Master Agreement – Delta Air Lines Inc. and Priceline.com Inc.
MASTER AGREEMENT
This Master Agreement ("Agreement"), dated the 17th day of November, 1999,
is between Delta Air Lines, Inc. ("Delta") and priceline.com Incorporated
("Priceline").
RECITALS
Delta has agreed to amend the General Agreement, dated August 31, 1998, as
amended (the "GA"), to add United Airlines, American Airlines, US Airways, Japan
Airlines, Alitalia and Aerolineas Argentinas to the list of permitted carriers
and to modify sections of the GA relating to market restrictions, the allocation
methodology, and reporting and audit rights set forth therein. In exchange,
Priceline (a) has agreed to provide financial consideration to Delta by making
possible certain arrangements described herein and (b) has requested the release
by Morgan Stanley of Delta from a lock-up arrangement so that Delta may sell
8,440,067 shares ("Market Sale Shares") of its approximately 14.4 million shares
of Priceline common stock. In addition, Priceline has agreed that the remaining
approximately six million shares of Priceline common stock held by Delta will be
exchanged, at Delta's option, for approximately six million shares of newly
issued Priceline convertible preferred stock, which will bear an eight percent
annual pay-in-kind dividend.
The parties agree to the following:
ARTICLE 1- ACTIONS OF THE PARTIES
1.1 Amendment to General Agreement and Airline Participation Agreement
Delta and Priceline agree to amend the General Agreement and Airline
Participation Agreement, dated August 31, 1998, as amended ("APA"), in
accordance with Exhibit A, attached hereto and incorporated by reference
herein (the "Amendment").
1.2 Release from Lock-up
Priceline will use its best efforts to cause Morgan Stanley & Co.
Incorporated and Morgan Stanley & Co. International Limited (collectively,
Morgan Stanley) to release the Market Sale Shares held by Delta from the
lock-up that
expires on February 7, 2000 pursuant to that certain Lock-Up Letter from
Delta to Morgan Stanley and several Underwriters dated August 11, 1999
(the "Lock-Up"). In addition, Priceline shall not request, will oppose if
requested, and will use its best efforts to cause Morgan Stanley not to
release any other parties from any existing lock-up agreements relating to
Priceline, until Delta has sold the Market Sale Shares.
1.3 No Amendment of Warrant Agreements
Priceline shall not amend, during the period from the date hereof until
the earlier of February 7, 2000 or Delta having sold the Market Sale
Shares (the "Release Date"), any warrant agreement or warrant certificate
to permit a cashless exercise feature.
1.4 No Sale or Registration of Securities
Priceline shall not initiate, and to the extent it has a contractual right
to do so, Priceline shall not consent to or participate in, a sale of
equity securities of Priceline until after the Release Date.
1.5 Convertible Preferred Stock
At Delta's option, , all of the shares of Priceline Common Stock held by
Delta (other than the Market Sale Shares) will be exchanged for
$359,580,000 aggregate principal amount of a newly issued class of
convertible preferred stock of Priceline bearing an accruing semi-annual
paid-in-kind dividend at a rate of eight percent (8%) per annum, payable
semiannually, in Priceline common shares (the "Convertible Preferred
Stock"), which such exchange to be structured to the extent possible in a
tax-free transaction to Delta pursuant to I.R.C. Section 368 (a)(1)(E).
