious or libelous
purposes, or (iii) intentionally to disrupt the resources, computer systems and
computer networks of Orbitz or its Subcontractors. Airline agrees to post a
mutually acceptable privacy policy, copyright infringement policy and end user
compliance policy on the Website and to comply with the terms and conditions of
such policy.
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
Airline Relationship Manager with periodic status reports on Orbitz's progress
during the performance of the Pre-Launch Development Services. Prior to the
Development Completion Date, the Relationship Managers will meet at least once
per month to discuss the status of the Pre-Launch Development Services.
Following the Development Completion 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 Pre-Launch Development Services or the Hosting and Support
Services, the Relationship Managers will discuss the relevant sources, possible
remedies and potential impact on the Pre-Launch 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.
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3.4 PROJECT MANAGERS. Airline may object to the appointment of an Orbitz
Project Manager who, in the opinion of Airline, reasonably and legally
exercised, does not meet Airline's qualifications, by providing notice of its
objection to Orbitz in writing, specifying such objection in reasonable detail.
In such event, the Relationship Managers will meet to resolve any issue related
to such Project Manager. Should the Relationship Managers be unable to resolve
any issue related to such Project Manager, Orbitz shall appoint a different
Project Manager.
4. PRE-LAUNCH DEVELOPMENT
4.1 PRE-LAUNCH DEVELOPMENT SERVICES. Orbitz will use its commercially
reasonable efforts to provide Airline with dedicated resources to perform the
Pre-Launch Development Services and will use its commercially reasonable efforts
to develop the Airline-Specific Software and the Core Software described in the
Specifications. Airline will promptly respond to Orbitz's requests for
information regarding such efforts and will provide Orbitz the assistance that
Orbitz may reasonably require to complete the Pre-Launch Development Services.
Upon completion of such development efforts, Orbitz will make the Orbitz
Software available to Airline for testing.
4.2 FUTURE DEVELOPMENT SERVICES. From time to time during the term of
this Agreement, Airline may request technical or functional modifications to the
Orbitz Software in addition to or in lieu of the requirements set forth in the
Specifications. Any such request will be processed according to the procedures
set forth in Section 7. Orbitz will perform any such additional services upon
which the parties mutually agree at the rates set forth in Exhibit D.
4.3 TESTING. Following receipt of Orbitz's notice that the Orbitz
Software, and any Update thereto, is ready for testing, Airline will test the
Orbitz Software, or any Update, within the time period set forth in the
Schedule, or any Order, to determine whether it substantially conforms to the
Specifications. If the Orbitz Software substantially conforms to the
Specifications, Airline will provide Orbitz with written notice that the Orbitz
Software, or any Update, is accepted. If the Orbitz Software or Update fails to
substantially conform to the Specifications, or Documentation, Airline will
provide Orbitz with a written report of the non-conformity, within thirty (30)
days after the notice that the Orbitz Software or Update is ready for testing,
specifying such non-conformity in reasonable detail. Upon receipt of a
non-conformity report, Orbitz will either promptly correct and resubmit the
Orbitz Software or Update for re-testing or, if the parties mutually agree that
such reported non-conformity is actually a modification from the agreed upon
Specifications, or other Documentation, the parties shall agree that such
reported non-conformity is actually a Change Request, to be handled pursuant to
Section 7. Following the correction of any non-conformity, Airline shall again
inspect and evaluate the Orbitz Software or Update and conduct all necessary
tests to determine whether the non-conformity has been corrected. Upon
confirming that the non-conformity identified by Airline has been corrected,
Airline shall accept the Orbitz Software or Update as specified herein. In the
event that Airline fails to issue a report of non-conformity within such thirty
(30) day period, the Orbitz Software or Update will be deemed to be accepted.
The test period shall be suspended during periods when Orbitz is attempting
to correct any non-conformities. Following re-delivery of a correction to
Airline under no circumstances shall Airline have less than ten (10) days to
complete testing.
4.4 FAILURE TO DELIVER CONFORMING SOFTWARE. In the event that Orbitz
fails to deliver to Airline a version of the Orbitz Software substantially in
conformance with the Specifications within sixty (60) days of the Launch Date
and Orbitz is primarily responsible for such failure, then Airline will not be
charged for any development efforts performed by Orbitz or its Subcontractors
following such sixty (60) day period with respect to the Pre-Launch Development
Services and Orbitz will refund Pre-Launch Development Fees actually paid to
Orbitz for the Pre-Launch Development Services, in accordance with refund policy
set forth in Exhibit D. In the event that Orbitz is not primarily responsible
for such failure, no refund will be due. Notwithstanding the foregoing, Orbitz
agrees that it shall provide written notice to Airline of any circumstances that
would prevent Orbitz from delivering conforming Orbitz Software and if such
notice is not provided, Orbitz will be deemed to have waived its argument that
any performance
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failure under this Agreement was attributable to Airline and Orbitz will be
deemed primarily responsible for such failure.
4.5 MIGRATION. Orbitz and Airline will develop a mutually agreed upon
plan to migrate the provision of online travel booking services from Airline's
current online travel booking provider to Orbitz. Such migration will be
completed prior to the Launch Date. Airline will use its commercially reasonable
efforts to cause its current online travel booking services provider to
cooperate with such migration. Airline will obtain from such provider and
deliver to Orbitz the customer registration database, and will secure any rights
necessary for Orbitz to convert and use such customer registration database to
provide the Services. Both parties will use reasonable best efforts to ensure a
smooth and seamless transition from Airline's current online travel booking
provider to Orbitz. [***]
4.6 INTERFACE TO PARTITION. With respect to any connectivity interface
that is required under the Specifications, the parties acknowledge that Orbitz's
obligations to develop such connectivity interface is expressly dependent upon
the cooperation of Worldspan, Airline's third party computerized reservation
system provider, or any other GDS selected by Airline, and Airline. Airline will
provide Orbitz with any and all information and assistance reasonably requested
by Orbitz to develop and maintain a connectivity interface with the applicable
computerized reservation system. Orbitz will not be responsible for any delays
caused by the computerized reservations system provider's failure to cooperate
with Orbitz.
5. HOSTING AND SUPPORT
5.1 HOSTING. Upon the Launch Date, Orbitz will, either directly or
through its Subcontractors, operate, host and maintain the Orbitz Software for
Airline in accordance with this Agreement. Orbitz will be responsible for (a)
all hardware and third-party licenses required to host the Orbitz Software, and
(b) pursuant to Section 6.3 herein, the reasonable routine business and
administrative expenses incurred by Orbitz or its Subcontractors in hosting the
Orbitz Software. Orbitz will host the Orbitz Software on servers located on
Orbitz's or its Subcontractor's premises.
5.2 SERVICE LEVELS. Orbitz will meet or exceed the service levels set
forth in Exhibit F related to the performance of the Hosting and Support
Services (the "Service Level Agreement"). Airline will use commercially
reasonable efforts to provide Orbitz with at least two (2) days 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 Airline for information that Airline requires to properly
evaluate the performance of Orbitz under this Agreement, including validating
Orbitz's compliance with Exhibit F. In the event Orbitz fails to meet the
service levels set forth in Exhibit F, Airline's exclusive remedies and Orbitz's
sole liabilities are the service level credits and/or right of termination set
forth in Exhibit F and Section 16 herein.
5.3 SUPPORT. Airline will perform all customer service related to, and
will be responsible for the fulfillment of, all bookings made through the
Website for air travel. At Airline's request and expense, Orbitz will provide
such customer service support for the Website to Airline for an additional fee.
Such support will be provided pursuant to mutually agreed to support terms and
conditions.
5.4 UPDATES. Orbitz will make available to Airline all Updates to the
Orbitz Software and will use commercially reasonable efforts to provide such
Updates to Airline within thirty (30) days of Orbitz's general release thereof.
Such Updates may include functionality licensed to Orbitz from third parties, to
the extent permitted by Orbitz's agreements with its licensors. Notwithstanding
the foregoing, in no event will Airline be charged an additional fee for such
Updates.
5.5 RESERVATION AND TICKETING SERVICES.
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(a) HOTEL AND RENTAL CAR RESERVATIONS. Orbitz will offer hotel and car
reservation services (including booking, fulfillment and customer
support) on the Website [***]. Upon at least 30 days prior written
notice, Airline may assume responsibility for the provision of hotel
and car reservation services on the Website. Any modifications or
changes to the Orbitz Software, the Website or the Services related
to Airline's provision of hotel and car reservations services will be
processed as a Change Request. In the event that Airline provides
hotel and car reservation services on the Website, Airline will
retain all commissions on such services and will pay Orbitz
transaction fees on such bookings in accordance with the schedule set
forth in Exhibit D, as if each such reservation were a Ticket.
