Exhibit 10.9
Confidential EXECUTION COPY
INTERACTIVE SERVICES AGREEMENT
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This Interactive Services Agreement (the "Agreement"), dated as of
September 1, 1997 (the "Effective Date"), is between America Online, Inc.
("AOL"), a Delaware corporation, with offices at ▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, and Preview Travel, Inc. ("Preview"), a California corporation, with
offices at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. AOL and Preview
may be referred to individually as a "Party" and collectively as "Parties."
INTRODUCTION
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AOL and Preview each desires that Preview make the Online Area (and the Res
System therein) available through the AOL Network, subject to the terms and
conditions set forth in this Agreement. Defined terms used but not defined in
the body of the Agreement shall be as defined on Exhibit A attached hereto.
TERMS
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1. ONLINE AREA - PROGRAMMING; ADVERTISING. The Parties shall have the
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following duties and rights with respect to the Content and programming of
the Online Area:
1.1 Online Area. Preview shall work diligently to maintain the Online
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Area, consisting of the Content contained within the Online Area as of
the Effective Date. Consistent with the Parties' joint goal that the
Online Area be rich and robust and substantially consistent with any
other version of the area (or similar Content of Preview) made
available directly by Preview or through any third party or via any
Interactive Site including, without limitation, any features, offers,
contests, functionality or technology (such other versions
collectively, the "Additional Preview Channels"), Preview shall ensure
that the Online Area shall include all of the Content that is then
included in the Additional Preview Channels; provided, however, that
(a) such inclusion shall not be required where it is commercially or
technically impractical to either Party and (b) the specific changes
in scope, nature and/or offerings required by such inclusion shall be
subject to AOL's review and approval and the terms of this Agreement.
Prior to the Transition (if any) (as defined in Section 1.10) the
inclusion in the Online Area of (a) any material amounts of additional
Content not contained within the Online Area as of the Effective Date
or (b) any additional Content that is inconsistent in any manner with
the scope and purpose of the Online Area as of the Effective Date
(including, without limitation, in each case, any features,
functionality or technology) shall be subject to AOL's prior written
approval. Subsequent to the Transition, all Content, including without
limitation, all links, advertising, transaction types and
functionality, shall be subject to the prior written approval of AOL.
Preview shall develop any redesign of the Online Area in consultation
with AOL and in accordance with any standard design and content
publishing guidelines provided to Preview by AOL (including, without
limitation, any HTML publishing guidelines). Preview shall not
authorize or permit any third party to distribute any Content of
Preview through the AOL Network absent AOL's prior written approval.
Preview shall reasonably consider AOL's views on any redesign of the
Online Area
1.2 Links. Preview shall not be permitted to establish any links between
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the Online Area and any other area on or outside of the AOL Network,
including, without limitation, sites on the World Wide Web portion of
the Internet, without the prior written approval of AOL. In the event
that AOL approves any such links, such approval shall, in each case,
be subject to Preview's compliance with the then-current standard
terms and conditions for such links, as such terms and conditions may
be amended by AOL from time to time.
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1.3 Contests. Preview shall take all commercially reasonable steps
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necessary to ensure that any contest, sweepstakes or similar promotion
conducted or promoted through the Online Area (a "Contest") complies
with all applicable federal, state and local laws and regulations.
Preview shall provide AOL with at least thirty (30) days prior written
notice (or less as applicable given the legal requirements relating to
such Contest) of any Contest.
1.4 Navigational Icons. AOL shall be entitled to establish navigational
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icons, links and pointers connecting the Online Area (or portions
thereof) with other content areas on or outside of the AOL Network.
In addition, upon AOL's reasonable request, Preview shall create
contextual links in the Online Area to appropriate Content outside of
the Online Area.
1.5 Lowest Price Commitment; Special Offers. Preview shall ensure that
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the prices for Products offered to AOL Users through the Online Area
(a) do not exceed prices for substantially similar Products offered by
or on behalf of Preview through any other Interactive Site and (b) are
competitive in all material respects with prices for substantially
similar Products offered by other travel services in any other online
or offline medium. In addition, Preview shall, on a reasonably
periodic basis, promote (a) any special or promotional offers made
available by or on behalf of Preview on any other Interactive Site or
through any Additional Preview Channel and (b) in addition, a
reasonable number (at least [*] per Contract Year, with best efforts
to make each of the [*] offers an airline offer and to create
additional offers in each Contract Year) of special exclusive offers
for AOL Users through the Online Area (e.g., discounted fares, free
upgrades (collectively, the "Special Offers"). Preview shall provide
AOL with reasonable prior notice of Special Offers so that AOL can
market the availability of such Special Offers in the manner AOL deems
appropriate in its editorial discretion. In addition, on an annual
basis, Preview will offer a mutually agreeable number of Special
Offers as part of the AOL Member Benefits program, which offers shall
be available exclusively to AOL Members. Preview and AOL will
regularly work together to create other effective and mutually
agreeable promotions for AOL Users.
1.6 Res System. Preview will maintain the Core Systems and the Res System
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accessible through the Online Area and will be responsible for
arranging for the connection of the Res System to the Airline Systems
(through the Core Systems). Preview's management of the Res System
shall also be subject to the obligations set forth in Sections 2.8 and
2.9 and Exhibits C and D.
1.7 Disclaimers. Preview agrees that a product disclaimer in
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substantially the following form will be displayed in a legal notice
screen to be placed in a mutually agreed upon area in the Online Area:
"AOL AND ITS AFFILIATES WILL NOT BE A PARTY TO ANY TRANSACTION
BETWEEN ANY PURCHASER AND PREVIEW, AND, EXCEPT AS EXPRESSLY
PROVIDED IN AOL'S SHOPPING CHANNEL SATISFACTION GUARANTEE
(AVAILABLE AT KEYWORD "GUARANTEE"), ALL ASPECTS OF SUCH
TRANSACTIONS INCLUDING BUT NOT LIMITED TO PURCHASE TERMS, PAYMENT
TERMS, WARRANTIES, GUARANTEES, MAINTENANCE, AND DELIVERY ARE
SOLELY BETWEEN PURCHASER AND PREVIEW. AOL AND ITS AFFILIATES
PROVIDE NO GUARANTEES OR WARRANTIES, EXPRESS OR IMPLIED,
REGARDING THE QUALITY, MAKE, OR PERFORMANCE OF THE PRODUCTS OR
SERVICES AVAILABLE THROUGH THIS AREA. ALL SUCH GUARANTEES OR
WARRANTIES, IF ANY, ARE DIRECTLY BETWEEN PREVIEW AND THE
PURCHASER."
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1.8 Licenses. Preview hereby grants AOL during the Term a non-exclusive
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worldwide license to market, license, distribute, display, perform,
transmit and promote the Online Area and the Licensed Content
contained therein through the AOL Network solely for the purposes
described herein. Preview also grants AOL during the Term a non-
exclusive worldwide license to use any Preview software (and all
modifications and enhancements thereto) necessary for use of the
Online Area by AOL and/or AOL Users (the "Preview Software"). During
the Term, AOL Users shall have the right to access and use the Online
Area and to use the Preview Software, each free of charge. Subject to
such licenses, Preview retains all right, title to and interest in the
Licensed Content and the Preview Software.
1.9 AOL Look and Feel. Preview acknowledges and agrees that AOL shall own
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all right, title and interest in and to the AOL Look and Feel, subject
to Preview's ownership rights in the Licensed Content.
1.10 Transition of Online Area. In the event that Parties mutually agree
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in writing that the Online Area should be reformatted in HTML and
placed on a customized Interactive Site instead of within the
"Rainman" portion of the AOL Network (the "Transition"), (a) the
Transition shall occur according to a written transition plan agreed
upon by the Parties which includes specific responsibilities for each
Party and timetables for completion of such responsibilities, (b)
Preview shall pay all production and communications costs associated
with the Transition and (c) the Online Area after the Transition will
be an Interactive Site customized for use solely by users of the AOL
Service and ▇▇▇.▇▇▇ and will contain links only to AOL Content areas,
unless expressly agreed upon in writing in advance by the Parties.
Prior to the Transition, AOL must be reasonably satisfied that
Preview's customized Interactive Site fully complies with the
"Customized Interactive Site Requirements" set forth in Exhibit C.
1.11 Advertising Sales. Both Parties shall have the right to license or
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sell promotions, advertisements, links, pointers or similar services
or rights through the Online Area ("Advertisements"), subject to the
Advertising Minimum, AOL's then-applicable advertising policies and
AOL's prior approval. The specific advertising inventory within the
Online Area shall be as reasonably determined by the Parties. In
connection with the sale by Preview of an Advertisement, Preview
shall, in each instance, provide AOL with a completed standard
Advertising Registration Form relating to such Advertisement. Preview
shall take all reasonable steps necessary to ensure that any
Advertisement sold by Preview or its agents complies with all
applicable federal, state and local laws and regulations. When selling
advertising associated with any Preview Interactive Site, Preview
shall use commercially reasonable efforts to sell related advertising
within the Online Area. To the extent a Party sells an Advertisement
as part of an advertising package including multiple placement
locations (e.g., both the Online Area and a Preview Interactive Site),
such Party shall allocate the payment for such advertising package
between or among such locations in an equitable fashion, subject to
the Advertising Minimum. To the extent an Advertisement is delivered
through a dynamic mechanism primarily linked to the AOL Members
viewing the advertisement (rather than a defined space within the
Online Area) (e.g., delivery using "ad server" technology), the amount
of revenue from the advertisement allocable to Advertising Revenues
shall be determined based on the number of Impressions to the
Advertisement generated by AOL Users while viewing Content within the
Online Area relative to the total Impressions to the Advertisement
during the given period (or such other formula as AOL may reasonably
implement across the AOL Service given the then-existing advertising
models). Preview shall be responsible for calculating the Internet
Advertising Quotient related to Internet Advertising Revenues. To the
extent AOL is caching any Preview Interactive Site, AOL will provide
Preview with the Impressions information related to any cached sites
necessary for Preview to calculate the Internet Advertising Quotient.
For any period
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during which Preview fails to calculate the Internet Advertising
Quotient, such quotient shall be deemed to be one hundred percent
(100%). In the event Preview or its Affiliates receives or desires to
receive, directly or indirectly, any barter advertising (or similar
compensation that does not meet the definition of Advertising Revenues
pursuant to Exhibit A) in connection with the Online Area ("Barter
Ads"), Preview shall be entitled to sell such Barter Ads solely from
Preview's unsold inventory on the Online Area; provided that (a)
Barter Ads shall not during any month constitute more than [*] of the
advertising inventory on the Online Area or more than [*] of the
advertising inventory on any screen and (b) sales of Advertisements
shall always preempt placement of Barter Ads. Preview will work with
AOL to incorporate AOL's ad-serving technology, subject to the
specific limitations of that technology. Preview has not yet received
documentation regarding this technology, and therefore cannot
guarantee specific functionality. In no event shall Preview use a
third party provider of ad-serving technology in the AOL Database
without AOL's prior written approval.
2. ONLINE AREA - MANAGEMENT AND MAINTENANCE.
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2.1 Management of Online Area. Preview shall manage, review, delete,
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edit, create, update and otherwise manage all content and services
available on or through the Online Area, including but not limited to
the Licensed Content and message boards (if any), in a timely and
professional manner and in accordance with the terms of this Agreement
and AOL's applicable Terms of Service. Preview shall keep the Online
Area current, accurate and well-organized. Preview warrants that no
portion of the Online Area which is proprietary to Preview (i) will
infringe on or violate any copyright, U.S. patent, trademark or trade
secret; or (ii) will contain any Content which violates any applicable
law or regulation. AOL shall have no obligations with respect to the
Content available on or through the Online Area, including, but not
limited to, any duty to review or monitor any such Content. Preview
acknowledges and agrees that in the event any Content made available
through the Online Area creates material adverse legal and/or public
relations consequences for AOL ("Adverse Content"), as reasonably
determined by AOL, AOL shall be entitled to (a) restrict access to the
Adverse Content in an agreed-upon manner or (b) in the event such
access cannot be restricted, direct Preview to remove the Adverse
Content. In the event that any Adverse Content remains in serious
violation of any copyright, U.S. patent, trademark or trade secret or
of any applicable law or regulation and has not been removed from the
Online Area more than 72 hours following discovery of the violation by
Preview or notice of the violation to Preview, AOL shall have the
right to terminate the Agreement on ten (10) days prior written notice
to Preview.