Any shares of Convertible Preferred Stock held by Delta after the date of
issuance may be converted at Delta's option at any time into shares of
Priceline common stock at a one (1) to one (1) ratio (i.e. a zero percent
premium). The Convertible Preferred Stock will have a final maturity of
ten (10) years from the date of issue and be subject to a mandatory
redemption at the tenth (10th) anniversary for cash at a price per share
of $59.93; provided that Priceline shall have a call right for the
Convertible Preferred Stock after three (3) years from the date of issue
for cash at a price per share of $59.93. To the extent all or a portion of
the Convertible Preferred Stock is called, Priceline will provide Delta
with 30
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days' advance written notice so that Delta will first have the right to
convert its Convertible Preferred Stock during such 30 day period. Whether
or not Priceline has exercised its call right, Delta is guaranteed the
first six semiannual dividends. The Convertible Preferred Stock will be
subordinated to any indebtedness of Priceline, will rank pari passau with
any existing or future preferred stock issued by Priceline, and will have
priority over the the common stock of Priceline. Delta will have voting
rights for the Convertible Preferred Stock as if Delta held an equivalent
number of Priceline common shares (i.e., on a one to one ratio). In the
event that Priceline issues a cash dividend to the holders of common
shares, then Delta shall be entitled to demand a cash dividend on the
Convertible Preferred Stock in lieu of the paid-in-kind dividend.
In the event of a change of control of Priceline where cash is a portion
of the consideration paid by the acquiring company, Delta will have the
right to elect to receive the greater of par (cash at a price per share of
$59.93) or the cash value of the transaction. If the transaction is for
stock, the exchange ratio will be adjusted such that Delta receives the
same monetary consideration for its Convertible Preferred Stock.
Priceline hereby confirms that such shares, when converted to Priceline
common stock, shall have demand and piggyback registration rights under
the existing Amended and Restated Registration Rights Agreement dated
December 8, 1998 by and among Delta, Priceline, and other parties or any
successor or substitute registration rights agreement thereto.
The Convertible Preferred Stock will be subordinated to any indebtedness
of Priceline, will rank pari passau with any existing or future preferred
stock issued by Priceline, and will have priority over the the common
stock of Priceline. Delta will have voting rights for the Convertible
Preferred Stock as if Delta held an equivalent number of Priceline common
shares (i.e., on a one to one ratio). In the event that Priceline issues a
cash dividend to the holders of common shares, then Delta shall be
entitled to demand a cash dividend on the Convertible Preferred Stock in
lieu of the paid-in-kind dividend.
1.6 Other Agreements
Priceline and Delta, respectively, shall execute and deliver the
agreements described in Article 6 to which either is a party.
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ARTICLE 2- CLOSING
2.1 Closing. The closing (the "Closing") of the transactions contemplated by
this Agreement shall take place immediately, following the satisfaction or
waiver of all of the conditions set forth in Article 6 hereof (the "Closing
Date").
ARTICLE 3- REPRESENTATIONS AND WARRANTIES OF PRICELINE
Representations and Warranties of Priceline. Priceline represents and warrants
to Delta as follows:
3.1 Organization and Qualification. Priceline is a duly organized and validly
existing corporation in good standing under the laws of the State of
Delaware and has the corporate power and authority to own, operate and
lease the properties and assets it now owns, operates or leases and to
conduct its business as it is now being conducted.
3.2 Authority Relative to this Agreement. Priceline has the corporate power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby in accordance with the terms hereof. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of the Priceline. This Agreement
has been duly and validly executed and delivered by Priceline and is,
assuming due execution and delivery thereof by Delta and that Delta has
full legal power and right to enter into this Agreement, a valid and
binding obligation of Priceline, enforceable against Priceline in
accordance with its terms, except as enforcement thereof may be limited by
the availability of certain equitable remedies or by bankruptcy,
insolvency or similar laws affecting creditors' rights generally.
3.3 Broker. Priceline has not retained or agreed to pay any broker or finder
with respect to this Agreement and the transactions contemplated hereby,
the fees for which Delta may be responsible.
3.4 Shares Held by Delta. Priceline represents that, as of the date of the
Warrant Agreement, after giving effect to the Stock Purchase Agreement of
November 16, 1999, pursuant to which Jay S. Walker purchased from Delta
2,085,767 shares of Priceline common stock at a price of $59.93 per share,
the remain-
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ing 14,440,067 shares of Priceline common stock held by Delta represent
approximately eight and eighty five hundredths percent (8.85%) of the
outstanding common stock of Priceline.
