1 North America Point-of-Sale Commission and Fare Agreement Part I Standard Terms and Conditions In addition to Part I - Standard Terms and Conditions and Part II General and Geographic Definitions, the following conditions shall apply to Commissions authorized under this Agreement: ARC Reporting Agreement - AA Addendum to the ARC Reporting Agreement - JL Addendum to the ARC Reporting Agreement - BA/IB/AY Additional Terms and Conditions See Part IV Appendices 1. Good Faith Dealing. (a) Good Faith Dealing. Contractor will book and ticket all passengers and conduct itself in its dealings with passengers in accordance with each Carrier s conditions of carriage and all other rules and procedures of each Carrier, as applicable. In addition, all travel using the Fare programs made available under this Agreement will be governed by each Carrier s conditions of carriage. An overview of such rules and procedures is published at each Carrier s website. (b) Authorized Sales Outlets. (i) Contractor represents that (A) (B) (C) it has the exclusive power to control, direct, manage and supervise the policies, assets and operations of all air travel-related businesses that report bookings or sales through each of the respective ARC/IATA identifying numbers listed in the attached certification and, if such businesses are separately incorporated or otherwise conducted within a legal entity distinct from Contractor, Contractor owns and controls at least 51% of the voting equity securities (or other equivalent ownership interests) of each such business; it has the ability to and will cause its Authorized Sales Outlets to comply with all obligations, restrictions and conditions under this Agreement and agrees that any failure by any Authorized Sales Outlet to so comply will be deemed to be a breach of this Agreement by Contractor. All air travel-related businesses meeting the foregoing criteria and using the same ARC/IATA identifying number are referred to herein collectively as an Authorized Sales Outlet ; and each Authorized Sales Outlet reports its air ticket bookings and sales only through the assigned number identified to each Carrier and through no other identifier of such type assigned by ARC or IATA. (ii) (iii) (iv) (v) An Authorized Sales Outlet may provide fulfillment or similar services for third parties, but bookings, ticket sales, passengers, revenues and the like derived from such services will not be credited to Contractor for performance measurement or Commission payment purposes under this Agreement. Contractor will notify each Carrier if any Authorized Sales Outlet (as defined above) makes any bookings or sales that are not timely reported through ARC/IATA (including, for example, bookings or sales with respect to a Carrier that Contractor makes through a direct connection to any airline s internal reservations system) and thus could have an impact on performance or payment calculations under this Agreement. Contractor will not permit any Authorized Sales Outlet directly or indirectly to sell, transfer or otherwise move bookings or sales (by online auction, fulfillment contract or otherwise) to or from any other travel agency, reservation service provider, Internet travel site or other booking or sales location or outlet that is not an Authorized Sales Outlet for the purpose or with the effect of artificially improving Contractor's performance on each Carrier under this Agreement or assisting another travel agency or outlet in improving its performance under another incentive agreement with each Carrier. Contractor will not share any Commission payment made hereunder with any travel agency, provider, site, outlet or location that is not an Authorized Sales Outlet. Contractor agrees to notify each Carrier within five (5) business days if any such outlet no longer qualifies as an Authorized Sales Outlet. If Contractor wishes to add additional Authorized Sales Outlets, it will promptly notify each
2 Carrier using the form or other method prescribed by each Carrier. Such additional Authorized Sales Outlets will be covered by this Agreement with respect to a Carrier only if approved by such Carrier in its sole discretion. Upon the Carriers approval, such inclusion will be effective immediately thereafter of the newly approved Authorized Sales Outlet. (c) Review and Certification. Each Carrier may from time to time require Contractor to conduct an internal review and certify to each Carrier that each Authorized Sales Outlet covered by this Agreement meets the foregoing criteria and each Authorized Sales Outlet s bookings and sales have not been moved or otherwise manipulated in a manner that impacted the amount of any Commission payment made to Contractor by each Carrier. In addition, such certification will identify every air travel-related business, other than an Authorized Sales Outlet, in which Contractor has an ownership interest of any kind or with respect to which Contractor has any franchising, outsourcing, support or similar arrangement that confers on Contractor the ability to direct or influence the policies of such business. The certification must be made in the form and manner prescribed by each Carrier and returned to each Carrier within thirty (30) days of the initial request. 