2.2 Access Equipment. Preview shall provide all computer, telephone and
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other equipment or resources necessary for Preview and the Online Area
to access the AOL Network (including, without limitation, high-speed
dedicated data connections capable of handling AOL peak traffic
loads), except for the AOL proprietary client software necessary to
access the AOL Network and the publishing and commerce tools to be
provided by AOL pursuant to Section 2.6.
2.3 Duty to Inform. Preview shall use all reasonable efforts to promptly
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inform AOL of any information related to the Online Area which could
reasonably lead to a claim, demand, or liability of or against AOL
and/or its Affiliates by any third party.
2.4 Overhead Accounts. Preview shall be granted a reasonable number of
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Overhead Accounts, as mutually determined by AOL and Preview, for the
exclusive purpose of enabling it and its agents to perform Preview's
duties under this Agreement. Preview shall be responsible for the
actions taken under or through its Overhead Accounts, which
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actions are subject to AOL's applicable Terms of Service and for any
surcharges, including, without limitation, all premium charges,
transaction charges, and any applicable communication surcharges
incurred by any Overhead Account issued to Preview, but Preview shall
not be liable for charges incurred by any Overhead Account relating to
AOL's standard monthly usage fees and standard hourly charges, which
charges AOL shall bear. Upon the termination of this Agreement, all
Overhead Accounts, related screen names and any associated usage
credits or similar rights, shall automatically terminate. AOL shall
have no liability for loss of any data or content related to the
proper termination of any Overhead Account.
2.5 Production Work. In the event that Preview requests AOL's production
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assistance in connection with (i) ongoing programming and maintenance
related to the Online Area, (ii) a redesign of or addition to the
Online Area (e.g., a change to an existing screen format or
construction of a new custom form), (iii) production to modify work
performed by a third party provider or (iv) any other type of
production work, Preview shall work with AOL to develop a detailed
production plan for the requested production assistance (the
"Production Plan"). Following receipt of the final Production Plan,
AOL shall notify Preview of (i) AOL's availability to perform the
requested production work, (ii) the proposed fee or fee structure for
the requested production and maintenance work and (iii) the estimated
development schedule for such work. To the extent the Parties reach
agreement regarding implementation of agreed-upon Production Plan,
such agreement shall be reflected in a separate work order signed by
the Parties. To the extent Preview elects to retain a third party
provider to perform any such production work, work produced by such
third party provider must generally conform to AOL's production
Standards & Practices (a copy of which will be supplied by AOL to
Preview upon request). The specific production resources which AOL
allocates to any production work to be performed on behalf of Preview
shall be as determined by AOL in its sole discretion.
2.6 Publishing and Commerce Tools. AOL grants Preview a non-exclusive,
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royalty-free license during the term of the Agreement to use AOL's
publishing tools and its commerce tools which are then made generally
available by AOL to its interactive content providers, solely in
connection with Preview's construction and/or maintenance and
operation of its Online Area. Preview recognizes that (i) AOL
provides all such publishing tools on an "as is" basis, without
warranties of any kind and (ii) AOL may withdraw or modify its
publishing tools at any time. Preview shall be required to complete
AOL's then-standard technical production training classes prior to
receiving access to the AOL publishing tools.
2.7 Training. AOL shall make available to Preview standard AOL training
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programs related to Preview's management and maintenance of the Online
Area (including, without limitation, the technical production classes
for AOL publishing tools described below). In addition, Preview will
pay its own travel and lodging costs associated with its participation
in any AOL training programs (including AOL's reasonable travel and
lodging costs when training is conducted at Preview's offices).
2.8 Performance Standards. Except as provided in this Agreement or
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otherwise mutually agreed, Preview shall comply with the performance
standards (the "Performance Standards") set forth in Exhibit C. To
the extent Performance Standards are not established for any portion
of the services provided by Preview hereunder, Preview will perform
those services at a level of accuracy, quality, completeness, and
responsiveness which meets or exceeds prevailing industry standards.
Upon any discovery by Preview, or receipt by Preview of notification
by AOL, of failure by Preview to meet a Performance Standard, (a)
Preview shall promptly investigate the failure and inform AOL in
writing of such failure and the "root causes" thereof (to the extent
they can be determined) no later than five (5) days after Preview
discovers the failure or receives such notification by AOL, (b)
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AOL shall consult with Preview to develop an action plan for remedying
the failure within five (5) days thereafter and (c) within thirty (30)
days of development of such action plan, Preview shall fully institute
such plan and reach compliance with the applicable Performance
Standard. In the event Preview has not complied with the Performance
Standard at the end of such 30-day period, AOL may, at its sole
option, terminate either the Agreement or Sections 3.1, 3.3 and 3.4
upon written notice to Preview.
2.9 Preview Services. Preview shall provide the services set forth in
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Exhibit D.
2.10 Certified Merchant Program. Preview shall participate in any
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generally applicable "Certified Merchant" program operated by AOL or
its authorized agents or contractors. Such program may require
merchant participants on an ongoing basis to meet certain reasonable,
generally applicable standards relating to provision of electronic
commerce through the AOL Network and may also require the payment of
certain reasonable certification and/or monitoring fees to AOL or its
authorized agents or contractors operating the program.
3. PLACEMENT AND PROMOTION; [*]; CROSS-PROMOTION.
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3.1 Promotional Plan. AOL shall provide online promotion for the Online
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Area across the AOL Network using promotional placements chosen from
time to time by AOL in its reasonable discretion from the list of
placements set forth in Exhibit B (the "Promotional Plan"). The
Parties shall also mutually agree on the extent to which Preview may
be entitled to Travel Channel pop-ups, subject to AOL's internal
testing regarding the efficacy and consumer acceptance of such pop-ups
for partners in the Travel Channel. On a periodic basis, no less than
quarterly, the parties shall review and modify these placements, as
applicable and mutually agreed, with the intent of maintaining a
current and effective plan. In addition to the specific placements
and distribution agreed upon in the promotional plan, AOL shall have
the right, but not the obligation, to promote and distribute the
Online Area throughout the AOL Network beyond the AOL Service and
▇▇▇.▇▇▇ (e.g., Greenhouse, Instant Messenger, Digital City, etc.). If
AOL is unable to deliver any particular promotional placement
described in Exhibit B (e.g., if the area in which the placement was
to occur is redesigned), the Parties will cooperate in good faith to
develop a replacement program that will include providing Preview with
a substitute promotion of similar quality, nature and value. AOL's
performance of its promotional commitments in the Travel Channel
(including any Impressions commitments pursuant to Section 3.2) is
contingent upon Preview's delivery of the "Destinations Database"
pursuant to the terms and conditions of the Database Agreement between
the parties dated as of September 25, 1997 (the "Database Agreement").
Until such date, AOL shall make commercially reasonable efforts to
satisfy any commitments with respect to the Travel Channel. Any delay
in delivery after such date will reduce AOL's commitments on a pro-
rata basis. In addition, in the event of non-delivery of such
database, AOL may elect to terminate the Agreement pursuant to Section
10.3.
3.2 Impressions. The online promotional placements within certain areas
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of the AOL Network, as required by Section 3.1 above, shall result in
at least the total amount of annual Impressions indicated on the
Promotional Plan; provided that AOL shall not be obligated to provide
in excess of any required amount of Impressions in any year. AOL will
use commercially reasonable efforts to deliver the Impressions in
roughly proportionate quarterly amounts based on the annual target
levels. Except as set forth below in this Section 3.2, any shortfall
in Impressions at the end of a Contract Year shall not be considered a
breach hereof by AOL; such amount shall instead be added to the target
level in the subsequent Contract Year. AOL's failure to provide an
agreed upon percentage (the "Shortfall Percentage") of the number of
total Impressions due to Preview
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during any Contract Year as set forth in Exhibit B shall be deemed a
material breach of the Agreement, unless such failure is substantially
attributable to Preview. The Shortfall Percentage shall be [*] for the
first and second Contract Years and [*] for the third, fourth and
fifth Contract Years. Preview's sole remedy for such breach shall be
to terminate the Agreement on thirty (30) days prior written notice to
AOL. In the event there is a shortfall in total Impressions as of the
anticipated Expiration Date (a"Final Shortfall"), AOL shall elect in
its sole discretion one of the following options to provide to Preview
as its sole remedy following the Expiration Date: (a) AOL shall pay
Preview an amount equal to the Final Shortfall divided by [*] (the
"Shortfall Dollar Value"), or (b) commencing on the Expiration Date,
AOL shall provide Preview with advertising placements at a mutually
agreed upon discount from AOL's then-current rate card in the Travel
Channel, the Shopping Channel and other mutually agreed upon areas
with a total value equal to the Shortfall Dollar Value; provided that
in the case of clause (b), the Parties shall negotiate an appropriate
promotional plan for such period prior to the Expiration Date, and
AOL's promotional commitment shall expire upon provision of the total
value due to Preview during the period, which shall not exceed nine
(9) months. In the event AOL has over-delivered Impressions as of the
end of the first four (4) Contract Years for either ▇▇▇.▇▇▇ or the
"Other AOL Network Placements" category set forth in Exhibit B, AOL's
Impressions commitment for either area in the fifth Contract Year
shall be reduced by the amount of such over-delivery (AOL to determine
allocation of such reductions between such areas). In the event AOL
has over-delivered Impressions as of the end of the first four (4)
Contract Years for the Travel Channel, AOL's Impressions commitment
for the Travel Channel (and only the Travel Channel) in the fifth
Contract Year shall be reduced by the amount of such over-delivery. In
the event that at any point during the Term, the aggregate amount of
Commissions earned by Preview as of such date equals or exceeds [*],
AOL's entire Impressions commitment for the remainder of the Term will
be deemed satisfied as of the date on which such hurdle was met.
Subject to Preview's reasonable approval, AOL will have the right to
fulfill Impressions commitments in any promotional area by
substituting incremental Impressions from alternative areas of the AOL
Network. In the event the Database Agreement is terminated, the
numbers of Impressions to be delivered by AOL in the Travel Channel
pursuant to Exhibit B shall be reduced to [*]. In the event delivery
of the database is delayed by Preview in any phase pursuant to the
Database Agreement, the numbers of Impressions to be delivered by AOL
in the Travel Channel pursuant to Exhibit B shall be reduced on a pro-
rata basis. Pursuant to Section 11.11, the remedies available to AOL
set forth in this Section 3.2 are not AOL's exclusive remedies
hereunder.
3.3 [*]. Subject to the terms of this Section 3.3, AOL agrees that the Res
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System shall be the [*] Reservations Engine that is (a) contextually
integrated across the "Travel Channel" on the AOL Service (i.e.,
threaded throughout the promotional areas listed on Schedule B) and
(b) expressly promoted by AOL in any areas on the AOL Service or on
▇▇▇.▇▇▇ over which AOL exercises complete or substantially complete
programming control (the "AOL-Controlled Areas"). For purposes of this
Agreement, areas managed by [*] or any third party content providers,
among other areas, shall not be deemed AOL-Controlled Areas. The
foregoing [*] shall not apply to (a) Last Minute Travel, Business
Travel, Airline Ticket Consolidation or Cruises [*] or (b) Vacations
Packages. In addition, notwithstanding the foregoing [*], no provision
of this Agreement shall limit AOL's ability (in the AOL-Controlled
Areas or elsewhere on or off the AOL Network) to:
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(a) promote, market or distribute (i) the Content of any other
travel-related interactive content provider that may link to a
Reservations Engine (so long as AOL does not expressly promote
the availability of such Reservation Engine through such
provider and does not promote the Content of any entity meeting
the definition of a Preview Competitor) or (ii) [*] travel
offerings or any discount travel club/membership service (e.g.,
Traveler's Advantage);
(b) sell advertising (e.g., banners, buttons, links) to any travel-
related company (other than a Preview Competitor), including
without limitation, any airline, hotel or rental car company
that may link to and promote a Reservations Engine ;
(c) perform its duties pursuant to arrangements with other parties
entered into prior to the Effective Date.