ARTICLE 4- REPRESENTATIONS AND WARRANTIES OF DELTA
Representations and Warranties of Delta. Delta represents to Priceline as
follows:
4.1 Organization and Qualification. Delta is a duly incorporated and validly
existing corporation in good standing under the laws of the State of
Delaware and has the corporate power and authority to own, operate and
lease the properties and assets it now owns, operates or leases and to
conduct its business as it is now being conducted.
4.2 Authority Relative to this Agreement. Delta has the corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby in accordance with the terms hereof. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of the Delta. This Agreement has
been duly and validly executed and delivered by Delta and is, assuming due
execution and delivery thereof by Priceline and that Priceline has full
legal power and right to enter into this Agreement, a valid and binding
obligation of Delta, enforceable against Delta in accordance with its
terms, except as enforcement thereof may be limited by the availability of
certain equitable remedies or by bankruptcy, insolvency or similar laws
affecting creditors' rights generally.
4.3 Purchase for Investment.
(a) Delta understands that the shares of Convertible Preferred Stock
to be issued to Delta hereunder (the "Shares") have not been registered
under the Securities Act of 1933, as amended (the "Act"), or under
applicable state securities laws, in reliance upon exemptions contained in
the Act and such laws and any applicable regulations promulgated
thereunder or interpretations thereof, and cannot be offered for sale,
sold or otherwise transferred unless all or any portion of the Shares
subsequently are so registered or qualify for exemption from registration
under the Act and such laws and unless such offer, sale or transfer is
made in compliance with the terms of this Agreement
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and that the certificate(s) representing the Shares shall bear the
following legends:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAW.
THEY MAY NOT BE SOLD OR OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR
OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH SAID ACT."
(b) The Shares are being acquired under this Agreement by Delta in
good faith solely for its own account, for investment and not with a view
toward resale or other distribution within the meaning of the Act; and
such Shares will not be offered for sale, sold or otherwise transferred
without either registration or exemption from registration under the Act.
(c) Delta is an "Accredited Investor" within the meaning of rule 501
of Regulation D under the Act, as presently in effect. Delta has such
knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of its investment in the
Shares; and understands and is able to bear any economic risks associated
with such investment.
(d) Delta understands that the Shares will be considered "restricted
securities" within the meaning of Rule 144 under the Act; that Rule 144
may not be available to exempt from the registration requirements of the
Act sales of such restricted securities; that if Rule 144 is available,
sales may be made in reliance upon Rule 144 only in accordance with the
terms and conditions of Rule 144, which among other things generally
requires that the securities be held for at least one year and that sales
be made in limited amounts (which amounts are subject to certain
exceptions depending upon whether the seller is an "affiliate" within the
meaning of Rule 144 and how long the securities have been held); and that,
if the exemption for such sales is not available, registration of the
Shares under the Act and state securities laws may be required.
4.4 Broker. Delta has not retained or agreed to pay any broker or finder with
respect to this Agreement and the transactions contemplated hereby, the
fees for which Priceline may be responsible.
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ARTICLE 5- FURTHER AGREEMENTS OF THE PARTIES
5.1 Governmental Filings. In connection with the consummation of the
transactions contemplated hereby, Priceline and Delta shall promptly file
with the SEC any required materials relating to the transactions
contemplated by this Agreement.
5.2 Reasonable Business Efforts. Upon the terms and subject to the conditions
of this Agreement, Delta and Priceline agree to use reasonable business
efforts to take, or cause to be taken, and to assist and cooperate with
each other in doing, all things reasonably necessary, proper or advisable
under applicable laws and regulations to consummate and make effective, in
the most expeditious manner practicable, the transactions contemplated by
this Agreement.
5.3 Expenses; Payments. Each party hereto agrees to bear its own expenses
(including, without limitation, the reasonable fees and disbursements of
counsel) in connection with the negotiation and preparation of this
Agreement and its performance hereunder.
5.4 Warrant. On November 17, 1999, Priceline shall execute and deliver to
Delta a Participation Warrant Agreement in the form of Exhibit D attached
hereto.
