1
EXHIBIT 10.7
CONFIDENTIAL TREATMENT
REQUESTED BY GALILEO
INTERNATIONAL, INC.
MARKETING COOPERATION
AND SALES REPRESENTATION AGREEMENT
between
US AIRWAYS, INC.
and
GALILEO INTERNATIONAL, INC.
Dated as of__________________, 1997
2
CONFIDENTIAL TREATMENT
REQUESTED BY GALILEO
INTERNATIONAL, INC.
MARKETING COOPERATION
AND SALES REPRESENTATION AGREEMENT
Table of Headings
-----------------
Section Page
------- ----
1 Definitions ...................................................................... 1
2 Sales Agency and Territories ..................................................... 2
2.1 Sales to NTP Subscribers .................................................. 2
2.1.1 Sales Agency Appointment ......................................... 2
2.1.2 Designated Subscribers ........................................... 2
2.2 Sales to CTMS Customers ................................................... 2
2.3 Other Sales Agents ........................................................ 2
2.4 Territorial Reassignment .................................................. 3
2.5 Trade Names 3
3 The Administration of this Agreement ............................................. 3
3.1 GI-Inc .................................................................... 3
3.2 US Airways 4
3.3 Meetings and Coordination ................................................. 5
4 Responsibilities of US Airways ................................................... 6
4.1 NTP Sales Services ........................................................ 6
4.2 CTMS Sales Services ....................................................... 7
4.3 Support Services .......................................................... 7
4.4 Responsibilities With Respect to Excluded Subscribers ..................... 8
4.5 Sales Planning ............................................................ 8
4.6 Staffing .................................................................. 8
4.6.1 Staffing Commitment ...................................... 8
4.6.2 Review of Staffing Levels ................................ 8
4.6.3 Employee Proficiency and Training ........................ 9
4.6.3.1 Introductory Training ........................... 9
4.6.3.2 Employee Proficiency ............................ 9
4.6.3.3 Training and Test Materials ..................... 10
5 GI-Inc Responsibilities .......................................................... 10
5.1 Marketplace Competitiveness ............................................... 10
i
3
CONFIDENTIAL TREATMENT
REQUESTED BY GALILEO
INTERNATIONAL, INC.
5.2 GI-Inc Support of Sales Services and Support Services .................... 10
5.3 Services of GI-Inc. ...................................................... 10
5.4 New Services ............................................................. 11
5.5 CTMS Products ............................................................ 11
5.5.1 Base Products ............................................. 11
5.5.2 Demonstrations ............................................ 11
5.6 Technical Support ........................................................ 11
5.7 Technical Assistance Offices ............................................. 12
5.8 Help Desk ................................................................ 12
6 Reporting ........................................................................... 12
7 Other Marketing Rights .............................................................. 12
7.1 GI-Inc ................................................................... 12
7.2 US Airways ............................................................... 12
8 Terms of Payment .................................................................... 13
9 Currency ............................................................................ 13
10 Term ................................................................................ 13
11 Confidentiality ..................................................................... 14
11.1 Confidential Information ................................................. 14
11.2 Service .................................................................. 14
12 Service Marks, Patents, Third Party Data ............................................ 14
12.1 Use of Service Marks .......................................................... 14
12.1.1 GI-Inc Marks ......................................................... 14
12.1.2 US Airways Marks ..................................................... 15
12.2 Patent Indemnity ............................................................ 15
12.2.1 Actions .............................................................. 15
12.2.2 Limitation ........................................................... 15
12.3 Third Party Data ............................................................ 15
13 Taxes ............................................................................... 16
13.1 GI-Inc Responsibilities ..................................................... 16
13.2 Claims ...................................................................... 16
14 Limitation of Liability ............................................................. 16
ii
4
CONFIDENTIAL TREATMENT
REQUESTED BY GALILEO
INTERNATIONAL, INC.
15 Consequential Damages......................... 16
16 Termination for Breach........................ 17
17 Force Majeure, Delay.......................... 17
18 Indemnification............................... 17
19 Guarantee of Performance...................... 17
20 Third Party Rights............................ 18
21 Assignment.................................... 18
22 Relationship of the Parties................... 18
23 Severability.................................. 18
24 Survival...................................... 18
25 Governing..................................... 18
26 Notices....................................... 19
27 Headings...................................... 19
28 Entirety of Agreement......................... 19
29 Counterparts.................................. 20
iii
5
CONFIDENTIAL TREATMENT
REQUESTED BY GALILEO
INTERNATIONAL, INC.
Table of Attachments
Appendix I..............................................................
[INTENTIONALLY OMITTED -- CONFIDENTIAL TREATMENT REQUESTED]
Appendix II.............................................................
[INTENTIONALLY OMITTED -- CONFIDENTIAL TREATMENT REQUESTED]
Attachment A.............................................. Defined Terms
Attachment B............................... Dispute Resolution Procedure
Exhibit A...............................................................
[INTENTIONALLY OMITTED -- CONFIDENTIAL TREATMENT REQUESTED]
Exhibit B...............................................................
[INTENTIONALLY OMITTED -- CONFIDENTIAL TREATMENT REQUESTED]
Exhibit C...............................................................
[INTENTIONALLY OMITTED -- CONFIDENTIAL TREATMENT REQUESTED]
Exhibit D.................................. Sales Representative Reports
Exhibit E........................................... Certain Territories
Schedule 1..............................................................
[INTENTIONALLY OMITTED -- CONFIDENTIAL TREATMENT REQUESTED]
iv
6
CONFIDENTIAL TREATMENT
REQUESTED BY GALILEO
INTERNATIONAL, INC.
MARKETING COOPERATION AND SALES REPRESENTATION AGREEMENT
US AIRWAYS, INC. AND GALILEO INTERNATIONAL, INC.
This Marketing Cooperation and Sales Representation Agreement (this
"Agreement") effective as of the ___ day of _______, 1997 (the "Effective
Date"), by and between GALILEO INTERNATIONAL, INC., a Delaware corporation
("GI-Inc") with offices at ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇, and US AIRWAYS, INC., a Delaware corporation ("US Airways")
with offices at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
RECITALS
WHEREAS US Airways and Apollo Travel Services Partnership, a Delaware
general partnership ("Apollo Partnership"), are parties to a Sales
Representative Agreement, dated as of January 1, 1994 (the "Original
Agreement"); and
WHEREAS GI-Inc generates computerized reservations services through
GI-Inc's computer reservation system and distributes such services worldwide
for use by travel-related business entities, by CTMS Customers, and by
individual consumers; and
WHEREAS GI-Inc desires to appoint Sales Representatives that will be
responsible for the sale of GI-Inc's reservations services to such persons and
for the provision of ongoing support services to certain of such persons; and
WHEREAS The parties hereto agree that, because of the competitiveness of
the products and services of GI-Inc vis-a-vis like products and services of all
other companies within the CRS Industry, US Airways is desirous of entering
into this Agreement; and
WHEREAS The parties hereto agree that, because of US Airways' knowledge of
and contact with a substantial portion of the community of travel agents within
the Territory, GI-Inc is desirous of entering into this Agreement; and
WHEREAS US Airways and Apollo Partnership intend to terminate the Original
Agreement and US Airways desires to be a Sales Representative for GI-Inc under
the terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants set forth in this
Agreement, GI-Inc and US Airways hereby agree as follows:
7
CONFIDENTIAL TREATMENT 2
REQUESTED BY GALILEO
INTERNATIONAL, INC.
1 Definitions.
Capitalized terms used as defined terms in this Agreement have, unless
otherwise defined elsewhere in this Agreement, the meanings provided for each
in Attachment A hereto.
2 Sales Agency and Territories.
2.1 Sales to NTP Subscribers.
2.1.1 Sales Agency Appointment.
With respect to the Assigned Subscribers, GI-Inc hereby
appoints US Airways as the exclusive limited agent of GI-Inc to
obtain commitments from the Assigned Subscribers to subscribe for
and lease Galileo Services. US Airways will act as the sales agent
of GI-Inc only for the limited purposes of negotiating and
obtaining written commitments from NTP Subscribers on terms and in
a form prepared and approved in advance by GI-Inc.
