Marketing Cooperation Agreement

MARKETING COOPERATION AGREEMENT


between


AMERICAN AIRLINES, INC


and


THE SABRE GROUP, INC.


Dated as of July 1, 1996 2
MARKETING COOPERATION AGREEMENT


TABLE OF CONTENTS


Section Page - ------- ---- 1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1


2 Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.1 Extension of Support Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1


3 Coordination of Marketing Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3.1 Marketing Liaison . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3.2 Informational Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2


4 Professional SABRE Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
4.1 Participation in other CRSs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
4.2 Level of Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
4.3 Annual Sales Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4.4 Sales Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4.5 Employee Reviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4.6 Strategic Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4.7 Initial Goods and Services Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4.8 Annual Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4.9 Quarterly Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4.10 Joint Sponsorship of Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4


5 BTS Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5.1 Participation in other Corporate Direct Systems . . . . . . . . . . . . . . . . . . . . . . . 5
5.2 Level of Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5.3 Marketing and Licensing Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5.4 American Supplied Functionality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5.5 AAdvantage Miles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6


6 SI Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
6.1 Participation in other Consumer Direct Systems . . . . . . . . . . . . . . . . . . . . . . . 6
6.2 American Supplied Functionality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
6.3 Promotional Tickets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
6.4 AAdvantage Miles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
6.5 Joint Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7


7 Market Share Information (MIDT) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8


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7.1 Source of MIDT Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
7.2 MIDT Information System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
7.3 American Processing Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9


8 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
8.1 Professional SABRE Support Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
8.2 BTS Support Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
8.3 SI Products Support Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
8.4 Payment Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
8.5 Interest on Late Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
8.6 Billing Disputes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9


9 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
9.1 Indemnification for Certain Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
9.2 Property Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
9.3 Contested Assessments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
9.4 Tax Refunds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
9.5 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
9.6 No Other Tax Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
9.7 Taxes and Dispute Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
9.8 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12


10 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
10.1 Confidential Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
10.2 Use of Confidential Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
10.3 Excluded Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
10.4 Standard of Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
10.5 Permitted Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
10.6 Required Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
10.7 Title to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
10.8 Return of Confidential Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
10.9 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13


11 Trademarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
11.1 Right to Approve Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14


12 Performance Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14


13 Dispute Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14


14 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
14.1 Termination for Cause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
14.2 Termination for Nonpayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14


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14.3 Termination for Insolvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
14.4 Nonexclusive Remedy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15


15 Indemnities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
15.1 Cross Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
15.2 Marketing Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
15.3 Infringement Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15


16 Limitation of Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15


17 Equitable Relief . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16


18 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
18.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
18.2 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
18.3 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
18.4 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
18.5 Subsequent Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
18.6 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
18.7 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
18.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
18.9 Relationship of Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
18.10 Non-Competition Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
18.11 Third-Party Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
18.12 Approvals and Similar Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
18.13 Force Majeure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
18.14 Modification and Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
18.15 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20


Attachments


Schedule A Professional SABRE Support Payments Exhibit A-1 to Schedule A Example of Calculation of Professional SABRE Support Payments Exhibit A-2 to Schedule A Current American Accounts Schedule B BTS Support Payments Schedule C SI Products Support Payments Attachment A Defined Terms Attachment B Dispute Resolution Procedures


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MARKETING COOPERATION AGREEMENT


This Marketing Cooperation Agreement is made and entered into as of July 1, 1996 by and between American Airlines, Inc. and The SABRE Group, Inc.


RECITALS


WHEREAS, STIN is an operating division of TSG that markets Professional SABRE, BTS and other Travel Distribution Systems principally to travel agencies, corporations and other businesses; and


WHEREAS, SABRE Interactive is an operating division of TSG that markets easySABRE and Travelocity and other Travel Distribution Systems principally to individual consumers; and


WHEREAS, this Agreement is ancillary to a reorganization transaction on the Effective Date under which, inter alia, the assets of STIN and SABRE Interactive were indirectly contributed by American to TSG; and


WHEREAS, before the Effective Date, American's Air Transportation Group, and its STIN and SABRE Interactive operating divisions cooperated in marketing American's travel services and Travel Distribution Systems; and


WHEREAS, TSG and American believe that there will be mutual benefit in having American continue to provide support in marketing STIN and SABRE Interactive Travel Distribution Systems to mutual customers of American and TSG; and


WHEREAS, American and TSG now desire to describe the support that American will provide in marketing STIN and SABRE Interactive Travel Distribution Systems and the compensation that TSG will pay to American in consideration for such support;


NOW, THEREFORE, in consideration of the mutual covenants set forth below, American and TSG hereby agree as follows:


1 Definitions Terms used as defined terms in this Agreement will,
unless otherwise indicated, have the meanings ascribed thereto in
Attachment A hereto.