Preview acknowledges that AOL does not and cannot guarantee that users
will not be able to access alternative Reservations Engines through
the AOL Service or ▇▇▇.▇▇▇ (e.g., using an Internet browser).
3.4 Specific Travel Categories.
3.4.1 Rights of First Offer. Preview shall have a right of first
offer to be the [*] provider on the AOL Service and ▇▇▇.▇▇▇ for
each of [*], as follows (any service in each such category, an
"Additional Service"). In the event AOL elects to provide an
Additional Service on the AOL Service and/or ▇▇▇.▇▇▇, AOL shall
provide Preview with written notice of the terms on which AOL
generally desires to distribute the Additional Service (the
"Terms"); provided that in the case of [*], AOL hereby
acknowledges its intent to provide such service and to provide
such Terms (including a written specification reasonably
designed to be created within the AOL structure within 45 days)
to Preview promptly following AOL's decision to offer the
applicable service. If Preview desires to provide the
Additional Service, Preview shall provide AOL with written
notice of its desire to provide such service within five (5)
business days of its receipt of written notice from AOL as set
forth above and shall execute a written agreement with AOL
setting forth the Terms within thirty (30) business days of its
receipt of notice from AOL describing the Terms. In such case,
Preview will work diligently to provide to AOL a viable version
of the Additional Service which is suitable for distribution
generally on the AOL Network and which is reasonably
satisfactory to AOL, in accordance with the Terms agreed to by
Preview; provided that Preview shall provide such version
within a reasonable period of time following Preview's notice
of agreement on the Terms, not to exceed ninety (90) days (45
days in the case of [*]). The right of first offer shall expire
and AOL will be entitled to pursue negotiations with third
parties on terms (including, without limitation, terms relating
to carriage, revenue share and programming requirements)
substantially identical to the Terms (a) if Preview informs AOL
in writing that it does not desire to participate in such
Additional Service or does not otherwise respond to the Terms
within the five (5) business days allowed above; or (b) at any
point (i) following the 30 days in which Preview is allowed to
enter into an agreement with AOL regarding the Additional
Service or (ii) following the 90/45 day period in which Preview
must provide the Additional Service; provided that AOL shall
not in bad faith rely on the foregoing to deprive Preview of
the opportunity to provide any Additional Service. In the event
AOL is entitled pursuant to the foregoing to pursue
negotiations with third parties regarding [*], AOL shall not be
prohibited from
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
8
Confidential
negotiating with ▇▇▇▇▇▇▇▇▇.▇▇▇ and ▇▇▇▇.▇▇▇; in the event
such negotiations result in an arrangement whereby either
entity provides Business Travel to AOL, such entity shall not
be deemed a Preview Competitor hereunder. In the event AOL
offers Cruises to Preview and Preview does not agree to offer
Cruises, all pursuant to this Section, Preview shall be
entitled to mutually agreed upon placement in the Cruises area
that may be developed by AOL. Absent the written agreement
described above between Preview and AOL setting forth the Terms
or a duly authorized and executed written agreement between AOL
and a third party with respect to an Additional Service, under
no circumstances shall AOL be obligated to distribute such
Additional Service, whether provided by Preview or any other
party. In the event that, in accordance with the foregoing, AOL
uses another provider for Business Travel, Preview agrees to
cooperate (as long as it is technically feasible) with such
provider in the development of any Business Travel applications
that are dependent on information from the Res System. This
includes, but is not limited to, frequent flyer programs,
mileage-optimization utilities, email and instant-message
travel updates, and integrated merchandizing. The Parties
acknowledge that more than one Additional Service may be
established with respect to any category (e.g., Last Minute
Travel) and, therefore, each such Additional Service shall be
subject to the terms and conditions of this Section 3.4.1.
3.4.2 Vacation Packages. AOL shall provide Preview the following
-----------------
promotional placements with respect to Vacation Packages (to
the extent Preview offers such packages): (a) on the front
screen of the AOL "Vacations Area", the top third-party
promotional button (currently anticipated to appear on the
right side of such screen), (b) the second from the top third-
party programming button (currently anticipated to appear on
the left side of the screen) and (c) in instances in both the
Vacations Area and the vacations database that may be created
by AOL in which AOL Users are allowed to search for Vacation
Packages in a particular category or subcategory (e.g.,
adventure), the first 2 search results will list packages
offered by Preview in such category (if Preview offers packages
in such category) (and no results will list packages offered by
a Preview Competitor).
3.5 Cross-Promotion by Preview. In general, Preview shall use
--------------------------
commercially reasonable efforts to market the Online Area.
Notwithstanding the generality of the foregoing, Preview shall, at a
minimum, perform the following obligations:
3.5.1 Preview shall cooperate with and reasonably assist AOL in
supplying material for AOL's marketing and promotional
activities which relate to the Online Area. For instance,
Preview shall make its video archives available to AOL and
shall produce six (6) video segments per Contract Year for use
by AOL in its "slideshow" promotions.
3.5.2 Preview shall prominently and regularly promote the Online
Area, making specific mention (verbally, where possible) of
its availability through the America Online(R) service), in
television, radio or print advertisements that are produced
after the Effective Date. In addition, in any instances when
Preview makes promotional reference to any Preview Interactive
Site (each reference, a "Site Reference"), Preview shall
include a specific reference to the Online Area's availability
through the America Online(R) brand service and/or ▇▇▇.▇▇▇, as
applicable, of at least equal prominence to the Site
Reference. Any listings of the applicable "URL(s)" (or similar
address) for such Interactive Site(s) (each an "URL
Reference") shall include a listing of the AOL "keyword" for
the Online Area of at least equal prominence to the URL
Reference and prior to the URL Reference. Preview shall
9
Confidential
also include at least 2 editorial features regarding America
Online per Contract Year in its television-related properties.
In addition, the Parties shall in good faith discuss member or
subscriber acquisition programs; provided that neither Party
shall be required to enter into any such program with the other
Party. Preview shall be required to perform the foregoing
obligations in this Section 3.5.2 only in promotional areas
over which Preview exercises complete or substantially complete
programming control (e.g., a television ad purchased solely by
or on behalf of Preview or its Affiliates).
3.5.3 Preview shall include each of the following promotions for AOL
and the Online Area (as the case may be) within each Preview
Interactive Site during the term of the Agreement: (i) a
prominent "Try America Online(R)" feature in the primary area
where Preview mentions its business partners from which users
can obtain promotional information about AOL products and
services and, at AOL's option, download or order AOL's then-
current version of client software for the AOL Service and
AOL's other branded software (e.g., Instant Messenger) and (ii)
a prominent link on the front screen of each Preview
Interactive Site to AOL's primary site on the World Wide Web.
3.5.4 Preview shall not agree to perform obligations similar to the
commitments stated above in Sections 3.5.2 and 3.5.3 for any
AOL Competitor subsequent to execution hereof. In addition,
Preview shall promote AOL exclusively as Preview's Internet
online access provider of choice and shall not promote, market
or distribute the products or services of any AOL Competitor.
3.5.5 Notwithstanding the foregoing obligations in this Section 3.5,
no provision of this Agreement shall limit Preview's ability to
perform certain promotional obligations pursuant to any
existing written agreement with Excite, Inc. (provided that
Preview shall disclose the specific nature and extent of such
duties to AOL subject to the applicable confidentiality
restrictions in such agreement). Preview hereby represents that
it does not owe any obligations to Excite which compete with
the promotions made available to AOL or any service provided by
AOL (other than Netfind).
3.6 Promotional Materials/Press Releases. Each Party will submit to the
------------------------------------
other Party, for its prior written approval, which shall not be
unreasonably withheld or delayed, any marketing, advertising, press
releases and all other promotional materials related to the Online
Area and/or referencing the other Party and/or its trade names,
trademarks, and service marks (the "Materials"); provided, however,
that either Party's use of screen shots of the Online Area for
promotional purposes shall not require the approval of the other Party
so long as the AOL Network is clearly identified as the source of such
screen shots. Each Party shall solicit and reasonably consider the
views of the other Party in designing and implementing such Materials.
A Party whose approval is sought shall respond within five (5)
business days of its receipt of the Materials. If such Party fails to
respond within such five-day period, then its consent shall be deemed
given. Once approved, the Materials may be used during the term of
this Agreement by a Party and its Affiliates for the purpose of
promoting the Online Area and the Content contained therein and reused
for such purpose until such approval is withdrawn with reasonable
prior notice. No press release, public announcement, confirmation or
other public statement regarding this Agreement or the contents hereof
shall be made without the prior written consent of the other Party,
which consent shall not be unreasonably withheld. Notwithstanding the
foregoing, either Party may issue a press release or other disclosure
without the consent of the other Party, if such disclosure is required
pursuant to Section 6 (and in accordance therewith). In addition, the
Parties agree that they will issue a mutually agreed initial
10
Confidential
press release announcing this Agreement and the Database Agreement on
a mutually agreed date no earlier than September 29, 1997, and no
later than October 15, 1997; provided that in the event no such
release has been issued as of October 15, 1997, neither Party shall be
deemed in breach of the Agreement, and either Party shall be entitled
to issue its own release pursuant to the terms of this Agreement.
3.7 Trademark License. In designing and implementing the Materials and
-----------------
subject to the other provisions contained herein, Preview shall be
entitled to use the following trade names, trademarks, and service
marks of AOL: the "America Online" brand service, "AOL"
service/software and AOL's triangle logo; and AOL and its Affiliates
shall be entitled to use the following trade names, trademarks, and
service marks of Preview solely in connection with this Agreement:
Preview Media, Preview Media, Inc., Travel Update, Weekend Travel
Update, Preview Vacation Bargains, Preview Vacations, Preview Travel,
Consumer Travel Guides and Consumer Travel Reports (collectively,
together with the AOL marks listed above, the "Marks"); provided that
each Party: (i) does not create a unitary composite ▇▇▇▇ involving a
▇▇▇▇ of the other Party without the prior written approval of such
other Party; (ii) displays symbols and notices clearly and
sufficiently indicating the trademark status and ownership of the
other Party's Marks in accordance with applicable trademark law and
practice; and (iii) uses the other Party's Marks in accordance with
written guidelines provided to such Party by the other Party.
3.7.1 Ownership of Trademarks. Each Party acknowledges the ownership
-----------------------
of the other Party in the Marks of the other Party and agrees
that all use of the other Party's Marks (including all goodwill
associated with the Marks) shall inure to the benefit, and be
on behalf, of the other Party. Each Party acknowledges that its
utilization of the other Party's Marks will not create in it,
nor will it represent it has, any right, title, or interest in
or to such Marks other than the licenses expressly granted
herein. Each Party agrees not to do anything contesting or
impairing the trademark rights of the other Party, including,
without limitation, seeking to register the other Party's Marks
as part of a composite ▇▇▇▇.
3.7.2 Quality Standards. Each Party agrees that the nature and
-----------------
quality of its products and services supplied in connection
with the other Party's Marks shall conform to quality standards
reasonably set by the other Party. Each Party agrees to supply
the other Party, upon request, with a reasonable number of
samples of any Materials publicly disseminated by such Party
which utilize the other Party's Marks. Each Party shall comply
with all applicable laws, regulations, and customs and obtain
any required government approvals pertaining to use of the
other Party's marks.
3.7.3 Infringement Proceedings. Each Party agrees to promptly notify
------------------------
the other Party of any unauthorized use of the other Party's
Marks of which it has actual knowledge. Each Party shall have
the sole right and discretion to bring proceedings alleging
infringement of its Marks or unfair competition related
thereto; provided, however, that each Party agrees to provide
the other Party with its reasonable cooperation and assistance
with respect to any such infringement proceedings.
