<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-Q
<TABLE>
<C> <S>
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
</TABLE>
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000.
<TABLE>
<C> <S>
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
</TABLE>
FOR THE TRANSITION PERIOD FROM ______________ TO ______________
COMMISSION FILE NUMBER 000-30634.
------------------------
TRAVELOCITY.COM INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 75-2855109
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
4200 BUCKINGHAM MD 1400 76155
FORT WORTH, TEXAS (Zip Code)
(Address of principal executive
offices)
</TABLE>
Registrant's telephone number, including area code (817) 963-2923
NOT APPLICABLE
(Former name, former address and former fiscal year, if changed since last
report)
------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter periods that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes / / No /X/
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, $.001 par value--16,072,289 as of May 10, 2000
- --------------------------------------------------------------------------------
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<PAGE>
INDEX
TRAVELOCITY.COM INC.
<TABLE>
<S> <C> <C>
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements........................................ 3
Consolidated Balance Sheets--March 31, 2000 and
December 31, 1999........................................... 3
Consolidated Statements of Operations--Three months ended
March 31, 2000 and 1999..................................... 4
Consolidated Statement of Stockholders' Equity--Three months
ended March 31, 2000........................................ 5
Consolidated Statements of Cash Flows--Three months ended
March 31, 2000 and 1999..................................... 6
Notes to Consolidated Financial Statements.................. 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................... 15
Item 3. Quantitative and Qualitative Disclosures About Market
Risk........................................................ 24
PART II: OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K............................ 25
SIGNATURE........................................................................... 26
</TABLE>
2
<PAGE>
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TRAVELOCITY.COM INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED) (IN THOUSANDS)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
2000 1999
--------- ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash...................................................... $ 907 $ --
Investments............................................... 70,583 --
Accounts receivable, net of allowance for doubtful
accounts of $249 at March 31, 2000...................... 10,236 3,259
Receivable from affiliates, net........................... 297 --
Prepaid expenses and other current assets................. 43,583 195
-------- --------
Total current assets.................................... 125,606 3,454
PROPERTY AND EQUIPMENT
Buildings and leasehold improvements...................... 1,710 726
Furniture, fixtures and equipment......................... 2,035 995
Computer equipment........................................ 16,217 1,342
-------- --------
19,962 3,063
Less accumulated depreciation and amortization............ (5,930) (1,118)
-------- --------
Total property and equipment............................ 14,032 1,945
Intangible assets, net of accumulated amortization of $5,321
and $4,810 at March 31, 2000 and December 31, 1999
respectively.............................................. 3,679 4,190
Intangible assets and goodwill, net of accumulated
amortization of $5,714 at March 31, 2000.................. 259,575 --
Marketable securities-long term............................. 12,498 --
Other assets................................................ 4,328 50
-------- --------
TOTAL ASSETS............................................ $419,718 $ 9,639
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable.......................................... $ 14,544 $ 7,114
Accrued compensation and related benefits................. 3,874 676
Other accrued liabilities................................. 9,216 983
-------- --------
Total current liabilities............................... 27,634 8,773
Payable to affiliates....................................... -- 68,884
Other liabilities........................................... 841 544
Sabre's interest in partnership............................. 54,288 --
STOCKHOLDERS' EQUITY (DEFICIT)
Series A Preferred Stock, $0.001 par value; 40,000 shares
authorized; 33,000 shares issued and outstanding........ 33 --
Class A Common Stock, $0.001 par value; 135,000 and 3,000
shares authorized, 15,793 and 3,000 shares issued and
outstanding at March 31, 2000 and December 31, 1999,
respectively............................................ 16 3
Class B Common Stock, $.001 par value; 75,000 and 1,500
shares authorized at March 31, 2000 and December 31,
1999, respectively; no shares issued.................... -- --
Contributions from affiliates............................. -- 7,841
Stock subscription receivable from affiliate.............. -- (3)
Additional paid-in capital................................ 420,898 --
Equity options outstanding................................ 1,248 --
Unrealized gains on investments........................... 234 --
Accumulated deficit....................................... (85,474) (76,403)
-------- --------
Total stockholders' equity (deficit).................... 336,955 (68,562)
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY.............. $419,718 $ 9,639
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
TRAVELOCITY.COM INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-------------------
2000 1999
-------- --------
<S> <C> <C>
REVENUES
Transaction............................................... $ 22,924 $ 9,181
Advertising............................................... 3,403 1,470
Other..................................................... 696 77
-------- -------
Total revenues.......................................... 27,023 10,728
Cost of revenues.......................................... 12,144 8,365
-------- -------
Gross profit.............................................. 14,879 2,363
OPERATING EXPENSES
Selling and marketing..................................... 16,674 5,158
Technology and development................................ 3,988 2,285
General and administrative................................ 3,494 1,040
Expenses related to integration of Preview Travel......... 526 --
Stock compensation........................................ 1,546 --
Amortization of intangible assets and goodwill from the
Merger.................................................. 5,714 --
-------- -------
Total operating expenses................................ 31,942 8,483
-------- -------
OPERATING LOSS.............................................. (17,063) (6,120)
OTHER INCOME (EXPENSE)
Interest income........................................... 334 --
Provision for income taxes.................................. (6) --
-------- -------
Loss before Sabre's interest in partnership............... (16,735) (6,120)
Sabre's interest in partnership............................. 7,664 --
-------- -------
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS................ $ (9,071) $(6,120)
======== =======
Loss per common share, basic and diluted.................. $ (.32)
========
Weighted average common shares used in loss per common
share computation:
Basic................................................... 28,449
========
Diluted................................................. 28,449
========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
TRAVELOCITY.COM INC.
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
THREE MONTHS ENDED MARCH 31, 2000
(UNAUDITED) (IN THOUSANDS)
<TABLE>
<CAPTION>
SERIES A CLASS A CLASS B CONTRIBUTIONS STOCK ADDITIONAL EQUITY
PREFERRED COMMON COMMON FROM SUBSCRIPTION PAID-IN OPTIONS
STOCK STOCK STOCK AFFILIATES RECEIVABLE CAPITAL OUTSTANDING
--------- -------- -------- ------------- ------------ ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1999......... $-- $ 3 $-- $ 7,841 $(3) $ -- $ --
Net loss............................. -- -- -- -- -- -- --
Contribution of the assets and
liabilities of the Travelocity
Division by Sabre.................. -- -- -- (7,841) 3 80,721 --
Conversion by Sabre of 3,000 Class A
common shares to 33,000 Series A
preferred shares................... 33 (3) -- -- -- 8,619 --
Issuance of 14,378 Class A common
shares in connection with the
Merger with Preview Travel, Inc.... -- 14 -- -- -- 276,749 --
Issuance of 1,350 Class A common
shares for cash.................... -- 1 -- -- -- 53,999 --
Issuance of 65 Class A common shares
pursuant to stock option,
restricted stock incentive and
stock purchase plans............... -- 1 -- -- -- 527 --
Options issued to consultants by
Preview Travel, Inc. and assumed in
the Merger......................... -- -- -- -- -- 283 1,248
Unrealized gains on investments...... -- -- -- -- -- -- --
--- --- --- ------- --- -------- ------
Balance at March 31, 2000............ $33 $16 $-- $ -- $-- $420,898 $1,248
=== === === ======= === ======== ======
<CAPTION>
UNREALIZED
GAIN ON ACCUMULATED
INVESTMENTS DEFICIT TOTAL
----------- ----------- --------
<S> <C> <C> <C>
Balance at December 31, 1999......... $ -- $(76,403) $(68,562)
Net loss............................. -- (9,071) (9,071)
Contribution of the assets and
liabilities of the Travelocity
Division by Sabre.................. -- -- 72,883
Conversion by Sabre of 3,000 Class A
common shares to 33,000 Series A
preferred shares................... -- -- 8,649
Issuance of 14,378 Class A common
shares in connection with the
Merger with Preview Travel, Inc.... -- -- 276,763
Issuance of 1,350 Class A common
shares for cash.................... -- -- 54,000
Issuance of 65 Class A common shares
pursuant to stock option,
restricted stock incentive and
stock purchase plans............... -- -- 528
Options issued to consultants by
Preview Travel, Inc. and assumed in
the Merger......................... -- -- 1,531
Unrealized gains on investments...... 234 -- 234
---- -------- --------
Balance at March 31, 2000............ $234 $(85,474) $336,955
==== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
TRAVELOCITY.COM INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED) (IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-------------------
2000 1999
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES
Net loss.................................................... $ (9,071) $(6,120)
Adjustments to reconcile net loss to cash used for operating
activities
Amortization of intangible assets and goodwill from the
Merger.................................................. 5,714 --
Other depreciation and amortization....................... 1,802 699
Stock compensation........................................ 1,546 --
Changes in operating assets and liabilities:
Accounts receivable and other assets.................... (4,638) (368)
Accounts payable, accrued and other liabilities......... 6,379 6,137
Prepayment to strategic distribution partner............ (40,000) --
Payable to affiliates................................... (325) (1,402)
-------- -------
Cash used for operating activities........................ (38,593) (1,054)
INVESTING ACTIVITIES
Cash acquired from Preview Travel net of direct acquisition
costs..................................................... 1,244 --
Additions to property and equipment......................... (1,555) (142)
Net increase in investments................................. (63,378) --
Other investing activities, net............................. (3,491) --
-------- -------
Cash used for investing activities........................ (67,180) (142)
FINANCING ACTIVITIES
Cash advances from Sabre affiliates......................... -- 1,196
Contribution of cash by Sabre in connection with the Merger
with Preview Travel....................................... 52,680 --
Proceeds from issuance of common stock...................... 54,000 --
-------- -------
Cash provided by financing activities..................... 106,680 1,196
-------- -------
Increase in cash and cash equivalents....................... 907 --
Cash at beginning of the period............................. -- --
-------- -------
Cash at end of the period................................... $ 907 $ --
======== =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
TRAVELOCITY.COM INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. GENERAL INFORMATION
Travelocity.com(SM) Inc. ("Travelocity.com" or the "Company"), is a leading
provider of online leisure and business travel services. Incorporated on
September 30, 1999 as a wholly-owned subsidiary of Sabre-Registered Trademark-
Holdings Corporation ("Sabre"), the Company is a holding company whose sole
assets are units of Travelocity.com LP (the "Partnership"), a limited
partnership, formed on September 30, 1999. Effective upon the consummation of a
merger (the "Merger") with Preview Travel, Inc. ("Preview Travel") on March 7,
2000, the Partnership became the owner and operator of the combined assets and
liabilities of the former Travelocity-Registered Trademark- business unit of
Sabre (the "Travelocity Division") and Preview Travel.
The Company, through the Partnership, is engaged in consumer-direct travel
distribution over the Internet. Through its Travelocity.com online travel Web
site, which is accessible free of charge through the Internet and online
services, leisure and business travelers can compare prices, make travel
reservations and obtain destination information. The Company features booking
and purchase capability for airlines, car rental and hotel companies, cruises
and vacation packages, and offers access to a database of information regarding
specific destinations and other information of interest to travelers. The
Internet address for the Company's main Web site is WWW.TRAVELOCITY.COM.
The Company and Sabre, directly and indirectly through wholly-owned
subsidiaries, are the partners in the Partnership. The Company holds an
approximate 38% equity interest in the Partnership, with the remaining 62%
equity interest held by Sabre. Sabre, through ownership of shares of the
Company's Class A Common Stock and Series A Preferred Stock, also holds an
approximate 22% equity interest in the Company. Sabre beneficially holds an
approximate 70% equity interest in the Partnership--that is:
- a 62% equity interest held directly, plus
- an 8% equity interest held through the Company--that is, 22% (Sabre's
equity interest in the Company) of 38% (the Company's equity interest in
the Partnership).
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION.--The accompanying consolidated financial statements
include the accounts of the Company after elimination of all significant
intercompany balances and transactions. The financial statements have been
prepared using Sabre's historical basis in the assets and liabilities of the
Travelocity Division. The results of operations of Preview Travel have been
included in the accompanying financial statements beginning with the date of the
Merger. The financial statements include the results of operations, financial
condition and cash flows of the Company as a component of Sabre for periods
prior to the Merger.
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, these financial statements
contain all adjustments, consisting of normal recurring accruals, necessary to
present fairly the financial position, results of operations and cash flows for
the periods indicated. The preparation of financial statements in accordance
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts
7
<PAGE>
TRAVELOCITY.COM INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
reported in the financial statements and accompanying notes. Actual results may
differ from these estimates. The Company's quarterly financial data should be
read in conjunction with the consolidated financial statements and notes of the
Company for the year ended December 31, 1999 included in the Company's Annual
Report on Form 10-K.
Sabre has a majority equity interest in the Partnership and the general
presumption would be for Sabre to consolidate the Partnership into its financial
statements. Although the Company does not have a majority equity interest in the
Partnership, it controls the Partnership through the Partnership's board of
directors since it has the right to appoint a majority of the directors.
Furthermore, although Travelocity Holdings, Inc. ("Travelocity Holdings"), a
wholly-owned subsidiary of Sabre, manages the day to day operations of the
Partnership pursuant to a management services agreement, it is subject to the
direction and oversight of the Partnership's board of directors. As such, the
Partnership's board of directors has the unilateral ability to control the
management of the Partnership, thereby enabling the Company to consolidate the
Partnership in its separate financial statements.
The Company's consolidated financial statements include the financial
statements of the Company and the Partnership, with Sabre's 62% interest in the
Partnership's results of operations presented as a single line item, "Sabre's
interest in partnership," in the Company's statement of operations. The
Company's consolidated results of operations and financial position consist of
the total of 38% of the Partnership's results and 100% of the Company's results.
CASH AND CASH EQUIVALENTS--Effective with the Merger, the Company began to
maintain its own cash and cash equivalents. Short-term investments, without
regard to remaining maturity at acquisition, are not considered cash equivalents
for purposes of the statement of cash flows.
Prior to the Merger, the Company did not maintain cash or cash equivalents.
Sabre maintained all cash balances, charging or crediting the Company through
intercompany accounts upon the recording of certain transactions, including the
collection of accounts receivable and the purchases of goods and services.
INVESTMENTS--Effective with the Merger, the Company began to administer its
own investment portfolio. The Company maintains an investment policy which is
intended to ensure the safety and preservation of invested funds by limiting
default risk, market risk and reinvestment risk. The Company does not currently
use derivative financial instruments to manage or reduce market risk. The
Company's investment policy is to invest in high credit quality securities such
as debt instruments of the United States government and its agencies and high
quality corporate issuers, as well as money market funds. Investments include
only marketable securities with active secondary or resale markets to ensure
portfolio liquidity.
All investments are accounted for in accordance with Statement of Financial
Accounting Standards No. 115, ACCOUNTING FOR CERTAIN INVESTMENTS IN DEBT AND
EQUITY SECURITIES. Marketable securities are classified as available-for-sale
securities and are carried at fair value, based on quoted market prices, with
the unrealized gains or losses, net of tax, reported in stockholders' equity.
The amortized cost of debt securities is adjusted for amortization of premiums
and accretion of discounts to maturity, both of which are included in interest
income.
8
<PAGE>
TRAVELOCITY.COM INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
All investments with original maturities greater than 90 days and current
maturities less than twelve months from the balance sheet date are classified as
current assets. Investments with maturities of twelve months or more from the
balance sheet date are classified as marketable securities--long term.
RECENT ACCOUNTING PRONOUNCEMENTS--The Financial Accounting Standards Board
(FASB) has recently issued Interpretation No. 44, ACCOUNTING FOR CERTAIN
TRANSACTIONS INVOLVING STOCK COMPENSATION("FIN 44"), an interpretation of
Accounting Principles Board Opinion No. 25, ACCOUNTING FOR STOCK ISSUED TO
EMPLOYEES ("APB 25"). FIN 44 will result in significant changes to current
practice regarding the accounting for stock compensation arrangements. It will
not change APB 25's intrinsic value method, under which compensation expense is
generally not recognized for grants of stock options to employees with an
exercise price equal to the market price of the stock at the date of grant, but
will narrow its application.
FIN 44 contains provisions whereby employees are defined as they are under
common law for purposes of applying APB 25. As a result, APB 25 would not apply
in the separate financial statements of a subsidiary for equity awards made by
the subsidiary to employees of the parent company, as these employees would not
be considered to be employees of the grantor. Grants of equity awards made to
such employees will be required to be recorded at fair value and recognized as
expense over the vesting period in the separate financial statements of the
subsidiary. Such grants may be required to be revalued to fair value at each
periodic reporting date until vesting is complete, with a cumulative catch up
adjustment recognized for any changes in fair value.
FIN 44 will require that the Company recognize expense at fair value for
grants of equity awards made subsequent to December 15, 1998 to employees of
Travelocity Holdings performing services for the Partnership under a management
services agreement for periods beginning after July 1, 2000. The Company is
currently evaluating the effect of FIN 44 on its earnings and financial
position.
3. MERGER WITH PREVIEW TRAVEL AND RELATED TRANSACTIONS
MERGER AND RELATED TRANSACTIONS--Immediately prior to the consummation of
the Merger, Sabre and TSGL Holdings, Inc. ("TSGL Holdings"), a wholly-owned
subsidiary of Sabre, contributed the assets and liabilities of the Travelocity
Division and $52.7 million in cash to the Partnership and received partnership
units in exchange. Sabre then contributed a portion of its partnership units to
Travelocity Holdings, which in turn contributed a portion of those partnership
units to the Company such that these entities became partners in the
Partnership. Additionally, the Company exercised an option to cause Travelocity
Holdings to invest an additional $50.0 million in exchange for approximately
1.2 million shares of Class A Common Stock. The Company then contributed these
funds to the Partnership. As a result, immediately prior to the Merger, the
Partnership owned all of the assets and liabilities of the Travelocity Division
and $102.7 million in cash. Sabre owned the Partnership through a combination of
its direct interest, its interest held through Travelocity Holdings and TSGL
Holdings, and its interest held through the Company.
On March 7, 2000, the Merger with Preview Travel was closed. In the Merger,
Preview Travel was merged with and into the Company, with the Company being the
surviving corporation. Each share of Preview Travel common stock was converted
into one share of the Company's Class A Common Stock.
9
<PAGE>
TRAVELOCITY.COM INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
3. MERGER WITH PREVIEW TRAVEL AND RELATED TRANSACTIONS (CONTINUED)
Approximately 14.4 million shares of the Company's common stock were issued to
former Preview Travel stockholders in the Merger. Additionally, Yahoo! Inc.
("Yahoo!") made a minority investment in the Company on the date of the Merger.
The shares of the Company's common stock beneficially held by Travelocity
Holdings at December 31, 1999 were converted in the Merger into 33.0 million
shares of Series A Preferred Stock. The preferred stock receives dividends and
distributions on a basis as if it were converted into common stock. Sabre has
the right to exchange one Partnership unit and one share of the Company's
Series A Preferred Stock, which it holds, either directly or indirectly through
its wholly-owned subsidiary, for one share of the Company's common stock at any
time. If Sabre chooses to convert all partnership units and preferred stock
which it holds, it would receive 33.0 million shares of common stock. If this
were to occur, then the Company would have approximately 48.7 million common
stock equivalent shares outstanding, of which former Preview Travel stockholders
and Yahoo! would own approximately 30% and Sabre would own approximately 70%.
Immediately after the Merger, the Company contributed all of the Preview
Travel assets and liabilities to the Partnership. Additionally, the Company
contributed the proceeds received in exchange for Class A common shares issued
to Yahoo!. The $50.0 million from Sabre was contributed to the Partnership prior
to the Merger. In exchange, the Company received partnership units representing
in total an approximate 38% equity interest in the Partnership. As a result, the
Company became a holding company whose sole asset is its interest in the
Partnership.
As a result of the Merger and Partnership contributions, the Preview Travel
stockholders became the Company's public stockholders and received shares of
common stock in the Merger that equates to approximately a 30% equity interest
in the combined assets and liabilities of the Travelocity Division and Preview
Travel held by the Partnership--that is, 78% (their equity interest in the
Company) of the 38% equity interest in the Partnership held by the Company.
Sabre beneficially holds an approximate 70% equity interest in the
Partnership--that is:
- a 62% equity interest held directly or through its affiliates, plus
- an 8% equity interest held through the Company--that is, 22% (its equity
interest in the Company) of 38% (the Company's equity interest in the
Partnership).
The cost of the acquisition of Preview Travel was approximately
$286.2 million, measured as the fair market value of Preview Travel's
outstanding common stock on October 1, 1999, the last trading day before the
Merger agreement was announced, plus the value of the vested options of Preview
Travel assumed by the Company in the Merger, and other costs directly related to
the Merger as follows (in thousands):
<TABLE>
<S> <C>
Fair market value of Preview Travel's common stock.......... $253,395
Fair market value of vested Preview Travel stock options.... 23,368
Investment advisor, legal, accounting and other professional
fees and expenses......................................... 8,875
Other costs directly related to the Merger.................. 561
--------
Total....................................................... $286,199
========
</TABLE>
10
<PAGE>
TRAVELOCITY.COM INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
3. MERGER WITH PREVIEW TRAVEL AND RELATED TRANSACTIONS (CONTINUED)
The costs of the acquisition have been allocated to the respective assets
and liabilities acquired, with the remainder recorded as goodwill, based on
preliminary estimates of fair values as follows (in thousands):
<TABLE>
<S> <C>
Working capital............................................. $ 4,212
Property and equipment...................................... 5,148
Marketable securities-long term............................. 12,262
Noncurrent liabilities...................................... (624)
Intangible assets and goodwill.............................. 265,201
--------
Total....................................................... $286,199
========
</TABLE>
The estimates of fair value were determined by the Company's management
based on information furnished by management of Preview Travel and preliminary
independent valuations of the net assets acquired, including intangible assets.
The goodwill recorded in the Merger is being amortized over a three-year
period.
PRO FORMA STATEMENT OF OPERATIONS DATA--The unaudited pro forma statement of
operations data in the table below presents the effects of the Merger, the
contribution agreements and certain other agreements entered into at the
effective time of the Merger by the Partnership and Sabre as if these
transactions occurred on January 1, 1999. These agreements are an access
agreement, a technology services agreement, an intellectual property agreement,
a facilities agreement and an administrative services agreement. Amounts shown
below are in thousands, except per share amounts.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-------------------
2000 1999
-------- --------
<S> <C> <C>
Total revenues.......................................... $ 35,695 $ 16,113
Net loss before Sabre's interest........................ (40,745) (31,694)
Sabre's interest in partnership......................... (25,262) (19,650)
-------- --------
Loss attributable to common shareholders................ $(15,483) $(12,044)
======== ========
Basic and diluted loss per share........................ $ (1.06) $ (0.88)
======== ========
Weighted average shares outstanding..................... 14,658 13,743
======== ========
</TABLE>
TRAVELOCITY.COM PARTNERSHIP--Travelocity.com LP is a Delaware limited
partnership. Applicable Delaware law and the Partnership agreement govern its
operations. The Partnership is governed by a nine member board of directors.
Sabre has the right to elect four directors, and the Company has the right to
elect the remaining five directors of the Partnership.
The partners in the Partnership are:
- The Company and its wholly-owned subsidiary, Travelocity.com LP
Sub, Inc., and
- Sabre and its wholly-owned subsidiaries Travelocity Holdings and TSGL
Holding (the "Sabre Partners").
11
<PAGE>
TRAVELOCITY.COM INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
3. MERGER WITH PREVIEW TRAVEL AND RELATED TRANSACTIONS (CONTINUED)
The general partners are the Company and Travelocity Holdings. The other
partners are limited partners.
PARTNERSHIP UNITS EQUIVALENT TO TRAVELOCITY.COM COMMON STOCK--One
partnership unit is equivalent to one share of the Company's common stock. For
this reason, when the Company issues new common shares, the Partnership will
issue additional partnership units to the Company, and when the Company acquires
its own common shares, it will return the same number of partnership units to
the Partnership.
To enable the Sabre Partners to maintain their proportionate interest in the
Partnership, Travelocity Holdings will have the right to contribute cash or
property to the Partnership in exchange for partnership units when the
Partnership issues additional partnership units to the Company because the
Company is issuing new shares of common stock. However, the Sabre Partners will
not have this right when the Company issues its common stock to employees upon
the exercise of stock options. The Sabre Partners' equity interest in the
Partnership, and the equity interest of the Company's public stockholders, will
be diluted in that case.
SPECIAL MAJORITY APPROVAL RIGHTS--As long as the Sabre Partners own 30% or
more of the partnership units, a special majority of the Partnership's board,
including at least one director designated by the Company and one director
designated by Travelocity Holdings, must approve any action to admit a new
partner; to consolidate or merge the Partnership with another entity; to
liquidate or dissolve the Partnership, initiate bankruptcy proceedings, or
dispose of substantially all of the Partnership's assets; to enter into any line
of business other than providing consumer-direct travel content, travel
reservation services and related goods and services through Internet Web sites;
to issue, directly or indirectly, any partnership units other than as the
Partnership agreement expressly permits; or to make distributions of cash or
property to partners, or acquire partnership interests, except as the
Partnership agreement expressly permits.
4. COMPREHENSIVE INCOME
Comprehensive income is defined as the change in equity (net assets) of a
business enterprise during a period from transactions and other events and
circumstances from nonowner sources. It includes all changes in equity during a
period except those resulting from investments by owners and distributions to
owners. During the three months ended March 31, 2000, the only component of
comprehensive loss other than the net loss was the unrealized gains on
marketable securities of approximately $234,000.
5. EARNINGS PER SHARE
Net loss per common share is accounted for in accordance with Statement of
Financial Accounting Standards No. 128, EARNINGS PER SHARE, which requires
companies to present basic earnings per share which is calculated based on the
weighted average number of common shares outstanding during the period, and if
applicable, diluted earnings per share which is calculated based on the weighted
average common shares outstanding during the period plus any dilutive common
equivalent shares outstanding. During the first quarter of 2000, employee stock
options to purchase approximately 4.6 million shares of the Company's common
stock and the effect of conversion of the 33.0 million Series A preferred
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TRAVELOCITY.COM INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
5. EARNINGS PER SHARE (CONTINUED)
shares held by Sabre were excluded from the computation of diluted earnings per
share as their effect would have been antidilutive.
The weighted average shares used in the calculation of basic earnings per
share for the three months ended March 31, 2000 have been calculated as if the
33.0 million shares of preferred stock held by Sabre were outstanding as common
shares from January 1, 2000 through the Merger with Preview Travel on March 7,
2000. Subsequent to the Merger, these shares are excluded from the weighted
average shares calculation. The common shares issued to former stockholders of
Preview Travel in connection with the Merger are included in the weighted
average share calculation from the date of issuance through March 31, 2000.
6. SIGNIFICANT TRANSACTIONS AND RELATIONSHIPS
AMERICA ONLINE--On October 2, 1999, Travelocity Holdings entered into an
Interactive Services and Exclusive Channel Agreement (the "AOL Agreement") with
America Online, Inc. ("AOL"), which became effective upon consummation of the
Merger with Preview Travel and was assigned to the Partnership. The AOL
Agreement provides, among other things, that the Travelocity.com site will be
the exclusive reservations engine for AOL's Internet properties and that
payments of up to $200 million will be made to AOL and advertising revenue and
commissions will be shared over the five year term of the agreement. In
connection with this agreement, the Company paid $40.0 million to AOL upon the
closing of the Merger with Preview Travel on March 7, 2000. The revenue sharing
agreement is expected to be effective during the second quarter of 2000.
7. RELATED PARTY TRANSACTIONS
REVENUES FROM AFFILIATES--Revenues from Sabre affiliates were approximately
$5.1 million for the three months ended March 31, 2000.
PAYABLES TO AFFILIATES--Amounts expensed for services provided by Sabre were
approximately $7.2 million and $7.9 million for the three months ended
March 31, 2000 and 1999, respectively. Effective with the Merger, amounts due to
Sabre were contributed to the Company along with the assets and liabilities of
the Travelocity Division. All outstanding amounts payable to Sabre were
capitalized to additional paid-in-capital.
8. STOCK OPTIONS AND AWARDS
Sabre employees who became employees of the Partnership or Travelocity
Holdings upon closing of the Merger were given the option to convert unvested
Sabre options to options to acquire shares of the Company's Class A Common
Stock. Approximately 256,000 unvested options were converted into 253,000
options to acquire the Company's Class A Common Stock, based upon a price of the
Sabre Class A Common Stock of $42.43 per share and a price of the Company's
Class A Common Stock of $42.90 per share. The conversion of the Sabre options to
options to acquire the Company's stock resulted in a new measurement date for
the options. As a result of the conversion, the Partnership will recognize stock
compensation expense of approximately $3.0 million which will be amortized over
the vesting periods of the related option.
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TRAVELOCITY.COM INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
8. STOCK OPTIONS AND AWARDS (CONTINUED)
On March 7, 2000, employees of Travelocity Holdings and the Partnership were
granted 259,680 and 554,975 options respectively at an exercise price of $46.88
per share, the fair market value of the Company's stock on the date of grant.
The options vest 25% on the first anniversary of the date of grant and monthly
thereafter until fully vested on the fourth anniversary of the grant. The
options are not exercisable more than ten years after the date of grant.
All vested and unvested options to purchase Preview Travel common stock held
by Preview Travel employees, directors or consultants were converted into
options to acquire the Company's common stock in connection with the Merger.
Because the share exchange ratio in the Merger was one to one the number of
options and the exercise prices per share remained unchanged.
Under the terms of Preview Travel's 1997 Directors' Stock Option Plan, the
Merger resulted in an immediate vesting of all unvested stock options that
Preview Travel granted to its directors under the plan. Approximately 65,000
unvested options granted under the plan vested immediately before the Merger. As
a result of the Merger, approximately 951,000 stock options held by Preview
Travel's officers had vesting periods that were accelerated. For each officer of
Preview Travel, 50% of the unvested options held as of October 4, 1999 vested
immediately prior to the Merger. After the Merger, one-twelfth of the remaining
unvested options held by officers of Preview Travel vest during each successive
month, subject to specified exceptions. For each non-officer employee of Preview
Travel, 50% of the unvested options held as of October 4, 1999 vested
immediately prior to the Merger. The remaining 50% of unvested options held by
each non-officer employee vests according to their terms of the initial grant of
the options.
The estimated fair market value of the vested options assumed by the Company
in the Merger was $23.4 million, which has been accounted for as a cost of the
acquisition of Preview Travel. The Company will recognize compensation expense
over the year following the Merger based on the intrinsic value of the options
as the unvested options held by officers of Preview Travel vest.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
OVERVIEW
The information provided in this Management Discussion and Analysis includes
the results of the Company from the date of the merger ("Merger") with Preview
Travel, Inc. ("Preview Travel") on March 7, 2000 through March 31, 2000 and the
historical results of the former Travelocity business unit (the "Travelocity
Division") of Sabre Holdings Corporation ("Sabre"), as an operating unit of
Sabre for all periods prior to the Merger. Results for the first quarter of 2000
prior to the Merger include the impacts of the contribution agreements and the
intercompany agreements entered into between the Partnership and Sabre. Results
prior to the Merger do not include financial impacts of the Merger with Preview
Travel. These historical results are not indicative of what our future financial
position or results of operations subsequent to the Merger will be. Pro forma
results for the three months ended March 31, 2000 and 1999 are also included
herein to illustrate the effect of these agreements and the Merger transaction
on our historical operations and financial position.
We receive transaction revenue including, for 2000, access fees under the
new access agreement with Sabre and, for 1999, booking fees collected by Sabre
and transferred to us. For both 2000 and 1999, transaction revenue also includes
commissions from travel suppliers for purchases of their online products and
services by customers. Our online travel services have experienced substantial
growth since the launch of our Web site in March 1996.
Gross bookings of travel services online increased from approximately
$129 million in the first quarter of 1999 to $399 million in the first quarter
of 2000, which resulted in an increase in transaction revenues from
approximately $9.2 million to approximately $22.9 million for the corresponding
periods. Gross bookings represent the total purchase price of all travel
services booked through our Web site. Gross bookings are not a financial
measurement in accordance with GAAP and should not be considered in isolation or
as a substitute for other information prepared in accordance with GAAP.
Period-to-period comparisons of gross bookings are not necessarily meaningful as
a measure of our revenues due to, among other things, changes in commission
rates. As with operating results, they should not be relied upon as an
indication of future performance.
The commission rates paid by travel suppliers are determined by individual
travel suppliers and are subject to change. Currently, we earn an average
commission of approximately 3-4% on the sale of airline tickets.
Advertising revenue has historically been generated primarily through an
agreement with DoubleClick Inc. ("DoubleClick") for the placement of advertising
on our Web site and through the direct selling of advertisements on the site.
Under the agreement, DoubleClick obtains advertisers for our site, collects the
revenue paid by the advertisers, and pays us an amount that is net of fees due
to DoubleClick for its service. We recorded advertising revenue generated
through the agreement with DoubleClick on a net of fee basis in the period the
advertisements are delivered. Effective with the Merger, our direct sales force
increased significantly and is expected to continue to provide a significant
portion of our advertising revenue.
Costs of revenues includes costs of operating our customer service center,
data processing charges and costs associated with operating our Internet
infrastructure.
GROSS MARGINS
Our gross margin for the three months ended March 31, 2000 was 55.1%, and
for the same period in 1999 was 22.0%. A number of different factors may impact
gross margins, including the mix of transaction revenues versus online
advertising revenues, the mix of travel services sold, the level of commissions
on travel products, and the amount of incentive commissions. We expect higher
gross margins on advertising revenues than transaction revenues, higher
commission rates on vacation
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packages than hotel rooms and car rentals and higher commission rates on hotel
rooms and car rentals than airline tickets.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2000 COMPARED TO THE THREE MONTHS ENDED MARCH 31,
1999
REVENUES
TRANSACTION REVENUES. Transaction revenues increased from $9.2 million to
$22.9 million for the three months ended March 31, 1999 compared to the three
months ended March 31, 2000, an increase of approximately $13.7 million, 149.7%.
This increase was primarily attributable to increased sales through our Web site
and added sales through the Preview Travel site subsequent to the Merger. Gross
bookings increased from $129 million for the three months ended March 31, 1999
to $399 million for the three months ended March 31, 2000.
ADVERTISING REVENUES. Advertising revenues increased from $1.5 million (net
of fees paid to DoubleClick of $367,000) to $3.4 million (net of fees of
$691,000) for the three months ended March 31, 1999 compared to the three months
ended March 31, 2000, an increase of $1.9 million, 131.5%. This increase was
primarily due to an increase in net revenue from DoubleClick of $0.8 million for
advertisements placed on our site, increasing advertising impressions and an
increase in direct selling of advertising by us of $1.1 million.
OTHER REVENUES. Other revenues increased from $77,000 to $696,000 for the
three months ended March 31, 1999 compared to the three months ended March 31,
2000, an increase of $619,000, 803.9%, due to new licensing and maintenance
agreements primarily with US Airways Inc.
COSTS OF REVENUES
Costs of revenues include costs of operating our customer service centers,
data processing charges and costs associated with operating our Internet
infrastructure. Costs of revenues increased from $8.4 million to $12.1 million
for the three months ended March 31, 1999 compared to the three months ended
March 31, 2000, an increase of approximately $3.8 million, 45.2%. This increase
is due to increases in data processing charges and costs associated with the
customer service center including the addition of costs and headcount associated
with two new customer service centers effective with the Merger. Costs of
revenues declined as a percentage of total revenue from 78.0% for the three
months ended March 31, 1999 to 44.9% for the three months ended March 31, 2000
primarily due to increased efficiencies in the customer service centers and to
more favorable terms under the access agreement with Sabre.
OPERATING EXPENSES
SELLING AND MARKETING. Selling and marketing expenses consist of
advertising costs to promote the Company's Web site, costs relating to strategic
distribution partnerships with companies such as America Online, Inc. ("AOL"),
Yahoo! Inc. ("Yahoo!"), Excite, Inc. ("Excite"), Lycos, Inc. ("Lycos"), Netscape
Communications Corporation and At Home Corporation, amortization of trademarks
and salaries and benefits. Selling and marketing expenses increased from
$5.2 million to $16.7 million for the three months ended March 31, 1999 compared
to the three months ended March 31, 2000, an increase of approximately
$11.5 million, 223.3%. This increase was due to additional advertising spending
of $6.6 million by us to gain market share, and increased costs of $3.4 million
relating to the amortization of payments made to strategic distribution partners
and new agreements with AOL, Excite and Lycos effective with the Merger. The
remaining increase of $1.5 million is primarily due to an increase in salaries
and other employee related costs to support the additional direct selling
efforts and the addition of Preview Travel's direct sales force effective with
the Merger.
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TECHNOLOGY AND DEVELOPMENT. Technology and development expense consists of
salaries and related costs and charges from Sabre for development and
maintenance of our Web site, including enhancements to and maintenance of the
site. Technology and development expenses increased from $2.3 million to
$4.0 million for the three months ended March 31, 1999 compared to the three
months ended March 31, 2000, an increase of approximately $1.7 million, 74.5%.
This increase was primarily due to an increase in salaries and benefits
associated with the transfer of development labor headcount to the Partnership
from Sabre in 2000, additional headcount from the Merger with Preview Travel and
additional costs incurred to enhance and maintain our Web site. This increase is
offset by a decrease in development labor charges from Sabre due to the transfer
of development labor headcount to the Partnership.
GENERAL AND ADMINISTRATIVE. General and administrative expense consists of
management fees paid to Travelocity Holdings and Sabre for the provision of
various services, including salaries and benefits for Travelocity Holdings
management devoted to the Company, corporate facility services, legal services,
and accounting services. General and administrative expense also includes
salaries and benefits of our management and administrative costs of the Company.
General and administrative expenses increased from $1.0 million to $3.5 million
for the three months ended March 31, 1999 compared to the three months ended
March 31, 2000, an increase of approximately $2.5 million, 236.0%. This increase
was primarily due to an increase in salaries and employee related costs and the
management fee to Sabre. These costs increased as a result of increased
administrative requirements to support our growth and the Merger. Additionally,
certain administrative costs incurred during the three months ended March 31,
2000 are duplicative due to the integration of the administrative services of
Preview Travel with the Company that is currently in process.
INTEGRATION RELATED EXPENSES. Integration related expenses represent costs
specifically associated with the integration of the Company and Preview Travel
and were $526,000 for the three months ended March 31, 2000. No comparable
amounts were recorded for the three months ended March 31, 1999.
STOCK COMPENSATION. Stock compensation expense represents expense associated
with the acceleration of vesting on stock options held by certain key employees
of Preview Travel over the shorter of the estimated remaining service period or
the twelve month period following the close of the Merger, expense for unvested
stock options held by former employees of Sabre which were converted to the
Company's options on the date of the Merger and expense for options granted to a
consultant by Preview Travel which were assumed in the Merger. Stock
compensation expense for the three months ended March 31, 2000 was
$1.5 million. No stock compensation was recorded for the three months ended
March 31, 1999.
AMORTIZATION OF INTANGIBLE ASSETS AND GOODWILL. Amortization of intangible
assets and goodwill represents the amortization of intangible assets and
goodwill recorded in conjunction with the Merger. Goodwill and certain other
intangible assets totaling approximately $265 million were recorded in
connection with the Merger.
INTEREST INCOME. Interest income represents interest income on short-term
investments and marketable securities held by the Company effective with the
Merger and the investment of funds received from the purchase of common stock by
Travelocity Holdings and Yahoo!.
SABRE'S INTEREST IN PARTNERSHIP. Sabre's interest in partnership represents
Sabre's approximate 62% share of the Partnership's net loss.
NET LOSS. Net loss increased $3.0 million, 48.2% from $6.1 million to
$9.1 million, primarily due to the increase in operating expenses offset by the
increase in gross profit, net of Sabre's interest in the results of operations
of the Partnership.
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PRO FORMA STATEMENT OF OPERATIONS DATA
The unaudited pro forma statement of operations data in the table below
presents the effects of the Merger, the contribution agreements and certain
other agreements entered into at the effective time of the Merger by the
Partnership and Sabre as if these transactions occurred on January 1, 1999.
These agreements are an access agreement, a technology services agreement, an
intellectual property agreement, a facilities agreement, and an administrative
services agreement.
The unaudited pro forma information is presented for illustrative purposes
only and is not necessarily indicative of the operating results that would have
occurred if such transactions had been consummated on January 1, 1999, nor is it
necessarily indicative of future results of operations.
The unaudited pro forma statement of operations data should be read in
conjunction with the Financial Statements and related notes thereto included
elsewhere herein. Pro forma adjustments include the impact of intercompany
agreements, the amortization of goodwill and other intangibles recorded as a
result of the Merger as well as other adjustments associated with the Merger.
Amounts shown below are in thousands, except per share amounts.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-------------------
2000 1999
-------- --------
<S> <C> <C>
Revenues
Transaction............................................... $ 29,774 $ 12,795
Advertising............................................... 5,225 3,241
Other..................................................... 696 77
-------- --------
Total revenues........................................ 35,695 16,113
Cost of revenues............................................ 15,895 8,333
-------- --------
Gross profit................................................ 19,800 7,780
Operating expenses
Selling and marketing..................................... 24,357 12,035
Technology and development................................ 5,207 2,929
General and administrative................................ 5,400 2,601
Expenses related to integration of Preview Travel......... 1,599 --
Stock compensation........................................ 2,375 451
Amortization of intangible assets and Goodwill............ 22,134 22,134
-------- --------
Total operating expenses.............................. 61,072 40,150
-------- --------
Operating loss.............................................. (41,272) (32,370)
Interest income............................................. 544 708
Provision for income taxes.................................. (17) (32)
-------- --------
Loss before Sabre's interest in Partnership........... (40,745) (31,694)
Sabre's interest in partnership............................. (25,262) (19,650)
-------- --------
Net loss attributable to common shareholders................ $(15,483) $(12,044)
======== ========
Basic and diluted loss per share............................ $ (1.06) $ (0.88)
======== ========
Weighted average shares outstanding......................... 14,658 13,743
======== ========
</TABLE>
GROSS MARGINS
Pro forma gross margins for the three months ended March 31, 2000 and 1999
were 55.5% and 48.3%, respectively. Our future gross margins may differ from pro
forma gross margins due to a higher mix of advertising revenue, which has a
higher gross margin, resulting from the AOL Agreement. As
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revenues under the AOL Agreement are dependent upon performance, the timing of
the revenues from the agreement are uncertain and may be sporadic, resulting in
a fluctuating gross margin.
RESULTS OF OPERATIONS
PRO FORMA THREE MONTHS ENDED MARCH 31, 2000 COMPARED TO PRO FORMA THREE MONTHS
ENDED MARCH 31, 1999
REVENUES
TRANSACTION REVENUES. Pro forma transaction revenues increased from
$12.8 million to $29.8 million for the three months ended March 31, 1999
compared to the three months ended March 31, 2000, an increase of approximately
$17.0 million, 132.7%. This increase was primarily attributable to increased
sales through our Web site and our co-branded Web sites. Gross bookings
increased from $205 million for the three months ended March 31, 1999 to
$504 million for the three months ended March 31, 2000. Transaction revenues are
expected to be impacted by factors such as transaction growth and variability in
commission rates.
ADVERTISING REVENUES. Pro forma advertising revenue increased from
$3.2 million (net of fees paid to DoubleClick of $367,000) to $5.2 million (net
of fees of $691,000) for the three months ended March 31, 1999 compared to the
three months ended March 31, 2000, an increase of $2.0 million, 61.2%. This
increase was primarily due to an increase in net revenue from DoubleClick of
$0.8 million for advertisements placed on our site, increasing advertising
impressions and an increase in direct selling of advertising by us of
$1.1 million.
Advertising revenue for the Company is expected to be higher than the
combined advertising revenue of Preview Travel and the Travelocity Division,
because our new advertising revenue sharing agreement with AOL will give us a
significantly larger share of the advertising revenue AOL receives on its Travel
Channel than Preview Travel historically received.
OTHER REVENUES. Other revenues increased from $77,000 to $696,000 for the
three months ended March 31, 1999 compared to the three months ended March 31,
2000, an increase of $619,000, 803.9% due to new licensing and maintenance
agreements primarily with US Airways Inc.
COSTS OF REVENUES
Pro forma costs of revenues increased from $8.3 million to $15.9 million for
the three months ended March 31, 1999 compared to the three months ended
March 31, 2000, an increase of approximately $7.6 million, 90.7%. This increase
is due to increases in data processing charges, costs associated with the
customer service center and salaries and employee related costs primarily due to
the increase in transactions on our Web site. Additionally, Preview Travel
opened a second call center in August 1999 which further increased costs for
2000.
Costs of revenues are expected to increase from current pro forma levels as
the number of transactions processed on the site increases. However, we
anticipate that, in the long-term, costs of revenues as a percentage of revenues
will decrease due to efficiencies gained in infrastructure costs and the ticket
fulfillment process due to economies of scale.
OPERATING EXPENSES
SELLING AND MARKETING. Pro forma selling and marketing expenses increased
from $12.0 million to $24.4 million for the three months ended March 31, 1999
compared to the three months ended March 31, 2000, an increase of approximately
$12.4 million, 102.4%. This increase was due to additional advertising spending
of $8.3 million by us to gain market share, and increased costs of $2.4 million
relating to the amortization of payments made to strategic distribution
partners. The
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remaining increase of $1.6 million is primarily due to an increase in salaries
and other employee related costs to support the additional direct selling
efforts and the addition of Preview Travel's direct sales force effective with
the Merger. Selling and marketing expenses in the future will be higher than pro
forma results. We will be investing a significant amount in advertising programs
to build our brand. Additionally, guaranteed payments under the new AOL
Agreement will result in significantly higher distribution costs for the Company
than reported in the pro forma statement of operations data. We expect a
significant portion of these increased costs will be offset by increased revenue
under our new advertising revenue share agreement with AOL.
TECHNOLOGY AND DEVELOPMENT. Pro forma technology and development expenses
increased from $2.9 million to $5.2 million for the three months ended
March 31, 1999 compared to the three months ended March 31, 2000, an increase of
approximately $2.3 million, 77.8%. This increase was primarily due to costs to
enhance and maintain our combined transaction processing systems. These costs
consist primarily of salaries and related costs, depreciation, repairs and
maintenance and software licensing.
GENERAL AND ADMINISTRATIVE. Pro forma general and administrative expenses
increased from $2.6 million to $5.4 million for the three months ended
March 31, 1999 compared to the three months ended March 31, 2000, an increase of
approximately $2.8 million, 107.6%. This increase was primarily due to an
increase in salaries and employee related costs and in the management fee to
Sabre. These costs increased as a result of increased administrative
requirements to support our growth and the Merger. Additionally, certain
administrative costs are duplicative due to the integration of the
administrative services of Preview Travel with the Company that is currently in
process. We expect cost savings from the combined operations to lower general
and administrative costs as a percentage of revenue.
INTEGRATION RELATED EXPENSES. Pro forma integration related expenses
include costs specifically associated with the integration of the Company and
Preview Travel and Merger related expenses for Preview Travel, and were
$1.6 million for the three months ended March 31, 2000. No amounts were recorded
for the three months ended March 31, 1999.
STOCK COMPENSATION. Pro forma stock compensation expense increased from
$0.5 million to $2.4 million for the three months ended March 31, 1999 compared
to the three months ended March 31, 2000, an increase of approximately
$1.9 million, 426.6%. This increase was due to stock compensation expense
associated with the acceleration of vesting on stock options held by certain
former Preview Travel key employees over the shorter of the estimated remaining
service period or the twelve month period following the close of the Merger,
expense for unvested stock options held by former employees of Sabre and
converted to the Company's options on the date of the Merger and expense for
options granted to Preview Travel non-employee directors and consultants. Stock
compensation expense may be higher than the pro forma expense due to additional
compensation expense associated with the acceleration of vesting on stock
options held by certain employees over the twelve month period following the
close of the Merger.
AMORTIZATION OF INTANGIBLE ASSETS AND GOODWILL. Pro forma amortization of
intangible assets and goodwill remained unchanged from the three months ended
March 31, 1999 compared to the three months ended March 31, 2000.
ANTICIPATED LOSSES
The Travelocity Division incurred significant operating losses since its
inception. For the future, our success will depend to a large part on our
ability to greatly increase sales volume to realize economies of scale and
increased revenue from advertising and non-air packages. As we increase spending
for product development, advertising, customer service, facilities,
international expansion and general and administrative expenses, we expect to
continue to incur significant operating losses on a
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quarterly and annual basis for the foreseeable future. Our operating losses may
be significantly different than the pro forma losses presented due to the
uncertain impact of the new AOL Agreement, the integration of the two businesses
(including cost synergies and recognition of non-recurring items), and the cost
and uncertain success of branding initiatives.
VARIABILITY OF RESULTS
We expect to experience seasonality in our business, reflecting seasonal
fluctuations in the travel industry, Internet and commercial online service
usage and advertising expenditures. Travel bookings typically increase during
the first and second quarter in anticipation of summer travel and typically
decline during the fourth quarter. Due to the significant quarterly growth of
the business, this effect has not been historically evident in our operations
but may become so in the future. Internet and commercial online service usage
and the rate of growth of such usage are expected to decline during the summer.
Depending on the extent to which the Internet and commercial online services are
accepted as an advertising medium, seasonality in the level of advertising
expenditures could become more pronounced for Internet-based advertising.
Seasonality in the travel industry, Internet and commercial online service usage
and advertising expenditures is likely to cause fluctuations in our operating
results and could have a material adverse effect on our business.
Other factors that may adversely affect our quarterly operating results
include:
- our ability to retain existing customers, attract new customers and
encourage repeat purchases;
- our ability to adequately maintain and upgrade our Web sites and technical
infrastructure;
- our ability to obtain travel inventory from travel suppliers on
satisfactory terms;
- fluctuating gross margins due to a changing mix of revenues;
- the amount and timing of operating costs related to expanding our
operations;
- general economic conditions or economic conditions specific to the
Internet, online commerce and the travel industry;
- the seasonal nature of the travel industry, Internet and commercial online
service usage and advertising expenditures;
- our ability to attract and retain advertisers on our sites; and
- advertising revenues from our agreement with AOL may fluctuate due to the
effects of seasonality.
Due to the foregoing factors, quarterly revenues and operating results are
difficult to forecast, and period-to-period comparisons of operating results
will not necessarily be meaningful and should not be relied upon as an
indication of future performance.
LIQUIDITY AND CAPITAL RESOURCES
Cash flows used for operating activities for the three months ended
March 31, 2000 were $38.6 million which was primarily attributed to the payment
to AOL of $40.0 million and an increase in accounts receivable, partially offset
by an increase in accounts payable. Cash flows used for operating activities for
the three months ended March 31, 1999 were $1.1 million which was primarily
attributed to the net loss before non-cash charges offset by increases in
accounts payable, accrued expenses, and other liabilities.
Investing activities for the three months ended March 31, 2000 and 1999 were
$67.2 million and $142,000, respectively. For the three months ended March 31,
2000, investing activities include the purchase of short-term investments and
marketable securities with funds received from Sabre in the
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Merger, the purchase of shares in Hotel Reservations Network for approximately
$2.2 million, and capital expenditures for furniture and fixtures and computer
equipment to support our growth during the year. For the three months ended
March 31, 1999, investing activities include capital expenditures for furniture
and fixtures and computer equipment.
Effective with the Merger, we began maintaining our own cash balances. Prior
to the Merger with Preview Travel, we did not maintain cash or cash equivalents,
but depended upon Sabre for the funding of our cash requirements. Sabre
maintained all cash balances, charging or crediting us through intercompany
accounts upon the recording of certain transactions, including the collection of
accounts receivable and purchase of goods and services. We incurred losses since
inception, which were funded by Sabre, as we were an operating unit of Sabre.
Cash advances for the three months ended March 31, 2000 and 1999 were
$13.5 million and $1.2 million, respectively. All cash advances from Sabre were
contributed to paid-in-capital effective with the Merger and are no longer due
to Sabre.
Immediately prior to the Merger, Sabre contributed $52.7 million in cash to
the Partnership and received partnership units in exchange. Additionally, the
Company exercised its option to cause Sabre to invest an additional
$50.0 million in the Company in exchange for approximately 1.2 million shares of
common stock of the Company. The Company contributed these funds to the
Partnership. Sabre is under no further obligation to fund the Partnership's
capital requirements.
As a result of our separation from Sabre, the Partnership will directly
incur capital expenditures that Sabre previously incurred and charged to us. We
expect this change to increase capital expenditures in 2000 by $10.0 to
$12.0 million.
We anticipate that Sabre's $52.7 million contribution and the additional
$50.0 million invested immediately prior to the Merger, together with our
existing funds, will be sufficient to meet anticipated cash requirements for at
least the next 24 months. Thereafter, we anticipate cash requirements will be
funded by cash flows from operating activities. However, we cannot assure you
that cash flows from operations of the Partnership will be sufficient to meet
our cash requirements, such as contractual commitments to our strategic
distribution partners, including AOL, or to make capital expenditures necessary
to support the anticipated growth of the business. In such event, we would be
required to obtain financing from the sale of equity securities or debt
financing. We cannot assure you that any such financing will be available or on
terms acceptable to us.
Over the next two years, we will use funds to enhance brand awareness and
supplier relationships, perform product development and for working capital.
Payments due under our agreements with strategic distribution partners could
also impact liquidity. Revenues under the AOL Agreement are based on performance
and are difficult to predict. Accordingly, they may not occur in the same time
periods as payments we must make to AOL. Additionally, agreements with Yahoo!,
Excite, Lycos and other distribution partners include guaranteed payments.
CAUTIONARY STATEMENT
Statements in this report which are not purely historical facts, including
statements regarding The Company's anticipations, beliefs, expectations, hopes,
intentions or strategies for the future, may be forward looking statements
within the meaning of Section 21E of the Securities Exchange Act of 1934, as
amended. All forward looking statements in this report are based upon
information available to the Company on the date of this report. The Company
undertakes no obligation to publicly update or revise any forward looking
statements, whether as a result of new information, future events or otherwise.
Any forward looking statements involve risks and uncertainties that could cause
actual events or results to differ materially from the events or results
described in the forward looking statements. Readers are cautioned not to place
undue reliance on these forward looking statements.
22
<PAGE>
Risks associated with the Company's forward looking statements both in this
report and in any and all written and oral statements include, but are not
limited to: risks related to the relationships of the Company with Sabre and its
affiliates, including risks that they may terminate any of the agreements with
the Company, or fail or otherwise become unable to fulfill their principal
obligations thereunder, or determine not to renew certain of the agreements;
risks associated with competition, and technological innovation by competitors,
which could require the Company to reduce prices, to change billing practices,
to increase spending or marketing or product development or otherwise to take
actions that might adversely affect its operations or earnings; risks related to
the Company's technology; risks associated with online commerce and doing
business through an Internet web site, such as security issues, liability for
site content, and uncertain protection of intellectual property; risks relating
to the Company's investment in technology, including the ability of the Company
to timely develop and achieve market acceptance of new products; risks
associated with industry consolidation, including strategic alliances, in the
travel industry; risks related to seasonality of the travel industry and booking
revenues; risks of the Company's sensitivity to general economic conditions and
events that affect airline travel and the airlines, hotel operators and car
rental companies, including the increased price of fuel; risks of a natural
disaster, computer terrorism or other calamity that may cause significant damage
to the data center facilities and enterprise information systems upon which the
Company relies; risks of interruption or deterioration of third party services
on which the Company relies to provide its services; risks of deterioration or
obsolescence of the Company's current systems and infrastructures; risks
associated with the Company's international operations, such as currency
fluctuations, governmental approvals, tariffs and trade barriers, and political
instability; risks of new or different legal and regulatory requirements; the
risk that we may not be able to successfully integrate the business of the
Travelocity Division and Preview Travel; risks associated with the growth
strategy of the Company, including investments in emerging markets and the
ability to successfully conclude alliances; the risk that evaluation of the
business and properties of the Company is difficult because Preview Travel and
the Travelocity Division have short operating histories; the risks associated
with our expectation of continued net losses for the foreseeable future, and our
inability to predict when we will operate profitably; risks that a decline in
commission rates or the elimination of commissions by travel suppliers would
reduce our revenues; the risk that our revenues derived from our relationships
with Yahoo!, AOL and Excite may not be sufficient to offset our significant
financial commitments to them; the risk that our financial performance could
deteriorate if we lose market share to our competitors; the risk that if we fail
to increase our brand recognition among consumers, we may not be able to expand
our online traffic; the risk that rapid technological changes may render our
technology obsolete or decrease the attractiveness of our services to consumers;
the risk that security breaches in our systems could damage our reputation and
cause us to lose customers; the risk that our computer systems may suffer system
failures, capacity constraints and business interruptions which could increase
our operating costs and cause us to lose customers; the risk that our inability
to increase our revenues depends on the continued use and growth of the Internet
and electronic commerce since that is the commercial medium through which we
provide our service; the risk that our stock price could fluctuate
significantly; the risk that evolving government regulation could impose taxes
or other burdens on our business which could increase our costs or decrease
demand for our products; the risk that the loss of our Chief Executive Officer
could harm our business, and that if we do not continue to attract and retain
qualified personnel, we will not be able to expand our operations; the risk that
if financing is not available to us when we need it on favorable terms, we may
not be able to compete and expand; the risk that conflicts of interest between
Sabre and the Company and the Partnership could impede our business strategy and
hurt our business; and the risk that our ability to promote our services in
Southeast Asia, Australia, New Zealand, Japan, India and other regions is
restricted by an existing agreement between Sabre and another operator of a
global distribution system.
23
<PAGE>
YEAR 2000 COMPLIANCE
We depended upon Sabre to ensure proper operation of our information
technology systems after the Year 2000 date change. In late 1999, Sabre and the
Company completed remediation and testing of hardware and software systems. As a
result of those planning and implementation efforts, we experienced no
significant disruptions in mission critical information technology and
non-information technology systems and we believe those systems successfully
responded to the Year 2000 date change. We are not aware of any material
problems resulting from Year 2000 issues, either with our products, our internal
systems, or the products and services of third parties. We will continue to
monitor mission critical computer applications and those of our suppliers and
vendors throughout the year 2000 to ensure that any latent Year 2000 matters
that may arise are addressed promptly.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As of December 31, 1999, the Company did not have any cash balances or
investments. The Company depended upon Sabre for the funding of cash
requirements until the Merger occurred on March 7, 2000.
Effective with the Merger, the Company began maintaining its own cash
balances. The exposure to market risk for changes in interest rates will relate
primarily to the Company's investment portfolio. The Company will maintain an
investment policy which is intended to ensure the safety and preservation of all
invested funds by limiting default risk, market risk and reinvestment risk. The
Company does not currently plan to use derivative financial instruments to
manage or reduce market risk. The Company will mitigate default risk by
investing in high credit quality securities such as debt instruments of the
United States government and its agencies and high quality corporate issuers, as
well as money market funds. The portfolio will include only marketable
securities with active secondary or resale markets to ensure portfolio liquidity
and will maintain a prudent amount of diversification.
The Company does not currently transact any significant portion of its
business in functional currencies other than the United States dollar. To the
extent that the Company continues to transact business using the United States
dollar as the functional currency, the Company does not believe that
fluctuations in foreign currency exchange rates will have a material adverse
effect on results of operations.
24
<PAGE>
PART II: OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- --------------------- -----------
<C> <S>
10.22 Information Technology Services Agreement, dated as of March
7, 2000, by and between Travelocity.com LP and Sabre Inc.+
10.23 Intellectual Property Agreement, dated as of March 7, 2000,
by and between Travelocity.com LP and Sabre Inc. +
10.24 Administrative Services Agreement, dated as of March 7,
2000, by and between Travelocity.com LP and Sabre Inc. +
10.25 Lease Agreement dated as of March 7, 2000, by and between
Travelocity.com LP and Sabre Inc. +
10.26 Noncompetition Agreement, dated as of March 7, 2000, by and
between Travelocity.com Inc., Travelocity.com LP, Sabre Inc.
and Sabre Holdings Corporation +
10.27 Sabre Access Agreement, dated as of March 7, 2000, by and
between Travelocity.com LP and Sabre Inc. +
27.1 Financial Data Schedule as of March 31, 2000.
</TABLE>
- ------------------------
+ Portions of this exhibit have been redacted and are subject to a request for
confidential treatment that has been filed with the Securities and Exchange
Commission.