2. Data and Discrepancies. All measurements and calculations under this Agreement will be based on data contained in each Carrier's records, which will take precedence over data in any other records. Each Carrier may in its discretion truncate decimals and use rounding to simplify calculations. If for any reason each Carrier determines that there are not sufficient data to process measurement or payment calculations hereunder, then such Carrier will process such calculations using other reasonably equivalent data selected by each Carrier in its sole discretion to approximate the incentive purposes of this Agreement. Contractor must send each Carrier written notice of any dispute or discrepancy regarding the amount of any Commission payment within (30) days of the date such payment is received. Contractor will have no right to challenge a payment if Contractor fails to raise such dispute or discrepancy within such time frame. 3. Billings and Debit Memos. (a) In addition to any rights or remedies available to each Carrier under its Governing Travel Agency Agreement(s) (as defined below), each Carrier may debit memo Contractor (or its affiliates, sub-agents or third party distributors, as applicable) for any deficiency or loss incurred by each Carrier by reason of Contractor improperly issuing a ticket, misusing a Fare, failing to comply with a Fare rule, improperly taking a Commission, failing to collect a tax, fee or charge or to properly remit monies due each Carrier or otherwise failing to comply with this Agreement. Contractor will be responsible for paying these amounts. (b) Contractor agrees to promptly reconcile all billings and debit memos received from each Carrier as well as any other debts owed by Contractor to each Carrier. All billings and debit memos, as well as any other debts owed by Contractor to each Carrier, must be paid within the time frame specified, or if not specified elsewhere, within sixty (60) days of the date shown on the memo, billing or invoice. If these amounts are not timely paid, each Carrier will have the right to (a) withhold all payments hereunder, (b) set off against all payments due hereunder the amount of such billings or debit memos or any other outstanding debts, (c) terminate this Agreement and exercise its remedies under this Agreement or under law or equity, and/or (d) exercise all remedies available to the Carrier under its Governing Travel Agency Agreement(s). 4. Compliance with Applicable Laws. Contractor represents to each Carrier, and each Carrier represents to Contractor, that such party is, and throughout the term of the Agreement shall remain, in compliance with all applicable laws, regulations and orders governing its business that pertain to the subject matter of the Agreement, including, without limitation, assembling, promoting, offering, booking, ticketing and selling travel marketed or operated by each Carrier and each Carrier s affiliates (including AA Airline Affiliates, BA Airline Affiliates, IB Airline Affiliates, or JL Airline Affiliates), as well as all applicable laws of the United States of America and Canada relating to data protection, data privacy and anti-corruption (such as the Foreign Corrupt Practices Act). 5. Change in Structure; Overpayments. Contractor will promptly notify each Carrier in writing no less than thirty (30) days prior to any material change to Contractor s organizational structure including, but not limited to, a merger or consolidation, sale of all or substantially all of Contractor s assets or other change of control of Contractor (such material change, a Change of Control ). Upon notice of a material change in Contractor s organizational structure, any Carrier may terminate this Agreement as provided below in Section 6(d) or unilaterally amend this Agreement in light of Contractor s new organizational structure (such amendments including, but not limited to, an adjustment of the incentive sales program to accurately reflect the number of Authorized Sales Outlets and the corresponding sales targets). In addition, upon the earlier of (i) any Carrier s receipt of a notice of a Change of Control with respect to Contractor or (ii) the occurrence of a Change of Control, resulting in either (x) Contractor not surviving such Change of Control or (y) another entity receiving Contractor s Incentives pursuant to another agreement or arrangement with a Carrier, this Agreement shall automatically terminate, effective upon such notice or occurrence. If any Carrier is notified that a newly acquired entity of Contractor or other change of control results in Contractor receiving incentive payments (whether directly or indirectly) in addition to what is specifically contemplated by this Agreement ( Overpayment ), such Carrier shall have the right to debit memo Contractor for the Overpayment or setoff such Overpayment against future payments.