(b) SELLING OF OTHER AIRLINE TICKETS. Airline may, at its option and sole
discretion, offer the air transportation services of Other Airlines
for sale through the Website. In the event Airline elects to offer
such services for sale through the Website, (i) any modifications or
changes to the Orbitz Software, the Website or the Services will be
processed as a Change Request, (ii) Airline will provide ticketing,
fulfillment and customer support services in connection Other Airline
bookings made through the Website, and (iii) Airline will retain all
commissions or service fees on Other Airline tickets sold through the
Website and will pay Orbitz transaction fees on such tickets in
accordance with the schedule set forth in Exhibit D, as if each such
ticket were a Ticket.
5.6 OUT-OF-SCOPE SERVICES. Orbitz is not responsible for profile
databases, ITA Software Inc.'s ("ITA") pricing services, customer service
(except as provided herein, specifically Section 5.3, or unless otherwise agreed
to 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 Airline obtains a license to the ITA pricing engine from ITA, Orbitz will
provide Airline 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 the rates set
forth in Exhibit D.
5.7 POST-LAUNCH DEVELOPMENT. Following the Launch Date, Orbitz will use
commercially reasonable efforts to provide, at Airline's request, additional
development services ("Post-Launch Development") for Airline-Specific
functionality, at the rates set forth in Exhibit D and pursuant to
specifications and requirements to be determined by Airline and mutually agreed
upon by the parties.
6. FEES AND PAYMENT
6.1 PRE-LAUNCH DEVELOPMENT SERVICES. Airline will pay Orbitz the
Pre-Launch Development Fee set forth in Exhibit D. Orbitz will invoice Airline
for the Pre-Launch Development Fee in accordance with the schedule set forth in
Exhibit D. Pre-Launch Development Fees may be deducted from Orbitz segment
incentive rebate per the Charter Associate Agreement dated May 9, 2000 made by
and between the parties.
6.2 HOSTING AND SUPPORT FEES. Upon the Launch Date, Airline will pay
Orbitz the Hosting and Support Fees set forth in Exhibit D. The Hosting and
Support Fees will be invoiced monthly.
6.3 REIMBURSABLE EXPENSES. If agreed to in writing by the parties,
Airline will reimburse Orbitz for reasonable, actual, out-of-pocket expenses
incurred by Orbitz in conjunction with out of town travel required for Orbitz to
perform the Services, provided that such travel is approved in advance by
Airline's representative. Airline will, at its option, provide Orbitz with Coach
Class space available or other tickets for air travel on Northwest Airlines or
reimburse Orbitz for Coach Class, round trip air travel. Orbitz
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shall utilize Northwest Airlines air transportation unless specifically approved
otherwise, on a case-by-case basis, by Airline's representative. Other
reimbursable expenses will be limited to reasonable and actual expenses for
lodging, meals, local transportation, and incidentals only as are required by
Orbitz in the performance of its obligations hereunder. Unless specifically
agreed upon otherwise by Airline's representative, rental car expenses will only
be reimbursed if the car is necessary for Orbitz to complete its obligations
hereunder. Receipts will be required for any expenditure totaling US $25.00 or
more. Air travel, hotel and rental car expenses will only be reimbursed if
reservations are made through Airline's representative, unless Airline declines
to make such reservations. Notwithstanding the foregoing, the parties may agree
upon, in advance of any travel, a per diem payment in lieu of reimbursement.
6.4 PAYMENT TERMS. Airline will pay all undisputed invoices within thirty
(30) days of receipt of a correct invoice. Any fees not paid when due will
accrue interest at the rate of 1% per month until fully paid. In the event that
Airline asserts in good faith that any item or items on an invoice are not
correct, then Airline will within thirty (30) days of receipt of such invoice
(i) deliver written notice to Orbitz explaining in detail why Airline 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 dispute by Airline. If Airline
disputes any invoice rendered or amount paid, the parties will use all
reasonable efforts to resolve such dispute expeditiously. If Airline so notifies
Orbitz of a disputed amount, the time for paying the disputed portion of the
invoice shall be extended by a period of time equal to the time between Orbitz's
receipt of such notice from Airline and the resolution of such dispute; provided
however that in no event will Airline pay less than the monthly minimum
transaction fee set forth in Exhibit D.
6.5 TAXES. The Pre-Launch Development Fees, the Hosting and Support Fees,
and the Reimbursable Expenses are exclusive of all sales, services or other
taxes that Orbitz may be legally obligated to charge Airline for performing the
Services, and Airline will promptly pay, or reimburse Orbitz for the payment of,
any and all such taxes that may be due or payable. For the avoidance of doubt,
Airline shall pay all sales and use taxes that are lawfully imposed by any
governmental authority in the United States and are based on or measured by any
payments of Airline pursuant to this Agreement, and for which no exemption is
available. Orbitz shall pay all taxes that are: (i) on, based on, or measured
by, gross or net income or gross or net receipts (including any capital gains
taxes or minimum taxes) of Orbitz, or taxes which are capital, doing business,
excess profits, net worth, or franchise taxes of Orbitz; (ii) caused by or
arising out of the willful misconduct or negligence of Orbitz; or (iii) any
interest, additions to tax, or penalties associated with the taxes set forth in
(i) or (ii) above.
No sales tax shall be collected by Orbitz if: (i) a specific exemption applies
to (a) the Products or Services purchased hereunder, or (b) any transaction
occurring pursuant to this Agreement, (ii) Airline has provided Orbitz with
written confirmation that Airline is authorized to make tax payments directly to
the applicable taxing authorities, or (iii) Orbitz is obligated to pay the taxes
as set forth herein. Orbitz shall promptly, upon receipt from any tax authority
of any levy, notice, assessment, or withholding of any tax for which Airline may
be obligated, notify Airline in writing directed to the following address:
Senior Tax Counsel, Northwest Airlines, Inc., Dept. A4450, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇.
If under the applicable law of the taxing jurisdiction Airline is allowed
directly to contest such tax in its own name, then Airline shall be entitled, at
its own expense and in its own name, to contest the imposition, validity,
applicability or amount of such tax and, to the extent permitted by law,
withhold payment during pendency of such contest. If Airline is not permitted by
law to contest such tax in its own name, upon Airline's request, Orbitz shall in
good faith and using best efforts, at Airline's expense, contest the imposition,
validity, applicability or amount of such tax. Orbitz shall in good faith and
using best efforts: (i) supply Airline with such information and documents
reasonably requested by Airline as are necessary or advisable for Airline to (a)
recover or seek a refund of any sales or use tax paid by Airline as a result of
this Agreement; or (b) control or participate in any proceeding to the extent
permitted herein, and (ii) reasonably assist Airline with evidentiary and
procedural development of any such proceeding or contest.
Upon Airline's request, Orbitz shall delineate the fees among the Component
Portions of the Service contracted for in this Agreement. The term "Component
Portions" for purposes of this paragraph shall
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include, but is not limited to: (i) maintenance, including upgrades and
enhancements, (ii) installation, (iii) support, and (iv) training and related
manuals.
6.6 MOST FAVORED CUSTOMER. During the Term, the financial terms of this
Agreement, including the fees set forth in Exhibit D, 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.
6.7 REPORTING; AUDIT. Orbitz will create and maintain accurate records
with respect to its performance under this Agreement. Orbitz will maintain such
records during the Term and for seven (7) years following any expiration or
termination of this Agreement. Within five (5) days following the end of each
applicable month, Orbitz will provide Airline with written reports of such
information. Airline will have the right, upon not less than five (5) days prior
notice, to conduct an audit of the information included in such monthly reports.
If such an audit reveals that any of Orbitz's reports submitted overstated
amounts owed by Airline, then Orbitz shall pay to Airline, within thirty (30)
days following the conclusion of such audit, the amount of any such
overpayments.
6.8 CALCULATION OF FARES. Orbitz will use Worldspan, or any other system
approved in writing by Airline, to calculate the total fares sold through the
Website.
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 Software and the Airline-Specific Software) 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 any license and
development fees and/or the 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 five (5) days after its receipt or (b)
defer the request for discussion at 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 Change Request will
be executed by the Relationship Managers of both parties and will then
constitute a formal amendment of this Agreement.
8. CONFIDENTIALITY
8.1 NDA. The following provisions shall supplement the terms of that
certain Non-Disclosure Agreement that was attached to the Letter of Intent
between Airline and Orbitz executed on March 8, 2000 (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. "Confidential Information" shall have the meaning ascribed in
the NDA.
8.2 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
CONFIDENTIAL Page 9
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.
8.3 RESTRICTIONS ON DISCLOSURE AND USE. Notwithstanding anything
contained in the NDA, Orbitz will not disclose any Confidential Information
provided to it by Airline, including the terms and conditions of this Agreement,
to any equity owners or principals of Orbitz that are employed by a Competitor
of Airline except to the extent required by the laws of the State of Delaware
and/or the Orbitz 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 E-Commerce and Distribution at Airline and
provide Airline 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 E-Commerce and
Distribution at Airline, which approval will not be unreasonably withheld.
