Exhibit 10.9
AIRLINE PARTICIPATION AGREEMENT
-------------------------------
THIS AGREEMENT (this "AGREEMENT"), dated April __, 1998, is by and among
xxxxxxxxx.xxx LLC, a Delaware limited liability company with an address at 0
Xxxx Xxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxx 00000 ("XXXXXXXXX.XXX LLC"), PriceLine
Travel, Inc., a Delaware corporation with an address at 0 Xxxx Xxxxx Xxxx,
Xxxxxxxx, Xxxxxxxxxxx 00000 ("PRICELINE TRAVEL" and, together with xxxxxxxxx.xxx
LLC, being collectively referred to herein as "PRICELINE"), and Trans World
Airlines, Inc., a Delaware corporation having a principal place of business at
One City Centre, 000 Xxxxx 0xx Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000 (the
"AIRLINE").
PRELIMINARY STATEMENT:
PriceLine provides an electronic service via the internet that allows consumers
to purchase airline tickets at an offer price determined by the consumer (the
"PRICELINE SERVICE"). The consumer identifies the departure and return dates for
travel and the price the consumer is willing to pay for the fare. PriceLine then
determines if appropriate seats are available. If appropriate seats are
available, PriceLine Travel will issue a ticket on the applicable carrier.
The Airline desires to participate in the PriceLine Service and, in connection
therewith, will provide access to the Airline's inventory at pricing for the
origin and destination pairs (each, an "O&D") identified by the Airline in
accordance with the terms and conditions set forth in this Agreement.
PriceLine desires to include the Airline as a participating carrier in the
PriceLine Service and to have access to such inventory in accordance with the
terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the covenants and agreements set forth in
this Agreement, the parties agree as follows:
I. TERMS AND CONDITIONS RELATING TO AIRLINE TICKETS
------------------------------------------------
1. The Airline shall make available to PriceLine inventory at
pricing for O&Ds identified by the Airline (a "PriceLine Fare")
in accordance with the terms and conditions set forth in this
Agreement. It is expressly understood and agreed that the
Airline makes no commitment, whatsoever, regarding the number of
such O&Ds or the level of specific pricing except that such will
be communicated by the Airline to PriceLine under the procedures
2
identified in ATTACHMENT A, "PriceLine Availability, Pricing &
Ticketing Procedures", annexed hereto and made a part hereof.
2. The Airline acknowledges and agrees that all tickets issued by
PriceLine on behalf of the Airline as contemplated by this
Agreement (each, a "PRICELINE TICKET") shall be subject to the
following restrictions:
(a) All PriceLine Tickets will be non-refundable,
non-endorsable and non-changeable, except as
otherwise required and/or authorized by the Airline
under Paragraph I.5 below;
(b) All travel will be round-trip with no stopovers or
open-jaw travel permitted; and
(c) Frequent Flyer mileage and upgrades will not be permitted.
The above restrictions will be communicated by PriceLine to
the consumer via the internet and will be set forth on
ticketing and/or itinerary documentation issued by PriceLine
Travel.
3. All tickets issued under the terms of this Agreement will be
issued by PriceLine Travel (Agency ARC: 07-50854-6). PriceLine
Travel will act as the agent of the Airline pursuant to the
Airlines Reporting Corporation Industry Agents Handbook and
Supplements, as established and in effect from time to time by
the Airline Reporting Corporation ("ARC"), and the TWA
Supplemental ARC Agency Reporting Agreement thereto
(collectively, the "ARC DOCUMENTS"). The Airline will provide
PriceLine Travel with a copy of the TWA Supplemental ARC Agency
Reporting Agreement concurrently with PriceLine Travel's
execution of this Agreement. In addition, xxxxxxxxx.xxx LLC
will act as the agent of the Airline in the performance of its
obligations as contemplated by this Agreement.