2.1.2 Designated Subscribers.
Exhibit C hereto lists the NTP Subscribers with locations
in the sales territories of more than one sales representative for
whom US Airways is the designated provider of Sales Services and
Support Services. US Airways is the exclusive provider of Sales
Services and Support Services for all locations of such NTP
Subscribers in the Territory. GI-Inc may add or delete NTP
Subscribers from such Exhibit C only with US Airways' consent.
All NTP Subscribers listed on Exhibit C are "Excluded Subscribers"
for all other sales representatives of GI-Inc, including for
GI-Inc itself.
2.2 Sales to CTMS Customers.
With respect to CTMS Customers and CTMS Agents, GI-Inc hereby
appoints US Airways as its non-exclusive limited agent to obtain
commitments from CTMS Customers and CTMS Agents to purchase, license, or
lease CTMS Services. Pursuant to Section 4.2 below, and except in those
territories where GI-Inc has granted exclusive distribution rights to
third parties with respect to Galileo Services and CTMS Services, as
listed in Exhibit E hereto, US Airways may act as the sales agent of
GI-Inc worldwide for the limited purposes of negotiating and obtaining
written commitments from CTMS Customers and CTMS Agents on terms and in a
form prepared and approved in advance by GI-Inc.
2.3 Other Sales Agents.
8
CONFIDENTIAL TREATMENT 3
REQUESTED BY GALILEO
INTERNATIONAL, INC.
Subject to this Section 2 and to Section 3 below, GI-Inc may at its
discretion appoint other persons as sales agents of GI-Inc and GI-Inc may
act on its own behalf as sales agent. GI-Inc will treat each of its
sales agents in a fair and nondiscriminatory manner and as appropriate in
a manner proportionate to US Airways' responsibilities hereunder with
respect to the terms and conditions of its appointment as a sales
representative, including, but not limited to, the provision of Sales
Services, Support Services, training, the criteria for approvals of Form
Agreements, the compensation arrangements provided by GI-Inc, and in all
associated support functions that are GI-Inc's responsibility hereunder.
2.4 Territorial Reassignment.
A "Territorial Reassignment" shall occur in the event of (i) a
reassignment by GI-Inc among its sales representatives of territories
outside of the APR but within the Territory, or (ii) the termination of
any arrangement regarding sales agency between GI-Inc and another sales
representative of GI-Inc who is performing as a sales agent within the
Territory but not within the APR (an "Other Agent"). In the event of a
Territorial Reassignment, GI-Inc will offer to US Airways the right of
first refusal to assume sales agent responsibility within such reassigned
territory or within the territory of such terminated Other Agent. Before
such territories are assigned to US Airways, GI-Inc and US Airways will
negotiate in good faith to adjust the performance objectives and the
compensation therefor as provided in Appendix II. If US Airways and
GI-Inc are unable within ninety days (90 days) from the commencement of
such negotiations to agree on the terms of adjustment for the performance
objectives and the compensation then GI-Inc shall be free to make the
Territorial Reassignment to any other agent or GI-Inc may perform such
sales function for itself.
2.5 Trade Names.
During the term of this Agreement and except as otherwise provided
in this Agreement, with respect to the APR, GI-Inc will market, and US
Airways will sell, the Reservations Services and CTMS Services of GI-Inc
under the "Apollo" trade name. Notwithstanding the foregoing, if, as a
result of US Airways' efforts under this Agreement, a customer of GI-Inc
commits to purchase GI-Inc products or services outside of the Territory
then GI-Inc will determine the trade name for such products or services
outside of the Territory. For the purposes of this Agreement it is
assumed, without obligation on GI-Inc's part, that such trade name
outside of the Territory is "Galileo".
3 The Administration of this Agreement.
9
CONFIDENTIAL TREATMENT 4
REQUESTED BY GALILEO
INTERNATIONAL, INC.
US Airways and GI-Inc agree that the proper and efficient administration
of each party's obligations under this Agreement is essential to meeting the
objectives of the parties hereunder. To this purpose, the parties agree to
dedicate appropriate staff and resources at an executive level, and otherwise,
as follows:
3.1 GI-Inc.
At all times during the term of this Agreement GI-Inc will employ an
individual who shall have primary responsibility for meeting GI-Inc's
obligations under this Agreement, which person shall be a duly appointed
officer of GI-Inc (the "GI-Inc Executive"). The GI-Inc Executive shall
report directly to the President and Chief Executive Officer of GI-Inc.
The GI-Inc Executive shall be a person who has experience and background
commensurate with his or her responsibilities. The GI-Inc Executive will
maintain an office in the Chicago metropolitan region.
The GI-Inc Executive shall have full authority to bind GI-Inc in all
matters regarding this Agreement that may arise during the term of this
Agreement, subject to the provisions of the corporate by-laws and
commitment authorities of GI-Inc as approved by GI-Inc's Board of
Directors or CEO, including, without limitation:
(i) matters regarding Financial Assistance;
(ii) the approval of agreements with current and
potential customers of GI-Inc that are negotiated by US
Airways on GI-Inc's behalf pursuant to this Agreement;
(iii) the negotiation with US Airways of goals and
targets related to GI-Inc's and US Airways' performance under
this Agreement;
(iv) the compensation owed US Airways by GI-Inc under
this Agreement, including the negotiation and payment thereof;
(v) the quantity, quality of performance and training
of personnel provided by GI-Inc pursuant to its obligations
under this Agreement;
(vi) the coordination of GI-Inc's role in negotiations
with any third party where such negotiations involve the
participation of parties other than GI-Inc, US Airways, and
that third party; and
(vii) the coordination and resolution of any issues
arising under this Agreement that, in US Airways' or GI-Inc's
estimation, are affected by actions that have been or may be
taken by other sales agents of GI-Inc or by GI-Inc.
The GI-Inc Executive may delegate to employees of GI-Inc or to
persons under the control of GI-Inc such matters that are his or her
responsibility hereunder and as
10
CONFIDENTIAL TREATMENT 5
REQUESTED BY GALILEO
INTERNATIONAL, INC.
may be, in the GI-Inc Executive's discretion, appropriate for delegation
provided that, if US Airways reasonably objects that such delegation will
result in a diminishment of GI-Inc's performance hereunder or in a
detriment to US Airways' ability to perform its obligations hereunder, or
both, then GI-Inc will review the proposed delegation and inform US
Airways as to how GI-Inc will address US Airways' reasonable concerns.
3.2 US Airways.
At all times during the term of this Agreement US Airways will
employ an individual to have primary responsibility for meeting US
Airways' obligations under this Agreement, which person shall be a duly
appointed officer of US Airways (the "US Airways Executive"). The US
Airways Executive shall he a person who has experience and background
commensurate with his or her responsibilities. The US Airways Executive
will maintain an office in the Washington, D.C. metropolitan region. The
US Airways Executive shall have full authority to bind US Airways in all
matters regarding this Agreement that may arise during the term of this
Agreement, subject to the provisions of the corporate by-laws and
commitment authorities of US Airways, Inc., as approved by US Airways,
Inc.'s Board of Directors or CEO, including, without limitation:
(i) the conduct of US Airways' negotiations with
current and potential customers of GI-Inc on GI-Inc's behalf
pursuant to this Agreement;
(ii) the negotiation with GI-Inc of goals and targets
related to GI-Inc's and US Airways' performance under this
Agreement;
(iii) the compensation owed US Airways by GI-Inc under
this agreement, including the negotiation and payment thereof;
(iv) the quantity, quality of performance and training
of personnel provided by US Airways pursuant to its
obligations under this Agreement;
(v) the coordination of US Airways' role in
negotiations with any third party where such negotiations
involve the participation of parties other than GI-Inc, US
Airways, and that third party; and
(vi) the coordination and resolution of any issues
arising under this Agreement that, in US Airways' or GI-Inc's
estimation, are affected by actions that have been or may be
taken by other sales agents of GI-Inc or by GI-Inc.