(b) Reports on Form 8-K
On March 7, 2000, the Company filed Form 8-K announcing on March 7, 2000,
the transactions contemplated by the Agreement and Plan of Merger, dated as of
October 3, 1999 and amended as of January 24, 2000, between the Company,
Sabre Inc., Travelocity Holdings, Inc., a wholly-owned subsidiary of
Sabre Inc., and Preview Travel Inc., were consummated. A full description of the
transactions are contained in the Company's proxy statement/prospectus dated
February 4, 2000. Also stated was, Pursuant to Rule 12g-3(a), the
Travelocity.com Common Stock was registered under Section 12(g) of the Exchange
Act of 1934, as amended, upon consummation of the merger.
On March 13, 2000 the Company filed Form 8-K/A amending Form 8-K filed on
March 7, 2000. The Form 8-K/A listed the filing of Exhibit 2.1, Agreement and
Plan of Merger, dated as of October 3, 1999 and amended as of January 24, 2000,
by and among Sabre Inc., Travelocity Holdings, Inc., Travelocity.com Inc. and
Preview Travel, Inc. Filed as an Exhibit to the Registration Statement on
Form S-4, as amended (File No. 333-95757). Also listed was Exhibit 99.1 a Press
Release, dated March 8, 2000, that was issued by Travelocity.com Inc. and
Preview Travel, Inc. announcing the close of a merger combining the two
companies and that the completion of the merger followed the March 7, 2000
approval of Preview Travel stockholders.
On March 31, 2000 the Company filed Form 8-K/A amending Form 8-K filed on
March 7, 2000. The following exhibits were filed: Exhibit 99.1, Consolidated
Financial Statements of Preview Travel, Inc. as of the year ended December 31,
1999 with Report of Independent Auditors and Exhibit 99.2, the Unaudited Pro
Forma Combined Condensed Balance Sheet of Travelocity.com Inc. and Preview
Travel, Inc. as of December 31, 1999; and Unaudited Pro Forma Combined Condensed
Statements of Operations of Travelocity.com Inc. and Preview Travel, Inc. for
the year ended December 31, 1999.
25
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
<TABLE>
<S> <C> <C>
TRAVELOCITY.COM INC.
Date: May 15, 2000 BY: /s/ TERRELL B. JONES
-----------------------------------------
Terrell B. Jones
PRESIDENT, CHIEF EXECUTIVE OFFICER AND
DIRECTOR
(PRINCIPAL EXECUTIVE OFFICER)
/s/ RAMESH K. PUNWANI
-----------------------------------------
Ramesh K. Punwani
CHIEF FINANCIAL OFFICER
(PRINCIPAL FINANCIAL AND ACCOUNTING
OFFICER)
</TABLE>
26
<PAGE>
CONFIDENTIAL
THIS AGREEMENT HAS CONFIDENTIAL PORTIONS OMITTED, WHICH PORTIONS HAVE BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. OMITTED
PORTIONS ARE INDICATED IN THIS AGREEMENT WITH
"[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]."
INFORMATION TECHNOLOGY SERVICES AGREEMENT
BETWEEN
SABRE INC.
AND
TRAVELOCITY.COM LP
MARCH 7, 2000
<PAGE>
CONFIDENTIAL
THIS AGREEMENT HAS CONFIDENTIAL PORTIONS OMITTED, WHICH PORTIONS HAVE BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. OMITTED
PORTIONS ARE INDICATED IN THIS AGREEMENT WITH "[TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED]."
INFORMATION TECHNOLOGY SERVICES AGREEMENT
THIS INFORMATION TECHNOLOGY SERVICES AGREEMENT (this "Agreement"),
dated as of March 7, 2000 (the "Effective Date"), is between TRAVELOCITY.COM
LP, a Delaware limited partnership ("Customer"), and SABRE INC., a Delaware
corporation ("Sabre").
BACKGROUND
Whereas, in order to support Customer's ongoing business operations,
Customer has requested that Sabre provide certain information technology
services to Customer; and
Whereas, on the terms and subject to the conditions described in this
Agreement, Sabre is willing to provide such services to Customer.
ARTICLE I. RELATIONSHIP MANAGEMENT
1.1 SABRE ACCOUNT MANAGER. Sabre will appoint a Sabre Account Manager who
will be (a) primarily dedicated to Customer's account and serve as
Customer's primary contact, (b) responsible for managing and coordinating
delivery of Services, and (c) authorized to act for Sabre in the ordinary
course of administering this Agreement (subject to the limits of authority
in the Contract Administration Process).
1.2 CUSTOMER ACCOUNT MANAGER. Customer will appoint a Customer Account
Manager who will (a) serve as Sabre's primary contact, (b) have overall
responsibility for managing and coordinating the performance of Customer's
obligations, and (c) be authorized to act for Customer in the ordinary
course of administering this Agreement (subject to the limits of authority
in the Contract Administration Process).
1.3 RELIANCE ON INSTRUCTIONS. In performing this Agreement, a Party may rely
on written instructions, authorizations and other information provided (a)
by the other Party's Account Manager within his limits of authority and
(b) as to areas of competency, within limits of authority and as specified
in writing by the other Party's Account Manager, by other specified
personnel of the other Party. A Party will incur no liability or
responsibility in relying on or complying with such written instructions,
authorizations or other information.
1.4 MEETINGS. The Account Managers will meet at least monthly (and more
frequently as mutually agreed) to discuss the Parties' performance of this
Agreement and any relevant operational issues. The Account Managers,
along with other designated executives of the Parties, will meet at least
annually to discuss their strategic objectives for the Base Services and
any Variable Services, as well as long-range planning.
ARTICLE II. SERVICES
2.1 BASE SERVICES. During the term of this Agreement as set forth in SECTION
11.1, Sabre will be the sole provider to Customer of, and Customer will
obtain from Sabre all of its requirements for, the Base Services. The
Base Services include only those services specifically described in
SCHEDULES 2.1, 2.2, 2.3 and 2.4.
2.2 VARIABLE SERVICES.
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CONFIDENTIAL
(a) EXCLUSIVE VARIABLE SERVICES. Sabre will be the sole provider to
Customer of, and Customer will obtain from Sabre all of its
requirements for, the Exclusive Variable Services. Except to the
extent that this Agreement specifically requires Sabre to provide
Exclusive Variable Services in certain circumstances, Sabre will not
begin performing any Exclusive Variable Service until the Parties
have completed and executed a Work Order for such Exclusive Variable
Service.
(b) NON-EXCLUSIVE VARIABLE SERVICES. Customer may obtain Non-Exclusive
Variable Services from any Third Party; provided, however, that
before entering into an agreement with a Third Party, Customer will
notify Sabre of Customer's intent to enter into such agreement; and
Customer shall comply with its obligations contained in
SECTION 2.8(a) and SECTION 5.2. If Customer and Sabre agree that
Sabre will provide Non-Exclusive Variable Services to Customer, then
(except to the extent that this Agreement specifically requires
Sabre to provide Variable Services in certain circumstances) Sabre
will not begin performing such Non-Exclusive Variable Service until
the Parties have completed and executed a Work Order for such
Non-Exclusive Variable Service.
2.3 MIGRATION OF PREVIEW OPERATIONS.
(a) As of the Effective Date, the Base Services do not pertain to the
Preview Operations. Pursuant to the provisions of this SECTION 2.3,
if Customer solicits (on a bid, RFP or other competitive basis) a
bona fide offer to provide IT services, then Customer will notify
Sabre and allow Sabre a period of time, consistent with the time
afforded to Third Party offerors, to submit a proposal to provide
such IT services with respect to the Preview Operations. In
response to Customer's solicitation, Sabre will submit a proposal to
provide Base Services with respect to the Preview Operations and, if
Customer accepts such proposal, will provide the Base Services with
respect to the Preview Operations. The expansion of Base Services to
include the Preview Operations will be a Change subject to the
Contract Administration Process.
(b) Within 180 days after the Effective Date, Customer will advise Sabre
if Customer desires Sabre to provide a Category of Service with
respect to the Preview Operations. Sabre will not be required to
provide Web Hosting Services with respect to the Preview Operations,
unless Sabre is also providing Data and Voice Services with respect
to the Preview Operations, and vice versa. As soon as reasonably
practicable following such notice, Sabre will consult with Customer
regarding, and develop the Migration Plan for, such Category of
Service. During the Migration Period, Customer and any Third Party
IT Service Providers of Customer will continue to provide the
selected services with respect to the Preview Operations, and
Customer will obtain, at its expense, the assistance of such Third
Party IT Service Providers in connection with the migration of such
services to Sabre, all according to the Migration Plan. Sabre's
work in developing the Migration Plan, and providing Migration
Services, will be an Exclusive Variable Service. During the
Migration Period, Customer will provide to Sabre the services of
Customer's transition team, and such other services as are required
by the Migration Plan.
(c) Following the Migration Completion Date with respect to any Category
of Service selected by Customer, the "Base Services" will include
such Category of Service with respect to the Preview Operations.
(d) If Customer requests that Sabre provide Web Hosting Services with
respect to the Preview Operations, then such Services will be
provided at the Data Center at which Web Hosting Services are then
being provided by Sabre, unless otherwise agreed by Sabre.
2
<PAGE>
CONFIDENTIAL
2.4 LOCATIONS. The Fees provided in SCHEDULE 8 are based on the assumption
that the Base Services will be provided at the Service Locations, and that
(to the extent that Access Locations are specifically described in the
description of Services) Customer will access certain Services from the
Access Locations. Customer may, by notice to Sabre, request changes in
the specified locations pursuant to the Contract Administration Process.
2.5 WEB HOSTING SERVICES: SPECIAL PROVISIONS.
(a) Customer may, as a Change governed by the Contract Administration
Process, elect to have Sabre provide one or more of the Optional Web
Hosting Services identified in SCHEDULE 2.3. To the extent that
transition services are necessary or appropriate in order to
implement Sabre's provision of Optional Web Hosting Services
selected by Customer, then Sabre's work in developing a transition
plan and providing related transition services will be an Exclusive
Variable Service, and Customer will provide to Sabre the services of
Customer's transition team and such other services as are required
by the transition plan. Upon such effective date, the selected
Optional Web Hosting Service(s) will become part of the Web Hosting
Services. Customer may terminate one or more of the Optional Web
Hosting Service(s) upon not less than sixty (60) days notice to
Sabre. If Customer elects to terminate a particular service within
a category (e.g., optional capacity planning services, system
manager customer interface, etc.) of Optional Web Hosting Services,
then Customer must terminate all services within such category. If
Customer has terminated such a category of Optional Web Hosting
Services, then it may not later elect to have Sabre provide such
category of service.
(b) Immediately following the termination of the Web Hosting Services,
Customer will (at Customer's sole cost and expense) remove from the
Tulsa Data Center, or any other Data Center at which Sabre then
provides the Web Hosting Services, Customer's hardware, system
software, and other Customer Assets comprising the web hosting
infrastructure then located at the Tulsa Data Center or such other
Data Center, as applicable. As a Termination Assistance Service,
Sabre will cooperate with such removal. Customer will accomplish
such removal in accordance with the reasonable requirements of
Sabre, including those intended to avoid technical, operating or
security problems at the Tulsa Data Center or such other Data
Center, as applicable.
(c) Customer may (at its sole cost and expense) move its hardware,
system software and other Customer Assets comprising the web hosting
infrastructure from the Tulsa Data Center or any other Data Center
at which Sabre then provides the Web Hosting Services to a Data
Center located in the Dallas-Fort Worth Metroplex area. Sabre will
cooperate with such removal as a Change to the Web Hosting Services
subject to the Contract Administration Process. Customer will
accomplish such removal in accordance with the reasonable
requirements of Sabre, including those intended to avoid technical,
operating or security problems at the Tulsa Data Center and such
other Data Centers.
(d) Sabre will establish and maintain safeguards against the
destruction, loss or alteration of Equipment in the possession of
Sabre at its Tulsa Data Center, which are no less rigorous than
those in effect at the Tulsa Data Center as of the Effective Date.
While such Equipment is in the possession of Sabre, Sabre shall be
responsible for Losses with respect to such Equipment, except to the
extent that any Losses are caused by the actions or omissions of
Customer. Sabre will provide reasonable premises security
procedures and reasonable system security procedures at any place
where Web Hosting Services are performed by Sabre for Customer.
Such procedures at the Tulsa Data Center shall be no less rigorous
than those in effect at the Tulsa Data Center as of the Effective
Date.
3
<PAGE>
CONFIDENTIAL
(e) Sabre's provision to Customer of the network portion of the Web
Hosting Services will be subject to the provisions of SCHEDULE 16.
2.6 DEVELOPMENT SERVICES: SPECIAL PROVISIONS.
(a) In providing Development Services, Sabre will use design,
programming, testing and acceptance methodologies consistent with
Sabre's methodologies for modifications of CRS Software initiated by
Sabre itself.
(b) Sabre will provide Development Services requested by Customer to the
extent contemplated in the Development Services Budget. [TEXT
OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
(c) Customer may reprioritize projects or change projects upon written
request to Sabre. Customer acknowledges that if it reprioritizes
projects or changes projects from those contemplated in the
Development Services Budget, such reprioritization or change may
result in the need for additional and/or fewer Development Resources
(in the aggregate and with respect to particular skill sets) to
perform the Development Services, and will be addressed by SECTIONS
2.6(f) and (g). In particular, Customer acknowledges that such
reprioritization or change could require Development Resources with
different skills than those contemplated in the Development Services
Budget which could result in customer incurring charges under both
SECTIONS 2.6(f) and (g) even though the net aggregate Development
Resources is unchanged. Initiation of a new Development Services
project, not contemplated by the Development Services Budget,
constitutes a Change to be processed under the Contract
Administration Process.
(d) The relative Intellectual Property Rights of Sabre and Customer,
with respect to CRS Developments, are defined in SECTIONS 4.4 and
4.5 and may also be defined in the Intellectual Property Agreement.
If Sabre creates Premium IP in performing Development Services for
Customer, then the incremental costs and expenses incurred by Sabre
in complying with such restriction will be negotiated between the
Parties prior to commencing the development activities for such
Premium IP; [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
(e) The initial Development Services Budget, attached as SCHEDULE 9,
will be effective for the twelve (12) month period commencing with
the month in which the Effective Date occurs. Within thirty (30)
days following the end of each Quarter thereafter, the Parties will
amend the then-current Development Services Budget to include the
Quarter that immediately follows the last Quarter covered by the
then-current Development Services Budget. The Parties will act in
good faith to establish the Development Services Budget for the new
Quarter, in a manner consistent with the terms of this Agreement.
In establishing the Development Services Budget for the new Quarter
Sabre will be obligated to perform the Development Services
requested by Customer, provided that unless Sabre otherwise agrees,
Sabre will not be required to provide Development Resources
exceeding twenty-five percent (25%) of the sum of the (i)
Development Resources actually provided during the Quarter most
recently completed; plus (ii) the Development Resources included in
the Development Services Budget for the three remaining Quarters of
the then-current Development Services Budget.
(f) If Sabre reasonably determines that the Development Resources (in
the aggregate and/or with respect to particular skill sets) required
to perform Development Services in a Quarter would exceed the
corresponding Development Resources contemplated by the
4
<PAGE>
CONFIDENTIAL
Development Services Budget for such Quarter, then Sabre will so
advise Customer and will use commercially reasonable efforts to
procure such additional Development Resources for such Quarter. In
such event, Customer will pay Sabre for such additional Development
Resources, at the times and rates described in SCHEDULE 8.
(g) If Sabre reasonably determines that the Development Resources (in
the aggregate and/or with respect to particular skill sets) required
to perform Development Services in a Quarter would be less than the
corresponding Development Resources scheduled to be provided during
such Quarter pursuant to the Development Services Budget, then Sabre
will so advise Customer, and will use reasonable efforts to
reallocate to non-Customer engagements the unneeded Development
Resources during such Quarter. If Sabre is successful in
reallocating all or part of the unneeded Development Resources, then
Sabre will provide to Customer a credit against amounts payable
pursuant to SCHEDULE 8, with respect to such Quarter, in an amount
equal to: (i) for Development Resources successfully reallocated to
Sabre's engagements with Third Party customers, the amounts paid by
such customers to Sabre with respect to such re-allocated resources;
and (ii) with respect to those resources reallocated to internal
development projects of Sabre, Sabre's internal transfer rate; but
such credit under clause (i) or (ii) will not exceed the amount that
would have been paid to Sabre by Customer with respect to such
reallocated resources for such Quarter.
(h) Without duplicating credits provided under other provisions of this
Agreement, for any Quarter, Customer shall not be obligated to pay
for scheduled Development Resources which are not actually used to
provide Development Services as a result of Sabre's failure to
assign such Development Resources to development projects according
to priorities established in the Development Services Budget.
2.7 DATA AND VOICE SERVICES: SPECIAL PROVISIONS. Sabre's provision to
Customer of the Data and Voice Services will be subject to the provisions
of SCHEDULE 16.
2.8 CERTAIN OTHER MUTUAL SERVICES.
(a) If either Party solicits (on a bid, RFP or other competitive basis)
a bona fide offer to provide Software application development
services, but excluding any Development Services provided by Sabre
under this Agreement, then that Party will notify the other Party
and allow the other Party a reasonable period of time to submit a
proposal to provide such development services; provided, however,
that Sabre's obligation to notify Customer under this SECTION 2.8(a)
is limited to those application development services that fall
within the scope of Customer's core competency. The Party
soliciting offers may then, in its sole, reasonable discretion,
decide to accept the proposal submitted by the other Party or accept
a proposal from any Third Party. If the Party soliciting an offer
accepts the proposal submitted by the other Party, then the Parties
will execute a development agreement identifying the nature and
scope of the application development services, the period of time
during which such services will be provided, and the basis upon
which the Party performing such services will be compensated
therefor. Neither Party will be obligated to perform any such
services until the Parties have executed a development agreement.
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
(b) In addition, either Party may, but is not obligated to, offer the
other Party the opportunity to participate in joint development or
co-funding on any Software application development. To the extent
that the Parties decide to jointly develop or co-fund any such
5
<PAGE>
CONFIDENTIAL
application development, the Parties will agree upon a development
process and ownership of any resulting intellectual property in the
Joint Development Agreement.
(c) The provisions of SECTIONS 2.8(a) and (b) shall continue as long as
Sabre is providing Development Services under this Agreement.
Except for the provisions expressly set forth in this SECTION 2.8,
the terms governing a Party's provision of Software application
development services to the other Party under SECTION 2.8 shall be
governed by the terms a separate development agreement executed by
the Parties with respect to such development services, rather than
the terms of this Agreement. Notwithstanding the foregoing, except
to the extent that such rights may be modified by the terms of the
particular development agreement: (i) the terms of SECTIONS 4.4 and
4.5 shall apply to Standard IP, Premium IP and Joint Interest IP
made by a Party, or the Parties jointly, pursuant to this Agreement
and the separate development agreement; [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED]
(d) In addition to (and separate from) Sabre's providing Services to
Customer under this Agreement, a Party may permit the other Party to
share Software and hardware resources (e.g., BTS servers, and
"Destination Guide") of the first Party. Any such sharing of
resources shall be pursuant to the mutual agreement of the Parties,
as evidenced by a separate agreement for such sharing of resources
and reflected in the Parties' separate agreement. [TEXT OMITTED -
CONFIDENTIAL TREATMENT REQUESTED] Except for the expressed terms of
this SECTION 2.8(d), the terms governing the sharing of resources
shall be those set forth in such separate agreement, rather than the
terms of this Agreement.
2.9 LAN SERVICES. Sabre will provide certain local area network services to
Customer, the scope of which and the pricing for which will be determined
by the parties after the Effective Date.
ARTICLE III. SERVICE LEVELS
3.1 SERVICE LEVEL AGREEMENTS. Sabre will use commercially reasonable efforts
to provide the Base Services in accordance with the SLAs for the Measured
Services set forth in SCHEDULE 5.
3.2 SLA MONITORING; PERFORMANCE REVIEWS. Sabre will measure its performance
of Measured Services against the SLA Standards. If a measurement is not
the type of measurement performed by Sabre in the ordinary course of its
business either for Sabre's internal operations or with respect to other
Sabre customers, and requires additional software, equipment or other
measurement tools, then Sabre will acquire and implement such tools (and
perform such measurements) once the Parties have agreed in writing on the
resulting Change in Base Fees. Sabre will provide Customer with the
monthly performance reports listed on SCHEDULE 6 in the manner described
therein. If Customer objects to a performance report, Customer will
notify Sabre of its specific objections (which notice must describe in
detail Customer's position) within thirty (30) Business Days of its
receipt.
ARTICLE IV. PROPRIETARY RIGHTS
4.1 OWNERSHIP OF SABRE IP. As between Customer and Sabre, Sabre retains sole
and exclusive ownership of all worldwide Intellectual Property Rights in
the Sabre IP, including any derivative work, modification, update or
enhancement. All rights in and to the Sabre IP not expressly granted to
Customer in this Agreement or in another written agreement between the
Parties are reserved by
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Sabre. Nothing in this Agreement will be deemed to grant, by implication,
estoppel or otherwise, a license under any of Sabre's existing or future
patents.
4.2 THIRD PARTY SOFTWARE. All Third Party Software will be and will remain
the property of the applicable Third Party vendor(s), and, as between
Sabre and Customer, any derivative work, modification, updates or
enhancements made by Sabre thereto will be owned by Sabre.
4.3 CUSTOMER ASSETS. All Customer Assets will be and will remain the property
of Customer or Customer's Third Party licensors (as applicable), and, as
between Customer and Sabre, any derivative work, modification, updates or
enhancements made by Sabre thereto will (subject to SECTIONS 4.4 and 4.5)
be owned by Customer.
4.4 OWNERSHIP OF DEVELOPED IP.
(a) Each Party will own all right, title and interest in and to all
Standard IP and Premium IP made by such Party pursuant to this
Agreement, and will control and pay for legal protection, including
patents and copyrights where appropriate, for all such IP solely;
provided, however, that such Party will have no obligation to obtain
or maintain any legal protection for such IP. No Party will have
any obligation to enforce or defend any of its IP. If a Party
wishes to enforce any of its IP against a Third Party, the other
Party will cooperate in such enforcement at the enforcing Party's
expense.
(b) Joint Interest IP will be jointly owned by the Parties in accordance
with the terms of the agreement pursuant to which such Joint
Interest IP was made ("Joint Development Agreement"). Any rights or
obligations with respect to obtaining and maintaining legal
protection for Joint Interest IP will be allocated in accordance
with the terms of the Joint Development Agreement. Each Party will
cooperate with the other Party in any action brought by the other
Party to enforce Joint Interest IP.
4.5 LICENSE RIGHTS IN DEVELOPED IP.
(a) Sabre may grant a license to any Third Party under any of Sabre's
Standard IP to use and fully exploit such Standard IP.
(b) Sabre may grant a license under its Premium IP to any Third Party
who, at the time such license is granted, is not a Customer Direct
Competitor.
(c) Customer may grant a license to any Third Party under any of
Customer's Standard IP to use and fully exploit such Standard IP.
(d) Customer may grant a license under its Premium IP to any Third Party
who, at the time such license is granted, is not a Sabre Direct
Competitor.
(e) Sabre hereby grants to Customer a perpetual, worldwide,
non-exclusive, royalty-free license in all of Sabre's Standard IP
and Premium IP for the unrestricted use and exploitation (including
the right to make derivative works of and make modifications
thereto) by Customer in its business. Sabre further grants to
Customer the right to grant sublicenses under any of its Standard IP
and Premium IP to any Third Party who, at the time such sublicense
is granted, is not a Sabre Direct Competitor.
(f) Customer hereby grants to Sabre a perpetual, worldwide,
non-exclusive, royalty-free license to all of Customer's Standard
IP and Premium IP for the unrestricted use and exploitation
(including the right to make derivative works of and make
modifications
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thereto) by Sabre in its business. Customer further grants to Sabre
the right to grant sublicenses under any of its Standard IP and
Premium IP to any Third Party who, at the time such sublicense is
granted, is not a Customer Direct Competitor.
(g) Any Software included in a Party's Standard IP or Premium IP (a)
shall be licensed to the other Party in both source code and
executable code, and (b) may be licensed or sublicensed by the other
Party to Third Parties in executable code only.
(h) [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
ARTICLE V. CONTRACT ADMINISTRATION
5.1 CONTRACT ADMINISTRATION PROCESS. The Contract Administration Process
describes and governs the process by which the Parties (a) propose or
request Changes, (b) implement and manage Changes agreed in writing by the
Parties, (c) resolve problems and issues with the Services and (d)
implement and manage any other item which this Agreement provides or
contemplates will be processed in accordance with the Contract
Administration Process.
5.2 TESTING OF THIRD PARTY SERVICES AND SYSTEMS. Sabre's acceptance,
installation, integration, implementation and operation of services,
software and technology provided by Third Parties or Customer is subject
to the Contract Administration Process. Sabre may test any such services,
software or technology (including changes to Customer's IT environment)
for compatibility with the Services, Sabre Software, and other components
of IT systems operated by Sabre. Sabre may refuse to consent to, accept,
install, integrate, implement or operate any service, software or
technology provided by a Third Party or Customer (including any change to
Customer's IT environment) if: (a) Sabre reasonably believes that any such
activity would likely (i) have a material adverse impact on Services,
Sabre Software, or other components of IT systems operated by Sabre or
Sabre's operations, or (ii) cause a material increase in Sabre's costs to
provide Services, unless the Parties have agreed in writing to an
associated increase in Base Fees; or (b) Sabre is not provided, at
Customer's expense, rights to Access and use such service, software or
technology on reasonable terms (including requirements for firewalls,
isolated access and password access) if Sabre's Access to or use thereof
is necessary to perform Services. All Sabre activities in connection with
this SECTION 5.2 are Exclusive Variable Services.
5.3 CHANGES IN DEMAND. Customer will give Sabre reasonable advance notice of
material changes in Customer's requirements for any Service. Customer's
failure to do so may adversely affect Services, SLAs and Sabre's
performance under this Agreement, and Sabre will not be liable to Customer
for such adverse effects. Subject to the Contract Administration Process
and Changes in writing agreed by the Parties, Sabre will adjust resources
in response to such changes in Customer's requirements for Services.
ARTICLE VI. MANAGEMENT OF RESOURCES
6.1 MANAGEMENT OF RESOURCES.
(a) GENERAL. Sabre may reasonably (i) manage all resources used in
providing Services as Sabre deems appropriate, (ii) decide which
member of Sabre will perform any particular Service, and (iii)
modify, enhance, update, add to, eliminate or replace any hardware,
software, other technology, personnel or other Sabre resource used
to provide Services or any element of its IT systems (and/or change,
consolidate, eliminate or add locations from
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which it provides Services) from time to time so long as such
action does not materially impair the functionality or performance
of the Services.
(b) CUSTOMER ASSETS. Sabre will give Customer reasonable advance notice
of proposed material changes to, replacements for or reallocations
of Customer Assets. If such action would constitute a Change, the
Parties will process such proposals pursuant to the Contract
Administration Process. Subject to SECTION 14.11, Customer may
reasonably refuse such proposed changes, replacements or
reallocations.
6.2 ACCOUNT TEAM REVIEW. If Customer is reasonably dissatisfied with any
Sabre personnel providing services, then Customer will describe in writing
such dissatisfaction and the reasons therefor. Sabre shall use
commercially reasonable efforts to remedy the problem giving rise to such
dissatisfaction within thirty (30) days after receiving such notice. If
Customer remains dissatisfied for good reason with the Sabre personnel in
question after such thirty (30) day period, Sabre will promptly replace
such Sabre personnel.
6.3 USE OF SUBCONTRACTORS. Sabre may subcontract any portion of the Services
to any Sabre Subsidiary, Sabre Affiliate, and any Third Parties; provided
that Sabre will not (without Customer's prior consent) subcontract
Services to a Third Party which (at the time of such subcontracting)
competes with Customer's business. Sabre will not disclose any
Confidential Information of Customer to any subcontractor unless it has
agreed in writing to protect the confidentiality of such Confidential
Information in a manner no less restrictive than required under SECTION
9.2, and to use such information only as needed to perform subcontracted
Services, and such disclosure shall be only to the extent reasonably
needed to perform subcontracted Services. Sabre is responsible for
Services performed by its subcontractors (excluding subcontractors under
Service Contracts or other agreements included with the Customer Assets,
whose performance is the responsibility of Customer).
6.4 MANAGEMENT OF THIRD PARTY SERVICES. The Parties acknowledge that, to the
extent provided in the description of Services in SCHEDULES 2.1, 2.2 AND
2.3, certain of the Services include Sabre's management or procurement of
various services and products provided by Third Parties at the request, or
with the consent, of Customer (e.g., certain telecommunications services).
Customer agrees that this arrangement does not constitute Sabre's
subcontracting of Services for purposes of this Agreement, and that Sabre
is not responsible or liable for the performance, inadequate performance
or non-performance of such Third Party services or products. The remedies
for any such Third Party service or product problems to the extent
attributable to nonperformance or inadequate performance by any such Third
Party provider or nonconformance of any such Third Party product will be
the remedies set forth in the applicable agreement with the provider of
such Third Party service or product. Nonetheless, if Customer expresses
any concerns to Sabre about any such Third Party services or products,
Sabre will use commercially reasonable efforts to manage relationships and
to minimize difficulties with providers of such Third Party services or
products.
ARTICLE VII. CUSTOMER'S OBLIGATIONS
7.1 RESTRICTIONS ON USE.
(a) GENERAL. Customer will restrict access to and use of the Services,
Sabre Software and other components of IT systems owned or licensed
by Sabre and utilized by Sabre to perform Services to Customer's own
employees and individual independent contractors who require such
access and use in performing their duties. Customer may not,
without Sabre's consent, which may be withheld in Sabre's sole
discretion: (i) access or use Services, Sabre Software or other
components of IT systems owned or licensed by Sabre and utilized by
Sabre to perform Services for any purpose other than for Customer's
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internal operations or (to the extent that the description of
Services specifies the Access Locations from which Services may be
Accessed) from any location other than the Access Locations (except
that Customer employees whose workplace is an Access Location may
remotely access Services and Sabre Software when away from their
workplace); or (ii) permit any Third Party to access or use
Services, Sabre Software or other components of IT systems owned or
licensed by Sabre and utilized by Sabre to perform Services.
Customer's access or use thereof for outsourcing, service bureau or
similar purposes, or for the benefit of any Third Party, is
prohibited. Notwithstanding the foregoing, Customer shall have the
Intellectual Property Rights provided for in SECTIONS 4.4 and 4.5;
and Customer may provide its customers with customary access to
Customer web sites hosted by Sabre.
(b) PERMITTED THIRD PARTY USE. Notwithstanding the foregoing, Customer
may permit Third Party IT Service Providers and their employees to
access and use, solely for the purpose of their performing services
for Customer, the Services, Sabre Software and other components of
IT systems owned or licensed by Sabre and utilized by Sabre to
perform Services, provided that such Third Party IT Service
Providers will be subject to the obligations of this Agreement
including, but not limited to, the confidentiality obligations set
forth in SECTION 9.2. Customer will notify Sabre of, and is
responsible and liable for, such access and use.
7.2 CUSTOMER FACILITIES AND RELATED SERVICES. Customer will provide to Sabre,
and its employees, subcontractors and agents, Access to Customer's
facilities, including all Access Locations, twenty-four (24) hours a day,
seven (7) days a week, as needed to perform the Services. Customer will
also provide, at Customer's expense, such resources and services at
Customer's facilities (including Access Locations), as are necessary for
Sabre to provide the Services. All space provided to Sabre at Customer's
facilities will remain free of health and safety hazards and in compliance
with applicable Environmental Laws. Sabre personnel shall comply with the
customary rules of Customer (which shall not unreasonably impede Sabre in
the performance of Services) with respect to Access to Customer's
facilities and Access Locations.
7.3 ASSISTANCE, CONSENTS AND GOVERNMENTAL APPROVALS.
(a) CUSTOMER COOPERATION AND PROVISION OF RESOURCES. Customer will
cooperate with, support and participate in Sabre's efforts to
provide Services and punctually accomplish its obligations under
this Agreement. Without limiting the generality of the foregoing,
Customer will, at Customer's expense: (i) promptly provide Sabre
with all resources, information, advice, authorizations,
instructions, decisions, approvals, signatures and other assistance
Sabre may reasonably request in connection with the Services; and
(ii) make available appropriate employees and contractors of
Customer for such purposes. In addition, Customer will provide
written evidence of Sabre's agency authority as Sabre may reasonably
request in order to provide the Services contemplated by this
Agreement. Customer's management authority shall include all
"ordinary course of business" functions related to management of
Customer Assets. Sabre shall consult with Customer prior to taking
any material actions (e.g., the institution of, or settlement of,
litigation or enforcement actions) with respect to Customer Assets.
(b) OBTAINING REQUIRED CONSENTS. Customer will use commercially
reasonable efforts to obtain all Required Consents (to the extent
related to the Customer Assets, or required under contracts to which
Customer is a party or Laws binding upon Customer) as promptly as
possible and will pay all fees, royalties, costs, expenses and other
charges now or hereafter properly payable to any Third Party in
order to obtain and maintain such Required Consents. Customer will
provide Sabre with written evidence of such Required
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Consents upon Customer's receipt thereof. Unless and until a
Required Consent is obtained, Customer will adopt such alternative
approaches as are necessary for Sabre to perform all obligations
and enjoy the benefits (economic, operational or otherwise) arising
under of in connection with this Agreement without such Required
Consent.
7.4 CUSTOMER ASSETS.
(a) GENERAL. Customer will provide Sabre Access to and use of the
Customer Assets, on terms and conditions acceptable to Sabre, for
use by Sabre and its subcontractors and agents in performing the
Services, and will act as Sabre's agent, to the maximum extent
permitted by law, to obtain the full benefits of the Customer Assets
for Sabre as needed to provide Services under this Agreement.
Customer will pay all fees, royalties, costs, expenses and other
charges now or hereafter properly payable to any Third Party in
connection with, or under agreements relating to, the Customer
Assets or arising from Sabre's Access thereto or proper use thereof.
Without limiting the foregoing, while Sabre is providing Web Hosting
Services to Customer, Customer shall retain all financial
responsibility for the servers, network equipment and other Customer
Assets furnished by Customer and operated and monitored by Sabre in
connection with the Web Hosting Services.
(b) INTELLECTUAL PROPERTY RIGHTS. Sabre's rights under this SECTION 7.4
include royalty-free rights for Sabre and its subcontractors and
agents to use, reproduce, create derivative works from and
sublicense all Customer Owned Systems, Customer Licensed Systems,
Customer Owned Intellectual Property Rights and Customer Third Party
Intellectual Property Rights solely for the purpose of performing
(and as needed to perform) the Services. Customer will provide to
Sabre copies of software included in the Customer Assets in object
code and source code formats, and in a form and on media compatible
with the equipment that Sabre is then operating on Customer's
behalf, together with all related documentation. To the extent that
Sabre makes any modifications or enhancements to Customer Owned
Systems, Customer Licensed Systems, Customer Owned Intellectual
Property Rights or Customer Third Party Intellectual Property Rights
under this Agreement, Sabre will provide Customer, upon expiration
or termination of this Agreement for any reason or upon Customer's
reasonable request, with sufficient documentation and source code to
fully utilize such modifications and enhancements.
(c) AMENDMENT, MODIFICATION OR TERMINATION. Customer will use
commercially reasonable efforts to notify Sabre prior to Customer's
extending the term of, modifying, or terminating any Equipment
Lease, System License Agreement, Intellectual Property License
Agreement, Real Property Lease, Service Contract, Authorization or
Other Contract included within the Customer Assets. If such
extension, modification or termination would prevent or interfere
with Sabre's compliance with its obligations under this Agreement,
or satisfying an applicable SLA, then such action will be processed
as a Change pursuant to the Contract Administration Process. If
such action would increase the costs or expenses incurred Sabre in
providing Services under this Agreement, or in satisfying applicable
SLAs, then, following Sabre's notice to Customer of such increase
and delivery to Customer of appropriate information evidencing such
increase, Customer shall reimburse Sabre for such increased costs
and expenses.
7.5 CUSTOMER'S IT ENVIRONMENT.
(A) GENERAL. Customer will not make any Change to Customer's IT
environment (including Customer's desktop environment, and including
Changes to personal computers, hardware, software, network
configuration or telecommunications network) without (i)
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conforming to Sabre's reasonable standards and requirements for
Customer's IT environment and (ii) complying with the Contract
Administration Process. Customer will not permit installation on,
or use with, personal computers or other elements of Customer's IT
environment or software which has not been validly licensed or
sublicensed to Customer by Third Parties or Sabre.
(b) SABRE RECOMMENDATIONS. Sabre may from time to time recommend
changes in Customer's IT environment. The Parties will process such
recommendations as Changes subject to the Contract Administration
Process. Subject to SECTION 14.11, Customer may reasonably refuse
such recommendations.
7.6 CUSTOMER DATA. Customer will be solely responsible for the accuracy of
Customer Data and the timely inputting of such Customer Data and any
changes thereto.
ARTICLE VIII. WARRANTIES AND ADDITIONAL COVENANTS
8.1 WARRANTIES AND ADDITIONAL COVENANTS.
(a) QUALIFIED WORK FORCE. Sabre represents and warrants that its
personnel possess the proper skill, training, experience and
background to perform the Services in a professional and workmanlike
manner.
(b) YEAR 2000. Sabre represents and warrants that the Sabre Software
specified in SCHEDULE 10 as of the Effective Date will be Year 2000
Compliant when running on computers and operating systems selected,
supplied or certified by Sabre and when used in accordance with
Sabre's documentation for such systems. If any such Sabre Software
is found not to be Year 2000 Compliant, Sabre will cause such non-
conforming system to be Year 2000 Compliant, at no additional cost
to Customer, as soon as reasonably practicable. Notwithstanding the
foregoing, Sabre will not be responsible for a failure of any Sabre
Software to be Year 2000 Compliant to the extent such failure is the
direct result of (A) the receipt of data in incorrect formats, (B)
the interoperation with machines, software or tools of Customer or
any other Third Parties that are not Year 2000 Compliant, and (C)
any modifications made by Customer or any other Third Parties to the
Sabre Software, unless such modifications were approved or
authorized by Sabre. The remedy provided in this SECTION 8.1(b) is
the sole and exclusive remedy available to Customer, and the sole
and exclusive obligation of Sabre, for a breach of this SECTION
8.1(b). The Services do not include, and Sabre will not be
responsible or liable for, any changes, modifications, updates or
Enhancements to any Assets or Third Party hardware, software,
equipment or other items which may be necessary so that such items
are Year 2000 Compliant.
(c) PASS-THROUGH WARRANTIES AND INDEMNITIES. Each Party, to the extent
permissible, will pass through to the other Party any rights it
obtains under warranties and indemnities given by its Third Party
licensors, subcontractors or suppliers in connection with any
services, telecommunications networks, software, equipment or other
assets provided by such Party pursuant to this Agreement. In the
event of a Third Party Software or equipment nonconformance, or
nonperformance or inadequate performance by any Third Party vendor,
Sabre will coordinate with, and be the point of contact for
resolution of the problem through, the applicable vendor. Upon
becoming aware of a problem, Sabre will notify such vendor and will
use commercially reasonable efforts to cause such vendor to promptly
repair or replace the nonconforming item or remedy the
nonperformance or inadequate performance in accordance with such
vendor's obligations. If any warranties or indemnities may not be
passed through, the Party providing such services, software,
equipment or other assets agrees
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that it will, upon request of the other Party, take commercially
reasonable action to enforce any applicable warranty or indemnity
which is enforceable by such Party in its own name. Neither Party,
however, is obligated to resort to litigation or other formal
dispute resolution procedures to enforce any such warranty or
indemnity unless the other Party agrees to reimburse such Party for
all costs and expenses incurred in connection therewith, including
reasonable attorneys' fees and expenses.
(d) CORPORATE MATTERS. Each Party represents and warrants that as of
the Effective Date: (i) it is a corporation or partnership duly
organized and validly existing and in good standing under the Laws
of its jurisdiction of formation and has the authority to carry on
its business as now conducted and to own, lease and operate its
assets; (ii) it has the power, authority and legal rights to
execute, deliver and perform its obligations under this Agreement
and to contemplate the transactions contemplated hereby; (iii) the
execution, delivery and performance of its obligations under this
Agreement and the transactions contemplated hereby have been duly
authorized by all necessary corporate or partnership action; and
(iv) this Agreement has been duly executed and delivered by duly
authorized officers of such Party and this Agreement constitutes a
legal, valid and binding obligation enforceable against it in
accordance with its terms.
(e) VALIDITY OF CONTEMPLATED TRANSACTIONS. Each Party represents and
warrants that as of the Effective Date neither the execution and
delivery of this Agreement, the performance of any of its
obligations hereunder, nor the consummation of any of the
transactions contemplated herein will violate, conflict with or
result in a breach of or default under any terms, conditions or
provisions of (i) any existing Law to which it or its assets is
subject, (ii) any judgment, order, writ, injunction, decree or award
of any Governmental Authority which is applicable to it or its
assets, (iii) any provision of its organizational documents or other
document of formation or governance to which it is a Party or by
which any of its assets are bound, (iv) any mortgage, indenture,
agreement, contract, commitment, lease, plan, Authorization or other
instrument, document or understanding, oral or written, to which it
is a Party.
(g) REQUIRED CONSENTS. Each Party represents and warrants that as of the
Effective Date it has duly obtained all Required Consents of, and
duly made all required registrations, declarations or filings with,
any Governmental Authority which are required on its part as a
condition to the execution, delivery and performance of this
Agreement. Customer represents and warrants as of the Effective
Date that SCHEDULE 11 sets forth a list of Required Consents (to the
extent related to the Customer Assets, or required under contracts
to which Customer is a party or Laws binding upon Customer) that
have not been obtained as of that date, and that such list is
accurate and complete in all material respects.
8.2 DISCLAIMER OF WARRANTIES. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS
AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES, EXPRESS
OR IMPLIED, REGARDING ANY MATTER, INCLUDING THE MERCHANTABILITY,
SUITABILITY, ORIGINALITY, FITNESS FOR A PARTICULAR USE OR PURPOSE, OR
RESULTS TO BE DERIVED FROM THE USE, OF ANY SERVICE, SOFTWARE, HARDWARE OR
OTHER MATERIALS PROVIDED UNDER THIS AGREEMENT.
ARTICLE IX. DATA, CONFIDENTIALITY AND AUDIT RIGHTS
9.1 CUSTOMER DATA.
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(a) OWNERSHIP. All Customer Data will remain the sole property of
Customer. Sabre may Access and use Customer Data as needed to
perform its obligations hereunder. Upon expiration or termination
of this Agreement, Sabre will, at Customer's expense, return to
Customer, in Sabre's then-existing, machine-readable format and
media, all Customer Data in Sabre's possession. Sabre will not use
Customer Data for any purpose other than providing Services.
(B) SAFEGUARDING. Sabre will employ substantially the same safeguards
it uses for data of its other customers of similar services, but not
less than reasonable safeguards, in protecting Customer Data against
accidental or unauthorized deletion, destruction or alteration.
Sabre personnel having Access to Customer Data will be informed of
their duties to maintain its confidentiality and to use it only for
purposes permitted hereunder. Customer may establish backup
security for Customer Data and retain backup data files if it so
chooses. Sabre will have Access to such backup data files as is
reasonably required by Sabre.
(c) USE IN SABRE CRS. Notwithstanding anything to the contrary
contained in this Agreement, this Agreement will not apply to or
govern Customer Data that is processed by or stored in the Sabre
CRS. All rights and obligations with respect to Customer Data that
is processed by or stored in the Sabre CRS will be governed by the
Access Agreement.
9.2 CONFIDENTIALITY.
(a) OWNERSHIP; SCOPE OF OBLIGATION. As between the Parties, the
Confidential Information of each Party will remain its sole
property. Confidential Information will be used by the recipient
Party only for purposes of this Agreement. Each Party will hold the
Confidential Information of the other Party in strict confidence and
protect such Confidential Information from disclosure using the same
care it uses to protect is own confidential information of like
importance, but not less than reasonable care. No Confidential
Information will be disclosed by the recipient Party without the
prior written consent of the other Party, except that each Party may
disclose this Agreement and the other Party's Confidential
Information to its directors, employees, attorneys, agents,
auditors, insurers and subcontractors who require access to such
information in connection with their employment or engagement and
who are obligated to keep such information confidential in a manner
no less restrictive than set forth in this SECTION 9.2. The Party
employing or engaging such Persons is responsible and liable for
their compliance with such confidentiality obligations.
(b) EXCEPTIONS. This Agreement does not prevent or restrict use or
disclosure by the recipient Party of Confidential Information of the
disclosing Party that (i) was in the public domain when communicated
to the recipient Party, (ii) enters the public domain through no
fault of the recipient Party, (iii) was in recipient Party's
possession free of any obligation of confidence when communicated to
the recipient Party or (iv) was rightfully communicated to the
recipient Party by a Third Party free of any obligation of
confidence to the disclosing Party. If Confidential Information is
required to be disclosed by law or a Governmental Authority,
including pursuant to a subpoena or court order, such Confidential
Information may be disclosed, provided that the Party required to
disclose the Confidential Information (x) promptly notifies the
disclosing Party of the disclosure requirement, (y) cooperates with
the disclosing Party's reasonable efforts to resist or narrow the
disclosure and to obtain an order or other reliable assurance that
confidential treatment will be accorded the disclosing Party's
Confidential Information, and (z) furnishes only Confidential
Information that the Party is legally compelled to disclose
according to advice of its legal counsel. Upon written
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request at the expiration or termination of this Agreement, all
documented Confidential Information (and all copies thereof) owned
by the requesting Party will be returned to it or destroyed by the
recipient Party, with written certification thereof.
(c) RESIDUAL KNOWLEDGE. Each Party acknowledges that the other may, as
a result of its receipt of or exposure to the other Party's
Confidential Information, increase or enhance the knowledge and
experience retained in the unaided memories of its directors,
employees, agents or contractors. Notwithstanding anything to the
contrary in this Agreement, a Party and its directors, employees,
agents or contractors may use and disclose such knowledge and
experience in such Party's business, so long as such use or
disclosure does not involve specific Confidential Information
received from the other Party. The disclosing Party will not have
rights in such knowledge and experience acquired by the recipient
Party, nor rights in any business endeavors of the recipient Party
which may use such knowledge and experience, nor rights to
compensation related to the recipient Party's use of such knowledge
and experience.
9.3 AUDIT RIGHTS.
(a) GENERAL. Auditors designated by Customer, and who agree in writing
to the security and confidentiality obligations and procedures
required by Sabre, will be provided with reasonable access to
locations from which Sabre provides Services to enable them to audit
(at Customer's expense, subject to SECTION 9.3(e)) Sabre's
activities under this Agreement, including verifying that Services
are being provided in accordance with this Agreement and applicable
SLAs. The auditors must be nationally recognized firms and Customer
may not designate any auditor who, in Sabre's reasonable opinion, is
a competitor of, or affiliated with a competitor of, Sabre or its
Subsidiaries.
(b) PROCEDURES. Such audits may be conducted once a year during
reasonable business hours. Customer will provide Sabre with at
least thirty (30) days prior written notice of an audit. Sabre will
cooperate with the audit, will make the information reasonably
required to conduct the audit available on a timely basis and will
assist the designated employees of Customer's auditors as reasonably
necessary. If Sabre requires resources in addition to those
required in the ordinary course of its delivery of the Services to
satisfy its obligations under this SECTION 9.3(b), such additional
resources will be charged as Variable Services. Sabre will not be
required to provide access to the proprietary data of Sabre or other
Sabre customers. All information pertaining to Sabre (including the
IP, business, properties or Services of Sabre) learned or exchanged
in connection with the conduct of an audit, as well as the results
of any audit, is Confidential Information of Sabre.
(c) RESULTS. Customer will provide Sabre copies and results of each
audit. The Parties will review the results of an audit, will
identify all relevant audit issues and will determine (i) what, if
any, actions will be taken in response to such audit issues, and
(ii) which Party will be responsible for the cost of taking the
actions necessary to resolve such issues.
(d) RECORDS RETENTION. Sabre will retain books and records that are
reasonably required to verify that Services are being provided in
accordance with this Agreement and applicable SLAs for a period of
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]after their
creation.
(e) COSTS OF AUDIT. In the event an audit conducted pursuant to this
SECTION 9.3 reveals that Sabre has overcharged Customer by an amount
in excess of [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]during
a period of at least [TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED], then Sabre will pay or
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reimburse Customer for the reasonable costs of such audit that are
attributable to that portion of the auditor's fees charged Customer
for auditing amounts charged by Sabre under the Agreement.
ARTICLE X. PAYMENTS
10.1 FEES FOR BASE SERVICES. In consideration for the performance of the Base
Services, Customer will pay to Sabre the Fees set forth in SCHEDULE 8.
Pursuant to the Contract Administration Process, the Fees for Base
Services will increase following the Migration Completion Date for any
Base Services provided with respect to the Preview Operations, and the
effective date of implementing any Optional Web Hosting Services.
10.2 FEES FOR VARIABLE SERVICES. In consideration for any agreement by Sabre
to provide Variable Services, Customer will pay to Sabre the Fees set
forth in SCHEDULE 8.
10.3 THIRD PARTY FEES. Customer will pay all fees, royalties, costs, expenses
and other charges now or hereafter payable to any Third Party in
connection with or related to Third Party Software, Customer Assets or
data used by Sabre in performing the Services or Accessed or used by
Customer (or permitted Third Parties).
10.4 EXPENSES. Customer will reimburse Sabre for all reasonable travel,
travel-related (including food, lodging and incidental) and out-of-pocket
expenses incurred by Sabre, its subcontractors or agents in performing
Services under this Agreement. Sabre has provided Customer with written
reimbursement guidelines as in effect on the Effective Date, and will
forward to Customer written copies of each amendment thereto.
10.5 MANNER OF PAYMENT. All payments will be made by wire transfer to a bank
account designated by Sabre or through such other means as the Parties
agree. If a Subsidiary or Affiliate of Sabre provides Services, Sabre may
opt for such Subsidiary or Affiliate to invoice Customer for Services it
provides, in which case Customer will pay that entity directly.
10.6 INVOICING AND TIME OF PAYMENT. SCHEDULE 8 sets forth procedures by which
Fees are invoiced by Sabre and dates by which Fees are due and payable by
Customer. Each invoice will itemize the Fees contained therein, and will
be accompanied by reasonable detail in accordance with Sabre's customary
billing practices. Sabre will provide Customer additional information
about invoices as Customer reasonably requests and as Sabre customarily
provides.
10.7 TAXES. Customer will be responsible for and will pay for any Taxes that
are imposed on or determined by reference to (a) services or property
provided under this Agreement, (b) the payments due to Sabre pursuant to
this Agreement, including (i) payments for the sale, delivery or
furnishing of any property or services (including the Services or access
to or use of Sabre Software) hereunder and (ii) Taxes arising from the
payments under this SECTION 10.7 and SECTION 10.8 below, or (c) the
execution, delivery, notarization, recordation or other similar action
with respect to, this Agreement; provided, however, that Customer will not
be responsible for Taxes imposed on the net income of Sabre.
10.8 NET PAYMENTS. All payments due to Sabre under this Agreement will be
made free and clear of any withholdings for present or future Taxes. If
Customer is required by law to make any deduction or withholding of Taxes
from any payment due to Sabre, then: (a) Customer will effect such
deduction or withholding, and remit such Taxes to the appropriate taxing
authorities; (b) the amount payable to Sabre upon which such deduction or
withholding is based will be increased to the extent necessary to ensure
that after such deduction or withholding Sabre is paid a net amount
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equal to the amount Sabre would have been paid in the absence of such
deduction or withholding; (c) if requirements of Law or any reason
indicated in this SECTION 10.8 cause any further deduction or withholding
of Taxes, the amount payable to Sabre will be further increased to the
extent necessary to ensure that after such deduction or withholding, Sabre
is paid a net amount equal to the amount Sabre would have been paid in
the absence of such further deductions or withholdings; and (d) Customer
will provide Sabre with the original receipt, a duplicate original
receipt, or a duly certified or authenticated copy of the receipt, and
copies of cancelled checks, for any Taxes deducted or withheld and
remitted to the appropriate taxing authorities under this SECTION 10.8.
Such receipts or copies will be provided to Sabre within sixty (60) days
following the date of deduction or withholding.
10.9 INTEREST. If Customer fails to pay any amount when properly due, the
past-due amount will bear interest, until paid, at a rate of [TEXT OMITTED
- CONFIDENTIAL TREATMENT REQUESTED] or the maximum rate allowed by law,
whichever is less. Such interest will be payable as it accrues, upon
demand.
ARTICLE XI. TERM AND TERMINATION
11.1 TERM. The term of this Agreement will begin on the Effective Date and,
unless terminated earlier under SECTION 11.2, will remain in effect until
the expiration or termination of all of the Services. Subject to SECTION
11.2, the period of time during which Sabre will provide each of the
following Categories of Service will be as follows:
(a) DATA AND VOICE SERVICES: Three (3) years from the Effective Date.
(b) WEB HOSTING SERVICES: Six (6) months from the Effective Date;
PROVIDED, HOWEVER, that unless Customer notifies Sabre to the
contrary at least sixty (60) days prior to the end of the initial
six-month period, the initial term will be extended for one
additional six (6) month period, and Customer may terminate the Web
Hosting Services during such renewal six-month period at any time
upon not less than sixty (60) days written notice to Sabre. [TEXT
OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
(c) DEVELOPMENT SERVICES: Fifteen (15) years.
(d) DESKTOP SERVICES: through August 31, 2000.
11.2 TERMINATION.
(a) If a Party commits a Material Breach, the other Party may terminate
this Agreement by notifying the breaching Party; provided, however,
that if a Material Breach pertains to only one Category of Services
then the other Party may terminate this Agreement only with respect
to the Category of Service to which the Material Breach pertains.
(b) [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
11.3 EFFECT OF EXPIRATION OR TERMINATION.
(a) [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
(b) [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
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(c) TERMINATION ASSISTANCE. If this Agreement expires under SECTION
11.1 or is terminated by Customer under SECTION 11.2, Sabre will
provide Termination Assistance Services during a period of time
("TERMINATION ASSISTANCE PERIOD") beginning on the earlier of: (a)
the date of expiration or termination of a Category of Services
under the Agreement and (b) a date (not more than [TEXT OMITTED -
CONFIDENTIAL TREATMENT REQUESTED]prior to then-scheduled expiration
of the Term) specified by Customer in a written notice to Sabre; and
ending that number of days following the commencement of the
Termination Assistance Period, for each of the following Categories
of Service as follows: (i) Data and Voice Services[TEXT OMITTED -
CONFIDENTIAL TREATMENT REQUESTED]; (ii) Development Services: [TEXT
OMITTED - CONFIDENTIAL TREATMENT REQUESTED]; and (iii) Web Hosting
Services: [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
Customer will continue to pay all Fees during such period. This
Agreement remains in effect during the Termination Assistance Period
and applies to the Termination Assistance Services. Customer will
cooperate in good faith with Sabre in connection with Sabre's
obligations under this SECTION 11.3(c), and will perform its
obligations under the Termination Assistance Plan. Sabre is not
required to provide Termination Assistance Services if it terminates
this Agreement under SECTION 11.2(a), and is not required to begin
new Development Services projects following the termination of this
Agreement with respect to Development Services.
(d) DISCLOSURE OF INFORMATION. Sabre is not required to disclose
Sabre's Confidential Information to any successor Third Party IT
service provider except to the extent that Customer is entitled
thereto. Customer will cause any such Third Party IT service
provider to agree in writing on terms acceptable to Sabre to
maintain the confidentiality of all Sabre Confidential Information
and to use such information only for purposes authorized under this
Agreement. Customer will use commercially reasonable efforts to
assure such Third Party's compliance with such confidentiality
obligation.
(e) TERMINATION OF CATEGORY OF SERVICES. To the extent that this
Agreement is terminated with respect to a particular Category
of Services, and not in its entirety, then the provisions of
this SECTION 11.3 shall apply to the Category of Services with
respect of which this Agreement has been terminated. Further,
to the extent that a particular Category of Services is
terminated, the obligations with respect to associated
Exclusive Variable Services will also terminate.
ARTICLE XII. INDEMNITIES AND LIABILITY
12.1 INDEMNITIES.
(a) TAXES. Each Party will indemnify, defend and hold harmless the
other Party and its Affiliates from and against all Losses arising
out of, under or in connection with any claim for Taxes for which
the indemnitor is financially responsible under this Agreement.
(b) PERSONAL INJURY AND PROPERTY DAMAGE. Each Party will indemnify,
defend and hold harmless the other Party and its Affiliates from and
against all Losses arising out of, under or in connection with (i)
bodily or other personal injury to, or death of, any Person or (ii)
damage to or destruction of any tangible property, in each case
resulting from, or arising out of, under or in connection with, the
gross negligence or willful misconduct of the indemnitor or any of
its Subsidiaries; provided that Sabre will have no indemnification
obligation in respect of Losses arising out of, under or in
connection with
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any incident for which it is entitled to indemnification under
SECTIONS 12.1(d) and 12.1(g).
(c) INFRINGEMENT.
(i) GENERAL. Sabre will indemnify, defend and hold harmless
Customer and its Affiliates against any action or cause of
action based on a claim that any Sabre IP (excluding portions
owned by Third Parties or Customer Assets) (A) infringes a
copyright, (B) infringes a patent granted under United States
law (C) infringes a trademark granted under United States law,
or (D) constitutes an unlawful disclosure, use or
misappropriation of a Third Party's Trade Secrets. Customer
will indemnify, defend and hold harmless Sabre and its
Affiliates against any action or cause of action based on a
claim that any Customer IP (excluding portions owned by Third
Parties) or Owned Systems or Owned Intellectual Property
Rights (W) infringes a copyright, (X) infringes a patent
granted under United States law, (Y) infringes a trademark
granted under United States law, or (Z) constitutes an
unlawful disclosure, use or misappropriation of a Third
Party's Trade Secrets. The indemnitor will bear the expense
of such defense and pay any damages and attorneys' fees that
are attributable to such claim finally awarded by a court of
competent jurisdiction. Notwithstanding the foregoing,
neither Party will be liable to the other for claims of
indirect or contributory infringement, including claims based
on use of Intellectual Property Rights with equipment or
software not agreed by the indemnitor or in a manner for which
such rights are not designed or indemnitee's modifications to
Intellectual Property Rights (other than those made at the
indemnitor's request).
(ii) ADDITIONAL REMEDY. If Sabre IP or Customer IP (or Owned
Systems or Owned Intellectual Property Rights) becomes the
subject of a claim under this SECTION 12.1(c), or in the
indemnitor's reasonable opinion is likely to become the
subject of such a claim, then, in addition to defending the
claim and paying any damages and attorneys' fees as required
above, the indemnitor will use commercially reasonable efforts
to either (A) replace or modify the Sabre IP or Customer IP
(or Owned Systems or Owned Intellectual Property Rights), as
applicable, to make it noninfringing or cure any claimed
misuse of a Third Party's Trade Secret or (B) procure for the
indemnitee the right to continue using the Sabre IP or
Customer IP (or Owned Systems or Owned Intellectual Property
Rights), as applicable. Any costs associated with either
alternative will be borne by the indemnitor. If neither
option is available to the indemnitor through the use of
commercially reasonable efforts, (X) the indemnitee will
return such Sabre IP or Customer IP (or Owned Systems or Owned
Intellectual Property Rights), as applicable, to the
indemnitor and (Y) if requested by the indemnitee in good
faith, the Parties will negotiate, pursuant to SCHEDULE 13,
but subject to SECTION 12.2, to reach a written agreement on
what, if any, monetary damages (in addition to the
indemnitor's obligations under this SECTION 12.1(c)) are
reasonably owed by the indemnitor to the indemnitee.