4. PriceLine Travel will issue tickets on the routes of the Airline
(but not on Trans World Express) and will be subject to the
ticketing, availability rules, conditions of carriage and fare
rules as identified and communicated per the procedures
identified on ATTACHMENT A. PriceLine will determine the price
at which tickets are sold based on offers received under the
PriceLine Service. PriceLine will remit to the Airline, using
standard ARC reporting procedures, the Airline's fares, fees and
associated taxes for tickets issued by PriceLine on the routes
of the Airline. The Airline will audit all tickets issued by
PriceLine on the routes of the Airline and establish debit memos
as appropriate. All audits conducted by the Airline will be in
compliance
3
with the ARC Documents but the Airline is not precluded from
applying any other audit policies or practices.
5. The Airline will provide transportation for PriceLine customers
in accordance with its general conditions for carriage except as
noted in Paragraph I.2 above and any special handling procedures
as noted in ATTACHMENT B, "Special Handling Procedures", annexed
hereto and made a part hereof.
PriceLine will provide customers with access to a telephone
service center that will respond to any consumer questions and
issues pertaining to special handling requirements for PriceLine
Tickets including processing any customer handling requirements
as identified and authorized by the Airline in ATTACHMENT B
HERETO.
6. All inquiries (including, without limitation, requests for
PriceLine Ticket refunds and credit card charges), received by
the Airline from actual or potential purchasers of PriceLine
Tickets will be referred to PriceLine's designated customer
service representatives for resolution. The Airline and
PriceLine agree to mutually resolve customer issues that remain
if PriceLine is unable to conclude the matter.
II. CONFIDENTIALITY AND RELATED MATTERS
1. PriceLine and the Airline will each hold in confidence and,
without the prior written consent of the other, will not
reproduce, distribute, transmit, transfer or disclose, directly
or indirectly, in any form, by any means or for any purpose, any
Confidential Information of the other. As used herein, the term
"CONFIDENTIAL INFORMATION" shall mean this Agreement and its
subject matter, and information that is provided to or obtained
from one party to the other party and that is valuable to the
disclosing party, and particularly any information which derives
economic value, actual or potential, from not being generally
known to, and not generally ascertainable by proper means by,
other persons who can obtain economic value from its disclosure
or use. The recipient of Confidential Information may only
disclose such information to its employees on a need-to-know
basis and as necessary for the performance of the recipient's
obligations under this Agreement. The obligations of a
recipient party with respect to Confidential Information shall
remain in effect during and after the term of this Agreement
(including any renewals or extensions hereof) except to the
extent necessary to comply with applicable law or the order or
other legal process of any court, governmental or similar
authority having jurisdiction over the recipient.
4
2. The recipient of Confidential Information will exercise
reasonable commercial care in protecting the confidentiality of
the other party's Confidential Information.
3. PriceLine will not identify the Airline's participation in any
specific O&D until a customer is booked and confirmed for
ticketing. Further, PriceLine will not, in any media, indicate
that the Airline is participating or has participated in any
specific O&D except to indicate that a PriceLine customer must
accept a routing on one of the major full service airlines or,
in the case of international travel on one of the major
international airlines, available through the PriceLine Service.
The Airline may be identified, as appropriate, in such case and
for definitional purposes, as one of the major U.S. full service
airlines or major international airlines.
III. REPORTING
1. PriceLine will provide the Airline with MIS reports, as
developed and available, providing (i) access to information
concerning each ticket issued by PriceLine Travel on the
Airline; (ii) aggregate information (i.e. non airline specific)
for all tickets issued by PriceLine Travel in each O&D that the
Airline participates in by providing a PriceLine Fare; and (iii)
aggregate information for all PriceLine offers not ticketed in
each O&D that the Airline participates in by providing a
PriceLine Fare. PriceLine will use reasonable commercial
efforts to provide the Airline, not later than ninety (90) days
after public launch of the PriceLine Service, with secured
Intranet access to the information described in this Paragraph
III.1 through a PriceLine Intranet site for Airline queries.
PriceLine will provide the Airline a user identification number
and password for this purpose.