The US Airways Executive may delegate to employees of US Airways or
to persons under the control of US Airways such matters that are his or
her responsibility hereunder and as may be, in the US Airways Executive's
estimation, appropriate for delegation, provided that, if GI-Inc
reasonably objects that such delegation will result in
11
CONFIDENTIAL TREATMENT 6
REQUESTED BY GALILEO
INTERNATIONAL, INC.
a diminishment of US Airways' performance hereunder or in a detriment to
GI-Inc's ability to perform its obligations hereunder, or both, then US
Airways will review the proposed delegation and inform GI-Inc as to how
US Airways will address GI-Inc's reasonable concerns.
3.3 Meetings and Coordination.
The GI-Inc Executive and the US Airways Executive shall meet from
time to time, whether telephonically or in person and on a schedule to
which they mutually agree, to review the progress of each party's
performance under this Agreement as well as general economic and travel
industry market conditions or factors that may potentially affect one or
the other party performance hereunder.
4 Responsibilities of US Airways.
4.1 NTP Sales Services.
Primarily using US Airways' General Sales Personnel, US Airways will
actively engage in the sale, marketing, and promotion of Galileo Services
to the Assigned Subscribers. To this end, US Airways will perform the
following services for GI-Inc pursuant to this Agreement (such services
are, collectively, "NTP Sales Services"):
(i) Scope. US Airways will engage in NTP Sales Services regarding
only those Galileo Services as directed or authorized in advance by
GI-Inc.
(ii) Contact. US Airways will maintain current and establish new
personal and telephone contact and sales relationships, including,
where appropriate, in person or telephone sales calls. At GI-Inc's
expense, US Airways may, on approval of GI-Inc, undertake direct
mail solicitations, promotions, and other sales efforts, with NTP
Subscribers within the APR. GI-Inc may disapprove any sales
promotion or solicitation with respect to the Galileo Services that
GI-Inc in its reasonable discretion determines to be contrary to the
objectives or policies of GI-Inc.
(iii) Commitment Review Procedure. US Airways shall follow the
Commitment Review Procedure described in Section 5.2 below.
(iv) Support Services. Subject to the NTP Form Agreement and
within the Negotiation Range, US Airways shall offer to NTP
Subscribers within the APR such NTP Support Services as are approved
in advance by GI-Inc.
(v) Discontinued Services. Upon receipt of a Discontinued
Service Notice, as such term is defined in Section 5.1 below, US
Airways will cease Sales Services regarding such Galileo Service or
feature.
12
CONFIDENTIAL TREATMENT 7
REQUESTED BY GALILEO
INTERNATIONAL, INC.
(vi) Changes to US Airways Organization. US Airways will give GI-Inc prompt
written notice regarding any significant re-organization, redeployment or
change of responsibilities of its General Sales Personnel (an
"Organization Change"). If such Organization Change is likely to result
in an inability of US Airways to perform NTP Sales Services in a
metropolitan area in the APR that provides a significant portion of Total
Revenue then US Airways will notify GI-Inc as to whether
(a) US Airways chooses to continue providing services under this
Agreement in such area, in which case US Airways will propose to
GI-Inc how US Airways will staff the necessary Sales Force coverage
for such area, and GI-Inc will review US Airways' proposal in good
faith and determine whether it accepts the proposal; or
(b) US Airways chooses not to continue providing
services under this Agreement in such area.
In the event of (b), above, or of GI-Inc's rejection of US Airways'
proposal in (a), above, then GI-Inc may reassign sales responsibility in
such area to another person, including to GI-Inc itself.
4.2 CTMS Sales Services.
US Airways will actively engage in the sale, marketing, and promotion of
CTMS Services to CTMS Customers and CTMS Agents. To this end, US Airways will
perform the following services for GI-Inc pursuant to this Agreement (such
services are, collectively, "CTMS Sales Services"):
(i) Scope. US Airways will engage in CTMS Sales Services regarding only those
CTMS Services as directed or authorized in advance by GI-Inc.
(ii) Product Licensing. As GI-Inc's non-exclusive sales agent for the
licensing of CTMS Services, subject to Section 2.2 above, US Airways may
market and license CTMS Services to CTMS Customers and to CTMS Agents.
The parties will work together to develop marketing plans for CTMS
Services, including the name or names of products.
(iii) Contact. US Airways will maintain current and establish new personal and
telephone contact and sales relationships, including, where appropriate,
in person or telephone sales calls with CTMS Customers and CTMS Agents.
At GI-Inc's expense, US Airways may, on approval of GI-Inc, undertake
direct mail solicitations, promotions, and other sales efforts, with CTMS
Customers and CTMS Agents. GI-Inc may disapprove any sales promotion or
solicitation
13
CONFIDENTIAL TREATMENT 8
REQUESTED BY GALILEO
INTERNATIONAL, INC.
with respect to the CTMS Services that GI-Inc in its reasonable
discretion determines to be contrary to the objectives or policies
of GI-Inc.
(iv) Commitment Review Procedure. US Airways shall follow the
Commitment Review Procedure described in Section 5.2 below.
(v) CTMS Support Services. Subject to the CTMS Form Agreement
and within the Negotiation Range, US Airways shall offer to CTMS
Customers or CTMS Agents, or both, as the case may be, such CTMS
Support Services as are approved in advance by GI-Inc.
(vi) Discontinued Services. Upon receipt of a Discontinued
Service Notice, as such term is defined in Section 5.1 below, US
Airways will cease CTMS Sales Services regarding such CTMS Service.
4.3 Support Services.
In addition to the Sales Services, US Airways will perform the
following services for GI-Inc pursuant to this Agreement for those NTP
Subscribers with annual HOL Flow in excess of $5 million (such services
are, collectively, "Support Services").
(i) Support Services Calls. Responses to inquiries from, and
regular premises visits and assistance to, NTP Subscribers in order
to establish and maintain good relations and to improve relations
between NTP Subscribers and GI-Inc, and to aid in familiarization
with and use of Galileo Services and CTMS Services.
(ii) Technical Questions Received. US Airways will relay promptly
to GI-Inc any technical questions received by US Airways from
customers of GI-Inc and, as requested by GI-Inc, will coordinate
responses thereto.
(iii) Area of Support. US Airways will be responsible for Support
Services for locations of NTP Subscribers within the APR, and as
designated by GI-Inc outside of the APR (although associated revenue
from non-APR Subscribers designated for support will be included in
Total Revenue).
4.4 Responsibilities With Respect to Excluded Subscribers.
US Airways will not enter into sales negotiations with Excluded
Subscribers except with the prior written approval of GI-Inc. GI-Inc may
add or delete NTP Subscribers as Excluded Subscribers on Exhibit B hereto
after consulting with and receiving the consent of all affected sales
representatives, including US Airways. Revenues from all Assigned
Subscribers who become Excluded Subscribers will continue to be counted for
that year in the Total Revenue. US Airways may negotiate with NTP
Subscribers regarding sales commitments outside of the APR (i) after prior
notice to GI-Inc, (ii) after a reasonable period of time in which GI-Inc
has had the opportunity to coordinate such sales calls with its own sales
force and with GI-Inc's
14
CONFIDENTIAL TREATMENT 9
REQUESTED BY GALILEO
INTERNATIONAL, INC.
other sales representatives, and (iii) after consent of GI-Inc. Only
those sales outside of the APR approved in advance by GI-Inc will be
included in Total Revenue totals.
4.5 Sales Planning.
Subject to Appendix II, and in no event later than February 28 of
each year, GI-Inc and US Airways jointly will develop a sales plan for
such year, which sales plan will be designed to increase business
opportunities, procure profitable NTP Subscriber accounts for GI-Inc and
attain or exceed the Revenue Goal.
4.6 Staffing.
4.6.1 Staffing Commmitment.
As described in Appendix I, US Airways will staff a Sales
Force who will provide Sales Services to GI-Inc under this
Agreement.