(d) PROVISION OF SERVICES. Customer will indemnify, defend and hold
harmless Sabre and its Affiliates from and against all Losses
arising out of or in connection with (i) Customer's improper use of
the Services, (ii) the failure of any equipment, products or
services provided by Customer, including, without limitation, the
Customer Assets, (iii) any act or omission of any Third Party
furnishing products, equipment, software or any other items or
services which are required by Customer to use the Services, (iv)
unauthorized modifications, alterations, tampering, adjustment or
repair of the Services, Applications
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or other components of the IT systems operated by Sabre to perform
the Services caused by Customer or any Third Party permitted access
to or use thereof by Customer; (v) the distribution, display or
publication of any material delivered by or through Customer (other
than material provided by Sabre) over or using the internet,
including with respect to such information: (A) content whether
editorial, advertising, or otherwise, (B) copyright infringement,
libel, indecency, misrepresentation, invasion of privacy, or (C)
statements for other materials made or made available by readers of
the content or by persons to whom the content is linked at the
request of Customer; and (vi) Customer's use of the Data and Voice
Services provided by Sabre including (A) the abuse or fraudulent use
of the Data and Voice Services (or the voice or data networks to
which the Data and Voice Services pertain), (B) any information,
data, or message transmitted over the network by Customer that
constitutes libel, slander, infringement of copyright, invasion of
privacy, violation of trans-border data flow regulations, or
alterations of private records or data, or (C) Customer's failure
to comply with the provisions of SCHEDULE 16.
(e) EMPLOYEES. Each Party will indemnify, defend and hold harmless the
other Party and its Affiliates from and against all Losses arising
out of, under or in connection with an act or omission of the
indemnitor in its capacity as an employer of a Person and arising
out of or relating to (i) federal, state or other Laws or
regulations for the protection of Persons who are members of a
protected class or category of Persons, (ii) sexual discrimination
or harassment, (iii) accrued employee benefits not expressly assumed
by the indemnitee and (iv) any other aspect of the employment
relationship or its termination (including claims for breach of an
express or implied contract of employment) and which, with respect
to each of clauses (i) through (iv), arose when the Person asserting
the claim, demand, charge, actions, cause of action or other
proceeding was or purported to be an employee of the indemnitor.
Customer acknowledges and agrees that its employee indemnity
obligation set forth above includes Losses for severance benefits.
(f) REQUIRED CONSENTS. Customer will indemnify, defend and hold
harmless Sabre and its Affiliates from and against all Losses
arising out of, under or in connection with Customer's failure or
inability to obtain any Required Consents (to the extent related to
the Customer Assets, or required under contracts to which Customer
is a party or Laws binding upon Customer). Sabre will indemnify,
defend and hold harmless Customer and its Affiliates from and
against all Losses arising out of, under or in connection with
Sabre's failure or inability to obtain any Required Consents (except
for Required Consents related to the Customer Assets, or required
under contracts to which Customer is a party or Laws binding upon
Customer).
(g) CUSTOMER'S END USERS. The Parties acknowledge that by entering into
this Agreement, Sabre shall not assume and should not be exposed to
the business and operational risks associated with Customer's
business. Customer therefore shall indemnify, defend and hold
harmless Sabre and its Affiliates from and against all Losses
arising out of or in connection with any claim by any customer or
end user of Customer, or of any of the customers or end users of any
such customer or end user.
(h) PROCEDURES FOR THIRD PARTY CLAIMS. Notwithstanding any provision to
the contrary, the indemnification obligations set forth in this
SECTION 12.1 for Losses arising out of, under or in connection with
Third Party claims, actions or causes of action will not apply
unless the Party claiming indemnification:
(i) promptly notifies the other Party of any matters to which the
indemnity may apply and of which the notifying Party has
knowledge in order to allow the indemnitor an
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opportunity to investigate and defend the matter; provided
that the failure to so notify will only relieve the indemnitor
of its obligations if and to the extent that the indemnitor is
prejudiced thereby; and
(ii) gives the other Party full opportunity to control the response
thereto and the defense thereof, including any agreement
relating to the settlement thereof; provided that the
indemnitee will have the right to participate in any legal
proceeding or audit to contest and defend a claim for
indemnification involving a Third Party and to be represented
by legal counsel of its choosing, all at the indemnitee's cost
and expense. If the indemnitor fails to promptly assume the
defense of the claim, the Party entitled to indemnification
may assume the defense at the indemnitor's cost and expense.
The indemnitor will not be responsible or liable for any settlement
or compromise made without its consent, unless the indemnitee has
tendered notice and the indemnitor has then refused to assume and
defend the claim and it is later determined that the indemnitor was
liable to assume and defend the claim. The indemnitee agrees to
cooperate in good faith with the indemnitor at the request and
expense of the indemnitor.
(i) NEGLIGENCE. THE ORDINARY, BUT NOT GROSS, NEGLIGENCE OF ANY
INDEMNITEE OR THE JOINT OR CONCURRENT ORDINARY, BUT NOT GROSS,
NEGLIGENCE OF TWO OR MORE INDEMNITEES WILL NOT PRECLUDE SUCH
INDEMNITEE(S) FROM RECEIVING THE BENEFITS OF INDEMNIFICATION UNDER
THIS SECTION 12.1.
12.2 LIABILITY.
(a) GENERAL LIMITATION. The liability of Sabre to Customer for all
damages and other Losses arising out of or related to this Agreement
for all claims, actions and causes of action of every kind and
nature that arise or accrue during any calendar year, regardless of
the form of action that imposes liability, whether in contract,
equity, negligence, intended conduct, tort or otherwise, will be
limited to and will not exceed [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED] Also, without increasing the aggregate amount
described in the preceding sentence, with respect to the
nonperformance or inadequate performance of any particular Service,
the liability of Sabre to Customer for all damages and other Losses
arising out of or related to this Agreement for all claims, actions
and causes of action of every kind and nature that arise or accrue
during any calendar year as a result of the nonperformance or
inadequate performance of such particular Service, regardless of the
form of action that imposes liability, whether in contract, equity,
negligence, intended conduct, tort or otherwise, will be limited to
and will not exceed [TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED]
(b) [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
(c) EXCEPTIONS TO LIMITATIONS. The limitations, waivers and disclaimers
set forth in SECTIONS 12.2(a) and 12.2(b) do not apply to the
liability of either Party resulting from: (i) that Party's
nonperformance of its payment obligations to the other expressly set
forth in this Agreement; (ii) that Party's breach of its obligations
under SECTIONS 7.1 or 9.2(a); or (iii) that Party's indemnification
obligations under SECTION 12.1 in respect of Losses arising out of,
under, or in connection with Third Party claims, actions or causes
of action.
(d) CONTRACTUAL STATUTE OF LIMITATIONS. No demand for mediation or
arbitration or cause of action which arose out of an event or events
which occurred more than two (2) years prior to
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the filing of a demand for mediation or arbitration or suit alleging
a claim or cause of action may be asserted by either Party against
the other.
(e) INJUNCTIVE RELIEF. Each of the Parties acknowledges that, in the
event a Party breaches its obligations under SECTIONS 4.1, 7.1 or
9.2(a), the non-breaching Party may be irreparably harmed. In such
a circumstance, the non-breaching Party may proceed directly to
court.
(f) EXCLUSIVE AND NON-CUMULATIVE REMEDIES. The rights and remedies of a
Party specified in this Agreement for any breach or event constitute
the exclusive rights and remedies of a Party for that breach or
event, except: (i) for injunctive relief to which Party is entitled
as a matter of law or equity; and (ii) that exercising the right to
terminate this Agreement entirely or with respect to a Category of
Services, following a breach of this Agreement, does not constitute
the exclusive remedy for the breach upon which such termination is
based.
(g) ACKNOWLEDGMENT. The Parties expressly acknowledge that the
limitations, waivers, disclaimers and exclusions set forth in this
SECTION 12.2 have been actively and completely negotiated by the
Parties and represent the Parties' agreement taking into account
each Party's level of risk associated with the performance or
nonperformance of its obligations under this Agreement and the
payments and other benefits to be derived by each Party pursuant to
this Agreement.
ARTICLE XIII. INSURANCE
13.1 GENERAL. Each Party will have and maintain in force insurance coverage,
including worker's compensation insurance and general liability insurance,
adequate for it to perform its obligations under this Agreement.
13.2 RISK OF LOSS. Each Party will be responsible for risk of loss of, and
damage to, any equipment, software or other materials in its possession or
under its control.
ARTICLE XIV. MISCELLANEOUS
14.1 RIGHT TO ENGAGE IN OTHER ACTIVITIES. Customer acknowledges and agrees
that Sabre and its Affiliates may provide data processing and other
information technology services for Third Parties at any Sabre facility
that Sabre uses to perform Services. Nothing in this Agreement will
impair Sabre's right to acquire, license, market, distribute, develop for
itself or others or have others develop for Sabre similar technology
performing the same or similar functions as the technology and Services
contemplated by this Agreement.
14.2 INDEPENDENT CONTRACTORS. The Parties are independent contractors, and
this Agreement will not be construed as constituting either Party as
partner, joint venturer or fiduciary of the other or to create any other
form of legal association that would impose liability on one Party for the
act or failure to act of the other or as providing either Party with the
right, power or authority (express or implied) to create any duty or
obligation of the other. Except as otherwise expressly provided in this
Agreement, each Party has the sole right and obligation to supervise,
manage, contract, direct, procure, perform or cause to be performed all
obligations to be performed by it pursuant to this Agreement.
14.3 ENTIRE AGREEMENT; SURVIVAL. This Agreement (including the Schedules
attached hereto and all Work Orders and SLAs entered into by the Parties
in connection herewith, each of which is incorporated into this Agreement
by this reference) constitutes the full and complete statement of the
agreement of
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the Parties with respect to the subject matter hereof and supersedes any
previous agreements, understandings or communications, whether written or
oral, relating to such subject matter. This Agreement does not supersede
the other agreements being executed by the Parties contemporaneously with
the execution of this Agreement, including the Sabre Access Agreement,
Noncompetition Agreement, and Intellectual Property Agreement. Any
provision of this Agreement which contemplates performance or observance
subsequent to any termination or expiration of this Agreement will survive
any termination or expiration of this Agreement and continue in full force
and effect. Such provisions will include ARTICLE IV, SECTION 8.2,
SECTION 9.1, SECTION 9.2, SECTION 10.7, SECTION 10.8, ARTICLE XII,
ARTICLE XIV, and obligations to make payments that remain due and payable
under this Agreement.
14.4 AMENDMENTS; WAIVER. Changes or modifications to this Agreement, Work
Orders and SLAs may not be made orally, but only by a written amendment or
revision signed by both Parties. Any terms and conditions varying from
this Agreement on any order, invoice or other notification from either
Party are not binding on the other unless specifically accepted in writing
by the other. Unless otherwise expressly provided in this Agreement, a
delay or omission by either Party to exercise any right or power under
this Agreement will not be construed to be a waiver thereof. No waiver of
any breach of any provision of this Agreement will constitute a waiver of
any prior, concurrent or subsequent breach of the same or any other
provision hereof.
14.5 BINDING NATURE; ASSIGNMENT. This Agreement will be binding on the
Parties and their successors and permitted assigns (it being understood
and agreed that nothing contained in this Agreement is intended to confer
upon any other Person any rights, benefits or remedies of any kind or
character whatsoever under or by reason of this Agreement). Except as
otherwise expressly provided in SECTION 6.3, neither Party may, nor will
it have the power to, assign this Agreement, or any part hereof, without
the prior written consent of the other, provided, that Sabre may assign
its rights and delegate its duties and obligations without the prior
written consent of Customer to any Subsidiary or Affiliate of Sabre as
necessary in order for such Subsidiary or Affiliate to provide all or part
of the Services. The Parties acknowledge that either Party might become a
party to one or more transactions in the form of a merger, consolidation,
reorganization, stock sale or exchange, sale of any substantial portion of
such Party's assets or similar transaction. Any such transaction
involving a Party (and whether or not it is the surviving entity) will be
deemed to be an assignment of this Agreement by that Party requiring the
consent of the other Party if in Sabre's reasonable opinion: (a) in the
case of Sabre being involved in such a transaction, the transaction
materially and adversely affects Sabre's ability to continue to perform
the Services in accordance with this Agreement; or (b) in the case of
Customer being involved in such a transaction, the transaction (i) causes
a material increase in Sabre's costs to provide Services, unless the
Parties have agreed in writing to an associated increase in Base Fees,
(ii) impairs Sabre's ability to meet SLAs or SLA Standards, unless the
Parties have agreed in writing to amendments thereto that remove such
impairment, or (iii) impairs Customer's ability to meet its financial
obligations hereunder.
14.6 THIRD PARTY BENEFICIARIES. Except as provided in this Agreement, this
Agreement is entered into solely between, and may be enforced only by,
Sabre and Customer, and this Agreement will not be deemed to create any
rights in Third Parties, including suppliers and customers of a Party, or
to create any obligations of a Party to any such Third Parties.
14.7 DISPUTE RESOLUTION. All Disputes arising out of the transactions
contemplated by this Agreement (including any Disputes governed but not
resolved under the Contract Administration Process) will be resolved in
accordance with the Dispute resolution procedures set forth in SCHEDULE
13.
14.8 EXPORT REGULATIONS. This Agreement is expressly made subject to any
United States government Laws or other restrictions regarding export from
the United States of computer hardware, software, technical data or
derivatives of such hardware, software or technical data. Notwithstanding
anything
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to the contrary in this Agreement, Customer will not directly or
indirectly export (or re-export) any computer hardware, software,
technical data or derivatives of such hardware, software or technical
data, or permit the shipment of same: (a) into (or to a national or
resident of) any country to which the United States has embargoed goods;
(b) to anyone on the U.S. Treasury Department's List of Specially
Designated Nationals, List of Specially Designated Terrorists or List of
Specially Designated Narcotics Traffickers, or the U.S. Commerce
Department's Denied Parties List; or (c) to any country or destination for
which the United States government or a United States governmental agency
requires an export license or other approval for export without first
having obtained such license or other approval. Each Party will
reasonably cooperate with the other and will provide to the other promptly
upon request any end-user certificates, affidavits regarding re-export or
other certificates or documents as are reasonably requested to obtain
approvals, consents, licenses and/or permits required for any payment or
any export or import of products or services under this Agreement.
14.9 APPROVALS AND SIMILAR ACTIONS. Except as otherwise expressly provided in
this Agreement, where agreement, approval, acceptance, consent or similar
action is required of either Party by any provision of this Agreement,
such action will not be unreasonably withheld or delayed. An approval or
consent given by a Party under this Agreement will not relieve the other
Party from responsibility for complying with the requirements of this
Agreement, nor will it be construed as a waiver of any rights under this
Agreement, except as and to the extent otherwise expressly provided in
such approval or consent.
14.10 NOTICES. All notices under this Agreement will be in writing and will be
deemed to have been duly given if delivered personally or by a nationally
recognized courier service, faxed, electronically mailed or mailed by
registered or certified mail, return receipt requested, postage prepaid,
to the Parties at the addresses set forth in SCHEDULE 14. All notices
under this Agreement that are addressed as provided in this SECTION 14.10,
(a) if delivered personally or by a nationally recognized courier service,
will be deemed given upon delivery, (b) if delivered by facsimile or
electronic mail, will be deemed given when confirmed and (c) if delivered
by mail in the manner described above, will be deemed given on the fifth
(5th) Business Day after the day it is deposited in a regular depository
of the United States mail. Either Party from time to time may change its
address or designee for notification purposes by giving the other Party
notice of the new address or designee and the date upon which such change
will become effective.
14.11 EXCUSED PERFORMANCE.
(a) CERTAIN EVENTS.
(i) If any of the items, events, conditions, acts or omissions
described in clause (ii) below:
(A) causes, results in or contributes to any impairment of
functionality or performance of any Service (or any
component of IT systems operated by Sabre to perform
Services): (1) Sabre will not be responsible or liable
for such impairment and will be excused, to the extent
of such impairment, from performing (x) impacted
Measured Services in accordance with the SLAs and SLA
Standards therefor until such impairment is cured or the
Parties agree on revised SLAs and SLA Standards therefor
and (y) impacted Services in accordance with the terms
of this Agreement until such impairment is cured; (2)
except in the instance of acts or omissions by Customer
that constitute a breach of this Agreement, Sabre will
use commercially reasonable efforts, at Customer's
expense and as Variable Services, to mitigate such
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impairment; and (3) pursuant to the Contract
Administration Process, Sabre and Customer will modify,
amend or, in certain circumstances, terminate Services,
SLAs, SLA Standards and other non-monetary obligations
of the Parties, in each case as appropriate in light of
such impairment; or
(B) causes, results in or contributes to a material increase
in Sabre's cost to provide the Services, Sabre will
reasonably determine the resulting increase in Base
Fees.
(ii) The following items, events, conditions, acts or omissions are
subject to this SECTION 14.11(a): (A) Customer's purchase or
use of Third Party IT Services; (B) the failure of any
equipment, products or services provided by Customer,
including the Customer Assets; (C) performance, nonperformance
or inadequate performance by any Third Party IT Service
Provider; (D) unauthorized modifications, alterations,
tampering, adjustment or repair of the Services, Applications
or other components of the IT systems operated by Sabre to
perform the Services caused by Customer or a Third Party
permitted access to or use thereof by Customer; (E) the
failure of any item to be Year 2000 Compliant (except for
items warranted by Sabre in SECTION 8.1(c)); (F) changes made
by Customer to Customer Assets, Customer's IT environment, or
IT services performed by Customer, or Customer's refusal to
implement changes to, replacements for or reallocations of
Customer Assets, Customer's IT environment or IT services
performed by Customer that are recommended by Sabre; (G)
inaccuracies of Customer Data; (H) any failure or inability by
Customer to obtain any Required Consent under this Agreement;
or (I) any other act or omission by Customer, any Third Party
that is a party to any agreement included within the Customer
Assets (when acting in that capacity) or any other Third
Party over which Sabre has no reasonable control.
(iii) The rights of Sabre set forth in this SECTION 14.11(a) are in
addition to, and not in limitation of, the rights afforded
Sabre under SECTION 14.11(b).
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(b) FORCE MAJEURE.
(i) Except for the obligations to make payments due hereunder,
each Party will be relieved of its obligations under this
Agreement to the extent that performance is delayed or
prevented by a Force Majeure Event.
(ii) In such event the non-performing Party will be excused from
further performance or observance of the obligation(s) so
affected for as long as such circumstances prevail and such
Party continues to use commercially reasonable efforts to
recommence performance or observance whenever and to whatever
extent possible without delay.
(iii) If any such Force Majeure Event substantially prevents,
hinders, or delays performance of Services necessary for the
performance of mission critical Customer functions for more
than [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED], then
Customer, at its expense, may procure such Services from an
alternate source until such time as Sabre is able to
recommence performance of such Services.
(iv) If a Force Majeure Event that substantially prevents, hinders,
or delays performance of Services necessary for the
performance of mission critical Customer functions continues
for [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED], then
either Party will have the right to terminate this Agreement
upon notice to the other Party.
(v) The Party suspending or delaying performance will notify the
other Party promptly upon learning of the occurrence of the
Force Majeure Event.
14.12 PRESS RELEASES. All press releases, public announcements or similar
public disclosure by either Party relating to this Agreement or its
subject matter, including promotional or marketing material, will be
coordinated with and approved by the other Party prior to release.
Notwithstanding the foregoing: Sabre will have the right to make general
references to Customer and the type of services being provided by Sabre to
Customer under this Agreement in Sabre's promotional and marketing
materials as well as in Sabre's presentations to prospects; and Customer
will have the right to make general references to Sabre and the type of
services provided by Sabre to Customer under this Agreement in Customer's
promotional and marketing materials. This provision does not alter the
restrictions on the disclosure of Confidential Information set forth in
SECTION 9.2 and, subject to SECTION 9.2, will not be construed so as to
delay or restrict either Party from disclosing any information required to
be disclosed in order to comply with any applicable law, rule or
regulation.
14.13 CONSTRUCTION RULES. If any provision of this Agreement is held to be
invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions will not in any way be affected
or impaired, and such provision will be deemed to be restated to reflect
the original intentions of the Parties as nearly as possible in accordance
with applicable law. The Parties agree that this Agreement is an
executory contract as contemplated by 11 U.S.C. Section 365. In
performing its obligations under this Agreement, neither Party will be
required to undertake any activity that would conflict with the
requirements of any applicable law, rule, regulation, interpretation,
judgment, order or injunction of any Governmental Authority. This
Agreement may be executed in multiple counterparts, each of which will be
deemed an original and all of which taken together will constitute one
instrument. The Parties acknowledge and agree that each has been
represented by legal counsel of its choice throughout the negotiation and
drafting of this Agreement, that each has participated in the drafting
hereof and that this Agreement will not be construed in favor of or
against either Party solely on the basis of a Party's drafting or
participation in the drafting of any portion of this Agreement.
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14.14 FURTHER ASSURANCES. The Parties will execute and deliver such other
instruments and documents, and take such other actions, as either Party
reasonably requests to evidence or effect the transactions contemplated by
this Agreement.
14.15 GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the substantive Laws of the State of Texas, without giving
effect to any choice-of-law rules that may require the application of the
Laws of another jurisdiction.
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IN WITNESS WHEREOF, the Parties have duly executed and delivered this
Agreement as of the Effective Date.
TRAVELOCITY.COM LP SABRE INC.
By: TRAVELOCITY HOLDINGS, INC., By: Jeffrey M. Jackson
its general partner ----------------------------------
Title: Sr. V.P. and CFO
-------------------------------
By: /s/ Jeffrey M. Jackson Date: March 7, 2000
---------------------------------- --------------------------------
Title: Sr. V.P. and CFO
-------------------------------
Date: March 7, 2000
--------------------------------
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LIST OF SCHEDULES
Schedule 2.1 Desktop Services
Schedule 2.2 Data and Voice Services
Schedule 2.3 Web-hosting Services
Schedule 2.4 Development Services
Schedule 3 Exclusive Variable Services
Schedule 4 Measured Services
Schedule 5 Service Level Agreements
Schedule 6 Performance Reports
Schedule 7 Contract Administration Process
Schedule 8 Fees
Schedule 9 Development Services Budget
Schedule 10 Sabre Software
Schedule 11 Required Consents
Schedule 12 Customer Assets
Schedule 13 Dispute Resolution Procedures
Schedule 14 Notices
Schedule 15 Termination Assistance
Schedule 16 Telecommunications Provisions
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APPENDIX A
TO
INFORMATION TECHNOLOGY SERVICES AGREEMENT
BETWEEN
SABRE INC.
AND
TRAVELOCITY.COM, L.P.
GLOSSARY
1. RULES OF INTERPRETATION. The following rules of interpretation apply to
the Agreement (and are by this reference incorporated into the Agreement):
(a) the word "or" is not exclusive and the words "including" or
"include" are not limiting;
(b) the words "hereby," "herein," "hereof," "hereunder" or other words
of similar meaning refer to the entire document in which it is
contained;
(c) a reference to any agreement or other contract includes permitted
supplements, amendments and restatements;
(d) a reference to a law includes any amendment or modification to such
law and any rules or regulations promulgated thereunder or any law
enacted in substitution or replacement therefor;
(e) a reference to singular includes plural and vice-versa and each
gender includes the other;
(f) a reference to days, months, or years refers to calendar days,
months, and years, unless Business Days are specified;
(g) Article and Section headings and table of contents are only for
reference and are not to be considered in interpreting the
agreement;
(h) a reference to an Article, Section, Appendix, Exhibit or Schedule
which does not specify a particular document is to the relevant
Article, Section Appendix, Exhibit or Schedule of the document
containing the reference;
(i) a reference to an Article includes all Sections and subsections
contained in such Article, and a reference to a Section or
subsection includes all Subsections of such Section or subsection;
(j) if an ambiguity arises in an Article's, Section's or subsection's
cross-reference to another Article, Section or subsection, the
cross-referenced heading controls over the cross-referenced Article,
Section or subsection number;
(k) All terms not otherwise defined herein shall have the meaning
commonly ascribed thereto in the information technology industry;
and
(l) "$" refers to United States dollars.
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2. DEFINITIONS. As used in the Agreement, the following terms will have the
following meanings:
"ACCESS" means the enjoyment of physical and legal use and operation of a
specific item of property in order for Sabre to perform the Services.
"ACCESS AGREEMENT" means that certain agreement allowing Customer to access
the Sabre CRS and executed by the Parties as of the Effective Date.
"ACCESS LOCATIONS" means (to the extent that the description of Services
specifies the facilities or locations from which Services may be Accessed)
the Customer facilities and other locations specified in the description of
Services, as the same may be changed from time to time in accordance with the
Contract Administration Process.
"ACCOUNT MANAGERS" means the Sabre Account Manager and Customer Account
Manager.
"AFFILIATE" means, with respect to any Person at any time, any other Person
that controls, is controlled by or is under common control with the first
mentioned Person.
"AGREEMENT" means the Information Technology Services Agreement between Sabre
and Customer.
"ANTITRUST LAWS" means any Law which relates to unlawful restraints on trade
and commerce, price discriminations, price fixing, monopolies or interference
with competition.
"AUTHORIZATIONS" means any franchises, licenses, permits, easements, rights,
applications, filings, registrations and other authorizations required or
useful in connection with the ownership or use of any Customer Asset.
"BASE FEE" means, for each calendar month, the amount that Customer is
obligated to pay to Sabre pursuant to SCHEDULE 8 of the Agreement in
connection with Base Services provided in that month.
"BASE SERVICES" means the Web Hosting Services, Data and Voice Services,
Development Services and Desktop Services provided by Sabre under the
Agreement.
"BUSINESS DAY" means usual days that the Parties conduct business.
"CATEGORY OF SERVICE" means each of the following major categories of the
Base Services: Web Hosting Services, Data and Voice Services, and
Development Services.
"CHANGE" means: (a) any amendment, modification, addition or deletion
proposed by any Party to the Agreement, any Work Order, any SLA, any Service,
the Service Locations, the Access Locations or any Fees; (b) Customer's
request that Sabre perform any Variable Service or that any Third Party
provide any Non Exclusive Variable Service (including provision of Third
Party Software or other technology); (c) any amendment, modification,
addition or deletion proposed by Customer to any component of the IT systems
operated by Sabre to perform the Services; (d) Customer's request to move its
web hosting infrastructure, as described in Section 2.5(c); (e) Customer's
request that Sabre perform any Optional Web Hosting Service; or (f) any
amendment, modification, addition or deletion proposed by Customer to the
type (as opposed to a change in the model only) of Customer Assets which
constitute the web hosting infrastructure managed and operated by Sabre in
providing Web Hosting Services; or (g) the inclusion of Preview Operations
within the scope of Base Services.
"CIA" has the meaning given in SECTION 4.5(h).
"CONFIDENTIAL INFORMATION" means (i) all information identified by a Party as
confidential to which the other Party has access in connection with the
Services, whether before or after the Effective Date, (ii) the
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Agreement and the Parties' rights and obligations thereunder, (iii) in the
case of Sabre, all Sabre IP, (iv) in the case of Customer, all Customer IP,
and (v) the terms of this Agreement; but in all cases excluding information
and Intellectual Property Rights independently developed by or on behalf of
the recipient Party without use of or reference to the disclosing Party's
Confidential Information.
"CONTRACT ADMINISTRATION PROCESS" means the process described in SCHEDULE 7
of the Agreement.
"CRS COMMUNICATIONS SYSTEMS" [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
"CRS DEVELOPMENT" means a development to or modification of the CRS Software,
created using the Development Services.
"CRS SOFTWARE" [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
"CUSTOMER ACCOUNT MANAGER" means the individual, and any successor
individual, who is a senior level individual within Customer's organization
and who is designated in writing by Customer from time to time.
"CUSTOMER ASSETS" means all Owned Systems, Licensed Systems, Systems License
Agreements, Owned Intellectual Property Rights, Third Party Intellectual
Property Rights, Intellectual Property License Agreements, Third Party IT
Services, Service Contracts, Equipment, Leased Equipment, Equipment Leases,
Real Property, Leased Real Property, Real Property Leases, Authorizations,
Other Contract Benefits, Other Contracts and Other Assets that are: (a) used
by or for the benefit of Customer, or that are necessary, to perform or
manage the Services, including without limitation the assets described in
SCHEDULE 12 of the Agreement, or (b) acquired by Customer after the Effective
Date and the Access by Sabre of which is necessary for Sabre to perform
Services.
"CUSTOMER DATA" means the following data, whether provided or produced
before, on or after the Effective Date: (a) all information relating to
Customer's business, financial condition or operations provided by Customer
to Sabre in connection with the Services; (b) all data that is provided by or
on behalf of Customer to Sabre in order for Sabre to perform the Services;
(c) all data that is produced in the Services using data described in clauses
(a) and (b); but in all cases excluding any Sabre IP.
"CUSTOMER DIRECT COMPETITOR" [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
"CUSTOMER EMPLOYEE(S)" means all employees of Customer who are engaged in,
or are related to, performing or managing the Services.
"CUSTOMER IP" means the Intellectual Property Rights of Customer, including
all Customer Systems.
"CUSTOMER SYSTEMS" means the Owned Systems and the Licensed Systems.
"DATA CENTER" means any computer data processing facility operated by Sabre.
"DATA AND VOICE SERVICES" means the Services described in SCHEDULE 2.2.
"DESKTOP SERVICES" means the Services described in SCHEDULE 2.1.
"DEVELOPMENT RESOURCES" means the personnel resources (expressed as FTE's)
used by Sabre in providing Development Services.
"DEVELOPED IP" means IP made by our Party, or jointly by the Parties,
pursuant to this Agreement.
"DEVELOPMENT SERVICES" means the Services described in SCHEDULE 2.4.
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"DEVELOPMENT SERVICES BUDGET" means a budget of Development Resources to be
provided by Sabre during the twelve (12) calendar months specified in such
budget, and a description of development projects which will be the subject
of Development Services during such period, including whether a project is to
be performed at Premium Rates.
"DISPUTE" means any dispute, claim or controversy of any kind or nature
arising under or in connection with the Services, Agreement and any related
agreements between any of the Parties (including disputes as to the Services,
billing, or the creation, validity, interpretation, breach or termination of
the Agreement).
"EFFECTIVE DATE" means March 7, 2000, at the time on such date immediately
after giving effect to the consummation of the transactions described in the
Bill of Contribution, Assignment and Assumption Agreement, dated March 7,
2000, between Sabre Inc. and Travelocity.com LP.
"EMPLOYEE BENEFIT LAW" means any Law that relates to Employee Benefit Plans
or the payment of salary, wages or commissions.
"ENVIRONMENTAL LAWS" means all Laws relating to pollution or protection of
human health, safety or the environment (including ambient air, surface or
subsurface water, land surface or subsurface strata).
"EQUIPMENT" means all equipment owned by Customer on or after the Effective
Date.
"EQUIPMENT LEASES" means all leases of Leased Equipment to which Customer is
a party that are effective on, or entered into after, the Effective Date.
"EXCLUSIVE VARIABLE SERVICES" means the Exclusive Variable Services described
in SCHEDULE 3 of the Agreement.
"FEES" means all fees, Fees, expenses and other amounts payable by Customer
to or at the direction of Sabre under or in connection with the Agreement.
"FTE" means a full time equivalent person, computed on the basis of an
average of 1,777 working days in a calendar year.
"FORCE MAJEURE EVENT" means any cause beyond a Party's reasonable control,
including but not limited to failures attributable to any action or failure
to act of any Governmental Authority; or as the result of strikes, lockouts
or other labor difficulties; riot, insurrection, protest, security breaches
or other hostilities; boycott, embargo, blockade, fuel or energy shortages;
fire, flood, cyclone, earthquake or other natural disasters; or acts of God
or other supreme beings; wrecks, transportation delays or telecommunication,
electrical or other utility system limitations or outages; or the inability
to obtain necessary labor, materials, or utilities from usual sources.
"GOVERNMENTAL AUTHORITY" means any nation or government, any federal, state,
province, territory, city, town, municipality, county, local or other
political subdivision thereof or thereto, any quasi-governmental authority,
and any court, tribunal, arbitral body, department, commission, board,
bureau, agency, instrumentality thereof or thereto or otherwise which
exercises executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"HAZARDOUS MATERIAL" means any chemical, substance, waste, material,
pollutant, contaminant, equipment or fixture defined as or deemed hazardous
or toxic or otherwise regulated under any Environmental Law.
"INTELLECTUAL PROPERTY AGREEMENT" means the Intellectual Property Agreement
between Sabre and Customer of even date herewith.
"INTELLECTUAL PROPERTY LICENSE AGREEMENTS" means all license agreements for
Third Party Intellectual Property Rights to which Customer is a party that are
effective on, or entered into after, the Effective Date.
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"INTELLECTUAL PROPERTY RIGHTS" means all Intellectual Property rights,
including (i) any patent, patent application, trademark (whether registered
or unregistered), trademark application, trade name, service mark (whether
registered or unregistered), service mark application, copyright (whether
registered or unregistered), copyright application, Trade Secret,
Confidential Information, know-how, process, technology, development tool,
ideas, concepts, design right, moral right, data base right, methodology,
algorithm or invention, (ii) any right to use or exploit any of the
foregoing, and (iii) any other proprietary right or intangible asset
(including Software).
"IT" means information technology.
"JOINT DEVELOPMENT AGREEMENT" has the meaning given in SECTION 4.4(b).
"JOINT INTEREST IP" means IP made jointly by the Parties pursuant to a joint
development or funding agreement between the Parties, as contemplated by
SECTION 2.8(b).
"LAWS" means any applicable code, statute, law (including common law),
ordinance, regulation, order, directive, rule or requirement of any
Governmental Authority, including Environmental Laws, Antitrust Laws and
Employee Benefit Laws.
"LEASED EQUIPMENT" means all Equipment leased by Customer pursuant to
Equipment Leases.
"LEASED REAL PROPERTY" means all real property leased by Customer pursuant to
Real Property Leases.
"LIABILITIES" means any direct or indirect indebtedness, guaranty,
endorsement, claim, loss, damages, deficiency, assessment, cost, expense,
obligation, disgorgement or responsibility, fixed or unfixed, known or
unknown, asserted or unasserted, liquidated or unliquidated, secured or
unsecured.
"LICENSED SYSTEMS" means all Software systems and/or components thereof
(including applications and operating systems) licensed to Customer by Third
Parties pursuant to Systems License Agreements.
"LIEN" means any conditional sale agreement, default of title, easement,
encroachment, encumbrance, hypothecation, infringement, lien, mortgage,
pledge, reservation, restriction, security interest, title retention or other
security arrangement, or any adverse right or interest, charge, or claim of
any nature whatsoever of, on, or with respect to any Asset.
"LOSSES" means all Liabilities, judgments, claims, settlements, losses,
damages, fees, Liens, Taxes, penalties, obligations and expenses (including
reasonable attorneys' fees).
"MARKET RATE" means, for a particular type of Service, the market rate
charged by Sabre for such type of Service, as reasonably determined by Sabre.
Market Rates for Development Services will be comparable to those charged to
future contractual customers of Sabre. With respect to Standard IP developed
by Customer for Sabre pursuant to SECTION 2.8(a), "Market Rate" means the
Market Rate that would have been charged by Sabre for a similar development
service.
"MATERIAL BREACH" means:
(a) The occurrence or existence of any of the following events,
circumstances or conditions will constitute, and be deemed to
constitute, a Material Breach by Sabre:
(i) a material failure or a series of material failures by Sabre
to meet SLA Standards, which failure or series of failures (i)
has a material adverse effect on Customer and (ii) as a result
the Agreement fails of its essential purpose, unless Sabre
cures such failures [TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED]of receiving notice thereof;
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(ii) Sabre breaches SECTION 9.2(a) of the Agreement, such breach
has a material adverse affect on Customer, and such breach is
not cured [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
after Sabre's receiving notice thereof;
(iii) Sabre breaches the anti-assignment provisions of SECTION 14.5
of the Agreement;
(iv) Sabre becomes or is declared insolvent or bankrupt, is the
subject of any proceedings relating to its liquidation,
bankruptcy, insolvency or for the appointment of a receiver or
similar officer for it, makes an assignment for the benefit of
all or substantially all of its creditors or enters into an
agreement for the composition, extension or readjustment of
all or substantially all of its obligations, provided that no
such Material Breach will be deemed to have occurred if the
events of this paragraph are involuntary and such state of
events no longer exists [TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED] of the original occurrence thereof; or
(V) a material failure or a series of material failures by Sabre
to perform its Development Services obligations, which failure
or series of failures has a material adverse effect on
Customer, unless Sabre cures such failures [TEXT OMITTED -
CONFIDENTIAL TREATMENT REQUESTED] of receiving notice thereof.
(b) The occurrence or existence of any of the following events,
circumstances or conditions, will constitute, and be deemed to
constitute, a Material Breach by Customer:
(i) Customer defaults in the payment when due of any undisputed
amount ([TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED])
properly due to Sabre pursuant to the Agreement and such
default is not cured [TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED] after Customer's receiving notice thereof;
(ii) Customer breaches its obligations under ARTICLE II of the
Agreement to obtain all of its requirements for Base and
Exclusive Variable Services from Sabre and such breach is not
cured [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]after
Customer's receiving notice thereof;
(iii) Customer breaches SECTION 9.2(a) of the Agreement, such breach
has a material adverse affect upon Sabre, and such breach is
not cured [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
after Customer's receiving notice thereof;
(iv) Customer breaches the anti-assignment provisions of SECTION
14.5 of the Agreement; or
(v) Customer becomes or is declared insolvent or bankrupt, is the
subject of any proceedings relating to its liquidation,
bankruptcy, insolvency or for the appointment of a receiver or
similar officer for it, makes an assignment for the benefit of
all or substantially all of its creditors or enters into an
agreement for the composition, extension or readjustment of
all or substantially all of its obligations, provided that no
such Material Breach shall be deemed to have occurred if the
events of this paragraph are involuntary and such state of
events no longer exists [TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED] of the original occurrence thereof.
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"MEASURED SERVICES" means those Services listed in SCHEDULE 4 of the Agreement.
"MIGRATION COMPLETION DATE" shall mean, for any Category of Service which
Customer elects to have Sabre provide with respect to the Preview Operations,
the date upon which the migration contemplated by the applicable Migration
Plan shall have been completed, and Sabre shall have begun performing the
selected Base Services on a regular basis with respect to the Preview
Operations.
"MIGRATION PERIOD" means the period during which Migration Services are to be
performed, and concluding on the Migration Completion Date.
"MIGRATION PLAN" means a written plan which shall describe the tasks to be
performed by Sabre, Customer, and any Third Party IT Service Provider of
Customer with respect to the Preview Operations, in connection with the
migration of the selected Category of Services to Sabre under SECTION 2.3.
"MIGRATION SERVICES" means services to be provided by Sabre pursuant to a
Migration Plan.
"NON-EXCLUSIVE VARIABLE SERVICES" means IT services other than Base Services
or Exclusive Variable Services.
"OPTIONAL WEB HOSTING SERVICES" are described in SCHEDULE 3.
"OTHER ASSETS" means all assets, to which Customer has rights on or after the
Effective Date, other than Owned Systems, Licensed Systems, Systems License
Agreements, Owned Intellectual Property Rights, Third Party Intellectual
Property Rights, Intellectual Property License Agreements, Third Party IT
Services, Service Contracts, Equipment, Leased Equipment, Equipment Leases,
Real Property, Leased Real Property, Real Property Leases, Authorizations,
Other Contract Benefits and Other Contracts.
"OTHER CONTRACT BENEFITS" means all benefits, entitlements, rights and
interests of Customer arising under or in connection with the Other
Contracts.
"OTHER CONTRACTS" means all contracts in effect on, or entered into after,
the Effective Date to which Customer is a party, other than Systems License
Agreements, Intellectual Property License Agreements, Service Contracts,
Equipment Leases, Real Property Leases and Authorizations.
"OWNED INTELLECTUAL PROPERTY RIGHTS" means all Intellectual Property Rights
owned by Customer on or after the Effective Date.
"OWNED SYSTEMS" means all Software systems and/or components thereof
(including applications and operating systems) owned by Customer on or after
the Effective Date.
"PARTY" means each of the signatories to the Agreement and their successors
and assigns as permitted by the Agreement.
"PERSON" means an individual, corporation, limited liability company,
partnership, trust, association, joint venture, unincorporated organization
or entity of any kind or nature, or a Governmental Authority.
"PREMIUM IP" means IP made solely by one Party pursuant to this Agreement and
paid for by the other Party at Premium Rates.
"PREMIUM RATES " means, for Development Services, the "Premium Rate" provided
in SCHEDULE 2.8. With respect to Premium IP developed by Customer for Sabre
pursuant to SECTION 2.8(a), [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
"PREVIEW " means Preview Travel, Inc., a Delaware corporation.
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"PREVIEW OPERATIONS" means the web hosting and network, and operations of
Preview which support Preview's online travel services business.
"QUARTER" means each three-calendar-month period ending during the term of
this Agreement.
"QUARTERLY AMOUNT" is described in SCHEDULE 8.
"REAL PROPERTY" means all real property owned by Customer on or after the
Effective Date.
"REAL PROPERTY LEASES" means all leases for Leased Real Property to which
Customer is a party and that are effective on, or entered into after, the
Effective Date.
"REQUIRED CONSENTS" means those authorizations, consents, orders and
approvals of Persons necessary or appropriate (a) for the execution and
delivery of the Agreement, (b) to effectuate or permit the sale, transfer,
assignment, lease, sublease, license, sublicense or provision of access to
any Customer Assets, (c) for performance by Sabre of the Services or (d) to
otherwise consummate or effectuate the transactions contemplated by the
Agreement.
"SABRE ACCOUNT MANAGER" means an individual, and any successor individual, so
designated in writing by Sabre from time to time.
"SABRE CRS" means a system providing any of the following products or
services, using CRS Software and CRS Communications Systems: (a) publication
and distribution of consumer travel-related information from computerized
data bases; (b) processing of passenger travel-related reservations and
transactions; (c) marketing and sales of passenger travel-related products
and services and related electronic transactions; or (d) publication and
distribution of passenger travel-related documents (including tickets).
"SABRE DIRECT COMPETITOR" [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
"SABRE GROUP" means, severally and collectively, Sabre and any Subsidiary of
Sabre that Sabre designates in writing as being a member of the Sabre Group.
"SABRE IP" means Intellectual Property Rights of Sabre, including all Sabre
Software.
"SABRE SOFTWARE" means all Software which is owned or developed by Sabre, or
in which Sabre otherwise holds Intellectual Property Rights.
"SERVICES" means the Base Services, Variable Services and Termination
Assistance Services performed by Sabre under the Agreement.
"SERVICE CONTRACTS" means all agreements, contracts or other arrangements
effective on, or entered into after, the Effective Date to which Customer is
a party and pursuant to which Third Party IT Service Providers provide Third
Party IT Services to Customer.
"SERVICE LOCATIONS" means the following locations at or for which SABRE
provides Base Services: [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED].
"SLA" OR "SERVICE LEVEL AGREEMENT" means each of the written statements of
performance levels for Measured Services that are described in SCHEDULE 5.
"SLA STANDARD" means the acceptable level of performance for a Measured
Service specified in the applicable SLA.
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"SOFTWARE" or "SOFTWARE" means any computer programming code consisting of
instructions or statements in a form readable by individuals (source code) or
machines (object code), and documentation and supporting materials therefor,
in any form or medium, including electronic media.
"STANDARD IP" means IP made solely by one Party pursuant to this Agreement
and paid for by the other Party at Market Rates.
"SUBSIDIARY" means, as to any Person, any other Person of which more than
fifty percent (50%) (in number of votes) of the issued and outstanding
securities having ordinary voting power for the election of at least a
majority of the directors is owned or controlled, directly or indirectly, by
that Person.
"SYSTEM LICENSE AGREEMENTS" means all license agreements for Licensed Systems
to which Customer is a party and that are effective on, or entered into
after, the Effective Date.
"TAX RETURNS" means all tax returns, reports, statements and other similar
filings with respect to any Taxes.
"TAXES" means any present or future taxes (including taxes denominated as
income taxes, franchise taxes, corporation taxes, withholding taxes, gross
receipts taxes, excise taxes (including federal excise taxes), doing business
taxes, capital taxes, net worth taxes, asset taxes, social security or social
contribution taxes, stamp taxes, transaction taxes, transfer taxes,
telecommunications taxes and assessments, exchange taxes, documentary taxes,
sales taxes, use taxes, or value added taxes), levies, imposts, duties, fees,
assessments or other Fees, and all interest, penalties or similar liabilities
with respect thereto, of whatever nature now or hereafter imposed by any
jurisdiction or any Governmental Authority.
"TERM" means the initial term and each renewal period of the Agreement, which
is subject to expiration in accordance under SECTION 11.1 thereof, or earlier
termination in accordance with SECTION 11.2 or 14.12 thereof.
"TERMINATION ASSISTANCE PERIOD" has the meaning given in SECTION 11.3(c).
"TERMINATION ASSISTANCE PLAN" means a plan to govern the migration/conversion
from Services to IT services, software and other resources to be provided by
Customer or a successor Third Party IT Service Provider. The Termination
Assistance Plan is a Work Order the production of which will be governed by
the Contract Administration Process.
"TERMINATION ASSISTANCE SERVICES" means the Services determined by the
Parties pursuant to the Contract Administration Process consistent with the
principles outlined in SCHEDULE 15 of the Agreement, and to be provided
pursuant to the Termination Assistance Plan.
"THIRD PARTY" means a Person excluding any Party or, with respect to Sabre,
another member of the Sabre Group.
"THIRD PARTY INTELLECTUAL PROPERTY RIGHTS" means all Intellectual Property
Rights licensed to Customer from Third Parties pursuant to Intellectual
Property License Agreements.
"THIRD PARTY IT SERVICE PROVIDERS" means all Third Parties that provide IT
services to Customer pursuant to Service Contracts.
"THIRD PARTY IT SERVICES" means all IT services provided to Customer pursuant
to Service Contracts.
"THIRD PARTY SOFTWARE" means any Software owned by or licensed from a Third
Party vendor.
"TRADE SECRETS" means information related to a Person (a) which derives
economic value, actual or potential, from not being generally known to or
readily ascertainable by other Persons who can obtain
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economic value from its disclosure or use, and (b) which is the subject of
efforts by said Person that are reasonable under the circumstances to
maintain its secrecy.
"TULSA DATA CENTER" means the existing underground computer data processing
facility operated by Sabre in Tulsa, Oklahoma; provided that Sabre may elect
to use another principal data center of Sabre so long as such use does not
materially and adversely affect the Services or increase the Fees to Customer.
"VARIABLE FEE" means, for each calendar month, the amount that Customer is
obligated to pay to Sabre pursuant to SCHEDULE 8 of the Agreement in
connection with Variable Services provided in that month.
"VARIABLE SERVICES" means the Exclusive Variable Services and Non Exclusive
Variable Services performed by Sabre.
"WEB HOSTING SERVICES" means the Services described in SCHEDULE 2.3.
"WORK ORDER" means an agreement or other document signed by the Parties
pursuant to the Contract Administration Process to describe Services or to
implement an approved Request.
"YEAR 2000 COMPLIANT" means that the software program or computer system (a)
will operate and produce data before, on or after January 1, 2000 (including
taking into effect that such year is a leap year), accurately and without
delay, interruption or error relating to the fact that the time at which and
the date on which such items are operating is on or after 12:00 a.m. on
January 1, 2000; or (b) will accept, calculate, process, maintain, write and
output, accurately and without delay, interruption, or error any function
referencing a time or date on or after 12:00 a.m. January 1, 2000 or both,
whether before, on or after 12:00 a.m. on January 1, 2000, and any time
period determined or to be determined based on any such times or date, or
both.
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SCHEDULE 2.1: DESKTOP SERVICES
1. SERVICE SCOPE. Desktop LAN management. Other hardware, software and
devices may be added to the Standard Desktop Environment as a Change
governed by the Contract Administration Process. The term of Schedule 2.1
will not extend beyong 8/31/2000. Prior to 8/31/2000 Sabre and
Travelocity will either terminate Schedule 2.1 or reach a new agreement
governed by the Contract Administration Process.
2. DESKTOP LAN MANAGEMENT.
- - Sabre will monitor LAN availability and security.
- - Sabre will provide LAN configuration management.
- - Sabre will provide fix/break support for the Desktop LAN.
- - Sabre will perform on-site technical troubleshooting and problem
resolution at Service Locations.
3. EXCLUSIONS. The following services are not considered Desktop Services
and are Customer's responsibility, but can be provided by Sabre as
Non-Exclusive Variable Services:
a. FACILITY ENGINEERING.
- - Consulting related to the design of TI rooms and wiring closets, and power
systems supporting computer workstations and information systems,
including dimensions, materials, room layout, and design/location of
communication equipment racks/rails.
- - Consulting on TI room mechanical requirements, including air conditioning,
ventilation and fire suppression systems.
- - Consulting on TI room electrical requirements, including UPS, surge
suppression, emergency generators, voltage regulators, transformers,
panelboards, branch circuitry, receptacles, grounding, lighting, and alarm
systems.
- - Consulting on the routing of cabling through conduit, and cable tray and
conduit sizing.
a. PHYSICAL SITE PREPARATION. All work related to preparing and
maintaining floors, walls, ceilings, counters, cubicles and similar
facilities.
b. ADDRESS PROBLEMS. Resolving address problems which occur as a
direct result of an end user using devices not included in the
Standard Desktop Environment.
c. NON-STANDARD SUPPORT. Supporting hardware, software and other
devices not included in the Standard Desktop Environment or not
certified through Sabre's Integration Lab, and supporting trouble
calls arising from Customer attaching or loading hardware, software
or other devices to the LAN that are not included in the Standard
Desktop Environment.
d. CUSTOMER MOVES, ADDS, INSTALLS OR CHANGES. Customer moving,
installing, changing or de-installing its own devices and contacting
Sabre for the connection or to correct improper work.
e. NEW TECHNOLOGIES. Consulting related to assessing new technologies.
f. BACKUP SERVICES. Backing up, restoring and reloading Customer files
and infrastructure fileservers where an appropriate backup solution
has been acquired by Customer.
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SCHEDULE 2.2: DATA AND VOICE SERVICES
Data and Voice Services refers to the following services:
1. DATA SERVICES.
a. DATA NETWORK SERVICES. Sabre will arrange for and manage the
following Third Party data network services:
- X.25/SDLC/ACL/SDN Service. Low-speed connections providing
data communication service between any two locations in which
Sabre's Third Party vendors have a presence. Customer can
request Sabre to arrange for remote areas to be covered using
Third Party satellite services.
- Frame Relay Service. High-speed direct access to the packet
switched data network and bandwidth management providing
"bandwidth on demand" and "bursty traffic requirements"
capabilities by use of a high bandwidth path, called a
Permanent Virtual Circuit ("PVC"), between two networks.
Customer shall subscribe to an allocated level of bandwidth
over the PVC, called the Committed Information Rate ("CIR"),
to obtain throughput at a certain speed.
- Circuit, Data Port and Router Installation. Sabre will
validate order information, oversee the installation services
provided by Third Parties, and initiate and manage problem
resolution on behalf of Customer with such Third Party
providers. Sabre will also provide on-site support for
installations at the Service Locations utilizing Sabre
personnel or Third Party vendors. Customer remains
responsible for ensuring that Customer's facilities can
accommodate any such installations.
b. ROUTER SERVICE. Sabre will arrange for and manage routers. Sabre
will arrange for an manage router hardware and software as part of
this managed service. Sabre will arrange for and manage router
hardware and software maintenance services provided by Third Party
vendors selected by Sabre. The Account Managers shall determine the
level of maintenance support provided by such Third Party vendors at
the various Service Locations by selecting among the following three
levels of service:
- Monday through Friday, 9 a.m. to 5 p.m., with a [TEXT OMITTED
- CONFIDENTIAL TREATMENT REQUESTED]response time;
- 7x24, with a [TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED]response time; and
- 7x24, with a [TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED]response time.
All of the foregoing levels of maintenance include parts, labor and
travel expenses. Sabre will arrange for hardware and software
upgrades for technology refreshes that are performed at Sabre's
discretion. A technology refresh is the process of upgrading router
hardware or software components to install the next generation or
version of the existing resource. From time to time Customer may
request changes in the technology configuration utilized by Sabre,
provided Customer is responsible for all costs and expenses incurred
by Sabre in implementing such changes. A technology change is the
process of altering the configuration of router hardware or software
components (e.g. introducing high capacity routers to accommodate
additional Customer requirements).
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c. LOCAL CHANNEL DIAL BACKUP SERVICE. Sabre will arrange for Third
Party vendors to provide dial backup services enabling network
redundancy and recovery capability. This service provides service
protection from the digital service unit to the network frame relay
port at any Service Location with a Sabre-provided data port. The
service bypasses the local circuit in the event of failure and
connects via analog or ISDN service from the digital service unit to
the frame relay provider's local point of presence. The service
automatically executes dial back-up on detection of local channel
failure and disconnects when service is again recognized.
d. MANAGEMENT SERVICES. In managing the data network services
described in paragraph 1 of this SCHEDULE 2.2, Sabre will provide
the following administrative services:
- NETWORK DESIGN. Sabre will define data parameters, perform a
customer needs analysis, provide a cost analysis and deliver a
solution recommendation. Sabre will create the network design
and specifications package and will oversee those Third
Parties that implement the agreed solution.
- ENGINEERING. Sabre will provide traffic engineering and
network capacity planning to maximize circuit usage, assess
host connectivity, and install technologies that the parties
determine best meets Customer's specific usage requirements.
Such technologies include, without limitation, ALC, X.25,
Frame Relay, and TCP/IP.
- NEW COMPONENT TESTING. Sabre will test new network components
before adding them to the existing network.
- APPLICATIONS SUPPORT. Sabre will provide consulting support
on customer applications to provide for compatible interface
and transmission protocols with the wide area network.
- NETWORK OPERATIONS CENTER. Sabre will monitor the reliability
of Third Party service providers.
- HELP DESK. Sabre will provide a 7x24 help desk for
coordinating problem resolution services. Customer's service
representative will initiate such services by contacting the
help desk to log details associated with the problem. If
Sabre determines the problem relates to products or services
provided by Sabre, the help desk representative will refer the
problem to Sabre's designated subject matter expert ("SME")
for resolution. If Sabre determines the problem relates to
products or services provided by Third Party vendors and
arranged for by Sabre, Sabre will request the appropriate
Third Party vendor to resolve the problem. A Sabre
representative will work with such Third Party vendor to
monitor problem resolution and follow-up with Customer to
close out open logged problems.
- PLANNING. Sabre will analyze and communicate to Customer
changes in related technology, marketplaces, and regulatory
treatments.
- CONTRACT ADMINISTRATION. Sabre will provide contract
administration services related to those contracts with Third
Party service providers, including tariff analysis, contract
management, and interfacing with vendors to resolve
performance or other contractual issues on behalf of Customer.
- AUDITING SERVICES. Sabre will review invoices submitted by
Third Party service providers to assess the accuracy of such
invoices.
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- CUSTOMER REPORTS. Sabre will provide billing, volume, usage
trends and analysis reports describing Customer's utilization
of its data network.
- EVALUATION OF NEW TECHNOLOGY. Sabre will research new and
emerging telecommunications technology features and
enhancements that may provide cost reductions while improving
overall service capabilities.
- IP ADDRESS MANAGEMENT. Sabre will manage Customer's IP
addresses.
e. ON-SITE SUPPORT. Sabre can send personnel at the request of
Customer to provide on-site support for problem management or
resolution, as applicable, provided Customer is responsible for
paying or reimbursing Sabre for all costs and expenses related to
sending personnel to such sites.
2. REMOTE CONNECTIVITY.
a. MANAGED DIAL SERVICES. Sabre will arrange for and manage Third
Party remote dial services allowing Customer to remote access its
LAN infrastructure without requiring a dedicated communications line
by using point to point protocol to provide remote access to
Internet protocol hosts. ISDN may be available to Customer if ISDN
services are offered by the Third Party provider in the area from
which the user attempts to remote access the network.
b. MANAGEMENT SERVICES. In managing the managed dial services
described in paragraph 2(a) of this SCHEDULE 2.2, Sabre will provide
the following administrative services:
- ENGINEERING. Sabre will provide traffic engineering and
network capacity planning to maximize circuit usage, assess
host connectivity, and install technologies that the parties
determine best meets Customer's specific usage requirements.
Such technologies include, without limitation, X.28 dial, PPP,
TCP/IP, and VPN.
- PROVISIONING. Sabre will set up and monitor Customer user
accounts, as well as order, oversee delivery of and test the
managed dial services.
- APPLICATIONS SUPPORT. Sabre will provide consulting support
on customer applications to provide for compatible interface
and transmission protocols with the network.
- NETWORK OPERATIONS CENTER. Sabre will monitor the reliability
of Third Party service providers.
- HELP DESK. Sabre will provide a 7x24 help desk for
coordinating problem resolution services. Customer's service
representative will initiate such services by contacting the
help desk to log details associated with the problem. If
Sabre determines the problem relates to products or services
provided by Sabre, the help desk representative will refer the
problem to Sabre's designated subject matter expert ("SME")
for resolution. If Sabre determines the problem relates to
products or services provided by Third Party vendors and
arranged for by Sabre, Sabre will request the appropriate
Third Party vendor to resolve the problem. A Sabre
representative will work with such Third Party vendor to
monitor problem resolution and follow-up with Customer to
close out open logged problems.
- PLANNING. Sabre will analyze and communicate to Customer
changes in related technology, marketplaces, and regulatory
treatments.
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- AUDITING SERVICES. Sabre will review invoices submitted by
Third Party service providers to assess the accuracy of such
invoices.
- CUSTOMER REPORTS. Sabre will provide billing, volume, usage
trends and analysis reports describing Customer's utilization
of the managed dial services.
- EVALUATION OF NEW TECHNOLOGY. Sabre will research new and
emerging telecommunications technology features and
enhancements that may provide cost reductions while improving
overall service capabilities.
- USER MANUALS. Sabre will develop and coordinate distribution
of user manuals.
3. VOICE SERVICES.
a. VOICE NETWORK SERVICES. Sabre will arrange for and manage
Customer's voice network for inbound and outbound calls across
multi-vendor networks. Such Third Party provided services include
inbound 800 services, outbound long distance services, and calling
card services, and related provisioning, engineering, consulting,
operation and management services.
b. MANAGEMENT SERVICES. In managing the voice services described in
paragraph 3 of this SCHEDULE 2.2, Sabre will provide the following
administrative services:
- ENGINEERING. Sabre will provide traffic engineering and
network capacity planning to maximize circuit usage. Sabre
will manage the traffic across all network trunks including
trunk analysis and optimization, traffic routing based on
Customer's requirement profiles including, without limitation,
time of day routing, geographical routing or traffic load
routing based on the volume of traffic at any given time.
- PROVISIONING. Sabre will order, oversee delivery of and test
the voice services.
- NETWORK OPERATIONS CENTER. Sabre will monitor the reliability
of Third Party service providers.