ARTICLE 6- CONDITIONS TO OBLIGATIONS OF DELTA
Delta shall not be obligated to consummate the transactions contemplated by this
Agreement, unless the following conditions shall have been satisfied or, if
applicable, waived by Delta prior to or at the Closing.
6.1 Representations and Warranties. The representations and warranties of
Priceline contained herein shall be true, complete and accurate in all
material respects as of the Closing Date.
6.2 Morgan Stanley shall have issued to Delta a letter in the form of Exhibit
B attached hereto in which Morgan Stanley releases the Market Sale Shares
from the Lock-Up that expires on February 7, 2000 (the "Lock-Up").
6.3 Jay S. Walker, Walker Digital, Richard Braddock, Paul Francis and Timothy
Brier each shall have signed a letter agreement with Delta, in the form of
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Exhibit C attached hereto, in which each agrees, during the period from
the date hereof until the Release Date, not to sell or transfer, directly
or indirectly, any Priceline securities.
6.4 Priceline shall have executed a Participation Warrant Agreement in the
form of Exhibit D attached hereto.
ARTICLE 7- CONDITIONS TO OBLIGATIONS OF PRICELINE
Priceline shall not be obligated to consummate the transactions contemplated by
this Agreement unless the following conditions shall have been satisfied or, if
applicable, waived by Priceline prior to or at the Closing.
7.1 Representations and Warranties. The representations and warranties of
Delta contained herein shall be true, complete and accurate in all
material respects as of the Closing Date.
7.2 Amendments. Delta shall have executed and delivered the Amendment to the
GA and APA, substantially in the form of Exhibit A attached hereto.
ARTICLE 8- TERMINATION
8.1 Certain Terminations. This Agreement may be terminated at any time prior
to the occurrence of the Closing: (a) by written agreement by Delta and
Priceline; or (b) by the party not in breach in the event of a material
breach by the other which is not cured within fifteen (15) days after
written notice thereof.
8.2 Effect of Termination. In the event of the termination of this Agreement
by either Delta or Priceline, as provided above, this Agreement shall
thereafter become void and of no further force and effect and there shall
be no liability on the part of any party hereto or its directors,
officers, stockholders, employees or agents, except for any liability for
any willful breach of this Agreement causing or permitting such
termination and except that the provisions of Sections 5.3 and this
Section 8.2 shall survive such termination. The representations and
warranties made herein shall survive the Closing.
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ARTICLE 9- MISCELLANEOUS
9.1 Further Assurances. From time to time hereafter, each party shall, using
reasonable business efforts, execute and deliver such other instruments of
transfer and assumption and take such further action including providing
access to necessary books and records as the other may reasonably request
to carry out the transfer of the Assets and as otherwise may be reasonably
required in connection with effecting or carrying out the provisions of
this Agreement.
9.2 No Waiver. Except as expressly provided in this Agreement, nothing
contained in this Agreement shall cause the failure of either party to
insist upon strict compliance with any covenant, obligation, condition or
agreement contained herein to operate as a waiver of, or estoppel with
respect to, any such or any other covenant, obligations, condition or
agreement by the party entitled to the benefits thereto.
9.3 Severability. If any provisions hereof shall be held invalid or
unenforceable by any court of competent jurisdiction or as a result of
future legislative action, such holding or action shall be strictly
construed and, subject to applicable law, shall not affect the validity or
effect of any other provisions hereof.
9.4 No Third Party Beneficiary. Nothing herein expressed or implied is
intended to or shall be construed to confer upon or give to any person or
corporation other than the parties hereto and their successors any rights
or remedies under or by reason of this Agreement.
9.5 Entire Agreement; Amendments. This Agreement contains and is intended as,
a complete statement of the entire agreement and understanding between the
parties with respect to the subject matter hereof and supersedes all prior
statements, representations, discussions, agreements, draft agreements and
undertakings, whether written or oral, express or implied, of any and
every nature with respect thereto. This Agreement cannot be changed or
terminated orally. This Agreement may only be amended by written agreement
of Priceline and Delta.