9. PROPRIETARY RIGHTS
9.1 OWNERSHIP. As between Airline and Orbitz, and to the extent of
Orbitz's prior ownership rights, Airline 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,
except as otherwise provided in this Section 9, including the Airline-Specific
Software developed by Orbitz or its employees or Subcontractors during the
performance of this Agreement and any derivative works thereof. Airline hereby
assigns and agrees to assign, and will cause its subcontractors to assign, to
Orbitz all rights that Airline 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, Airline, for no additional consideration, will
cause the execution of the instruments that may be appropriate to give full
legal effect to this Section.
For the avoidance of doubt, as between Airline and Orbitz, and to the
extent of Airline's prior ownership rights, Orbitz acknowledges that Airline
will own all patents related to its internally developed business processes, and
the rights to file for such patents, inventions, copyrights, trademarks, and
trade secrets.
9.2 LICENSE TO AIRLINE.
A. Upon Airline's acceptance of any Orbitz Software, Orbitz grants
Airline the limited, non-exclusive, non-transferable, worldwide
right, effective during the Term, to access and use (and permit
its customers to access and use) the Orbitz Software in
conjunction with an unlimited number of (i) Websites or (ii)
other Airline applications, on the terms and conditions set forth
in this Agreement. Airline will have no obligation to pay any
license fees or royalties to Orbitz's licensors, if any, with
respect to the license of the Orbitz Software granted herein.
Airline 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 reasonable protections for Orbitz
at least as protective as the terms and conditions that Airline
posts to protect its own rights, limit its liability, and
disclaim forms of damages. Such terms and conditions to be
approved by Airline, with such approval not to be unreasonably
withheld. Airline will not display or use the Orbitz Software as
part of any third party site or service. Notwithstanding the
foregoing, the Website may be branded, as determined by Airline,
with Airline branding, and, at Airline's election, branding of
KLM Royal Dutch
CONFIDENTIAL Page 10
Airlines, Continental Airlines, other Affiliate Airlines and/or a
global alliance brand such as "Wings".
B. Upon Airline's acceptance of any Orbitz Software, Orbitz grants
Airline a limited, non-exclusive, non-transferable, worldwide
right, effective during the Term, to use the object/executable
code to the Orbitz Software, and all Documentation related
thereto to modify the Airline-Specific Software pursuant to
Section 9.3.
9.3 AIRLINE MODIFICATIONS. [***]
[***]
Orbitz shall fully cooperate with Airline enforcing any patents,
copyrights, or other possessory or proprietary rights, provided that in the
event any assistance by Orbitz is requested and rendered pursuant to this
Section 9.3, Airline shall reimburse Orbitz for out-of-pocket expenses incurred
by Orbitz in rendering such assistance.
9.4 OPTIONAL LICENSE. At the expiration or termination of this Agreement,
Airline will have the option to purchase from Orbitz, and Orbitz agrees to grant
to Airline, a perpetual, non-exclusive, paid-up license to the source and object
code for the Orbitz Software (including the related Documentation) for [***].
9.5 LICENSE TO ORBITZ. Effective during the Term, Airline hereby grants
Orbitz the limited, non-exclusive, non-transferable, royalty-free, world-wide
right to (a) use the Airline Information solely to perform its obligations under
this Agreement; (b) use aggregated customer data derived from Website bookings
for internal site management purposes; and (c) permit Subcontractors to use
aggregate use data (that is not identified or identifiable with any individual
customer or user) derived from the Airline Information in connection with user
and performance statistics, so long as such aggregated data does not make
reference to the travel industry.
10. ESCROW
10.1 ESCROWED MATERIALS. No later than sixty (60) days after the Launch
Date, and within thirty (30) days after release of each Update, Orbitz will
deliver to DSI, 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
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masters of the latest release of the Orbitz Software (collectively, "Escrowed
Material"). A copy of the Escrow Agreement between Orbitz and DSI 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
Airline only at the facilities of the escrow agent in the presence of a
representative of Orbitz. Except as provided in the Escrow Agreement and in
Section 10.4 below, Airline 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 Airline and Orbitz.
10.3 RELEASE CONDITION. If Orbitz (a) generally discontinues the
operation, hosting or maintenance of the Orbitz Software, or (b) is insolvent,
files a petition in bankruptcy or has such a petition filed against it (and
fails to lift any stay imposed thereby within sixty (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, or (c) is in
material breach of this Agreement, then Airline 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 facsimile and overnight
courier. In such circumstances, release of the Escrowed Material will be
governed by Article 4 of the Escrow Agreement set forth in Exhibit H hereto.
10.4 RIGHTS. In the event the Escrowed Material is released to Airline,
Orbitz grants to Airline 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. Airline will maintain the
Escrowed Material on a secure system with access limited to only those persons
necessary to maintain and support the Orbitz Software. Airline may make only
such copies of the Escrowed Material as are reasonably required for archival and
disaster recovery purposes, and Airline will keep any such copies under lock and
key.
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) the execution or performance of this Agreement
will not violate or be considered a breach of any obligation of such party to
any third party.
11.2 SPECIFIC WARRANTIES. Orbitz represents and warrants that it will
perform the Pre-Launch Development Services in a good and workmanlike manner and
will meet or exceed the service levels set forth in the Service Level Agreement.
In the event that Orbitz fails to perform the Pre-Launch Services in a good and
workmanlike manner, Orbitz will re-perform the defective Pre-Launch Development
Services. In the event that Orbitz fails to meet or exceed the service levels
set forth in the Service Level Agreement, Airline will be entitled to the
applicable service level credits and/or the right to termination set forth in
the Service Level Agreement. This section and the applicable section in the
Service Level Agreement set forth Airline's exclusive remedies and Orbitz's sole
liabilities in the event of any breach of warranty with respect to the quality
of the Services.
11.3 LIMITATION. The warranties and remedies specified in this Section
will not apply to the extent the Services are defective due to 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 Airline, (d) a correction or
modification of the Orbitz Software, the Website or the Services not authorized
by Orbitz, or (e) the combination of the Orbitz Software or Service in any
manner not authorized by Orbitz.
CONFIDENTIAL Page 12
11.4 WARRANTY DISCLAIMER. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT,
ALL WARRANTIES, CONDITIONS, REPRESENTATIONS, INDEMNITIES AND GUARANTEES WITH
RESPECT TO THE SERVICES, THE WEBSITE, THE ORBITZ SOFTWARE OR ANY COMPONENT
THEREOF, INCLUDING WITHOUT LIMITATION THE CORE SOFTWARE AND THE AIRLINE-SPECIFIC
SOFTWARE, 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, 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 Airline, as well
as Airline's subsidiaries and its Affiliates, and each of their directors,
officers, employees, assignees, agents and shareholders (hereinafter
collectively called the "Airline Indemnified Parties") from and against any and
all Claims, including any related Losses that the Airline Indemnified Parties
are required to pay any third party in any way relating to, arising out of or
resulting from: (i) any gross 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, 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) Airline 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 Airline; (ii) breach of any
warranty of Airline 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
Airline Information; or (iv) Airline'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,
CONFIDENTIAL Page 13
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 thirty (30)
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 Airline with reasonable assurances
acceptable to Airline that Airline will continue to have the right to use the
affected products or services or (b) Orbitz will, at its expense, either (i)
procure for Airline 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 Airline, provided that
Orbitz will provide Airline with a comparable temporary replacement product or
reimburse Airline for the reasonable costs incurred by Airline in obtaining an
alternative product in the event Airline 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 Airline 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 EXPRESSLY SET FORTH HEREIN,
WITH RESPECT TO EACH OF WHICH LIABILITY WILL NOT BE LIMITED PURSUANT TO THIS
SECTION, 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 AIRLINE'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 AIRLINE
TO ORBITZ DURING THE 12 MONTH PERIOD PRECEDING THE EVENT THAT RESULTED IN SUCH
LIABILITY, OR (Y) [***].
14. INSURANCE
Orbitz shall maintain insurance, with an A.M. Best rating of A- (VIII) or
better, in the following amounts:
(i) WORKER'S COMPENSATION - [***].
(ii) EMPLOYERS LIABILITY - [***]
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(iii) COMMERCIAL GENERAL LIABILITY - [***] Combined Single Limit Insurance
per occurrence. (This is a minimum amount. Airport requirements or the nature of
the work may necessitate higher limits.) Commercial General Liability insurance
shall include endorsements for: personal injury; contractual liability;
completed operations/product liability; naming Airline as an additional insured;
and provide severability of interest, cross liability, and independent
contractors coverage.