- HELP DESK. Sabre will provide a 7x24 help desk for
coordinating problem resolution services. Sabre will take
calls into the help desk between the hours of 8 am to 5 pm and
then via pager after hours. Customer's service representative
will initiate such services by contacting the help desk to log
details associated with the problem. If Sabre determines the
problem relates to products or services provided by Sabre, the
help desk representative will refer the problem to Sabre's
designated subject matter expert ("SME") for resolution. If
Sabre determines the problem relates to products or services
provided by Third Party vendors and arranged for by Sabre,
Sabre will request the appropriate Third Party vendor to
resolve the problem. A Sabre representative will work with
such Third Party vendor to monitor problem resolution and
follow-up with Customer to close out open logged problems.
- PLANNING. Sabre will analyze and communicate to Customer
changes in related technology, marketplaces, and regulatory
treatments.
- CONTRACT ADMINISTRATION. Sabre will provide contract
administration services related to those contracts with Third
Party service providers, including tariff analysis, contract
management, and interfacing with vendors to resolve
performance or other contractual issues on behalf of Customer.
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- AUDITING SERVICES. Sabre will review invoices submitted by
Third Party service providers to assess the accuracy of such
invoices.
- CUSTOMER REPORTS. Sabre will provide billing, volume, usage
trends and analysis reports describing Customer's utilization
of the voice services.
- EVALUATION OF NEW TECHNOLOGY. Sabre will research new and
emerging telecommunications technology features and
enhancements that may provide cost reductions while improving
overall service capabilities.
- AUTHORIZATION CODE MANAGEMENT. Sabre will manage long
distance dialing codes to monitor and track abuse of long
distance voice services by Customer's employees.
4. VOICEMAIL.
a. VOICE MESSAGING SERVICES. Sabre will arrange for and manage voice
messaging services that include message storage and retrieval,
network messaging, dial-by-name capabilities, and creation and
deletion of voice mailbox for users. Sabre may, at Sabre's sole
discretion, later outsource the voice messaging services to a Third
Party provider. Customer may select among the classes of service
indicated below. Customer will make such selection according to its
requirements for each Customer employee and at the time it adds a
mailbox. Customer may then change the selection it made at any time
following the month in which Customer initiated the service.
- Service Level 1 - Voice Box: [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED]messages retained for up to [TEXT OMITTED
- CONFIDENTIAL TREATMENT REQUESTED] days
- Service Level 2 - Message Lite: Adds more memory and
outcall/pager in addition to voice box.
- Service Level 3 - Answer Box: Adds telephone answering in
addition to voice box and message lite.
- Service Level 4 - Remote Box: Adds remote answering in
addition to voice box, message lite and answer box.
- Service Level 6 - Advanced: Adds additional memory in addition
to voice box, message lite, answer box and remote box.
- Service Level 7 - Advanced Custom: Unlimited message retention
in addition to voice box, message lite, answer box, remote box
and advanced.
b. MANAGEMENT SERVICES. In providing the voice messaging services
described in paragraph 4 of this SCHEDULE 2.2, Sabre will also
provide the following administrative services:
- ENGINEERING. Sabre will provide traffic engineering and
capacity planning to maximize circuit usage. Voice mail
engineers will ensure that the Voice Mail systems integrate
with the premise switch and the traffic to the voicemail
system is received over optimized trunks so that voicemail
does not give a busy signal to the Customer.
- PROVISIONING. Sabre will set up and maintain Customer user
accounts, as well as order, deliver and test the voice
messaging services.
- OPERATIONS. Sabre will monitor the reliability of Third Party
service providers.
- HELP DESK. Sabre will provide a 7x24 help desk for
coordinating problem resolution services. Sabre will take
calls into the help desk between the hours of 8 am to 5 pm
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and then via pager after hours. Customer's service
representative will initiate such services by contacting the
help desk to log details associated with the problem. If
Sabre determines the problem relates to products or services
provided by Sabre, the help desk representative will refer the
problem to Sabre's designated subject matter expert ("SME")
for resolution. If Sabre determines the problem relates to
products or services provided by Third Party vendors and
arranged for by Sabre, Sabre will request the appropriate
Third Party vendor to resolve the problem. A Sabre
representative will work with such Third Party vendor to
monitor problem resolution and follow-up with Customer to
close out open logged problems.
- PLANNING. Sabre will analyze and communicate to Customer
changes in related technology, marketplaces, and regulatory
treatments.
- CUSTOMER REPORTS. Sabre will provide billing, volume, usage
trends and analysis reports describing Customer's utilization
of the managed dial services.
- EVALUATION OF NEW TECHNOLOGY. Sabre will research new and
emerging telecommunications technology features and
enhancements that may provide cost reductions while improving
overall service capabilities.
- USER TRAINING AND MANUALS. Sabre will provide user training
classes at the Service Locations and will develop and
coordinate distribution of user manuals.
5. CAMPUS TELEPHONE. Sabre will manage campus telephone lines and manage,
plan, design and engineer the infrastructure of telephone systems at the
Service Locations. Telephone lines managed by Sabre include Private
Branch Exchanges (PBX), Centrex Service and Automatic Call Distributors
(ACD's), and large telephone key systems for large business applications.
Sabre will recommend telephone system modifications based on changing
Customer requirements and negotiate service contracts such as rate
stabilization contracts, maintenance contracts and local trunking
contracts with Third Party providers. Sabre provides for the
Install/Move/Add/Change ("IMAC") activity for Customer.
a. Add: Any activity related to adding a new device. An add will
increase the count of the inventory database.
b. Change: Changing a device configuration or peripheral component.
Includes installing, deinstalling, or changing software on the
device. This activity does not alter the number of devices on the
inventory database.
c. Move: Relocation of an existing device. Equipment-funding document
is not required. A move will not alter the number of devices on the
inventory database.
Sabre will provide a 7x24 help desk for coordinating problem resolution
services. Sabre will take calls into the help desk between the hours of 8
am to 5 pm and then via pager after hours. Customer's service
representative will initiate such services by contacting the help desk to
log details associated with the problem. If Sabre determines the problem
relates to products or services provided by Sabre, the help desk
representative will refer the problem to Sabre's designated subject matter
expert ("SME") for resolution. If Sabre determines the problem relates to
products or services provided by Third Party vendors and arranged for by
Sabre, Sabre will request the appropriate Third Party vendor to resolve
the problem. A Sabre representative will work with such Third Party
vendor to monitor problem resolution and follow-up with Customer to close
out open logged problems.
[6. INTERNET ACCESS.
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a. HOST LINK. Sabre will arrange for a Third Party Internet service
provider to provide a host link enabling Customer's employees to
access standard business oriented Internet information services on
the World Wide Web at the following Customer sites: Centreport I,
Centreport II, Centreport IV, Centreport V, Trinity and Solana.
Users are able to browse the World Wide Web and utilize those
resources of the Internet permitted under Customer's Internet usage
policies. Internet access is integrated into the user's desktop and
allows seamless access to both the corporate Intranet sites and to
Internet sites. Netscape Communicator 4.5 will be provided to
Customer. Setup instructions for Microsoft Internet Explorer will
be made available if Customer does not desire to use Netscape
Communicator 4.5.
b. SCOPE OF SERVICES.
- HTTP Proxy - Browser access to the World Wide Web
- Telnet Proxy - Command Line Telnet
- FTP Proxy - File Transfer Protocol for uploading or
downloading files
- Newsgroups - Access to USENET News Services
- Real Audio - Streaming Audio and Video
- AOL Instant Messenger - Online Chat service
- Pointcast - Push News service
- NTP - Time Services to set computer with Atomic clock
- SOCKS Services - Multi-purpose Internet Access
c. ATTRIBUTES OF INTERNET SERVICES.
- Integrated into Customer desktop
- Includes Netscape Communicator 4.5
- Setup instructions for Microsoft Internet Explorer will
be made available
- Does not require external modem or dial connection
- Utilizes existing desktop LAN infrastructure
- Performance
- Connection speeds of up to 10Mbps
- Utilizes fully redundant dedicated ISP connections
- Dedicated connection - no dial connect time delay
- Availability
- Never a busy signal delay
- Available 7x24 (seven days a week, 24 hours per day)
- Security
- Firewall protection of workstation and internal network
- User Authentication
- Enforcement of Customer's Internet usage policies
- Monitoring of access to inappropriate sites
- List of 200 banned words/sites
- Reports sent to human resources for employees violating
policy
- Availability of full access logs and audit trail
- Query function available to human resources'
representative
- Filtered newsgroups
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- Customer Support
- Sabre will provide a 7x24 help desk for coordinating
problem resolution services. Sabre will take calls into
the help desk between the hours of 8 am to 5 pm and then
via pager after hours. Customer's service
representative will initiate such services by contacting
the help desk to log details associated with the
problem. If Sabre determines the problem relates to
products or services provided by Sabre, the help desk
representative will refer the problem to Sabre's
designated subject matter expert ("SME") for resolution.
If Sabre determines the problem relates to products or
services provided by Third Party vendors and arranged
for by Sabre, Sabre will request the appropriate Third
Party vendor to resolve the problem. A Sabre
representative will work with such Third Party vendor to
monitor problem resolution and follow-up with Customer
to close out open logged problems.
- Browser software upgrades to Sabre-certified Netscape
Communicator Software. Sabre can peform upgrades or
change browsers at Customer's request, provided Customer
pays or reimburses Sabre for all costs and expenses
incurred by Sabre relating to such upgrades or changes.
- User documentation is available on line
7. INITIAL CONFIGURATION. For purposes of delivering the Data and Voice
Services, the initial configuration is set forth in EXHIBIT A to this
SCHEDULE 2.2. Any modifications to such initial configuration shall be
considered a Change governed by the Contract Administration Process.
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EXHIBIT A TO SCHEDULE 2.2: [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
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SCHEDULE 2.3: WEB HOSTING SERVICES
Web Hosting Services refers to the services described below:
1. TULSA DATA CENTER: PREMISES AND SECURITY.
a. TULSA DATA CENTER PREMISES. In connection with providing the Web
Hosting Services described below, Sabre will provide and maintain
the Tulsa Data Center as follows:
- RESTRICTED ACCESS. Sabre will provide secure key card
restricted access to the Tulsa Data Center. Sabre will
provide controlled access to Third Party vendors from whom
Customer acquired hardware for use in the Tulsa Data Center to
enable hardware maintenance to be performed. In providing
such access, appropriate Sabre personnel will accompany Third
Party personnel while they perform such maintenance services
at the Tulsa Data Center.
- RAISED FLOOR. Sabre will provide for a raised floor at the
Tulsa Data Center to enable cable clearance for housing
Customer's servers.
- POWER HEAT AND COOLING. Sabre will provide environmentally
controlled conditions through the use of water powered heating
and cooling systems. Fire suppression equipment consisting of
dry pipe and deluge sprinklers, and inert gas and limited
applications, is also present in the Tulsa Data Center.
- UNINTERRUPTED POWER SUPPLY ("UPS"). Sabre will provide UPS to
back up all power supplies at the Tulsa Data Center. These
battery systems provide gault tolerance and provide sufficient
power to operate the Tulsa Data Center for at least fifteen
(15) minutes. In addition, diesel generators automatically
start in the event of a power outage. These generators supply
all of the power necessary for the Tulsa Data Center, and can
be refueled to power the facility indefinitely. Sufficient
fuel is stored on premise to supply three days of operation,
and fuel delivery contracts are in place with multiple local
diesel fuel suppliers.
b. TULSA DATA CENTER SECURITY. In connection with providing the Web
Hosting Services described below, Sabre will provide facility and
resource security services at the Tulsa Data Center as follows:
- FACILITY SECURITY SERVICES. Sabre will provide physical
security for the Tulsa Data Center at commercially reasonable
levels, and in such a manner as to reasonably satisfy
Customer's external audit and risk management insurance
requirements. Multi-layered electronic access control, 24x7
on-site security guards and video surveillance equipment also
are utilized to provide additional protection.
- RESOURCE SECURITY SERVICES. Sabre will provide perimeter
infrastructure security around infrastructure system and
network resources. Sabre retains control and sole
responsibility for creating system security policies for all
Sabre infrastructure system and network resources. Sabre will
also be responsible for user account maintenance, including
adding, changing, and deleting user accounts, issuing
passwords, and tracking user access. Customer will be
responsible for creating system security policies for Sabre
managed Customer resources, approving user accounts, and
performing security audits within Sabre managed Customer
servers and Customer firewalls.
2. SERVER MONITORING: HARDWARE AND OPERATING SYSTEM.
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a. MONITORING. Sabre will monitor the operability and performance of
Sun, SGI, Windows NT, NCR and IBM hardware and related operating
systems at the Tulsa Data Center.
b. SERVICES. Sabre will perform the following services with respect to
the hardware and operating system software monitored by Sabre at the
Tulsa Data Center:
- Installation and testing of operating system and layered
products.
- Installation of software licenses.
- Upgrade operating system as provided by Customer.
- Evaluation of operating system and layered products.
- Apply provided software patches.
c. OPERATING SYSTEM MONITORING METHODOLOGY. Sabre will monitor the
systems identified in paragraph 2(a) of this SCHEDULE 2.3 on a 24x7
basis with respect to:
- Swap.
- Memory Utilization.
d. HARDWARE MONITORING METHODOLOGY. Sabre will provide 24x7 re-boot
services, and monitor the hardware identified in paragraph 2(a) of
this SCHEDULE 2.3 on a 24x7 basis with respect to:
- CPU Utilization.
- Disk Space.
- Network Pinging.
e. LIMITED APPLICATION MONITORING. Sabre will provide 24x7 automated
monitoring of Customer applications. Sabre and Customer will
establish reasonable levels of monitoring with respect to:
- Application Error and Performance (response time).
- URL Monitoring.
f. NOTIFICATION AND ESCALATION PROCEDURES. Sabre and Customer will
establish reasonable notification and escalation procedures with
respect to each of the performance criteria monitored under
paragraphs 2(a), (c), and (d) above. The procedures will include
notification and escalation thresholds appropriate for Customer's
business operations.
g. MAINTENANCE SERVICES. Sabre shall initiate problem resolution
services in response to problems in operating system or hardware
performance identified by Sabre under paragraphs 2(c) and 2(d) of
this SCHEDULE 2.3. Unless otherwise agreed by Sabre and Customer,
the resolution of operating system and hardware problems will be
performed by Third Party vendors, selected by Customer and
reasonably approved by Sabre, pursuant to maintenance contracts
between Customer and such Third Party vendors. Sabre and Customer
shall establish, by mutual agreement, reasonable levels of problem
resolution initiation communication between Sabre and such Third
Party vendors.
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h. EXCLUSIONS. Customer will be responsible for the following:
- Problem resolution relating to any failure of application
software monitored by Sabre at the Tulsa Data Center. Sabre's
only obligations with respect to problem resolution of
application software problems are to monitor problems
experienced in the production environment as specified in
paragraph 2(e) of this SCHEDULE 2.3, and notify Customer of
such problems pursuant to paragraph 2(f) of this SCHEDULE 2.3.
- All obligations and liabilities related to temporary root
passwords.
- Implementing software applications hosted on servers located
in the Tulsa Data Center and monitoring the operability and
performance of such software applications.
i. CUSTOMER NOTIFICATION. Customer will notify Sabre of any changes in
monitored operating systems, resulting from temporary root password
functions in Customer's possession/control.
3. SERVER MONITORING: DATABASE.
a. MONITORING. Sabre will monitor the operability and performance of
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED] databases at the
Tulsa Data Center.
b. DATABASE MONITORING METHODOLOGY. Sabre will monitor the databases
identified in paragraph 3(a) of this SCHEDULE 2.3 on a 24x7 basis
with respect to:
- CPU Utilization.
- Disk Space.
- Extents Monitoring.
- Memory Utilization.
- Disk Failure Notification.
- DB Processes.
- DB Parameters.
c. EXCLUSIONS. Customer will be responsible for problem resolution
relating to any failure of the databases monitored by Sabre to
perform in accordance with their specifications or the Service
Levels set forth in SCHEDULE 5, unless Customer obtains such service
from Sabre as an Optional Web Hosting Service.
4. NETWORK SERVICES.
a. NETWORK. Sabre will arrange for and manage the communications
lines, network devices and related telecommunications infrastructure
used by Sabre in the Tulsa Data Center to connect Customer's servers
to the Internet, including LAN connectivity, load balancers, cache,
and switch/router administration. From time to time, Customer may
request Sabre to install at the Tulsa Data Center additional network
devices such as switches, routers,
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load balancers and firewalls purchased by Customer from Third Party
vendors pre-approved by Sabre, and Sabre will use commercially
reasonable efforts to provide such installation services within a
reasonable period of time from Customer's request.
b. NETWORK SUPPORT. Sabre will provide the following support services
relating to the communications lines, network devices and related
telecommunications infrastructure used by Sabre in the Tulsa Data
Center:
- Install network device software as Third Party vendors issue
new releases;
- Install, monitor and maintain network device software for
system connectivity;
- Maintain network equipment;
- Troubleshoot and repair network devices;
- Plan installation of network and environmental equipment at
the Tulsa Data Center;
- Initiate and manage problem resolution with Third Party
hardware vendors in order to resolve hardware problems;
- Order and schedule installation of network hardware with Third
Party vendors; and
- Initiate and manage problem resolution with Third Party
maintenance providers in order to resolve network device and
software problems.
c. MANAGEMENT SERVICES. Sabre will provide the following administrative
services with respect to the communications lines, network devices
and related telecommunications infrastructure used by Sabre in the
Tulsa Data Center:
- DESIGN. Sabre will provide network design and engineering
services.
- CONFIGURATION. Sabre will configure and test network
equipment.
- INSTALLATION SUPPORT. Sabre will provide network installation
support for adding devices, upgrading systems, and replacing
devices during the implementation window.
- TUNING. Sabre will analyze the network and provide
performance tuning.
- SECURITY. Sabre will monitor network systems for misuse and
unauthorized access.
- SECURITY CONSULTING. Sabre will provide network security
consulting services.
- ON-CALL SUPPORT. Sabre will provide 24x7 on-call engineering
support.
- NETWORK CONSULTING. Sabre will provide network consulting
services.
- STANDARD CAPACITY PLANNING. Sabre will provide capacity
planning and forecasting services.
- PLANNED CHANGES. Sabre will assess planned changes to the
network.
- PRODUCT EVALUATION. Sabre will evaluate new network products.
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d. FIREWALL. Sabre will provide firewall infrastructure devices at the
Tulsa Data Center comprised of redundant enterprise class [TEXT
OMITTED - CONFIDENTIAL TREATMENT REQUESTED] and stateful inspection
firewalls to form a multi-layered switched and routed network
infrastructure providing [TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED] access speeds with stateful packet inspection technology
and intrusion detection. This architecture comprises full backup
power systems and redundant network connectivity.
e. LOAD BALANCING SERVICE. Sabre will arrange for a Third Party vendor
to provide load balancing services within the Tulsa Data Center
firewall architecture in order to split data transmission into two
or more routes among the web and application servers located within
Customer's server architecture.
5. BACKUP SERVICES.
a. TAPE BACKUP. Sabre will offer daily incremental backups on tape,
and weekly full system backups on tape. Customer will notify Sabre
of each database instance or server for which Customer desires Sabre
to produce tape backups, and Sabre will perform such service
accordingly.
b. BACKUP PROCESS STOPS AND RESTARTS. Sabre will monitor the backup
process and stop and restart the backup process in the event of any
problem.
c. VERIFICATION AND LOG REPORTING. Sabre will verify that each backup
is completed and that the data has been copied in the appropriate
format for reinstallation, and create management log reports
cataloging the location of data on the tapes.
d. NOTIFICATION. Sabre will notify Customer via e-mail of any problem
conditions during the backup process.
e. STORAGE. Sabre will provide off-site storage of backup tape.
f. CUSTOMER'S OBLIGATION. Customer shall be responsible for all
purchases of tape.
6. STANDARD CAPACITY PLANNING. Sabre will monitor and provide Customer with
monthly written reports identifying CPU and memory utilization, booking
information, number of hits and page views, and Internet utilization.
7. INTERNET SERVICE PROVIDER (ISP) ACCESS. Sabre will arrange for and manage
Third Party provided links between the Tulsa Data Center and the Internet.
The links between Sabre and the ISP's are comprised of fully redundant
routers with [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED] speed
connections that currently are connected to two providers. The ISP's
utilize a full transit, route optimized TCP/IP connectivity linked
directly to major Internet communication backbone lines. These ISP's
provide 24x7 circuit monitoring, outage reporting and troubleshooting from
their network operating centers, or their equivalent.
8. DOCUMENTATION. Customer will provide all existing documentation to
include Customer application internals, flows or connectivities on or
before the Effective Date. Sabre will assist Customer in developing
documentation that is either non-existent or inadequate. Sabre expects,
without limitation, the following:
a. Application description, diagrams, connectivity;
b. Monitor console message descriptions and actions required;
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c. Hardware specifications;
d. Customer contacts;
e. Support contacts, if in addition to those contracts with Third Party
providers managed by Sabre pursuant to this Agreement;
f. Special backup requirements;
g. Application procedures; and
h. Operations procedures.
Sabre will maintain these documents during the term of this Agreement.
9. OPTIONAL WEB HOSTING SERVICES.
a. OPTIONAL CAPACITY PLANNING SERVICES. Sabre can provide the
following capacity planning services:
- Utilize Sabre-proprietary methods and models to forecast
infrastructure needs and measure end-to-end response time
performance.
- Provide rolling hardware purchasing forecasts in the monthly
written reports submitted to Customer.
- Provide infrastructure growth and performance enhancement
recommendations.
- Meet with Customer monthly and consult with Customer to
develop custom recommendations, modeling and trending
analysis.
b. SYSTEM MANAGER CUSTOMER INTERFACE. Sabre can provide a dedicated,
on-site resource to serve as a single point of contact for Customer
who will perform event management for existing systems, identify and
enlist necessary resource group participation, and track and drive
problem resolution, including action items and their ownership.
c. ASSET MANAGEMENT. Sabre can provide web hosting asset management
services, including warranty contract negotiation, software
licensing and contract renewal negotiation, hardware and software
purchase negotiation, and hardware tagging and tracking.
d. TECHNICAL CONSULTING. Sabre can provide technical consulting
services including, but not limited to, UNIX and database
engineering, database management, network connectivity, hardware and
application restoration and fixes, and disaster recovery planning
and validation.
e. DATABASE PROBLEM RESOLUTION. Sabre can provide problem resolution
services for any failure of the databases monitored by Sabre to
perform in accordance with their specifications or the Service
Levels set forth in SCHEDULE 5.
f. CHANGE MANAGEMENT SERVICES. Sabre can provide the following change
management services:
- Issue, track and manage change records.
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- Identify and coordinate the approval and notification process
for all implementations.
- Execute implementation policy for normal and exception change
records.
- Send out notification on change records that were created
after the implementation takes place ("after the fact"
records).
- Investigate "after the fact" change requests for status.
- Schedule and coordinate all implementations, with
communication through daily Internet implementation meetings.
10. REPORTS. Sabre will provide to Customer the following written reports at
the times indicated below:
a. Daily INET availability;
b. Daily keynote performance;
c. Monthly capacity of the hardware monitored under paragraph 2(a) of
this SCHEDULE 2.3;
d. Monthly performance of Customer's applications monitored under
paragraph 2(d) of this SCHEDULE 2.3; and
e. Monthly Internet utilization, capacity and performance.
11. CUSTOMER'S OBLIGATION TO REFRESH HARDWARE AND OPERATING SYSTEM. Customer
will upgrade and/or refresh the hardware and related operating systems
identified in paragraph 2(a) of this SCHEDULE 2.3 which Sabre monitors as
part of the Web Hosting Services no less than every two (2) years in order
to maintain a level of technology comparable to the level of technology
generally adopted from time to time by Web hosting service providers. In
the event Customer does not upgrade or refresh such hardware and related
operating systems pursuant to this paragraph 10, the affected SLAs will be
appropriately adjusted by Sabre.
12. INITIAL CONFIGURATION. For purposes of delivering the Web Hosting
Services, the initial configuration is set forth in EXHIBIT A to this
SCHEDULE 2.3. Any modifications to such initial configuration shall be
considered a Change governed by the Contract Administration Process.
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EXHIBIT A TO SCHEDULE 2.3:
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
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SCHEDULE 2.4: DEVELOPMENT SERVICES
Applications development services with respect to CRS Software; provided that
Sabre has the legal and contractual right to perform such development
services; and provided further that Sabre may refuse to perform a development
service if, in Sabre's reasonable business judgment, performing such
development service would jeopardize the security, integrity or viability of
the CRS Software or the Sabre CRS.
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SCHEDULE 3: EXCLUSIVE VARIABLE SERVICES
1. NETWORK SERVICES. The following Network Services are Exclusive Variable
Services:
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
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SCHEDULE 4: MEASURED SERVICES
1. MID RANGE SERVER AVAILABILITY. Mid range server availability measures the
uptime and downtime of mid range servers managed by Sabre at the Data
Center in order to gauge the performance, reliability and accessibility of
such servers and related infrastructure.
a. MAXIMUM AVAILABILITY. "Maximum Availability" is the maximum amount
of time each month during which the system shall be operable.
Maximum Availability is computed by multiplying the number of days
in a given month by the number of minutes in each such day (1440),
and subtracting from that the total minutes of the Scheduled
Outages.
(i) SCHEDULED OUTAGES. "Scheduled Outages" are those periods of
time during which Sabre takes the server(s) off-line in order
to perform the following pre-approved functions during the
times and days indicated below and are not considered Downtime
(defined below):
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED].
In addition, if Customer requests Sabre to take any of the
servers off-line, then the period of time during which the
server(s) remain off-line shall be considered a Scheduled
Outage.
(ii) IMPACT EVENTS. "Impact Events" are situations where one or
more functions of the system are inoperable for a period of
time but are not considered Unscheduled Outages, and will not
be included in the availability calculation, unless otherwise
noted. Impact Events may be reported separately from SLA
performance. Impact Events may include any of the following
occurrences:
(A) Failures of an Internet Service Provider (ISP)
connectivity or network services that are provided by
Third Parties; as long as it does not result in an
Unscheduled Outage;
(B) Farewatcher failure;
(C) Email failure;
(D) BTS Seatmaps failure;
(E) Weather failure;
(F) Unscheduled Outages caused by any failure or changes in
Customer's proprietary applications hosted on the
servers;
(G) Failure in LAN components managed by Sabre including,
without limitation, routers and switches; as long as it
does not result in an Unscheduled Outage;
(H) Sabre DNS failure in which the duration is less than
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]. Once
the duration of the DNS failure exceeds [TEXT OMITTED -
CONFIDENTIAL TREATMENT REQUESTED], then it is considered
an Unscheduled Outage;
(I) Unscheduled Outages caused by any failure of the Open
Front End Processor or Sabre's PSS or FPC mainframe
system;
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(J) Any system failure that does not result in an
Unscheduled Outage but negatively impacts Customer's
users' ability to access Customer's product; or
(K) When the peak response time for Customer's applications
is [TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED]times the "normal." (average of peak response
times, measured Monday through Friday). Sabre will
periodically benchmark the "normal" response time as
described below in paragraph 1(c) of this SCHEDULE 4.
b. UNSCHEDULED OUTAGE. "Unscheduled Outage" measures those periods of
time during which the system is completely inoperable. An
Unscheduled Outage is measured from the point in time in which the
problem begins due to the occurrence of one of the events listed
below to the point in time in which such problem is resolved
(problem ticket is closed). However, Unscheduled Outages that are
attributed to Customer negligence or Customer software failure are
considered an Impact Event. For Unscheduled Outages that are
attributed to Customer negligence or Customer software failure,
Sabre will only be responsible from the time that the Unscheduled
Outage began until the time in which the Unscheduled Outage is
reported according to agreed upon problem escalation procedures.
Customer may request a correction of the Unscheduled Outage period
by submitting evidence to the Account Managers that the problem
began or got resolved at a time different than what was reported in
the problem ticket. Upon review of the evidence, if the Account
Managers agree that the problem ticket did not accurately reflect
the Unscheduled Outage period and the difference is greater than
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED], the problem
ticket will be corrected.
Unscheduled Outages include any of the following occurrences:
(i) Inoperability of all application servers;
(ii) Inoperability of all homepage servers;
(iii) Inoperability of all content servers;
(iv) Inoperability of the profile or content database;
(v) When the number of concurrent users in a [TEXT OMITTED -
CONFIDENTIAL TREATMENT REQUESTED] period decreases by [TEXT
OMITTED - CONFIDENTIAL TREATMENT REQUESTED] or more from the
previous [TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED]period and the cause of the decrease is determined
to be the result of Sabre support activity; or
(vi) When the number of passenger bookings in a [TEXT OMITTED -
CONFIDENTIAL TREATMENT REQUESTED] period decreases by [TEXT
OMITTED - CONFIDENTIAL TREATMENT REQUESTED] or more from the
previous [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
period and the cause of the decrease is determined to be the
result of Sabre support activity.
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
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SCHEDULE 5: SERVICE LEVEL AGREEMENTS
1. MID RANGE SERVER AVAILABILITY. The mid-range server availability SLA
Standard shall equal [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED],
calculated on a monthly basis as follows:
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
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SCHEDULE 6: PERFORMANCE REPORTS
1. OVERVIEW.
The monthly performance reports for the SLAs will be released and viewable
online at a URL address that will be disseminated to Customer no later than June
30, 2000 (the "SLA PERFORMANCE DATABASE WEBSITE"). The SLA Performance Database
Website will enable recording, tracking, reporting, and storing of the Measured
Services. These performance data and metrics will be secured to serve only
designated and approved employees of Sabre and Customer.
As the monitoring/reporting cycle begins anew each consecutive calendar month,
the following steps are performed:
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
2. ACCESS.
Users of the SLA Performance Database Website access the reports via a PC
running a minimum operating system of DOS 3.1 or WIN95 and a minimum browser of
Netscape browser (version 3.0 or 4.0, with 4.0 preferred), or Internet Explorer
3.0 and Sabre's Intranet/Internet.
The SLA Performance Database Website has restricted read and write access:
- - Update access is granted only to support personnel such as Sabre Reporters
who actually gather measurement data required for each SLA;
- - one of the Sabre SLA Performance Report Coordinators, who also serves as a
database administrator; and
- - Read access is furnished on a "need-to-know" basis, including Sabre
support personnel, Sabre Account Management teams, and the specific
individuals identified by Customer's management.
3. REPORT TYPES.
The reports are generated and viewable online and will appear as follows:
(a) TABLE OF CONTENTS.
Lists all the summary reports as well as reports on individual SLA
environments.
(b) EXECUTIVE SUMMARY REPORT.
Recaps performance each month, alphabetically listing data by
category and SLA, and displaying availability/prime hours, number of
green days, and red days.
(c) MONTHLY PERFORMANCE.
Summarizes performance for 13 months, alphabetically listing data by
SLA, risk level, and metric description. Color and symbols are
combined as green (up) arrows, yellow (horizontal) arrows, and red
(down) arrows to indicate acceptable, marginally acceptable, and
unacceptable performance, respectively. Diamonds indicate that
tolerances for performance have not yet been set. Clicking on the
symbol links to the full document.
(d) DAILY PERFORMANCE.
Summarizes daily performance each month alphabetically by SLA.
Color and symbols are combined as green (up) arrows, yellow
(horizontal) arrows, and red (down) arrows to
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indicate acceptable, marginally acceptable, and unacceptable
performance, respectively. Diamonds indicate that tolerances for
performance have not yet been set. Clicking on the symbol links
to the full document.
(e) PROBLEM/ STATUS INFORMATION.
Lists monthly Outages, providing date, time of day, duration, and
textual descriptions of the problem and its explanation.
(f) PROBLEM EXPLANATION.
Sabre will provide explanations of any incident where availability
fails to meet standard.
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SCHEDULE 7: CONTRACT ADMINISTRATION PROCESS
1. OVERVIEW.
This Contract Administration Process outlines procedures by which the Parties
(i) propose or request Changes, (ii) implement and manage Changes agreed in
writing by the Parties, and (iii) resolve problems and Issues.
2. CERTAIN DEFINITIONS.
This Section 2 sets forth certain definitions used in this Contract
Administration Process. Other capitalized terms used but not defined herein
have the meanings ascribed to them in the Agreement.
IMPACT ANALYSIS
The Impact Analysis is the document analyzing the (a) cost, scope, timeline, and
technological and business risks, (b) impacts on other Customer or Sabre
departments, products, projects or customers, and/or (c) other impacts, in each
case resulting from implementation, or lack thereof, of a Change.
ISSUE
An Issue constitutes a question, concern or request which, in the opinion of
either Customer or Sabre, has not been, or may not be, efficiently or
effectively resolved and which may have an impact on the cost, scope, timeline,
objectives, deliverables or performance of the Base Services or Variable
Services, other than any question, concern or request that either Account
Manager has notified the other Account Manager and the Project Office that he
believes constitutes a Dispute.
ISSUE ANALYSIS
The Issue Analysis is the document analyzing the (a) cost, scope, timeline, and
technological and business risks, (b) impacts on other Customer or Sabre
departments, products, projects or customers, and/or (c) other impacts, in each
case resulting from resolution, or lack thereof, of an Issue.
OWNER
The individual responsible for evaluating the impact of a Change or Issue,
developing the Impact or Issue Analysis and facilitating implementation of the
solution when approved.
ORIGINATOR
The individual from either Customer or Sabre who initiates the Request.
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
PROJECT OFFICE
The centralized management office where Changes, Issues and plans are
maintained, logged, tracked and reported, and where other central customer
service functions are located.
REQUEST
A request to resolve an Issue or implement a Change submitted by either Customer
or Sabre.
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STEERING COMMITTEE
The Steering Committee is a management body comprised of designated senior
management from each Party. The Steering Committee functions as the approving
body for all Requests that (a) involve (i) [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED] in capital, or (ii) require [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED] of labor, and/or (iii) require an amendment of this
Agreement, other than a Change in the Services to be provided by Sabre or within
the Account Managers' authority, or (b) are within the authority of, but not
approved by, the Account Mangers. The Steering Committee may delegate authority
to the Account Managers to manage recurring Requests such as capacity upgrades.
In addition, the Steering Committee functions as the forum in which the Parties
negotiate resolution of Disputes that (a) involve (i) ) [TEXT OMITTED -
CONFIDENTIAL TREATMENT REQUESTED] in capital obligations under this Agreement,
or (ii) involve ) [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED] of labor, or
(iii) would materially affect the rights (including Intellectual Property
Rights) of either Party, or (b) are within the authority of, but not resolved
by, the Account Managers.
STATUS CODES
Status codes are used by the Project Office to track and report Changes and/or
Issues.
<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------
Code Short Description Description
- ------------------------------------------------------------------------------------------------------
OPN Open Request New Request logged by Project Office. Owner not
assigned.
- ------------------------------------------------------------------------------------------------------
EST Prepare Analysis Estimate Request assigned to the Owner for the sole purpose of
preparing an estimate to perform Impact or Issue
Analysis.
- ------------------------------------------------------------------------------------------------------
ANL In Analysis Request currently being analyzed.
- ------------------------------------------------------------------------------------------------------
REV1 Account Management Review Request is waiting for Account Management action.
- ------------------------------------------------------------------------------------------------------
REV2 Steering Committee Review Request is waiting for Steering Committee action.
- ------------------------------------------------------------------------------------------------------
MOD Modifications Requested Open Request initial analysis completed and presented.
Modifications requested by Account Management or
Steering Committee.
- ------------------------------------------------------------------------------------------------------
APR Approved Request approved or approved with modifications by
Account Management and/or Steering Committee.
- ------------------------------------------------------------------------------------------------------
DEF Defer Request will be considered.
- ------------------------------------------------------------------------------------------------------
REJ Rejected Request not approved, will not be revisited.
- ------------------------------------------------------------------------------------------------------
CLS Closed Request Approved and incorporated into applicable
- ------------------------------------------------------------------------------------------------------
</TABLE>
WORK ORDER
An agreement or other document signed by both Parties pursuant to this Contract
Administration Process that sets forth the terms and conditions pursuant to
which the Parties agree that a Change is to be implemented or an Issue or
Dispute resolved.
3. CONTRACT ADMINISTRATION PROCESS FOR REQUESTS TO IMPLEMENT CHANGES AND
RESOLVE ISSUES.
(a) SUBMIT REQUEST.
The Originator will complete the Request and submit it to either
Account Manager or to the Project Office. If a Request is submitted
to an Account Manager, he will forward the Request to the Project
Office, with a copy to the other Account Manager.
If at any time during the process set forth in this Section 3(a),
either Account Manager determines that funding for a Request will
not be approved, the Request will be immediately rejected.
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If at any time during the process set forth in this Section 3(a),
either Account Manager determines that a question, concern or
request characterized as an Issue constitutes, or has evolved into,
a Dispute that should be resolved under the process set forth in
SCHEDULE 13, he shall so notify the other Account Manager and the
Project Office. From and after such notification, such question,
concern or request shall be processed as a Dispute under the Dispute
Resolution Process set forth in SCHEDULE 13 to the Agreement.
(b) LOG REQUEST.
The Project Office will assign a number to the Request, create a
brief description for reporting purposes, and log the Request into
the tracking system.
(c) ASSIGN RESPONSIBILITY FOR IMPACT OR ISSUE ANALYSIS.
The Project Office will assign an Owner and forward the Request to
the Owner for preparation of an Impact or Issue Analysis. The
Account Managers must approve the initiation of the research and
preparation for an Impact or Issue Analysis.
Labor and other costs incurred by Sabre in connection with
researching and preparing Impact and Issue Analyses (including
revisions or additions) will be charged to Customer as Exclusive
Variable Services.
(d) PREPARE IMPACT OR ISSUE ANALYSIS.
When researching and preparing an Impact or Issue Analysis, the
Owner shall solicit input from all impacted project team members. An
Impact or Issue Analysis shall include at least one recommended
solution from the Owner. Upon completion, the Owner shall forward
the Impact or Issue Analysis to the Project Office.
(e) REVIEW AND DECIDE.
The Project Office will hold regular meetings to perform a
preliminary review and summary of all Requests and Impact or Issue
Analyses. The Account Managers and other appropriate personnel will
attend the regular meetings. The Account Managers will have the
authority to approve all Requests that (a) involve less than ) [TEXT
OMITTED - CONFIDENTIAL TREATMENT REQUESTED] in capital, (b) require
less [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED] of labor, and
(c) do not require an amendment to this Agreement other than as a
result of the foregoing (other than an amendment of the description
of Services to be provided by Sabre under this Agreement.) In
addition, the Account Managers will have the authority to negotiate
resolution of Disputes that (a) involve less than [TEXT OMITTED -
CONFIDENTIAL TREATMENT REQUESTED] in capital obligations under this
Agreement, (b) involve less than [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED] of labor and (c) would not materially affect
the rights (including Intellectual Property Rights) of either Party.
The Account Managers may, at their election, require revisions to,
or additional research or information not included in, an Impact or
Issue Analysis in connection with their analysis of a Request and
related Impact or Issue Analysis.
(i) If the Request is within the authority of the Account
Managers, the Account Managers will approve or reject the
Request.
If the Account Managers approve the Request, the approval and
reasons therefor shall be documented, a copy retained by the
Account Mangers and the Project Office, a copy forwarded to
the Owner and Originator, and the Request shall be
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implemented commencing upon completion and execution by both
Parties of the applicable Work Order(s).
If the Account Managers reject the Request, the rejection and
reasons therefor shall be documented, a copy retained by the
Account Managers and Project Office, a copy forwarded to the
Owner and Originator, and the Request will not be implemented.
If the Account Mangers cannot agree whether to approve or
reject the Request, the disagreement and reasons therefor
shall be documented, a copy retained by the Account Managers
and Project Office, a copy forwarded to the Owner and
Originator, and the Request and related documentation shall be
forwarded to the Steering Committee for their review and
decision.
(ii) If the Request is not within the authority of the Account
Managers, the Account Managers will (1) summarize the Request
and Impact or Issue Analysis, (2) determine and document their
recommended solution in respect of the Request (or, if they
cannot agree on a recommended solution, the Account Mangers
will document such disagreement and reasons therefor), (3)
prepare a written summary outlining any aspects of the
Agreement, including Fees, requiring revision as a result of
their recommended solution, and (4) forward the Request and
related documentation to the Steering Committee for their
review and decision.
(iii) Upon receipt of a Request and requisite related documentation
from the Account Managers, the Steering Committee will approve
or reject the Request.
If the Steering Committee approves the Request, the approval
and reasons therefor shall be documented, a copy retained by
the Account Managers, a copy forwarded to the Project Office,
the Owner and Originator, and the Request shall be implemented
commencing upon completion and execution by both Parties of
the applicable Work Order(s).
If the Steering Committee rejects the Request, the rejection
and reasons therefor shall be documented, a copy retained by
the Account Managers, a copy forwarded to the Project Office,
Owner and Originator, and the Request will not be implemented.
If the Steering Committee cannot agree whether to approve or
reject the Request, the disagreement and reasons therefor
shall be documented, a copy retained by the Account Managers,
and a copy forwarded to the Project Office, the Owner and
Originator. In addition, the disagreement shall, at the
written request of either Party, be submitted to mediation in
accordance with the Dispute Resolution procedures set forth in
SCHEDULE 13 to the Agreement.
(f) IMPLEMENT APPROVED REQUESTS.
Upon approval of a Request, the Account Managers, working in
conjunction with the Project Office and the affected areas, shall
coordinate and supervise the preparation of appropriate Work
Order(s) to implement the approved Change or the resolution of the
resolved Issue.
Work Orders include documentation of: (a) amendments, modifications,
additions or deletions to the Agreement, any Work Order, any Base
Services, Variable Service, or any Fees that are the subject of the
approved Request; (b) resolution of problems and Issues that
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are the subject of the approved Request; and/or (c) any
modifications to projects, timelines, plans, budgets, other
affected documents, departments or positions that are the subject
of the approved Request.
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
Upon completion of the applicable Work Order(s) and their execution by
both Parties, the approved Change or resolution of the resolved Issue will
be implemented in accordance with the terms and conditions of the Work
Order(s) and the Agreement.
(g) CLOSE REQUESTS.
Upon completion of the applicable Work Order(s) and their execution by
both Parties for approved Requests, or upon rejection by the Account
Managers or Steering Committee, as applicable, of a Request, the Project
Office shall close the Request.
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SCHEDULE 8: FEES
Customer shall pay to Sabre Fees for the Services, computed as described in this
SCHEDULE 8. Sabre shall invoice Customer for such fees, computed for each month
ending after the Effective Date. Customer shall pay invoiced amounts within
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED] after receipt of the invoice.
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
For purposes of this paragraph 1, the following definitions will apply:
a. "Device" means a piece of equipment or mechanism that is linked by a
network system to facilitate data communications between two end
points. The Device count will be based on Customer Devices that
reside or are located within the dedicated Customer network
structure, and will not include any shared Devices which Customer
utilizes in association with or in conjunction with other customers
of Sabre.
b. "Mission Critical" means those Servers whose outage or performance
degradation would cause substantial impact to Customer's business.
c. "Non-Mission Critical" means those Servers whose outage or
performance degradation would not cause substantial impact to
Customer's business.
d. "Port" means a network access point for data entry or exit through
the firewall.
e. "Server" means a logical server, evidenced by each instance of a
unique operating system that resides on either shared or distinct
computing machinery.
2. CHARGES FOR DATA AND VOICE SERVICES.
a. MANAGED NETWORK CHARGES. For each of the following types of Data
and Voice Services, Customer shall pay the charges assessed to Sabre
by the applicable Third Party communications provider, together with
the monthly management fee described below:
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
b. DIRECT SERVICES. For each of the following Data and Voice Services
provided by Sabre, Customer shall pay the monthly charge described
below:
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
The charges for the following categories (which are not intended to be
exclusive) of Exclusive Variable Services shall be as follows:
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
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Schedule 9: Development Services Budget
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
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SCHEDULE 10: SABRE SOFTWARE
SABRE-DEVELOPED SOFTWARE AND CONSTITUTING:
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
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SCHEDULE 11: REQUIRED CONSENTS
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
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SCHEDULE 12: CUSTOMER ASSETS
TRAVELOCITY SYSTEMS INVENTORY
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
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TRAVELOCITY SOFTWARE
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
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SCHEDULE 13: DISPUTE RESOLUTION PROCEDURES
CONFIDENTIAL
1. CERTAIN DEFINITIONS
This Section 1 sets forth certain definitions used in this Dispute Resolution
Process. Other capitalized terms used but not defined here in have the meanings
ascribed to them in the Agreement.
ARBITRATION RULES
The rules of the American Arbitration Association ("AAA") in effect on the date
of the commencement of the arbitration.
CONTRACT ADMINISTRATION PROCESS
The Contract Administration Process is the process set forth on SCHEDULE 7 to
the Agreement.
QUALIFICATIONS
Having extensive knowledge or experience, or both, regarding information
technology services similar to the Base Services or the Variable Services that
are the subject of the Dispute, and fluent in English.
2. DISPUTE RESOLUTION PROCEDURE.
(a) GENERAL PROCEDURE.
The Parties shall resolve all Disputes in accordance with this
procedure:
(i) Disputes shall first be submitted to the Account Managers or
the Steering Committee as indicated in Section 3 of this
Schedule.
(ii) If a Dispute is not resolved by the Account Managers or the
Steering Committee, then either Party may submit the Dispute
to mediation as outlined in Section 4 of this Schedule.
(iii) If a Dispute is not resolved by mediation, then either Party
may submit the Dispute to binding arbitration in accordance
with Section 5 of this Schedule.
A referral under either Section 2(a)(ii) and/or 2(a)(iii) of this
Schedule shall be made by written notice to the Account Managers.
That notice shall be in a form mutually agreed to by the Account
Managers or an electronic mail message and addressed to each Account
Manager at his or her office address or electronic mail address;
each notice shall be given and effective upon actual receipt.
3. DISPUTE RESOLUTION.
(a) ACCOUNT MANAGEMENT ACTION.
If the Dispute (a) involves less than [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED] in capital, (b) involves less than [TEXT
OMITTED - CONFIDENTIAL TREATMENT REQUESTED], and (c) does not
require an amendment to the Base Services, the Variable Services,
Fees or any other material term of the Agreement, the Account
Mangers will discuss the Dispute in good faith in an attempt to
resolve the Dispute to the mutual satisfaction of both Parties. If
the Account Managers are unable to resolve the Dispute to the mutual
satisfaction of both Parties within [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED] after receipt of written notice by one Party
from the other that a Dispute exists, the Dispute shall be referred
to the Steering Committee.
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(b) STEERING COMMITTEE ACTION.
If the Dispute (a) involves (i) [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED] or more in capital, (ii) requires [TEXT OMITTED
- CONFIDENTIAL TREATMENT REQUESTED] of labor or more, and/or (ii)
requires an amendment to the Base Services, the Variable Services,
Fees or any other material term of the Agreement, or (b) is within
the authority of, but not resolved by, the Account Managers, then
the Steering Committee will discuss the Dispute in good faith in an
attempt to resolve the Dispute to the mutual satisfaction of both
Parties. If the Steering Committee is unable to resolve the Dispute
to the mutual satisfaction of both Parties within [TEXT OMITTED -
CONFIDENTIAL TREATMENT REQUESTED] after receipt of written notice by
one Party from the other that a Dispute exists, the Dispute shall,
at the written request of either Party, be submitted to mediation as
outlined in Section 4 of this Schedule.
4. MEDIATION.
The mediation of an unresolved Dispute shall be conducted in this manner:
(a) Either Party may submit the Dispute to mediation by giving notice of
mediation to the other Party. The Parties shall attempt to agree
promptly after that notice is given upon and appoint a sole mediator
who has the Qualifications.
(b) If the Parties are unable to agree upon a mediator within [TEXT
OMITTED - CONFIDENTIAL TREATMENT REQUESTED] after the date the
Dispute is submitted to mediation, either Party may request the
Dallas, Texas office of the AAA to appoint a mediator who has the
Qualifications. The mediator so appointed shall be deemed to have
the Qualifications and to be accepted by the Parties.
(c) The mediation shall be conducted in Dallas, Texas at a place and a
time agreed by the Parties with the mediator, or if the Parties
cannot agree, as designated by the mediator. The mediation shall be
held within [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED] after
the mediator is appointed.
(d) If either Party has substantial need for information from the other
Party in order to prepare for the mediation, the Parties shall
attempt to agree on procedures for the formal exchange of
information; if the Parties cannot agree, the mediator's
determination shall be effective.
(e) Each Party shall be represented in the mediation by a natural person
with authority to settle the Dispute on behalf of that Party and, if
desired by that Party, by counsel for that Party. The Parties'
representatives in the mediation shall continue with the mediation
as long as the mediator requests.
(f) Unless otherwise agreed by the Parties, each Party shall pay
one-half of the mediator's fees and expenses and shall bear all of
its own expenses in connection with the mediation. Neither Party
may employ or use the mediator as a witness, consultant, expert, or
counsel regarding the Dispute or any related matters.
5. ARBITRATION.
The arbitration of an unresolved Dispute shall be conducted in this manner:
(a) Either Party may begin arbitration by filing a demand for
arbitration in accordance with the Arbitration Rules. The Parties
shall attempt to agree upon and appoint a panel of
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three (3) arbitrators promptly after that demand is filed. Each
of those arbitrators must have the Qualifications unless otherwise
agreed by both Parties.
(b) If the Parties are unable to agree upon any or all of the
arbitrators within [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
after the demand for arbitration was filed (and do not agree to an
extension of that [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
period), then each Party shall designate one arbitrator with
Qualifications and the AAA shall designate a third, if possible,
with Qualifications; nevertheless, such arbitrator so appointed
shall be deemed to have the Qualifications and to be accepted by the
Parties as part of the panel.
(c) The arbitration shall be conducted in Dallas, Texas at a place and a
time agreed by the Parties with the panel, or if the Parties cannot
agree, as designated by the panel. The panel may, however, call and
conduct hearings and meetings at such other places as the Parties
may agree or as the panel may, on the motion of one Party, determine
to be necessary to obtain significant testimony or evidence.
(d) The Parties shall attempt to agree upon the scope and nature of any
discovery for the arbitration. If the Parties do not agree, the
panel may authorize any and all forms of discovery, including
depositions, interrogatories, and document production, upon a
showing of particularized need that the requested discovery is
likely to lead to material evidence needed to resolve the Dispute
and is not excessive in scope, timing, or cost.
(e) The arbitration shall be subject to the Federal Arbitration Act and
conducted in accordance with the Arbitration Rules to the extent
they do not conflict with this Section 5. The Parties and the panel
may, however, agree to vary the provisions of this Section 5 or the
matters otherwise governed by the Arbitration Rules.
(f) The panel has no power to:
(i) rule upon or grant any extension, renewal, or continuance of
the Agreement;
(ii) award remedies or relief either expressly prohibited by the
Agreement or under circumstances not permitted by the
Agreement; or
(iii) grant provisional or temporary injunctive relief before
rendering the final decision or award.
(g) Unless the Parties otherwise agree, all Disputes regarding or
related to the same topic or event that are subject to arbitration
at one time shall be consolidated in a single arbitration
proceeding.
(h) A Party or other person involved in an arbitration under this
Section 5 may join in that arbitration any person other than a Party
if:
(i) the person to be joined agrees to resolve the particular
dispute or controversy in accordance with this Section 5 and
the other provisions of this Schedule applicable to
arbitration; and
(ii) the panel determines, upon application of the person seeking
joinder, that the joinder of that other person will promote
the efficiency, expedition, and consistency of the result of
the arbitration and will not unfairly prejudice any other
Party to the arbitration.
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(i) The arbitration hearing shall be held within [TEXT OMITTED -
CONFIDENTIAL TREATMENT REQUESTED] after the appointment of the
panel. Upon request of either Party, the panel shall arrange for a
transcribed record of the arbitration hearing, to be made available
to both Parties.
(j) The panel's final decision or award shall be made within [TEXT
OMITTED - CONFIDENTIAL TREATMENT REQUESTED] after the hearing. That
final decision or award shall be made by unanimous or majority vote
or consent of the arbitrators constituting the panel, shall be
deemed issued at the place of arbitration and shall be made in U.S.
dollars. The panel shall issue a reasoned written final decision or
award based on the Agreement and Texas law; the panel may not act
according to equity and conscience or as an amicable compounder or
apply the law merchant.
(k) The panel's final decision or award may include:
(i) recovery of general damages to the extent permitted by the
Agreement (but not consequential, exemplary or punitive
damages); or
(ii) injunctive relief in response to any actual or threatened
breach of the Agreement or any other actual or threatened
action or omission of a Party under or in connection with the
Agreement.
(l) The panel's final decision or award shall be final and binding upon
the Parties, and judgment upon that decision or award may be entered
in any court having jurisdiction over either or both of the Parties
or their respective assets. The Parties specifically waive any
right they may have to apply or appeal to any court for relief from
the preceding sentence or from any decision of the panel made, or
any question of law arising, before the final decision or award; and
the Parties shall not dispute nor question the validity of such
award before any regulator or other authority in any jurisdiction
where enforcement action is taken by the Party or Parties in whose
favor the award was rendered. If any decision by the panel is
vacated for any reason, the Parties shall submit that Dispute to a
new arbitration in accordance with this Section 5.
(m) Each Party shall pay one-half of the arbitrators' fees and expenses,
and shall bear all of its own expenses in connection with the
arbitration. The panel has the authority, however, to award
recovery of all costs and fees (including attorneys' fees,
administrative fees and the panel's fees and expenses) to the
prevailing Party in the arbitration.
6. RECOURSE TO COURTS.
Nothing in this Schedule limits the right of either Party to apply to a court or
other tribunal having jurisdiction to:
(a) enforce this Schedule, including the agreement to arbitrate in this
Schedule;
(b) seek provisional or temporary injunctive relief, in response to an
actual or impending breach of Sections 4.1, 7.1 and 9.2 of the
Agreement or otherwise so as to avoid irreparable damage or maintain
the status quo, until a final arbitration decision or award is
rendered or the Dispute is otherwise resolved; or
(c) challenge or vacate any final arbitration decision or award that
does not comport with Section 5 of this Schedule.
7. SUBMISSION TO JURISDICTION.
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Each Party irrevocably submits to the jurisdiction of the federal courts of
the United States and the state courts of Texas located in Fort Worth. Each
Party waives any defense or challenge to that jurisdiction based on lack of
personal jurisdiction, improper venue, or inconvenience of forum.
8. CONFIDENTIALITY.
The proceedings of all negotiations, mediations, and arbitrations shall be
privately conducted. The Parties shall keep confidential all conduct,
negotiations, documents, decisions, and awards in connection with those
proceedings under this Schedule.
9. EXCLUSIVE REMEDY.
OTHER THAN THOSE MATTERS INVOLVING INJUNCTIVE OR OTHER EXTRAORDINARY RELIEF
OR ANY ACTION NECESSARY TO ENFORCE THE AWARD OF THE ARBITRATOR, THE PARTIES
AGREE THAT THE PROVISIONS OF THIS SCHEDULE ARE A COMPLETE DEFENSE TO ANY
SUIT, ACTION OR OTHER PROCEEDING INSTITUTED IN ANY COURT OR BEFORE ANY
ADMINISTRATIVE TRIBUNAL WITH RESPECT TO ANY DISPUTE OR THE PROVISION OF THE
BASE SERVICES OR VARIABLE SERVICES BY SABRE. NOTHING IN THIS SCHEDULE
PREVENTS THE PARTIES FROM EXERCISING THEIR RIGHTS TO TERMINATE THE AGREEMENT
IN ACCORDANCE WITH SECTION 11.2 OF THE AGREEMENT.
10. CONTINUED PERFORMANCE; ESCROW ACCOUNT.
Unless (a) Sabre has commenced a proceeding or has presented a claim for
nonpayment by Customer of amounts due under the Agreement, and Customer does
not promptly pay all amounts in dispute into the escrow account referred to
below, or (b) the Agreement has been terminated in accordance with Section
11.2, Sabre will continue to provide the Base Services and Variable Services
during any dispute resolution proceedings (whether informal or formal)
commenced pursuant to this Schedule and Customer will continue to perform its
obligations (including the making of payments to Sabre) in accordance with
the Agreement. Up to the maximum amount in dispute, any disputed payment will
be paid pending resolution of the Dispute into an escrow account that is
structured by agreement of the Parties or, if agreement cannot be reached, as
directed by the mediator or arbitrator, as the case may be, engaged in
accordance with this Schedule. Any such escrow account will provide for the
payment of interest on the amounts deposited therein, and the Parties (if the
Dispute is resolved informally) or the mediator or arbitrator, as the case
may be (if the Dispute is resolved formally), will make the determination
regarding distribution of such deposited amounts plus interest. If Customer
fails to escrow disputed payments as required by the Agreement, Sabre may
apply to any court of competent jurisdiction to seek injunctive relief for
such failure and will have the right to terminate the Agreement in accordance
with Section 11.2(a) of the Agreement.
11. OTHER.
(a) U.N. CONVENTION.
The enforcement of any arbitral award will be in accordance with and
governed by the United Nations Convention on the Recognition and
Enforcement of Foreign Arbitral Awards.
(b) LANGUAGE.
NEGOTIATIONS, MEDIATIONS AND ARBITRATIONS WILL BE CONDUCTED IN THE ENGLISH
LANGUAGE.
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SCHEDULE 14: NOTICES
If to Sabre:
Sabre Inc.
MD 4204
4255 Amon Carter Blvd.
Fort Worth, TX 76155
Fax: (817) 967-1215
Attention: President
With a copy to:
Sabre Inc.
MD 4204
4255 Amon Carter Blvd.
Fort Worth, TX 76155
Fax: (817) 967-1215
Attention: General Counsel
If to Customer:
Travelocity.com LP
4200 Buckingham Road, MD 1400
Fort Worth, Texas 76155
Fax: (817) 963-8869
Attention: President
With a copy to:
Travelocity.com LP
4200 Buckingham Road, MD 1400
Fort Worth, Texas 76155
Fax: (817) 963-8869
Attention: General Counsel
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SCHEDULE 15: TERMINATION ASSISTANCE
Sabre will provide the following Termination Assistance Services:
1. Sabre will continue to perform, during the specified Termination
Assistance Period, any or all of the Services then being performed by
Sabre.
2. Sabre will develop, with the assistance of Customer, a plan for the
transition of Services from Sabre to Customer or Customer's designee.
3. Sabre will provide training to Customer personnel in the performance of
the Services then being performed by Sabre.
4. Sabre will make available to Customer, pursuant to mutually agreeable
terms and conditions, any Third Party IT Services obtained by Sabre that
are then dedicated solely to the performance of Services hereunder, which
terms and conditions permit Customer to assume Sabre's rights and
obligations with respect to any such Third Party IT Services.
5. Sabre will provide to Customer copies of documentation and procedures then
in existence that are necessary to provide the Services. Documentation
and procedures located on magnetic media will be delivered on magnetic
media; those contained on other media (such as paper) will be duplicated
and delivered at Customer's expense.
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SCHEDULE 16: TELECOMMUNICATIONS PROVISIONS
1. AGENCY. Customer will if requested by Sabre provide a letter of agency in
form and substance reasonably satisfactory to Sabre and the vendors
designating Sabre to act as agent for Customer with respect to all matters
related to obtaining the telecommunications services from the vendors.
Customer shall do, or cause to be done, all such further acts and to
execute, acknowledge, and deliver, or cause to be executed, acknowledged,
and delivered, all such further documentation (including billing transfer
letters) as Sabre may reasonably request in connection with Customer's use
of the Data and Voice Services and the network portion of the Web Hosting
Services. Customer acknowledges that Sabre's performance of its
obligations under this Agreement, and the timing of such performance,
depend upon Sabre's ability to acquire the telecommunications services
from the vendors on terms that will allow the telecommunications services
to be managed for Customer in the manner contemplated hereby.