2. PriceLine will provide to the Airline the methodology for
selecting a carrier in processing customer offers and the
supporting application source code. This methodology may be
modified or adjusted from time to time by PriceLine. PriceLine
will use its best efforts to provide, in writing, any
modifications or adjustments to the methodology then in effect
within 5 (five) business days of any such modification or
adjustment.
3. PriceLine will provide to the Airline an annual statement by
PriceLine's independent accounting firm or other qualified
third-party concerning PriceLine's compliance with all reporting
and processing procedures in effect from time to time.
5
IV. TERM OF AGREEMENT
1. This Agreement will commence on the date set forth on the
first page of this Agreement and may be terminated by the
Airline or PriceLine upon thirty (30) days prior written
notice to the other party. The obligations of the parties
under Paragraphs II and V of this Agreement shall indefinitely
survive the expiration or termination of this Agreement.
2. In the event of written notice of termination of this
Agreement in accordance with the terms of Paragraph IV.1
above, all PriceLine Tickets issued prior to the effective
date of termination specified in such notice will be accepted
by the Airline under the terms of this Agreement.
V. INDEMNIFICATION
1. PriceLine Travel and xxxxxxxxx.xxx LLC will jointly and
severally indemnify, defend and hold harmless the Airline, its
officers, directors, employees and agents, from and against
all damages, losses and causes of action including, without
limitation, damage to property or bodily injury, to the extent
caused by xxxxxxxxx.xxx LLC's or PriceLine Travel's breach of
this Agreement or by the negligence or willful acts of such
party or any of their respective employees.
2. The Airline will indemnify, defend and hold harmless
PriceLine, its officers, directors, employees and agents from
and against all damages, losses and causes of action
including, without limitation, damage to property or bodily
injury, to the extent caused by the Airline's breach of this
Agreement or by the negligence or willful acts of the Airline
or any of its employees.
VI. MILLENNIA CAPABILITY; PRICELINE SYSTEM
1. PriceLine hereby warrants to the Airline that its electronic
systems and related software are Millennia Capable; provided,
however, that such warranty shall not extend to the systems and
related software owned or controlled by a third party vendor.
For purposes of this Agreement, Millennia Capable shall mean the
ability and capability to avoid errors in processing arising
from dates occurring on and after the year 2000 (including such
errors as may occur on, before and after the year 2000). The
Airline acknowledges and agrees that the performance of
PriceLine's obligations hereunder may be adversely affected in
the event that problems relating to the systems, software or
processes of third party vendors utilized
6
by PriceLine are not Millennia Capable. In such case, PriceLine
will not have any liability hereunder, or any obligation to
correct or otherwise rectify such problems. Further, the
existence of such problems, if any, will not constitute a breach
of PriceLine's obligations under this Agreement.
2. PriceLine will use reasonable commercial efforts to ensure that
all data, software and related systems necessary for the
operation of the PriceLine Service are adequately maintained and
are accessible at all times relevant to this Agreement. All
data, software and related systems necessary for the operation
of the PriceLine Service are fully redundant, are updated for
security purposes and are firewall protected.
VII. GENERAL PROVISIONS
1. No waiver or breach of any of the provisions of this Agreement
shall be construed as a waiver of any succeeding breach of the
same or any other provision.
2. If any paragraph, sentence or clause of this Agreement shall be
adjudged illegal, invalid or unenforceable, such illegality,
invalidity or unenforceability shall not affect the legality,
validity or enforceability of this Agreement as a whole or of
any paragraph, sentence or clause hereof not so adjudged.
3. Any notice required or permitted hereunder shall be deemed
sufficient if given in writing and delivered personally, by
facsimile transmission, by reputable overnight courier service
or United States mail, postage prepaid, to the addresses shown
below or to such other addresses as are specified by similar
notice, and shall be deemed received upon personal delivery,
upon confirmed facsimile receipt, two (2) days following deposit
with such courier service, or three (3) days from deposit in the
United States mail, in each case as herein provided:
7
If to PriceLine Travel or to If to the Airline:
xxxxxxxxx.xxx LLC:
Xxxxxxxxx.xxx LLC Trans World Airlines, Inc.