(iv) BUSINESS AUTO POLICY - [***] Combined Single Limit. Such insurance to
cover owned, non-owned and hired vehicles when doing work on Airline's premises.
(v) INTERNET MEDIA AND PROFESSIONAL LIABILITY - [***].
Orbitz agrees to insure (or self-insure) all losses to its owned or leased
tools and equipment used in the delivery of the Products and provision of the
Services and agrees to obtain an endorsement from its insurance carrier waiving
its right of subrogation against Airline.
If requested by Airline, Certificates of Insurance shall be delivered to
Airline evidencing compliance with the insurance terms of this Agreement. All of
the above insurance shall be written through a company or companies with an A.M.
Best rating of A- (VIII) or better. Orbitz will notify Airline in writing in
advance of the effective date of any material change in or cancellation of such
insurance; provided Orbitz receives such advance notice from the insurer.
Orbitz's failure to provide or to maintain the insurance required during the
term of this Agreement shall be deemed a material breach pursuant to Section
16.2.
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 Airline
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 thirty (30) days after the initial
request for an executive meeting, the parties may pursue any other legal
remedies available.
16. TERM AND TERMINATION
16.1 TERM. This Agreement shall be in effect as of the Effective Date and
will have an initial term of thirty (30) months following the Launch Date (the
"Initial Term"). This Agreement shall automatically renew for up to three (3)
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
Airline notifies Orbitz of its intention not to renew this Agreement at least
ninety (90) days prior to the expiration of the Initial Term or the then-current
Renewal Term.
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16.2 TERMINATION FOR CAUSE. Either party may terminate this Agreement for
cause in the event that the other party materially breaches its obligations
under this Agreement and fails to cure such breach within ninety (90) days after
receiving written notice of such breach from the non-breaching party.
Notwithstanding the foregoing, Airline may terminate this Agreement upon fifteen
(15) days prior written notice without penalty in the event of a Material
Service Level Failure, as defined in Exhibit F attached hereto.
16.3 TERMINATION PRIOR TO LAUNCH DATE. If at any time prior to the Launch
Date (a) Orbitz assigns this Agreement or any of its rights or obligations
hereunder to an unrelated company pursuant to a sale, merger or other
consolidation of Orbitz or any of its operating divisions or offices, or (b)
Orbitz is acquired by another entity or merges with another entity and Orbitz is
not the surviving entity in such merger, then Airline may immediately terminate
this Agreement without penalty or any other obligation hereunder except to pay
Orbitz the amounts due, pursuant to the fee schedule set forth in Exhibit D(I),
for Services performed prior to the actual termination date.
16.4 EFFECT OF TERMINATION. If this Agreement terminates or expires,
except as a result of a material breach by Orbitz, Airline will promptly pay
Orbitz any undisputed amounts. In addition, if this Agreement terminates or
expires, except as a result of a material breach by Orbitz or as a result of the
Release Conditions set forth in Section 10.3, all rights Airline may have in or
to the Orbitz Software, including without limitation the Core Software and the
Airline-Specific Software, will immediately cease following the Transition
Period described in Section 16.5. The provisions of Sections 8, 9.1 9.3, 9.4,
11, 12, 13, 15, 16.5, 18, and 19, will survive the expiration or termination of
this Agreement. Further, in the event Airline elects to purchase a license to
the Orbitz Software in accordance with Section 9.4, then the provisions of
Sections 9.1, 9.3, 9.4, and 10 will also survive the expiration or termination
of this Agreement.
16.5 POST-TERMINATION. In the event that Airline provides written notice
of termination of the Agreement in accordance with the terms of this Agreement,
Orbitz will use reasonable efforts to cooperate with Airline and Airline's new
vendor, if any, in the transfer of all appropriate customer information, as
necessary to facilitate the transition to the new vendor. Prior to the actual
termination date of the Agreement, Airline shall have the right to request that
Orbitz continue to provide maintenance and support services for Airline's
Website(s) after the termination date of the Agreement ("Extended Maintenance
and Support Services") for such period of time as Airline may reasonably
request, up to ninety (90) days (the "Stand By Period"). In the event that
Airline requests that Orbitz provide such Extended Maintenance and Support
Services, such services shall be provided pursuant to the terms of the Agreement
at no additional charge for the duration of the Stand By Period.
17. 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. Airline will provide a prominent notice on the Website that the
Website is powered by Orbitz and its designees. The parties will mutually agree
upon the location and content of such notice.
18. LEGAL STATUS
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, Airline 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. Airline will have
no obligation whatsoever to provide any employee benefits
CONFIDENTIAL Page 16
or privileges of any kind or nature to Orbitz, including, without limitation,
insurance benefits, pension benefits or travel privileges. Further, Orbitz
agrees that Airline is not responsible to collect or withhold federal, state or
local taxes, including, without limitation, income taxes, social security taxes,
unemployment taxes or Medicare taxes, and that any and all such taxes imposed,
assessed or levied as a result of payments made to Orbitz pursuant to this
Agreement or the fees, and any penalties assessed on or against such taxes,
shall be paid by Orbitz, or if paid by Airline, Orbitz shall reimburse Airline
upon demand. Orbitz shall further reimburse Airline upon demand for any costs
incurred by Airline to pay for employee benefits upon Orbitz or any individuals
utilized by Orbitz to perform its obligations under this Agreement.
Reimbursement for any costs associated with the foregoing shall be considered an
adjustment to the fees for the Services contracted for in this Agreement.
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 Airline:
Northwest Airlines, Inc.
Department A6370
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With copy to:
Northwest Airlines, Inc.
Department A1180
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: General Counsel
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Orbitz:
Orbitz LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Notices will be effective on the first business day following receipt
thereof. Notices sent by certified mail or courier will be deemed received on
the date of delivery as indicated on the return receipt or delivery notice;
notices sent by facsimile will be deemed received on the date transmitted.
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.
CONFIDENTIAL Page 17
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; provided that Orbitz may not assign this Agreement or any
of its rights or obligations to any of the following entities without Airline's
prior written approval, which approval will not be unreasonably withheld: an
Other Airline, Sabre, Galileo, Amadeus, any affiliate of or successor to Sabre,
Galileo or Amadeus, or any other global distribution system.
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 (5) 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 New York, 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 G constitute the complete and
entire statement of all terms, conditions and representations of the agreement
between Airline 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 NON-DISCRIMINATION AND FEDERAL CONTRACT COMPLIANCE. Airline is a
government contractor, and the parties agree, as a condition of this Agreement,
to comply with all applicable Equal Employment Opportunity and Affirmative
Action clauses as set forth in Executive Order 11246, the Vietnam-Era Veterans'
Readjustment Act of 1974, the Rehabilitation Act of 1973, and implementing
regulations at 41 CFR 60-1.14(a), 41 CFR 6-741.5, and 41 CFR 60-250.4 and that
the provisions of such laws and regulations are hereby adopted and incorporated
into this Agreement by reference.
19.11 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: Specifications
Exhibit B: Change Request
Exhibit C: Schedule
Exhibit D: Fees
Exhibit E: Relationship Managers
Exhibit F: Service Level Agreement
Exhibit G: Non-Disclosure Agreement
Exhibit H: Escrow Agreement
CONFIDENTIAL Page 18
IN WITNESS WHEREOF, Airline and Orbitz have caused this Agreement to be
executed by their duly authorized representatives identified below.
NORTHWEST AIRLINES, INC. ORBITZ LLC
By: /s/ A.M. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇
------------------------------------- -------------------------------
Name: A.M. ▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇
----------------------------------- -----------------------------
Title: VP, Distribution and E-Commerce Title: V.P. New Ventures
---------------------------------- ----------------------------
Date: 3/8/02 Date: 3/8/02
----------------------------------- -----------------------------
CONFIDENTIAL Page 19
EXHIBIT A
SPECIFICATIONS
[Attach Statement of Work]
[***]
----------
*** The contents of this exhibit, consisting of 24 pages, have been omitted and
filed separately with the Commission. Confidential treatment has been
requested with respect to the omitted portions.
CONFIDENTIAL Page 20
EXHIBIT B
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 Approvals:
NORTHWEST AIRLINES, INC. ORBITZ LLC
By: By:
---------------------------------- ---------------------------------
Name: Name:
-------------------------------- -------------------------------
Title: Relationship Manager Title: Relationship Manager
Date: Date:
------------------------------- -------------------------------
CONFIDENTIAL Page 21
EXHIBIT C
SCHEDULE
ORBITZ NWA
SITE MODULE TURNOVER TURNOVER
-------------------------------------------------------------------
Home Page 3/7/2002 4/4/2002
Login 3/7/2002 4/4/2002
Car Booking 3/7/2002 4/4/2002
Hotel Booking 3/11/2002 4/8/2002
Registration 3/18/2002 4/15/2002
Flight Booking 4/8/2002 5/6/2002
MyStuff 4/22/2002 5/20/2002
TASK FINISH
------------------------------------------------
Legacy data migration 4/1/2002
All site code complete 5/30/2002
Admin features complete 5/30/2002
Train the Trainer Training 6/10/2002
Help pages complete 7/2/2002
Integration test ends/Beta begins 7/16/2002
CONFIDENTIAL Page 22
EXHIBIT D
FEES
[***]
----------
*** The contents of this exhibit, consisting of two pages, have been omitted
and filed separately with the Commission. Confidential treatment has been
requested with respect to the omitted portions.