3.8 Marketing Surveys. PM and AOL shall jointly conduct an annual
------------------
marketing survey that is designed, among other reasons, to determine
the level of customer satisfaction. The Parties shall mutually agree
upon the design of the surveys and shall meet to discuss the results
of the surveys and determine any actions required in response to such
results.
11
CONFIDENTIAL
4. PAYMENTS; REPORTS; WARRANTS.
---------------------------
4.1 FIXED PAYMENTS. Preview shall pay AOL a guaranteed amount of Thirty
--------------
Two Million Dollars (US$32,000,000) across the five Contract Years of
the initial term, as follows. Prior to the Financing Event, Preview
shall pay AOL [*] due and payable in arrears on the last day of each
month during the Term, with the first payment to be paid on September
30, 1997. On the first monthly due date following the Financing Event,
Preview shall pay AOL Six Million Four Hundred Thousand Dollars
(US$6,400,000) representing advance payment of Preview's monthly
payment commitments for the next twelve (12) months (the "Pre-Paid
Year"). Following the Pre-Paid Year, Preview shall pay AOL in advance
[*] on the first day of each quarter following the Pre-Paid Year.
4.2 REVENUE SHARING PAYMENTS.
------------------------
4.2.1 Quarterly Hurdle; High Hurdle. If at any time during the first
-----------------------------
and second Contract Years, the amount of Commissions and
Advertising Revenues (the "Total Revenues") generated as of
such date equals or exceeds [*] the cumulative amount of
payments to be made by Preview to AOL pursuant to Section 4.1
(the "Earnout Hurdle") as of such date (the "Earnout Date"),
then: (a) for the quarter in which the Earnout Date occurs,
Preview shall pay AOL [*] of the Commissions generated in such
quarter following the Earnout Date, and (b) if the Total
Revenues generated in any subsequent quarter during the first
and second Contract Years equal or exceed [*] (the "Quarterly
Hurdle"), Preview shall pay AOL [*] of the Commissions
generated in such quarter following the date on which the
Quarterly Hurdle is met. In the event that the Total Revenues
generated during any quarter of the third, fourth and fifth
Contract Years equal or exceed the Quarterly Hurdle, Preview
shall pay AOL [*] of the Commissions generated in such quarter
following the date on which the Quarterly Hurdle is met.
Preview shall make all of the foregoing payments in this
Section 4.2 within thirty (30) days of the end of the quarter
in which the Quarterly Hurdle is met. The foregoing provisions
in this Section 6.2 shall cease to apply in the event that the
Total Revenues generated during the Term equals or exceeds [*]
(the "High Hurdle"), in which case, Preview shall pay AOL [*]
of Commissions generated during the remainder of the Term
following the date on which the High Hurdle is exceeded. In
such event, Preview shall make such payments within thirty (30)
days of the end of each quarter, commencing with the quarter in
which the High Hurdle is exceeded.
4.2.2 Renegotiation of Amounts. In the event the weighted average
------------------------
Commissions percentage received by Preview from its airline
partners is at any point during the Term less than [*], Preview
shall promptly notify AOL in writing and, upon AOL's request,
shall negotiate in good faith regarding an equitable
alternative compensation structure to the structure set forth
above in this Section 4.2. Such alternative structure shall, at
a minimum, be designed to maintain the level of AOL's
compensation prior to the reduction in Commissions percentage
and shall satisfy the Parties' joint goal that AOL receive its
equitable share of revenues generated by Preview (including any
new or incremental revenues) in connection with the Online
Area; in that regard, during such negotiation, Preview shall
seriously consider sharing Overrides with AOL without regard to
the conditions limiting such sharing set forth in Section 4.4.
In the event the Parties
[*]= CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTD WITH RESPECT TO THE OMITTED PORTIONS.
12
CONFIDENTIAL
cannot in good faith reach agreement regarding such alternative
structure within fifteen (15) days of AOL's request to
negotiate, AOL shall have the right to terminate the Agreement
immediately on written notice to Preview.
4.3 ADVERTISING REVENUES. Preview shall be entitled to retain [*]
--------------------
of all Advertising Revenues generated during the first and second
Contract Years and [*] of all Advertising Revenues below certain
threshold amounts (the "Ad Thresholds") generated during the third,
fourth and fifth Contract Years. In the third, fourth and fifth
Contract Years, the respective Threshold Amounts shall be [*]. In the
event that total Advertising Revenues in any of these three (3) years
equal or exceed the applicable Ad Threshold, Preview shall pay AOL [*]
of all Advertising Revenues in excess of the Ad Threshold during the
remainder of such Contract Year, paid quarterly within thirty (30)
days of the end of each quarter, commencing with the quarter in which
the Ad Threshold was exceeded.
4.4 OVERRIDES; ADDITIONAL REVENUES. Except as expressly provided
------------------------------
hereunder, Preview shall not share Overrides with AOL; provided that
in the event the total amount of Overrides as of the end of any
quarter exceeds [*] of the total amount of Commissions generated in
such quarter, then the total amount of Overrides generated in such
quarter shall be included in (a) the calculation of whether the
Commissions hurdles in Sections 3.2 ([*] hurdle), 4.2.1 (Earnout
Hurdle and High Hurdle) and 10.3 ([*] hurdle) have been reached and
(b) the calculation of any Commissions payment relating to such
quarter which is to be made to AOL pursuant to the Agreement (e.g.,
pursuant to Section 4.2.1). In the event Preview or its Affiliates
receives or desires to receive, directly or indirectly, any
compensation in connection with the Online Area other than Advertising
Revenues, Commissions and Overrides or otherwise restructures the
nature of its transactions with AOL Users (e.g., establishment of club
memberships) (collectively, "Additional Revenues"), Preview shall
promptly inform AOL in writing, and the Parties shall negotiate in
good faith regarding whether Preview shall be allowed to collect such
Additional Revenues, and if so, the equitable portion of such
Additional Revenues that shall be shared with AOL. In the event the
Parties cannot in good faith reach agreement regarding such Additional
Revenues within fifteen (15) days of AOL's request to negotiate, AOL
shall have the right to terminate the Agreement immediately on written
notice to Preview. Any portion shared with AOL shall, at a minimum,
satisfy the Parties' joint goal that AOL receive its equitable share
of revenues generated by Preview (including any new or incremental
revenues) in connection with the Online Area.
4.5 WIRED PAYMENTS; LATE PAYMENTS. All payments required under this
--------------- -------------
Section 4 shall be paid in immediately available funds wired to AOL's
account. All amounts owed hereunder not paid when due and payable
will bear interest from the date such amounts are due and payable at
the rate of 8% per year, or the highest legally permissible rate if
below 8%.
4.6 AUDITING RIGHTS. Each Party shall maintain complete, clear and
---------------
accurate records of all expenses, revenues and fees in connection with
the performance of this Agreement. For the sole purpose of ensuring
compliance with this Agreement (including, without limitation,
Sections 4.1, 4.2, 4.3 and 4.4), each Party shall have the right, at
its expense, to direct an independent certified public accounting firm
to conduct a reasonable and necessary inspection of portions of the
books and records of the other Party which are relevant to amounts
payable to the auditing Party pursuant to this Agreement. Any such
audit may be conducted once per year after twenty (20) business days
prior written notice. Any audit shall be at the auditing Party's sole
cost and expense unless a discrepancy of the greater of five percent
(5%) or Ten Thousand Dollars (US$10,000) is found, in which case
[*]= CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTD WITH RESPECT TO THE OMITTED PORTIONS.
13
CONFIDENTIAL
the other Party will pay all reasonable costs and expenses related to
the audit. No such audit of AOL shall occur during the period
beginning on June 1 and ending October 1.
4.7 REPORTS. Each Party shall each provide the other Party with certain
-------
reports evidencing the reporting Party's compliance with its
obligations under the Agreement and detailing certain information, all
as set forth below, which may be mutually amended from time to time by
the parties.
4.7.1 Sales Reports. Preview shall provide AOL in an automated
-------------
manner with a monthly report accompanying the payments to be
made pursuant to this Section 4 (as applicable) in a mutually
agreeable format consistent with the reports provided to AOL by
its other interactive content providers, detailing the
following activity in such period (and any other information
mutually agreed upon by the Parties or reasonably necessary for
measuring revenue activity by Preview through the Online Area):
Commissions, Advertising Revenues, Overrides, number of
profiles created, transactions by type (air, hotel, car) and by
source (Travel Channel, ▇▇▇.▇▇▇, other channels), chargebacks
and credits for returned or cancelled goods or services (and,
where possible, an explanation of the type of reason therefor,
e.g., bad credit card information, poor customer service,
etc.), and credit card processing fees charged and/or collected
by the credit card issuer.
4.7.2 Promotional Reports. Each Party shall provide the other Party
-------------------
with a quarterly report documenting its compliance with any
promotional commitments it has undertaken pursuant to the
Agreement. In reporting any promotion, the Party should
describe the nature of promotion, its duration and any other
relevant information regarding the promotion, including any
required information set forth in the description of each
promotion.
4.7.3 Fraudulent Transactions. To the extent permitted by applicable
-----------------------
laws, Preview shall provide AOL with an prompt report of any
fraudulent order, including the date, screenname and amount
associated with such order, following Preview obtaining
knowledge that the order is, in fact, fraudulent.
4.7.4 AOL Reports. AOL shall provide Preview with monthly reports
-----------
specifying for the prior month aggregate hourly usage within
the Online Area (as applicable) and other mutually agree-upon
information relating to the Online Area.
4.8 TAXES. Preview shall collect and pay and indemnify and hold AOL
-----
harmless from, any sales, use, excise, import or export value added or
similar tax or duty not based on AOL's net income, including any
penalties and interest, as well as any costs associated with the
collection or withholding thereof, including reasonable attorneys'
fees, in the event litigation or any regulatory proceeding,
investigation or action is commenced.
5. REPRESENTATIONS AND WARRANTIES. Each Party represents and warrants to the
------------------------------
other Party that: (i) such Party has the full corporate right, power and
authority to enter into this Agreement and to perform the acts required of
it hereunder; (ii) the execution of this Agreement by such Party, and the
performance by such Party of its obligations and duties hereunder, do not
and will not violate any agreement to which such Party is a party or by
which it is otherwise bound; (iii) when executed and delivered by such
Party, this Agreement will constitute the legal, valid and binding
obligation of such Party, enforceable against such Party in accordance with
its terms; and (iv) such Party acknowledges that the other Party makes no
representations, warranties or agreements related to the subject matter
hereof that are not expressly provided for in this Agreement.
14
CONFIDENTIAL
6. CONFIDENTIALITY. Each Party acknowledges that Confidential Information may
---------------
be disclosed to the other Party during the course of this Agreement. Each
Party agrees that it shall take reasonable steps, at least substantially
equivalent to the steps it takes to protect its own proprietary
information, during the term of this Agreement and thereafter, to prevent
the duplication or disclosure of Confidential Information of the other
Party, other than duplication by or disclosure to its employees or
Affiliates who must have access to such Confidential Information to perform
such Party's obligations hereunder, who shall each be subject to
restrictions substantially similar to this Section 6. Notwithstanding the
foregoing, either Party may issue a press release or other disclosure
containing Confidential Information without the consent of the other Party,
to the extent such disclosure is required by law, rule, regulation or
government or court order. In such event, the disclosing Party shall
provide at least five (5) business days prior written notice of such
proposed disclosure to the other Party. Further, in the event such
disclosure is required of either Party under the laws, rules or regulations
of the Securities and Exchange Commission or any other applicable governing
body, such Party shall (i) redact mutually agreed-upon portions of this
Agreement to the fullest extent permitted under applicable laws, rules and
regulations and (ii) submit a request to such governing body that such
portions and other provisions of this Agreement receive confidential
treatment under the laws, rules and regulations of the Securities and
Exchange Commission or otherwise be held in the strictest confidence to the
fullest extent permitted under the laws, rules or regulations of any other
applicable governing body.