0 Xxxx Xxxxx Xxxx Xxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000 000 Xxxxx 0xx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxx Attention: Xxxxxx X. Xxxxxxx
Phone: 000-000-0000 Phone:_______________________
Fax: 000-000-0000 Fax:_________________________
A party may change its address and the name of its designated
recipient of copies of notices for purposes of this Agreement by
giving the other parties written notice of the new name and the
address, phone and facsimile number of its designated recipient
in accordance with this Paragraph VI.3.
4. This Agreement and the Attachments hereto, together with the ARC
Documents, supersede and replace all previous understandings or
agreements, whether oral or written, with respect to the subject
matter hereof. In the event that any provision or provisions of
the ARC Documents are contrary to or inconsistent with any term
or provision of this Agreement or any Attachment hereto, the
terms of this Agreement or such Attachment shall control.
5. This Agreement may be amended or modified only by a written
amendment executed by each of the parties.
6. The formation, construction, performance and validity of this
Agreement shall be governed by the internal laws of the State of
New York.
7. This Agreement may be executed in counterparts, each of which
shall be deemed an original, and together, shall constitute one
and the same instrument.
8. No party will in any manner or by any device, either directly or
indirectly, act in violation of any applicable law, governmental
order or regulation including the provisions of the Airline's
tariffs (except where such tariffs are specifically amended by
Airline, under the terms of this Agreement) and PriceLine
Travel's appointment or provision for the conduct of business as
established by ARC.
8
9. PriceLine agrees to notify the Airline promptly, in writing, in
the event there is a change of control in the ownership of
PriceLine Travel or xxxxxxxxx.xxx LLC.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement on the date indicated above.
PRICELINE TRAVEL, INC. TRANS WORLD AIRLINES, INC.
------------------------------------- --------------------------------------
By: Xxxxxxx Xxxxx, President By: Xxxxxx X. Xxxxxxx, Vice President
Sales and Reservations
XXXXXXXXX.XXX LLC
-------------------------------------
By: Xxxxxxx Xxxxx, Executive Vice
President
ATTACHMENT A
PRICELINE AVAILABILITY, PRICING & TICKETING PROCEDURES
1. The Airline will provide PriceLine with access to the Airline's seat
inventory in accordance with specific fares and rules, filed by the
Airline directly into its designated CRS, for use by PriceLine in the
sale of airline tickets in accordance with the terms and conditions of
this Agreement. All PriceLine Fares filed by the Airline into its
designated CRS for use by PriceLine as herein provided will be deemed
fully guaranteed by the Airline.
2. The PriceLine Fares that are filed by the Airline for use by PriceLine
are fares that are not commissionable and domestic PriceLine Fares are
inclusive of the then applicable U.S.
transportation tax, if applicable.
(a) All PriceLine Fares are exclusive of any domestic federal segment
taxes, and any domestic or international fuel, departure, arrival,
passenger facility, airport, terminal and/or security taxes, fees or
surcharges which, when applicable, must be added to the fare collected
from the passenger and shown on the PriceLine Ticket.
3. PriceLine Tickets will be issued on standard ARC traffic documents and
will be validated with the Airline's validation. The passenger and
flight coupon will show "bulk" for the fare and will include all
additional collections as noted in Paragraph 2 of this Attachment A.
The auditor's coupon will show the fare as authorized by the Airline
plus applicable taxes, fees and surcharges. PriceLine Travel will be
the merchant of record and all tickets and payments will be settled
between PriceLine and the Airline through ARC as a cash sale unless
otherwise authorized by the Airline.