CONFIDENTIAL Page 24
EXHIBIT E
RELATIONSHIP MANAGERS
- The Relationship Manager for Orbitz will be ▇▇▇▇▇ ▇▇▇. The Alternate
Relationship Manager will be ▇▇▇▇▇ ▇▇▇▇.
- The Relationship Manager for Airline will be ▇▇▇▇▇ ▇▇▇▇▇. The Alternate
Relationship Manager will be ▇▇▇▇▇ ▇▇▇▇▇▇▇.
CONFIDENTIAL Page 24
EXHIBIT F
SERVICE LEVEL AGREEMENT
[***]
----------
*** The contents of this exhibit, consisting of seven pages, have been omitted
and filed separately with the Commission. Confidential treatment has been
requested with respect to the omitted portions.
CONFIDENTIAL Page 25
EXHIBIT G
NON-DISCLOSURE AGREEMENT
CONFIDENTIAL Page 26
CONFIDENTIALITY AGREEMENT
This Confidentiality Agreement (this "Agreement"), is made this 6th
day of March, 2000, by and between DUNC, LLC, a Delaware limited liability
company (the "COMPANY") and NORTHWEST AIRLINES, INC., a Minnesota corporation
("INVESTOR"). Capitalized terms used and not defined herein shall have the
meanings set forth in the LLC Agreement (as defined below).
RECITALS
WHEREAS, the Investor has entered into a Subscription Agreement of
even date herewith pursuant to which it will its purchase membership interests
in the Company and become a member of the Company; and
WHEREAS, the Investor previously entered into that certain Limited
Liability Company Agreement of the Company, dated as of February 9, 2000 (the
LLC Agreement"), pursuant to which the Company was formed with Investor as one
of the Initial Members:
WHEREAS, in connection with the conduct of the Company's operations,
each of the Company and Investor (each a "Party" and, collectively, the
"Parties") may disclose certain confidential and proprietary information
regarding the conduct of each Party's respective business activities; and
WHEREAS, the Parties desire to provide appropriate protection for the
exchange of such confidential and proprietary information and to establish the
terms under which such information shall be disclosed.
NOW THEREFORE, in consideration of the premises, covenants and
agreements herein contained and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties, intending
to be legally bound hereby agree, as follows:
1. CONFIDENTIAL INFORMATION. Confidential Information shall mean:
(a) any data or information that is supplied by either Party
(which will be deemed to include, in the case of the Company, any data or
information with respect to any Member of the Company supplied by the
Company or such Member to the Investor in connection with the operation of
the Company or the performance of any obligation, or the exercise of any
rights, under the LLC Agreement or any Related Agreement), including by its
Affiliates (the "DISCLOSING PARTY"), or the agents, employees, authorized
representatives or nominees thereof (such persons being referred to
collectively as the REPRESENTATIVES") to the other Party including its
Affiliates (the "RECEIVING PARTY") (or the Representatives of the Receiving
Party) including, but not limited to, information regarding: products and
services planning, marketing strategies, strategic and business plans,
finance, operations, customer relationships, customer profiles, sales
estimates and internal performance results relating to the past, present or
future business activities of the Disclosing Party and its owners,
customers, clients and suppliers;
CONFIDENTIAL Page 27
(b) any scientific or technical information, design, process,
procedure, formula, or improvement that is supplied by the Disclosing Party
or its Representatives to the Receiving Party or its Representatives;
(c) all confidential or proprietary concepts, documentation.
reports, data, specifications, computer software, source code, object code,
flow charts, databases, inventions, information, know-how and trade
secrets, whether or not patentable or subject to copyright, supplied by the
Disclosing Party or its Representatives to the Receiving Party or its
Representatives; and
(d) without limitation, all documents, inventions, drawings,
diagrams, specifications, bills of material, equipment, prototypes and
models, and any other tangible manifestation of the foregoing supplied by
the Disclosing Party or us Representatives to the Receiving Party or its
Representatives.
2. CONFIDENTIALITY OBLIGATIONS. Except as expressly authorized by
prior written consent of the Disclosing Party, the Receiving Party shall:
(a) limit access to any Confidential Information received by it
solely to its Representatives who have a need to know such in connection
with any current or future negotiations or arrangements between the
Receiving Party and the Disclosing Party, including, without limitation in
connection with the membership of the Investor in the Company and any
commercial arrangements between the Investor and the Company and only for
use in connection therewith. The Investor may provide access to and may
disclose Confidential Information of the Company to any other Member of the
Company in connection with such Member's participation as a Member of the
Company. The Disclosing Party hereby consents to, and represents and
warrants that it has obtained from its applicable Affiliates their consent
to the use by the Receiving Party of any information received by the
Receiving Party in connection with the above-referenced negotiations or
arrangements;
(b) advise its Representatives having access to the Confidential
Information of the proprietary nature thereof and of the obligation set
forth in this Agreement;
(c) take appropriate action by instruction or agreement with its
Representatives having access to the Confidential Information to fulfill
its obligations under this Agreement;
(d) safeguard all Confidential Information received by it using
a reasonable degree of care and discretion to avoid disclosure, publication
or dissemination of such Confidential Information, but not less than that
degree of care and discretion used by the Receiving Party in safeguarding
its own similar information or material that it does not wish to disclose,
publish or disseminate; and
(e) use all Confidential Information received by it for the
purposes described in subsection (a) of this Section 2 and for no other
purpose whatsoever.
CONFIDENTIAL Page 28
3. DESTRUCTION OF CONFIDENTIAL INFORMATION UPON REQUEST. Upon the
request of the Disclosing Party, the Receiving Party shall (i) destroy all
memoranda, notes, records, drawings, manuals, other documents or materials and
any other manifestation (and all copies thereof) pertaining to or arising from
the Confidential Information in any form or medium (whether written,
typewritten, recorded, electronic or otherwise) and (ii) at the option of the
Receiving Party, either return to the Disclosing Party or destroy the
Confidential Information supplied by the Disclosing Party or its
Representatives. Upon the return and/or destruction of such materials, the
Receiving Party agrees to certify, in writing, that all of the foregoing
materials have been destroyed or surrendered to the Disclosing Party.
4. EXCEPTIONS TO CONFIDENTIALITY. The obligation of confidentiality
and restriction on use in Section 2 hereof shall not apply to any Confidential
Information that the Receiving Party proves:
(a) was in the public domain prior to the date of this Agreement
or subsequently came into the public domain other than as a result of
disclosure by the Receiving Party;
(b) was received by the Receiving Party from a third party free
of any obligation of confidence of the Receiving Party to such third party;
provided that such third party is not known by the Receiving Party, after
reasonable diligence, to be bound by a confidentiality agreement with or
other obligation of secrecy to the Disclosing Party;
(c) was already in the possession of or known to the Receiving
Party, without obligation of confidentiality, prior to receipt thereof,
directly or indirectly, from the Disclosing Party;
(d) is requested to be disclosed in a judicial or administrative
law, regulation or proceeding after all reasonable legal remedies for
maintaining such information in confidence have been exhausted, including,
but not limited to, giving the Disclosing Party reasonable advance notice
of the potential for such disclosure and allowing the Disclosing Party to
seek a protective order concerning such disclosure; or
(e) is subsequently and independently developed by employees,
consultants or agents of the Receiving Party without reference to the
Confidential Information of the Disclosing Party disclosed under this
Agreement.
5. RIGHTS IN CONFIDENTIAL INFORMATION. Except as specifically
provided for herein, this Agreement does not confer any right, license, interest
or title in, to or under the Disclosing Party's Confidential Information to the
Receiving Party. No license is hereby granted to the Receiving Party, by
estoppel or otherwise, under any patent, trademark, copyright, trade secret or
other proprietary rights of the Disclosing Party. Title to the Disclosing
Party's Confidential Information shall remain solely in the Disclosing Party.
6. TERMINATION. This Agreement may not be terminated except
following Withdrawal by the Investor pursuant to the terms of the LLC Agreement.