4.6.2 Review of Staffing Levels.
US Airways will consult with GI-Inc from time to time as
requested by either party to review the job descriptions, minimum
qualifications, career paths, and other matters in connection with
the Sales Force. US Airways will consult with GI-Inc regarding the
staffing of Dedicated Personnel and Administrative Support
Personnel positions to be provided under this Agreement. Such
consultations will include review of job descriptions and necessary
qualifications, consideration of possible applicants from GI-Inc
and US Airways as well as third parties, and full consultation and
review of proposed training schedules for each Dedicated Personnel
and Administrative Support Personnel.
4.6.3 Employee Proficiency and Training.
4.6.3.1 Introductory Training.
Prior to commencing any Sales Services on behalf of
GI-Inc hereunder, all Sales Force personnel of US Airways
must attend a five-day introductory training course and,
thereafter, a two-day refresher training course at least
once annually, at a location or locations to be mutually
agreed between US Airways and GI-Inc. As new GI-Inc
products or services are released by GI-Inc for Sales
Services hereunder, GI-Inc will provide training with
respect thereto to the Sales Force at a location or
locations as agreed by the parties. GI-Inc will bear its
own
15
CONFIDENTIAL TREATMENT 10
REQUESTED BY GALILEO
INTERNATIONAL, INC.
expenses in providing the training and US Airways will bear
its own expenses of the Sales Force in attending such
training.
4.6.3.2 Employee Proficiency.
US Airways will take all reasonable steps to ensure
that all of the Sales Force who are authorized to sell or
support the products and services of GI-Inc hereunder have
been trained appropriately and are proficient to provide
Sales Services in accordance with the terms of this Agreement.
GI-Inc shall have the right to test the proficiency of
individual Sales Force personnel at the time of their
refresher training and to require additional training for
such individuals as do not demonstrate minimum proficiency.
GI-Inc will provide all course materials, test materials, and
training facilities necessary to provide such additional
training, and US Airways and GI-Inc will mutually establish a
reasonable schedule for the administration of such additional
training. Sales Force personnel who have completed such
additional training will be again tested and those who again
demonstrate an inability to achieve the minimum level of
proficiency will not be counted toward the required staffing
levels prescribed in this Section 4.6.
4.6.3.3 Training and Test Materials.
GI-Inc will provide to US Airways in advance of their
use copies of all introductory training materials, refresher
training materials, and proficiency test vehicles to he used
pursuant to this Section 4.6.3 (collectively, the "Training
Materials"). The Training Materials will always be
constructed according to the best practices for Training
Materials then employed by U.S. industry and shall be related
solely to the reasonable skills required of a person engaged
in the sales of products and services such as those of
GI-Inc. US Airways may, at its request, review such Training
Materials in advance of their use hereunder and GI-Inc will
make all reasonable changes requested by US Airways to the
Training Materials.
5 GI-Inc Responsibilities.
5.1 Marketplace Competitiveness.
GI-Inc will at all times during the term of this Agreement use its
best efforts to ensure that Galileo Services maintain a superior level of
competitiveness in the CRS Industry. GI-Inc will give US Airways as much
notice as is reasonably practicable if
16
CONFIDENTIAL TREATMENT 11
REQUESTED BY GALILEO
INTERNATIONAL, INC.
GI-Inc discontinues general distribution or provision of any particular
Galileo Service or CTMS Service or major feature thereof (a "Discontinued
Service Notice")
5.2 GI-Inc Support of Sales Services and Support Services.
With the objective of ensuring the proper level of GI-Inc support
for Sales Services and for Support Services provided by US Airways under
this Agreement, GI-Inc will provide the following support to US Airways
(collectively, the "GI-Inc Support"):
(i) Copies. GI-Inc will ensure that US Airways at all times has
a current copy of each version of the Form Agreements together with
such commentary or explanation of the Form Agreements as may be
reasonably required by US Airways for the comprehension and
understanding of the Form Agreements.
(ii) Changes to Form Agreements. GI-Inc will provide US Airways
with no less than 30 days written notice in the event that GI-Inc
modifies or discontinues the use of any of the Form Agreements.
5.3 Services of GI-Inc.
GI-Inc will provide Galileo Services, CTMS Services and New Services
to NTP Subscribers, CTMS Customers and CTMS Agents, subject to the terms
of the Form Agreements as negotiated by US Airways and approved by GI-Inc
pursuant to this Agreement.
5.4 New Services.
GI-Inc will not distribute any Galileo Service (but excluding
enhancements or replacements of any Galileo Service) that did not exist
as of the Effective Date (a "New Service") through any sales
representative in the Territory, and including GI-Inc itself, without
first offering US Airways the right of first refusal to become the
exclusive sales agent for such New Service for the APR. GI-Inc and US
Airways shall negotiate on the reasonable terms of such agency, including
the performance objectives and the compensation therefor as provided in
Appendix II. Failing agreement with US Airways within ninety days (90
days) of the inception of such negotiations, GI-Inc may, upon giving
notice to US Airways pursuant to Section 26, below, make the other sales
representative arrangements for the New Service within the Territory.
5.5 CTMS Products.
5.5.1 Base Products.
17
CONFIDENTIAL TREATMENT 12
REQUESTED BY GALILEO
INTERNATIONAL, INC.
GI-Inc has the ultimate role in determining product
specifications and features of any CTMS Service, and GI-Inc will
ensure that such specifications and product implementations of
such specifications meet prevailing market needs. To that end,
the GI-Inc Executive shall consult regularly with the US Airways
Executive as to information that US Airways may gather in the
course of its business that US Airways believes is relevant to
ensuring that the CTMS Service is competitive with like services
and products provided by other service providers.
5.5.2 Demonstrations.
Upon US Airways' request, subject to GI-Inc's agreement,
GI-Inc, at its expense, will provide demonstrations of CTMS
Services to CTMS Customers and/or CTMS Agents. GI-Inc will
coordinate the content and scheduling of such demonstrations with
US Airways.
5.6 Technical Support.
GI-Inc will provide in a good and workmanlike manner all
installation, connection, and testing of all Galileo Services, CTMS
Services and any field or technical support or field maintenance required
by NTP Subscribers, CTMS Customers, or CTMS Agents. GI-Inc will maintain
ongoing and appropriate contact with NTP Subscribers, CTMS Customers and
CTMS Agents to facilitate user operation of the Galileo Services and CTMS
Services. Technical sales consulting support will also be provided by
GI-Inc to the Sales Force.
5.7 Technical Assistance Offices.
GI-Inc will maintain regional Tech Offices for the use of its
sales representatives that will be staffed by knowledgeable employees
capable of providing technical assistance regarding Galileo Services and
CTMS Services. Such assistance will be available to US Airways during
normal GI-Inc business hours.
5.8 Help Desk.
GI-Inc, at its expense, will maintain a telephone call center or
centers for use by the Sales Force, NTP Subscribers, CTMS Customers, and
CTMS Agents during normal business hours for each of those persons in their
places of business. The call centers will be staffed by knowledgeable
persons under the control of GI-Inc who are capable of providing prompt,
thorough, courteous, and professional technical assistance regarding the
products and services of GI-Inc.
6 Reporting.
18
CONFIDENTIAL TREATMENT 13
REQUESTED BY GALILEO
INTERNATIONAL, INC.
US Airways will furnish, at no cost to GI-Inc, the reports and documents
set forth in Exhibit D hereto.
7 Other Marketing Rights.
7.1 GI-Inc.
GI-Inc reserves the right to market and to support services in the
Sales APR. During the term of this Agreement, and except as otherwise
provided in this Agreement, GI-Inc will not designate the Sales APR of US
Airways as the area of primary sales responsibility of any other sales
agent of GI-Inc, including GI-Inc itself.