2. USE OF THE DATA AND VOICE SERVICES AND THE WEB HOSTING SERVICES. Customer
will be responsible for all use (whether authorized and unauthorized) of
the Data and Voice Services and the Web Hosting Services, and for
complying with all obligations that are applicable to Customer as set
forth in this Agreement or in any tariff, regulation, or agreement with
the vendors. In particular, Customer will be responsible for the
protection of all transmission facilities from unauthorized access, for
the selection of the appropriate access control products or services, and
for the proper use of such products or services.
Customer will not: (i) use the Data and Voice Services or the Web Hosting
Services (including related networks and circuits) made available by Sabre
under this Agreement for purposes other than for which they are designed,
which are lawful, and which are intended by this Agreement; (ii) perform
or attempt any alteration of or tampering with the networks or circuits
provided as part of the Data and Voice Services or the Web Hosting
Services; (iii) use the Data and Voice Services or the Web Hosting
Services in a manner which interferes with the use by any Authorized Sabre
User (defined below); or (iv) use the Data and Voice Services or the Web
Hosting Services for any purpose or in any manner directly or indirectly
in violation of the law or in aid of any unlawful act or undertaking. As
used in this Agreement, "AUTHORIZED SABRE USER" means any person or entity
authorized by Sabre to use any Data and Voice Services or any Web Hosting
Services managed by Sabre, including the Data and Voice Services and the
Web Hosting Services. Sabre will have no liability whatsoever to Customer
arising out of or relating to the illegal or fraudulent use of the Data
and Voice Services or the Web Hosting Services by any Third Party.
3. TELECOMMUNICATIONS EQUIPMENT. Other than the Wide Area Network Routers,
Customer will provide all telecommunications equipment and related
services that are required at all Customer locations to which the Data and
Voice Services and the network portion of the Web Hosting Services will be
provided (the "TELECOMMUNICATIONS EQUIPMENT"). Customer will be
responsible for the operation and maintenance of the Telecommunications
Equipment, including any transfers, modifications, or adjustments of the
Telecommunications Equipment or any configurations thereof. In addition,
Customer will be responsible for any termination or other liabilities
under any supplier contracts the services under which will be replaced by
the Data and Voice Services or the network portion of the Web Hosting
Services, as well as for any deinstallation activities that are required
before performance of the Data and Voice Services or the network portion
of the Web Hosting Services can begin.
4. REGULATORY REQUIREMENTS.
(a) The parties expressly acknowledge that this SCHEDULE 16 has been
negotiated, and the Data and Voice Services and Web Hosting Services
have been uniquely customized, to satisfy the special requirements
of Customer. The Data and Voice Services and Web Hosting Services
are private services and are not common carrier services.
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(b) If a vendor amends or obtains revisions to, or withdraws, any tariff
covering the Data and Voice Services or the Web Hosting Services and
that action materially impairs Sabre's ability to provide the Data
and Voice Services or the Web Hosting Services, Sabre may, in its
sole discretion, (i) negotiate modifications to this Agreement with
Customer, or (ii) without any liability whatsoever, terminate the
affected Data and Voice Services or the affected Web Hosting
Services, in whole or in part, by giving Customer at least 30 days'
prior notice of the nature and effective date of such termination
and provide to Customer a pro-rata refund of any prepaid charges,
subject to any limitations set forth in this Agreement. In no event
will Sabre be considered in breach or default as a result of the
occurrence of any of the preceding circumstances.
(c) In no event will Sabre have any liability to Customer as a result of
(i) any regulatory requirements imposed by any agency of the United
States or Customer jurisdiction government, state, or local
governments or applicable foreign government on a vendor or (ii) any
independent actions that a vendor may undertake which alter the
terms, conditions, or methodology for providing the Data and Voice
Services or the Web Hosting Services, or render the provision of the
Data and Voice Services or the Web Hosting Services unlawful.
(d) If, at any time, the prices charged under a tariff by a vendor to
Sabre for the transmission of data over a network or circuit
increases or decreases, then Sabre may, if an increase (and will if
a decrease) by written notice to Customer (which notice will be sent
by Sabre within 30 days following when Sabre learns that the tariff
prices have changed), increase or decrease, as the case may be,
Sabre's fees by a percentage equal to the percentage increase, or
decrease, by which such new tariff prices are higher or lower, than
the prices previously charged under tariff by the vendor to Sabre.
Such recalculated fees will remain in effect unless and until Sabre
adjusts the same pursuant to this paragraph.
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THIS AGREEMENT HAS CONFIDENTIAL PORTIONS OMITTED, WHICH PORTIONS HAVE BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. OMITTED
PORTIONS ARE INDICATED IN THIS AGREEMENT WITH "[TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED]."
INTELLECTUAL PROPERTY AGREEMENT
In this Agreement, SABRE INC., a corporation organized and existing
under the laws of the State of Delaware and having a principal place of
business at Fort Worth, Texas (hereinafter "Sabre"), and TRAVELOCITY.COM LP,
a limited partnership organized and existing under the laws of Delaware and
having a principal place of business at Fort Worth, Texas (hereinafter
"Travelocity"), agree as follows:
1. DEFINITIONS
1.1 "Common Internet Architecture" or "CIA" means existing and future
versions of the functional software module that provides a common
interface between Internet applications and the Sabre host (i.e.,
the Sabre Table Builder (STB)).
1.2 "Effective Date" means March 7, 2000, at the time on such date
immediately after giving effect to the consummation of the
transaction described in that certain Bill of Contribution,
Assignment and Assumption Agreement, dated March 7, 2000, between
Sabre Inc. and Travelocity.com LP.
1.3 "Existing Clone" means the product in existence and owned by
Travelocity as of the Effective Date of this Agreement that
Travelocity uses to distribute consumer-direct Internet travel
services and products.
1.4 "Existing Contract" means any contract or agreement between a Party
to this Agreement and a third party that was in existence and
enforceable on 3 October 1999.
1.5 "Existing IP" means all IP owned by a Party as of the Effective Date
of this Agreement.
1.6 "Future Clone" means any new or updated version of the Existing
Clone, which new or updated version is created, developed or
acquired during the Pool Term.
1.7 "Intellectual Property" or "IP" means and includes (a) inventions
whether or not patented or patentable and all worldwide patent
rights to such inventions, (b) technical information and knowhow,
and (c) software and related documentation
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and all worldwide copyrights therein. IP does not include customer
data, customer profiles, marketing plans, market intelligence data
and similar non-technical information.
1.8 "Joint Interest IP" means IP made jointly by the Parties pursuant to
a joint development, funding or other similar agreement between the
Parties.
1.9 "Made IP" means all IP made or acquired by a Party during the Pool
Term without funding from the other Party.
1.10 "New Contract" means any new contract or agreement between a Party
to this Agreement and a third party that is entered into after 3
October 1999 and any renewal or extension of an Existing Contract
that becomes effective after 3 October 1999.
1.11 "Non-Competition Agreement" means the agreement between the Parties
entitled "Non-Competition Agreement" having an effective date of
March 7, 2000.
1.12 "Party" means Sabre or Travelocity individually and "Parties" means
Sabre and Travelocity collectively.
1.13 "Pool IP" [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
1.14 "Pool Term" means the period from 3 October 1999 until the fifteenth
(15th) anniversary of the Effective Date of this Agreement, unless
the obligation to contribute to Pool IP is earlier terminated
pursuant to the terms of this Agreement.
1.15 "Premium IP" means IP made solely by one Party during the Pool Term
and paid for by the other Party at premium rates as provided in the
Technology Services Agreement.
1.16 "Sabre Direct Competitor" [TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED]
1.17 "Sabre Pool IP" [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
1.18 "Standard IP" means IP made solely by one Party during the Pool Term
and paid for by the other Party at standard rates as provided in the
Technology Services Agreement.
1.19 "Technology Services Agreement" means an agreement between the
Parties entitled "Information Technology Services Agreement" having
an effective date
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of March 7, 2000.
1.20 "Travelocity Direct Competitor" [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED]
1.21 "Travelocity Pool IP" [TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED]
2. OWNERSHIP, MAINTENANCE AND ENFORCEMENT OF IP
2.1 Each Party will retain all ownership interest in Existing IP as it
had as of the Effective Date.
2.2 Each Party will own all right, title and interest in and to all Made
IP, Standard IP and Premium IP made or acquired by it during the
Pool Term.
2.3 Each Party will control and pay for necessary legal protection,
including patents and copyrights where appropriate, for all IP
solely owned by it during the term of this Agreement, PROVIDED,
HOWEVER, that no Party will have any obligation to obtain or
maintain any legal protection for IP, owned solely by such Party.
2.4 Joint Interest IP will be jointly owned by the Parties in accordance
with the terms of the agreement pursuant to which such Joint
Interest IP was made ("Joint Development Agreement"). Any rights or
obligations with respect to obtaining and maintaining legal
protection for Joint Interest IP will be allocated in accordance
with the terms of the Joint Development Agreement. Each Party will
cooperate with the other Party in any action brought by the other
Party to enforce Joint Interest IP.
2.5 No Party will have any obligation to enforce or defend any IP. If
one Party wishes to enforce any Pool IP against a third party, the
other Party will cooperate in such enforcement at the one Party's
expense.
3. POOL IP
3.1 During the Pool Term, each Party will disclose to the other Party
all Pool IP within [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
after a prototype is made or acquired. All software within Pool IP
will be disclosed to the other Party in executable and source code
versions and such disclosure will include all applicable
documentation.
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3.2 To the extent a Party considers any of its Pool IP to be proprietary
and confidential, the Party may disclose it to the other Party in
confidence. Such disclosure shall be in writing or other tangible
form that is marked as confidential and proprietary to the
disclosing Party. The other Party will receive and maintain such
Pool IP in confidence and will treat it as it does its own
proprietary information. Obligations of confidentiality shall not
apply to Pool IP that becomes part of the public domain through no
fault of the receiving Party, that the receiving Party can show by
documentary evidence was in its possession prior to disclosure of
such Pool IP, or that was rightfully communicated to the receiving
Party by a third party free of any obligation of confidence owed by
such third party to the other Party.
3.3 [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
3.4 Each Party will be free to use and to fully exploit in its own
business throughout the world all Pool IP owned by it.
4. POOL IP LICENSE RIGHTS
4.1 Sabre may grant a license to any third party under any Sabre Pool
IP, except for Premium IP, to use and fully exploit such Sabre Pool
IP.
4.2 Sabre may grant a license under any Premium IP that is a part of
Sabre Pool IP to any third party who, at the time such license is
granted, is not a Travelocity Direct Competitor.
4.3 Travelocity may grant a license to any third party under any
Travelocity Pool IP, except for Premium IP, to use and fully exploit
such Travelocity Pool IP.
4.4 Travelocity may grant a license under Premium IP that is a part of
Travelocity Pool IP to any third party who, at the time such license
is granted, is not a Sabre Direct Competitor.
4.5 [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
4.6 Travelocity hereby grants to Sabre a perpetual, worldwide, non-
exclusive, royalty-free license to all Travelocity Pool IP for the
unrestricted use and exploitation by Sabre in its business.
Travelocity further grants to Sabre the right to grant sublicenses
under any Travelocity Pool IP (regardless of which party paid for
the IP or at what rate it was paid for) to any third party who, at
the time such sublicense is granted, is not a Travelocity Direct
Competitor.
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4.7 Any software included in a Party's Pool IP shall include applicable
documentation and (a) shall be licensed to the other Party in both
source code and executable code, and (b) may be licensed or
sublicensed to third parties in executable code only.
4.8 [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
5. THIRD PARTY CONTRACTS
5.1 Nothing in this Agreement will prevent a Party from complying with
any Existing Contract. If required by an Existing Contract with a
third party, a Party may grant a license under Premium IP paid for
by the other Party and a sublicense under the other Party's Pool IP
to the third party even if the third party is or becomes a Direct
Competitor of the other Party.
5.2 Any New Contract with a third party will be subject to the
provisions and restrictions of Article 4 of this Agreement relating
to Direct Competitors of the other Party. In the event such a third
party becomes a Direct Competitor after any such New Contract has
been executed, (a) the third party will be permitted to use whatever
IP was originally the subject of the New Contract in accordance with
the terms of that contract, and (b) each party acknowledges that
thereafter it can not grant to such third party additional rights or
extension of rights under any Pool IP that is subject to the Direct
Competitor provisions and restrictions outlined in Section 4 of this
Agreement.
6. ROYALTY AND LICENSE FEE
6.1 Except as provided in this Article 6 of this Agreement, no Party
will be obligated to pay to the other Party any fee, royalty or any
form of monetary consideration for use, exploitation or sublicensing
of Pool IP.
6.2 Travelocity hereby grants to Sabre the right and license to use the
Existing Clone in its business and grants to Sabre the right to
grant sublicenses to third parties who are not Travelocity Direct
Competitors.
6.3 [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
6.4 Upon request by Sabre, Travelocity will deliver to Sabre any Future
Clone and will grant to Sabre a license to use any Future Clone in
its business and to grant
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sublicenses to third parties who are not Travelocity Direct
Competitors.
6.5 If, after the Effective Date of this Agreement, Sabre grants a
sublicense to a third party to use any Future Clone, Sabre will
notify Travelocity of the sublicense within thirty (30) days after
execution thereof and will pay to Travelocity [TEXT OMITTED -
CONFIDENTIAL TREATMENT REQUESTED]
7. TERM AND TERMINATION
7.1 All rights granted to and restrictions imposed on a Party pursuant
to this Agreement with respect to any Pool IP will continue in
perpetuity. Termination of this Agreement for any reason will not
affect rights granted or obligations assumed prior to the date of
such termination.
7.2 If Sabre either: (a) materially breaches the Noncompetition
Agreement, during the term thereof; or (b), after expiration of the
non-competition restriction provided in the Noncompetition
Agreement, Sabre commences a business that would have been subject
to the non-competition restriction, or acquires Control (as defined
in the Non-Competition Agreement) of such a business; then, in
either such event, Travelocity, by [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED] advance written notice to Sabre, may terminate
the portion of this Agreement that obligates both parties to
contribute to Pool IP.
7.3 If at any time Travelocity commences (or acquires Control of) a
business of distribution (a) of travel inventory directly to travel
agents or corporations, or (b) of travel technology to any travel
industry suppliers (e.g., airlines, car companies, hotels, cruise
lines and tour companies), then Sabre, by [TEXT OMITTED -
CONFIDENTIAL TREATMENT REQUESTED] advance written notice to
Travelocity, may terminate the portion of this Agreement that
obligates both parties to contribute to Pool IP.
7.4 The obligation of each party to contribute to Pool IP will
automatically terminate in the event Sabre no longer controls
Travelocity. Sabre shall be considered to have "control" of
Travelocity.com so long as Sabre has (a) direct or indirect
ownership of, or the unrestricted right to acquire such ownership
of, at least 20% of the limited partnership units or other ownership
interests in Travelocity, and (b) effective control, by contract or
otherwise, of the management, governance and activities of
Travelocity.
7.5 Either Party may terminate the portion of this Agreement that
obligates both parties to contribute to Pool IP upon written notice
to the other Party in the event the other Party becomes insolvent,
makes a general assignment for the benefit of creditors, suffers or
permits the appointment of a receiver for its business or
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assets, becomes subject to any proceeding under any bankruptcy or
insolvency law whether domestic or foreign, or has wound up or
liquidated, voluntarily or otherwise.
7.6 Termination as provided herein will not be a Party's sole remedy,
and each Party hereby reserves all rights and remedies at law or in
equity for any breach by the other Party of any term of this
Agreement.
7.7 Termination of the obligation to contribute to Pool IP shall not
affect the rights of either party to Pool IP in existence before the
date of such termination. All rights and obligations that accrued
prior to termination of the obligation to contribute to Pool IP will
continue in full force and effect.
8. ASSIGNMENT
Neither this Agreement, nor any rights granted or obligations imposed
hereby, may be assigned or encumbered by either party without the prior
written consent of the other party.
9. MISCELLANEOUS
9.1 A waiver of any breach of any provision of this Agreement shall not
be construed as a continuing waiver of other breaches of the same or
other provisions of this Agreement.
9.2 Nothing herein shall be deemed to create an agency, joint venture or
partnership relation between the parties hereto.
9.3 This Agreement constitutes the entire agreement and understanding of
the Parties with regard to the IP that is the subject matter hereof
and merges and supersedes all prior discussions, negotiations,
understandings and agreements between the parties concerning the
subject matter hereof. This Agreement does not supersede the other
agreements being executed by the Parties contemporaneously with the
execution of this Agreement, including the Sabre Access Agreement,
Noncompetition Agreement, and Information Services Technology
Agreement. Neither party shall be bound by any definition,
condition, warranty, right, duty or covenant other than as expressly
stated in this Agreement or as subsequently set forth in a written
document signed by both parties. Each party expressly waives any
implied right or obligation regarding the subject matter hereof.
9.4 This Agreement shall be interpreted and construed, and the legal
relations created herein shall be determined, in accordance with the
laws of the State of Texas (excluding conflicts of laws) and of the
United States.
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9.5 This Agreement may be amended only by a written document signed by
authorized representatives of both Parties.
9.6 Each party hereto agrees to execute, acknowledge and deliver all
such further instruments, and to do all such further acts, as may be
necessary or appropriate to carry out the intent and purposes of
this Agreement.
9.7 Should any part or provision of this Agreement be held unenforceable
or in conflict with the law of any jurisdiction, the validity of the
remaining parts or provisions shall not be affected by such holding.
In the event a part or provision of this Agreement held
unenforceable or in conflict with law affects consideration to
either Party, the Parties agree to negotiate in good faith amendment
of such part or provision in a manner consistent with the intention
of the Parties as expressed in this Agreement.
9.8 Neither Party shall be responsible or liable to the other Party for
nonperformance or delay in performance of any terms or conditions of
this Agreement due to acts or occurrences beyond the control of the
non-performing or delayed Party, including but not limited to, acts
of God, acts of government, wars, riots, strikes or other labor
disputes, shortages of labor or materials, fires and floods,
provided the nonperforming or delayed Party provides to the other
Party written notice of the existence and the reason for such
nonperformance or delay.
9.9 (a) Any and all notices or other communications required or
permitted by this Agreement or by law to be served on or given to
either party hereto by the other party shall be in writing and
delivered or sent to:
To Sabre:
Sabre Inc.
MD 4204
4255 Amon Carter Blvd.
Fort Worth, TX 76155
Fax: (817) 967-1215
Attention: President
With a copy to:
Sabre Inc.
MD 4204
4255 Amon Carter Blvd.
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Fort Worth, TX 76155
Fax: (817) 967-1215
Attention: General Counsel
To Travelocity:
Travelocity.com LP
4200 Buckingham Road, MD 1400
Fort Worth, Texas 76155
Fax: (817) 963-8869
Attention: President
With a copy to:
Travelocity.com LP
4200 Buckingham Road, MD 1400
Fort Worth, Texas 76155
Fax: (817) 963-8869
Attention: General Counsel
Each party may change its address for purposes of this Agreement by
written notice to the other party.
(b) All notices or other communications shall be deemed duly
served and given on the date when personally delivered to the party
to whom it is directed, when transmitted electronically by telex or
facsimile, or when deposited in the United States mail, first class,
postage prepaid, and addressed to the party at the address in
Paragraph 9.9(a).
9.10 This Agreement shall be executed by each Party in duplicate
originals, each of which shall be deemed an original, but both
originals together shall constitute only one and the same
instrument.
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
Effective Date.
SABRE INC.
/s/ Jeffrey M. Jackson
- -----------------------------
Signature
Jeffrey M. Jackson
- -----------------------------
Name
Sr. V.P. and CFO
- -----------------------------
Title
March 7, 2000
- -----------------------------
Date
TRAVELOCITY.COM LP
/s/ Andrew B. Steinberg
- -----------------------------
Signature
Andrew B. Steinberg
- -----------------------------
Name
Sr. V.P., General Counsel and
Corporate Secretary of
Travelocity Holdings, Inc.
its General Partner
- -----------------------------
Title
March 7, 2000
- -----------------------------
Date
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THIS AGREEMENT HAS CONFIDENTIAL PORTIONS OMITTED, WHICH PORTIONS HAVE BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. OMITTED
PORTIONS ARE INDICATED IN THIS AGREEMENT WITH "[TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED]."
ADMINISTRATIVE SERVICES AGREEMENT
BETWEEN
SABRE INC.
AND
TRAVELOCITY.COM LP
MARCH 7, 2000
<PAGE>
CONFIDENTIAL
THIS AGREEMENT HAS CONFIDENTIAL PORTIONS OMITTED, WHICH PORTIONS HAVE BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. OMITTED
PORTIONS ARE INDICATED IN THIS AGREEMENT WITH "[TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED]."
ADMINISTRATIVE SERVICES AGREEMENT
THIS ADMINISTRATIVE SERVICES AGREEMENT (this "Agreement"), dated as of
March 7, 2000 (the "Effective Date"), is between TRAVELOCITY.COM LP, a
Delaware limited partnership ("TCY"), and SABRE INC., a Delaware corporation
("Sabre"). Sabre and TCY may each be referred to as a "Party" or collectively
as the "Parties."
BACKGROUND
WHEREAS, in order to support TCY's ongoing business operations, TCY has
requested that Sabre provide certain administrative services to TCY; and
WHEREAS, on the terms and subject to the conditions described in this
Agreement, Sabre is willing to provide such services to TCY.
NOW, THEREFORE, in consideration of the mutual promises contained
herein and other good and valuable consideration, the adequacy of which is
hereby acknowledged, the Parties agree as follows:
ARTICLE I. RELATIONSHIP MANAGEMENT
1.1 DESIGNATION. TCY designates its Chief Financial Officer as TCY's
Representative, and Sabre designates its Vice President/Controller as
Sabre's Representative, upon and after the Effective Date until changed by
the designating Party. A Party may change its Representative by Notice to
the other Party. A Party may rely on and deal with the Person who is
designated as the other Party's Representative until Notice of change is
given by the other Party.
1.2 REPRESENTATIVES' AUTHORITY. Each Party has authorized its Representative
to conduct discussions and negotiations, make and communicate decisions,
frame and pose questions or issues, and resolve Disputes on behalf of that
Party relating to this Agreement. Though one Party's employees or agents
other than its Representative may also take actions of the kinds described
in the preceding sentence with the other Party's employees or agents other
than its Representative, matters that require more formal discussions or
negotiations between the Parties shall be addressed through and by the
Representatives. Each Party and its Representative are entitled to rely
on the actions and decisions of the other Party's Representative relating
to this Agreement.
ARTICLE II. SERVICES
2.1 SERVICES. Sabre shall render, and TCY shall pay for, the Mandatory
Services and, to the extent not discontinued in accordance with this
Agreement, the Optional Services during the effectiveness of this
Agreement. The Services are described on the Schedules, which are an
integral part of this Agreement. The Services described in Schedule I and
II are, unless otherwise indicated on such Schedules, Mandatory Services;
the Services described on the other Schedules are Optional Services.
2.2 ADDING OPTIONAL SERVICES. At least [TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED] prior to the beginning of each Sabre fiscal year, TCY may
request in writing that Sabre perform any of the services listed on the
attached EXHIBIT C as Optional Services and with respect to which
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the Parties have reached an agreement regarding the nature and scope of
such additional Optional Services and the period of time during which such
additional Optional Services will be provided. Such agreement with
respect to any additional Optional Services will be set forth in a written
agreement which will contain the following information, as applicable: (a)
a reference to this Agreement, which reference will be deemed to
incorporate all of the provisions of this Agreement; (b) the date as of
which the provisions of the agreement will become effective and, if
applicable, the term or period of time during which the services or
resources referenced therein will be provided; (c) a description of the
services or resources to be provided by Sabre pursuant to the agreement;
(d) a description of TCY's responsibilities relating to the agreement; (e)
the monthly amounts payable for the Optional Service provided, determined
in a manner consistent with the calculations made pursuant to ARTICLE 4 of
this Agreement; and (f) any additional provisions that are not otherwise
set forth in this Agreement or that are exceptions to the provisions set
forth in this Agreement.
2.3 RECLASSIFICATION OF MANDATORY SERVICES. A Mandatory Service may be
reclassified as an Optional Service upon notification of TCY of Sabre's
determination that Sabre no longer bears, and is not subject to, the
legal, contractual, and tax-related risks and obligations which made
necessary or appropriate Sabre's provision of the Mandatory Services to
TCY.
2.4 MANNER AND PLACE OF PERFORMANCE. Sabre has full discretion about how and
where to render each Service as that Service is so described. Sabre and
the TCY Companies shall afford access to their respective premises as
necessary or reasonably appropriate to permit a Service or Task to be
rendered.
2.5 RECIPIENTS OF SERVICES. The Services shall be rendered solely to, or for
the direct benefit of, TCY and the TCY Companies. Neither TCY nor any TCY
Company may assign, license, or otherwise transfer or provide, whether for
or without consideration, any right to any Service, in whole or in part,
to any Person other than TCY or any TCY Company; provided, however, that
Sabre shall not be required to provide any Services to or for the benefit
of a TCY Company unless TCY has Notified Sabre that TCY has acquired
Control over the TCY Company and Sabre and TCY have negotiated in good
faith, and executed, a supplement to this Agreement for the purpose of
modifying the Services, and the Price pertaining to Services, with respect
to such TCY Company.
2.6 SERVICE SUBCONTRACTS.
(a) Sabre may, without any consent or approval of TCY,
(i) Subcontract any Service, in whole or in part, to any Person,
including any Affiliate of Sabre,
(ii) amend any Service Subcontract, or
(iii) cease to Subcontract any Service, in whole or in part.
Sabre shall provide reasonable notice to TCY of any material changes
in Service Subcontracts made after the Effective Date.
(b) Sabre shall remain responsible for the rendering to TCY of any
Service that is Subcontracted, in whole or in part. Also, except as
described in SECTION 11.4(b), Sabre shall be solely responsible for
its obligations to the Subcontractor (including any applicable
Subcontract Termination Penalty) under each Service Subcontract.
(c) If Sabre has subcontracted a Service to AA, and AA changes the scope
or nature of any Service or Task that it provides to Sabre under the
relevant Services Subcontract, then, following reasonable notice to
TCY, Sabre may make a corresponding change in the scope or nature of
the affected Service or Task.
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2.7 INFORMATION REGARDING SERVICES. Each Party shall make available to the
other Party any information required or reasonably requested by that other
Party regarding the performance of any Service and shall be responsible
for timely providing that information and for the accuracy and
completeness of that information. But a Party shall not be liable for not
providing any information that is subject to a confidentiality obligation
owed by it to a Person other than an Affiliate of it or the other Party.
A Party shall not be liable for any impairment of any Service caused by
its not receiving information, either timely or at all, or by its
receiving inaccurate or incomplete information from the other Party that
is required or reasonably requested regarding that Service.
2.8 LEGAL SERVICES. The Service described in one of the Schedules as "legal
services" consists of Sabre's making the Legal Staff available for
engagement by TCY and the TCY Companies for their legal matters. The
engagement, services, or withdrawal of any of the Legal Staff regarding a
particular legal matter for TCY or any of the TCY Companies, as well as
certain of the Prices for those legal services, are governed by and
subject to the Legal Staff's professional or ethical obligations.
2.9 WARRANTY DISCLAIMER. SABRE MAKES NO REPRESENTATIONS OR WARRANTIES,
EXPRESS OR IMPLIED, REGARDING ANY SERVICE OR TASK OTHER THAN AS STATED IN
THIS AGREEMENT. SABRE SPECIFICALLY DISCLAIMS ALL IMPLIED WARRANTIES,
INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE, REGARDING THE SERVICES.
ARTICLE III. DISCONTINUANCE OF OPTIONAL SERVICES
3.1 PROCEDURE. Either Party may discontinue or terminate any Optional Service
effective as of June 1 or December 1 of any year by providing six (6)
months' prior Notice to the other Party (and termination of such Optional
Service will be effective as of, but not before, the following December 1
or June 1, respectively and as applicable). Unless mutually agreed by the
Parties, neither Party may discontinue or terminate any of the individual
Tasks which comprise an Optional Service without terminating the entire
Optional Service. A Notice of discontinuance may refer to more than one
Optional Service. Any Optional Service that is the subject of a Notice of
discontinuance shall continue to be rendered by Sabre until the effective
date of the discontinuance, and TCY shall pay for that Optional Service
rendered until that date. A Party may not unilaterally rescind its Notice
of discontinuance.
3.2 IMPOSSIBLE OPTIONAL SERVICES. If either Party reasonably determines that
the discontinuance of any Optional Service would make it functionally
impossible to continue any other Optional Service, in whole or in part,
that Party shall promptly Notify the other of that determination. Any
Optional Service that so becomes functionally impossible to render shall
be deemed discontinued effective upon the date of discontinuance of the
Optional Service or Optional Services that caused that impossibility.
3.3 TRANSITION ASSISTANCE. For up to [TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED] after the effective date of discontinuance of an Optional
Service, Sabre shall comply with TCY's reasonable requests for assistance
in TCY's engaging or training another Person or Persons to provide, and
for records and other information relating to, that discontinued Optional
Service. If Sabre discontinues that Optional Service, it shall comply
with those requests at its own expense. If TCY discontinues that Optional
Service, it shall pay for Sabre's compliance with those requests by:
(a) reimbursing Sabre all of its resulting reasonable out-of-pocket
expenses, and
(b) paying Sabre for the resulting time or activities of Sabre's
personnel on a time and materials basis.
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Invoicing and payment for transition assistance shall be in accordance
with ARTICLE 6. Sabre may cease providing transition assistance,
immediately upon Notice to TCY, if TCY has not paid the amount described
in a Nonpayment Notice by the [TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED] after the Nonpayment Notice was given.
3.4 REINSTATEMENT OF DISCONTINUED SERVICE. Neither Party may unilaterally
reinstate any Optional Service that has been discontinued under this
Agreement.
ARTICLE IV. PRICES
4.1 BUDGETED COST ALLOCATION. The monthly prices for the Services will be
determined as follows:
(a) Prior to the beginning of each calendar year occurring (in whole or
part) during the term of this Agreement, Sabre will determine
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
(b) For each calendar month during the term of this Agreement, the
monthly price for each Service shall be determined as follows:
(i) The monthly Price for each Optional Service (or Tasks) will be
calculated as follows: (a) 1.10 times (b) the Budgeted Service
Costs for such category of Optional Service (or Tasks), for
the calendar year in which the calendar month occurs [TEXT
OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
(ii) The monthly Price for each Mandatory Service will be
calculated as follows: (a) the Budgeted Service Costs for such
category of Mandatory Service for the calendar year in which
the calendar month occurs[TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED]
(c) Sabre will promptly notify TCY of Sabre's determination of Budgeted
Service Costs and the TCY Allocable Percentage, for each category of
Services (or Tasks), and permit TCY a reasonable opportunity to
discuss such determinations with Sabre.
4.2 COST ALLOCATION TRUE-UP. During each calendar year of the Agreement,
Sabre will determine, in a manner consistent with its customary practices,
the costs allocable to TCY's use of Services. For purposes of the
remainder of this SECTION 4.2, the costs allocable to TCY's use of
Optional Services (other than AMR Pass-through Services) will be equal to
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]of the costs determined
pursuant to the preceding sentence. If either Party believes that, for
any [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED] ending [TEXT OMITTED
- CONFIDENTIAL TREATMENT REQUESTED]or [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED]of any calendar year, the costs allocable to TCY's use
of Services were at least [TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED]greater than or less than the amounts paid by TCY during such
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED], pursuant to SECTION
4.1(b) and ARTICLE VI, then such Party may request, within [TEXT OMITTED -
CONFIDENTIAL TREATMENT REQUESTED] after the end of the period in question,
Sabre's calculation of such allocable costs and a comparison with such
amounts paid. If the calculation confirms a differential between such
allocable costs and such amounts paid of more than [TEXT OMITTED -
CONFIDENTIAL TREATMENT REQUESTED] then the Party that benefited from such
over-payment or underpayment will pay the entire differential (not just
that portion of the differential that is more than the [TEXT OMITTED -
CONFIDENTIAL TREATMENT REQUESTED] margin) to the other Party within [TEXT
OMITTED - CONFIDENTIAL TREATMENT REQUESTED] of the completion of the
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calculation. In addition, in such event, if the differential between
actual allocable costs, and amounts paid, during the [TEXT OMITTED -
CONFIDENTIAL TREATMENT REQUESTED], would likely continue during the next
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED], then the Parties shall
negotiate in good faith to adjust the monthly price for Services, pursuant
to SECTION 4.1(b), in order to eliminate such differential for the next
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED].
ARTICLE V. EXPENSES AND TAXES
5.1 EXPENSES. Each Party shall be solely responsible for its costs and
expenses incurred in performing its obligations and exercising its rights
and remedies under this Agreement, except as otherwise provided in this
Agreement.
5.2 TAXES. The Parties shall be responsible for tax payments or liabilities
relating to this Agreement as follows:
(a) Each Party shall be responsible for its income and franchise taxes
and for all other taxes (however described) based on its own income
or earnings.
(b) TCY shall be responsible for all sales, use, and similar taxes
(however described) applicable to the Services, in whole or in part.
This obligation includes TCY's paying the sales taxes identified in
Sabre's invoices submitted to TCY for the Services.
(i) TCY shall indemnify Sabre, in accordance with SECTION
11.4(c)(ii), against any taxes of this kind assessed or levied
against, or paid by, Sabre and any other related Damages of
Sabre.
(ii) If Sabre receives an assessment from a taxing authority
covering taxes for which TCY is responsible under this SECTION
5.2(b), Sabre shall Notify TCY of the assessment and, at TCY's
request, timely contest the assessment. If payment to the
taxing authority is required by law as a condition to protest,
TCY shall timely furnish Sabre the required amount for that
payment.
(iii) If TCY believes it has overpaid taxes to Sabre for any of the
Services (in whole or in part), TCY may require Sabre to file
a claim for a refund at TCY's expense. If permitted by law,
Sabre may assign any right to a refund directly to TCY instead
of filing a refund claim. Any refund of taxes (including any
interest) received by Sabre under this SECTION 5.2(b)(iii)
shall be promptly forwarded to TCY.
(iv) Before Sabre is required to pursue any action requested by TCY
under this SECTION 5.2(b), Sabre may at any time require TCY
to deliver a letter of advice from outside counsel (selected
by TCY) stating that TCY's tax position is reasonable.
(v) Except as stated in the next sentence, any Dispute between the
Parties regarding the application of any taxes of this kind to
any Service (in whole or in part) shall be resolved by the
Dispute Resolution Procedure. Any Dispute as to the amount of
tax (if any) owed to a taxing authority, including a Dispute
between a Party and the taxing authority, need not be resolved
by the Dispute Resolution Procedure, but may be resolved by
any appropriate administrative or legal procedure available to
a Party or the Parties under this Agreement apart from the
Dispute Resolution Procedure.
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(c) Each Party shall be responsible for all real property, personal
property, and other taxes (however described) based on its owned or
leased property, whether real or personal.
(d) Each Party shall be responsible for all employment-related taxes
(however described) regarding its own employees.
Each Party shall cooperate with any reasonable request of the other Party
to restructure any Service, in whole or in part, or to take any other
reasonable action to avoid or minimize any duplicate taxes that might be
imposed; the requesting Party shall bear the expenses of the other Party's
compliance.
ARTICLE VI. PAYMENT
6.1 INVOICES. Sabre shall submit to TCY monthly one or more invoices for the
Services. Each invoice shall indicate:
(a) The amount charged for each Service covered by that invoice; and
(b) if that invoice includes any credit or offset for TCY, the amount
and purpose of that credit or offset.
Each invoice should also indicate the sales, use, or similar taxes being
collected on each Service, or part of a Service, that Sabre believes to be
so taxable. An invoice may cover more than one Service.
6.2 PAYMENT. TCY shall pay the amount of each invoice within [TEXT OMITTED -
CONFIDENTIAL TREATMENT REQUESTED] after the date of that invoice. TCY
shall pay the invoiced amount even if TCY disputes all or a portion of
that amount, unless Sabre has agreed on or before the due date to accept a
different amount.
6.3 METHOD OF PAYMENT. TCY shall pay Sabre by wire transfer of immediately
available funds to an account or accounts designated by Sabre. All
payments shall be made in United States currency.
6.4 INTEREST. Sabre may charge interest on any past due invoiced amount at
the [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED] from the due date
until paid in full with accrued interest. Any payment of interest only is
not a cure or Sabre's sole remedy for nonpayment of any invoiced amount
that is due.
6.5 NONPAYMENT NOTICE. If Sabre does not receive the full payment of any
invoice (and has not agreed to accept a different amount), it may give TCY
a Nonpayment Notice. TCY shall pay the amount described in the Nonpayment
Notice by the [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]after that
Nonpayment Notice is given.
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ARTICLE VII. CONFIDENTIALITY AND AUDIT RIGHTS
7.1 CONFIDENTIALITY.
(a) OWNERSHIP; SCOPE OF OBLIGATION. As between the Parties, the
Confidential Information of each Party will remain its sole
property. Confidential Information will be used by the recipient
Party only for purposes of this Agreement. Each Party will hold the
Confidential Information of the other Party in strict confidence and
protect such Confidential Information from disclosure using the same
care it uses to protect is own confidential information of like
importance, but not less than reasonable care. No Confidential
Information will be disclosed by the recipient Party without the
prior written consent of the other Party, except that each Party may
disclose this Agreement and the other Party's Confidential
Information to its directors, employees, attorneys, agents,
auditors, insurers and subcontractors who require access to such
information in connection with their employment or engagement and
who are obligated to keep such information confidential in a manner
no less restrictive than as set forth in this SECTION 7.1. The
Party employing or engaging such Persons is responsible and liable
for their compliance with such confidentiality obligations.
(b) EXCEPTIONS. This Agreement does not prevent or restrict use or
disclosure by the recipient Party of Confidential Information of the
disclosing Party that (i) was in the public domain when communicated
to the recipient Party, (ii) enters the public domain through no
fault of the recipient Party, (iii) was in recipient Party's
possession free of any obligation of confidence when communicated to
the recipient Party or (iv) was rightfully communicated to the
recipient Party by a Third Party free of any obligation of
confidence to the disclosing Party. If Confidential Information is
required to be disclosed by law or a Governmental Authority,
including pursuant to a subpoena or court order, such Confidential
Information may be disclosed, provided that the Party required to
disclose the Confidential Information (i) promptly notifies the
disclosing Party of the disclosure requirement, (ii) cooperates with
the disclosing Party's reasonable efforts to resist or narrow the
disclosure and to obtain an order or other reliable assurance that
confidential treatment will be accorded the disclosing Party's
Confidential Information, and (iii) furnishes only Confidential
Information that the Party is legally compelled to disclose
according to advice of its legal counsel. Upon written request at
the expiration or termination of this Agreement, all documented
Confidential Information (and all copies thereof) owned by the
requesting Party will be returned to it or destroyed by the
recipient Party, with written certification thereof.
7.2 AUDIT RIGHTS.
(a) GENERAL. Auditors designated by TCY, and who agree in writing to the
security and confidentiality obligations and procedures required by
Sabre, will be provided with reasonable access to locations from
which Sabre provides Services to enable them to audit Sabre's
activities under this Agreement, including verifying that Services
are being provided in accordance with this Agreement. The auditors
must be internationally recognized firms and TCY may not designate
any auditor who, in Sabre's reasonable opinion, is a competitor of,
or affiliated with a competitor of, Sabre or its Subsidiaries. TCY
will be responsible for compensating its auditors.
(b) PROCEDURES. Such audits may be conducted once a year during
reasonable business hours. TCY will provide Sabre with at least
thirty (30) days prior written notice of an audit. Sabre will
cooperate with the audit, will make the information reasonably
required to conduct the audit available on a timely basis and will
assist the designated employees of TCY's auditors as reasonably
necessary. Sabre will not be required to provide access to the
proprietary data of Sabre or other Sabre customers. All information
learned or exchanged in connection with the conduct of an audit, as
well as the results of any audit, is Confidential Information of
Sabre.
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(c) RESULTS. TCY will provide Sabre copies and results of each audit.
The Parties will review the results of an audit, will identify all
relevant audit issues and will determine (i) what, if any, actions
will be taken in response to such audit issues, and (ii) which Party
will be responsible for the cost of taking the actions necessary to
resolve such issues.
(d) RECORDS RETENTION. Each Party shall create and maintain accurate
records regarding the Services rendered and the amounts charged and
paid or received under this Agreement. Sabre's records shall
include information regarding the determination of the cost or the
cost allocation for each Service rendered. Each Party's records
regarding:
(i) the Services rendered, as of the Effective Date, shall be of
substantially the same kinds as that Party has created and
maintained regarding those Services before the Effective Date;
and
(ii) the Services, as changed after the Effective Date in
accordance with this Agreement, shall be of the kinds that are
reasonable, and consistent with the other business records
created and maintained by that Party, regarding services like
those Services.
Each Party shall create and maintain those records with the same
degree of completeness and care as it maintains its other similar
business records. Each Party shall maintain those records for the
time or times required by applicable law or regulation, except that
a party shall, upon request of the other Party, maintain any of
those records for a longer time if the requesting Party pays the
additional expenses incurred in complying with that request.
ARTICLE VIII. PARTIES' RELATIONSHIP
8.1 INDEPENDENT. The Parties are independent; each has sole authority and
control of the manner of, and is responsible for, its performance of this
Agreement. This Agreement does not create or evidence a partnership or
joint venture between the Parties. Neither Party may create or incur any
liability or obligation for or on behalf of the other Party, except as
described in this Agreement and any other written agreement between the
Parties. This Agreement does not restrict Sabre from providing or
rendering any services, including services like the Services, to any other
Person; nothing in this Agreement, however, gives Sabre the right to
provide or render any services in violation of any other agreement entered
into by the Parties.
8.2 EMPLOYEES. Except as described in SECTION 11.4(b) or SECTION 11.4(c) of
this Agreement, for the purposes of this Agreement:
(a) each Party is solely responsible for its own employees or agents,
including the actions or omissions and the compensation of those
employees and agents, and
(b) neither Party has any authority with respect to any of the other
Party's employees or agents.
8.3 AUTHORITY AND ENFORCEABILITY. Each Party warrants to the other Party
that:
(a) it has the requisite corporate authority to enter into and perform
this Agreement;
(b) its execution, delivery, and performance of this Agreement have been
duly authorized by all requisite corporate action on its behalf;
(c) this Agreement is enforceable against it; and
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(d) it has obtained all consents or approvals of Governmental
Authorities and other Persons that are conditions to its entering
into this Agreement.
8.4 THIRD-PARTY CONSENTS. Each Party shall be responsible for obtaining and
maintaining any licenses, permits, consents, or approvals of Governmental
Authorities and other Persons necessary or appropriate for it to perform
its obligations under this Agreement.
8.5 THIRD-PARTY-RELATED ARRANGEMENTS. The Parties also have certain
arrangements and agreements relating to certain of the Services provided
by an Effective Date Service Subcontract or provided directly by Sabre but
involving an agreement with a third party. The Parties currently expect
that the matters or issues addressed by those arrangements or agreements
will need to continue to be addressed -- whether in the same or in a
different manner -- upon Expiration or the termination of this Agreement
or the discontinuance of certain Optional Services. Hence, before and
upon any of those events, each Party shall use its Reasonable Efforts to
change, renegotiate, replace, sever, or assign, as the Parties mutually
agree, those arrangements or agreements as necessary to so address those
matters or issues and to equitably allocate to the respective Parties --
in accordance with their respective assets and businesses -- the benefits
and the obligations of those arrangements or agreements upon and after the
occurrence of any of those events.
8.6 FURTHER ASSURANCES. Each Party shall take such actions, upon request of
the other Party and in addition to the actions specified in this
Agreement, as may be necessary or reasonably appropriate to implement or
give effect to this Agreement.
ARTICLE IX. TERM
9.1 STATED TERM. This Agreement commences on the Effective Date and will
continue in effect until 11:59 p.m. on March 6, 2015, unless terminated
earlier by one or both of the Parties in accordance with ARTICLE 10.
9.2 RENEWAL. The Parties may consent to successive [TEXT OMITTED -
CONFIDENTIAL TREATMENT REQUESTED] by following this procedure: If TCY
wishes to renew the term of this Agreement, it shall Notify Sabre of that
intention no later than [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
(and no more than [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]) prior
to the end of the then-current term of this Agreement. If Sabre wishes to
concur with that renewal, it shall Notify TCY of that concurrence within
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]of receipt of the Notice
delivered by Sabre pursuant to the previous sentence. If no Notice of
intent to renew or no concurrence is given, this Agreement will Expire
when the then-current term expires.
9.3 TRANSITION ASSISTANCE. For a period of up to [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED]after Expiration, Sabre shall comply with TCY's
reasonable requests for assistance in engaging or training another Person
or Persons to provide, and for records and other information relating to,
the Services rendered by Sabre immediately preceding that Expiration. TCY
shall reimburse and pay Sabre's Transition Charges in accordance with
invoices submitted to TCY by Sabre. ARTICLE 6 shall apply in this
situation as though this Agreement had not Expired. Sabre may cease
providing transition assistance, immediately upon Notice to TCY, if TCY
has not paid the amount described in a Nonpayment Notice by the [TEXT
OMITTED - CONFIDENTIAL TREATMENT REQUESTED]after the Nonpayment Notice was
given. If the records or other information provided by Sabre are
Confidential Information, SECTION 7.1 shall also apply as though this
Agreement had not Expired.
ARTICLE X. TERMINATION
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10.1 TERMINATION EVENTS. This Agreement may be terminated, without liability
to the Party terminating:
(a) By either Party, upon [TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED]' Notice to the other, at any time upon or after the
Parties cease to be Affiliates.
(b) By a Party, immediately upon Notice to the other Party, if:
(i) that other Party makes a general assignment of all or
substantially all of its assets for the benefit of its
creditors;
(ii) that other Party applies for, consents to, or acquiesces in
the appointment of a receiver, trustee, custodian, or
liquidator for its business or all or substantially all of its
assets;
(iii) that other Party files, or consents to or acquiesces in, a
petition seeking relief or reorganization under any bankruptcy
or insolvency laws; or
(iv) a petition seeking relief or reorganization under any
bankruptcy or insolvency laws is filed against that other
Party and is not dismissed within [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED]after it was filed.
(c) By a Party, immediately upon Notice to the other Party, if that
other Party's material breach of this Agreement continues uncured or
uncorrected for [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
after both the nature of that breach and the necessary cure or
correction has been agreed upon by the Parties or otherwise
determined by the Dispute Resolution Procedure. But if:
(i) the Parties agree or it is determined by the Dispute
Resolution Procedure that the material breach is not capable
of being cured or corrected, the termination shall be
effective immediately upon Notice, without any cure period; or
(ii) the breaching Party (A) reasonably requires longer than [TEXT
OMITTED - CONFIDENTIAL TREATMENT REQUESTED] to cure or correct
-- such as when the applicable Service Subcontract permits the
Subcontractor longer than [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED] to cure or correct -- and (B) Notifies
the non-breaching Party of the circumstances, then the cure
period shall be extended for the reasonable time so required,
so long as during that time the breaching Party diligently
acts to effect that cure or correction; provided, however,
that in no event shall this SECTION 10.1(c)(ii) apply to TCY's
obligation to make payments to Sabre under this Agreement.
A non-breaching Party's exercise of the remedy described in this
SECTION 10.1(c) shall be conditioned upon its giving a Breach Notice
to the other Party.
(d) By Sabre, immediately upon Notice to TCY, if TCY has not paid the
amount described in a Nonpayment Notice by the [TEXT OMITTED -
CONFIDENTIAL TREATMENT REQUESTED] after that Nonpayment Notice was
given.
A Party may not terminate this Agreement if the event or circumstance
described above in this SECTION 10.1, upon which that Party would rely in
so terminating, was caused by that Party's breach of this Agreement.
10.2 NONEXCLUSIVE. The termination rights under SECTIONS 10.1(c) and 10.1(d)
are not exclusive of any other right or remedy of a non-breaching Party
granted in this Agreement.
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10.3 CONSEQUENCES OF TERMINATION. Upon termination of this Agreement:
(a) Under SECTION 10.1(a) or by TCY under SECTION 10.1(c):
(i) During the Transition Period Sabre shall continue to render,
and TCY shall pay for, each Service reasonably requested by
TCY until terminated by either Party in accordance with
SECTIONS 10.3(a)(ii) and 10.3(a)(iii). Except as stated in
SECTION 10.3(a)(ii), the terms of this Agreement shall
continue to apply during the Transition Period as though no
termination of this Agreement had occurred.
(ii) The Price for each Service during the Transition Period shall
be the same as in effect immediately preceding the Termination
Date. During the Transition Period, any Service (including a
Mandatory Service), but not any one or more of the Tasks
separately, may be terminated by (A) TCY, for any reason, by
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED] Notice to
Sabre, or (B) Sabre, if TCY has not paid the amount described
in a Nonpayment Notice by the [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED] after the Nonpayment Notice was given.
Any Service that is the subject of a Notice of termination
shall continue to be rendered by Sabre until the effective
date of that termination, and TCY shall pay for that Service
rendered through that date. Neither Party may unilaterally
rescind a Notice of termination.
(iii) If either Party reasonably determines that the termination of
any Service during the Transition Period would make it
functionally impossible to continue any other Service during
the Transition Period, that Party shall promptly Notify the
other Party of that determination; any Service that so becomes
functionally impossible to render shall be deemed terminated
effective upon the date of termination of the Service that
caused that impossibility. Neither Party may unilaterally
reinstate any Service that has been terminated as of the
Termination Date or during the Transition Period.
(b) Under SECTION 10.1(b), during the Transition Period Sabre shall
comply with TCY's reasonable requests for assistance in TCY's
engaging or training another Person or Persons to provide, and for
records and other information relating to, each Service in effect
immediately preceding the Termination Date. If Sabre terminates
this Agreement, Sabre shall comply with those requests at its own
expense. If TCY terminates this Agreement, TCY shall reimburse and
pay Sabre's Transition Charges in accordance with invoices submitted
to TCY by Sabre. ARTICLE 6 shall apply in this situation as though
this Agreement had not been terminated. When TCY is obligated to
reimburse and pay Sabre's Transition Charges, Sabre may cease
providing transition assistance, immediately upon Notice to TCY, if
TCY has not paid the amount described in a Nonpayment Notice by the
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED] after the
Nonpayment Notice was given. If the records or other information
provided by Sabre are Confidential Information, SECTION 7.1 shall
also apply as though this Agreement had not been terminated.
(c) Under SECTION 10.1(d) or by Sabre under SECTION 10.1(c), then Sabre
shall have no obligation to provide any continued Services or
transition assistance as described above in this SECTION 10.3.
ARTICLE XI. LIABILITY AND REMEDIES
11.1 WARRANTIES. Each Party's warranties in this Agreement are made solely to
and for the benefit of the other Party and, to the extent described in
this Agreement, the TCY Companies. No Person other than a Party
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may make a claim based on the other Party's warranties under this
Agreement; any claim by a TCY Company shall be made by TCY.
11.2 NONCONFORMING SERVICES. TCY shall promptly Notify Sabre of any Deficiency
in any Service or Task, whether rendered by Sabre or a Subcontractor. To
the extent Sabre agrees, or it is otherwise determined by the Dispute
Resolution Procedure, that a Service or Task was or is a Nonconforming
Service, Sabre shall use its Reasonable Efforts promptly to cure or
correct, or cause its Subcontractor to cure or correct, the Deficiency to
the extent it may then be cured or corrected.
(a) If the Deficiency was, or was the result of, Sabre's negligence,
Sabre shall not be responsible or liable for any resulting Damages
of TCY; provided, however, that if Sabre performs on its own behalf
a service that is substantially similar to Service or Task which is
the subject of the Deficiency, and Sabre has not been negligent in
performing such substantially similar service on its own behalf,
then subject to SECTION 11.3 below, Sabre shall be responsible or
liable for TCY's resulting damages in an amount up to:
(i) if Sabre's liability is determined (by the Parties' agreement
or the Dispute Resolution Procedure) after the calendar year
in which the Deficiency occurred, [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED]; or
(ii) if Sabre's liability is determined during the calendar year
in which the Deficiency occurred, the greater of [TEXT
OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
(b) If the Deficiency was, or was the result of, Sabre's or a
Subcontractor's gross negligence (including recklessness) or willful
misconduct, or a Subcontractor's negligence, then, subject to
SECTION 11.2(c) and SECTION 11.3 below, Sabre shall be responsible
or liable for TCY's resulting Damages in an amount up to:
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
(c) If the Deficiency was, or was the result of, a Subcontractor's
negligence, gross negligence (including recklessness) or willful
misconduct, then the additional limitations of this SECTION 11.2(c)
shall apply. In such event, Sabre's responsibility or liability to
TCY for Damages resulting from such Deficiency shall not exceed
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]. In lieu of
seeking to recover damages from the relevant Subcontractor, Sabre
has the right, but not the obligation, to assign to TCY Sabre's
right to recover such damages from such Subcontractor.
11.3 [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
11.4 INDEMNITIES FOR CERTAIN BREACHES AND OTHER MATTERS. The following shall
apply to any breach of, and certain other Damages relating to, this
Agreement, other than a Deficiency for which Sabre has no liability
for Damages under SECTION 11.2(a) or a nonpayment by TCY of any amount
relating to an invoice:
(a) Subject to the limits on liability described in SECTION 11.2(b) AND
(c), if that Section is applicable, each Party shall indemnify the
other Party against all Damages of the Indemnified Party, or any of
its Indemnified Agents, resulting from or relating to:
(i) any breach of this Agreement, including a breach of any
warranty in this Agreement, by the Indemnifying Party;
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(ii) any Proceedings relating to a breach of this Agreement by the
Indemnifying Party; and
(iii) the actions or omissions of the Indemnifying Party's employees
or agents under or in connection with this Agreement, except
as described in SECTIONS 11.4(b) and 11.4(c).
(b) TCY shall also indemnify Sabre against all Damages of Sabre or any
of its Indemnified Agents, including any Subcontract Termination
Penalty, under or relating to any Service Subcontract resulting
from:
(i) any violation by TCY of any obligation imposed on it under
that Service Subcontract;
(ii) the actions or omissions of TCY's employees or agents under or
in connection with that Service Subcontract;
(iii) TCY's discontinuance of any Optional Service that Sabre
renders, in whole or in part, by that Service Subcontract,
even if permitted by ARTICLE 3;
(iv) TCY's performing itself or obtaining from any Person other
than Sabre or its Subcontractor any service or services to
supplement or substitute for any Optional Service that Sabre
renders, in whole or in part, by that Service Subcontract;
(v) the actions, omissions or claims of any client or customer of
TCY or any Person to whom TCY provides goods or services; or
(vi) the termination of this Agreement other than a termination by
TCY under SECTIONS 10.1(a), 10.1(b) or 10.1(c).
(c) TCY shall also indemnify Sabre against all Damages of Sabre or any
of its Indemnified Agents resulting from or relating to:
(i) the actions or omissions of any of the Legal Staff that are
directed by TCY or any TCY Company within the scope of that
lawyer's or paralegal's engagement for any legal matter of TCY
or any TCY Company; or
(ii) any sales, use, or similar taxes (however described)
applicable to any of the Services, in whole or in part, that
are assessed or levied against or paid by Sabre.
(d) The indemnification obligations in SECTIONS 11.4(a), 11.4(b), and
11.4(c) shall be extinguished to the extent that the Damages of the
other Party, or any of its Indemnified Agents for whom or which the
other Party is seeking indemnification, were caused by the gross
negligence (including recklessness) or willful misconduct of the
Person for whom or which indemnification is sought. THE ORDINARY
NEGLIGENCE OF A PERSON OR THE JOINT OR CONCURRENT ORDINARY
NEGLIGENCE OF PERSONS SHALL NOT PRECLUDE THAT PERSON OR ANY OF THOSE
PERSONS FROM RECEIVING THE BENEFITS OF INDEMNIFICATION UNDER THIS
AGREEMENT.
(e) If an Indemnification Claim is not based on a Third-Party Claim, the
Indemnified Party shall give an Indemnification Claim Notice
promptly after the event constituting the basis for the
Indemnification Claim; its failure to do so, however, shall relieve
the Indemnifying Party of its indemnification obligations only to
the extent the Indemnifying Party is actually prejudiced by that
failure. If the Indemnified Party gives an Indemnification Claim
Notice regarding an Indemnification Claim not based on a Third-Party
Claim, the Indemnifying Party shall Notify the Indemnified Party
within the Indemnification Response Period whether the Indemnifying
Party
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disputes all or any portion of the Indemnification Claim. If
the Indemnifying Party does not give that dispute Notice or agrees
to accept liability for all or a portion of the Indemnification
Claim, the Indemnification Claim, or the agreed portion of that
Indemnification Claim, shall be the Indemnifying Party's liability.
Otherwise, the Indemnification Claim shall be deemed a Dispute to be
resolved by the Dispute Resolution Procedure.
(f) If an Indemnification Claim is based on a Third-Party Claim:
(i) The Indemnified Party shall give an Indemnification Claim
Notice promptly after it receives the Third-Party Claim. The
failure of an Indemnified Party to timely give an
Indemnification Claim Notice shall relieve the Indemnifying
Party of its indemnification obligations only to the extent
the Indemnifying Party is actually prejudiced by that failure.
(ii) The Indemnifying Party shall be entitled to defend the Third-
Party Claim, with its chosen counsel and at its own expense,
if (A) the Third-Party Claim seeks only monetary relief, and
not an injunction or other equitable relief, against the
Indemnified Party, and (B) the Indemnifying Party elects to
assume, and diligently conducts, that defense. The
Indemnifying Party's election to defend shall be given by
Notice to the Indemnified Party within the Indemnification
Response Period. If the Indemnifying Party conducts the
defense, the Indemnified Party may participate in that defense
with its own counsel and at its own expense.
(iii) If the Indemnifying Party does not elect to defend the Third-
Party Claim by Notice within the Indemnification Response
Period, or if the Indemnifying Party does not diligently
conduct the defense, the Indemnified Party shall be entitled,
upon further Notice to the Indemnifying Party, to defend the
Third-Party Claim on behalf of, and for the account and risk
of, the Indemnifying Party (if it is determined that the
Indemnifying Party has an indemnification obligation regarding
that Indemnification Claim). In this circumstance, the
Indemnifying Party may participate in the defense with its own
counsel and at its own expense.
(iv) If there is a conflict of interest that makes it inappropriate
for the same counsel to represent the Indemnifying Party and
the Indemnified Party in defending the Third-Party Claim, the
Indemnifying Party shall pay for separate counsel for the
Indemnified Party.
(v) The Indemnifying Party defending a Third-Party Claim may
compromise, settle, or resolve that Third-Party Claim without
the Indemnified Party's consent if the compromise, settlement,
or resolution involves only the payment of money by the
Indemnifying Party (whether on its own behalf or behalf of the
Indemnified Party) and the third-party claimant provides the
Indemnified Party a release from all liability regarding the
Third-Party Claim. Otherwise, the Indemnifying Party may not
compromise, settle, or resolve the Third-Party Claim without
the Indemnified Party's Reasonable Consent.
(vi) The Indemnifying Party and the Indemnified Party shall
cooperate with all reasonable requests of the other in
defending any Third-Party Claim.