7. SOLICITATION/PROMOTION; USER INFORMATION
----------------------------------------
7.1 SOLICITATION OF SUBSCRIBERS. During the term of this Agreement, and
---------------------------
for the one-year period following the expiration or termination of
this Agreement, neither Preview nor its Affiliates or agents will use
the AOL Network to promote, solicit, or participate in the
solicitation of AOL Users when that promotion or solicitation is for
the benefit of any AOL Competitor. In addition, Preview may not send
any AOL User e-mail communications through the AOL Network without a
"Prior Business Relationship." For purposes of this Agreement, a
"Prior Business Relationship" shall mean that the AOL User has either
(i) engaged in a transaction with Preview through the AOL Network or
(ii) voluntarily provided information to Preview through a contest,
registration, or other communication, which, in the case of clause
(ii), included notice therein to the AOL User that the information
provided by the AOL User could result in an e-mail being sent to that
AOL User by Preview or its Affiliates or agents. A Prior Business
Relationship does not exist by virtue of an AOL User's visit to the
Online Area (absent the additional elements described above).
7.2 COLLECTION OF USER INFORMATION. Preview is prohibited from collecting
------------------------------
AOL User screennames from public or private areas of the AOL Network,
except as specifically provided below. Preview shall ensure that any
survey, questionnaire or other means of collecting AOL User names,
screennames, addresses or other identifying information ("User
Information") including, without limitation, requests directed to
specific AOL User screennames and automated methods of collecting
screennames (an "Information Request") complies with (i) all
applicable laws and regulations, (ii) AOL's applicable Terms of
Service and (iii) any privacy policies which have been issued by AOL
in writing during the Term and made available to Preview (the "AOL
Privacy Policies") (currently found in Section 5 of the Terms of
Service). Each Information Request shall clearly and conspicuously
specify to the AOL Users at issue the purpose for which User
Information collected through the Information Request shall be used
(the "Specified Purpose").
7.3 USE OF USER INFORMATION. Preview shall restrict use of the User
-----------------------
Information collected through an Information Request to the Specified
Purpose. In no event shall Preview (i) provide User Information to
any third party (except to the extent specifically (a) permitted
15
CONFIDENTIAL
under the AOL Privacy Policies or (b) authorized by the members in
question), (ii) rent, sell or barter User Information, (iii) identify,
promote or otherwise disclose AOL User names, screennames, addresses
or other identifying information in a manner that identifies AOL Users
as end-users of the AOL Service or ▇▇▇.▇▇▇ or (iv) otherwise use any
User Information in contravention of Section 7.1 above. Nor shall
Preview use any User Information for any purpose (including any
Specified Purpose) not directly related to online travel.
7.4 CUSTOMER DATA; AOL DATA. [*] Preview agrees that
-----------------------
AOL may use the Customer Data subject to the terms of this Agreement
and AOL's then-applicable privacy policies; provided that AOL shall
not use destination-specific reservation information on a customer-by-
customer basis unless agreed to by both Parties to implement
programming objectives or "smart agent" type services as reasonably
required by prevailing market conditions. AOL agrees that during the
Term, Preview may use the Customer Data subject to the terms of this
Agreement and AOL's then-applicable privacy policies; provided that
Preview (a) shall comply with the foregoing Sections 7.1 through 7.3,
(b) shall provide users the right to have their Customer Data deleted
from any database created by or on behalf of Preview, and (c) shall
not have the right to use the Customer Data to market or promote any
consumer direct airline travel information and reservations systems
reasonably construed to be in competition with the Res System. Any
data provided by AOL to Preview (e.g., usage reports) (the "AOL Data")
shall be and remain the property of AOL, and the AOL Data will be
promptly returned to AOL by Preview in the form in which such data is
maintained by Preview or, if AOL so elects, will be destroyed, upon
(i) AOL's request, (ii) expiration or termination of this Agreement
for any reason, or (iii) with respect to any particular AOL Data, on
such earlier date that the same is no longer required by Preview in
order to provide the services required hereunder. Preview will not use
the AOL Data for any purpose other than that of providing such
services, nor will the AOL Data, or any part thereof, be disclosed,
sold, assigned, leased, or otherwise disposed of to third parties by
Preview or commercially exploited by or on behalf of Preview, its
employees or agents. Preview will not possess or assert any lien or
other right against or to the AOL Data.
8. LIMITATION OF LIABILITY; DISCLAIMER; INDEMNIFICATION.
----------------------------------------------------
8.1 LIABILITY. UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE LIABLE TO
---------
THE OTHER PARTY FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR
EXEMPLARY DAMAGES (EVEN IF THAT PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES), ARISING FROM BREACH OF THE AGREEMENT,
THE SALE OF PRODUCTS, THE USE OR INABILITY TO USE THE AOL NETWORK, THE
AOL SERVICE, THE ONLINE AREA OR THE RES SYSTEM, OR ARISING FROM ANY
OTHER PROVISION OF THIS AGREEMENT, SUCH AS, BUT NOT LIMITED TO, LOSS
OF REVENUE OR ANTICIPATED PROFITS OR LOST BUSINESS ("COLLECTIVELY,
"DISCLAIMED DAMAGES"); PROVIDED THAT EACH PARTY SHALL REMAIN LIABLE TO
THE OTHER PARTY TO THE EXTENT ANY DISCLAIMED DAMAGES ARE CLAIMED BY A
THIRD PARTY AND ARE SUBJECT TO INDEMNIFICATION PURSUANT TO SECTION
8.3. EXCEPT AS PROVIDED IN SECTION 8.3, NEITHER PARTY SHALL BE LIABLE
TO THE OTHER PARTY FOR MORE THAN [*] PROVIDED THAT EACH PARTY
SHALL REMAIN LIABLE FOR THE AGGREGATE AMOUNT OF ANY PAYMENT
OBLIGATIONS OWED TO THE OTHER PARTY PURSUANT TO SECTION 4.
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
16
CONFIDENTIAL
8.2 NO ADDITIONAL WARRANTIES. EXCEPT AS EXPRESSLY SET FORTH IN THIS
------------------------
AGREEMENT, NEITHER PARTY MAKES, AND EACH PARTY HEREBY SPECIFICALLY
DISCLAIMS, ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED,
REGARDING THE AOL NETWORK, THE AOL SERVICE OR THE ONLINE AREA,
INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE AND IMPLIED WARRANTIES ARISING FROM COURSE OF
DEALING OR COURSE OF PERFORMANCE. WITHOUT LIMITING THE GENERALITY OF
THE FOREGOING, AOL SPECIFICALLY DISCLAIMS ANY WARRANTY REGARDING THE
PROFITABILITY OF THE ONLINE AREA.
8.3 INDEMNITY. Either Party will defend, indemnify, save and hold
---------
harmless the other Party and the officers, directors, agents,
Affiliates, distributors, franchisees and employees of the other Party
(the "Covered Parties") from any and all third party claims, demands,
liabilities, costs or expenses, including reasonable attorneys' fees
("Liabilities"), resulting from the indemnifying Party's material
breach of any duty, representation, or warranty of this Agreement,
except to the extent Liabilities result from the negligence or
misconduct of, or material breach of any duty, representation, or
warranty of this Agreement by, the other Party. In addition, Preview
will defend, indemnify, save and hold harmless AOL and the Covered
Parties of AOL from any and all Liabilities resulting from any claim
that any Third Party Content in the Online Area infringes on or
violates any copyright, U.S. patent, trademark or trade secret, or
(ii) violates any applicable law or regulation. "Third Party Content"
is any Content that is licensed (or otherwise made available for use
or distribution) to Preview by a third party.
8.4 CLAIMS. Each Party agrees to (i) promptly notify the other Party in
------
writing of any indemnifiable claim and give the other Party the
opportunity to defend or negotiate a settlement of any such claim at
such other Party's expense, and (ii) cooperate fully with the other
Party, at that other Party's expense, in defending or settling such
claim. Each Party reserves the right, at its own expense, to assume
the exclusive defense and control of any matter otherwise subject to
indemnification by the other Party hereunder, and in such event, such
other Party shall have no further obligation to provide
indemnification for such matter hereunder.
8.5 ACKNOWLEDGEMENT. AOL and Preview each acknowledges that the
---------------
provisions of this Agreement were negotiated to reflect an informed,
voluntary allocation between them of all risks (both known and
unknown) associated with the transactions contemplated hereunder. The
limitations and disclaimers related to warranties and liability
contained in this Agreement are intended to limit the circumstances
and extent of liability. The provisions of this Section 8 shall be
enforceable independent of and severable from any other enforceable or
unenforceable provision of this Agreement.
9. AOL TERMS OF SERVICE; UNSPECIFIED CONTENT. AOL shall have the right to
-----------------------------------------
remove, or direct Preview to remove, any Content which, as reasonably
determined by AOL (i) violates AOL's then-standard Terms of Service (as set
forth on the AOL Service) or the terms of this Agreement or (ii) is
inconsistent in any manner with the scope and purpose of the Online Area as
of the Effective Date (including, without limitation, in each case, any
features, functionality or technology) or with AOL's programming
objectives.
10. TERM, RENEWAL AND TERMINATION.
-----------------------------
10.1 TERM. The term of this Agreement (the "Term") will commence on the
----
Effective Date and, unless earlier terminated or extended in
accordance with this Agreement, will continue in effect until August
31, 2002. The date on which this Agreement expires due to the passage
of time (of the initial term and any renewal term(s)) is referred to
herein as the "Expiration
17
CONFIDENTIAL
Date." The date on which this Agreement is terminated pursuant to
Section 10.3 is referred to herein as the "Termination Date."
10.2 RENEWAL. At least six (6) months prior to the expiration of the
-------
initial term or any renewal term(s), as the case may be, Preview will
give notice to AOL of the pending Expiration Date. Within three (3)
months of receipt of Preview's notice (or at least thirty (30) days
prior to the Expiration Date, if Preview fails to provide such
notice), AOL will notify Preview whether AOL desires to: (a) renew
this Agreement for successive one-year renewal terms in perpetuity
[*] (i.e., without regard to Sections 3.3 or 3.4) and receive, in lieu
of the payment amounts set forth in Section 4.2, [*] of Commissions
and [*] of Advertising Revenues or (b) elect not to renew this
Agreement, in which case this Agreement will expire on the applicable
Expiration Date. In the event AOL elects in its sole discretion to
renew the Agreement pursuant to clause (a) above, the Agreement shall
so renew, Sections 3.2 and 4.1 shall not apply, and AOL shall elect at
the beginning of such renewal term one of the following two options
with respect to such renewal term: (i) AOL shall not be required to
perform its obligations pursuant to Section 3.1 (promotional
placements) and Preview shall not be required to perform its
obligations pursuant to Sections 1.10 (customization), 2.8
(performance standards) and 3.5 (cross-promotion) or (ii) both Parties
shall perform their respective obligations listed in the foregoing
clause (i).
10.3 TERMINATION. Either Party may terminate this Agreement at any time
-----------
in the event of a material breach by the other Party which remains
uncured after thirty (30) days written notice thereof.
Notwithstanding the foregoing, in the event either Party fails to make
any payment required hereunder as of the due date, the other Party may
terminate the Agreement on the date thirty (30) days following such
due date. In addition, either Party may terminate this Agreement
immediately following written notice to the other Party if the other
Party ceases to do business, becomes or is declared insolvent or
bankrupt, is the subject of any proceeding related to its liquidation
or insolvency which is not dismissed within ninety (90) days or makes
an assignment for the benefit of creditors. In addition, in the event:
(a) Gross Bookings in any Contract Year are less than the Gross
Bookings Hurdle; (b) an AOL Direct Competitor acquires Preview, or all
or substantially all of the assets of Preview, through merger, asset
acquisition, stock acquisition or otherwise; (c) the Financing Event
does not occur prior to September 30, 1998; (d) as of the end of the
fourth Contract Year, the cumulative amount of Commissions equals or
exceeds [*] and Preview has received [*] cumulative Impresssions; or
(e) AOL is eligible to exercise any of its rights to terminate the
Database Agreement pursuant to the terms and conditions thereof, then
AOL shall have the right to terminate the Agreement upon thirty (30)
days written notice to Preview. In addition, in the event that AOL is
eligible to exercise any of its termination rights pursuant to this
Agreement, AOL may elect instead to renew the Agreement consistent
with the terms of Section 10.2 above as of the date such termination
would have taken effect.