3 6. Default and Termination. (a) Each Carrier may terminate its participation to this Agreement in whole or part for its convenience without cause or penalty upon at least thirty (30) days prior written notice to the Contractor. (b) Any party may, in its discretion, terminate its participation to this Agreement immediately upon written notice to the other parties upon the occurrence of any of the following events, and/or pursue any remedy available to it under this Agreement and/or in law or in equity: (i) if Contractor or any Carrier breaches its confidentiality obligations set forth herein and such breach causes, or is likely to cause, material harm to the other party not susceptible to cure or (ii) if bankruptcy or insolvency proceedings are commenced concerning the other party. (c) If Contractor or any Carrier defaults in its performance of this Agreement, and the default continues for ten (10) days following written notice from the non-defaulting party to the defaulting party, then a non-defaulting party may terminate such defaulting party s participation to this Agreement with respect to the relevant Carriers, and/or pursue any remedy available to it under this Agreement, in law and/or in equity. (d) Any Carrier also may, in its discretion, terminate its participation to this Agreement immediately upon written notice to Contractor, and/or pursue any remedy available to it under this Agreement and/or in law or in equity, (i) upon suspension or termination of Contractor s appointment as an approved ARC or IATA agent of the Carrier regardless of who initiated the suspension or termination; (ii) upon a Change of Control; (iii) if such Carrier terminates another contract with Contractor for default; or (iv) if such Carrier announces a general change to its Commission policy in a country in which Contractor s activities hereunder are conducted. (e) If a Carrier in good faith believes that Contractor has violated any provision of Sections 1 or 11 of these Standard Terms and Conditions, then upon notice to Contractor, such Carrier may withhold any amount otherwise due to Contractor under this Agreement for the most recent quarter for which payment has not yet been made, until the breach is resolved to each Carrier s reasonable satisfaction. If the breach is not resolved prior to the termination or expiration of the Agreement, any amounts withheld by each Carrier will be deemed unearned by Contractor, and Contractor waives any claim to those amounts. The exercise by each Carrier of this right to withhold payment will not preclude each Carrier from exercising any other right that such Carrier may have under this Agreement, in law and/or in equity including termination of this Agreement. (f) In the event any Carrier terminates its participation to this Agreement with or without cause, any Commission payments which have not yet been paid to Contractor shall be deemed waived by Contractor; provided that if such termination is by a Carrier without cause after the completion of a quarterly or other performance period but prior to processing of Commission payments for such period, such Carrier will process and pay any such Commission payments not yet processed. (g) In the event a Carrier terminates its participation to a specific Attachment, such termination will not impact the effectiveness of such Carrier s participation to another Attachment unless such Carrier also terminates its participation to the entire Agreement or such other Attachment. In the event that a Carrier terminates Contractor as an approved ARC or IATA agent of Carrier, such termination will automatically terminate the entire Agreement as between Contractor and such Carrier. In the event a Carrier terminates the entire Agreement with Contractor, the remaining Carriers reserve the right, in their absolute discretion, to terminate the entire Agreement or any relevant Attachment with Contractor without penalty to Carrier. Appendices to this Agreement may contain additional termination rights. 7. Modifications. The Carriers may modify this Agreement or any Attachment, including modifications to Commissions, by sending Contractor a revised Agreement or Attachment, at least thirty (30) days prior to effectiveness. Contractor may object to the modification by notifying the Carriers within fifteen (15) days of Contractor s receipt of such modification (such fifteen-day period, the Objection Period ). Notwithstanding Section 27, Contractor shall be deemed to accept the modification if (i) Contractor fails to notify the Carriers of its objection within the Objection Period and (ii) following the Objection Period, Contractor continues to perform under this Agreement. 8. Promotional Materials and Advertising. Contractor s publication or use of any promotional materials (including, but not limited to all artwork, scripts, copy, advertising, direct mail, press releases, newsletters, brochures, flyers, web graphics, newspaper and/or magazine advertisements or other communications or any other publicity) or internet, radio, television or other advertisements, if any, may use or display each Carrier s Marks (as defined by each Carrier in its Appendix) only with each Carrier s prior review and written approval in each instance. Each Carrier may, however, grant blanket approval for certain types of uses or displays. Contractor shall utilize the