11.5 TIME FOR CLAIMS. TCY may make a claim against Sabre for the cure or
correction of any Deficiency only within [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED] after the Deficiency occurred; any Deficiency shall
be deemed to have occurred when the particular Nonconforming Service was
rendered. A Party may make an Indemnification Claim
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(a) not based on a Third-Party Claim, only within [TEXT OMITTED -
CONFIDENTIAL TREATMENT REQUESTED] after the breach or other event
constituting the basis for that Indemnification Claim occurred, even
if not discovered until after that [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED], or
(b) based on a Third-Party Claim, at any time.
11.6 EQUITABLE RELIEF. To the extent that monetary relief is not a sufficient
remedy for any breach of this Agreement, or upon any breach or impending
breach of SECTION 7.1, the non-breaching Party shall be entitled to
injunctive relief as a remedy for that breach or impending breach by the
other Party, in addition to any other remedies granted to the
non-breaching Party in this Agreement.
11.7 EXCLUSIVE REMEDIES. Except for the termination right stated in ARTICLE 10
and the relief described in SECTIONS 5.2(b) and 12.8(d) and in the Dispute
Resolution Procedure, the remedies described in this ARTICLE 11 are the
exclusive rights and remedies of a Party regarding any breach of this
Agreement or any matter that may be the subject of an Indemnification
Claim.
11.8 WAIVER OF REMEDIES. No forbearance, delay, or indulgence by either Party
in enforcing this Agreement -- within the applicable time limits stated in
this Agreement -- shall prejudice the rights or remedies of that Party.
No waiver of a Party's rights or remedies regarding a particular breach of
this Agreement constitutes a waiver of those rights or remedies, or any
other rights or remedies, regarding any other or any subsequent breach of
this Agreement.
11.9 CUMULATIVE REMEDIES. A Party's election to pursue a right or remedy
granted in this Agreement upon the other Party's breach of this Agreement
shall not preclude the non-breaching Party from pursuing other rights or
remedies granted to that Party in this Agreement that are applicable to
that breach under this Agreement.
ARTICLE XII. MISCELLANEOUS
12.1 ENTIRE AGREEMENT; SURVIVAL. This Agreement (including the Definitional
Appendix, Exhibits and Schedules attached hereto, each of which is
incorporated into this Agreement by this reference) constitutes the full
and complete statement of the agreement of the Parties with respect to the
subject matter hereof and supersedes any previous agreements,
understandings or communications, whether written or oral, relating to
such subject matter. Any provision of this Agreement which contemplates
performance or observance subsequent to any termination or expiration of
this Agreement will survive any termination or expiration of this
Agreement and continue in full force and effect. Such provisions will
include ARTICLES 7 and 11 and payments that remain due and payable under
this Agreement.
12.2 AMENDMENTS; WAIVER. Changes or modifications to this Agreement may not be
made orally, but only by a written amendment or revision signed by both
Parties. Any terms and conditions varying from this Agreement on any
order, invoice or other notification from either Party are not binding on
the other unless specifically accepted in writing by the other. Unless
otherwise expressly provided in this Agreement, a delay or omission by
either Party to exercise any right or power under this Agreement will not
be construed to be a waiver thereof. No waiver of any breach of any
provision of this Agreement will constitute a waiver of any prior,
concurrent or subsequent breach of the same or any other provision hereof.
12.3 BINDING NATURE; ASSIGNMENT. This Agreement will be binding on the Parties
and their successors and permitted assigns (it being understood and agreed
that nothing contained in this Agreement is intended to confer upon any
other Person any rights, benefits or remedies of any kind or character
whatsoever under or by reason of this Agreement). Neither Party may, nor
will it have the power to, assign this Agreement, or any part hereof,
without the prior written consent of the other, provided, that Sabre may
assign its rights and delegate its
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duties and obligations without the prior written consent of TCY to any
Subsidiary or Affiliate of Sabre as necessary in order for such Subsidiary
or Affiliate to provide all or part of the Services. The Parties
acknowledge that either Party might become a party to one or more
transactions in the form of a merger, consolidation, reorganization, stock
sale or exchange, sale of any substantial portion of such Party's assets
or similar transaction. Any such transaction involving a Party (and
whether or not it is the surviving entity) will be deemed to be an
assignment of this Agreement by that Party requiring the consent of the
other Party if: (a) in the case of Sabre being involved in such a
transaction, the transaction materially and adversely affects Sabre's
ability to continue to perform the Services in accordance with this
Agreement; or (b) in the case of TCY being involved in such a transaction,
the transaction (i) causes a material increase in Sabre's costs to
provide Services, or (ii) impairs TCY's ability to meet its financial
obligations hereunder.
12.4 THIRD PARTY BENEFICIARIES. Except as provided in this Agreement, this
Agreement is entered into solely between, and may be enforced only by,
Sabre and TCY, and this Agreement will not be deemed to create any rights
in third parties, including suppliers and customers of a Party, or to
create any obligations of a Party to any such third parties.
12.5 DISPUTE RESOLUTION. All Disputes arising out of the transactions
contemplated by this Agreement will be resolved in accordance with the
Dispute Resolution Procedure set forth in EXHIBIT A.
12.6 APPROVALS AND SIMILAR ACTIONS. Except as otherwise expressly provided in
this Agreement, where agreement, approval, acceptance, consent or similar
action is required of either Party by any provision of this Agreement,
such action will not be unreasonably withheld or delayed. An approval or
consent given by a Party under this Agreement will not relieve the other
Party from responsibility for complying with the requirements of this
Agreement, nor will it be construed as a waiver of any rights under this
Agreement, except as and to the extent otherwise expressly provided in
such approval or consent.
12.7 NOTICES. All notices under this Agreement will be in writing and will be
deemed to have been duly given if delivered personally or by a nationally
recognized courier service, faxed, electronically mailed or mailed by
registered or certified mail, return receipt requested, postage prepaid,
to the Parties at the addresses set forth in EXHIBIT B. All notices under
this Agreement that are addressed as provided in this SECTION 12.7, (a) if
delivered personally or by a nationally recognized courier service, will
be deemed given upon delivery, (b) if delivered by facsimile or electronic
mail, will be deemed given when confirmed and (c) if delivered by mail in
the manner described above, will be deemed given on the fifth (5th)
Business Day after the day it is deposited in a regular depository of the
United States mail. Either Party from time to time may change its address
or designee for notification purposes by giving the other Party notice of
the new address or designee and the date upon which such change will
become effective.
12.8 FORCE MAJEURE.
(a) NO BREACH OR LIABILITY. No delay or failure of a Party to perform
any of its obligations, other than payment obligations, under this
Agreement due to causes beyond its reasonable control shall
constitute a breach of this Agreement or render that Party liable
for that delay or failure. Causes beyond a Party's reasonable
control include:
(i) events or circumstances that the Party, using its Reasonable
Efforts, is unable to prevent or overcome;
(ii) as to Sabre, causes also beyond the reasonable control of the
Person to whom or which Sabre has Subcontracted the affected
Service or Task in accordance with this Agreement; and
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(iii) labor disputes, strikes, or other similar disturbances; acts
of God; utilities or communications failures; acts of the
public enemy; and riots, insurrections, sabotage, or
vandalism.
(b) NOTICE OF EXCUSABLE DELAY OR FAILURE. If a Party anticipates any
excusable delay or failure under SECTION 12.8(a), it shall promptly
Notify the other Party of the anticipated delay or failure, the
anticipated effect of that delay or failure, and any actions that
are being or are to be taken to alleviate or overcome the cause of
the delay or failure.
(c) EFFORTS TO OVERCOME. If a Party is claiming an excusable delay or
failure under SECTION 12.8, it shall use its Reasonable Efforts to
alleviate or overcome the cause of the delay or failure as soon as
practicable.
(d) EXTENDED DELAY OR FAILURE. If an excusable delay or failure
continues for more than [TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED], the Party entitled to the benefit of the affected
obligation may perform itself or obtain from any other Person the
obligation to which that Party is entitled (and that Party shall
Notify the other Party of this election).
12.9 CONSTRUCTION RULES. If any provision of this Agreement is held to be
invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions will not in any way be affected
or impaired, and such provision will be deemed to be restated to reflect
the original intentions of the Parties as nearly as possible in accordance
with applicable law. The Parties agree that this Agreement is an
executory contract as contemplated by 11 U.S.C. Section 365. In
performing its obligations under this Agreement, neither Party will be
required to undertake any activity that would conflict with the
requirements of any applicable law, rule, regulation, interpretation,
judgment, order or injunction of any governmental authority. This
Agreement may be executed in multiple counterparts, each of which will be
deemed an original and all of which taken together will constitute one
instrument. The Parties acknowledge and agree that each has been
represented by legal counsel of its choice throughout the negotiation and
drafting of this Agreement, that each has participated in the drafting
hereof and that this Agreement will not be construed in favor of or
against either Party solely on the basis of a Party's drafting or
participation in the drafting of any portion of this Agreement.
12.10 FURTHER ASSURANCES. The Parties will execute and deliver such other
instruments and documents, and take such other actions, as either Party
reasonably requests to evidence or effect the transactions contemplated by
this Agreement.
12.11 GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the substantive laws of the State of Texas, without giving
effect to any choice-of-law rules that may require the application of the
laws of another jurisdiction.
* * *
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IN WITNESS WHEREOF, the Parties have duly executed and delivered this
Agreement as of the Effective Date.
TRAVELOCITY.COM LP SABRE INC.
By: TRAVELOCITY HOLDINGS, INC.,
Its general partner By: /s/ Jeffrey M. Jackson
-----------------------------
By: /s/ Andrew B. Steinberg Title: Sr. V.P. and CFO
---------------------------- --------------------------
Title: Sr. V.P., General Counsel Date: March 7, 2000
and Corporate Secretary ---------------------------
-------------------------
Date: March 7, 2000
--------------------------
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DEFINITIONAL APPENDIX TO
ADMINISTRATIVE SERVICES AGREEMENT
A. DEFINED TERMS. In the Agreement, the following terms have the
corresponding meanings:
"AFFILIATE": A Person that directly or indirectly through one or more
intermediaries Controls, is Controlled by, or is under common Control with
another Person.
"AGREEMENT": The Administrative Services Agreement between Sabre and TCY
(including the Definitional Appendix, the Dispute Resolution Appendix, and
the Schedules), as may be amended or supplemented from time to time in
accordance with its terms.
"AA": means American Airlines, Inc., a Delaware corporation.
"AA PASS-THROUGH SERVICE" has the meaning given in SECTION 4.1(b)(i).
"ARBITRATION RULES": The Rules for Commercial Arbitration of the American
Arbitration Association in effect at the time of an arbitration in accordance
with the Dispute Resolution Procedure.
"BREACH NOTICE": A Party's Notice to the other Party alleging a breach of
the Agreement (other than TCY's nonpayment of any amount related to an
invoice) by the other Party, which describes the alleged breach, to the
extent known by the notifying Party, and any particular cure or correction
requested by the notifying Party.
"BUDGETED SERVICE COSTS" has the meaning given in SECTION 4.1(a)(i).
"BUSINESS DAY": Any Monday through Friday, excluding any such day on which
banks are authorized to be closed in Texas.
"CONFIDENTIAL INFORMATION": All information identified by a Party as
confidential to which the other Party has access in connection with the
Services, whether before or after the Effective Date, and the Administrative
Services Agreement and the Parties' rights and obligations thereunder.
"CONTROL": The right to exercise, directly or indirectly, more than 50% of
the voting power attributable to the equity interests in an entity.
("Controlling" and "Controlled" have correlative meanings.)
"CONSENT": The prior written consent of a Party (in any capacity) in its
sole discretion.
"DAMAGES": Losses, claims, obligations, demands, assessments, fines and
penalties (whether civil or criminal), liabilities, expenses and costs
(including reasonable fees and disbursements of legal counsel and
accountants), bodily and other personal injuries, damage to tangible
property, and other damages, of any kind or nature, actually suffered or
incurred by a Person. "Damages":
1. consists only of actual damages;
2. excludes any lost profits, lost income, or lost savings and any
punitive, exemplary, consequential, indirect, special, or incidental
damages (however described), even if the possibility of those losses or
damages was known; and
3. includes (except as may be reduced in accordance with the next
sentence) all fines, penalties, and interest paid or payable to any
Governmental Authority.
If TCY has Damages, for which Sabre is liable, consisting of fines,
penalties, and interest paid or payable to a Governmental Authority
corresponding to any tax not timely paid, then those "Damages" shall be
reduced by an amount equal to interest, [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED], accrued on that
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tax from the due date until that tax is paid; for the avoidance of doubt, in
this situation "Damages" shall not include any tax for which TCY would
otherwise be liable to the Governmental Authority. Also for the avoidance of
doubt, the "Damages" of a Person shall include any lost profits, lost income,
or lost savings and any punitive, exemplary, consequential, indirect,
special, or incidental damages (however described) awarded against that
Person in favor of another Person asserting a Third-Party Claim against that
Person. Notwithstanding anything to the contrary contained herein, "Damages"
expressly includes all payments required to be made by TCY, and all claims of
Sabre for payments required to be made by TCY, under this Agreement.
"DEFICIENCY": Sabre's failure, in rendering a Service or Task, to satisfy
any contractual requirements for performance established under the Agreement.
("Deficient" has the correlative meaning.)
"DEFINITIONAL APPENDIX": This Definitional Appendix to Administrative
Services Agreement, containing definitions and interpretive matters for, as
an integral part of, the Agreement.
"DISPUTE": Any dispute, disagreement, claim, or controversy arising in
connection with or relating to the Agreement, or the validity,
interpretation, performance, breach, or termination of the Agreement,
including any claim of breach of representation or warranty or of
nonperformance and any claim regarding bodily or other personal injury or
damage to tangible property.
"DISPUTE RESOLUTION APPENDIX": The Dispute Resolution Appendix to,
containing the Dispute Resolution Procedure for, as an integral part of, the
Agreement.
"DISPUTE RESOLUTION PROCEDURE": The procedure or process by which a Dispute
shall be resolved (except as otherwise stated in the Agreement) as described
in the Dispute Resolution Appendix.
"EFFECTIVE DATE": March 7, 2000, the date on which the Agreement becomes
effective.
"EXPIRATION": The expiration of the term of the Agreement as stated in, and
as may be renewed under, Article 2, without regard to any period of
transition assistance. For the avoidance of doubt, "Expiration" does not
include a termination of the Agreement under SECTION 10.1. ("Expire" and
"Expired" have correlative meanings.)
"GOVERNMENTAL AUTHORITY": Any federal, state, local, or foreign government
or governmental, quasi- governmental, administrative, or regulatory
authority, agency, body, or entity, including any court or other tribunal.
"INDEMNIFICATION CLAIM": A claim or demand of a Party, on its behalf or on
behalf of one or more of its Indemnified Agents, for indemnification under
SECTION 11.4.
"INDEMNIFICATION CLAIM NOTICE": A Notice from the Indemnified Party
describing an Indemnification Claim and the amount or the estimated amount of
that Indemnification Claim to the extent then feasible (though that estimate
shall not be determinative of the final amount of that Indemnification Claim).
"INDEMNIFICATION RESPONSE PERIOD": The
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED] after an Indemnification
Claim Notice is given during which the Indemnifying Party may investigate and
determine its responsibility or liability for an Indemnification Claim and,
if relating to a Third-Party Claim, Notify the Indemnified Party of the
Indemnifying Party's election to defend that Third-Party Claim.
"INDEMNIFIED AGENTS": Collectively, the officers, directors, employees, and
agents of a Party and, as to TCY, the TCY Companies and their respective
officers, directors, employees, and agents.
"INDEMNIFIED PARTY": A Party entitled to or seeking indemnification, on its
own behalf or on behalf of one or more of its Indemnified Agents, under
SECTION 11.4.
"INDEMNIFYING PARTY": A Party that has or is alleged to have an obligation
to indemnify the other Party in response to an Indemnification Claim.
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"INFORMATION TECHNOLOGY SERVICES AGREEMENT": The Information Technology
Services Agreement between Sabre and TCY dated March 7, 2000, as may be
amended or supplemented from time to time in accordance with its terms.
"LEGAL STAFF": Legal personnel that Sabre employs or otherwise engages.
"MANDATORY SERVICE": A Service that shall be rendered and paid for, and may
not be unilaterally discontinued under by TCY during the effectiveness of the
Agreement.
"NONCONFORMING SERVICE": A Service or Task that, as agreed by the Parties or
otherwise determined by the Dispute Resolution Procedure, was or is Deficient.
"NONPAYMENT NOTICE": A Notice from Sabre to TCY that describes an amount
related to an invoice to TCY that Sabre has not received when due, which
shall:
1. constitute a demand for payment of the described amount; and
2. state that either termination of the Agreement or cessation of
transition assistance, whichever is applicable, by Sabre may result if the
described amount is not paid by the tenth Business Day after that Notice
is given.
"NOTICE": A written communication complying with SECTION 12.7. ("Notify" has
the correlative meaning.)
"OPTIONAL SERVICE": A Service that may be unilaterally discontinued by
either Party in accordance with the Agreement.
"PARTIES": Collectively, Sabre and TCY. ("Party" means either Sabre or TCY.)
"PERSON": An individual; a corporation, partnership, trust, association, or
entity of any kind or nature; or a Governmental Authority.
"PRICE": The amount or rate, in either case whether fixed or variable and
however measured, charged to TCY for a Service, as agreed by the Parties.
"PROCEEDINGS": Any action, suit, claim, investigation, demand, audit, or
other proceedings by or before any Governmental Authority or any arbitration
proceedings.
"REASONABLE CONSENT": The prior written consent of a Party (in any
capacity), which may not be unreasonably withheld or delayed.
"REASONABLE EFFORTS": The efforts of a Party that are commercially
reasonable under the circumstances, which do not require a Party to institute
or prosecute any Proceedings or to pay any Person other than that Party's
representatives or agents, including (only as to Sabre) Subcontractors.
"REPRESENTATIVES": Collectively, Sabre's Representative and TCY's
Representative.
"SABRE": Sabre, Inc., a Delaware corporation.
"SABRE'S REPRESENTATIVE": The individual agent or representative designated
by Sabre to be Sabre's formal liaison with or representative to TCY for
matters relating to the Agreement, having the (non-exclusive) authority and
responsibility described in the Agreement.
"SABRE'S TRANSITION CHARGES": The sum of the following, incurred in or
resulting from Sabre's compliance with requests for transition assistance for
up to [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED] after Expiration or
during the Transition Period (as the case may be):
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[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
"SCHEDULE": A Schedule to the Agreement that describes a Service, and the
location or locations at which that Service is to be rendered if not at
Sabre's offices or Subcontracted.
"SERVICE": An individual management service, to be rendered by Sabre under
the Agreement, that is described as a "Service" in a Schedule. A Service may
also be described in a Schedule by all or a portion of its constituent Tasks.
"SERVICE SUBCONTRACT": An agreement or arrangement, oral or written, under
which a Subcontractor is to render or perform any Service or Task on Sabre's
behalf or in Sabre's stead.
"SUBCONTRACT": Sabre's entering into a Service Subcontract. ("Subcontracted"
and "Subcontracting" have correlative meanings.)
"SUBCONTRACT TERMINATION PENALTY": An obligation described in, as part of
the terms of, a Service Subcontract to pay the Subcontractor a charge, fine,
penalty, or other amount upon the termination or partial termination of that
Service Subcontract, including any return to the Subcontractor of any
equipment or goods held under that Service Subcontract.
"SUBCONTRACTOR": A Person, other than an employee of Sabre, who or which
enters into a Service Subcontract with Sabre.
"SUBSIDIARY": As to any Person, any other Person of which more than fifty
percent (50%) (in number of votes) of the issued and outstanding securities
having ordinary voting power for the election of at least a majority of the
directors is owned or controlled, directly or indirectly, by that Person.
"TASK": Any one of the group of processes, procedures, or services that is
described in a Schedule as constituting, or included in, a Service.
"TCY ALLOCABLE PERCENTAGE" has the meaning given in Section 4.1(a)(ii).
"TERMINATION DATE": The date on which the Agreement is terminated in
accordance with SECTION 10.1, without regard to any Transition Period.
"THIRD-PARTY CLAIM": A claim of liability asserted against either Party by a
Person other than the other Party or either Party's Indemnified Agents.
"TRANSITION PERIOD": The maximum
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED] after the Termination Date
during which Sabre shall, as TCY reasonably requests, render one or more
Services in accordance with SECTION 10.3(a) or provide transition assistance
in accordance with SECTION 10.3(b).
"TCY": Travelocity.com LP, a Delaware limited partnership.
"TCY COMPANY": Travelocity.com Inc., a Delaware corporation, and any entity
over which TCY has Control.
"TCY'S REPRESENTATIVE": The individual agent or representative designated by
TCY to be TCY's formal liaison with or representative to TCY for matters
relating to the Agreement, having the (non-exclusive) authority and
responsibility described in the Agreement.
B. INTERPRETATIVE MATTERS. The Agreement is the result of the Parties'
negotiations, and no provision of the Agreement shall be construed for or
against either Party because of the authorship of that provision. In the
interpretation of the Agreement, except where the context otherwise requires:
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1. "including" or "include" does not denote or apply any limitation;
2. "or" has the inclusive meaning "and/or";
3. "$" refers to United States dollars;
4. the singular includes the plural, and vice versa, and each gender includes
each of the others;
5. captions or headings are only for reference and are not to be considered in
interpreting the Agreement;
6. "Article" and "Section" refer to an Article and Section, respectively, of
the Agreement, unless otherwise stated in the Agreement;
7. an event to occur, an action to be performed, or a condition to be satisfied
"by" or "as of" a stated date in the Agreement shall occur or be effective or
satisfied no later than 5:00 p.m. on that date; and
8. each reference to a time of day in the Agreement is to local time in Fort
Worth, Texas, and "midnight" begins a day.
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EXHIBIT A
DISPUTE RESOLUTION APPENDIX
1. CERTAIN DEFINITIONS
This Section 1 sets forth certain definitions used in this Dispute Resolution
Process. Other capitalized terms used but not defined here in have the
meanings ascribed to them in the Agreement.
ARBITRATION RULES
The rules of the American Arbitration Association ("AAA") in effect on the
date of the commencement of the arbitration.
QUALIFICATIONS
Having extensive knowledge or experience, or both, regarding information
technology services similar to the Services that are the subject of the
Dispute, and fluent in English.
2. DISPUTE RESOLUTION PROCEDURE.
(a) GENERAL PROCEDURE.
The Parties shall resolve all Disputes in accordance with this
procedure:
(i) Disputes shall first be submitted to the Representatives as
indicated in Section 3 of this Exhibit.
(ii) If a Dispute is not resolved by the Representatives, then
either Party may submit the Dispute to mediation as outlined
in Section 4 of this Exhibit.
(iii) If a Dispute is not resolved by mediation, then either Party
may submit the Dispute to binding arbitration in accordance
with Section 5 of this Exhibit.
A referral under either Section 2(a)(ii) and/or 2(a)(iii) of this
Exhibit shall be made by written notice to the Representatives.
That notice shall be in a form mutually agreed to by the
Representatives or an electronic mail message and addressed to each
Representative at his or her office address or electronic mail
address; each notice shall be given and effective upon actual
receipt.
3. DISPUTE RESOLUTION.
(a) REPRESENTATIVE ACTION.
If the Dispute (a) involves less than [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED], and (b) does not require an amendment to the
Services, Fees or any other material term of the Agreement, the
Representatives will discuss the Dispute in good faith in an attempt
to resolve the Dispute to the mutual satisfaction of both Parties.
If the Representatives are unable to resolve the Dispute to the
mutual satisfaction of both Parties within [TEXT OMITTED -
CONFIDENTIAL TREATMENT REQUESTED] after receipt of written notice by
one Party from the other that a Dispute exists, the Dispute shall,
at the written request of either Party, be submitted to mediation as
outlined in Section 4 of this Exhibit.
4. MEDIATION.
The mediation of an unresolved Dispute shall be conducted in this manner:
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(a) Either Party may submit the Dispute to mediation by giving notice of
mediation to the other Party. The Parties shall attempt to agree
promptly after that notice is given upon and appoint a sole mediator
who has the Qualifications.
(b) If the Parties are unable to agree upon a mediator within [TEXT
OMITTED - CONFIDENTIAL TREATMENT REQUESTED] after the date the
Dispute is submitted to mediation, either Party may request the
Dallas, Texas office of the AAA to appoint a mediator who has the
Qualifications. The mediator so appointed shall be deemed to have
the Qualifications and to be accepted by the Parties.
(c) The mediation shall be conducted in Dallas, Texas at a place and a
time agreed by the Parties with the mediator, or if the Parties
cannot agree, as designated by the mediator. The mediation shall be
held within [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED] after
the mediator is appointed.
(d) If either Party has substantial need for information from the other
Party in order to prepare for the mediation, the Parties shall
attempt to agree on procedures for the formal exchange of
information; if the Parties cannot agree, the mediator's
determination shall be effective.
(e) Each Party shall be represented in the mediation by a natural person
with authority to settle the Dispute on behalf of that Party and, if
desired by that Party, by counsel for that Party. The Parties'
representatives in the mediation shall continue with the mediation
as long as the mediator requests.
(f) Unless otherwise agreed by the Parties, each Party shall pay one-
half of the mediator's fees and expenses and shall bear all of its
own expenses in connection with the mediation. Neither Party may
employ or use the mediator as a witness, consultant, expert, or
counsel regarding the Dispute or any related matters.
5. ARBITRATION.
The arbitration of an unresolved Dispute shall be conducted in this manner:
(a) Either Party may begin arbitration by filing a demand for
arbitration in accordance with the Arbitration Rules. The Parties
shall attempt to agree upon and appoint a panel of three (3)
arbitrators promptly after that demand is filed. Each of those
arbitrators must have the Qualifications unless otherwise agreed by
both Parties.
(b) If the Parties are unable to agree upon any or all of the
arbitrators within [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
after the demand for arbitration was filed (and do not agree to an
extension of that ten-day period), then each Party shall designate
one arbitrator with Qualifications and the AAA shall designate a
third, if possible, with Qualifications; nevertheless, such
arbitrator so appointed shall be deemed to have the Qualifications
and to be accepted by the Parties as part of the panel.
(c) The arbitration shall be conducted in Dallas, Texas at a place and a
time agreed by the Parties with the panel, or if the Parties cannot
agree, as designated by the panel. The panel may, however, call and
conduct hearings and meetings at such other places as the Parties
may agree or as the panel may, on the motion of one Party, determine
to be necessary to obtain significant testimony or evidence.
(d) The Parties shall attempt to agree upon the scope and nature of any
discovery for the arbitration. If the Parties do not agree, the
panel may authorize any and all forms of discovery, including
depositions, interrogatories, and document production, upon a
showing of particularized need that the requested discovery is
likely to lead to material evidence needed to resolve the Dispute
and is not excessive in scope, timing, or cost.
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CONFIDENTIAL
(e) The arbitration shall be subject to the Federal Arbitration Act and
conducted in accordance with the Arbitration Rules to the extent
they do not conflict with this Section 5. The Parties and the panel
may, however, agree to vary the provisions of this Section 5 or the
matters otherwise governed by the Arbitration Rules.
(f) The panel has no power to:
(i) rule upon or grant any extension, renewal, or continuance of
the Agreement;
(ii) award remedies or relief either expressly prohibited by the
Agreement or under circumstances not permitted by the
Agreement; or
(iii) grant provisional or temporary injunctive relief before
rendering the final decision or award.
(g) Unless the Parties otherwise agree, all Disputes regarding or
related to the same topic or event that are subject to arbitration
at one time shall be consolidated in a single arbitration
proceeding.
(h) A Party or other person involved in an arbitration under this
Section 5 may join in that arbitration any person other than a Party
if:
(i) the person to be joined agrees to resolve the particular
dispute or controversy in accordance with this Section 5 and
the other provisions of this Schedule applicable to
arbitration; and
(ii) the panel determines, upon application of the person seeking
joinder, that the joinder of that other person will promote
the efficiency, expedition, and consistency of the result of
the arbitration and will not unfairly prejudice any other
Party to the arbitration.
(i) The arbitration hearing shall be held within [TEXT OMITTED -
CONFIDENTIAL TREATMENT REQUESTED] after the appointment of the
panel. Upon request of either Party, the panel shall arrange for a
transcribed record of the arbitration hearing, to be made available
to both Parties.
(j) The panel's final decision or award shall be made within [TEXT
OMITTED - CONFIDENTIAL TREATMENT REQUESTED] after the hearing. That
final decision or award shall be made by unanimous or majority vote
or consent of the arbitrators constituting the panel, shall be
deemed issued at the place of arbitration and shall be made in U.S.
dollars. The panel shall issue a reasoned written final decision or
award based on the Agreement and Texas law; the panel may not act
according to equity and conscience or as an amicable compounder or
apply the law merchant.
(k) The panel's final decision or award may include:
(i) recovery of general damages to the extent permitted by the
Agreement (but not consequential, exemplary or punitive
damages); or
(ii) injunctive relief in response to any actual or threatened
breach of the Agreement or any other actual or threatened
action or omission of a Party under or in connection with the
Agreement.
(l) The panel's final decision or award shall be final and binding upon
the Parties, and judgment upon that decision or award may be entered
in any court having jurisdiction over either or both of the Parties
or their respective assets. The Parties specifically waive any
right they may have to apply
3
<PAGE>
or appeal to any court for relief from the preceding sentence or
from any decision of the panel made, or any question of law arising,
before the final decision or award; and the Parties shall not
dispute nor question the validity of such award before any
regulator or other authority in any jurisdiction where enforcement
action is taken by the Party or Parties in whose favor the award
was rendered. If any decision by the panel is vacated for any
reason, the Parties shall submit that Dispute to a new arbitration
in accordance with this Section 5.
(m) Each Party shall pay one-half of the arbitrators' fees and expenses,
and shall bear all of its own expenses in connection with the
arbitration. The panel has the authority, however, to award
recovery of all costs and fees (including attorneys' fees,
administrative fees and the panel's fees and expenses) to the
prevailing Party in the arbitration.
6. RECOURSE TO COURTS.
Nothing in this Schedule limits the right of either Party to apply to a court or
other tribunal having jurisdiction to:
(a) enforce this Schedule, including the agreement to arbitrate in this
Schedule;
(b) seek provisional or temporary injunctive relief so as to avoid
irreparable damage or maintain the status quo, until a final
arbitration decision or award is rendered or the Dispute is
otherwise resolved; or
(c) challenge or vacate any final arbitration decision or award that
does not comport with Section 5 of this Schedule.
7. SUBMISSION TO JURISDICTION.
Each Party irrevocably submits to the jurisdiction of the federal courts of
the United States and the state courts of Texas located in Fort Worth. Each
Party waives any defense or challenge to that jurisdiction based on lack of
personal jurisdiction, improper venue, or inconvenience of forum.
8. CONFIDENTIALITY.
The proceedings of all negotiations, mediations, and arbitrations shall be
privately conducted. The Parties shall keep confidential all conduct,
negotiations, documents, decisions, and awards in connection with those
proceedings under this Schedule.
9. EXCLUSIVE REMEDY.
Other than those matters involving injunctive or other extraordinary relief
or any action necessary to enforce the award of the arbitrator, the parties
agree that the provisions of this schedule are a complete defense to any
suit, action or other proceeding instituted in any court or before any
administrative tribunal with respect to any dispute or the provision of the
base services or variable services by sabre. Nothing in this exhibit
prevents the parties from exercising their rights to terminate the agreement
in accordance with article x of the agreement.
10. CONTINUED PERFORMANCE; ESCROW ACCOUNT.
Unless (a) sabre has commenced a proceeding or has presented a claim for
nonpayment by customer of amounts due under the agreement, and customer does
not promptly pay all amounts in dispute into the escrow account referred to
below, or (b) the agreement has been terminated in accordance with article x,
sabre will continue to provide the services during any dispute resolution
proceedings (whether informal or formal) commenced pursuant to this exhibit
and customer will continue to perform its obligations (including the making
of payments to sabre) in accordance with the agreement. Up to the maximum
amount in dispute, any disputed payment will be paid pending resolution of
the dispute into an escrow account that is structured by agreement of the
parties or, if agreement cannot be reached, as directed by the mediator or
arbitrator, as the case may be, engaged in accordance with this
4
<PAGE>
CONFIDENTIAL
exhibit. Any such escrow account will provide for the payment of interest on
the amounts deposited therein, and the parties (if the dispute is resolved
informally) or the mediator or arbitrator, as the case may be (if the dispute
is resolved formally), will make the determination regarding distribution of
such deposited amounts plus interest. If customer fails to escrow disputed
payments as required by the agreement, sabre may apply to any court of
competent jurisdiction to seek injunctive relief for such failure and will
have the right to terminate the agreement in accordance with article x of the
agreement.
11. OTHER.
(a) U.N. CONVENTION.
The enforcement of any arbitral award will be in accordance with
and governed by the United Nations Convention on the Recognition
and Enforcement of Foreign Arbitral Awards.
(b) LANGUAGE.
Negotiations, mediations and arbitrations will be conducted in the
English language.
5
<PAGE>
CONFIDENTIAL
EXHIBIT B
NOTICE
If to Sabre:
Sabre Inc.
MD 4204
4255 Amon Carter Blvd.
Fort Worth, TX 76155
Fax: (817) 967-1215
Attention: President
With a copy to:
Sabre Inc.
MD 4204
4255 Amon Carter Blvd.
Fort Worth, TX 76155
Fax: (817) 967-1215
Attention: General Counsel
If to TCY:
Travelocity.com LP
4200 Buckingham Road, MD 1400
Fort Worth, Texas 76155
Fax: (817) 963-8869
Attention: President
With a copy to:
Travelocity.com LP
4200 Buckingham Road, MD 1400
Fort Worth, Texas 76155
Fax: (817) 963-8869
Attention: General Counsel
1
<PAGE>
CONFIDENTIAL
EXHIBIT C
ADDITIONAL OPTIONAL SERVICES
The Services currently described on the Schedules, which are not initially
selected by TCY on Schedule XIV.
1
<PAGE>
ADMINISTRATIVE SERVICES AGREEMENT SCHEDULE OF SERVICES
SCHEDULES
ADMINISTRATIVE SERVICES AGREEMENT
<PAGE>
ADMINISTRATIVE SERVICES AGREEMENT SCHEDULE OF SERVICES
Note: Certain of the Services and Tasks described below will not be relevant
to TCY's business and operations. To the extent that such Services and Tasks
are not relevant, then Sabre will not perform such Services or Tasks for TCY,
and TCY will not be required to pay for such Services or Tasks.
Schedule I
TAX ADMINISTRATION SERVICE (MANDATORY)
DESCRIPTION OF SERVICE: Tax Administration is defined as tax research and
planning and tax return preparation in compliance with tax statutes and
regulations. The Tasks to be performed under Tax Administration Service
(Mandatory) consist of:
A. U.S. federal and state income tax compliance
i. tax return preparation and tax payment processing
ii. representation on audits and contests
iii. management of development of tax and accounting systems to minimize
compliance costs
B. U.S. federal and state income tax accounting and reporting
i. income tax account analysis
ii. tax provision accounting
C. U.S. federal and state income tax planning and projects
i. research and planning to assess impact of taxes on operations and on
proposed transactions
ii. legislative and regulatory monitoring
D. Sales/use, excise, property and other transaction taxes
i. Tax return preparation and property tax rendition filing
ii. Tax payment processing
iii. Audits and contests
iv. Research and planning
v. Monitor legislation and regulations effecting the business
vi. Tax accounting
E. International
i. Manage tax return preparation and VAT collection calculations
ii. Foreign audits and contests
iii. Research and planning
iv. Monitor legislation and regulations effecting the business
v. Tax accounting
F. Systems Development
i. Develop design specifications for the new financial and logistics
systems to automate the tax functions
ii. Assisting in the developments of semi-automated accounting systems
iii. Maintenance and modifications of tax systems
<PAGE>
ADMINISTRATIVE SERVICES AGREEMENT SCHEDULE OF SERVICES
Schedule II
HUMAN RESOURCES GOVERNMENT REPORTING SERVICE (MANDATORY)
DESCRIPTION OF SERVICE: Tasks to be performed to support TCY's compliance with
U.S. Federal human-resources-related reporting statutes. The Tasks to be
performed consist of:
A. Summary Plan Descriptions
B. Pension Annual Reporting and Disclosure, maintaining ERISA administration
requirements, plan documentation, research and analysis, ADA
accommodations, and Affirmative Action / Department of Labor / EEO
administration.
C. State unemployment compensation administration, including responding to
State and Federal government agencies (including State unemployment
compensation claims, and claims regulated by State and Federal equal
employment opportunity agencies); processing unemployment compensation
claims; monitoring charges to TCY unemployment accounts in each State; and
administering rates assigned by States.
<PAGE>
ADMINISTRATIVE SERVICES AGREEMENT SCHEDULE OF SERVICES
Schedule III
ACCOUNTING SERVICES
CASH ACCOUNTING SERVICE
DESCRIPTION OF SERVICE: The Tasks to be performed consist of:
A. Reconciliation of domestic bank accounts
B. Identification and resolution of cash irregularities and cash reporting
issues
C. Primary internal control relative to cash
D. Recognition of foreign currency adjustments
E. Investigation, resolution and subsequent clearing of reconciling items
RECEIVABLES SERVICE
DESCRIPTION OF SERVICE: The Tasks to be performed consist of:
A. Receivable Billing/Accounting
i. Bill posting to the receivable sub-ledger system
ii. Cash applications
iii. Coordination of settlement with Airlines Clearing House, or IATA
Clearing House
iv. Account reconciliation, and receivable servicing
PAYROLL PRODUCTION SERVICE
DESCRIPTION OF SERVICE: Responsible for the calculation and distribution of
payroll checks and incentive compensation checks. The Tasks to be performed
consist of:
A. Regular Checks - Processing of regular paychecks on a weekly, bi-weekly,
and semi-monthly basis
B. Remote Checks - Processing of remote or supplemental paychecks for
adjustments
C. Gross Pay Adjustments to be completed during the next regular pay period
D. Garnishments
E. Stop payments for lost or stolen paychecks
F. Bonuses and Special Payments - Processing of special payments that require
development changes
PAYROLL TAX ACCOUNTING SERVICE
DESCRIPTION OF SERVICE: The Tasks to be performed consist of:
A. Payroll Taxes - Charges for the collection, remittance and accounting for
payroll taxes and other moneys collected from employee paychecks. The
cost is driven by the number of payroll checks that are processed in one
calendar year.
B. Payroll Tax Reporting - Charges for reporting for Federal and State
withholding and unemployment taxes. The costs are driven by the number of
states worked.
C. Payroll Tax Year End - Charges for the year end production of annual wage
and tax statements. The cost is driven by the number of W-2s issued in
one calendar year, and the number of states worked.
PAYROLL CUSTOMER SERVICE
DESCRIPTION OF SERVICE: The Tasks to be performed consist of:
<PAGE>
ADMINISTRATIVE SERVICES AGREEMENT SCHEDULE OF SERVICES
A. Employment Verification - Completion of the wage and employment
information requested by lending institutions.
B. W-2 Reissues.
C. Employment Receivables - The administration and collection of balances
from employees for advances, uniforms, and salary overpayments, check
distribution special handling.
NOTE that certain related fees are paid directly by TCY, its employees, or
relevant lending institutions.
DISBURSEMENTS PRODUCTION SERVICE
DESCRIPTION OF SERVICE: The Tasks to be performed consist of:
A. Usage of EDI Mailbox and translator, Federal Express
B. Other EDI
C. Audit and Processing of contract based payments
<PAGE>
ADMINISTRATIVE SERVICES AGREEMENT SCHEDULE OF SERVICES
Schedule IV
HUMAN RESOURCES ADMINISTRATION
DESCRIPTION OF SERVICE: The Service consists of:
Employment relations administration generally, but excluding mandatory Services
described on Schedule II, and further consisting of the following Tasks:
SERVICE DESCRIPTION
Providing and Managing Health and Welfare Benefits
Management and Professional Recruitment
College Recruitment
Support Staff Recruitment
Managing Employee Information and Documentation
Managing Employee Performance and Terminations
Compensating Employees and Job Leveling
Bonus Commission Programs
Providing Retirement Benefits
Training Management
Maintain Human Resources Information System (HRIS)
Providing and Managing Workers Compensation
Facilitating Management Career Moves
Developing Admin / Interpreting Corporate Policy
Assisting AMR Executives - Executive administration
Evaluating Employees and their Performance Progress
Relocating Employees
Admin and Cost Control
Managing employees' employment-related complaints
Executive compensation administration
Family Medical Leave Act Application Processing and Program Administration
<PAGE>
ADMINISTRATIVE SERVICES AGREEMENT SCHEDULE OF SERVICES
Schedule V
Medical Services
DESCRIPTION OF SERVICE: The Tasks to be performed consist of:
A) Employee Assistance Program Services (as required by the Federal Drugfree
Workplace Act)
B) Full TCY Employee Access to all Sabre Preventive Healthcare Programs
C) Ergonomics Support Including Workstation Design And Other OSHA Required
for all Ergonomics Services
D) ADA-Related Ergonomic Accommodations Work
E) Occupational Healthcare Litigation Support
F) Full Access to all Sabre Travel Medicine Databases, and Applicable
Occupational Healthcare Record Keeping (but not OSHA Log Record keeping).
G) New Hire Physicals--Non-Safety Sensitive
H) Clinic - Employee Visit
I) Employee Drug and Alcohol Testing
K) Other services will be provided to TCY on a by-request basis
<PAGE>
ADMINISTRATIVE SERVICES AGREEMENT SCHEDULE OF SERVICES
Schedule VI
FINANCIAL SERVICES
General Corporate Finance Services
DESCRIPTION OF SERVICE: As more fully described below, Sabre Finance Department
will provide TCY centralized finance services. The Tasks to be performed by
Sabre consist of:
A. Cash Management Strategies
B. Consolidated Financial Planning and Analysis
C. Business Insurance Administration
D. Financial Systems Services
E. Strategic Planning and Corporate Development Advisory Services
F. Investor Relations
BANKING/CASH MANAGEMENT SERVICE
DESCRIPTION OF SERVICE: Sabre shall provide TCY centralized cash management
services which are substantially the same as the cash management services
provided by Sabre to TCY immediately prior to the Effective Date. The Tasks to
be performed by Sabre consist of:
A. Cash Management Strategies
i. optimize the utilization of the daily cash activity
ii. maintain separate bank accounts for TCY and, in connection
therewith, open and close bank accounts, as required
iii. design, develop and implement enhanced, practical, cost-efficient
cash management processes
iv. negotiate for new improved bank services
v. review bank services and fees
B. Cash Mobilization
i. initiate properly approved wire transfers
ii. collect all available bank account balances
iii. fund all disbursements accounts
iv. coordinate daily with investment services resources for all cash
excess/shortfalls
v. generate, as needed, advance to and/or from Sabre
C. Coordination of Letters of Credit
D. Pass-Through expense of banking service charges
E. Cash Investment - transfer excess cash to investment services resources,
which will invest such cash in a manner consistent with the investment
objectives utilized by the investment services resources for TCY as of the
date of this Agreement.
CORPORATE FINANCE SERVICE
DESCRIPTION OF SERVICE: The Tasks to be performed consist of:
A. Coordination of Financing Decisions
B. Risk Assessment and Management
C. Financing Administration
BUSINESS INSURANCE ADMINISTRATION SERVICE
DESCRIPTION OF SERVICE: The Tasks to be performed consist of:
A. Negotiation of Insurance Policy Terms and Premiums
<PAGE>
ADMINISTRATIVE SERVICES AGREEMENT SCHEDULE OF SERVICES
B. Contract Review and Revisions
C. Claims Handling
D. Calculation for the allocation of insurance premiums to TCY
TCY may determine, in its discretion, whether to obtain its own business
insurance policies or to participate in one or more business insurance policies
obtained or arranged by Sabre. To the extent that TCY elects (by agreement with
Sabre) to so participate, TCY shall pay a portion of the premiums for the
insurance policies in which it participates based on an allocation methodology
agreed upon by the Parties for those policies.
FINANCIAL SYSTEMS SERVICE
DESCRIPTION OF SERVICE: Tasks consist of providing usage of Financial Services
systems applications, including SAP.
STRATEGIC PLANNING
Strategic planning services.
INVESTOR RELATIONS
Investor relations services
<PAGE>
ADMINISTRATIVE SERVICES AGREEMENT SCHEDULE OF SERVICES
Schedule VII
GENERAL CORPORATE SERVICES
SABRE SUPPLY MANAGEMENT SERVICE
DESCRIPTION OF SERVICE: The Supply Management Service will be performed in
accordance with a corresponding power of attorney granted to Sabre. The Tasks
to be performed are needs identification, bid proposals, awarding process,
ordering process, delivery process, payment and maintenance process for:
A. Hardware Purchases including Personal Computers, Telecommunications
Equipment, and Printers
B. Software Purchases and Licensing Agreements
C. Telecom Services and Maintenance Contracts
CORPORATE SECURITY SERVICE
DESCRIPTION OF SERVICE: The Tasks to be performed consist of:
A. Investigations
B. Consultation & Representation
C. Ticket Loss Prevention
D. Audits & Tests
E. Instruction
F. Administration
SAFETY ADMINISTRATION SERVICE
DESCRIPTION OF SERVICE: The Tasks to be performed consist of:
A. Ground Safety
i. Employee Injury and Illness
ii. Ergonomic Program
iii. Safety Audits
iv. OSHA Administration
v. Industrial Hygiene Program
vi. Safety Training
B. Environmental Safety
i. Environmental Assessments
ii. Environmental Training
iii. Legal & Lobbying
iv. Environmental Regulations
v. Technical Assistance and Support
vi. Program and Professional Development Services
vii. Waste Minimization Programs
viii. Recycling Programs
GENERAL SERVICES DEPARTMENT
DESCRIPTION OF SERVICE: The Services (which are not merely Tasks) to be
performed will consist of:
<PAGE>
ADMINISTRATIVE SERVICES AGREEMENT SCHEDULE OF SERVICES
1.1 Services
A. Archives
B. Reserved Parking Permits Administration
C. Mail Services includes mailings by USPS below 1,000 pieces
D. USPS Postage for orders exceeding 1,000 pieces not covered by Mail
Services
E. HDQ Telephone Directory
i. Maintain Corporate Mailing Lists
ii. Maintain Company Regulations
F. Administration of contracts executed between Sabre and subcontractors for
Services not performed by Sabre employees
GENERAL SERVICES' PASS-THROUGH EXPENSES SERVICE
DESCRIPTION OF SERVICE: Sabre pays Subcontractors for the following Services
(which are not merely Tasks). The list below represents a pass-through of
expenses allocable to TCY.
1.2 Services
A. Employee Shuttle Service DFW/HDQ/DFW
B. Paper Supplier
C. Installation and Management of Copiers
D. Printing and Mailing Services
E. Cafeteria and Vending Services
CPIV and Trinity
[Buildings Served: Sabre is offering General Services to TCY at the following
locations:
CPI CPIV
CORPORATE CARD SERVICE
A. Administration of Corporate Card
<PAGE>
ADMINISTRATIVE SERVICES AGREEMENT SCHEDULE OF SERVICES
Schedule VIII
LEGAL SERVICES
DESCRIPTION OF SERVICE: Tasks consist of rendering professional legal services
for matters in the following areas:
A. Labor and Employment Law
i. Labor Litigation
ii. Equal Employment Opportunity Commission Claims (EEOC)
iii. Department of Human Rights Claims (DHR)
iv. Railway Labor Act Issues and Claims
v. OSHA Issues and Claims
vi. Environmental Issues and Claims
vii. Immigration Filings
viii. Garnishments
ix. ERISA Issues
B. Litigation
i. Commercial Litigation
ii. Antitrust Litigation
iii. EC Regulation
iv. CRS Issues
v. Federal Aviation Administration Issues and Claims (FAA)
vi. Subpoenas
C. Corporate Law
i. Contract Review and Preparation
ii. Mergers and Acquisitions
iii. Corporate Registrations
iv. Corporate and Securities law compliance
v. Real Estate
vi. Bankruptcy
vii. Intellectual Properties
viii. Customs
D. Corporate Finance
i. Public Financing
ii. Private Financing
iii. SEC Regulations
E. General Regulatory Matters
F. Government Affairs Service
i. U.S. Federal Government Regulations
ii. State and Local Government Relations
iii. Coordination of Sabre Lobbying Efforts at all levels of Government
<PAGE>
ADMINISTRATIVE SERVICES AGREEMENT SCHEDULE OF SERVICES
Schedule IX
AUDIT SERVICE
DESCRIPTION OF SERVICE: Conducting internal audits and coordinating external
audit functions.
<PAGE>
ADMINISTRATIVE SERVICES AGREEMENT SCHEDULE OF SERVICES
Schedule X
FACILITIES SERVICES
DESCRIPTION OF SERVICE: The Tasks to be performed at the current TCY locations,
and other locations agreed to by the parties, will consist of:
A. Facilities Support
i. Space Programming Studies
ii. Manage Design Professionals
iii. Cost Estimations/Refinement for New Projects
iv. Evaluate Requests for Proposals (RFPs)
v. Value Engineering
vi. Project Feasibility Studies
vii. Bidding and Contract Negotiations
viii. Project Management
ix. Contract Audit Control
x. Project Close Out
xi. HDQ Space Planning
B. Properties Support
i. Rate and Change Evaluation
ii. Tenant and Landlord Liaison
iii. Negotiation of New Leases
iv. Negotiation of Additional Services under Leases
v. Property Management
vi. Real Estate Market Analysis
C. Planning and Technical Support
i. Environmental Engineering
ii. Energy Audits
iii. Automation Environment
iv. Pre-Conditioned Air / Ground Power
v. Material Handling Systems
D. Facilities Maintenance Pass-Through Expense
i. Sabre General Services pay Subcontractors providing facilities
maintenance services (e.g., hazardous waste removal, janitorial
services and pest control), for Prices consisting only of a pass-
through of expenses (under the Service Subcontracts) allocable to
TCY.
E. Utilities Management Services
<PAGE>
ADMINISTRATIVE SERVICES AGREEMENT SCHEDULE OF SERVICES
Schedule XI
CORPORATE COMMUNICATIONS SERVICE
DESCRIPTION OF SERVICE: The Tasks to be performed consist of:
A. Strategic Planning & Counseling
B. Media Relations
C. Marketing Communications
D. Issues Management
E. Project Management
F. Executive Support
G. Internal Communications
H. On-Line Communications
I. Financial Reporting Communications
J. Administration and Clerical Duties
K. Community Relations
<PAGE>
ADMINISTRATIVE SERVICES AGREEMENT SCHEDULE OF SERVICES
Schedule XII
CORPORATE TRAVEL SERVICES
OTHER AIRLINE (OA) PERSONAL TRAVEL ADMINISTRATION SERVICE
DESCRIPTION OF SERVICE: Sabre will provide administrative support for TCY's
personal travel on Other Airlines (OA). Tasks to be performed consist of:
A. Secure of agreement with Other Airlines (OAs)
i. Draft cover letters
ii. Revise Sabre ID agreement to include the TCY
iii. Negotiate new arrangements with each airline
iv. Conclude and execute revised agreements
B. Contract Maintenance
i. Ongoing negotiations
ii. Secure additional carriers
iii. Conflict resolution with OAs
iv. Contract preparation and filing
C. Administrative Support
i. Provide updates to TCY reference material
ii. Respond to employee inquiries
iii. Prepare PNRs for ticketing
iv. Provide OA with pay-back passes on AA
OTHER AIRLINE (OA) BUSINESS TRAVEL ADMINISTRATION SERVICE
DESCRIPTION OF SERVICE: Sabre will provide administrative support for the TCY's
business travel on Other Airlines (OA). Tasks to perform consist of:
A. Secure Business Travel on Other Airlines
i. Negotiate arrangements with other airlines
ii. Provide other airlines travel on AA
B. Contract Maintenance
i. Process TCY pass requests
ii. Process OA business travel requests
C. Administrative Support
i. Provide updates to the TCY reference manual
ii. Respond to employee inquiries
iii. Prepare PNRs for ticketing
CORPORATE TRAVEL DESK SERVICE
DESCRIPTION OF SERVICE: The Tasks to be performed consist of:
A. Booking of Hotels for Business Travel and Interline Rates
B. Booking for Rental Vehicles for Business Travel at Interline Rates
<PAGE>
ADMINISTRATIVE SERVICES AGREEMENT SCHEDULE OF SERVICES
Schedule XIII
Executive Office Functions
DESCRIPTION OF SERVICE: Sabre provides executive office support, for its
Subsidiaries (including TCY), in the following areas of executive function:
A. Chief Executive Office
B. Chief Financial Officer
C. Chief Information Officer
<PAGE>
ADMINISTRATIVE SERVICES AGREEMENT SCHEDULE OF SERVICES
Schedule XIV
TCY Allocable Percentage for Year 2000
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
<PAGE>
THIS AGREEMENT HAS CONFIDENTIAL PORTIONS OMITTED, WHICH PORTIONS HAVE BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. OMITTED
PORTIONS ARE INDICATED IN THIS AGREEMENT WITH "[TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED]."
LEASE AGREEMENT
This Lease Agreement (hereinafter called "LEASE") is executed on March
7, 2000 ("EFFECTIVE DATE") by and between Sabre Inc., a Delaware corporation
("LANDLORD"), and Travelocity.com LP, a Delaware Limited Partnership
("TENANT").
W I T N E S S E T H:
WHEREAS, Landlord is the owner of the office buildings and related
appurtenances (the "BUILDING") described on EXHIBIT "A" attached hereto; and
WHEREAS, Landlord is willing to provide, and Tenant desires to receive,
office space as more fully described below all on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, for the fees described herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Landlord and Tenant agree as follows:
1. PREMISES. (A) Landlord hereby leases to Tenant and Tenant hereby
takes from Landlord the office space in the offices identified and described
on EXHIBIT "B" attached hereto (the "LEASED PREMISES"), for the limited
purpose specified in paragraph 3 below and the furniture, fixtures and
equipment (the "furniture") owned by Landlord and located within the Leased
Premises as of the commencement date. In addition, Landlord hereby agrees
that Tenant and its agents, employees and invitees shall have non-exclusive
access to the shared office support areas (which areas include, without
limitation, photocopy service areas, mail room, reception areas and such)
containing the agreed rentable square footages identified and described on
EXHIBIT "B" attached hereto (the "SHARED AREAS"), for the limited purposes
specified in paragraph 3 below. Tenant and its agents, employees and invitees
shall additionally have the non-exclusive right with others designated by
Landlord (including, without limitation, Landlord and its agents, employees
and invitees) to the free use of the common areas situated in or about the
Building for their intended and normal purposes in connection with the use of
the Leased Premises and Shared Areas in accordance with the terms of this
Lease, including, without limitation, the parking areas, sidewalks,
driveways, hallways, stairways, restrooms, common entrances, lobbies and
other similar public areas and access ways situated in or about the Building.
(B) In the event that Tenant requires additional space in the
premises known as Centreport I, then Landlord will use its reasonable best
efforts to provide additional space in Centreport I to enable Tenant's new
employees to be co-located with Tenant's current employees. The parties will
execute an amendment to this Lease to add the additional space to the Leased
Premises and to account for the additional rent resulting from such
additional space.
2. TERM. The term (the "TERM") of this Lease shall commence on the
Effective Date and shall continue for a period of one (1) year, unless sooner
terminated or extended as provided herein. Following the initial year the
Term will automatically extend for successive one (1) year periods. Tenant
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may terminate this Lease at any time upon sixty (60) days prior written
notice to Landlord, and Landlord may terminate this Lease at any time upon
one (1) year's prior written notice to Tenant.
3. USE. During the Term hereof, Tenant shall use and occupy the
Leased Premises for general office purposes, and shall use the Shared Areas
for the reasonable business purposes for which they were being used by Tenant
at the Effective Date.
4. BASIC RENT. Tenant covenants and agrees to pay to Landlord the
Monthly Basic Rent as set forth in EXHIBIT "C". The pro-rata Monthly Basic
Rent for March 2000 is payable on the Effective Date. Thereafter, Monthly
Basic Rent is payable in advance in equal monthly installments on the first
day of each month, commencing April 1, 2000, during the Term. Additional rent
may be payable as provided on EXHIBIT "C".
5. PAYMENTS AND AUDIT. Tenant covenants and agrees to make payments
to Landlord for Basic Rent at the address of Landlord as set forth in
paragraph 26 below or at any other place that Landlord may designate to
Tenant in writing, without notice or demand and without abatement, deduction
or set-off (except as is otherwise provided in this Lease) of any amount
whatsoever. Upon thirty (30) days notice to Landlord, Tenant may audit the
books and records of Landlord related to the calculation of rent due under
this Lease solely to verify the accuracy of the rent paid or payable by
Tenant under this Lease. Such audits may occur no more frequently than once
per calendar year during the Term, and once within the six (6) month period
following termination of this Lease.
6. LANDLORD'S OBLIGATIONS. (A) Subject to the limitations
hereinafter set forth, Landlord agrees, while Tenant is occupying the Leased
Premises, to furnish to Tenant (i) water (hot and cold) at those points of
supply provided for general use of tenants of the Building, (ii) heated and
refrigerated air conditioning in season, and (iii) elevator and janitorial
service to the Leased Premises, all such services to be provided at such
times as Landlord normally furnishes these services to all other occupants of
the Building and in no event less than the manner and to the extent provided
to Tenant at the Leased Premises immediately prior to the Effective Date of
this Lease. In addition, Landlord agrees to maintain the Leased Premises and
the public and common areas of the Building, such as lobbies, stairs,
corridors and restrooms, in reasonably good order and condition, except for
damage occasioned by Tenant, or its employees, agents or invitees. Landlord
reserves the right, exercisable without notice and without liability to
Tenant for damage or injury to property, persons or business and without
effecting an eviction, constructive or actual, or disturbance of Tenant's use
or possession or giving rise to any claim for set off or abatement of rent,
to decorate and to make repairs, alterations, additions, changes or
improvements, whether structural or otherwise, in and about the Building, or
any part thereof, and for such purposes to enter upon the Leased Premises
and, during the continuance of any such work, to temporarily close doors,
entryways, public space and corridors in the Building and to interrupt or
temporarily suspend Building services and facilities (provided, however, that
Landlord shall in all events use Landlord's best efforts to conduct such
activities in a manner which will reasonably minimize any interference with
and/or impairment of Tenant's use and occupancy of the Leased Premises and
Shared Areas for the purposes set forth in this Lease).
(B) Without Landlord's prior written consent (which consent
shall not be unreasonably withheld, conditioned or delayed), Tenant shall not
install any new equipment in the Leased Premises which shall require for its
use electrical current or other utility service in excess of
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amounts provided to Tenant at the Leased Premises prior to the Effective Date
of this Lease or which affects the temperature otherwise maintained by the
air conditioning system or otherwise overloads any utility serving the Leased
Premises.
(C) Landlord shall make available to Tenant facilities to
provide all electrical current required by Tenant in its use and occupancy of
the Leased Premises and further shall make available electric lighting and
current for the Shared Areas and common areas of the Building in the manner
and to the extent reasonably determined by Landlord to be standard (and in no
event less than in effect as of the Effective Date).
(D) Heating and air conditioning during other than the normal
business hours shall be furnished only upon the prior request of Tenant, who
shall bear the cost thereof.
(E) Failure to any extent to make available, or any slow-down,
stoppage or interruption of, or any change in the quantity, character or
availability of the above described services, resulting from any cause, shall
not render Landlord liable in any respect for damages to either person,
property or business, nor be construed as an eviction of Tenant or (except as
set forth below) work an abatement of rent, nor relieve Tenant from
fulfillment of any covenant or agreement hereof; provided, however, that if
such failure, stoppage or slowdown of defined services is caused by
Landlord's gross negligence, willful misconduct or intentional breach of this
Lease, Tenant shall be entitled to any and all remedies provided at law or in
equity or under this Lease; provided further, however, that any recovery of
damages by Tenant as a result of any such failure, stoppage, or slowdown
caused by Landlord's gross negligence, willful misconduct or intentional
breach of this Lease shall consist only of actual damages, and exclude any
and all punitive, consequential, indirect, loss of business, special or
incidental damages (however described). Should any equipment or machinery
furnished by Landlord break down or for any cause cease to function properly,
Landlord shall use reasonable diligence to repair same promptly.