9.6 Assignment. This Agreement shall be binding upon the successors and
assigns of the parties hereto, although no party shall be permitted to
assign
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any of its rights or delegate any of its duties under this Agreement
without the consent of the other party hereto.
9.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to agreements
made and to be performed in the State of Delaware.
9.8 Notices. All notices, requests, demands, and other communications under
this Agreement shall be in writing and shall be delivered personally
(including by courier) or mailed by registered mail, return receipt
requested, or given by facsimile transmission to the parties at the
following addresses (or to such other address as a party may have
specified by notice given to the other pursuant to this provision) and
shall be deemed given when so received:
(a) if to Priceline, to:
priceline.com Incorporated
5 High Ridge Park,
Stamford, Connecticut 06905
Attn: - General Counsel
Facsimile number: (203) 595-8344.
(b) if to Delta, to:
Delta Air Lines, Inc.
1030 Delta Boulevard Atlanta, GA 30320
Attn: Senior Vice President - General Counsel
Facsimile number: (404) 715-2106.
9.9 Headings. The section headings of this Agreement are for reference
purposes only and are to be given no effect in the construction or
interpretation of this Agreement. All references herein to sections,
unless otherwise identified, are to sections of this Agreement.
9.10 Counterparts; Facsimile Signature. This Agreement may be executed by the
parties hereto in two or more counterparts, by facsimile or otherwise,
each of which shall be deemed to constitute an original, but together
which shall constitute one and the same instrument.
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9.11 Indemnity Each party (the "Indemnifying Party") shall indemnify, defend,
compensate, and hold harmless the other, and the other's officers,
directors, employees, and representatives, to the fullest extent permitted
by law, from and against all damages, claims, liabilities, losses and
attorneys' fees, arising out of or relating to any breach of any
representation, warranty, covenant or agreement in this Agreement or any
agreement signed by Delta or Priceline pursuant to Article 6.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed as of the date first above written.
PRICELINE.COM DELTA AIR LINES, INC.
INCORPORATED
------------------------ ---------------------------
By: Paul E. Francis By: M. Michele Burns
Title: Chief Financial Officer Title: Vice President & Treasurer
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TYPE: EX-10.11.6
SEQUENCE: 3
DESCRIPTION: AMENDMENT
AMENDMENT TO THE AIRLINE PARTICIPATION AGREEMENT AND THE GENERAL AGREEMENT
This Amendment ("Amendment"), dated the 17th day of November, 1999, amends the
Airline Participation Agreement ("APA") and the General Agreement ("GA"), dated
August 31, 1998, as amended, between and among Delta Air Lines, Inc. ("Delta")
and priceline.com Incorporated and PriceLine Travel, Inc. which merged with and
into priceline.com Incorporated on March 24, 1999 ("Priceline"). Unless
otherwise defined herein, capitalized terms shall have the meanings set forth in
the APA and the GA, as applicable.
1. The following provision replaces Section 3.1 of the GA in its entirety:
3.1 Subject to Section 3.5 below, Delta and Priceline agree that, during
the term of the GA and APA:
(a) Delta consents to the participation in Priceline by the U.S.
carriers identified in the attached Schedule 3.1; subject to the
following restrictions:
(i) Priceline shall not issue tickets on Northwest Airlines to or
from ATL, except for the following O&D markets: DTW-ATL,
MSP-ATL, and MEM-ATL;
(ii) Priceline shall not issue tickets on Continental Airlines to
or from ATL, except for the following O&D markets: EWR-ATL,
CLE-ATL, HOU-ATL and IAH-ATL;
(iii) Priceline shall not issue tickets on United Airlines to or
from ATL, except for the following O&D markets: ORD- ATL,
DEN-ATL, SFO-ATL, and IAD-ATL;
(iv) Priceline shall not issue tickets on USAirways to or from ATL,
BOS or LGA except for the following O&D markets: PIT-
ATL/BOS/LGA, PHL-ATL/BOS/LGA, and CLT-ATL/BOS/LGA.