7.2 US Airways.
Subject to the provisions of the Non-Competition Agreement, while US
Airways is the sales agent of GI-Inc under the terms of this Agreement,
US Airways will not act as a sales agent for the reservations or
accounting services of another entity in the CRS Industry in the APR
without the prior consent of GI-Inc, provided, however, that nothing in
this Agreement will prevent US Airways from:
(i) having US Airways Group Products and Services displayed or
listed in any person's computer reservation system, schedule, other
electronic or paper communications medium, or otherwise;
(ii) providing to any person any technological or computerized
means of delivering information and automation functionality;
(iii) authorizing any person to use US Airways' trademarks and
trade names in connection with advertising US Airways' participation
in such person's computer information or reservation system, or
otherwise;
(iv) endorsing the products or services of another member of the
CRS Industry, provided, however, that US Airways may not endorse
such products or services of such other member of the CRS Industry
as being preferred to those of GI-Inc, provided, however, (a) if
GI-Inc does not itself provide such products or services, or (b)
GI-Inc provides such products or services but they do not meet US
Airways' needs, then, subject to the provisions of the
Non-Competition Agreement, US Airways may endorse such products or
services of such other member of the CRS Industry in any manner.
8 Terms of Payment.
GI-Inc will pay US Airways quarterly in arrears, upon receipt and
acceptance by GI-Inc of US Airways' reports pursuant to Section 6 above for the
preceding quarter and of its invoice
19
CONFIDENTIAL TREATMENT 14
REQUESTED BY GALILEO
INTERNATIONAL, INC.
therefor, an amount equal to one quarter of the Base Compensation. Invoices
will be prepared and mailed on the first work day of April, July, October and
January of each year. After the end of each calendar year, following receipt
and acceptance by GI-Inc of US Airways' report pursuant to Section 6 above with
results for the year as a whole, adjustments will be made as required by
Appendix II, and GI-Inc or US Airways, as appropriate, will make payment to the
other in an amount determined in accordance with the application of such
Section. All payments hereunder will be made within 30 days of date of invoice
by wire transfer, banking instructions to be given by the recipient thereof in
advance of each such transfer. All amounts due and payable hereunder and not
paid within 30 days of date of invoice shall be subject to late payment
interest subject to the following: (i) the Interest Rate shall be fixed as of
the due date of the invoice, and (ii) interest shall be calculated, on the
basis of a 360-day year, from the due date.
9 Currency.
For the purposes of this Agreement all currency calculations shall be in
US Dollars and, to the extent paid in a currency other than US Dollars, revenue
received by GI-Inc or expenses incurred by GI-Inc will be converted to US
Dollars at the exchange rate in effect at the date of the receipt of such
revenue or payment of such expense, as the case may be.
10 Term.
This Agreement is effective as of the Effective Date, and will continue
until the termination of the Non-Competition Agreement. GI-Inc may issue, no
earlier than July 1 of each year a conditional notice of termination if GI-Inc
has reasonably determined that US Airways may, as a result of its own failure
to perform and not as a result of a Material Change, not meet its then current
Revenue Goal; if, as of 120 days after such conditional notice, GI-Inc
reasonably determines that US Airways will not meet such Revenue Goal and so
notifies US Airways, this Agreement will terminate 90 days after such
determination (with no sales exclusivity during the last 30 days of the 90 day
period) and US Airways will be paid for sales services during the last 30 days
only at direct labor cost (adjusted to reflect time devoted to GI-Inc) and
associated expenses.
11 Confidentiality.
11.1 Confidential Information.
Confidential information, including, without limitation, source
code, object code, manufacturing, financial and marketing data, orders,
forecasts, plans, designs, drawings and specifications of either US
Airways or GI-Inc, which is contained in
20
CONFIDENTIAL TREATMENT 15
REQUESTED BY GALILEO
INTERNATIONAL, INC.
tangible records designated as "CONFIDENTIAL", "TRADE SECRET" or
"PROPRIETARY", or which is otherwise communicated on the express basis
that the information is confidential, and which is provided to the other
party during the performance of this Agreement (hereafter "Confidential
Information"), will be treated as confidential and not further disclosed
to any third party without the prior written consent of the providing
party, except as provided under the terms of this Agreement, for five
years from the date such Confidential Information was first received,
unless such Confidential Information was already in the possession of the
other party, is placed in the public domain through no fault of the party
receiving such information, or becomes rightfully available to the other
party through other sources without restriction on disclosure.
11.2 Service.
If either party is served with a subpoena or other legal process
requiring the production or disclosure of any Confidential Information or
US Airways Information, then that party will immediately notify the owner
thereof, and will in good faith attempt to permit the owner at the
owner's expense to intervene and contest such disclosure or production.
12 Service Marks, Patents, Third Party Data.
12.1 Use of Service Marks.
12.1.1 GI-Inc Marks.
US Airways will use and display the GI-Inc trade and service
marks in the form specified by GI-Inc. US Airways will market the
Galileo Services and CTMS Services under product names established
by GI-Inc and must identify all such Galileo Services and CTMS
Services as the products or services of GI-Inc. US Airways may
include its name and identifying marks in association with the name
"GI-Inc". GI-Inc reserves the right to disapprove any use of the
trade and service marks and other proprietary rights of GI-Inc if
GI-Inc determines in its reasonable discretion that such use is
contrary to the objectives or policies of GI-Inc.
12.1.2 US Airways Marks.
GI-Inc will not use the trade or service marks of US Airways
without US Airways' prior written consent. US Airways reserves the
right to disapprove any use of the trade and service marks and
other proprietary rights of US
21
CONFIDENTIAL TREATMENT 16
REQUESTED BY GALILEO
INTERNATIONAL, INC.
Airways if US Airways determines in its reasonable discretion that
such use is contrary to the objectives or policies of US Airways.
12.2 Patent Indemnity.
12.2.1 Actions.
GI-Inc will defend at its expense any suit or proceeding
against US Airways based on a claim that any product or service of
GI-Inc ("GI-Inc Product") constitutes an infringement of the
patent, trademark, or copyright laws of the United States, provided
that GI-Inc is notified promptly in writing and given full and
complete authority, information, and assistance for the defense of
such suit or proceeding. If the foregoing provision is complied
with, GI-Inc will pay damages and costs awarded against US Airways,
but GI-Inc will not be responsible for any compromise or settlement
made without its prior written consent. If any GI-Inc Product is
held to constitute infringement of such patent, trademark, or
copyright and its use is enjoined, GI-Inc will, at its election and
expense, either obtain for US Airways the right to continue using
such GI-Inc Product, modify such GI-Inc Product so that it is not
infringing, or remove such GI-Inc Product.
12.2.2 Limitation.
GI-Inc will not be liable to US Airways with respect to any
claim of infringement which is based upon (a) combination or
utilization of an GI-Inc Product with products or services not
supplied by GI-Inc; (b) the unauthorized modification by US Airways
or a person other than GI-Inc or its designated representatives of
any GI-Inc Product or (c) the use of any GI-Inc Product not in
accordance with GI-Inc's specifications or recommendations.
12.3 Third Party Data.
GI-Inc makes no representation or warranty regarding the accuracy or
reliability of any schedule, fare, quote, or other information provided
to GI-Inc by airlines or by hotels, car rental companies or other vendors
of travel related services. GI-Inc will not be responsible for, and US
Airways hereby releases and waives any claims against GI-Inc conceding,
the accuracy or reliability of any such information provided by such
third parties.
13 Taxes.
13.1 GI-Inc Responsibilities.
22
CONFIDENTIAL TREATMENT 17
REQUESTED BY GALILEO
INTERNATIONAL, INC.
GI-Inc will pay any sales, use, or personal property taxes
(except for any tax levied upon or measured by US Airways' gross
receipts) imposed by any taxing authority and required to be paid by
GI-Inc or US Airways as a result of services provided to GI-Inc under
this Agreement. GI-Inc will not be liable for any tax levied upon or
measured by the income of US Airways.
13.2 Claims.
If a claim is made against US Airways for any taxes that are to
be paid by GI-Inc, US Airways will timely notify GI-Inc. If GI-Inc so
requests in writing, US Airways will, at GI-Inc's expense, take such
action as GI-Inc may reasonably direct with respect to such taxes,
including payment of such taxes under protest. If the tax has been
paid, and if requested by GI-Inc, US Airways will, at GI-Inc's
expense, take such action as GI-Inc may reasonably direct, including
allowing GI-Inc to file a claim or commence legal action in US
Airways' name, to recover such tax payment. In the event of refund or
recovery of any tax, or part thereof, US Airways will pay to GI-Inc
promptly that portion of the tax paid by GI-Inc, including any
interest received thereon.