10.4 EFFECT OF TERMINATION. Except in the event of termination by Preview
---------------------
based on a material breach of the Agreement by AOL during any Contract
Year, Preview shall pay AOL within thirty (30) days of the date of
termination all amounts otherwise due pursuant to Section 4 during the
quarter of such Contract Year in which termination occurs; provided
that if such termination occurs prior to the Financing Event, Preview
shall continue to owe payments to AOL for any unpaid Impressions
delivered to Preview in the month in which termination occurs but
shall not owe AOL for any fixed payment amounts relating to subsequent
months. In the event of termination by Preview based on a material
breach of the Agreement by AOL during any Contract Year, Preview shall
not be required to pay AOL the amounts otherwise due to AOL pursuant
to Section 4.1 for such
[*]= CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
18
CONFIDENTIAL
Contract Year. Notwithstanding the foregoing, each Party shall be
entitled upon termination due to breach of the Agreement by the other
Party to seek all additional remedies for such breach which the Party
may possess at law or in equity.
11. GENERAL PROVISIONS.
------------------
11.1 EXCUSE. Neither Party shall be liable for, or be considered in
------
breach of or default under this Agreement on account of, any delay or
failure to perform as required by this Agreement as a result of any
causes or conditions which are beyond such Party's reasonable control
and which such Party is unable to overcome by the exercise of
reasonable diligence; provided: (i) the delayed Party gives the other
Party written notice of such cause or condition promptly and (ii) uses
its reasonable best efforts to promptly correct such failure or delay.
For purposes of this provision, a delay or non-performance shall not
be deemed beyond the reasonable control of the Party affected if such
delay or non-performance would not have occurred had the affected
Party been performing in accordance with the provisions of the
Agreement.
11.2 INDEPENDENT CONTRACTORS. The Parties to this Agreement are
-----------------------
independent contractors. Neither Party is an agent, representative,
or partner of the other Party. Neither Party shall have any right,
power or authority to enter into any agreement for or on behalf of, or
incur any obligation or liability of, or to otherwise bind, the other
Party. This Agreement shall not be interpreted or construed to create
an association, agency, joint venture or partnership between the
Parties or to impose any liability attributable to such a relationship
upon either Party.
11.3 NOTICE. Any notice, approval, request, authorization, direction or
------
other communication under this Agreement shall be given in writing and
shall be deemed to have been delivered and given for all purposes (i)
on the delivery date if delivered by electronic mail on the AOL
Network; (ii) on the delivery date if delivered personally to the
Party to whom the same is directed; (iii) one business day after
deposit with a commercial overnight carrier, with written verification
of receipt, or (iv) five business days after the mailing date, whether
or not actually received, if sent by U.S. mail, return receipt
requested, postage and charges prepaid, or any other means of rapid
mail delivery for which a receipt is available, to the address of the
Party to whom the same is directed as such addresses are set forth
below.
AMERICA ONLINE PREVIEW TRAVEL
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Attn: ▇▇▇ ▇▇▇▇▇
America Online, Inc. Preview Travel, Inc.
▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇@▇▇▇.▇▇▇ ▇▇▇▇▇▇▇▇@▇▇▇.▇▇▇
With copies to:
Senior Vice President, Business Affairs
and
Vice President and General Counsel
America Online, Inc.
▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
19
CONFIDENTIAL
11.4 NO WAIVER. The failure of either Party to insist upon or enforce
---------
strict performance by the other Party of any provision of this
Agreement or to exercise any right under this Agreement shall not be
construed as a waiver or relinquishment to any extent of such Party's
right to assert or rely upon any such provision or right in that or
any other instance; rather, the same shall be and remain in full
force and effect.
11.5 RETURN OF INFORMATION. Upon the expiration or termination of this
---------------------
Agreement, each Party shall, upon the other Party's written request,
either return or destroy (at the option of the Party receiving the
request) all Confidential Information, documents, manuals and other
materials specified by the other Party.
11.6 SURVIVAL. Sections 3.2, 4, 6, 7, 8, 10.4, 11.5, 11.6, 11.11, 11.14,
--------
11.15 and any provisions that reasonably contemplate survival thereof
and all payment obligations incurred during the Term shall survive
the completion, expiration, termination or cancellation of this
Agreement.
11.7 ENTIRE AGREEMENT. This Agreement sets forth the entire agreement,
----------------
and supersedes any and all prior agreements of the Parties with
respect to the transactions set forth herein. Neither Party shall be
bound by, and each Party specifically objects to, any term, condition
or other provision which is different from or in addition to the
provisions of this Agreement (whether or not it would materially
alter this Agreement) and which is proffered by the other Party in
any correspondence or other document, unless the Party to be bound
thereby specifically agrees to such provision in writing.
Notwithstanding the foregoing, Preview shall also be bound by the
Terms of Service except as such Terms of Service are specifically
amended by this Agreement.
11.8 EXPIRATION OF PRIOR AGREEMENT. Upon the Effective Date, the
-----------------------------
Development and Management Services Agreement, dated as of November
3, 1995 between the Parties (and any amendments thereto) and the
Online Services Agreement dated as of July 20, 1994 between the
Parties (and any amendments thereto) shall each be deemed to be
terminated and of no further force and effect.
11.9 AMENDMENT. No change, amendment or modification of any provision of
---------
this Agreement shall be valid unless set forth in a written
instrument signed on behalf of each Party hereto, and in the case of
AOL, by a senior vice president.
11.10 FURTHER ASSURANCES. Each Party shall take such action (including,
------------------
but not limited to, the execution, acknowledgment and delivery of
documents) as may reasonably be requested by any other Party for the
implementation or continuing performance of this Agreement.
11.11 RESERVATION OF REMEDIES. Except where otherwise expressly
-----------------------
specified, the rights and remedies granted to a Party under this
Agreement are cumulative and in addition to, and not in lieu of, any
other rights or remedies which the Party may possess at law or in
equity; provided that, in connection with any dispute hereunder,
neither Party shall be entitled to offset any amounts that such Party
claims to be due and payable from the other Party against amounts
otherwise payable by the claiming Party to the other Party.
11.12 HEADINGS. The headings in this Agreement are for reference only,
--------
and shall not affect the interpretation of this Agreement.
11.13 ASSIGNMENT. Except for assignment, transfer or delegation by
----------
Preview to an Affiliate or successor by way of merger, consolidation
or sale of all or substantially all of Preview's outstanding voting
securities or assets, Preview shall not assign (voluntarily, by
operation of law or otherwise) this Agreement or any right, interest
or benefit under this Agreement
20
CONFIDENTIAL
without the prior written consent of AOL. AOL shall not assign
(voluntarily, by operation of law or otherwise) this Agreement or any
right, interest or benefit under this Agreement to any Preview
Competitor, or any other party whose primary business is in the
nature of a Preview Competitor, without the prior written consent of
Preview. Subject to the foregoing, this Agreement shall be fully
binding upon, inure to the benefit of and be enforceable by the
Parties hereto and their respective successors and assigns.
11.14 CONSTRUCTION. In the event that any provision of this Agreement
------------
conflicts with the law under which this Agreement is to be construed
or if any such provision is held invalid by a court with
jurisdiction over the Parties to this Agreement, such provision
shall be deemed to be restated to reflect as nearly as possible the
original intentions of the Parties in accordance with applicable
law, and the remainder of this Agreement shall remain in full force
and effect.
11.15 APPLICABLE LAW. This Agreement shall be interpreted, construed and
--------------
enforced in all respects in accordance with the laws of the
Commonwealth of Virginia except for its conflicts of laws
principles.
11.16 COUNTERPARTS. This Agreement may be executed in facsimile
------------
counterparts, each of which shall be deemed an original and all of
which together shall constitute one and the same document.
21
CONFIDENTIAL
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the Effective Date.
AMERICA ONLINE, INC. PREVIEW TRAVEL, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇ ▇▇▇▇▇
-------------------------------- --------------------------------
Print Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Print Name: ▇▇▇ ▇▇▇▇▇
------------------------- ------------------------
Title: Sr. V.P., AOL Networks Title: President & CEO
------------------------------ ----------------------------
22
EXHIBIT A
Confidential
DEFINITIONS. The following definitions shall apply to this Agreement:
-----------
1.1 ADVERTISING MINIMUM. (i) [*] per thousand entries
-------------------
per month by AOL Users into the Online Area or (ii) such different
rate or rates as AOL may establish based upon market conditions
and publish during the Term.
1.2 ADVERTISING REVENUES. The combination of AOL Advertising Revenues
--------------------
and Internet Advertising Revenues:
(A) AOL ADVERTISING REVENUES. Aggregate amounts collected plus
------------------------
the fair market value of any other compensation received
(excluding barter advertising except as provided in Section
1.11) by Preview, AOL or either Party's agents, as the case
may be, arising from the license or sale of Advertisements,
less applicable Advertising Sales Commissions; provided
that, in order to ensure that AOL receives fair value in
connection with Advertisements, Preview shall be deemed to
have received no less than the Advertising Minimum in
instances when Preview makes an Advertisement available to a
third party at a cost below the Advertising Minimum.
(B) INTERNET ADVERTISING REVENUES. For each Advertisement on any
Preview Interactive Site linked to the Online Area, the
product of: (a) the amount collected plus the fair market
value of any other compensation received (excluding barter
advertising except as provided in Section 1.11) by Preview
or its agents arising from the license or sale of such
Advertisement attributable to a given period of time and (b)
the quotient of (i) Impressions on the page containing such
Advertisement by AOL Users for such period of time divided
by (ii) total Impressions on the page containing such
Advertisement by all users for such period of time (the
"Internet Advertising Quotient") (or such other percentage
or formula as is mutually agreed upon in writing by the
Parties). For example, if (a) Preview is paid five thousand
dollars ($5,000) by a third party to include an
Advertisement within a linked Preview Interactive Site
during a given month and (b) during such month AOL Users
generate twenty percent (20%) of the Impressions to such
Advertisement, then (c) the Internet Advertising Revenue
relating to such advertisement would be one thousand dollars
($1,000) and such amount would be subject to the revenue
sharing described in Section 4.3.
1.3 ADVERTISING SALES COMMISSION. In the case of an Advertisement, (i)
---------------------------
actual amounts paid as commission to third party agencies in
connection with sale of the AOL Advertisement or (ii) [*], in the
event the Party has sold the Advertisement directly and will not
be deducting any third party agency commissions.
1.4 AFFILIATE. (i) in the case of AOL, any agent, distributor, or
---------
franchisee of AOL, or an entity controlled by, in common control
with, or in which AOL holds, directly or indirectly, at least a
19.9% equity interest and (ii) in the case of any other party, an
entity controlling, controlled by, or in common control with,
directly or indirectly, such party.
1.5 ANCHOR TENANCY. A prominent placement on a screen or form which is
--------------
no less favorable in size and position on the screen than any
other third party on such screen.
1.6 AIRLINE SYSTEMS. The computerized reservations systems providing
---------------
flight and fare information (and the ability to make reservations)
on all airlines whose information is general available through
industry airline systems (i.e., ABACUS, AMADEUS, APOLLO,
[*]= CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
23
Confidential
GALILEO, GEMINI, GETS, SYSTEM ONE, SABRE and WORLDSPAN), that will
interface with the Core Systems. Airline Systems also provide hotel
and car rental information (and, as applicable, the ability to make
reservations).
1.7 AIRLINE TICKET CONSOLIDATION. Any service that aggregates unsold
----------------------------
airline seats and sells them directly to consumers.