Notwithstanding the above restriction, Priceline may issue
tickets on USAirways to or from BOS or LGA in O&D markets not
served by nonstop flights operated by Delta or a carrier
operating a flight under Delta's two letter "DL" designator
code, provided, that Priceline shall restrict its ticket BOS
or LGA sales on USAirways within thirty (30) days of any new
nonstop BOS or LGA service offered by Delta or a carrier
operating a flight under Delta's two letter "DL" designator
code; and
(v) Priceline shall not issue tickets on American Airlines to or
from ATL, except for the following O&D markets: ORD-ATL,
DFW-ATL and MIA-ATL. In the event that American Airlines (or
an affiliate of American Airlines), merges with or acquires
substantial assets of USAirways in Boston, then, in addition
to the ATL market restriction, Priceline shall not issue
tickets on American Airlines to or from BOS, except for the
following O&D markets: ORD- BOS, DFW- BOS and MIA- BOS;
provided, that Priceline may issue tickets on American
Airlines to or from BOS in O&D markets not served by nonstop
flights operated by Delta or a carrier operating a flight
under Delta's two letter "DL" designator code subject to;
provided, further, that Priceline shall restrict its BOS
ticket sales on American within thirty (30) days of any new
nonstop BOS service offered by Delta or a carrier operating a
flight under Delta's two letter "DL" designator code. In the
event that American acquires or operates a hub airport in PIT,
PHL or CLT as a result of the acquisition of substantially all
of the assets of USAirways in PIT, PHL or CLT, then Priceline
may issue tickets on American Airlines, respectively, in the
PIT-ATL, PHL-ATL, or CLT-ATL markets, respectively.
(b) Delta consents to the participation in Priceline by the
International Carriers identified in the attached Schedule 3.1;
subject to the following restrictions:
(i) Priceline shall not issue tickets for international travel on
Austrian Airlines, Sabena, Swissair, AeroMexico, Air Jamaica,
Korean Airlines, Air Canada, All Nippon Airways, El Al Israel
Airlines, Qantas, Japan Airlines, Alitalia and Aerolineas
Argentinas to or from ATL or BOS, except for offers
originating from O&D markets not served by Delta or a carrier
operating a flight under Delta's two letter ("DL") designator
code.
(c) Notwithstanding the restrictions set forth in Section 3.1(a) and
3.1(b), Priceline may, in addition to other rights set forth in this
Amendment issue tickets (i) on Turkish Airlines solely in the New
York (JFK) - Tel Aviv O&D market, (ii) on flights operated by
Participating Airlines in O&D markets not served by Delta or a
carrier operating a flight under Delta's two letter designator code,
and (iii) on code share flights operated by third party carriers
(including commuter carriers) where the Participating Carrier's two
letter designator code used to identify its flights (as published
and used in the Official Airline Guide (OAG), computer reservation
systems (CRS's) and internal reservations systems) appears in the
carrier code box of the flight coupon; provided, that the market
restrictions set forth in Section 3.1(a) and 3.1(b) are applicable
to such code share flights.
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(d) Priceline shall not issue tickets on carriers that are not listed on
Schedule 3.1. The participation of other domestic and international
carriers in Priceline, and the sale of tickets on such carriers, is
subject to Delta's prior written consent. Delta agrees to meet with
Priceline to discuss objective criteria by which new international
participants could be added.
(e) For purposes of Section 3.1, an O&D market shall be considered to be
served by Delta or a carrier operating a flight under Delta's two
letter designator code at any time scheduled service is offered for
sale by one or more such carriers.