14 Limitation of Liability.
Except as provided under Section 18 below ("Indemnification."), each
party's total liability regarding any claim by the other party for breach of
this Agreement is limited to the amount of compensation earned by US Airways for
the year in which the claim arises or, if based on obligations of a continuing
nature and arising after termination, then the final year of this Agreement, and
each party hereby releases and waives any claims against the other party for
such breach in excess of such amount.
15 Consequential Damages.
NEITHER PARTY WILL BE LIABLE FOR, AND EACH PARTY WAIVES AND RELEASES
ANY CLAIMS AGAINST THE OTHER PARTY FOR, ANY SPECIAL, INCIDENTAL, OR
CONSEQUENTIAL DAMAGES, INCLUDING DAMAGE TO OR DESTRUCTION OF PROPERTY, LOST
REVENUES, LOST PROFIT, OR LOSS OF PROSPECTIVE ECONOMIC ADVANTAGE, RESULTING FROM
PERFORMANCE OR FAILURE TO PERFORM UNDER THIS AGREEMENT.
23
CONFIDENTIAL TREATMENT 18
REQUESTED BY GALILEO
INTERNATIONAL, INC.
16 Termination for Breach.
If either party (the "Defaulting Party") breaches any of its duties or
obligations under this Agreement, and such breach continues for thirty days
(ten days regarding failure to pay amounts due) after written notice of such
default from the other party, then the other party may terminate this Agreement
at any time thereafter, effective immediately upon written notice of
termination to the Defaulting Party, without prejudice to any other rights or
remedies the non-defaulting party may have. Upon notice of such termination,
the Defaulting Party will return immediately to the non-defaulting party any
and all confidential or proprietary information, programs, materials, or other
data, and any copies thereof, in the possession or control of the Defaulting
Party.
17 Force Majeure, Delay.
Neither party will be responsible for delays in performance caused by acts
of God or governmental authority, strikes or labor disputes, fires or other
loss of manufacturing facilities, breach by suppliers of supply agreements, or
any other cause beyond the reasonable control of that party.
18 Indemnification.
Each party (the "Indemnitor") will indemnify the other party, its
officers, employees, and agents (collectively "Indemnitees") against and hold
each Indemnitee harmless from all claims, suits, judgments, losses, damages,
fines or costs (including reasonable legal fees and expenses) resulting from
any claim, suit, or demand by any third party for injuries to or deaths of
persons or loss of or damage to property arising out of the Indemnitor's
performance or, willful misconduct of the Indemnitor its employees, officers,
or agents, in connection with the Indemnitor's performance of this Agreement,
except to the extent caused by the negligence of any Indemnitee. The
Indemnitor's obligations under this paragraph will survive the termination of
this Agreement.
19 Guarantee of Performance.
If either party (the "Insolvent Party") becomes insolvent; if the other
party (the "Insecure Party") has evidence that the Insolvent Party is not
paying its bills when due without just cause; if a receiver of the Insolvent
Party's assets is appointed; if the Insolvent Party takes any step leading to
its cessation as a going concern; or if the Insolvent Party either ceases or
suspends operations for reasons other than a strike, then immediately upon
receipt of written notice from the Insecure Party the Insolvent Party will
provide adequate assurance, satisfactory
24
CONFIDENTIAL TREATMENT 19
REQUESTED BY GALILEO
INTERNATIONAL, INC.
to the Insecure Party, of the future performance of this Agreement. If
bankruptcy proceedings are commenced with respect to the Insolvent Party, then
the Insecure Party may suspend all further performance of this Agreement until
the Insolvent Party assumes or rejects this Agreement pursuant to section 365
of the Bankruptcy Code or any similar or successor provision. Any such
suspension of further performance by the Insecure Party pending the Insolvent
Party's assumption or rejection will not be a breach of this Agreement and will
not affect the Insecure Party's right to pursue or enforce any of its rights
under this Agreement or otherwise
20 Third Party Rights.
Nothing contained in this Agreement establishes or creates, or is intended
or will be construed to establish or create, any right in or any duty or
obligation to any third party.
21 Assignment.
US Airways may assign or transfer this Agreement or any rights granted or
provided for hereunder, in whole or in part, to any person or entity that is
controlled by US Airways, otherwise US Airways may not assign or transfer this
Agreement or any rights granted or provided for hereunder, in whole or in part,
without the written Agreement of GI-Inc. GI-Inc may assign or transfer this
Agreement or any rights granted or provided for hereunder, in whole or in part,
to any person or entity that is controlled by GI-Inc, otherwise GI-Inc may not
assign or transfer this Agreement or any rights granted or provided for
hereunder, in whole or in part, without the written Agreement of US Airways.
22 Relationship of the Parties.
The relationship of the parties is that of principal and limited agent.
US Airways may bind GI-Inc only as specifically provided in this Agreement.
23 Severability.
If any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect, then the Agreement shall he construed to exclude
such provision and to be enforceable in all other respects, unless to do so
would prejudice the rights of either party or result in such a material change
as to cause performance by either party to be unreasonable.
24 Survival.
All provisions of this Agreement which by their terms survive termination
thereof will continue thereafter in full force and effect.
25
CONFIDENTIAL TREATMENT 20
REQUESTED BY GALILEO
INTERNATIONAL, INC.
25 Governing Law.
This Agreement, and any dispute arising under or in connection with this
Agreement, including any action in tort, will be governed by the internal laws
of the State of Illinois. Any action brought to (i) preserve the status quo
pending arbitration or (ii) enforce an arbitration proceeding or decision shall
be brought in courts located within ▇▇▇▇ County, Illinois, the parties hereby
consenting to personal jurisdiction and venue therein.
26 Notices.
All notices to either party under this Agreement must be in writing and
sent to the following addressee and at the following address:
for GI-Inc:
Galileo International Incorporated
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President
for US Airways:
US Airways, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn:
Notices will be deemed effective on the date received. Notices by
certified or registered mail (return receipt requested) will be deemed received
on the date shown on the return receipt. Notices sent by telex or facsimile
will be deemed received on the date transmitted if transmitted before 3:30 p.m.
time of recipient, otherwise on the next business day following transmission.
27 Headings.
The section headings and captions used in this Agreement are for
convenience of reference only and do not constitute a part of this Agreement
and will not be deemed to limit, characterize or in any way affect any
provision of this Agreement, and all provisions of this Agreement will be
enforced and construed as if no heading or caption had been used in this
Agreement.
28 Entirety of Agreement.
26
CONFIDENTIAL TREATMENT 21
REQUESTED BY GALILEO
INTERNATIONAL, INC.
This Agreement including any Exhibits or attachments, supersedes all prior
oral or written representations or communications between the parties and
constitutes the entire understanding of the parties regarding the subject
matter of this Agreement. This Agreement may be modified only in a writing
signed by both parties.
29 Counterparts.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which shall be considered one and the
same instrument.
IN WITNESS WHEREOF, the parties have agreed to and executed this Agreement
by their authorized representatives as of the Effective Date first set forth
above
GALILEO INTERNATIONAL, INC. US AIRWAYS, INC.
By:____________________________ By:_________________________
Name:__________________________ Name:_______________________
Title:_________________________ Title:______________________
27
CONFIDENTIAL TREATMENT
REQUESTED BY GALILEO
INTERNATIONAL, INC.
Appendix I
[INTENTIONALLY OMITTED -- CONFIDENTIAL TREATMENT REQUESTED]
[THREE PAGES OMITTED]
(APPENDIX I-1)
28
CONFIDENTIAL TREATMENT
REQUESTED BY GALILEO
INTERNATIONAL, INC.
Appendix II
[INTENTIONALLY OMITTED -- CONFIDENTIAL TREATMENT REQUESTED]
[FOUR PAGES OMITTED]
(APPENDIX II-1)
29
CONFIDENTIAL TREATMENT
REQUESTED BY GALILEO
INTERNATIONAL, INC.