1.8 AOL COMPETITOR. Any entity which could reasonably be construed to be
--------------
or become in competition with AOL (including, without limitation,
[*].
1.9 AOL DIRECT COMPETITOR. Any online or Internet interactive services
---------------------
providers, including, without limitation, any online service
providers, Internet service providers, @Home or other broadband
providers, any search, directory or other large-scale aggregators of
Internet content, any off-line content providers (e.g., PointCast) or
any provider of open standard (e.g., HTML) distribution platforms
(e.g., the Microsoft Active Desktop).
1.10 AOL LOOK AND FEEL. The elements of graphics, design, organization,
-----------------
presentation, layout, user interface, navigation and stylistic
convention (including the digital implementations thereof) which are
generally associated with online areas within the AOL Service.
1.11 AOL MEMBER. Any authorized user of the AOL Service, including any
----------
sub-accounts using the AOL Service under an authorized master
account.
1.12 AOL NETWORK. The AOL Service and any other information,
-----------
communication, transaction or other related service owned, operated,
distributed or authorized to be distributed by or through AOL or its
Affiliates throughout the world through which AOL elects to offer the
Online Area (including, without limitation, any CD-ROM merchandising
products which may be distributed by AOL).
1.13 AOL SERVICE. The U.S. version of the America Online (R) brand service
-----------
(specifically excluding Digital City, ▇▇▇.▇▇▇, NetFind, WorldPlay,
other sites or services not wholly owned by AOL that may be
distributed by or through the U.S. version of the America Online
brand service, and other sites or services distributed by AOL wholly
or partially outside the U.S. version of the America Online brand
service).
1.14 AOL USER. Any AOL Member or any authorized user of ▇▇▇.▇▇▇.
--------
1.15 ▇▇▇.▇▇▇. AOL's Internet-based Interactive Site referred to as
-------
▇▇▇.▇▇▇.
1.15a BUSINESS TRAVEL. Any business travel service that comprises a
---------------
combination of targeted content offerings and a business-oriented
reservations engine and service and which has access to the GDS
systems and fares, schedules, and other reservations services.
1.16 COMMISSIONS. The aggregate amount of standard commissions (based on
-----------
commission schedules published in the GDS and available for review by
all approved ARC agencies). paid to or received by Preview or its
agents which are generated from (a) AOL Users using the Online Area
through either the AOL Service or ▇▇▇.▇▇▇ and (b) AOL Users using any
Preview Interactive Site who have either (i) created a profile on the
Online Area after September 1, 1997 or (ii) created a profile prior
to such date using only an AOL e-mail address (or addresses, as the
case may be); provided that to the extent Preview is able during the
Term to identify whether an AOL User is using the AOL Network when
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
24
Confidential
accessing any Preview Interactive Site (e.g., using the standard AOL
Service browser to visit such site), revenues from such users shall
also be included hereunder. Commissions shall, in certain instances
set forth in Section 4.4, include Overrides.
1.17 CONFIDENTIAL INFORMATION. Any information relating to or disclosed
------------------------
in the course of the Agreement, which is or should be reasonably
understood to be confidential or proprietary to the disclosing Party,
including, but not limited to, the material terms of this Agreement,
information about AOL Users and Preview customers, technical
processes and formulas, source codes, product designs, sales, cost
and other unpublished financial information, product and business
plans, projections, and marketing data. "Confidential Information"
shall not include information (a) already lawfully known to or
independently developed by the receiving Party, (b) disclosed in
published materials, (c) generally known to the public, or (d)
lawfully obtained from any third party.
1.18 CONTENT. Information, materials, features, Products, advertisements,
promotions, links, pointers and software, including any
modifications, upgrades, updates, enhancements and related
documentation.
1.19 CONTRACT YEAR. Any twelve (12) month period commencing on the
-------------
Effective Date or any anniversary thereof.
1.20 CORE SYSTEMS. The systems between the RMG and the Airline Systems,
------------
that serve as the back-end systems for the Res System, and that shall
be managed and maintained by Preview pursuant to this Agreement.
1.20a CRUISE. Any offer solely relating to travel by ocean liner which is
------
offered directly by a travel agent and reserved through a CRS.
1.21 FINANCING EVENT. (i) the closing of the initial public offering of
---------------
Preview's common stock registered under the Securities Act of 1933,
as amended, pursuant to an underwritten firm commitment public
offering from a prominent underwriter, in which the aggregate gross
proceeds to Preview, net of underwriting discounts and commissions,
exceed $25,000,000 for listing on a major exchange (the "IPO") or
(ii) the closing of a private equity investment in Preview which,
when compared with the IPO, creates for Preview the same or greater
amount of net proceeds, provides Preview with access to cash and has
the same or greater overall value (e.g., market perception), as
determined by AOL in its reasonable discretion.
1.22 GROSS BOOKINGS. The aggregate amounts paid to or received by Preview
--------------
or its agents for all travel bookings (e.g., air, car, hotel,
vacation packages, etc.) generated from (a) AOL Users using the
Online Area through either the AOL Service or ▇▇▇.▇▇▇ and (b) AOL
Users using any Preview Interactive Site who have either (i) created
a profile on the Online Area after September 1, 1997 or (ii) created
a profile prior to such date using only an AOL e-mail address (or
addresses, as the case may be); provided that to the extent Preview
is able during the Term to identify whether an AOL User is using the
AOL Network when accessing any Preview Interactive Site (e.g., using
the standard AOL Service browser to visit such site), revenues from
such users shall also be included hereunder.
1.23 GROSS BOOKINGS HURDLE. An amount equal to (i) [*]
---------------------
in the first Contract Year and (ii) in all Contract Years subsequent
to the first Contract Year, [*] of the Gross Bookings Hurdle for the
prior Contract Year.
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
25
[*]
Confidential
1.24 IMPRESSIONS. A user's viewing of any screen containing an
-----------
advertisement, promotion or other similar placement required under
this Agreement, as determined by AOL from time to time.
1.25 INTERACTIVE SITE. Any interactive site or area, including, by way of
----------------
example and without limitation, (i) a Preview-operated site or area
on the World Wide Web portion of the Internet or (ii) a channel, site
or area delivered through a "push" product such as the Pointcast
Network or interactive environment such as Microsoft's proposed
"Active Desktop."
1.26 LAST MINUTE TRAVEL. Any service that sells distressed travel
------------------
supplier inventory at deep discounts to regular tariffs.
1.27 LICENSED CONTENT. All Content offered through the Online Area
------------------
pursuant to this Agreement, including any modifications, upgrades,
updates, enhancements, and related documentation.
1.28 ONLINE AREA. The specific area within the AOL Network where Preview
------------
can market and complete transactions regarding Preview's Products.
The Online Area shall be developed, managed and marketed by Preview
pursuant to this Agreement, including but not limited to the Licensed
Content, message boards, chat and other AOL User supplied content
areas.
1.29 OVERHEAD ACCOUNTS. Accounts of AOL Users for which AOL does not
-----------------
require payment of standard AOL subscription and usage charges.
1.30 OVERRIDES. The aggregate amounts received from airlines by Preview
---------
or its agents for performance over and above standard sales targets
set by such airlines, including without limitation, any amounts based
on percentage of target volume, flat fee arrangements, or other non-
cash incentives.
1.31 PREVIEW COMPETITOR. [*] solely to the extent each of the
------------------
foregoing entities makes available through its Interactive Site a
Reservations Engine and Travel Information/Reservations; provided
that in the event any of the foregoing entities utilizes Preview's
Reservations Engine or does not have a Reservations Engine integrated
into the version of its Interactive Site (or portion thereof) which
AOL desires to distribute through the AOL Network, such entity shall
not be deemed a Preview Competitor hereunder.
1.32 PRODUCTS. Any product, good or service which Preview offers, sells
--------
or licenses to AOL Users through the Online Area.
1.33 RES SYSTEM. The Preview Media brand computerized reservations
----------
system, which includes a screen interface and programming behind the
screen that is connected to the Core Systems that is connected to the
Airline Systems.
1.34 RESERVATIONS ENGINE. A computerized reservations system that
-------------------
provides consumers with flight and fare information and the ability
to make reservations and purchase tickets on all airlines whose
information is general available through industry airline systems
(i.e., ABACUS, AMADEUS, APOLLO, GALILEO, GEMINI, GETS, SYSTEM ONE,
SABRE and WORLDSPAN) and also provides hotel and car rental
reservation information (and the ability to make those reservations).
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
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1.35 RMG. The remote managed gateway connecting the AOL Network to the
---
Core Systems and the Airline Systems. Preview will be responsible for
maintenance of the the part of the RMG connecting the Core Systems up
to the RMG Focal Point. In the event the Parties agree to transition
from the RMG to a Web gateway, as described in Section 1.10, each
reference to the RMG in this Exhibit A shall be read as a reference
to such Web gateway.
1.36 RMG FOCAL POINT. The focal point within the RMG in which Preview's
---------------
and AOL's equipment and software directly interface (i.e., connect).
1.37 TRAVEL INFORMATION/RESERVATIONS. Travel information, pricing and
-------------------------------
reservations for, among other things, airlines, hotels, and car
rentals, all as generally available through the major Airline
Systems.
1.38 VACATION PACKAGES. Any leisure travel offer involving two or more of
-----------------
the following travel features: air, hotel (or other lodging), car (or
other land transportation), Cruises, adventure, which is offered
directly by a travel agent and reserved through a CRS.
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EXHIBIT B
Promotional Plan
----------------
1. [*]
[*]
. [*] on the [*] of the Travel Channel on the AOL Service, which shall
include the following:
. [*] promotional [*]
. [*] presence on [*] of the [*] for [*] per week
. [*] within [*] screen and [*] screens
. [*] within the [*] at the [*] levels
. [*] within [*] areas
. [*] on the [*] linked from the [*]
. [*] on [*]
. Mutually agreed [*] on the [*] (if applicable pursuant to Section [*])
[*]
. A portion of [*] travel-related [*]
. [*] within the [*] of [*]
. [*] within the [*] areas within [*]
. [*] within [*]
. [*] on [*]
[*]
. [*] in the [*] department of the [*]
. Additional [*]
. [*] in [*]
. [*] in the [*]
. Other general [*] on the [*]
. [*]
2. [*]
Year 1 Year 2 Year 3 Year 4 Year 5
[*] [*] [*] [*] [*] [*]
[*] [*] [*] [*] [*] [*]
[*] [*] [*] [*] [*] [*]
Total [*] [*] [*] [*] [*]
[*]
[*]= CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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EXHIBIT C
Performance Standards
---------------------
General. The Online Area (including the Res System) will be in the top [*]
-------
in performance and quality averages or standards for the online travel
reservations industry, including, without limitation, the following specific
standards: (i) pricing of Products made available through AOL, (ii) scope and
selection of Products, (iii) quality of Products, (iv) customer service and
fulfillment associated with the marketing and sale of Products; and (v) ease of
use of the Online Area shall, with respect to each measure, be competitive with
that offered by any Preview ▇▇▇▇▇▇▇▇▇▇.▇▇ addition, the Online Area (including
the Res System) will be in the top [*] in the online travel reservations
industry with respect to gross travel sales to consumers and small businesses.
Each of the performance standards contained in this paragraph shall apply only
to the extent it can be validated by a third party that is prominent and
generally accepted within the online travel reservations industry.
Capacity. Preview will maintain sufficient servers, software and other
--------
technical infrastructure necessary for Preview to receive and support traffic
from the AOL Service on a timely basis, without producing material delays. In
the event Preview fails to satisfy this requirement AOL will have the right (in
addition to any other remedies available to AOL hereunder) to regulate the
promotions it provides to Preview hereunder to the extent necessary to minimize
user delays until such time as Preview corrects its infrastructure deficiencies.
To the extent AOL fails to make necessary adjustments to the AOL technical
infrastructure for capacity increases, Preview will not be penalized pursuant to
the foregoing.