2 Term The term of this Agreement will commence on the Effective Date
and, unless terminated earlier as provided herein, will expire when
the last Support Period expires or terminates.


2.1 Extension of Support Periods Upon any scheduled expiration of
any Support Period, including any Support Period that may have
been previously extended under this Section 2.1, that Support
Period will be automatically extended for twelve (12)


1 6
months, unless at least sixty (60) days prior to such
scheduled expiration, either Party provides Notice to the
other Party that the notifying Party does not desire to extend
that Support Period.


3 Coordination of Marketing Support


3.1 Marketing Liaison American will appoint an individual from
within its Passenger Sales organization who, during the Term,
will be dedicated to supporting TSG's marketing organization
and coordinating the management of this Agreement on behalf of
American. Such individual will be responsible for: (a)
managing the ongoing relationships and promotional programs
between American's Passenger Sales organization and TSG's
field sales organizations; (b) developing an annual sales
plan, in conjunction with American's Passenger Sales and
Distribution Planning organizations, as it relates to
American's marketing functions for TSG; (c) planning and
executing quarterly executive strategy meetings between the
American and TSG executive sales team; (d) coordinating TSG's
presence and participation in American's annual Executive
Business Council event; (e) identifying, planning and
executing joint promotional opportunities, including employee
recognition plans; (f) coordinating American's implementation
of its sales plan for TSG and American's execution of TSG's
tactical plans related to travel agency, corporate and
consumer distribution.


3.2 Informational Meetings Prior to October 1, 1996, each of TSG
and American will provide its sales organization with an
overview of this Agreement and the processes by which it will
be managed by its sales organization.


4 Professional SABRE Support In support of TSG's marketing of
Professional SABRE, each of American and TSG will provide during the
Professional SABRE Support Period the marketing and promotional
support described in this Section 4 and specified as its obligation.


4.1 Participation in other CRSs American will not provide to any
CRS other than SABRE any of the marketing support described in
Section 4. Nothing in this Agreement will prevent American
from: (i) having its products and services displayed or listed
in any CRS, (ii) authorizing any CRS to use American's
trademarks and tradenames in connection with advertising
American's participation in such CRS; and (iii) endorsing
another CRS, provided, however, that American may not endorse
such CRS as being preferred over SABRE or having qualities
superior to SABRE.


4.2 Level of Support American will provide marketing and
promotional support to Professional SABRE that is at least at
the same level and quality as American's Passenger Sales
organization provided to Professional SABRE during the twelve
months prior to the Effective Date. During June of each
Contract Year, the Representatives of each Party shall meet
and the Parties shall negotiate regarding methods to be
employed during the next Contract Year for incentivizing
Corporate


2 7
Customers to make their Bookings through SABRE. If the
Parties fail to agree upon such methods, then such failure
shall constitute a Dispute that shall be resolved through the
Dispute Resolution Procedures and, pending such resolution,
the Parties shall continue to employ the methods upon which
they most recently agreed.


4.3 Annual Sales Plan. In June of each Contract Year, American
will prepare and submit to TSG its annual sales plan for the
marketing of Professional SABRE for the following Contract
Year. American and TSG shall thereafter consult on that sales
plan.


4.4 Sales Training In each Contract Year after the initial
Contract Year, American will provide, by itself and/or jointly
with TSG, and will cause each of its Passenger Sales
organization sales personnel to receive, a minimum of eight
hours of training relating to American's obligations to market
Professional SABRE and the TSG products and services related
to Professional SABRE. American may conduct such training in
conjunction with other educational events or may offer such
training through self-study, multi-media or other automated
education and training methodology. Such training will
include updates on new TSG products, services, strategies and
customer incentives.


4.5 Employee Reviews American will tell each of its Passenger
Sales organization sales personnel during his/her performance
reviews that part of his/her job function is to market
Professional SABRE pursuant to this Agreement.