(a) Promptly following the launch date of the PriceLine Service,
PriceLine will provide the Airline with either a performance bond or an
irrevocable letter of credit in the amount of $50,000. Such bond or
letter of credit shall be in a form reasonably acceptable to the
Airline, payable to the Airline on demand, and valid until all of
PriceLine's payment obligations in respect of PriceLine Tickets sold
have been fulfilled. Any letter of credit shall be drawn upon a bank
reasonably acceptable to the Airline in U.S. dollars, with a U.S.
branch presentable in a city in the United States currently served by
the Airline. The Airline may draw upon such letter of credit to cover
any failure of PriceLine to pay monies owed to the Airline with respect
to the purchase and sale of PriceLine Tickets. PriceLine agrees to
allow monthly reviews (at the end of each month during the term of this
Agreement) of PriceLine Ticket sales on the Airline and, based on the
dollar
2
amount of such PriceLine Tickets sales, the Airline may request that
such $50,000 performance bond or irrevocable letter of credit, as
applicable, be increased by a reasonable amount not to exceed the
average dollar value of sales for the subject period, multiplied by two.
Until provision of the performance bond or irrevocable letter of
credit, PriceLine shall deposit with the Airline the amount of $50,000
to secure its payment obligations under this Agreement. Such deposit
will be returned to PriceLine by wire transfer of immediately available
funds to the account designated by PriceLine upon the Airline's receipt
of such performance bond or irrevocable letter of credit.
4. (b) The Airline shall maintain and communicate any changes in fares
and/or rules to be used by PriceLine. The most current fares and rules
may be accessed by PriceLine as authorized by the Airline through the
designated CRS entries provided by the Airline, which entries shall
include the fare and rules display designated from time to time by the
Airline. The Airline will honor all PriceLine Tickets properly issued
before the Airline has communicated any change in fares and/or rules.
5. Examples of the type of fares and rules, as provided by the Airline,
are included as ATTACHMENT A-1, annexed hereto and made a part hereof.
Such attachment is for example only; only the current authorized fares
and rules may be used.
3
ATTACHMENT A-1
--------------
EXAMPLE OF FARES AND RULES
--------------------------
We will attach an example of a summary sheet of fares and rules that
the Airline provides PriceLine for sample purposes only.
ATTACHMENT B
------------
SPECIAL HANDLING PROCEDURES
---------------------------
1. PriceLine Tickets issued on the Airline are subject to the published
conditions of carriage and rules of the Airline except as specifically
identified in this Agreement. Specifically, PriceLine will market the
PriceLine Service with the following restrictions:
(a) PriceLine Tickets will be non-refundable, non-endorseable and
non-changeable;
(b) All travel will be round-trip with no stopovers or open-jaw travel
permitted; and
(c) Frequent Flyer mileage and upgrades will not be permitted.
2. Notwithstanding the product definition that PriceLine markets to
consumers, the Airline authorizes that its published conditions of
carriage, rules and restrictions apply for the following (Check
applicable boxes):
(a) Frequent Flyer Mileage / /
(b) Involuntary Rerouting / /
(c) Missed Flight provisions / /
(d) Death or Illness provisions / /
(e) Lost or stolen tickets / /
(f) Other (Identify) / /
In the event that the Airline chooses to honor frequent flyer mileage
and/or seat upgrades, the Airline will be solely responsible for any
tracking and documentation resulting therefrom.
3. PriceLine Tickets are non-refundable and non-changeable. PriceLine and
the Airline will handle any customer service issues regarding requests
for refunds or changes. On the basis that the Airline wishes to
authorize refunds or changes on a case-by-case basis, the Airline will
interface with PriceLine's designated customer service representatives
and communicate the Airline's intent to refund or change specific
PriceLine Ticket. In such cases, the applicable add-collect and any
Airline specific change fee will apply. In all cases, PriceLine
Tickets that the Airline wishes to refund or change will be forwarded
to PriceLine and refunds or changes will be processed through standard
merchant procedures as outlined in the Industry Agents Handbook,
Section 80, subsection X and Section 6.