Speed; Accessibility. Preview shall ensure that the performance and
--------------------
availability of the Online Area (a) is monitored on a continuous, 24/7 basis
and (b) remains competitive in all material respects with the performance and
availability of other similar sites based on similar form technology. In the
event that any or all portions of the Online Area are contained within HTML-
based World Wide Web forms (or any other forms created using a technology other
than AOL's proprietary form technology) ("Web Forms"), Preview shall take all
commercially reasonable steps to ensure that the Web Forms are designed and
populated in a manner that minimizes delays when AOL Users attempt to access
such Web Forms.
Functionality. Preview shall ensure that the features and functionality of the
-------------
Online Area remains competitive in all material respects with the features and
functionality of other similar sites based on similar form technology. Preview
shall ensure that the features and functionality within any Web Forms are
optimized for the AOL client software then in use by AOL Users. AOL shall be
entitled to require reasonable changes to the content, features and/or
functionality within any screen or form created using AOL's proprietary form
technology (a "Rainman Area") to the extent such Rainman Area will, in AOL's
good faith judgment, adversely affect operation of any portion of the AOL
Network.
User Interface. Preview shall maintain a graphical user interface within the
--------------
Online Area that is competitive in all material respects with interfaces of
other similar sites based on similar form technology. AOL reserves the right to
conduct focus group testing to assess Preview's competitiveness in this regard.
Service Level Response. Preview agrees to use commercially reasonable efforts
----------------------
to provide the following service levels in response to problems with or
improvements to the software/functionality associated with the Online Area.
1. For material functions of the software that are or have become entirely or
substantially inoperable, Preview will provide a bug fix or workaround
within two business days after the first report of such error.
2. For functions of the software that are impaired or that otherwise fail to
operate in accordance with agreed upon specifications, Preview will provide
a bug fix or workaround within three business days after the first report
of such error.
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
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3. Degraded operations: for errors disabling only certain non-essential
functions, Preview will provide a bug fix or workaround within sixty days
after the first report of such error.
4. Minimal impact: for all other errors, Preview will address these requests
on a case-by-case basis as soon as reasonably feasible.
Additional Standards. Preview shall diligently monitor the Online Area,
--------------------
especially the Res System for fraud and abuse and shall provide adequate
staffing for maintenance of both the Rainman Areas and any Web Forms contained
in the Online Area. In the event that fraudulent activity associated with use of
the Online Area exceeds two times AOL's average occurrence of fraud for a
similar time frame across its credit card transaction activities through the AOL
Service (as measurable by AOL) (the "Average Fraud Level"), then the Parties
shall make such modifications to any and all applicable operations, systems,
information flows related to fraud prevention and billing as are necessary to
reduce such fraudulent activity to no greater than two times the Average Fraud
Level. Preview shall also work with AOL in developing policies (not otherwise
addressed herein) that are designed to combat any repeated customer service
complaints and to prevent deceptive selling practices.
Customized Interactive Site Requirements. In the event the Transition occurs
----------------------------------------
pursuant to Section 1.10, Preview shall comply with all of the following:
Technical Performance:
---------------------
1. Preview will design the customized Interactive Site to support the Windows
version of the Microsoft Internet Explorer 3.0 browser, and make
commercially reasonable efforts to support all other AOL browsers listed
at: ▇▇▇▇://▇▇▇▇▇▇▇▇▇.▇▇▇▇.▇▇▇.▇▇▇/▇▇▇▇▇▇▇▇▇.▇▇▇▇.
2. Preview will configure the server from which it serves the site to examine
the HTTP User-Agent field in order to identify the AOL User-Agents listed
at: ▇▇▇▇://▇▇▇▇▇▇▇▇▇.▇▇▇▇.▇▇▇.▇▇▇/▇▇▇▇▇▇▇▇▇.▇▇▇▇ (the "AOL User-Agents").
3. Preview will design its site to support HTTP 1.0 or later protocol as
defined in RFC 1945 (available at ▇▇▇▇://▇▇.▇▇▇▇▇▇▇▇.▇▇▇/▇▇▇/▇▇▇▇▇▇▇.▇▇▇▇)
and to adhere to AOL's parameters for refreshing cached information listed
at ▇▇▇▇://▇▇▇▇▇▇▇▇▇.▇▇▇▇.▇▇▇.▇▇▇/▇▇▇▇▇▇▇▇▇.▇▇▇▇.
4. Preview will provide continuous navigational ability for AOL Members to
return to an agreed-upon point on the AOL Service (for which AOL shall
supply the proper address) from the Online Area.
Testing and Integration: Preview shall test the site in accordance with
------------------------
standard diagnostic practices, to ensure to the extent reasonably possible that
the site conforms to a mutually agreed upon technical specification, including
but not limited to ensuring that the site works without significant program
errors under a variety of test conditions that reasonably reflect the actual
environments in which the site has been designed to be used. In addition,
Preview will work with AOL to enable integration of the site with the AOL
Service and to provide any reasonable assistance necessary to AOL engineers to
ensure the level of integration called for in the product specification.
Acceptance Testing and Quality Assurance Testing: The prototype and launch
-------------------------------------------------
versions of the site shall be subjected to acceptance by AOL based on
satisfaction of such tests as AOL will reasonably construct in order to
determine whether such versions operate in accordance with the AOL's standard
quality assurance assistance program, which is designed to provide assistance
and resources to AOL partners during the development and testing of integrated
web sites.
30
Confidential
31
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EXHIBIT D
Preview Services
----------------
1. INTRODUCTION
This Exhibit D describes certain services, functions and responsibilities
of Preview (the "Services"). Preview shall be fully responsible for all
services (including, without limitation, for equipment and software) from
the connection to the Airline Systems to the Core Systems to the RMG Focal
Point (such area shall be known as the "Preview Responsibility Area").
Included in such responsibilities, Preview shall operate and maintain the
Core Systems and part of the RMG up to the RMG Focal Point, and arrange for
the connection of the Core Systems to the Airline Systems, and then manage
and operate the equipment, software and any other resources within the
Preview Responsibility Area. Preview shall also be fully responsible for
providing support and back-end services in connection with travel
reservations support and ticket processing, including, without limitation,
call center operation and management services and fulfillment services and
other general support functions.
Preview anticipates that the provision of Services will improve over the
Term based on Preview's knowledge of and access to state-of-the-art
resources and technology, implementation of improved methods and procedures
for providing the Services, and efficiencies arising from Preview's
provision of the Services.
2. MANAGEMENT AND OPERATION SERVICES
2.1 Management and Operation of the Equipment. Preview will assume
------------------------------------------
full management and operational responsibility for the equipment
within the Preview Responsibility Area. Such responsibilities
include, at a minimum, acquiring, installing, upgrading, managing,
maintaining, repairing and replacing all equipment in order to provide
the Services.
. Preview shall assume full management and operational
responsibility for host processor(s) functions and services
within the Preview Responsibility Area. Preview's
responsibilities during the term of the Agreement will include,
at a minimum: console monitoring and operations; tape and storage
management; and all technical system support operations. Preview
will maintain proper and adequate facilities, equipment and
supplies, and a properly trained and adequately staffed
operations center, including necessary management and support
staff. The hours of operation of the operations center will be 24
hours per day, 7 days per week.
. Preview will assume full management and operational
responsibility for network functions and services within the
Preview Responsibility Area. Preview's responsibilities will
include, at a minimum, acquiring, installing, upgrading,
managing, maintaining, repairing and replacing all equipment,
software, lines and cabling, as required to perform the network
services as the network may change during the Term. Preview shall
implement measures necessary to ensure confidentiality and
protect against unauthorized access and fraudulent use.
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Confidential
2.2 Software Management and Maintenance. Preview will assume full
-----------------------------------
management and operational responsibility for the software within the
Preview Responsibility Area, i.e., the "Back-End Systems". Such
responsibilities include, at a minimum, acquiring, installing,
upgrading, managing, maintaining, repairing and replacing all software
in order to provide the Services. Software management and maintenance
will include, at a minimum, the following:
. Corrective maintenance, including correction of systems defects
in accordance with applicable specifications;
. Preventative maintenance, including prevention of systems
problems by, where appropriate, improving systems documentation,
source code restructuring to the extent the code is accessible,
database/index reorganization, system re-engineering, tool
construction and re-writing un-maintainable modules.
. Upgrading the Back-End Systems: (i) so that the Back-End Systems
are always kept current and competitive (including cost-
competitive) with the major airline reservations systems in the
industry, (ii) pursuant to Preview's normal maintenance
practices, (ii) in a manner that ensures continued eligibility
for support and maintenance by any third-party for such Software,
and (iii) so as to maintain connectivity with the Airline
Systems.
. Tuning of systems to improve operational performance and minimize
resource usage to the extent practicable;
. Development and maintenance of current documentation for the
Back-End Systems, including changes to reflect any modifications
to the Back-End Systems; and
. Implementation of any regulatory requirements.
2.3 Other Management and Operational Responsibilities. Preview shall
-------------------------------------------------
be responsible for other management and operation services related to
the Preview Responsibility Area, including, without limitation, the
following:
. Disaster Recovery. Preview will assume management and operational
-----------------
responsibility, as applicable, for the provision of disaster
recovery services in a manner at least consistent with industry
standards. Such services include the management and interface
with third party disaster recovery service providers, and the
development, management and, as applicable, operation of a
disaster recovery plan.
. Security Management. Preview will manage and monitor access to
-------------------
computer system resources, including system level accounts,
groups, users and passwords and will maintain the security
software. AOL shall have the right to perform a and end-to-end
security audit of the Preview Responsibility Area at AOL's sole
option and expense.
3. SUPPORT AND BACK-END SERVICES
3.1 Call Center Services. Preview shall be responsible for the management
---------------------
of a call center to answer inquiries from users of the Res System
related to information and reservations on all airlines that are
generally available on major airline reservations systems (the "Call
Center"). Preview shall manage and operate the Call Center, providing
the resources necessary to respond promptly to inquiries and customer
support related to information and reservations on all airlines that
are generally available on major airline reservations
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Confidential
systems. Without limiting the generality of the foregoing, Preview's
services shall include, without limitation:
. Supporting both toll free (800) voice service and online, real-
time assistance to users through instant messages and/or (as
commercially reasonable and necessary) chat/conference room(s).
. Providing hours of operation that will mirror periods of highest
user activity over all time zones, which, unless mutually agreed,
at a minimum will be between 6:00 am to 10:00 p.m. Pacific Time.
. Staffing the Call Center as necessary to meet or exceed customer
demand for customer support.
. Acknowledging customer complaints within 24 hours of receipt of
complaint and promptly resolving the same, but no later than
within five (5) business days after receipt. Preview shall log
all such complaints and will note the date/time of the complaint,
escalation (if any) and resolution. Preview shall maintain files
on all complaints and resolutions.
. Responding to AOL requests for information on Call Center
operations. Preview understands that from time to time AOL shall
make surprise test calls to the Call Center in order to determine
provision of Call Center services. In the event that AOL
discovers a problem with the services, AOL shall notify Preview,
and the Parties shall meet to discuss the problem. Preview shall
take the steps necessary to correct any problems.
3.2 Fulfillment Services. Preview shall be responsible for the
---------------------
management of fulfillment services in which Preview shall receive
ticket reservation orders made by customers through the Res System and
then print out the tickets and distribute (i.e., mail) them to
customers ("Fulfillment"). Preview shall manage and operate the
Fulfillment services, providing the resources necessary to receive
ticket reservation orders made by customers through the Res System and
then printing out the tickets and distributing them to customers.
Without limiting the generality of the foregoing, Preview's services
shall include:
. Using commercially reasonable best efforts to ensure that all
travel documentation is delivered to customers on a timely basis.
Preview shall document all missed deliveries and will keep such
documentation on file for AOL review.
. Acknowledging customer complaints within 24 hours of receipt of
complaint and promptly resolving the same, but no later than
within five (5) business days after receipt. Preview shall log
all such complaints and will note the date/time of the complaint,
escalation (if any) and resolution. Preview shall maintain files
on all complaints and resolutions.
34