The obligations of confidentiality and limitations on use under this Agreement
shall survive termination of this Agreement for a period of five (5) years from
the execution of this Agreement; PROVIDED,
CONFIDENTIAL Page 29
HOWEVER, notwithstanding the term of this Agreement, any provisions hereof that
by their nature extend beyond such term or termination shall remain in effect
beyond such term or termination under this Section 6 until fulfilled and shall
apply to either Party's successors and assigns.
7. EQUITABLE RELIEF. Each Party agrees that money damages would not
be a sufficient remedy for breach of the confidentiality and other obligations
of this Agreement. Accordingly, in addition to all other remedies that each
Party may have, each Party shall be entitled to specific performance and
injunctive relief or other equitable relief as determined by a court of
competent jurisdiction as a remedy for any breach of this Agreement. Each Party
agrees to waive any requirement for a bond in connection with any such
injunctive or other equitable relief.
8. GOVERNING LAW. This Agreement and performance thereunder shall be
governed by the laws of the State of Delaware, excluding its conflicts of laws
rules.
9. THIRD PARTY BENEFICIARIES. This Agreement may be enforced by any
Member of the Company with respect to any information or data regarding such
Member disclosed by the Investor m violation of this Agreement. Except as set
forth in the preceding sentence, nothing in this Agreement shall provide any
benefit to any third party or entitle any third party to any claim, cause of
action, remedy or right of any kind, it being the intent of the Parties that
this Agreement shall not be construed as a third party beneficiary contract.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first written above.
COMPANY:
DUNC, LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Title: Vice President
--------------------------------------
INVESTOR:
NORTHWEST AIRLINES, INC.
By: /s/ A.M. ▇▇▇▇▇
--------------------------------------
Name: A.M. ▇▇▇▇▇
--------------------------------------
Title: Vice-President
--------------------------------------
CONFIDENTIAL Page 30
EXHIBIT H
MASTER PREFERRED ESCROW AGREEMENT
Master Number ______________________
This agreement ("Agreement") is effective ________, 20__ among DSI Technology
Escrow Services, Inc. ("DSI"), Orbitz LLC ("Depositor"), and any additional
party signing the Acceptance Form attached to this Agreement ("Preferred
Beneficiary"), who collectively may be referred to in this Agreement as the
parties ("parties").
A. Depositor and Preferred Beneficiary have entered or will enter into an
agreement regarding certain proprietary technology of Depositor (referred to in
this Agreement as "the License Agreement").
B. Depositor desires to avoid disclosure of its proprietary technology except
under certain limited circumstances.
C. The availability of the proprietary technology of Depositor is critical to
Preferred Beneficiary in the conduct of its business and, therefore, Preferred
Beneficiary needs access to the proprietary technology under certain limited
circumstances.
D. Depositor and Preferred Beneficiary desire to establish an escrow with DSI
to provide for the retention, administration and controlled access of certain
proprietary technology materials of Depositor.
E. The parties desire this Agreement to be supplementary to the License
Agreement pursuant to ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ [Bankruptcy] Code, Section 365(n).
ARTICLE 1 -- DEPOSITS
1.1 OBLIGATION TO MAKE DEPOSIT. Upon the signing of this Agreement by the
parties, including the signing of the Acceptance Form, Depositor shall deliver
to DSI the proprietary technology and other materials ("Deposit Materials")
required to be deposited by the License Agreement or, if the License Agreement
does not identify the materials to be deposited with DSI, then such materials
will be identified on Exhibit A. If Exhibit A is applicable, it is to be
prepared and signed by Depositor and Preferred Beneficiary. DSI shall have no
obligation with respect to the preparation, signing or delivery of Exhibit A.
1.2 IDENTIFICATION OF TANGIBLE MEDIA. Prior to the delivery of the Deposit
Materials to DSI, Depositor shall conspicuously label for identification each
document, magnetic tape, disk, or other tangible media upon which the Deposit
Materials are written or stored. Additionally, Depositor shall complete Exhibit
B to this Agreement by listing each such tangible media by the item label
description, the type of media and the quantity. Exhibit B shall be signed by
Depositor and delivered to DSI with the Deposit Materials. Unless and until
Depositor makes the initial deposit with DSI, DSI shall have no obligation with
respect to this Agreement, except the obligation to notify the parties regarding
the status of the account as required in Section 2.2 below.
1.3 DEPOSIT INSPECTION. When DSI receives the Deposit Materials and the Exhibit
B, DSI will conduct a deposit inspection by visually matching the labeling of
the tangible media containing the Deposit Materials to the item descriptions and
quantity listed on the Exhibit B. In addition to the deposit inspection,
Preferred Beneficiary may elect to cause a verification of the Deposit Materials
in accordance with Section 1.6 below.
1.4 ACCEPTANCE OF DEPOSIT. At completion of the deposit inspection, if DSI
determines that the labeling of the tangible media matches the item descriptions
and quantity on Exhibit B, DSI will date and
CONFIDENTIAL Page 31
sign Exhibit B and mail a copy thereof to Depositor and Preferred Beneficiary.
If DSI determines that the labeling does not match the item descriptions or
quantity on Exhibit B, DSI will (a) note the discrepancies in writing on Exhibit
B; (b) date and sign Exhibit B with the exceptions noted; and (c) mail a copy of
Exhibit B to Depositor and Preferred Beneficiary. DSI's acceptance of the
deposit occurs upon the signing of Exhibit B by DSI. Delivery of the signed
Exhibit B to Preferred Beneficiary is Preferred Beneficiary's notice that the
Deposit Materials have been received and accepted by DSI.
1.5 DEPOSITOR'S REPRESENTATIONS. Depositor represents as follows:
a. Depositor lawfully possesses all of the Deposit Materials deposited with
DSI;
b. With respect to all of the Deposit Materials, Depositor has the right and
authority to grant to DSI and Preferred Beneficiary the rights as provided in
this Agreement;
c. The Deposit Materials are not subject to any lien or other encumbrance;
d. The Deposit Materials consist of the proprietary technology and other
materials identified either in the License Agreement or Exhibit A, as the case
may be; and
e. The Deposit Materials are readable and useable in their current form or, if
any portion of the Deposit Materials is encrypted, the decryption tools and
decryption keys have also been deposited.
1.6 VERIFICATION. A verification determines, in different levels of detail, the
accuracy, completeness, sufficiency and quality of the Deposit Materials.
Preferred Beneficiary shall have the right to cause a verification of any
Deposit Materials, at Preferred Beneficiary's expense. Preferred Beneficiary
shall notify Depositor and DSI of Preferred Beneficiary's request for
verification. Depositor shall have the right to be present at the verification.
If a verification is elected after the Deposit Materials have been delivered to
DSI, then only DSI, or at DSI's election an independent person or company
selected and supervised by DSI, may perform the verification.
1.7 DEPOSIT UPDATES. Unless otherwise provided by the License Agreement,
Depositor shall update the Deposit Materials within sixty (60) days of each
release of a new version of the product which is subject to the License
Agreement. Such updates will be added to the existing deposit. All deposit
updates shall be listed on a new Exhibit B and the new Exhibit B shall be signed
by Depositor. Each Exhibit B will be held and maintained separately within the
escrow account. An independent record will be created which will document the
activity for each Exhibit B. The processing of all deposit updates shall be in
accordance with Sections 1.2 through 1.6 above. All references in this Agreement
to the Deposit Materials shall include the initial Deposit Materials and any
updates.
1.8 REMOVAL OF DEPOSIT MATERIALS. The Deposit Materials may be removed and/or
exchanged only on written instructions signed by Depositor and Preferred
Beneficiary, or as otherwise provided in this Agreement.
ARTICLE 2 -- CONFIDENTIALITY AND RECORD KEEPING
2.1 CONFIDENTIALITY. DSI shall maintain the Deposit Materials in a secure,
environmentally safe, locked facility which is accessible only to authorized
representatives of DSI. DSI shall have the obligation to reasonably protect the
confidentiality of the Deposit Materials. Except as provided in this Agreement,
DSI shall not disclose, transfer, make available, or use the Deposit Materials.
DSI shall not disclose the content of this Agreement to any third party. If DSI
receives a subpoena or any other order from a court or other judicial tribunal
pertaining to the disclosure or release of the Deposit Materials, DSI will
immediately notify the parties to this Agreement unless prohibited by law. It
shall be the responsibility of Depositor and/or Preferred Beneficiary to
challenge any such order; provided, however, that DSI does not waive its rights
to present its position with respect to any such order. DSI will not be required
to disobey any order from a court or other judicial tribunal. (See Section 7.5
below for notices of requested orders.)
CONFIDENTIAL Page 32
2.2 STATUS REPORTS. DSI will issue to Depositor and Preferred Beneficiary a
report profiling the account history at least semi-annually. DSI may provide
copies of the account history pertaining to this Agreement upon the request of
any party to this Agreement.