7. ALTERATIONS. Tenant may not make any alteration, addition or
improvement to the Leased Premises, without the prior written approval of
Landlord. All alterations, additions or improvements made by Tenant upon the
Leased Premises shall be at the expense of Tenant and shall, at Landlord's
option, be removed by Tenant prior to the expiration of the Term of this
Lease at Tenant's cost and Tenant shall repair any damage to the Leased
Premises caused by such removal.
8. STATUTES AND ORDINANCES. Tenant will comply with all federal,
state, county and municipal statutes and ordinances and all rules,
regulations, orders and directives of the local, state and federal
governments applicable to the Leased Premises or to Tenant's use or occupancy
thereof and all obligations imposed thereby, at its own expense; provided,
however, that Tenant shall in no event be required to make any structural
changes to the Leased Premises, Shared Areas or Building in order to effect
any such compliance. Landlord will comply with all federal, state, county
and municipal statutes and ordinances and all rules, regulations, orders and
directives of the local, state and federal governments applicable to the
Building or to Landlord's and Tenant's use or occupancy thereof (excepting
any uses of the Leased Premises by Tenant in any manner materially different
from that permitted and contemplated hereunder) and all obligations imposed
thereby, at its own expense.
9. INSURANCE. (A) COVERAGE. During the Term of this Lease, Tenant
at its own cost and expense, shall maintain with insurers reasonably acceptable
to Landlord, the following coverage: (i)
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Comprehensive Liability Insurance including but not limited to Comprehensive
General Liability, Contractual Liability and Automobile Liability coverages
in an amount not less than $1,000,000 for bodily injury and property damage
combined single limit, and (ii) all risk property insurance covering loss of
or damage to property of the Tenant in an amount at least equal to the value
of such property. Tenant shall also maintain Workers Compensation and
Employer's Liability coverage as may be required by law.
(B) FORM AND CERTIFICATES. The Comprehensive General
Liability, Contractual Liability and Automobile Liability policies described
in paragraph 9(A) above shall: (i) name Landlord as additional insured(s);
(ii) specifically insure the liability assumed by Tenant hereunder; (iii) be
primary as to any occurrences insured thereby, without right of contribution
from any insurance carried by the Landlord hereunder; and (iv) provide for
ten (10) days written notice to the Landlord prior to cancellations or
material change. Tenant agrees to provide certificates evidencing the above
coverages and special endorsements to the Landlord on or before the signature
date of this Lease.
(C) WAIVER OF SUBROGATION. Landlord and Tenant, on behalf of
themselves and their respective insurers, hereby waive any claim or right of
recovery from the other party hereto and its officers, directors, employees,
agents, concessionaires and contractors, for loss or damage to the property
of such party or the property of others under such party's control, to the
extent that such loss is covered by valid insurance policies. Landlord and
Tenant shall provide notice of the waiver of subrogation to their respective
insurers and shall endeavor to cause all applicable insurers to similarly
waive such rights of subrogation.
10. RULES AND REGULATIONS. Tenant and Tenant's agents, employees and
invitees will comply fully with all requirements of the rules and
regulations, especially security requirements, of the Landlord that are
applicable to Building and related facilities. Landlord shall at all times
have the right to change such rules and regulations or to promulgate other
rules and regulations in such manner as may be deemed reasonably advisable
for safety, care or cleanliness of the Building and related facilities or
Leased Premises, and for preservation of good order therein, all of which
rules and regulations, changes and amendments will be forwarded to Tenant in
writing in advance and shall be carried out and observed by Tenant. Tenant
shall be responsible for compliance therewith by the agents, employees, and
invitees of Tenant. Landlord agrees that such rules and regulations (and any
changes thereto as may be permitted hereunder) shall at no time be
discriminatorily created nor discriminatorily applied or enforced among the
various occupants of Building and Landlord further agrees that no such rules
and regulations shall unreasonably interfere in any manner with Tenant's use
of the Leased Premises and Shared Areas as contemplated and permitted under
this Lease. It is agreed that in the event of any conflict or contradiction
between the rules and regulations of the Building and the terms and
conditions of this Lease, the terms and conditions of this Lease shall
control.
11. SECURITY OF THE BUILDING, PROPERTY AND INFORMATION. Tenant and
Tenant's agents, employees and invitees will comply fully with all security
regulations of the premises. Additionally, Tenant will take all reasonable
steps to ensure that its employees, agents and invitees maintain the
confidentiality of any and all proprietary information pertaining to Landlord
and Landlord's business that they might observe through their use of or
access to the Leased Premises and that such persons shall only access the
Leased Premises, Shared Areas and common areas.
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12. INSPECTION. Landlord or its officers, agents and representatives
shall have the right to enter into and upon any and all parts of Leased
Premises at all reasonable hours (or, in any emergency, at any hour) to (a)
inspect same or clean or make repairs or alterations or additions as Landlord
may deem necessary (but without any obligation to do so, except as expressly
provided for herein), or (b) show the Leased Premises to prospective tenants,
purchasers or lenders; and Tenant shall not be entitled to any abatement or
reduction of rent by reason thereof, nor shall such be deemed to be an actual
or constructive eviction. Landlord shall exercise reasonable care so as not
to interfere with Tenant's business operations.
13. CONDEMNATION. If the Leased Premises, or any part thereof, or if
the Building or any portion of the Building, leaving the remainder of the
Building unsuitable for use as an office building comparable to its use on
the Effective Date of this Lease, shall be taken or condemned in whole or in
part for public purposes, or sold in lieu of condemnation, then the Term
shall, at the option of Landlord or Tenant, forthwith cease and terminate;
all compensation awarded for any taking (or sale proceeds in lieu thereof)
shall be the property of Landlord, and Tenant shall have no claim thereto,
the same being hereby expressly waived by Tenant; provided, however, that
Tenant shall be permitted to make a separate claim in any such condemnation
proceeding for any of Tenant's relocation expenses and the taking of any of
Tenant's fixtures, furniture or leasehold improvements or for the value of
the loss of Tenant's leasehold interest. If any such condemnation shall
result in a termination of this Lease, as set forth hereinabove, then the
Basic Rent and all other charges payable by Tenant hereunder will be
apportioned to the date of such termination, and in the event of a partial
condemnation, the Basic Rent will be reduced in the proportion that the
rentable area of the Leased Premises remaining after such taking bears to the
rentable area contained in the Leased Premises before such taking.
14. FIRE OR OTHER CASUALTY. In the event that the Building should be
totally destroyed by fire, tornado or other casualty or in the event the
Leased Premises or the Building should be so damaged that rebuilding or
repairs cannot be completed within ninety (90) days after the date of such
damage, either party hereto may terminate this Lease by delivering written
notice of said termination to the other party within ten (10) days of such
damage, in which event the Basic Rent and all other charges payable by Tenant
hereunder shall be abated during the unexpired portion of this Lease
effective with the date of such damage. In the event the Building or the
Leased Premises should be damaged by fire, tornado or other casualty covered
by Landlord's insurance, but only to such extent that rebuilding or repairs
can be completed within ninety (90) days after the date of such damage, or if
the damage should be more serious but neither party elects to terminate this
Lease, in either such event Landlord shall within thirty (30) days after the
date of such damage commence to rebuild or repair the Building and/or the
Leased Premises and shall proceed with reasonable diligence to restore the
Building and/or Leased Premises to substantially the same condition in which
it was immediately prior to the happening of the casualty, except that
Landlord shall not be required to expend in excess of available insurance
proceeds or rebuild, repair or replace any part of the furniture, equipment,
fixtures and other improvements which may have been placed by Tenant or other
occupants within the Building or the Leased Premises. Landlord shall allow
Tenant a fair diminution of rent during the time the Leased Premises are
unfit for occupancy for their intended purpose. In the event any mortgagee
under a deed of trust, security agreement or mortgage on the Building should
require that the insurance proceeds be used to retire the mortgage debt,
Landlord shall have no obligation to rebuild and this Lease shall terminate
upon notice to Tenant. Except as hereinafter provided, any insurance which
may be carried by Landlord or Tenant against loss
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or damage to the Building or to the Leased Premises shall be for the sole
benefit of the party carrying such insurance and under its sole control.
15. TAXES. Tenant shall be liable for all taxes levied or assessed
against personal property, furniture or fixtures owned and placed by Tenant
in the Leased Premises, and if any such taxes for which Tenant is liable are
in any way levied or assessed against Landlord, Tenant shall pay to Landlord
upon demand that part of such taxes for which Tenant is primarily liable
hereunder.
16. TENANT'S DEFAULT. The following events shall be deemed to be
events of default (herein so called, whether one or more) by Tenant under
this Lease:
(A) Tenant shall fail to pay when due any Basic Rent or other
sums payable by Tenant hereunder and such failure is not cured within thirty
(30) days after written notice of such failure has been delivered to Tenant;
(B) Tenant shall fail to comply with or observe any other
provision of this Lease, and such failure shall continue for a period of
thirty (30) days after written notice of such failure is delivered to Tenant
(or such longer period as is reasonably necessary to cure such failure,
provided that Tenant shall commence the cure of said failure within such
thirty (30) day period and shall continuously and diligently pursue the
remedy of such failure);
(C) Tenant shall make a general assignment for the benefit of
creditors;
(D) Any petition shall be filed by or against Tenant under any
section or chapter of the U.S. Bankruptcy Code, as amended, or under any
similar law or statute of the United States or any State thereof and such
petition is not dismissed or stayed within 90 days following the filing
thereof; or Tenant shall be adjudged bankrupt or insolvent in proceedings
filed thereunder;
(E) A receiver or trustee shall be appointed for all or
substantially all of the assets of Tenant or any guarantor of Tenant's
obligations hereunder, or
(F) Tenant shall desert or vacate the Leased Premises and
Shared Areas in their entirety.
17. REMEDIES UPON TENANT'S DEFAULT. Upon the occurrence of any event of
default specified in this Lease, Landlord shall have the option to pursue any
one or more of the following remedies without any notice or demand whatsoever:
(A) Terminate this Lease in which event Tenant shall
immediately surrender the Leased Premises to Landlord, and if Tenant fails to
do so, Landlord may, without prejudice to any other remedy which it may have
for possession or arrearages in rent, enter upon and take possession of the
Leased Premises and expel or remove Tenant and any other person who may be
occupying said Leased Premises or any part thereof, by applicable legal
process; and Tenant shall be liable to Landlord for all direct damage which
Landlord may suffer by reason of such termination, whether through inability
to relet the Leased Premises on satisfactory terms or otherwise.
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(B) Enter upon and take possession of the Leased Premises and
expel or remove Tenant and any other person who may be occupying the Leased
Premises or any part thereof, by applicable legal process, and if Landlord so
elects, relet the Leased Premises on such terms as Landlord shall deem
advisable and receive the rent therefor; and Tenant shall be liable to
Landlord for any deficiency that may arise by reason of such reletting for
the remainder of the Lease Term.
(C) Enter upon the Leased Premises, by applicable legal
proceedings, and do whatever Tenant is obligated to do under the terms of
this Lease; and Tenant shall be liable to Landlord for any reasonable
expenses which Landlord may incur in thus effecting compliance with Tenant's
obligations under this Lease.
No re-entry or taking possession of the Leased Premises by
Landlord shall be construed as an election on its part to terminate this
Lease, unless a written notice of such intention be given to Tenant. Pursuit
of any of the foregoing remedies shall not preclude pursuit of any of the
other remedies herein provided or any other remedies provided by law, nor
shall pursuit of any remedy herein provided constitute a forfeiture or waiver
of any rent due to Landlord hereunder or of any damages accruing to Landlord
by reason of the violation of any of the terms, provisions and covenants
herein contained. Landlord's acceptance of rent following an event of default
hereunder shall not be construed as Landlord's waiver of such event of
default. No waiver by Landlord of any violation or breach of any of the
terms, provisions, and covenants herein contained shall be deemed or
construed to constitute a waiver of any other violation or default. The loss
or damage that Landlord may suffer by reason of termination pursuant to this
paragraph 17 of this Lease or the deficiency from any reletting as provided
for above shall include the expense of repossession and any repairs
undertaken by Landlord following possession, which repairs are reasonably
necessary to restore the premises to the condition to which they were
delivered to Tenant, reasonable wear and tear and damage by casualty
excepted. Should Landlord at any time terminate this Lease for any default,
in addition to any other remedy Landlord may have, Landlord may recover from
Tenant all damages Landlord may incur by reason of such default, including
the cost of recovering the Leased Premises. Notwithstanding anything to the
contrary set forth in this Lease, it is hereby agreed by Landlord that in no
event shall Tenant have any obligation, responsibility or liability for
payment of any costs or damages as a result of any breach, default or event
of default by Tenant under this Lease other than Landlord's actual and
reasonable damages incurred by reason of any such breach, default or event of
default; and it is thus hereby further acknowledged and agreed by Landlord
that in no event shall Tenant be responsible, obligated or liable in any
manner for any consequential, punitive or incidental damages which might
otherwise be asserted or claimed by Landlord (including, without limitation,
any claims for loss of profits and/or loss of business opportunity), all such
claims or potential claims for anything other than Landlord's actual and
reasonable damages being hereby knowingly, intentionally and voluntarily
waived and released by Landlord for all purposes, and it being further hereby
agreed that Tenant shall in no event be responsible for or obligated to pay
to Landlord any cost of finish work or other tenant inducements provided by
Landlord to or for the benefit of any substitute tenant in connection with a
reletting of all or any part of the Leased Premises.
18. LANDLORD'S DEFAULT/TENANT REMEDIES. Except where the provisions
of this Lease grant Tenant an express, exclusive remedy or deny Tenant a
remedy, if Landlord fails to perform or observe any covenant, term, provision
or condition of this Lease and such default continues beyond a period of ten
(10) days for a monetary default or twenty (20) days for a non-monetary
default (or such longer period as is reasonably necessary to cure such
failure, provided Landlord shall commence the cure of
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such failure within such twenty (20) day period and shall continuously and
diligently pursue the remedy of such failure), after in each instance Tenant
gives written notice specifying in reasonable detail such failure to Landlord
then, in any such event, Tenant shall have the right to commence such actions
at law or in equity to which Tenant may be entitled. If Tenant obtains a
final judgment against Landlord in a court of law or equity awarding Tenant
any damages, Tenant may, in addition and not to the exclusion of any other
methods of collection, offset against any amounts owed Landlord such sums up
to the maximum amount of damages so awarded. The rights and remedies set
forth in this paragraph are cumulative of and in addition to any other rights
or remedies of Tenant set forth in this Lease. The foregoing shall not limit
or impair any rights or remedies of Tenant at law or in equity.
19. SURRENDER OF PREMISES/HOLDING OVER. At the expiration or earlier
termination of this Lease, Tenant shall surrender the Leased Premises to the
Landlord in good condition, broom clean, reasonable wear and tear and damage
by fire or other casualty excepted. Should Tenant remain in possession of
the Leased Premise, or any portion thereof, after the termination of the
Lease (whether by expiration of the Lease or otherwise), Tenant shall be
liable to pay monthly rental at double the rate provided hereunder, as long
as Tenant remains in the Leased Premises. Such tenancy shall be subject to
all terms and conditions of this Lease.
20. ASSIGNMENT. Tenant shall not assign this Lease or any right
hereunder without the prior written consent of Landlord (which consent shall
not be unreasonably withheld, conditioned or delayed). In the event of the
transfer by Landlord of its interest in this Lease or the Leased Premises and
the assumption by the transferee of the Landlord's obligations hereunder,
Landlord shall be released from any further obligations under this Lease, and
Tenant agrees to look solely to Landlord's transferee/successor-in-interest
for performance of the obligations of "Landlord" under this Lease.
21. MECHANICS LIENS. Tenant agrees not to allow any mechanic's lien
to be filed against the Leased Premises or any part of the Building by reason
of any work, labor, services, or materials performed at or furnished to the
Leased Premises to Tenant, or to anyone acting under Tenant, without
obtaining a release or bonding around said mechanic's lien within twenty (20)
days after receiving notice of the existence of any such mechanic's lien.
Tenant will indemnify and hold Landlord harmless of and from any and all
loss, cost, and expense, including reasonable attorneys' fees, incurred by
Landlord as a result of any such mechanic's lien. This provision shall
survive the termination or expiration of this Lease.
22. INDEMNITY. Landlord is not liable to Tenant, Tenant's agents,
employees, guests, invitees, or any person claiming by, through or under
Tenant for any injury to person, loss or damage to property, or loss or
damage to Tenant's business, occasioned by or through the acts or omissions
of Landlord, or any other person, or by any other cause whatsoever unless
caused by the gross negligence or willful misconduct of Landlord, its agents
or employees. Tenant shall indemnify Landlord and save it harmless from all
suits, actions, damages, liability and expense in connection with loss of
life, bodily or personal injury, or property damage arising from or out of
any occurrence in, on, at or from the Leased Premises or from the occupancy
or use by Tenant of the Leased Premises or the Shared Areas or any part
thereof, or occasioned wholly or in part by any action or omission of Tenant,
its agents, contractors, employees, servants, invitees or licensees. If
Landlord shall be made a party to any action commenced by or against Tenant,
then Tenant shall protect and hold Landlord harmless and shall pay all costs,
expenses and reasonable attorney's fees incurred by Landlord.
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23. LIMITATION OF DAMAGES. [TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED]
24. SUBORDINATION. This lease shall be subject and subordinate in
all respects to any present and future mortgage, deed of trust or other
encumbrance that the Landlord may incur on the Building.
25. CONDITION OF PROPERTY. Tenant acknowledges and agrees that the
Leased Premises and the non-exclusive right to use portions of the Shared
Areas are conveyed "AS IS," "WHERE IS" and "WITH ALL FAULTS" (as the Leased
Premises and Shared Areas are currently built out) and that Landlord has not
made, nor does hereby make, any representation, guarantee, promise, agreement
or warranty of any kind whatsoever, whether express or implied, oral or
written, past, present or future, relating to or concerning the nature,
quality or condition of the Leased Premises or the Shared Areas, the income
to be derived therefrom, the suitability of the Leased Premises or the Shared
Areas for the uses allowed under this Lease or the habitability,
merchantability or fitness for a particular purpose.
26. NOTICES. Notices required or permitted hereunder shall be in
writing, and sent to the parties by first class mail, postage prepaid,
certified mail, return receipt requested, or, alternatively, by personal
delivery using an independent third party courier who shall provide
independent proof of such delivery, and in either such case addressed as
follows:
(a) When to Landlord: Sabre Inc.
P.O. Box 619615, MD4221 HDQ
Dallas/Fort Worth Airport, TX 75261-9615
Attn: Vice President Corporate Services
(b) When to Tenant: Travelocity.com LP
4200 Buckingham Rd., MD 1400
Fort Worth, Texas 76155
Attn: General Counsel
27. FORCE MAJEURE. Neither Landlord nor Tenant shall be deemed to be
in breach of this Lease by reason of failure to perform any of its
obligations hereunder to the extent that such performance is delayed by
strikes, boycotts, labor disputes, lockouts, embargoes, shortages of
materials, acts of God, acts of public enemy, acts of governmental authority,
unusual weather conditions, floods, fire, earthquake, riots, rebellion,
sabotage or any other circumstances beyond such party's reasonable control.
28. SEVERABILITY. In the event that any one or more of the
provisions of this Lease shall be determined to be invalid, unenforceable or
illegal, such invalidity, illegality or unenforceability shall not affect any
other provisions of this Lease, and this Lease shall be construed as if such
provision had never been contained herein.
29. INCORPORATION OF PRIOR AGREEMENT; AMENDMENTS. This Lease
constitutes the complete agreement of the parties with respect to the subject
matter contained herein and supersedes all previous agreed provisions. This
Lease may be modified, amended or waived only by a written instrument,
executed by Landlord and Tenant.
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30. NON-RECOURSE LIABILITY. Notwithstanding anything to the contrary
contained in this Lease, Landlord and its successors and assigns shall not
have any personal, partnership, or corporate liability for failure to perform
the obligations and agreements contained in this Lease, and Tenant agrees to
look solely to Landlord's interest in the Building (including any rents,
profits, insurance and condemnation proceeds, proceeds from sale of the
Building or any portion thereof, or any other proceeds therefrom) to satisfy
any judgment, deficiency or otherwise.
31. GOVERNING LAW. This Lease shall be governed by the laws of the
State of Texas.
32. COUNTERPARTS. This Lease may be executed in separate
counterparts, each of which when executed and delivered shall be an original,
but such counterparts shall together constitute one and the same instrument.
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<PAGE>
WITNESS the signatures of the parties as of the date first above
written.
LANDLORD:
Sabre Inc.
By: /s/ Mike Baker
----------------------------------------
Name: Mike Baker
Title: Vice President Corporate Services
Sabre Inc.
TENANT:
Travelocity.com LP
By: Travelocity Holdings, Inc.,
its general partner
By: /s/ Andrew B. Steinberg
----------------------------------------
Name: Andrew B. Steinberg
-----------------------------------
Title: Corporate Secretary, Sr. V.P. and
General Counsel
----------------------------------
11
<PAGE>
EXHIBIT "A"
The building commonly known as CentrePort I, having a street address of 42000
Buckingham Road, Fort Worth, Texas 76155
<PAGE>
EXHIBIT "B"
<PAGE>
EXHIBIT "C"
BASIC RENT
Rent and expenses shall be charged to Tenant at the yearly rate of
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED] (the standard work area
historically allocated to an individual employee prior to the date of this
Lease) as calculated by using depreciation, maintenance, operational and
capital costs. Sabre shall reserve space for [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED]beginning with the commencement of the Lease. Upon
request by Tenant, Landlord shall use its reasonable efforts to provide
additional space in the Building at the above-mentioned specified per
position rate. Any additional rent, for positions that exceed the
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]threshold, shall be
reconciled once every quarter.
Minimum Monthly Basic Rent: [TEXT OMITTED -
CONFIDENTIAL TREATMENT REQUESTED]
The Basic Rent for the foregoing shall be payable in equal monthly payments
in accordance with Paragraph 4 of the Lease. The additional rent for any
positions that exceed the basic monthly rent shall be reconciled quarterly
and paid within [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED] of written
notice by Landlord.
The amount of Basic Rent may be recalculated and adjusted annually to reflect
actual costs incurred by Landlord for capital improvements, maintenance,
operations (including property taxes) and depreciation. Any additional costs
charged to Tenant shall be calculated and charged using the methodology
utilized by Landlord prior to the date of this Lease.
<PAGE>
CONFIDENTIAL
THIS AGREEMENT HAS CONFIDENTIAL PORTIONS OMITTED, WHICH PORTIONS HAVE
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. OMITTED
PORTIONS ARE INDICATED IN THIS AGREEMENT WITH
"[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]."
NONCOMPETITION AGREEMENT
This Noncompetition Agreement (this "Agreement") is made as of March 7,
2000 by and among Sabre Holdings Corporation, a Delaware corporation ("Sabre
Holdings"), Sabre Inc., a Delaware Corporation ("Sabre"), Travelocity.com
Inc., a Delaware corporation ("Travelocity.com") and Travelocity.com LP, a
Delaware limited partnership ("Travelocity.com LP", together with
Travelocity.com, the "Company").
WHEREAS, Travelocity.com is a party to the Agreement and Plan of Merger
dated October 3, 1999 (the "Merger Agreement") by and among Travelocity.com,
Sabre, Travelocity Holdings, Inc. and Preview Travel, Inc. ("Preview");
WHEREAS, Preview is merging with and into Travelocity.com as of the date
hereof pursuant to the Merger Agreement (the "Merger");
WHEREAS, as a condition to the Merger, Sabre Holdings and Sabre agreed
to enter into a noncompetition agreement on the terms described herein;
WHEREAS, the Company will conduct the Travelocity Business (as defined
below) after the Merger that Sabre formerly conducted through its Travelocity
division; and
WHEREAS, Sabre believes that in order to promote and protect the
Travelocity Business (as defined below), it is in the best interests of Sabre
Holdings, as the common parent of Sabre and the Company, to restrict, in
certain respects, the ability of Sabre and other Sabre subsidiaries as
provided herein to compete with the Travelocity Business.
NOW THEREFORE, in exchange for good and valuable consideration, the
sufficiency and receipt of which is hereby acknowledged, the parties agree as
follows:
1. DEFINITIONS. As used in this Agreement, the following terms have
the following meanings:
"COMPETE" means to engage in the Travelocity Business anywhere in the
world.
<PAGE>
"CONTROL" means: (i) owning or having the right to acquire, directly or
indirectly, at least 20% of the equity interests of any Person; and (ii)
having effective control, by contract or otherwise, of the management,
governance and activities of such Person.
"GOVERNMENTAL AUTHORITY" means any (a) nation, state, county, city,
town, village, district, or other jurisdiction of any nature; (b) federal,
state, local, municipal, foreign, or other government; (c) governmental or
quasi-governmental authority of any nature (including any governmental
agency, branch, department, official, or entity and any court or other
tribunal); (d) multi-national organization or body; or (e) body exercising,
or entitled to exercise, any administrative, executive, judicial,
legislative, police, regulatory, or taxing authority or power of any nature.
"PERSON" means any individual, corporation, limited liability company,
partnership, firm, joint venture, association, joint-stock company, trust,
estate, unincorporated organization, Governmental Authority or other entity.
"TRAVELOCITY BUSINESS" means the offering of real time travel-related
reservations, services and content directly to consumers through a
travel-related Internet site generally available to all Internet users.
2. NONCOMPETITION. Except as otherwise provided in Section 3, Sabre
Holdings and Sabre each agrees for a period of two (2) years from the date
hereof (the "Term") not to (a) Compete with the Travelocity Business or (b)
Control a Person who Competes with the Travelocity Business.
3. EXCEPTIONS. Notwithstanding Section 2 hereof, Sabre Holdings,
Sabre or a Person Controlled by Sabre Holdings or Sabre may:
(a) offer travel related reservations, services and content
through and to travel agencies, corporations and travel suppliers, through
which such entities enable consumers to book reservations via the Internet,
such as through Sabre's "Web Reservations" business and "Business Travel
Solutions" products;
(b) offer Sabre's "Virtually There Online" product directly to
consumers over the Internet, as long as such product does not enable air,
car, hotel, tour or cruise bookings (other than through Travelocity.com or
Travelocity.com LP); and
(c) acquire Control of any Person which conducts a business that
Competes with the Travelocity Business as long as Sabre Holdings or a Person
Controlled by Sabre Holdings uses reasonable efforts to divest itself of the
portion of such Person's business that Competes with the Travelocity Business
within one (1) year of the time that Control of such Person was acquired,
regardless of whether such one-year period extends beyond the Term.
2
<PAGE>
4. REPRESENTATIONS. Sabre Holdings and Sabre each agree and
acknowledge that:
(a) the enforcement of the noncompetition provisions of this
Agreement would not be unduly burdensome;
(b) the noncompetition covenants of this Agreement were negotiated
as part of, in consideration of, and were considered an essential part of,
the Merger Agreement and the other agreements relating to the separation of
the Travelocity division's business from Sabre, and that the Company relied
on those covenants in entering into those agreements; and
(c) the restrictions regarding the scope of activities, duration,
and geographic area that are part of this Agreement are reasonable and do not
impose a greater restraint on it than is necessary to protect the goodwill
and other business interests of the Company.
5. MISCELLANEOUS.
(a) GOVERNING LAW. This Agreement will be governed by, and
construed and interpreted under, the laws of Texas without regard to any
conflicts of law rules.
(b) ALTERNATIVE DISPUTE RESOLUTION. Any dispute will be resolved
in accordance with the alternative dispute resolution procedures set forth in
SCHEDULE A to this Agreement ("ADR Procedures"). Notwithstanding the
foregoing, and subject to Section 5(c) below, this section shall in no way
affect the right of any party to seek such interim relief, and only such
relief as may be required to maintain the status quo in aid of the
alternative dispute resolution procedures in any court of competent
jurisdiction.
(c) REMEDIES. If Sabre Holdings, Sabre or any Person Controlled
by Sabre Holdings or Sabre breaches or threatens to commit a breach of any of
the provisions of Section 2 hereof, the Company shall have the right and
remedy to specific performance of this Agreement or an injunction issued by
any court of competent jurisdiction restraining any breach or violation, or
future or continued breach or violation, of this Agreement, it being
acknowledged and agreed that any breach or threatened breach of this
Agreement will cause irreparable injury to the Company and money damages will
not provide an adequate remedy to the Company. The rights set forth in this
Section 5(c) shall be cumulative of, and not in lieu of, any other rights or
remedies to which the Company may also be entitled including, but not limited
to, the recovery of damages from Sabre Holdings. So long as Sabre owns fifty
percent (50%) or more of the Travelocity.com LP's equity interests, specific
enforcement shall be sought first in accordance with the ADR Procedures.
(d) CHOICE OF FORUM. For any actions to enforce arbitral awards
issued in accordance with SCHEDULE A to this Agreement or to enforce the
parties' compliance with the ADR Procedures in SCHEDULE A to this Agreement,
each party consents to the exclusive jurisdiction of the competent courts in
Fort Worth, Texas, U.S.A. Each party irrevocably waives any objection it may
now or hereafter have as to the venue of any such action or proceeding
brought in any such court or that such court is an inconvenient forum. Each
party hereby waives
3
<PAGE>
personal service of process and consents that service of process upon it may
be made by certified or registered mail, return receipt requested, at its
address specified or determined in accordance with Section 5(e). Nothing
herein will affect the right to serve process in any other manner permitted
by law.
(e) NOTICES. Any notice or communication required or permitted to
be given or made to a party under this Agreement must be typed in English and
personally delivered to the office of the person identified below or
delivered by registered mail with confirmed receipt (postage prepaid) or air
courier or by telex, facsimile, cable, or telegram with confirmation copy
dispatched simultaneously by registered mail (or airmail if overseas) with
confirmed receipt (postage prepaid) to the following addresses:
If to Sabre Holdings:
Sabre Holdings Corporation
MD 4204
4255 Amon Carter Boulevard
Fort Worth, Texas 76155
URGENT ATTN: General Counsel
Telecopy: 817-967-1215
If to Sabre:
Sabre Inc.
MD 4204
4255 Amon Carter Boulevard
Fort Worth, Texas 76155
URGENT ATTN: General Counsel
TELECOPY: 817-967-1215
IF TO COMPANY:
TRAVELOCITY.COM LP
4200 BUCKINGHAM BOULEVARD
POST OFFICE BOX 1400
FORT WORTH, TEXAS 76155
ATTENTION: General Counsel
Telecopy: 817-963-8869
Notices delivered in the foregoing manner will be deemed effective on (i) the
day received if delivered personally or sent by courier; (ii) the business
day at the location of the recipient following the day received if sent by
facsimile, cable, telex or diagram, or (iii) the fourteenth (14th) day
following the date of dispatch by registered mail.
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<PAGE>
(f) TITLES AND CAPTIONS. All article and section titles or
captions in this Agreement are for convenience only. They will not be deemed
part of this Agreement and in no way define, limit, extend, or describe the
scope or intent of any of their provisions.
(g) BINDING EFFECT; ASSIGNMENT. This Agreement will be binding
upon and inure to the benefit of the parties and their successors and
permitted assigns. Neither party may assign this Agreement without the prior
written consent of the other.
(h) INTEGRATION. This Agreement and the attachments hereto
constitute the entire agreement of the parties pertaining to their subject
matter and supersede all prior agreements and understandings pertaining to
that subject matter, and this Agreement may not be amended, supplemented, or
rescinded, except in writing and signed by the authorized representatives of
each of the parties.
(i) WAIVER. A waiver of a breach or other non-performance of any
covenant, duty, agreement, or condition of this Agreement will not be
asserted against a party unless such waiver is in writing and signed by such
party. Failure by any party to insist upon the strict performance of or to
exercise any right or remedy consequent upon the breach of any covenant,
duty, agreement, or condition of this Agreement will not constitute a waiver
of that or any other failure to perform or breach of that or any other
covenant, duty, agreement, or condition. No waiver of a breach of any
provision of this Agreement by either party will constitute a waiver of any
subsequent breach of the same or any other provision thereof;
(j) MULTIPLE ORIGINALS. This Agreement may be executed in
counterparts or multiple originals, all of which together will constitute one
agreement binding on each party.
(k) INVALIDITY OF PROVISIONS/BLUE PENCILING. If any provision of
this Agreement is or becomes wholly or partly invalid, illegal or
unenforceable, the validity, legality, and enforceability of the remaining
provisions will continue in force unaffected, and the parties will meet as
soon as possible and negotiate in good faith upon a replacement provision
that is legally valid and that as nearly as possible achieves the objectives
of this Agreement and produces an equivalent economic effect. A replacement
provision will apply as of the date that the replaced provision had become
invalid, illegal, or unenforceable. If the parties cannot reach agreement
after good faith negotiations, a party may invoke the ADR Procedures, and the
arbitrators will have the authority to determine a replacement provision that
is legally valid and that as nearly as possible achieves the objectives of
this Agreement and produces an equivalent economic effect; PROVIDED, HOWEVER,
that such determination may not materially increase the payment or
performance obligations of either party. If any court or arbitration panel
determines that any limitation regarding the scope of any activity restricted
herein, or the duration and geographic area of the restrictions herein is
unenforceable, then this Agreement shall not be invalidated, but shall be
amended to the extent required to render it valid and enforceable.
5
<PAGE>
IN WITNESS WHEREOF, this Agreement is entered into as of the date and
year first above written.
SABRE HOLDINGS CORPORATION
By: /s/ Jeffrey M. Jackson
------------------------------------
Name: Jeffrey M. Jackson
Title Executive V.P., CFO and Treasurer
SABRE INC.
By: /s/ Jeffrey M. Jackson
------------------------------------
Name: Jeffrey M. Jackson
Title Sr. V.P. and CFO
TRAVELOCITY.COM INC.
By: /s/ Terrell B. Jones
------------------------------------
Name: Terrell B. Jones
Title President and CEO
TRAVELOCITY.COM LP
By: /s/ Andrew B. Steinberg
------------------------------------
Name: Andrew B. Steinberg
Title Sr. V.P., General Counsel and
Corporate Secretary of Travelocity
Holdings, Inc., its General
Partner
6
<PAGE>
SCHEDULE A: DISPUTE RESOLUTION PROCEDURES
1. CERTAIN DEFINITIONS
This Section 1 sets forth certain definitions used in this Dispute Resolution
Process. Other capitalized terms used but not defined here in have the meanings
ascribed to them in the Agreement.
ARBITRATION RULES
The rules of the American Arbitration Association ("AAA") in effect on the date
of the commencement of the arbitration.
QUALIFICATIONS
Having extensive knowledge or experience, or both, regarding information
technology services, and fluent in English.
2. DISPUTE RESOLUTION PROCEDURE.
(a) GENERAL PROCEDURE.
The Parties shall resolve all Disputes in accordance with this
procedure:
(i) Disputes shall first be submitted to each Party's principal
manager ("Account Manager") of the contract relationships
between the Parties, as indicated in Section 3 of this Schedule.
(ii) If a Dispute is not resolved by the Account Managers, then
either Party may submit the Dispute to mediation as outlined in
Section 4 of this Schedule.
(iii) If a Dispute is not resolved by mediation, then either Party may
submit the Dispute to binding arbitration in accordance with
Section 5 of this Schedule.
A referral under either Section 2(a)(ii) and/or 2(a)(iii) of this
Schedule shall be made by written notice to the Account Managers.
That notice shall be in a form mutually agreed to by the Account
Managers or an electronic mail message and addressed to each Account
Manager at his or her office address or electronic mail address; each
notice shall be given and effective upon actual receipt.
3. DISPUTE RESOLUTION.
The term "Dispute" means any dispute, claim or controversy of any kind arising
under or in connection with this Agreement. If a Party believes that a Dispute
has occurred, then it may notify the other Party of the existence of the
Dispute. Immediately after receipt of such notice, the Account Managers of the
Parties shall meet, and act in good faith, to attempt to resolve the Dispute.
If the Account Managers are not able to resolve the Dispute within [TEXT OMITTED
- - CONFIDENTIAL TREATMENT REQUESTED] of notice of such Dispute, then either Party
may submit the Dispute to mediation as outlined in Section 4 of this Schedule.
4. MEDIATION.
The mediation of an unresolved Dispute shall be conducted in this manner:
(a) Either Party may submit the Dispute to mediation by giving notice of
mediation to the other Party. The Parties shall attempt to agree
promptly after that notice is given upon and appoint a sole mediator
who has the Qualifications.
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<PAGE>
(b) If the Parties are unable to agree upon a mediator within [TEXT
OMITTED - CONFIDENTIAL TREATMENT REQUESTED] after the date the Dispute
is submitted to mediation, either Party may request the Dallas, Texas
office of the AAA to appoint a mediator who has the Qualifications.
The mediator so appointed shall be deemed to have the Qualifications
and to be accepted by the Parties.
(c) The mediation shall be conducted in Dallas, Texas at a place and a
time agreed by the Parties with the mediator, or if the Parties cannot
agree, as designated by the mediator. The mediation shall be held
within [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED] after the
mediator is appointed.
(d) If either Party has substantial need for information from the other
Party in order to prepare for the mediation, the Parties shall attempt
to agree on procedures for the formal exchange of information; if the
Parties cannot agree, the mediator's determination shall be effective.
(e) Each Party shall be represented in the mediation by a natural person
with authority to settle the Dispute on behalf of that Party and, if
desired by that Party, by counsel for that Party. The Parties'
representatives in the mediation shall continue with the mediation as
long as the mediator requests.
(f) Unless otherwise agreed by the Parties, each Party shall pay one-half
of the mediator's fees and expenses and shall bear all of its own
expenses in connection with the mediation. Neither Party may employ
or use the mediator as a witness, consultant, expert, or counsel
regarding the Dispute or any related matters.
5. ARBITRATION.
The arbitration of an unresolved Dispute shall be conducted in this manner:
(a) Either Party may begin arbitration by filing a demand for arbitration
in accordance with the Arbitration Rules. The Parties shall attempt
to agree upon and appoint a panel of three (3) arbitrators promptly
after that demand is filed. Each of those arbitrators must have the
Qualifications unless otherwise agreed by both Parties.
(b) If the Parties are unable to agree upon any or all of the arbitrators
within [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED] after the
demand for arbitration was filed (and do not agree to an extension of
that ten-day period), then each Party shall designate one arbitrator
with Qualifications and the AAA shall designate a third, if possible,
with Qualifications; nevertheless, such arbitrator so appointed shall
be deemed to have the Qualifications and to be accepted by the Parties
as part of the panel.
(c) The arbitration shall be conducted in Dallas, Texas at a place and a
time agreed by the Parties with the panel, or if the Parties cannot
agree, as designated by the panel. The panel may, however, call and
conduct hearings and meetings at such other places as the Parties may
agree or as the panel may, on the motion of one Party, determine to be
necessary to obtain significant testimony or evidence.
(d) The Parties shall attempt to agree upon the scope and nature of any
discovery for the arbitration. If the Parties do not agree, the panel
may authorize any and all forms of discovery, including depositions,
interrogatories, and document production, upon a showing of
particularized need that the requested discovery is likely to lead to
material evidence needed to resolve the Dispute and is not excessive
in scope, timing, or cost.
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<PAGE>
(e) The arbitration shall be subject to the Federal Arbitration Act and
conducted in accordance with the Arbitration Rules to the extent they
do not conflict with this Section 5. The Parties and the panel may,
however, agree to vary the provisions of this Section 5 or the matters
otherwise governed by the Arbitration Rules.
(f) The panel has no power to:
(i) rule upon or grant any extension, renewal, or continuance of the
Agreement;
(ii) award remedies or relief either expressly prohibited by the
Agreement or under circumstances not permitted by the Agreement;
or
(iii) grant provisional or temporary injunctive relief before
rendering the final decision or award.
(g) Unless the Parties otherwise agree, all Disputes regarding or related
to the same topic or event that are subject to arbitration at one time
shall be consolidated in a single arbitration proceeding.
(h) A Party or other person involved in an arbitration under this Section
5 may join in that arbitration any person other than a Party if:
(i) the person to be joined agrees to resolve the particular dispute
or controversy in accordance with this Section 5 and the other
provisions of this Schedule applicable to arbitration; and
(ii) the panel determines, upon application of the person seeking
joinder, that the joinder of that other person will promote the
efficiency, expedition, and consistency of the result of the
arbitration and will not unfairly prejudice any other Party to
the arbitration.
(i) The arbitration hearing shall be held within [TEXT OMITTED -
CONFIDENTIAL TREATMENT REQUESTED] after the appointment of the panel.
Upon request of either Party, the panel shall arrange for a
transcribed record of the arbitration hearing, to be made available to
both Parties.
(j) The panel's final decision or award shall be made within [TEXT OMITTED
- CONFIDENTIAL TREATMENT REQUESTED] after the hearing. That final
decision or award shall be made by unanimous or majority vote or
consent of the arbitrators constituting the panel, shall be deemed
issued at the place of arbitration and shall be made in U.S. dollars.
The panel shall issue a reasoned written final decision or award based
on the Agreement and Texas law; the panel may not act according to
equity and conscience or as an amicable compounder or apply the law
merchant.
(k) The panel's final decision or award may include:
(i) recovery of general damages to the extent permitted by the
Agreement (but not consequential, exemplary or punitive
damages); or
(ii) injunctive relief in response to any actual or threatened breach
of the Agreement or any other actual or threatened action or
omission of a Party under or in connection with the Agreement.
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<PAGE>
(l) The panel's final decision or award shall be final and binding upon
the Parties, and judgment upon that decision or award may be entered
in any court having jurisdiction over either or both of the Parties or
their respective assets. The Parties specifically waive any right
they may have to apply or appeal to any court for relief from the
preceding sentence or from any decision of the panel made, or any
question of law arising, before the final decision or award; and the
Parties shall not dispute nor question the validity of such award
before any regulator or other authority in any jurisdiction where
enforcement action is taken by the Party or Parties in whose favor the
award was rendered. If any decision by the panel is vacated for any
reason, the Parties shall submit that Dispute to a new arbitration in
accordance with this Section 5.
(m) Each Party shall pay one-half of the arbitrators' fees and expenses,
and shall bear all of its own expenses in connection with the
arbitration. The panel has the authority, however, to award recovery
of all costs and fees (including attorneys' fees, administrative fees
and the panel's fees and expenses) to the prevailing Party in the
arbitration.
6. RECOURSE TO COURTS.
Nothing in this Schedule limits the right of either Party to apply to a court or
other tribunal having jurisdiction to:
(a) enforce this Schedule, including the agreement to arbitrate in this
Schedule;
(b) seek provisional or temporary injunctive relief, in response to an
actual or impending breach of the Agreement or otherwise so as to
avoid irreparable damage or maintain the status quo, until a final
arbitration decision or award is rendered or the Dispute is otherwise
resolved; or
(c) challenge or vacate any final arbitration decision or award that does
not comport with Section 5 of this Schedule.
7. SUBMISSION TO JURISDICTION.
Each Party irrevocably submits to the jurisdiction of the federal courts of the
United States and the state courts of Texas located in Fort Worth. Each Party
waives any defense or challenge to that jurisdiction based on lack of personal
jurisdiction, improper venue, or inconvenience of forum.
8. CONFIDENTIALITY.
The proceedings of all negotiations, mediations, and arbitrations shall be
privately conducted. The Parties shall keep confidential all conduct,
negotiations, documents, decisions, and awards in connection with those
proceedings under this Schedule.
9. EXCLUSIVE REMEDY.
Other than those matters involving injunctive or other extraordinary relief
or any action necessary to enforce the award of the arbitrator, the Parties
agree that the provisions of this Schedule are a complete defense to any
suit, action or other proceeding instituted in any court or before any
administrative tribunal with respect to any Dispute.
10. OTHER.
(a) U.N. CONVENTION.
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The enforcement of any arbitral award will be in accordance with and
governed by the United Nations Convention on the Recognition and
Enforcement of Foreign Arbitral Awards.
(b) LANGUAGE.
Negotiations, mediations and arbitrations will be conducted in the English
language.
11
<PAGE>
CONFIDENTIAL
THIS AGREEMENT HAS CONFIDENTIAL PORTIONS OMITTED, WHICH PORTIONS HAVE BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. OMITTED
PORTIONS ARE INDICATED IN THIS AGREEMENT WITH "[TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED]."
SABRE ACCESS AGREEMENT
This Sabre Access Agreement (this "AGREEMENT") is made as of March 7,
2000, by and between Sabre Inc., a Delaware corporation ("SABRE"), and
Travelocity.com LP, a Delaware limited partnership ("CUSTOMER").
RECITALS
A. Sabre developed, owns and operates the Sabre System and offers, directly
and through Sabre Licensees, access and use of Licensed Sabre Functions.
B. Customer desires to receive a license to access and use the Licensed Sabre
Functions, and to market and provide access to the Licensed Sabre Functions
to Customer's End Users upon the terms and conditions contained in this
Agreement.
C. Sabre is willing to grant such a license to Customer upon the terms and
conditions contained in this Agreement.
In consideration of the foregoing, the mutual covenants and agreements of the
Parties contained herein, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties to this Agreement
hereby agree as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
SECTION 1.1 DEFINITION APPENDIX. Capitalized terms used herein and not
otherwise defined will have the meaning given to them in the Definition Appendix
attached to this Agreement as ANNEX A. The Rules of Interpretation set forth in
the Definition Appendix attached to this Agreement as ANNEX A will also apply to
this Agreement.
ARTICLE 2
LICENSE TO USE AND MARKET LICENSED SABRE FUNCTIONS
SECTION 2.1 GRANT OF LICENSE. Subject to the terms and conditions of
this Agreement, Sabre hereby grants to Customer for the term of this
Agreement, the non-exclusive, non-transferable (other than as provided
herein) right and license to access and use the Licensed Sabre Functions in
order to market, support and deliver the access to Licensed Sabre Functions
to End Users.
SECTION 2.2 DIRECT BOOKING LIMITATION. In the event Customer
provides direct reservation capabilities with Vendors or provides Bookings
through another GDS, as permitted by this Agreement, all messages relating to
such direct reservations (including pricing and availability) and Bookings
must go directly through such Vendors' systems or the other GDS and not
through the Sabre System.
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CONFIDENTIAL
SECTION 2.3 SABRE NOT RESTRICTED. The Parties acknowledge and agree
that nothing set forth in this Agreement prohibits, restricts or otherwise
impairs the right and ability of Sabre and/or its Affiliates to market,
offer, license, sublicense, distribute and provide access to Licensed Sabre
Functions to any Persons. This acknowledgement and agreement does not,
however, supersede the covenants and agreements contained in the
Noncompetition Agreement dated March 7, 2000, between Sabre Holdings
Corporation, Sabre, Travelocity.com Inc., and Customer.
SECTION 2.4 DISPLAY OF SABRE SYSTEM. Subject to Customer's
compliance with any applicable law, rule or regulation, Customer may display
the content from the Licensed Sabre Functions in the manner determined by
Customer, provided that Sabre is not required to make any modifications or
changes, or otherwise take any action, to enable or maintain Customer's
display of such content.
ARTICLE 3
EXCLUSIVITY
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
ARTICLE 4
IMPLEMENTATION
SECTION 4.1 IMPLEMENTATION. Sabre will provide Customer with such
services in connection with implementation of the Licensed Sabre Functions as
are from time to time mutually agreed in writing between Sabre and Customer.
ARTICLE 5
OWNERSHIP OF GDS
SECTION 5.1 OWNERSHIP OF SABRE SYSTEM. Other than the License
granted herein or as otherwise agreed upon by the Parties in writing,
Customer will not acquire under this Agreement, nor identify itself as the
owner of, any right, title or interest in or to the Sabre System, the
Licensed Sabre Functions, the software, hardware, Databases or communications
facilities utilized in operating the Sabre System, Confidential Information
of Sabre or its Affiliates, the Sabre Marks or any intellectual property
rights associated with any of the foregoing. Nothing in this Agreement will
be interpreted as expanding the scope of the License granted in SECTION 2.1
and no additional license will be effective unless and until a separate
written agreement is signed by the Parties identifying in detail the software
program or programs to be licensed and the license fee therefor. The
limitations contained in this SECTION 5.1 do not limit the license rights
which Customer may receive in certain Sabre Enhancements pursuant to SECTION
4.5 of the Information Technology Services Agreement or pursuant to any other
agreement between the Parties.
ARTICLE 6
CERTAIN SABRE RESPONSIBILITIES
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Sabre agrees to perform the following duties and responsibilities, in
addition to those duties and responsibilities required of it elsewhere in
this Agreement:
SECTION 6.1 PROMOTION MATERIALS. Sabre will provide Customer upon
request with English language versions of existing Sabre sales, advertising,
promotional, and training materials regarding the Licensed Sabre Functions,
which materials will be provided free of charge, so long as Customer does not
request such materials in unreasonable quantity.
SECTION 6.2 CUSTOMER ASSISTANCE. Sabre will provide diagnostic
assistance and resolutions to Customer line control personnel for
communications problems and to Customer data processing personnel for
Licensed Sabre Functions problems. All assistance and problem resolution
will be provided and made available according to Sabre's then-current
customer assistance procedures and availability for its Sabre Licensees
generally.
SECTION 6.3 OPERATIONS AND MAINTENANCE. Sabre will use commercially
reasonable efforts to accomplish all transaction processing, security,
maintenance and other services hereunder in accordance with the performance
standards and procedures established by Sabre from time to time for Sabre's
operations as used by Sabre Licensees generally.
SECTION 6.4 PNR SECURITY. Sabre will maintain in effect and enforce
PNR security policies and procedures which ensure that the PNR security
aspects of the Sabre System with respect to PNRs generated by Customer's End
Users comply with all applicable governmental rules and regulations. Sabre
will retain records of the PNRs created by Customer's End Users for a minimum
period (after the last Segment Activity Date in such PNR) consistent with
Sabre's customary practices, or for such longer period as may be required by
any applicable law, regulation or code.
SECTION 6.5 COMPATIBILITY. Sabre may establish standards, formats and
specifications (consistent with those established for other Sabre customers)
from time to time for any hardware or software to be connected to the Sabre
Central Site or otherwise used in conjunction with the Licensed Sabre
Functions. Sabre will provide Customer with prior written notice of any
changes or modifications of the required standards, formats and
specifications.
SECTION 6.6 CUSTOMER INSTRUCTORS AND MANAGEMENT. From time to time
Sabre will provide training to Customer's relevant training personnel engaged
in the distribution of the Licensed Sabre Functions, such training to be
carried out at mutually acceptable times and at Sabre's headquarters' in the
U.S.A. Customer may request Sabre to conduct such training at Customer's
location subject to Sabre's approval, provided that Customer will be
responsible for all reasonable travel, accommodation, and incidental expenses
incurred by the Sabre trainers.
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
ARTICLE 7
CERTAIN CUSTOMER RESPONSIBILITIES
SECTION 7.1 MARKETING RESPONSIBILITY.
7.1.1 SABRE SYSTEM REFERRALS. In consideration for Sabre's payment
to the Customer of the PNR Referral Payments, Customer will use its reasonable
efforts to maintain a system on Customer's websites that enable referrals of its
End Users' PNRs on the Sabre System
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to Sabre travel agencies for ticketing. [TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED]
7.1.2 ATTRIBUTION. Subject to the terms and conditions of
ARTICLE 9, Customer will provide the Sabre with the attribution provided on
ANNEX C.
Section 7.2 MISUSE. Customer shall take all reasonable precautions
necessary to prevent unauthorized operation or misuse of the Sabre System,
including Speculative Bookings, Shell Bookings, reservation of space in
anticipation of demand, or improper record or access. Further, Customer
shall not enter or permit End Users to enter any Prohibited Segments into the
Sabre System. Customer will remove Travel Service Segments from the Sabre
System should Customer become aware that corresponding space is canceled
direct via telephone with the Vendor.
SECTION 7.3 RESPONSIBILITIES FOR COMMUNICATIONS NETWORKS. Customer
will be responsible for installing, operating and maintaining the Customer
Communications Network (including communication line circuits and equipment).
Customer may satisfy this responsibility by performing such functions
directly, or through contracts with third party service providers, including
Sabre.
SECTION 7.4 CUSTOMER SOFTWARE AND HARDWARE. Customer will be
responsible for obtaining, creating and maintaining all software and hardware
required to enable communications with the Sabre Central Site and to
otherwise enable End Users to access and use the Licensed Sabre Functions,
all in accordance with Sabre's then-current standards, formats and
specifications. Customer may elect to purchase from Sabre (or its suppliers),
at Sabre's then-current prices and terms, hardware and data lines required by
Customer to access and use the Licensed Sabre Functions. Customer agrees
that its continued right to maintain the connection with the Sabre Central
Site is dependent upon Customer's full cooperation with requests by Sabre
(which shall be administered reasonably among Sabre's customers and without
discriminating against Customer) to repair, alter, modify, or where
necessary, de-install any component that Sabre reasonably determines is
impairing the Sabre System or another Person's access to or operation of the
Sabre System.
ARTICLE 8
SABRE ENHANCEMENTS
SECTION 8.1 SABRE ENHANCEMENTS. Sabre may from time to time create
Sabre Enhancements. Such Sabre Enhancements may be implemented at Sabre's
sole discretion, provided that they do not materially and negatively affect
the Licensed Sabre Functions. Sabre will notify Customer, not later than the
disclosure of such Sabre Enhancement to other Sabre Licensees, regarding any
Sabre Enhancements which Sabre may from time to time propose. Sabre will,
from time to time, consult with Customer and keep Customer advised of the
status of the development of Sabre Enhancements. Customer may provide Sabre
with recommendations regarding Sabre Enhancements and functionality needed
for the Licensed Sabre Functions to be competitive with other GDS's.
Customer additionally shall have the right to require Sabre to develop Sabre
Enhancements, pursuant to the terms of the Information Technology Services
Agreement.
ARTICLE 9
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TRADEMARKS
SECTION 9.1 OWNERSHIP OF SABRE MARKS. Customer acknowledges and
covenants that (i) Customer will not acquire any right, title or interest in
the Sabre Marks except as specifically provided in SECTION 9.2, (ii) Customer
may not contest or challenge the validity of the Sabre Marks, or their
registration or ownership by Sabre or its Affiliates, and (iii) the use of
the Sabre Marks by Customer, and any goodwill arising by reason of such use,
will inure to the benefit of Sabre. In no circumstances will Sabre be liable
to make any payment on account of any alleged inurement of such goodwill to
Sabre.
SECTION 9.2 LICENSE OF SABRE MARKS. Subject to the terms and
conditions of this Agreement, Sabre hereby grants to Customer for the term of
this Agreement the non-exclusive, non-transferable (other than as provided
herein) right and license to use and publish the Sabre Marks in conjunction
with marketing the Licensed Sabre Functions in accordance with the terms and
conditions of this Agreement.
SECTION 9.3 USE OF SABRE MARKS. Customer will use the name "Sabre"
and the Sabre Marks only in the formats approved by Sabre. Customer will not
append any Customer trade name or logo to any Sabre Mark or use any variation
from the Sabre Marks without Sabre's prior written approval which may be
withheld in Sabre's sole discretion.
SECTION 9.4 APPROVAL OF USE. If Customer desires to use the Sabre
Marks, it must first submit samples of the proposed use to Sabre for Sabre's
prior written approval. In any event, if required by Sabre, the approved use
of the Sabre Marks must include, at a minimum, in reasonably legible typeface
the phrase: "Sabre" (or other relevant Sabre Mark) is a registered trademark
of an affiliate of Sabre Inc." or such other notices or legends of
identification of the ownership of the published Sabre Marks as are required
by Sabre.
SECTION 9.5 INFRINGEMENT. Customer will notify Sabre immediately upon
becoming aware of (i) any actual or threatened infringement of the Sabre
Marks, (ii) any publication or registration of a trademark or service mark of
which Customer becomes aware and which is likely to be confusingly similar to
any Sabre Marks, and (iii) any notice, claim or threatened claim based upon
infringement by Customer of the rights of a third party arising out of the
use by Customer of the Sabre Marks.
SECTION 9.6 NO WARRANTY. SABRE MAKES NO REPRESENTATION OR WARRANTY
WITH RESPECT TO THE SABRE MARKS. NOTWITHSTANDING ANY PROVISION TO THE
CONTRARY, SABRE WILL NOT BE LIABLE FOR ANY INFRINGEMENT OF A THIRD PARTY'S
RIGHTS RESULTING FROM CUSTOMER'S USE OF THE SABRE MARKS IN A MANNER THAT IS
INCONSISTENT WITH THE LIMITATIONS ESTABLISHED IN THIS AGREEMENT.
SECTION 9.7 CUSTOMER TRADEMARKS. Customer authorizes Sabre to use
Customer Marks solely for the purpose of listing Customer as a Sabre Customer
and to otherwise promote the fact that Customer is using the Sabre System and
other services provided to Customer by Sabre pursuant to other service
agreements. Sabre acknowledges and covenants that: (i) Sabre will not acquire
any right, title or interest in the Customer Marks except as specifically
provided in this SECTION 9.7, (ii) Sabre may not contest or challenge the
validity of the Customer Marks, or the registration or ownership by Customer
or its Affiliates, and (iii) the use of the Customer Marks by Sabre, and any
goodwill arising by reason of such use, will inure to the benefit of
Customer. In no circumstances will Customer be liable to make any payment on
account of any alleged
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inurement of such goodwill to Customer. CUSTOMER MAKES NO REPRESENTATION OR
WARRANTY WITH RESPECT TO THE CUSTOMER MARKS. NOTWITHSTANDING ANY PROVISION
TO THE CONTRARY, CUSTOMER WILL NOT BE LIABLE FOR ANY INFRINGEMENT OF A THIRD
PARTY'S RIGHTS RESULTING FROM SABRE'S USE OF THE CUSTOMER MARKS IN A MANNER
THAT IS INCONSISTENT WITH THE LIMITATION ESTABLISHED IN THIS AGREEMENT.
ARTICLE 10
FEES AND CHARGES
SECTION 10.1 FEES AND PAYMENT. The Parties will pay the fees and
charges ("Fees") as set forth on SCHEDULE 1. SCHEDULE 1 also sets forth
procedures by which Fees are invoiced and dates by which Fees are due and
payable. Each Sabre invoice will itemize the Fees contained therein, and
will be accompanied by reasonable detail in accordance with Sabre's customary
billing practices. Sabre will provide Customer additional information about
invoices as Customer reasonably requests and as Sabre customarily provides.
Sabre may offset payments owed by Customer to Sabre or its Affiliates against
any payments due to Customer under this Agreement.
SECTION 10.2 TAXES. Customer will be responsible for and will pay for
any Taxes that are imposed on or determined by reference to (i) services or
property provided under this Agreement, (ii) payments (including Taxes) due
to Sabre pursuant to this Agreement or (iii) the execution, delivery,
notarization, recordation or other similar action with respect to this
Agreement; provided, however, Customer will not be responsible for Taxes
imposed on the net income of Sabre. All payments due to Sabre under this
Agreement will be made free and clear of any withholdings for present or
future Taxes. If Customer is required by law to make any deduction or
withholding of Taxes from any payment due to Sabre, then (i) Customer will
effect such deduction or withholding and remit such Taxes to the appropriate
taxing authority and (ii) the amount payable to Sabre upon which such
deduction or withholding is based will be increased to the extent necessary
to ensure that after such deduction or withholding Sabre is paid a net amount
equal to the amount Sabre would have been paid in the absence of such
deduction or withholding. Customer will provide Sabre with the original
receipt, a duplicate original receipt or a duly certified or authenticated
copy of the receipt, and copies of any cancelled check for any Taxes deducted
or withheld and remitted to the appropriate taxing authorities.
