CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE SYMBOL "[*]" HAS BEEN INSERTED IN PLACE OF THE PORTIONS SO OMITTED.
MARKETING COOPERATION
AND SALES REPRESENTATION AGREEMENT
US AIRWAYS, INC.
GALILEO INTERNATIONAL, INC.
Dated as of __________________ __, 1997
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
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
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
Table of Attachments
Appendix I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Certain Terms
Appendix II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Budgets and Compensation
Attachment A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Defined Terms
Attachment B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dispute Resolution Procedure
Exhibit A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Area of Primary Sales Responsibility
Exhibit B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . List of Excluded Subscribers
Exhibit C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Designated Subscribers
Exhibit D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sales Representative Reports
Exhibit E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Certain Territories
Schedule 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Certain Information Relating to 1997
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 Suite 400, 9700 West Higgins Road, Rosemont, Illinois, 60018, and US AIRWAYS, INC., a Delaware corporation ("US Airways") with offices at 2345 Crystal Drive, Arlington, Virginia 22227.
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:
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
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.
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.
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 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 be 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 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
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