2.3 AUDIT RIGHTS. During the term of this Agreement, Depositor and Preferred
Beneficiary shall each have the right to inspect the written records of DSI
pertaining to this Agreement. Any inspection shall be held during normal
business hours and following reasonable prior notice.
ARTICLE 3 -- GRANT OF RIGHTS TO DSI
3.1 TITLE TO MEDIA. Depositor hereby transfers to DSI the title to the media
upon which the proprietary technology and materials are written or stored.
However, this transfer does not include the ownership of the proprietary
technology and materials contained on the media such as any copyright, trade
secret, patent or other intellectual property rights.
3.2 RIGHT TO MAKE COPIES. DSI shall have the right to make copies of the
Deposit Materials as reasonably necessary to perform this Agreement. DSI shall
copy all copyright, nondisclosure, and other proprietary notices and titles
contained on the Deposit Materials onto any copies made by DSI. With all Deposit
Materials submitted to DSI, Depositor shall provide any and all instructions as
may be necessary to duplicate the Deposit Materials including but not limited to
the hardware and/or software needed.
3.3 RIGHT TO TRANSFER UPON RELEASE. Depositor hereby grants to DSI the right to
transfer Deposit Materials to Preferred Beneficiary upon any release of the
Deposit Materials for use by Preferred Beneficiary in accordance with Section
4.5. Except upon such a release or as otherwise provided in this Agreement, DSI
shall not transfer the Deposit Materials.
ARTICLE 4 -- RELEASE OF DEPOSIT
4.1 RELEASE CONDITIONS. As used in this Agreement, "Release Condition" shall
mean those conditions set forth in Section 10.3 of the License Agreement.
4.2 FILING FOR RELEASE. If Preferred Beneficiary believes in good faith that a
Release Condition has occurred, Preferred Beneficiary may provide to DSI written
notice of the occurrence of the Release Condition and a request for the release
of the Deposit Materials. Upon receipt of such notice, DSI shall provide a copy
of the notice to Depositor by facsimile and overnight courier.
4.3 CONTRARY INSTRUCTIONS. From the date DSI transmits the notice requesting
release of the Deposit Materials, Depositor shall have two (2) business days to
deliver to DSI contrary instructions ("Contrary Instructions"). Contrary
Instructions shall mean the written representation by Depositor that a Release
Condition has not occurred or has been cured. Upon receipt of Contrary
Instructions, DSI shall send a copy to Preferred Beneficiary by facsimile and
overnight courier. After transmitting Contrary Instructions to DSI, Depositor
shall have ten (10) calendar days to provide Preferred Beneficiary with material
information which establishes that none of the Release Conditions have occurred
("Material Information"). A copy of the Material Information shall be
simultaneously sent to DSI. If Depositor provides such Material Information to
Preferred Beneficiary, DSI shall notify both Depositor and Preferred Beneficiary
that there is a dispute to be resolved pursuant to Section 7.3 of this
Agreement. Subject to Section 5.2 of this Agreement, DSI will continue to store
the Deposit Materials without release pending (a) joint instructions from
Depositor and Preferred Beneficiary; (b) dispute resolution pursuant to Section
7.3; or (c) order of a court.
4.4 RELEASE OF DEPOSIT. If DSI does not receive Contrary Instructions from the
Depositor or if Depositor does not provide Material Information to Preferred
Beneficiary, DSI is authorized to release the Deposit Materials to the Preferred
Beneficiary or, if more than one beneficiary is registered to the deposit, to
release a copy of the Deposit Materials to the Preferred Beneficiary. However,
DSI is entitled to receive
CONFIDENTIAL Page 33
any fees due DSI before making the release. Any copying expense in excess of
$300 will be chargeable to Preferred Beneficiary. Upon any such release, the
escrow arrangement will terminate as it relates to the Depositor and Preferred
Beneficiary involved in the release.
4.5 RIGHT TO USE FOLLOWING RELEASE. Unless otherwise provided in the License
Agreement, upon release of the Deposit Materials in accordance with this Article
4, Preferred Beneficiary shall have the right to use the Deposit Materials for
the sole purpose of continuing the benefits afforded to Preferred Beneficiary by
the License Agreement. Preferred Beneficiary shall be obligated to maintain the
confidentiality of the released Deposit Materials.
ARTICLE 5 -- TERM AND TERMINATION
5.1 TERM OF AGREEMENT. The initial term of this Agreement is for a period of
one year. Thereafter, this Agreement shall automatically renew from year-to-year
unless (a) Depositor and Preferred Beneficiary jointly instruct DSI in writing
that the Agreement is terminated; or (b) DSI instructs Depositor and Preferred
Beneficiary in writing that the Agreement is terminated for nonpayment in
accordance with Section 5.2 or by resignation in accordance with Section 5.3. If
the Acceptance Form has been signed at a date later than this Agreement, the
initial term of the Acceptance Form will be for one year with subsequent terms
to be adjusted to match the anniversary date of this Agreement. If the Deposit
Materials are subject to another escrow agreement with DSI, DSI reserves the
right, after the initial one year term, to adjust the anniversary date of this
Agreement to match the then prevailing anniversary date of such other escrow
arrangements.
5.2 TERMINATION FOR NONPAYMENT. In the event of the nonpayment of fees owed to
DSI, DSI shall provide written notice of delinquency to the parties to this
Agreement affected by such delinquency. Any such party shall have the right to
make the payment to DSI to cure the default. If the past due payment is not
received in full by DSI within one month of the date of such notice, then at any
time thereafter DSI shall have the right to terminate this Agreement to the
extent it relates to the delinquent party by sending written notice of
termination to such affected parties. DSI shall have no obligation to take any
action under this Agreement so long as any payment due to DSI remains unpaid.
5.3 TERMINATION BY RESIGNATION. DSI reserves the right to terminate this
Agreement, for any reason, by providing Depositor and Preferred Beneficiary with
60-days' written notice of its intent to terminate this Agreement. Within the
60-day period, the Depositor and Preferred Beneficiary may provide DSI with
joint written instructions authorizing DSI to forward the Deposit Materials to
another escrow company and/or agent or other designated recipient. If DSI does
not receive said joint written instructions within 60 days of the date of DSI's
written termination notice, then DSI shall destroy, return or otherwise deliver
the Deposit Materials in accordance with Section 5.4.
5.4 DISPOSITION OF DEPOSIT MATERIALS UPON TERMINATION. Subject to the foregoing
termination provisions, and upon termination of this Agreement, DSI shall
destroy, return, or otherwise deliver the Deposit Materials in accordance with
instructions. If there are no instructions, DSI may, at its sole discretion,
destroy the Deposit Materials or return them to Depositor. DSI shall have no
obligation to destroy or return the Deposit Materials if the Deposit Materials
are subject to another escrow agreement with DSI or have been released to the
Preferred Beneficiary in accordance with Section 4.4.
5.5 SURVIVAL OF TERMS FOLLOWING TERMINATION. Upon termination of this
Agreement, the following provisions of this Agreement shall survive:
a. Depositor's Representations (Section 1.5);
b. The obligations of confidentiality with respect to the Deposit Materials;
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c. The rights granted in the sections entitled Right to Transfer Upon Release
(Section 3.3) and Right to Use Following Release (Section 4.5), if a release of
the Deposit Materials has occurred prior to termination;
d. The obligation to pay DSI any fees and expenses due;
e. The provisions of Article 7; and
f. Any provisions in this Agreement which specifically state they survive the
termination of this Agreement.
ARTICLE 6 -- DSI'S FEES
6.1 FEE SCHEDULE. DSI is entitled to be paid its standard fees and expenses
applicable to the services provided. Unless otherwise stated in this Agreement
or agreed in a writing signed by DSI, Depositor will pay DSI's fees. DSI shall
notify the party responsible for payment of DSI's fees at least sixty (60) days
prior to any increase in fees. For any service not listed on DSI's standard fee
schedule, DSI will provide a quote prior to rendering the service, if requested.
6.2 PAYMENT TERMS. DSI shall not be required to perform any service unless the
payment for such service and any outstanding balances owed to DSI are paid in
full. Fees are due upon receipt of a signed contract or receipt of the Deposit
Materials whichever is earliest. If invoiced fees are not paid, DSI may
terminate this Agreement in accordance with Section 5.2.
ARTICLE 7 -- LIABILITY AND DISPUTES
7.1 RIGHT TO RELY ON INSTRUCTIONS. DSI may act in reliance upon any
instruction, instrument, or signature reasonably believed by DSI to be genuine.
DSI may assume that any employee of a party to this Agreement who gives any
written notice, request, or instruction has the authority to do so. DSI shall
not be required to inquire into the truth or evaluate the merit of any statement
or representation contained in any notice or document. DSI shall not be
responsible for failure to act as a result of causes beyond the reasonable
control of DSI.