SECTION 10.3 INTEREST. If a Party fails to pay any amount when due,
the past-due amount will bear interest, until paid,
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED], whichever is less. Such
interest will be payable as it accrues, upon demand.
SECTION 10.4 AUDIT RIGHTS.
10.4.1 GENERAL. Auditors designated by Customer, and who agree
in writing to the security and confidentiality obligations and procedures
required by Sabre, will be provided with reasonable access to Sabre's books
and records to enable them to audit Sabre's calculations under paragraph 5 of
SCHEDULE 1. The auditors must be nationally recognized firms and Customer may
not designate any auditor who, in Sabre's reasonable opinion, is a competitor
of, or affiliated with a competitor of, Sabre or its Affiliates.
10.4.2 PROCEDURES. Such audits may be conducted once a year
during reasonable business hours. Customer will provide Sabre with at least
thirty (30) days prior written notice of an
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audit. Sabre will cooperate with the audit, will make the information
reasonably required to conduct the audit available on a timely basis and will
assist the designated employees of Customer's auditors as reasonably
necessary. All information learned or exchanged in connection with the
conduct of an audit, as well as the results of any audit, is Confidential
Information of Sabre.
10.4.3 RESULTS. Customer will provide Sabre copies and results
of each audit. The Parties will review the results of an audit, will
identify all relevant audit issues and will determine in good faith (i) what,
if any, actions will be taken in response to such audit issues, and (ii)
which Party will be responsible for the cost of taking the actions necessary
to resolve such issues.
ARTICLE 11
SABRE SYSTEM AVAILABILITY
SECTION 11.1 MAINTENANCE OF LICENSED SABRE GDS HOST FUNCTIONS. Sabre
will, at its own expense, maintain the Licensed Sabre Functions, so that the
Licensed Sabre Functions will be generally available for access by Customer.
Except as specifically provided in SECTIONS 11.2 and 11.3, Sabre will, at its
own expense, maintain the Licensed Sabre Functions so that the Licensed Sabre
Functions are reasonably available to Customer on a twenty-four (24) hour per
day, seven (7) days a week basis.
SECTION 11.2 SCHEDULED UNAVAILABILITY. Customer acknowledges that
Sabre will need to make the Sabre System and Licensed Sabre Functions
unavailable from time to time in order to maintain the Sabre System and the
Databases used in connection with the Sabre System. Sabre may, from time to
time, schedule Sabre System unavailability in order to accomplish normal
system maintenance and implementation of software enhancements. Sabre will
use commercially reasonable efforts to give Customer as much prior notice as
practicable for scheduled unavailability.
SECTION 11.3 CORRECTION OF PERFORMANCE PROBLEMS. Customer
acknowledges that Sabre Central Site hardware or software operational or
performance problems that diminish or render unavailable the Sabre System and
Licensed Sabre Functions will occur from time to time. In the event of any
failure of the Licensed Sabre Functions or the Sabre System, Sabre will use
commercially reasonable efforts to restore the Licensed Sabre Functions and
the Sabre System as soon as is reasonably practicable. The relative urgency
of repair will be determined by Sabre in good faith and in accordance with
the severity of the problem and the standards and procedures of Sabre.
ARTICLE 12
TERM AND TERMINATION
SECTION 12.1 TERM. The term of this Agreement will begin as of the
Effective Date and will continue for fifteen (15) years unless terminated
earlier as provided herein.
SECTION 12.2 EARLY TERMINATION. In the event that Sabre is not one of
the top four (4) GDS's, based on North American market share, as determined
by the number of Bookings made in North America on airlines for
transportation on any and all city-pairs, in any given calendar year of this
Agreement, Customer may terminate this Agreement upon [TEXT OMITTED -
CONFIDENTIAL TREATMENT REQUESTED] prior written notice to Sabre delivered no
later
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than [TEXT OMITTED -CONFIDENTIAL TREATMENT REQUESTED] following the year in
which Sabre was not one of such top four (4) GDS's.
SECTION 12.3 SABRE TERMINATION FOR EVENT OF DEFAULT. In the event of
an Event of Default by Customer, which remains uncured at the expiration of
the Cure Period, Sabre may terminate this Agreement and/or pursue any and all
other available remedies.
SECTION 12.4 CUSTOMER TERMINATION FOR EVENT OF DEFAULT. In the event
of an Event of Default by Sabre which remains uncured at the expiration of
the Cure Period, Customer may terminate this Agreement and/or pursue any and
all other available remedies.
SECTION 12.5 EVENTS OF DEFAULT BY CUSTOMER. Any of the following will
constitute an "EVENT OF DEFAULT" by Customer:
12.5.1 Any failure by Customer to pay any fee, charge or payment
that is due and owing under this Agreement;
12.5.2 Any other material breach by Customer of any of its
representations, warranties, obligations or covenants under this Agreement; or
12.5.3 If Customer: (i) is adjudicated bankrupt or insolvent by a
court of competent jurisdiction, (ii) substantially ceases to do business,
(iii) fails to pay its debts generally as they become due, or (iv) takes
steps to declare bankruptcy, wind up, dissolve or liquidate, or a receiver,
trustee or similar officer is appointed over (or a lien holder takes
possession of) all or a substantial part of Customer's property or assets, or
anything similar to any of the foregoing occurs in relation to Customer under
the laws of any jurisdiction.
SECTION 12.6 EVENTS OF DEFAULT BY SABRE. Any of the following will
constitute an "EVENT OF DEFAULT" by Sabre:
12.6.1 Any failure by Sabre to pay any fee, charge or payment that
is due and owing under this Agreement;
12.6.2 Any other material breach by Sabre of any of its
representations, warranties, obligations or covenants under this Agreement;
or
12.6.3 If Sabre: (i) is adjudicated bankrupt or insolvent by a
court of competent jurisdiction, (ii) substantially ceases to do business,
(iii) fails to pay its debts generally as they become due, or (iv) takes
steps to declare bankruptcy, wind up, dissolve or liquidate, or a receiver,
trustee or similar officer is appointed over (or a lien holder takes
possession of) all or a substantial part of Sabre's property or assets, or
anything similar to any of the foregoing occurs in relation to Sabre under
the laws of any jurisdiction.
SECTION 12.7 CUSTOMER CROSS-TERMINATION RIGHTS. In the event that
Customer terminates the Development Services, under the Information
Technology Services Agreement between Sabre and Customer of even date
herewith, as a result of Sabre's material breach of its Development Services
obligations, and if such breach denies Customer the material benefits of this
Agreement, taken as a whole, then Customer may terminate this Agreement upon
[TEXT OMITTED -CONFIDENTIAL TREATMENT REQUESTED] written notice to Sabre that
is delivered within [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
following Customer's termination of the Information Technology Services
Agreement.
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SECTION 12.8 TERMINATION ASSISTANCE. If Customer terminates this
Agreement under SECTION 12.7, Sabre will provide Customer with Termination
Assistance for the period of time requested by Customer, not to exceed
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED] beginning on the date of
termination under SECTION 12.7. Customer will continue to pay all Fees
during such period and, for all Termination Assistance services that are in
addition to those services otherwise required of Sabre in this Agreement,
Customer will pay Sabre at Sabre's then current rates all additional fees and
expenses incurred by Sabre in connection with Sabre's performance of such
services. This Agreement remains in effect during the termination assistance
period and applies to the Termination Assistance Services. Customer will
cooperate in good faith with Sabre in connection with Sabre's obligations
under this section.
ARTICLE 13
CONFIDENTIALITY
SECTION 13.1 OWNERSHIP; SCOPE OF OBLIGATION. As between the Parties,
the Confidential Information of each Party will remain its sole property.
Confidential Information will be used by the recipient Party only for
purposes of, or as otherwise authorized by, this Agreement, including Sabre's
provision of information to Vendors and others required in connection with
the processing of Bookings. Each Party will hold the Confidential
Information of the other Party in strict confidence and protect such
Confidential Information from disclosure using the same care it uses to
protect is own confidential information of like importance, but not less than
reasonable care. No Confidential Information will be disclosed by the
recipient Party without the prior written consent of the other Party, except
that each Party may disclose this Agreement and the other Party's
Confidential Information to its directors, employees, attorneys, agents,
auditors, insurers and subcontractors who require access to such information
in connection with their employment or engagement and who are obligated to
keep such information confidential in a manner no less restrictive than set
forth in this Section 13.1. The Party employing or engaging such Persons is
responsible and liable for their compliance with such confidentiality
obligations.
SECTION 13.2 EXCEPTIONS.
13.2.1 Nothing in this Agreement shall be interpreted to limit
in any way Sabre's right to use, market, sell or publish any Booking-related
data subject only to any applicable laws or regulations. Notwithstanding the
preceding sentence, Sabre will not make available to any entity not a party
to the travel reservation transaction any personal identifying information
concerning a traveler contained in a PNR booked in the Sabre System through
Customer unless such traveler or Customer provides Sabre with permission to
do so, nor will Sabre make available to any other Party, other than an
airline, which utilizes the Sabre System to make reservations, any Booking
related data, detailed or aggregate, that identifies Customer unless Customer
provides Sabre with permission to do so or Sabre is required by applicable
law or regulation to make such data available.
13.2.2 If Confidential Information is required to be disclosed
by law or a Governmental Authority, including pursuant to a subpoena or court
order, such Confidential Information may be disclosed, provided that the
Party required to disclose the Confidential Information (i) promptly notifies
the disclosing Party of the disclosure requirement, (ii) cooperates with the
disclosing Party's reasonable efforts to resist or narrow the disclosure and
to obtain an order or other reliable assurance that confidential treatment
will be accorded the disclosing Party's Confidential Information, and (iii)
furnishes only Confidential Information that the Party is legally
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compelled to disclose according to advice of its legal counsel. Upon written
request at the expiration or termination of this Agreement, all documented
Confidential Information (and all copies thereof) owned by the requesting
Party will be returned to it or destroyed by the recipient Party, with
written certification thereof.
SECTION 13.3 RESIDUAL KNOWLEDGE. Each Party acknowledges that the
other may, as a result of its receipt of or exposure to the other Party's
Confidential Information, increase or enhance the knowledge and experience
retained in the unaided memories of its directors, employees, agents or
contractors. Notwithstanding anything to the contrary in this Agreement, a
Party and its directors, employees, agents or contractors may use and
disclose such knowledge and experience in such Party's business, so long as
such use or disclosure does not involve specific Confidential Information
received from the other Party. The disclosing Party will not have rights in
such knowledge and experience acquired by the recipient Party, nor rights in
any business endeavors of the recipient Party which may use such knowledge
and experience, nor rights to compensation related to the recipient Party's
use of such knowledge and experience.
ARTICLE 14
LIMITED WARRANTIES AND LIMITED LIABILITY
SECTION 14.1 DISCLAIMER OF WARRANTIES. SABRE AND ITS APPLICABLE
MANUFACTURERS AND SUPPLIERS MAKE NO REPRESENTATIONS OR WARRANTIES WHATSOEVER
WITH RESPECT TO THE LICENSED SABRE FUNCTIONS, THE SABRE SYSTEM OR ANY
SOFTWARE, HARDWARE COMPONENT OR DATA. THE LICENSED SABRE FUNCTIONS, SABRE
SYSTEM, SOFTWARE, HARDWARE COMPONENTS AND DATA ARE PROVIDED "AS IS" AND "WITH
ALL FAULTS." THERE ARE NO WARRANTIES, EXPRESS OR IMPLIED, BY OPERATION OF
LAW OR OTHERWISE, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR INTENDED USE OR ANY IMPLIED REPRESENTATIONS OR WARRANTIES ARISING
OUT OF COURSE OF PERFORMANCE, COURSE OF DEALING, USAGE OF TRADE OR
NON-INFRINGEMENT. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, NO
REPRESENTATION OR OTHER AFFIRMATION OF FACT WHICH IS NOT CONTAINED IN THIS
AGREEMENT, INCLUDING STATEMENTS REGARDING CAPACITY, SUITABILITY FOR USE, OR
PERFORMANCE OF THE LICENSED SABRE FUNCTIONS, SABRE SYSTEM, HARDWARE
COMPONENTS, SOFTWARE OR DATA, WHETHER MADE BY SABRE OR OTHERWISE, WILL BE
DEEMED TO BE A REPRESENTATION OR WARRANTY FOR ANY PURPOSE OR GIVE RISE TO ANY
LIABILITY OF SABRE OR ANY MANUFACTURER OR SUPPLIER.
SECTION 14.2 SYSTEM PERFORMANCE FAILURES. IN THE EVENT OF ANY FAILURE
OF THE LICENSED SABRE FUNCTIONS OR THE SABRE SYSTEM FOR WHATEVER REASON, THE
SOLE AND EXCLUSIVE REMEDY OF CUSTOMER WILL BE TO REQUIRE SABRE TO USE
COMMERCIALLY REASONABLE EFFORTS TO RESTORE THE LICENSED SABRE FUNCTIONS AND
THE SABRE SYSTEM AS SOON AS IS REASONABLY PRACTICABLE. CUSTOMER ACKNOWLEDGES
AND ACCEPTS THE RISK OF SUCH FAILURES OF THE LICENSED SABRE FUNCTIONS AND THE
SABRE SYSTEM AND WAIVES ALL REMEDIES THEREFOR OTHER THAN ANY RIGHT TO
TERMINATE THIS AGREEMENT ARISING UNDER SECTION 12.4, AND AS OTHERWISE
SPECIFICALLY SET FORTH HEREIN.
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SECTION 14.3 INACCURACY OF DATA. NONE OF SABRE, REED ELSEVIER, INC.,
THE PUBLISHER OF THE OFFICIAL AIRLINE GUIDE AND SUPPLIER OF CERTAIN DATA
PROVIDED UNDER THIS AGREEMENT, AND ANY OTHER PERSON PROVIDING DATA UNDER THIS
AGREEMENT: (1) WARRANTS THE ACCURACY, MERCHANTABILITY, OR THE FITNESS FOR A
PARTICULAR PURPOSE, OR THE NON-INFRINGEMENT OF ANY INTELLECTUAL PROPERTY
RIGHTS OF ANY THIRD PARTY, OF ANY DATA PROVIDED UNDER THIS AGREEMENT, OR (2)
WILL BE LIABLE FOR ANY INJURY, LOSS, CLAIM OR DAMAGE CAUSED IN WHOLE OR IN
PART BY THE USE OF THE DATA, THE LICENSED SABRE FUNCTIONS OR THE SABRE
SYSTEM, WHETHER OR NOT ARISING BY REASON OF THE NEGLIGENCE OF ANY SUCH PERSON
IN PROCURING, COLLECTING, COMPILING, ABSTRACTING, INTERPRETING,
COMMUNICATING, PROCESSING OR DELIVERING ANY SUCH DATA. IN THE EVENT OF ANY
INACCURACY OF ANY DATA TRANSMITTED BY THE LICENSED SABRE FUNCTIONS OR THE
SABRE SYSTEM, FOR WHATEVER REASON, THE SOLE AND EXCLUSIVE REMEDY OF CUSTOMER
WILL BE TO REQUIRE SABRE TO USE COMMERCIALLY REASONABLE EFFORTS TO CORRECT
SUCH ERRORS AS SOON AS IS REASONABLY PRACTICABLE, TO THE EXTENT SUCH ERRORS
ARE DUE TO CIRCUMSTANCES UNDER SABRE'S DIRECT CONTROL. IN THE EVENT A
PASSENGER USES A CONFIRMED TICKET FOR AIR TRANSPORTATION PROPERLY ISSUED BY
MEANS OF THE LICENSED SABRE FUNCTIONS OR THE SABRE SYSTEM AND IS REFUSED
CARRIAGE BECAUSE OF AN OVERSALE OF SEATS OR THE LACK OF RECORD OF SUCH
RESERVATION, THE SOLE REMEDY WILL BE AS SET FORTH IN THE TARIFF OF THE
REFUSING CARRIER OR APPLICABLE TERMS AND CONDITIONS OF THE CARRIER'S CONTRACT
OF CARRIAGE. CUSTOMER ACKNOWLEDGES AND ACCEPTS THE RISK OF SUCH FAILURES OF
THE LICENSED SABRE FUNCTIONS AND THE SABRE SYSTEM AND INACCURACY OF DATA AND
WAIVES ALL REMEDIES THEREFOR OTHER THAN AS SPECIFICALLY SET FORTH HEREIN.
SECTION 14.4 LIMITS OF LIABILITY. [TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED]
ARTICLE 15
INDEMNIFICATION
SECTION 15.1 INDEMNIFICATION BY CUSTOMER. Except for Claims which
Sabre has indemnified Customer against pursuant to SECTION 15.2, Customer
hereby agrees to indemnify, defend and hold harmless the Sabre Indemnitees
from and against Claims are threatened against, suffered by, accrued against,
charged to, or recoverable from any Sabre Indemnitee, by any Person, to the
extent arising out of or in connection with or by reason of any Claim based
on the use of the Sabre System by or through Customer (including use of the
Sabre System by Customer's End Users) and for misappropriation, violation or
infringement of any duly issued United States patent, or any copyright,
trademark, trade secret or other proprietary right relating to Customer's
business.
SECTION 15.2 INDEMNIFICATION BY SABRE. Sabre hereby agrees to
indemnify, defend and hold harmless the Customer Indemnitees from and against
Claims which are threatened against, suffered by, accrued against, charged
to, or recoverable from any Customer Indemnitee, by any Person, based on a
Claim of infringement of any duly issued United States patent or infringement
of any copyright resulting solely from use of the Licensed Sabre Functions or
arising out of or in connection with or by reason of any Claim for
misappropriation, violation or
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infringement of any proprietary rights, trademarks, trade names or service
marks with respect to the use of the Sabre Marks as permitted herein.
SECTION 15.3 NOTIFICATION OF CLAIM. Each Indemnitee which is entitled
to indemnification will give prompt written notice to the indemnifying Party
of the receipt of any Claim or the commencement of any action which is or may
be covered by the indemnity. Upon receipt of such notice the indemnifying
Party will, at its election, assume the defense thereof, with counsel
acceptable to the Indemnitee, and the Indemnitee will, if required for the
purpose of such proceedings, lend its name to the proceedings. The Indemnitee
will not compromise or settle any such Claim nor any proceedings pursuant
thereto without the indemnifying Party's prior written consent. In general,
in the event of any third party Claims against either Party related to the
Licensed Sabre Functions or other subject matter of this Agreement, the
unaffected Party will provide all reasonable assistance (without significant
costs or devotion of resources) and access to documents and information that
the affected Party may request to resolve the Claim.
ARTICLE 16
GOVERNING LAW; DISPUTE RESOLUTION
SECTION 16.1 GOVERNING LAW. This Agreement will be governed by, and
construed and interpreted under, the laws of Texas without regard to any
conflicts of law rules.
SECTION 16.2 ALTERNATIVE DISPUTE RESOLUTION. Any Dispute will be
resolved in accordance with the ADR Procedures set forth in ANNEX B to this
Agreement.
SECTION 16.3 CHOICE OF FORUM. For any actions to enforce arbitral
awards issued in accordance with ANNEX B to this Agreement or to enforce the
Parties' compliance with the ADR Procedures in ANNEX B to this Agreement,
each Party consents to the exclusive jurisdiction of the competent courts in
Fort Worth, Texas, U.S.A. Each Party irrevocably waives any objection it may
now or hereafter have as to the venue of any such action or proceeding
brought in any such court or that such court is an inconvenient forum. Each
Party hereby waives personal service of process and consents that service of
process upon it may be made by certified or registered mail, return receipt
requested, at its address specified or determined in accordance with SECTION
17.1. Nothing herein will affect the right to serve process in any other
manner permitted by law.
ARTICLE 17
MISCELLANEOUS
SECTION 17.1 NOTICES. Any notice or communication required or
permitted to be given or made to a Party under this Agreement must be typed
in English and personally delivered to the office of the person identified
below or delivered by registered mail with confirmed receipt (postage
prepaid) or air courier or by telex, facsimile, cable, or telegram with
confirmation copy dispatched simultaneously by registered mail (or airmail if
overseas) with confirmed receipt (postage prepaid) to the following addresses:
If to Sabre:
Sabre Inc.
MD 4204
4255 Amon Carter Boulevard
Fort Worth, Texas 76155
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URGENT ATTN: General Counsel
Telecopy: (817) 967-1215
If to Customer:
Travelocity.com LP
4200 Buckingham Blvd.
P.O. Box 1400
Fort Worth, Texas 76155
URGENT ATTN: General Counsel
Telecopy: (817) 967-1215
Notices delivered in the foregoing manner will be deemed effective on (i) the
day received if delivered personally or sent by courier; (ii) the Business
Day at the location of the recipient following the day received if sent by
facsimile, cable, telex or telegram, or (iii) the fourteenth (14th) day
following the date of dispatch by registered mail.
SECTION 17.2 TITLES AND CAPTIONS. All article and section titles or
captions in this Agreement are for convenience only. They will not be deemed
part of this Agreement and in no way define, limit, extend, or describe the
scope or intent of any of their provisions.
SECTION 17.3 BINDING EFFECT; ASSIGNMENT. This Agreement will be
binding upon and inure to the benefit of the Parties and their successors and
permitted assigns. Customer may not assign this Agreement without the prior
written consent of Sabre and any attempted assignment in contravention hereof
will be null and void AB INITIO.
SECTION 17.4 INTEGRATION. This Agreement and the attachments hereto
constitute the entire agreement of the Parties pertaining to their subject
matter and supersede all prior agreements and understandings pertaining to
that subject matter, and this Agreement may not be amended, supplemented, or
rescinded, except in writing and signed by the authorized representatives of
each of the Parties. This Agreement does not supersede the other agreements
being executed by the Parties contemporaneously with the execution of this
Agreement, including the Information Technology Services Agreement,
Noncompetition Agreement, and Intellectual Property Agreement.
SECTION 17.5 SURVIVAL. Notwithstanding anything to the contrary
contained herein, the rights and obligations under Sections 2.3, 5.1, 6.4,
9.1, 9.3, 9.7 and 10.2 and Articles 13 through 17 will survive the
termination of this Agreement for any reason whatsoever. Termination of this
Agreement for any cause will not release any Party from any liability, duty,
or obligation which at the time of termination has already accrued to any
other Party or which thereafter may accrue in respect of any act or omission
prior to such termination, nor will any such termination thereof affect in
any way the survival of any right, liability, duty, or obligation of the
Parties which is intended, expressly or impliedly, in accordance with the
terms of this Agreement to survive the termination hereof.
SECTION 17.6 NO THIRD PARTY BENEFICIARIES. Except as specifically
provided therein, no provision of this Agreement will be for the benefit of
or be enforceable by third persons, including creditors of any Party.
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SECTION 17.7 NO PARTNERSHIP. The Parties do not intend this Agreement
to create a partnership, joint venture or fiduciary relationship or any other
business combination.
SECTION 17.8 WAIVER. A waiver of a breach or other non-performance of
any covenant, duty, agreement, or condition of this Agreement will not be
asserted against a Party unless such waiver is in writing and signed by such
Party. Failure by any Party to insist upon the strict performance of or to
exercise any right or remedy consequent upon the breach of any covenant,
duty, agreement, or condition of this Agreement will not constitute a waiver
of that or any other failure to perform or breach of that or any other
covenant, duty, agreement, or condition. No waiver of a breach of any
provision of this Agreement by either Party will constitute a waiver of any
subsequent breach of the same or any other provision thereof.
SECTION 17.9 MULTIPLE ORIGINALS. This Agreement may be executed in
counterparts or multiple originals, all of which together will constitute one
agreement binding on each Party.
SECTION 17.10 INVALIDITY OF PROVISIONS. Except as specifically
provided in SECTION 17.13, any provision of this Agreement is or becomes
wholly or partly invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining provisions will continue in force
unaffected, and the Parties will meet as soon as possible and negotiate in
good faith upon a replacement provision that is legally valid and that as
nearly as possible achieves the objectives of this Agreement and produces an
equivalent economic effect. A replacement provision will apply as of the
date that the replaced provision had become invalid, illegal, or
unenforceable. If the Parties cannot reach agreement after good faith
negotiations, a Party may invoke the arbitration procedures hereunder, and
the arbitrators will have the authority to determine a replacement provision
that is legally valid and that as nearly as possible achieves the objectives
of this Agreement and produces an equivalent economic effect; provided,
however, that such determination may not materially increase the payment or
performance obligations of either Party.
SECTION 17.11 COMPLIANCE WITH LAWS. The Parties will comply with all
applicable laws and no Party will perform any act, or be obligated to perform
any act that could either (i) result in any violation of any applicable law
or any regulation, rule, directive, or policy of any Governmental Authority
or (ii) result in any fine, penalty, retaliation or sanction being imposed on
any other Party, or their respective Affiliates.
SECTION 17.12 FORCE MAJEURE. Except for the obligations to make
payment herewith, neither Party will be liable to the other in the event and
to the extent that performance by such Party is delayed or prevented by FORCE
MAJEURE; provided that in the event any failure to pay results from a FORCE
MAJEURE preventing the actual transfer of funds (E.G., failure of
communication lines for transfer of funds) such obligation to pay will be
suspended until such time as that particular FORCE MAJEURE preventing the
transfer of funds ends. The Party claiming the existence of a FORCE MAJEURE
will give notice to the other Party as soon as practicable of the existence
of the FORCE MAJEURE and will use commercially reasonable efforts to bring
the FORCE MAJEURE to an end as soon as possible. If the FORCE MAJEURE
continues for a period of [TEXT OMITTED -CONFIDENTIAL TREATMENT REQUESTED],
the other Party will have the right, but not the obligation, to terminate
this Agreement upon [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED] written
notice.
SECTION 17.13 SUBSEQUENT ACTS OF GOVERNMENT. In the event that there is
any change in the statutes of the United States of America or other location
governing the economic regulation of air transportation, or the sale thereof,
or governing the provision or operation of
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Computerized Reservations Systems, or in the applicable rules, regulations,
or orders of the U.S. Department of Transportation, or of any other United
States or other government agency or department having jurisdiction over air
transportation or the sale thereof or GDSs, which causes any diminution of
Sabre's ownership of the Sabre System, or which materially increases either
Party's payment or performance obligations under this Agreement, or which
otherwise materially impairs the benefits to either Party under this
Agreement, then the Parties will commence consultation within thirty (30)
days in order to determine what, if any, changes to this Agreement are
necessary or appropriate, including early termination and cancellation of
this Agreement. If the Parties are unable to agree whether any change or
changes are necessary and proper, or as to the terms of such changes, to this
Agreement in light of the occurrences described above, and such failure to
reach agreement will continue for a period of [TEXT OMITTED -CONFIDENTIAL
TREATMENT REQUESTED] following the commencement of the consultations, then
the Party adversely affected by such change may terminate this Agreement upon
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED] prior written notice.
SECTION 17.14 ACQUISITIONS. If at any time during the term of the
Agreement, Customer purchases or otherwise acquires all of the assets of any
travel agency, or other Person, which utilizes the Sabre System, then such
travel agency, or other Person, shall be bound by the terms and conditions as
set forth in the Agreement in lieu of the terms and conditions set forth in
the other agreement then governing such Person's utilization of the Sabre
System. Notwithstanding the foregoing, all outstanding receivables at the
time of acquisition by Customer must be paid to Sabre prior to inclusion of
the acquired locations and/or equipment under the terms of the Agreement,
unless otherwise agreed to by both Parties. Customer and the acquired Person
must both notify Sabre in writing of the acquisition and must provide at a
minimum (i) the pseudo city code of acquired location(s), (ii) total number
of productive devices being acquired, and (iii) the effective date of the
acquisition.
*****
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IN WITNESS WHEREOF, each of the Parties hereto has caused this Agreement to
be executed as of the date first written above.
SABRE INC.
By: /s/ Jeffrey M. Jackson
---------------------------------------
Name: Jeffrey M. Jackson
-------------------------------------
Title: Sr. V.P. and CFO
------------------------------------
TRAVELOCITY.COM LP
By: TRAVELOCITY HOLDINGS, INC.,
ITS GENERAL PARTNER
By: /s/ Jeffrey M. Jackson
---------------------------------------
Name: Jeffrey M. Jackson
-------------------------------------
Title: Sr. V.P. and CFO
------------------------------------
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ANNEX A
DEFINITION APPENDIX
1. RULES OF OTHER INTERPRETATION. The following rules of interpretation
apply to the Agreement, and are by this referenced incorporated into the
Agreement:
1.1 the word "or" is not exclusive and the words "include" and "including"
are not limiting;
1.2 the words "hereby", "herein", "hereof", "hereunder" or other words of
similar meaning refer to the entire Agreement;
1.3 a reference to any agreement or other contract includes permitted
supplements, amendments and restatements;
1.4 a reference to a law includes any amendment or modification to such
law and any rules or regulations promulgated thereunder or any law
enacted in substitution or replacement therefor;
1.5 a reference to a Person includes any permitted successors and assigns;
1.6 a reference to an Article, Section, Annex, Exhibit or Schedule which
does not specify a particular agreement is to the relevant Article,
Section, Annex, Exhibit or Schedule of the Agreement;
1.7 a reference to an Article includes all Sections and subsections
contained in such Article, and a reference to a Section or subsection
includes all subsections of such Section or subsection;
1.8 all terms not otherwise defined herein shall have the meaning commonly
ascribed thereto in the GDS industry.
2. DEFINITIONS. As used in the Agreement, the following terms shall have the
following meanings:
"ADR PROCEDURES" means the alternative dispute resolution procedures
attached as Annex B to the Agreement.
"AFFILIATE" means, with respect to any entity at any time, any Person that
is controlled by such entity or is under common control with such entity, where
"control" means, with respect to any Person, owning, directly or indirectly,
more than fifty percent (50%) of the capital stock (or other ownership interest,
if not a corporation) of such Person ordinarily having voting rights or
otherwise having the right or ability, by contract or otherwise, to direct the
management and policies of such Person.
"AGREEMENT YEAR" means, starting on the Effective Date, each consecutive
twelve (12) month period of the Agreement.
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"BOOKING" means a Segment that obligates a Participant to pay a Booking
Fee to the GDS Operator and that is created in or processed through the GDS,
excluding a Segment canceled prior to the Segment Activity Date.
"BOOKING FEES" means a fee charged by a GDS Operator to a Participant
pursuant to an agreement with such Participant for participation in the GDS,
as in effect from time to time.
"BUSINESS DAY" means a day other than Saturday, Sunday, national
holidays in the United States, and December 30 through January 3.
"CLAIMS" means any and all liabilities, damages, losses, expenses,
claims, demands, suits, fines or judgments including, but not limited to,
attorneys' fees, expert witness costs, court costs and expenses incident
thereto.
"COMPETITOR GDS" means [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
"CONFIDENTIAL INFORMATION" means any and all trade secrets, proprietary
and confidential information that is owned (jointly or severally) by a Party
and/or such Party's Affiliate, concerning its past, present or future
research, development, business activities or affairs (including, without
limitation, market intelligence), finances, properties, methods of operation,
processes and/or systems, which are reasonably considered by it to be
confidential. Such Confidential Information includes, without limitation,
the following: (i) the Sabre System (in the case of Sabre and its
Affiliates); (ii) any and all algorithms, routines, source codes, object
codes, software programs, export programs, computer processing systems and
techniques employed or used by the disclosing Party and any related items
such as specifications, layouts, flow charts, manuals, instruction books, and
other like documentation together with all data and know-how, technical or
otherwise, included therein; (iii) all documents, Databases, files, reports,
drawings, plans, sketches, equipment and the like related to or concerning
past, present or future research, development, business activities or
affairs, prospects, finances, properties, methods of operation, processes
and/or systems of the disclosing Party; (iv) any and all upgrades,
enhancements, improvements, or modifications to the foregoing; (v) PNRs
provided by the disclosing Party; and any information obtained by or supplied
to a GDS Operator arising from the Licensed Sabre Function relating to:
marketing, sales and commercial data, reports, comparative information,
analysis, statistics and statistical reports beyond information which the GDS
Operator is obliged to furnish to a Participant under the applicable rules of
any aviation or governmental authority governing the use of a GDS when
invoicing such Participant; (vi) any information, including, the Licensed
Sabre Function functional specifications, that is jointly developed by the
Parties during the term of the Sabre License Agreement; and (vii) the terms
of this Agreement. Notwithstanding the foregoing, the following will not
constitute "Confidential Information" for the purposes of the Agreement: (a)
information which was already in the receiving Party's possession prior to
the date of the Agreement (unless the receiving Party is prohibited from
disclosing such information to a Person other than the receiving Party by a
contractual, legal or fiduciary obligation to the disclosing Party) or that
is independently developed by the receiving Party without the use of any
Confidential Information of the disclosing Party; (b) information that is
obtained from a third party who, insofar as is known to the receiving Party,
is not prohibited from transmitting the information to the receiving Party by
a contractual, legal or fiduciary obligation to the disclosing Party; and (c)
information which is or which becomes generally available to the public,
other than as a result of disclosure by the receiving Party.
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"CONSOLIDATOR" means a Person that purchases or otherwise obtains travel
inventory from a Vendor at rates not generally available to travel agents
directly from the Vendor.
"CURE PERIOD" means a period which expires
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED] after receipt of written
notice of an Event of Default from a non-defaulting Party.
"CUSTOMER" means Travelocity.com LP, a limited partnership organized and
existing under the laws of the State of Delaware, U.S.A. and having its
principal office at 4200 Buckingham Blvd., Fort Worth, Texas.
"CUSTOMER COMMUNICATION NETWORK" means all communications line circuits
and equipment located between Customer and the Sabre Central Site.
"CUSTOMER INDEMNITEES" means Customer and its Affiliates and their
respective directors, officers, employees and agents.
"CUSTOMER MARKS" means all trademarks, service marks, trade names, logos
and trade dress and to identify or market Customer's products and services.
"DATABASE" means a set of computer data files used in or generated by
the operation of a GDS.
"DISPUTE" means any dispute, claim or controversy of any kind or nature
arising under or in connection with the Agreement and any related agreements
between any of the Parties.
"DOLLARS" or "$" means the lawful currency of the United States of
America.
"EFFECTIVE DATE" means March 7, 2000, at a time on such date immediately
after giving effect to the consummation of the transactions described in that
Bill of Contribution, Assignment and Assumption Agreement, dated March 7,
2000, between Sabre Inc. and Travelocity.com LP.
"END USERS" means individuals who desire to create their own personal
Bookings and/or have their Bookings made through Customer.
"EVENT OF DEFAULT" has the meaning assigned to that term in SECTIONS
12.4 AND 12.5 of the Agreement.
"FEES" has the meaning assigned to that term in SECTION 10.1 of the
Agreement.
"FORCE MAJEURE" means acts of God, war, warlike conditions, strikes or
other labor disputes, work stoppage, fire, flood, valid or invalid acts of
government or any other cause, whether similar or dissimilar, beyond the
reasonable control of the Party.
"GDS" or "GLOBAL DISTRIBUTION SYSTEM" means a computer system which
collects, stores, processes, displays and distributes information concerning
air and ground transportation, lodging and other travel related products and
services offered by system Participants and which enables users of the GDS
to, among other things, (i) reserve or otherwise confirm the use of, or make
inquiries or obtain information in relation to, such products and services,
and/or (ii) issue tickets for the acquisition or use of such products and
services.
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"GDS OPERATOR" means a Person who operates, markets or distributes a GDS.
"GOVERNMENTAL AUTHORITY" means any:
(a) nation, state, county, city, town, village, district, or other
jurisdiction of any nature;
(b) federal, state, local, municipal, foreign, or other government;
(c) governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, official, or entity
and any court or other tribunal);
(d) multi-national organization or body; or
(e) body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory, or taxing authority
or power of any nature.
"INDEMNITEE" means, collectively, the Sabre Indemnitees and the Customer
Indemnitees.
"INFORMATION TECHNOLOGY SERVICES AGREEMENT" means that certain Information
Technology Services Agreement, dated the date hereof, between Sabre and
Customer.
"LICENSE" means the rights granted pursuant to SECTION 2.1 of the
Agreement.
"LICENSED SABRE FUNCTIONS" means all existing and future Sabre Host
Functions, including Subscriber Sabre, Professional Sabre, WorldFare, SHAARP
Plus, CARS Plus, FLIFO, and Vendor reservations, and including any Sabre
Enhancements.
"MESSAGE" means a grouping of up to [TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED] characters, or such other number of characters that is Sabre's
standard message length for Sabre's customers generally, transmitted to the
Sabre System whether such transmission is made in the Sabre System through
manual or automated means. Each such transmission to the Sabre System from
Customer constitutes one Message.
"PARTICIPANT" means a Vendor which has an agreement with a GDS Operator for
the display of information regarding its products or services in such Operator's
GDS.
"PARTICIPATION AGREEMENT" means the form of agreement between Sabre and a
Vendor for the sale of such Vendor's travel products or the distribution of its
information through the Sabre System which may be in effect from time to time.
"PARTY" means each of the signatories to the Agreement, as the case may be,
and their permitted successors and assignees.
"PERSON" means any individual, corporation, limited liability company,
partnership, firm, joint venture, association, joint-stock company, trust,
estate, unincorporated organization, Governmental Authority or other entity.
"PNR" means a passenger name record residing on a GDS.
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"PROHIBITED SEGMENT" means a Segment for which no corresponding space
has been reserved within the transporting carrier's internal reservation
system.
"SABRE" means Sabre Inc., a corporation organized and existing under the
laws of the State of Delaware, U.S.A. and having its principal office at 4255
Amon Carter Boulevard, Fort Worth, Texas 76155, U.S.A.
"SABRE CENTRAL SITE" means Sabre's data processing operation and
computer facilities located in Tulsa, Oklahoma or such other location or
locations as may be determined by Sabre from time to time.
"SABRE ENHANCEMENTS" means any improvements, enhancements or
modifications to the Licensed Sabre Functions.
"SABRE HOST FUNCTIONS" means Sabre GDS software functions for which the
implementing software resides on the Sabre Central Site.
"SABRE INDEMNITEES" means Sabre and its Affiliates and their respective
directors, officers, employees and agents.
"SABRE LICENSEE" means a Person that has entered into an agreement to
utilize the Sabre System for the purpose of making Bookings or any other
transactions.
"SABRE MARKS" means all trademarks, service marks, trade names, logos
and trade dress used to identify or market the Sabre GDS, in any form, and
the Sabre System.
"SABRE PARTICIPANT" means a Vendor that has entered into a Sabre
Participation Agreement.
"SABRE SYSTEM" means Sabre's GDS which collects, stores, processes,
displays and distributes information through computer terminals concerning
air and ground transportation, lodging and other travel related products and
services offered by Vendors and which enables (i) Sabre Licensees or their
End Users to reserve or otherwise confirm the use of, or make inquiries or
obtain information in relation to, such products and services and/or (ii)
Sabre Licensees to issue tickets for the acquisition or use of such products
and services.
"SEGMENT" means: (a) for airline Bookings, each separate flight segment
reservation identified by a separate flight number in a PNR, multiplied by
the number of passengers booked in such PNR for such flight segment; (b) for
hotel Bookings, each separate reservation that is processed through Sabre
SHAARP with an action code status HK, KK or KL regardless of the number of
rooms, suites or other accommodations or the number of persons or the
duration of the stay; (c) for car rental Bookings, each separate reservation
that is processed through Sabre CARS with an action code status HK, KK or KL
regardless of the number of vehicles or persons or the duration of the
rental; and (d) for any other product or service, each separate reservation
for such product or service that is processed through Sabre with an action
code status HK, KK or KL regardless of the number of products or services or
the number of persons or the duration of the products or services. The term
Segment does not include Prohibited Segments.
"SEGMENT ACTIVITY DATE" means the date listed in a PNR as the date of
travel or other use for the relevant Segment.
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"SHELL BOOKINGS" means a Booking that is placed with a false name in
anticipation of filling the Booking with another person later.
"SPECULATIVE BOOKINGS" means a Booking made without the intent of
traveling, such as booking more than an End User plans to use, or booking one
person for two flights at the same time.
"TAXES" means any present or future taxes (including taxes denominated
as income taxes, franchise taxes, corporation taxes, withholding taxes, gross
receipts taxes, excise taxes (including federal excise taxes), doing business
taxes, capital taxes, net worth taxes, asset taxes, social security or social
contribution taxes, stamp taxes, transaction taxes, transfer taxes,
telecommunications taxes and assessments, exchange taxes, documentary taxes,
sales taxes, use taxes, or value added taxes), levies, imposts, duties, fees,
assessments or other Fees, and all interest, penalties or similar liabilities
with respect thereto, of whatever nature now or hereafter imposed by any
jurisdiction or any Governmental Authority.
"TERMINAL ADDRESS" means an assigned concurrent communication session
between Customer and the Sabre System through which Customer is capable of
accessing the Sabre System.
"TERMINATION ASSISTANCE" means the following services: (a) Sabre will
continue to perform any or all of the services then being performed by Sabre
under this Agreement; (b) Sabre will develop, with the assistance of
Customer, a plan for the transition of the services from Sabre to Customer or
Customer's designee; and (c) Sabre will assist Customer with the transition
of services from Sabre to Customer or Customer's designee.
"TRAVEL SERVICE SEGMENT" means a Sabre System Booking with an action
status code of GK, GL, BK, BL, HN, YK, HK*, or HL*.
"VENDOR" means any air carrier (including all scheduled, charter,
domestic and international airlines), car rental company, surface
transportation carrier, hotel or lodging provider, railroad, steamship
company, cruise or tour operator or other vendor of travel-related products,
information or services (but excluding any such Person while operating as a
travel agency or any such person operating as a GDS).
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ANNEX B
DISPUTE RESOLUTION PROCESS
1. CERTAIN DEFINITIONS
THIS SECTION 1 SETS FORTH CERTAIN DEFINITIONS USED IN THIS DISPUTE RESOLUTION
PROCESS. OTHER CAPITALIZED TERMS USED BUT NOT DEFINED HEREIN HAVE THE MEANINGS
ASCRIBED TO THEM IN THE AGREEMENT.
ARBITRATION RULES
The rules of the American Arbitration Association ("AAA") in effect on the date
of the commencement of the arbitration.
QUALIFICATIONS
Having extensive knowledge or experience, or both, regarding information
technology services similar to the services that are the subject of the Dispute,
and fluent in English.
2. DISPUTE RESOLUTION PROCEDURE.
(a) GENERAL PROCEDURE.
The Parties shall resolve all Disputes in accordance with this
procedure:
(i) Either Party may submit the Dispute to mediation as outlined in
Section 3 of this Annex.
(ii) If a Dispute is not resolved by mediation, then either Party may
submit the Dispute to binding arbitration in accordance with
Section 4 of this Annex.
Parties within [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED] after
receipt of written notice by one Party from the other that a Dispute
exists, the Dispute shall, at the written request of either Party, be
submitted to mediation as outlined in Section 4 of this Schedule.
3. MEDIATION.
The mediation of an unresolved Dispute shall be conducted in this manner:
(a) Either Party may submit the Dispute to mediation by giving notice of
mediation to the other Party. The Parties shall attempt to agree
promptly after that notice is given upon and appoint a sole mediator
who has the Qualifications.
(b) If the Parties are unable to agree upon a mediator within [TEXT
OMITTED - CONFIDENTIAL TREATMENT REQUESTED] after the date the Dispute
is submitted to mediation, either Party may request the Dallas, Texas
office of the AAA to appoint a mediator who has the Qualifications.
The mediator so appointed shall be deemed to have the Qualifications
and to be accepted by the Parties.
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(c) The mediation shall be conducted in Dallas, Texas at a place and a
time agreed by the Parties with the mediator, or if the Parties cannot
agree, as designated by the mediator. The mediation shall be held
within [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED] after the
mediator is appointed.
(d) If either Party has substantial need for information from the other
Party in order to prepare for the mediation, the Parties shall attempt
to agree on procedures for the formal exchange of information; if the
Parties cannot agree, the mediator's determination shall be effective.
(e) Each Party shall be represented in the mediation by a natural person
with authority to settle the Dispute on behalf of that Party and, if
desired by that Party, by counsel for that Party. The Parties'
representatives in the mediation shall continue with the mediation as
long as the mediator requests.
(f) Unless otherwise agreed by the Parties, each Party shall pay one-half
of the mediator's fees and expenses and shall bear all of its own
expenses in connection with the mediation. Neither Party may employ
or use the mediator as a witness, consultant, expert, or counsel
regarding the Dispute or any related matters.
4. ARBITRATION.
The arbitration of an unresolved Dispute shall be conducted in this manner:
(a) Either Party may begin arbitration by filing a demand for arbitration
in accordance with the Arbitration Rules. The Parties shall attempt
to agree upon and appoint a panel of three (3) arbitrators promptly
after that demand is filed. Each of those arbitrators must have the
Qualifications unless otherwise agreed by both Parties.
(b) If the Parties are unable to agree upon any or all of the
arbitrators within [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
after the demand for arbitration was filed (and do not agree to an
extension of that ten-day period), then each Party shall designate
one arbitrator with Qualifications and the AAA shall designate a
third, if possible, with Qualifications; nevertheless, such arbitrator
so appointed shall be deemed to have the Qualifications and to be
accepted by the Parties as part of the panel.
(c) The arbitration shall be conducted in Dallas, Texas at a place and a
time agreed by the Parties with the panel, or if the Parties cannot
agree, as designated by the panel. The panel may, however, call and
conduct hearings and meetings at such other places as the Parties may
agree or as the panel may, on the motion of one Party, determine to be
necessary to obtain significant testimony or evidence.
(d) The Parties shall attempt to agree upon the scope and nature of any
discovery for the arbitration. If the Parties do not agree, the panel
may authorize any and all forms of discovery, including depositions,
interrogatories, and document production, upon a showing of
particularized need that the requested discovery is likely to lead to
material evidence needed to resolve the Dispute and is not excessive
in scope, timing, or cost.
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CONFIDENTIAL
(e) The arbitration shall be subject to the Federal Arbitration Act and
conducted in accordance with the Arbitration Rules to the extent they
do not conflict with this Section 4. The Parties and the panel may,
however, agree to vary the provisions of this Section 4 or the matters
otherwise governed by the Arbitration Rules.
(f) The panel has no power to:
(i) rule upon or grant any extension, renewal, or continuance of the
Agreement;
(ii) award remedies or relief either expressly prohibited by the
Agreement or under circumstances not permitted by the Agreement;
or
(iii) grant provisional or temporary injunctive relief before
rendering the final decision or award.
(g) Unless the Parties otherwise agree, all Disputes regarding or related
to the same topic or event that are subject to arbitration at one time
shall be consolidated in a single arbitration proceeding.
(h) A Party or other person involved in an arbitration under this Section
4 may join in that arbitration any person other than a Party if:
(i) the person to be joined agrees to resolve the particular dispute
or controversy in accordance with this Section 4 and the other
provisions of this Schedule applicable to arbitration; and
(ii) the panel determines, upon application of the person seeking
joinder, that the joinder of that other person will promote the
efficiency, expedition, and consistency of the result of the
arbitration and will not unfairly prejudice any other Party to
the arbitration.
(i) The arbitration hearing shall be held within [TEXT OMITTED -
CONFIDENTIAL TREATMENT REQUESTED] after the appointment of the panel.
Upon request of either Party, the panel shall arrange for a
transcribed record of the arbitration hearing, to be made available to
both Parties.
(j) The panel's final decision or award shall be made within [TEXT OMITTED
- CONFIDENTIAL TREATMENT REQUESTED] after the hearing. That final
decision or award shall be made by unanimous or majority vote or
consent of the arbitrators constituting the panel, shall be deemed
issued at the place of arbitration and shall be made in U.S. dollars.
The panel shall issue a reasoned written final decision or award based
on the Agreement and Texas law; the panel may not act according to
equity and conscience or as an amicable compounder or apply the law
merchant.
(k) The panel's final decision or award may include:
(i) recovery of general damages to the extent permitted by the
Agreement (but not consequential, exemplary or punitive
damages); or
25
<PAGE>
CONFIDENTIAL
(ii) injunctive relief in response to any actual or threatened breach
of the Agreement or any other actual or threatened action or
omission of a Party under or in connection with the Agreement.
(l) The panel's final decision or award shall be final and binding upon
the Parties, and judgment upon that decision or award may be entered
in any court having jurisdiction over either or both of the Parties or
their respective assets. The Parties specifically waive any right
they may have to apply or appeal to any court for relief from the
preceding sentence or from any decision of the panel made, or any
question of law arising, before the final decision or award; and the
Parties shall not dispute nor question the validity of such award
before any regulator or other authority in any jurisdiction where
enforcement action is taken by the Party or Parties in whose favor the
award was rendered. If any decision by the panel is vacated for any
reason, the Parties shall submit that Dispute to a new arbitration in
accordance with this Section 4.
(m) Each Party shall pay one-half of the arbitrators' fees and expenses,
and shall bear all of its own expenses in connection with the
arbitration. The panel has the authority, however, to award recovery
of all costs and fees (including attorneys' fees, administrative fees
and the panel's fees and expenses) to the prevailing Party in the
arbitration.
5. RECOURSE TO COURTS.
Nothing in this Annex limits the right of either Party to apply to a court or
other tribunal having jurisdiction to:
(a) enforce this Annex, including the agreement to arbitrate in this
Annex;
(b) seek provisional or temporary injunctive relief, in response to an
actual or impending breach of the Agreement so as to avoid irreparable
damage or maintain the status quo, until a final arbitration decision
or award is rendered or the Dispute is otherwise resolved; or
(c) challenge or vacate any final arbitration decision or award that does
not comport with Section 4 of this Annex.
6. SUBMISSION TO JURISDICTION.
EACH PARTY IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE FEDERAL COURTS OF THE
UNITED STATES AND THE STATE COURTS OF TEXAS LOCATED IN FORT WORTH. EACH PARTY
WAIVES ANY DEFENSE OR CHALLENGE TO THAT JURISDICTION BASED ON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE, OR INCONVENIENCE OF FORUM.
7. CONFIDENTIALITY.
The proceedings of all negotiations, mediations, and arbitrations shall be
privately conducted. The Parties shall keep confidential all conduct,
negotiations, documents, decisions, and awards in connection with those
proceedings under this Annex.
8. EXCLUSIVE REMEDY.
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<PAGE>
CONFIDENTIAL
Other than those matters involving injunctive or other extraordinary relief
or any action necessary to enforce the award of the arbitrator, the Parties
agree that the provisions of this Annex are a complete defense to any suit,
action or other proceeding instituted in any court or before any
administrative tribunal with respect to any Dispute. Nothing in this Annex
prevents the Parties from exercising their rights to terminate the Agreement
in accordance with the Agreement.
9. CONTINUED PERFORMANCE; ESCROW ACCOUNT.
UNLESS (a) SABRE HAS COMMENCED A PROCEEDING OR HAS PRESENTED A CLAIM FOR
NONPAYMENT BY CUSTOMER OF AMOUNTS DUE UNDER THE AGREEMENT, AND CUSTOMER DOES
NOT PROMPTLY PAY ALL AMOUNTS IN DISPUTE INTO THE ESCROW ACCOUNT REFERRED TO
BELOW, OR (b) THE AGREEMENT HAS BEEN TERMINATED IN ACCORDANCE WITH THE
AGREEMENT, SABRE WILL CONTINUE TO PROVIDE THE SERVICES DURING ANY DISPUTE
RESOLUTION PROCEEDINGS (WHETHER INFORMAL OR FORMAL) COMMENCED PURSUANT TO
THIS ANNEX AND CUSTOMER WILL CONTINUE TO PERFORM ITS OBLIGATIONS (INCLUDING
THE MAKING OF PAYMENTS TO SABRE) IN ACCORDANCE WITH THE AGREEMENT. UP TO THE
MAXIMUM AMOUNT IN DISPUTE, ANY DISPUTED PAYMENT WILL BE PAID PENDING
RESOLUTION OF THE DISPUTE INTO AN ESCROW ACCOUNT THAT IS STRUCTURED BY
AGREEMENT OF THE PARTIES OR, IF AGREEMENT CANNOT BE REACHED, AS DIRECTED BY
THE MEDIATOR OR ARBITRATOR, AS THE CASE MAY BE, ENGAGED IN ACCORDANCE WITH
THIS SCHEDULE. ANY SUCH ESCROW ACCOUNT WILL PROVIDE FOR THE PAYMENT OF
INTEREST ON THE AMOUNTS DEPOSITED THEREIN, AND THE PARTIES (IF THE DISPUTE IS
RESOLVED INFORMALLY) OR THE MEDIATOR OR ARBITRATOR, AS THE CASE MAY BE (IF
THE DISPUTE IS RESOLVED FORMALLY), WILL MAKE THE DETERMINATION REGARDING
DISTRIBUTION OF SUCH DEPOSITED AMOUNTS PLUS INTEREST. IF CUSTOMER FAILS TO
ESCROW DISPUTED PAYMENTS AS REQUIRED BY THE AGREEMENT, SABRE MAY APPLY TO ANY
COURT OF COMPETENT JURISDICTION TO SEEK INJUNCTIVE RELIEF FOR SUCH FAILURE
AND WILL HAVE THE RIGHT TO TERMINATE THE AGREEMENT IN ACCORDANCE WITH THE
AGREEMENT.
10. OTHER.
(a) U.N. CONVENTION.
The enforcement of any arbitral award will be in accordance with and
governed by the United Nations Convention on the Recognition and
Enforcement of Foreign Arbitral Awards.
(b) LANGUAGE.
Negotiations, mediations and arbitrations will be conducted in the
English language.
27
<PAGE>
CONFIDENTIAL
ANNEX C
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
28
<PAGE>
CONFIDENTIAL
SCHEDULE 1
FEES AND CHARGES
1. BOOKING PAYMENT. For Bookings made in the Sabre System by or through
Customer (including by Customer's End users), Sabre will pay Customer a
Booking payment ("BOOKING PAYMENT"), on a monthly basis, as follows:
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
2. PNR REFERRAL PAYMENT. In the event Customer refers PNRs created in the
Sabre System to a Sabre travel agency for ticketing and in lieu of paying the
Booking Payment and the Marketing Payment, Sabre will pay Customer a PNR
referral payment ("PNR REFERRAL PAYMENT"), on a monthly basis, equal to
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED] per referred PNR.
3. MESSAGE FEES. Sabre will charge, and Customer will pay, Message fees
("MESSAGE FEES") under this Agreement. Message Fees for each month under this
Agreement will be based on [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
(a) For the initial Agreement Year, the per Message rates for the
following message categories ("INITIAL MESSAGE CATEGORIES") will be as follows:
(i) "basic" (all non-pricing Messages including availability and
PNR): [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED];
(ii) "fare pricing" (including FareQuote and FareLed): [TEXT OMITTED
- - CONFIDENTIAL TREATMENT REQUESTED]; and
(iii) "search pricing" (including Trip Search and BargainFinder Plus):
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED].
See Attachment A for additional detail on the Initial Message
Categories.
For each subsequent Agreement Year thereafter, the per Message rates for each
Initial Message Category will equal the lesser of [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED]
(b) In the event Sabre develops in good faith new message categories other
than the Initial Message Categories, or changes the composition of the Initial
Message Categories, Sabre may implement and charge Customer at Sabre's
then-existing prevailing rates, for such new or modified message categories, so
long
as Sabre provides Customer with [TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED] advance written notice thereof. [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED]
4. TERMINAL ADDRESS FEES. For the initial Agreement Year, Sabre will charge,
and Customer will pay, a monthly fee of [TEXT OMITTED - CONFIDENTIAL TREATMENT
REQUESTED]
per Terminal Address ("TA FEES"). For each subsequent Agreement Year
thereafter, Sabre will charge, and Customer will pay, per Terminal Address, TA
Fees equal to the lesser of [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED].
If Sabre later implements, for its customers generally, a cost recovery system
that is not based upon the number of Terminal Addresses, then (following written
notice to Customer) Sabre's charges, and Customer's payments, under this
Paragraph 5 will be modified by Sabre to be consistent with the new cost
recovery system.
1
<PAGE>
CONFIDENTIAL
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
7. BELOW THRESHOLD PAYMENTS. In the event Customer does not utilize the Sabre
System for Bookings equal to or greater than the [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED] during a given Agreement Year, then Customer will pay
Sabre, as a liquidated damage and not a penalty, a payment equal to
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]. For purposes of this
paragraph, the "YEARLY VOLUME THRESHOLD" is defined for each Agreement Year
as [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
8. MARKETING PAYMENT. In consideration for Customer's performance of its
obligations under Section 7.1 of this Agreement, Sabre will pay Customer a
marketing payment ("MARKETING PAYMENT") based on Sabre System Bookings, on a
monthly basis, as follows:
(a) For Sabre System Bookings other than cruise and tour Bookings, Sabre
will pay Customer a per Booking fee equal to [TEXT OMITTED - CONFIDENTIAL
TREATMENT REQUESTED]
;
(b) For Sabre System cruise Bookings, Sabre will pay Customer a per
Booking fee equal US [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]; and
(c) For Sabre System tour Bookings, Sabre will pay Customer a per Booking
fee equal to [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED].
9. TRAINING. All training provided by Sabre under this Agreement will be
charged to and paid for by Customer at Sabre's prevailing rate. In addition,
Customer will pay for all associated costs relating to travel, accommodation and
incidental expenses of Sabre personnel.
10. IMPLEMENTATION AND CONSULTING FEES AND COSTS. All labor expended by Sabre
personnel or agents in performing implementation and consulting services under
this Agreement will be charged to and paid for by Customer at the rate mutually
agreed to by the Parties. In addition, Customer will pay for: (a) all
associated costs relating to travel, accommodation and incidental expenses of
Sabre personnel incurred in connection with performing such implementation and
consulting services; and (b) all non-labor components of such services (e.g.,
equipment or third party software) on a cost plus basis. The parties agree that
all such non-labor components of such services (e.g., equipment or third party
software) purchased by Sabre in furtherance of this Agreement is purchased
solely for resale to Customer.
11. FEE EXCLUSIONS. Notwithstanding anything to the contrary in this
Agreement, Sabre will not charge Customer for the services and products listed
below:
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
12. PAYMENTS. All amounts payable by Sabre to Customer under this Agreement
will be payable within [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]after
the applicable month related to such payment. All amounts payable by Customer
to Sabre under this Agreement will be due
2
<PAGE>
CONFIDENTIAL
and payable within [TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]of Sabre's
invoice, without setoff of counterclaim.
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
3
<PAGE>
CONFIDENTIAL
ATTACHMENT A
[TEXT OMITTED - CONFIDENTIAL TREATMENT REQUESTED]
4
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> USD
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<EXCHANGE-RATE> 1
<CASH> 907
<SECURITIES> 70,583
<RECEIVABLES> 10,485
<ALLOWANCES> 249
<INVENTORY> 0
<CURRENT-ASSETS> 125,606
<PP&E> 19,962
<DEPRECIATION> 5,930
<TOTAL-ASSETS> 419,718
<CURRENT-LIABILITIES> 27,634
<BONDS> 1,580
0
33
<COMMON> 16
<OTHER-SE> 336,906
<TOTAL-LIABILITY-AND-EQUITY> 419,718
<SALES> 0
<TOTAL-REVENUES> 27,023
<CGS> 0
<TOTAL-COSTS> 12,144
<OTHER-EXPENSES> 20,784
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (16,729)
<INCOME-TAX> 6
<INCOME-CONTINUING> (9,071)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (9,071)
<EPS-BASIC> (.32)
<EPS-DILUTED> (.32)
</TABLE>