Attachment A
Defined Terms
As used in this Agreement, including the Attachments, Exhibits and Schedules
hereto, the terms listed in this Attachment A have the meanings ascribed to
them. The use of a term in the singular that is defined herein in the plural
is understood in this Agreement to signify a single instance of such defined
matter.
"Accounting Services" means those travel agency accounting services that are
provided by GI-Inc to customer of GI-Inc.
"Administrative Support Personnel" means those General Sales Personnel who
perform primarily administrative or management functions in the provision of
Sales Services pursuant to this Agreement.
"Advance Credit" has the meaning ascribed to that term in Section 9 of Appendix
II.
"APR" means "Area of Primary Sales Responsibility" as defined herein.
"ARC" means Airlines Reporting Corporation.
"Area of Primary Sales Responsibility" means the exclusive geographic area of
primary sales responsibility assigned to US Airways as described in Exhibit A
hereto and as such geographic area may be amended from time to time in
accordance with the provisions of this Agreement.
"Assigned Subscribers" means (i) all NTP Subscribers within the APR and (ii)
the Designated Subscribers, but excluding the Excluded Subscribers.
"Base Compensation" has the meaning ascribed to that term in Section 6 of
Appendix II and, in the event that there is a Carryover Base Compensation,
means such Carryover Base Compensation.
"BSP" means an entity, including, without limitation, IATA, that performs
accreditation, revenue reporting and clearing functions such as those performed
by ARC.
"Cancelled Deal" has the meaning ascribed to that term in Section 5.2 above.
(ATTACHMENT A-1)
30
CONFIDENTIAL TREATMENT
REQUESTED BY GALILEO
INTERNATIONAL, INC.
"Carryover Base Compensation" has the meaning ascribed to that term in Section
4.2 of Appendix II.
"Carryover FA Budget" has the meaning ascribed to that term in Section 4.2 of
Appendix II.
"Carryover Plan" has the meaning ascribed to that term in Section 4.2 of
Appendix II.
"Carryover Revenue Goal" has the meaning ascribed to that term in Section 4.2
of Appendix II.
"Commitment Review Procedure" has the meaning ascribed to that term in Section
5.2 above.
"Corporate Direct System" means a computerized travel reservations system that
is integrated with desktop travel management software including, for example,
travel policy enforcement, expense management, and management reporting
functionality and is (i) selected by a CTMS Customer for use by its employees,
or (ii) selected for use by a CTMS Agent retained by a CTMS Customer to service
the travel planning and management requirements of such CTMS Customer.
"CRS Industry" means the group of business entities who provide products and
services alike to the products and services of GI-Inc.
"CTMS Agent" means a Travel Agent, NTP Subscriber, service bureau, or other
person with whom a CTMS Customer has an agreement pursuant to which the CTMS
Agent performs services related to the use of a CTMS and other aspects of that
CTMS Customer's travel planning and travel management requirements.
"CTMS Customer" means a corporation, partnership, or other person who is an
existing or a potential purchaser of CTMS Services from GI-Inc.
"CTMS Form Agreement" means a Form Agreement that relates to CTMS Services.
"CTMS Sales Services" has the meaning ascribed to that term in Section 4.3
above.
"CTMS Services" means any portion of a Corporate Direct System provided by
GI-Inc, whether itself, or through an arrangement or arrangements between
GI-Inc and a third party or third parties.
"CTMS" means a CTMS Service.
(ATTACHMENT A-2)
31
CONFIDENTIAL TREATMENT
REQUESTED BY GALILEO
INTERNATIONAL, INC.
"Designated Subscribers" means those NTP Subscribers listed on Exhibit C hereto
and as amended pursuant to this Agreement.
"Dedicated Personnel" means General Sales Personnel of at least Account
Executive level who will be dedicated full-time (100 percent of work time) to
the provision of Sales Services pursuant to this Agreement.
"Discontinued Multinational Account" has the meaning ascribed to that term in
Section 2.1.3 above.
"Discontinued Service Notice" has the meaning ascribed to that term in Section
5.1 above.
"Dispute" means any dispute, disagreement, claim, or controversy arising in
connection with or relating to this Agreement, or the validity, interpretation,
performance, breach, or termination of this Agreement, including any claim of
breach of representation or warranty or of non-performance.
"Dispute Resolution Procedure" means the procedure described in Attachment B
hereto.
"Dispute Summary" means, with respect to a Dispute and with respect to the
party to the Dispute who shall prepare a Dispute Summary, a written declaration
presenting (i) a statement expressing the issue(s) in Dispute, (ii) facts
relevant to the understanding of the issue(s) in Dispute, and (iii) a statement
expressing the resolution of the Dispute that is sought by the party who
prepares the Dispute Summary.
"Excluded Subscribers" means those NTP Subscribers listed on Exhibit B pursuant
to this Agreement.
"FAA Factor" means, with respect to the Carryover Plan year in question, the
change, expressed as a percentage, in forecast domestic revenue passenger
enplanements for that Carryover Plan year versus the immediately preceding
year, where "forecast domestic revenue passenger enplanements" shall be as
provided in the then-current (as of the time the Carryover Plan is created)
"FAA Aviation Forecasts" issued by the U.S. Department of Transportation,
Federal Aviation Administration, Office of Aviation Policy and Plans.
"Financial Assistance" means the provision by GI-Inc, and at GI-Inc's expense,
to any one or more of (i) the Assigned Subscribers, (ii) CTMS Customers, and
(iii) CTMS Agents, of any one or more of: (a) cash payments; (b)
indemnification payments; (c) revenue sharing; (d) booking fee rebates; (e)
lease fee waivers; (f) license fee waivers; (g) productivity or
(ATTACHMENT A-3)
32
CONFIDENTIAL TREATMENT
REQUESTED BY GALILEO
INTERNATIONAL, INC.
efficiency fee waivers; (h) airline tickets or other airline, car or hotel
perquisites; (i) computer or other hardware; and (j) other benefits.
"FA Budget" means the amount of Financial Assistance established in accordance
with the provisions of Section 3 of Appendix II and, in the event that there is
a Carryover FA Budget, means such Carryover FA Budget.
"Form Agreements" has the meaning ascribed to that term in Section 5.2 above.
"Galileo Board" means the Board of Directors of GI-Inc.
"Galileo Services" means, collectively, Reservations Services and Accounting
Services, as provided by GI-Inc in the APR, excluding CTMS Services.
"General Sales Personnel" means regular, full-time employees of US Airways who
either are in training for or are actively engaged in the sale of air
transportation on US Airways, or other persons as may be agreed by GI-Inc and
US Airways, including Administrative Support Personnel as provided above, but
excluding employees of US Airways engaged primarily in administrative or
management positions that supervise sale planning or implementation policies or
processes of US Airways.
"GI Corp Executive" has the meaning ascribed to that term in Section 3.1 above.
"GI-Inc Lead" has the meaning ascribed to that term in Section 4.2 above.
"GI-Inc Support" has the meaning ascribed to that term in Section 5.2 above.
"Guaranteed Compensation" has the meaning ascribed to that term in Section 7 of
Appendix II.
"Headquarters" means, with respect to the corporation or partnership in
question, the city or place in which that corporation or partnership maintains
its principal offices.
"HOL Flow" means, with respect to an individual NTP Subscriber, the annual
sales of air transportation revenue, as measured by ARC and BSPS, for all
locations of that NTP Subscriber.
"IATA" means the International Air Transport Association.
(ATTACHMENT A-4)
33
CONFIDENTIAL TREATMENT
REQUESTED BY GALILEO
INTERNATIONAL, INC.
"Independent Directors" means the members of the Galileo Board who are neither
nominated by an airline owner of GI-Inc or are members of the executive
management of GI-Inc.
"Interest Rate" means the mathematical average of the prevailing
dollar-denominated 30 day and 90 day London Interbank Offered Rates (LIBOR), as
reported in the Wall Street journal for a specified business day, plus 200
basis points.
"Level One Bonus" has the meaning ascribed to that term in Section 8 of
Appendix II.
"Level Two Bonus" has the meaning ascribed to that term in Section 8 of
Appendix II.