7.2 INDEMNIFICATION. Depositor and Preferred Beneficiary each agree to
indemnify, defend and hold harmless DSI from any and all claims, actions,
damages, arbitration fees and expenses, costs, attorney's fees and other
liabilities ("Liabilities") incurred by DSI relating in any way to this escrow
arrangement unless such Liabilities were caused solely by the negligence or
willful misconduct of DSI.
7.3 DISPUTE RESOLUTION. Any dispute relating to or arising from this Agreement
shall be resolved by arbitration using a panel of three (3) arbitrators under
the Commercial Rules of the American Arbitration Association. Three arbitrators
shall be selected. The Depositor and Preferred Beneficiary shall each select one
arbitrator and the two chosen arbitrators shall select the third arbitrator, or
failing agreement on the selection of the third arbitrator, the American
Arbitration Association shall select the third arbitrator. However, if DSI is a
party to the arbitration, DSI shall select the third arbitrator. Unless
otherwise agreed by Depositor and Preferred Beneficiary, arbitration will take
place in Chicago, Illinois, USA. Any court having jurisdiction over the matter
may enter judgment on the award of the arbitrators. Service of a petition to
confirm the arbitration award may be made by First Class mail or by commercial
express mail, to the attorney for the party or, if unrepresented, to the party
at the last known business address.
7.4 CONTROLLING LAW. This Agreement is to be governed and construed in
accordance with the laws of
New York, without regard to its conflict of law
provisions.
7.5 NOTICE OF REQUESTED ORDER. If any party intends to obtain an order from the
arbitrator or any court of competent jurisdiction which may direct DSI to take,
or refrain from taking any action, that party shall:
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a. Give DSI at least two business days' prior notice of the hearing;
b. Include in any such order that, as a precondition to DSI's obligation, DSI
be paid in full for any past due fees and be paid for the reasonable value of
the services to be rendered pursuant to such order; and
c. Ensure that DSI not be required to deliver the original (as opposed to a
copy) of the Deposit Materials if DSI may need to retain the original in its
possession to fulfill any of its other escrow duties.
ARTICLE 8 -- GENERAL PROVISIONS
8.1 ENTIRE AGREEMENT. This Agreement, which includes the Acceptance Form and
Exhibits described herein, embodies the entire understanding among all of the
parties with respect to its subject matter and supersedes all previous
communications, representations or understandings, either oral or written. DSI
is not a party to the License Agreement between Depositor and Preferred
Beneficiary and has no knowledge of any of the terms or provisions of any such
License Agreement. DSI's only obligations to Depositor or Preferred Beneficiary
are as set forth in this Agreement. No amendment or modification of this
Agreement shall be valid or binding unless signed by all the parties hereto,
except that Exhibit A need not be signed by DSI, Exhibit B need not be signed by
Preferred Beneficiary, Exhibit C need not be signed, and the Acceptance Form
need only be signed by the parties identified therein.
8.2 NOTICES. All notices, invoices, payments, deposits and other documents and
communications shall be given to the parties at the addresses specified in the
attached Exhibit C and Acceptance Form. It shall be the responsibility of the
parties to notify each other as provided in this Section in the event of a
change of address. The parties shall have the right to rely on the last known
address of the other parties. Unless otherwise provided in this Agreement, all
documents and communications may be delivered by First Class mail.
8.3 SEVERABILITY. In the event any provision of this Agreement is found to be
invalid, voidable or unenforceable, the parties agree that unless it materially
affects the entire intent and purpose of this Agreement, such invalidity,
voidability or unenforceability shall affect neither the validity of this
Agreement nor the remaining provisions herein, and the provision in question
shall be deemed to be replaced with a valid and enforceable provision most
closely reflecting the intent and purpose of the original provision.
8.4 SUCCESSORS. This Agreement shall be binding upon and shall inure to the
benefit of the successors and assigns of the parties. However, DSI shall have no
obligation in performing this Agreement to recognize any successor or assign of
Depositor or Preferred Beneficiary unless DSI receives clear, authoritative and
conclusive written evidence of the change of parties.
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8.5 REGULATIONS. Depositor and Preferred Beneficiary are responsible for and
warrant compliance with all applicable laws, rules and regulations, including
but not limited to customs laws, import, export, and re-export laws and
government regulations of any country from or to which the Deposit Materials may
be delivered in accordance with the provisions of this Agreement.
Orbitz LLC DSI Technology Escrow Services, Inc.
By: By:
---------------------------------- -----------------------------------
Name: Name:
-------------------------------- ---------------------------------
Title: Title:
------------------------------- --------------------------------
Date: Date:
-------------------------------- ---------------------------------
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PREFERRED BENEFICIARY ACCEPTANCE FORM
Account Number ________________
Depositor, Preferred Beneficiary and DSI Technology Escrow Services, Inc.
("DSI"), hereby acknowledge that _______________ is the Preferred Beneficiary
referred to in the Master Preferred Escrow Agreement ("Agreement") effective
________, 20__ with DSI as the escrow agent and Orbitz LLC as the Depositor.
Preferred Beneficiary hereby agrees to be bound by all provisions of such
Agreement.
Notices and communications to Invoices should be addressed to:
Preferred Beneficiary should
be addressed to:
Company Name: ________________ Company Name: ________________
Address: _____________________ Address: _____________________
Address: _____________________ Address: _____________________
Address: _____________________ Address: _____________________
Designated Contact: __________ Contact: _____________________
Tel: _________________________ Tel: _________________________
Fax: _________________________ P.O.# if req'rd: _____________
Orbitz LLC ------------------------------------
Depositor Preferred Beneficiary
By: By:
--------------------------- ---------------------------
Name: Name:
--------------------------- ---------------------------
Title: Title:
----------------------- -----------------------
Date: Date:
--------------------------- ---------------------------
DSI Technology Escrow Services, Inc.
By:
---------------------------
Name:
---------------------------
Title:
-----------------------
Date:
---------------------------
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EXHIBIT A
MATERIALS TO BE DEPOSITED
Account Number _________________
Depositor represents to Preferred Beneficiary that Deposit Materials delivered
to DSI shall consist of the following Deposit Materials identified in License
Agreement:
Orbitz LLC
----------------------------
Depositor Preferred Beneficiary
By: By:
--------------------------- ---------------------------
Name: Name:
--------------------------- ---------------------------
Title: Title:
----------------------- -----------------------
Date: Date:
--------------------------- ---------------------------
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CONFIDENTIAL Page 39
EXHIBIT B
DESCRIPTION OF DEPOSIT MATERIALS
Depositor Company Name: Orbitz LLC
Account Number: ________________________
Product Name: ________________________ Version: _______________
(Product Name will appear as the Exhibit B Name on Account History report)
DEPOSIT MATERIAL DESCRIPTION:
Quantity Media Type & Size Label Description of Each Separate Item
____ Disk 3.5" or ____
____ DAT tape ____mm
____ CD-ROM
____ Data cartridge tape ____
____ TK 70 or ____ tape
____ Magnetic tape ____
____ Documentation
____ Other ______________________
PRODUCT DESCRIPTION:
Environment: ____________________________________________________
DEPOSIT MATERIAL INFORMATION:
Is the media or are any of the files encrypted? Yes / No If yes, please include
any passwords and the decryption tools.
Encryption tool name ________________________ Version: _______________
Hardware required: _________________________________________________________
Software required: _________________________________________________________
Other required information: ________________________________________________
I certify for Depositor that the above described Deposit Materials have been
transmitted to DSI:
Signature:
---------------------
Print Name:
---------------------
Date:
----------------------------
DSI has inspected and accepted the above materials (any exceptions are noted
above):
Signature:
---------------------
Print Name:
---------------------
Date Accepted:
-------------------
Exhibit B#:
--------------------
Send materials to: DSI, ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
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EXHIBIT C
DESIGNATED CONTACT
Account Number: _________________
Notices and communications Invoices should be addressed to:
should be addressed to:
Company Name: _________________
Address: _____________________ Address: _____________________
Address: _____________________ Address: _____________________
Address: _____________________ Address: _____________________
Designated Contact: ________ Contact: _____________________
Tel: ________________________ Tel: _________________________
Fax: _________________________ P.O.# if req'rd: __________
Email: ______________________ Email: _______________________
Verification Contact: ____________
Requests to change the designated contact should be given in writing by the
designated contact or an authorized employee.
Contracts, Deposit Materials and Invoice inquiries and fee
notices to DSI should be addressed: remittances addressed to:
DSI Technology Escrow Services, Inc. DSI Technology Escrow Services, Inc.
Contract Administration Accounts Receivable
▇▇▇▇▇ ▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇)▇▇▇-▇▇▇▇ Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇)▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
Date:
----------------------
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