4.6 [CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE
COMMISSION]


4.6.1 [CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY
WITH THE COMMISSION]


4.6.2 [CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY
WITH THE COMMISSION]


4.6.3 TSG may purchase from American additional promotional
items of the type that are generally used by American
for promotional purposes. [CONFIDENTIAL PORTION
OMITTED AND FILED SEPARATELY WITH THE COMMISSION]


4.6.4 Except as permitted by Section 4.6.2, promotional
goods and services obtained by TSG under this Section
4.6 [CONFIDENTIAL PORTION OMITTED AND FILED
SEPARATELY WITH THE COMMISSION] shall not be used by
TSG's employees or by the Strategic Customers for
TSG's other business purposes, such as attending TSG
training sessions.


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4.7 Initial Goods and Services Credit On September 30, 1996,
American will provide to TSG a credit usable towards TSG's
purchase from American of marketing and promotional goods and
services [CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY
WITH THE COMMISSION] TSG may in any of such Contract Years
apply a greater or lesser amount of such credit.


4.8 Annual Credit At the end of the each Contract Year, American
will issue to TSG a credit [CONFIDENTIAL PORTION OMITTED AND
FILED SEPARATELY WITH THE COMMISSION] which TSG may, not
withstanding paragraph 2(c) of Schedule A, apply in TSG's
discretion against the amounts owed to American under Section
8.1 of this Agreement.


4.9 Quarterly Reporting At the end of each calendar quarter, and
at the end of each calendar year, American will advise TSG of
the Value of the promotional goods and services provided by
American during that period.


4.10 Joint Sponsorship of Events American and TSG will jointly
participate in and sponsor various events, functions and
activities, including, but not limited to: (i) American and
TSG's annual global sales events, (ii) American and TSG's
regional conferences, (iii) promotional events, functions and
activities for American and TSG top accounts (e.g., American's
Executive Business Council, National Accounts functions, TSG's
top account functions, etc.), (iv) various American and TSG
local customer events, functions and activities, (v) special
event tickets for Strategic Customer entertainment (e.g., NCAA
Basketball Final Four, World Cup, etc.), (vi) sponsorship of
recognition or familiarization trips for key customers
(American will provide transportation of key customers and
other items at the discretion of the Managing Director of its
Passenger Sales organization), (vii) TSG sponsorship,
[CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE
COMMISSION] of recognition events, functions and activities
for American's top Passenger Sales employees. Joint
participation and sponsorship in such events, functions and
activities includes participation in the events, providing
financial support, training, promotional materials, and other
goods and services as mutually agreed from time to time.


4.10.1 American and TSG will each budget [CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE
COMMISSION] during each Contract Year to fund its
participation and events, functions and activities of
the types described in Section 4.10. American and
TSG will agree as part of their annual budgeting
processes on the types of events, functions and
activities they will jointly sponsor and in which
they will jointly participate, and the level of
funding to be allocated to each events, functions and
activities. If American and TSG are unable to agree
on the events, functions and activities that they
will jointly fund during a Contract Year, then


4 9
each Party will provide to the other Party
[CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY
WITH THE COMMISSION] funding for events, functions
and activities chosen by the other Party,
[CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY
WITH THE COMMISSION]


5 BTS Support In support of TSG's marketing of BTS, each of American
and TSG will provide during the BTS Support Period the marketing and
promotional support described in this Section 5 and specified as its
obligation.


5.1 Participation in other Corporate Direct Systems American will
not market, endorse or promote any Corporate Direct System
other than BTS. American will not provide to any other
Corporate Direct System any of the marketing support described
in Section 5. Nothing in this Agreement will prevent
American from: (i) having its products and services displayed
or listed in any Corporate Direct System, and (ii) authorizing
any Corporate Direct System to use American's trademarks and
tradenames in connection with advertising American's
participation in such Corporate Direct System.


5.2 Level of Support During November of each Contract Year, the
Representatives of each Party shall meet and the Parties shall
negotiate regarding methods to be employed during the next
Contract Year for incentivizing Corporate Customers to make
their Bookings through SABRE using BTS. If the Parties fail
to agree upon such methods, then such failure shall
consti ...