"Material Change" has the meaning ascribed to that term in Section 5 of
Appendix II.
"Multinational Accounts" means those Excluded Subscribers listed under "(A)
Multinational Accounts" on Exhibit B hereto.
"Negotiation Range" has the meaning ascribed to that term in Section 5.2 above.
"Neutral Travel Provider" means any Travel Agent that sells the products and
services of Vendors and holds itself out as a neutral source of information
regarding Vendors and their services or products.
"New Service" has the meaning ascribed to such term in Section 5.2 above.
"Non-Competition Agreement" means the Amended and Restated Non-Competition
Agreement among GI-Inc, US Airways and USAM Corp. dated as of
, 1997.
"Non-Vendor Revenue" means all revenue received by GI-Inc from NTP Subscribers,
CTMS Customers, CTMS Agents, and other persons and including, without
limitation, lease and license payments, install/deinstall charges, variable
charges (including but not limited to charges for tickets, itineraries and
invoice documents), and backroom lease and license fees, net of discounts, but
not including Vendor Revenue.
"NTP" means Neutral Travel Provider, as defined herein.
"NTP Form Agreement" means a Form Agreement that relates to Galileo Services,
but excluding CTMS Services.
"NTP Sales Services" has the meaning ascribed to that term in Section 4.1
above.
(ATTACHMENT A-5)
34
CONFIDENTIAL TREATMENT
REQUESTED BY GALILEO
INTERNATIONAL, INC.
"NTP Subscriber" means a Neutral Travel Provider who is an existing or a
potential purchaser of Galileo Services from GI-Inc.
"Other Agent" has the meaning ascribed to that term in Section 2.4 above.
"Performance Compensation" has the meaning ascribed to that term in Section 7
of Appendix II.
"Reporting Number" means an account number issued by the Airline Reporting
Corporation or by the International Air Transport Association, or both, to an
individual or entity for the purpose of authorizing such individual or entity
to operate as a travel agency.
"Reservations Services" means the computerized display, reservation, ticketing,
or sale of the services or products of Vendors including the availability and
price thereof, as generated by GI-Inc to any person other than Vendors.
"Revenue Goal" has the meaning ascribed to that term in Section 2 of Appendix
II.
"Sales Services" means, collectively, NTP Sales Services, and CTMS Sales
Services.
"Sales Force" means, collectively, the Administrative Support Personnel and
Dedicated Support Personnel.
"Senior Review Committee" means a committee consisting of GI-Inc's President
and US Airways' Senior Vice President - North America.
"Support Services" has the meaning ascribed to that term in Section 4.4 above.
"Tech Office" means a technical support center (at times referred to
colloquially as a "TN" office) operated and staffed by GI-Inc with personnel
proficient in all technical aspects of the use by end-users of GI-Inc products
and services.
"Territorial Reassignment" has the meaning ascribed to that term in Section 2.4
above.
"Territory" means, collectively, the United States of America together with its
territories and protectorates, and the Republic of Mexico.
"Total Revenue" means the sum of Non-Vendor Revenue and Vendor Revenue, with
respect to the APR plus such revenue generated from Designated Subscribers less
such revenue generated
(ATTACHMENT A-6)
35
CONFIDENTIAL TREATMENT
REQUESTED BY GALILEO
INTERNATIONAL, INC.
from Excluded Subscribers, provided that any such revenue generated from the
location of an Excluded Subscriber in the calendar year in which such location
commences purchasing Galileo Services shall be included in the Total Revenue
only for the sales representative who was responsible for such sale of Galileo
Services.
"Training Materials" has the meaning ascribed to that term in Section 4.7.3.3
above.
"Travel Agent" means an individual or entity, that has been assigned a
Reporting Number.
"US Airways Executive" has the meaning ascribed to that term in Section 3.2
above.
"US Airways Group Products and Services" means with respect to US Airways and
any carrier that uses US Airways' airline designator code in the display of
certain designated flights (collectively, the "group carriers") the schedule,
seat availability, and price thereof of the group carriers, including, without
limitation, air and/or non-air travel packages that may include ancillary air
segments on non-group-carrier airlines.
"US Dollar" means the lawful currency of the United States of America.
"Vendor" means a vendor of travel-related services, such as an airline, hotel,
or rental car company, tour package, cruise operator, or travel insurance
company, that has purchased or subscribed for Reservations Services.
"Vendor Revenue" means all revenue received by GI-Inc from Vendors with respect
to booking fees and other service charges or fees as a result of bookings and
other transactions for which GI-Inc charges a fee to Vendors, which such
bookings and other transactions are generated by NTP Subscribers, CTMS
Customers, CTMS Agents, and other persons.
(ATTACHMENT A-7)
36
CONFIDENTIAL TREATMENT
REQUESTED BY GALILEO
INTERNATIONAL, INC.
Attachment B
Dispute Resolution Procedure
1. General Procedure.
Except as otherwise stated in the Agreement, the parties hereto shall
resolve all Disputes in accordance with this procedure:
(a) Each party shall instruct its appropriate representative to promptly
negotiate in good faith with the other party's appropriate representative
to resolve the Dispute. The GI-Inc Executive shall be the representative
of GI-Inc. The US Airways Executive shall be the representative of US
Airways.
(b) if the representatives do not resolve the Dispute within ten business
days (or such longer period as the Representatives may agree) after the
date of referral of the Dispute to them, the representative of each party
will prepare a Dispute Summary with respect to that party's position in
the Dispute. The Dispute shall be referred (by either or both of the
representatives) to the Senior Review Committee for resolution on the
basis of the Dispute Summaries prepared by each party.
(c) If the Senior Review Committee does not resolve the Dispute within ten
business days (or such longer period as that Committee may agree) from the
date of referral to it, either party may submit the Dispute to binding
arbitration in accordance with Section 2 of this Attachment.
2. Arbitration Procedure
The Arbitration Procedure shall be the "baseball" arbitration procedure
provided in Section 5.04 of the Amended and Restated Computer Services
Agreement between US Airways and GI-Inc, modified as necessary with respect to
defined terms in this Agreement.
(ATTACHMENT B-1)
37
CONFIDENTIAL TREATMENT
REQUESTED BY GALILEO
INTERNATIONAL, INC.
Exhibit A
[INTENTIONALLY OMITTED -- CONFIDENTIAL TREATMENT REQUESTED]
[TWO PAGES OMITTED]
(EXHIBIT A-1)
38
CONFIDENTIAL TREATMENT
REQUESTED BY GALILEO
INTERNATIONAL, INC.
Exhibit B
[INTENTIONALLY OMITTED -- CONFIDENTIAL TREATMENT REQUESTED]
(EXHIBIT B-1)
39
CONFIDENTIAL TREATMENT
REQUESTED BY GALILEO
INTERNATIONAL, INC.
Exhibit C
[INTENTIONALLY OMITTED -- CONFIDENTIAL TREATMENT REQUESTED]
(EXHIBIT C-1)
40
CONFIDENTIAL TREATMENT
REQUESTED BY GALILEO
INTERNATIONAL, INC.
Exhibit D
Sales Representative Reports
1) Staffing Report. A quarterly written advice of staffing levels.
2) Account Activity Reports setting forth: Gains (signed contracts/OA's);
Losses, Renewals; Changes/Updates to target lists - due on last day of
each month.
3) Redistricting Reports and Administrative Files. On GI-Inc's request,
contains account alignments and assignments.
(EXHIBIT D-1)
41
CONFIDENTIAL TREATMENT
REQUESTED BY GALILEO
INTERNATIONAL, INC.
Exhibit E
Certain Territories
[This Exhibit E is to contain a list of territories for which Galileo has
granted exclusive distribution rights for products to a third party and in
which US Airways may not sell CTMS Services so long as the exclusivity
provision(s) of Galileo's agreement with that third party is in effect.]
(EXHIBIT E-1)
42
CONFIDENTIAL TREATMENT
REQUESTED BY GALILEO
INTERNATIONAL, INC.
Schedule 1
[INTENTIONALLY OMITTED -- CONFIDENTIAL TREATMENT REQUESTED]
(Schedule 1-1)