2. The following test is added as Section 7.15 (f) of the GA:
Reporting Audit Rights:
The General Agreement will be amended to state that Priceline will make
available (at no cost to Delta) to all Participating Airlines, on an agreed
production schedule, the following information for all Domestic and
International markets in which such Participating Airlines provide fares and
availability ("Applicable O&D's"):
o Methodology for determination of "Reasonable Demand" where "Reasonable
Demand" denotes offers acceptable to Priceline for possible fulfillment
o Notification of changes to "Reasonable Demand" methodology
o O&D routing, number of passengers, revenue, and average fare data for all
Priceline tickets for each Participating Airline The above data will be
made available to each Participating Airline no later than 30 days
following the end of each calendar month in the case of segment data and
each calendar quarter in the case of data relating to number of
passengers, revenue and average fare data.
o With respect to Delta only
- Weekly frequency distribution of offer price demand by applicable
O&D to include mode, range, minimum/maximum level, mean, median,
standard deviation and bid price trends
- As soon as practical but in any case within six months, make
available to Delta with weekly detail and summary report that
identifies rejected offers and the reasons leading to the rejections
(e.g., "bid was too low by $20, no "L" inventory LGA-ATL Nov 1)
o Priceline will continue to provide to Delta all the data it currently
submits on a regular basis (i.e., Delta Air Lines' Weekly Ticket Report -
Summaries of Ticket Sales by O&D - Domestic and International), including
data routinely submitted in response to Delta ad hoc requests.
Priceline will disclose bookings through Priceline in a format comparable
to the CRS MIDT data on a weekly basis and Priceline shall make available
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such data to all Participating Carriers.
Priceline agrees to make available to Delta the audit plan and the report
prepared by priceline's auditors concerning Priceline's compliance with
the Participation Agreement and Delta General Agreement. In addition,
Delta will have the right to audit Priceline for compliance on all
contractual market, product, and other agreements and to receive regular
reports measuring compliance to such contractual terms.
3. The following provision replaces Section 7.11 of the General Agreement in
its entirety:
7.11 All Participating Carriers will be given the first opportunity to
fill a customer ticket request based on a formula which allocates such
requests in proportion to the aggregate domestic or international market
share (as applicable) of each Participating Carrier for each O&D
requested. If a Participating Carrier fails to respond to a ticket request
on its designated first look, then Priceline will allocate the request
through a second round of preferred looks, which will be allocated in
proportion to the aggregate domestic or international market shares (as
applicable) of all remaining Participating Carriers for each O&D requested
(but excluding the Participating Carrier that failed to fulfill the ticket
request on the first look).
4. The following provision replaces Article III of the Airline Participation
Agreement in its entirety:
III. Priceline Ticket Allocation Methodology
All Participating Carriers will be given the first opportunity to
fill a customer ticket request based on a formula which allocates
such requests in proportion to the aggregate domestic or
international market share (as applicable) of each Participating
Carrier for each O&D requested. If a Participating Carrier fails to
respond to a ticket request on its designated first look, then
Priceline will allocate the request through a second round of
preferred looks, which will be allocated in proportion to the
aggregate domestic or international market shares (as applicable) of
all remaining Participating Carriers for each O&D requested (but
excluding the Participating Carrier that failed to fulfill the
ticket request on the first look).
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5. Except as provided herein, all other terms and conditions of the APA and
the GA shall remain in full force and effect. In the event any term or
provision of the APA or the GA is contrary to or inconsistent with this
Amendment, the terms of this Amendment shall control.
PRICELINE.COM DELTA AIR LINES, INC.
INCORPORATED
------------------------------- ----------------------------
By: Paul E. Francis By: M. Michele Burns
Title: Chief Financial Officer Title: Vice President & Treasurer
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SCHEDULE 3.1
US CARRIERS
Alaska Airlines
American Airlines
America West Airlines
Continental Airlines
Hawaiian Airlines
Midway Airlines
Northwest Airlines
Sky West
Trans World Airlines
Trans States
USAirways
United Airlines
INTERNATIONAL CARRIERS
Air Jamaica
Aer Lingus
Aerolineas Argentinas
Aeromexico
Air Canada
Air France
Air New Zealand
Alitalia
All Nippon Airways
Austrian Airlines
Cathay Pacific Airways
El Al Israel Airlines
Iberia
Icelandair
Korean Air Lines
Japan Airlines
Lufthansa
Malaysia Airlines
Qantas
SAS (Scandinavian Airlines)
Singapore Airlines
Sabena
South African Airways
Swissair
Varig
Virgin Atlantic
6
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