4 corporate graphic standards as provided by each Carrier to prepare any such promotional materials. Upon approval by each Carrier, Contractor shall not change approved final proofs without first obtaining each Carrier s approval. 9. Indemnification. Contractor will defend, indemnify and hold harmless each Carrier, and its affiliates, and each of their respective officers, directors, agents, and employees, from and against any and all liabilities, losses, fines, penalties, damages, and expenses (including reasonable attorneys fees) and costs arising from a claim, demand, proceeding, suit or action by a third party relating to, arising out of or resulting from (i) Contractor's failure to perform or improper performance under this Agreement or breach of any representation or warranty set forth in this Agreement, (ii) any negligent acts or omissions, or willful and wanton conduct of Contractor, (iii) the operation of Contractor s business, or (iv) Contractor s failure to comply with applicable law, including, without limitation, if Contractor makes any false or misleading claims or statements in its advertising or promotional activities. 10. Force Majeure. No party will be in breach of this Agreement if it is unable to perform as a result of any force majeure, including without limitation, an Act of God, act of governmental authority, quarantine restrictions, fire, flood, inclement weather, riots or civil commotion, strikes, lockouts, labor disputes, (whether resulting from disputes between each Carrier and its employees or between other parties), war, acts or threats of terrorism or any other acts, matters, or things beyond the reasonable control of such party. 11. Confidentiality. Each party will keep confidential all provisions of this Agreement (including, without limitation, the Attachments to this Agreement), fare programs and the payments each Carrier makes to Contractor under this Agreement (unless required by law or judicial process after making reasonable efforts to resist disclosure, if requested to do so by the other party) and will not disclose any of the same to any third party without obtaining the prior written consent of the other party, other than (i) the receiving party s directors, officers, employees or agents to the extent such persons are bound by equivalent confidentiality commitments and have a legitimate need to know in order for the receiving party to perform its obligations or exercise its rights under this Agreement; and (ii) in the case of the Carriers, representatives of each Carrier s affiliate carriers (and with respect to both historical and current provisions, fare programs and payments information), to the extent that such affiliate carriers are similarly bound to maintain the confidentiality of such information as it relates to Contractor. Contractor shall protect and safeguard the confidentiality of all information provided by any Carrier and take all reasonable measures to prevent the disclosure of any such information to the other Carriers. These provisions will survive the termination or expiration of this Agreement for any reason. 12. Relationship of Parties. Persons employed by either party will not be held or construed to be employees of the other party. Notwithstanding the fact that Contractor has agreed to follow certain procedures and instructions of each Carrier, each Carrier will have no supervisory power or control over any employees, agents or contractors engaged by Contractor in connection with this Agreement. Each party understands and agrees that this is a non-exclusive agreement and that each party may enter into similar agreements with third parties. 13. Taxes. Contractor shall pay to the appropriate taxing authorities, as applicable, all federal, state and local taxes, charges, duties, any public or private fees, charges or assessments levied on Contractor under the laws of any country which result from or are: (i) attributable to Contractor for sale of travel on a Carrier or any income received by Contractor under the Agreement, or (ii) incurred in connection with or incidental to the sale of travel on a Carrier insofar as the same is not expressly included in the prices hereunder; provided, however, that a Carrier shall be responsible for any income or franchise taxes on the revenue or income attributable to such Carrier respectively. Carriers and Contractor shall each bear sole responsibility for all taxes, assessments, and other ad valorem levies on such party's respective owned property as well as for their supply of goods and services. Carriers and Contractor shall comply with all rules or regulations relating to the administration of sales, use, goods and services tax (GST), value added tax (VAT) and other similar transaction tax as applicable (the Transaction Taxes ). All sums payable under this Agreement are exclusive of Transaction Taxes. Where Transaction Taxes are due, Contractor shall submit to Carriers a valid tax invoice as required by law. Where a Carrier is required to self-account for any Transaction Taxes due on the transaction, such Transaction Taxes will not be charged by Contractor provided that it has been given all relevant documentation by such Carrier or unless it is legally required to charge Transaction Taxes. Any and all payments by or on account of any obligation of a Carrier to Contractor under this Agreement shall be made without deduction of withholding taxes, except as required by applicable laws. If any applicable laws (as determined in the good faith discretion of the applicable Carrier) require the withholding of any tax from any such payment by a Carrier to Contractor, then such Carrier shall be entitled to make such withholding. Carriers shall withhold by the applicable law and shall timely pay the full amount withheld to the relevant governmental authority in accordance with applicable law. 14. Complete Agreement; ARC and IATA Agreements. This Agreement, which is comprised of the Standard Terms and Conditions (Part I), Definitions (Part II), Attachments (Part III) and Appendices (Part IV), represents the complete, final, and exclusive agreement with respect to the subject matter hereof between each Carrier and Contractor; provided, however, that nothing in this Agreement will be
5 deemed to modify or supersede any of the provisions of the IATA Passenger Sales Agency Agreement and associated IATA resolutions or Agent Reporting Agreement (the Governing Travel Agency Agreement(s) ) or an individual Carrier s Addendum(a) to the Governing Travel Agency Agreements (the GTAA Addendum(a) ), each as may be amended from time to time and any successor thereto, to which the parties agree that they are bound and which includes, without limitation, the ability of each Carrier to remove the ability of Contractor to sell each Carrier s inventory, i.e., pull Contractor s (or any Authorized Sales Outlet s or their respective affiliates ) plates. Contractor acknowledges that under the Governing Travel Agency Agreement(s), each Carrier has a unilateral right to amend its GTAA Addendum(a). 15. Assignment; Subcontractors. Contractor shall not transfer or assign this Agreement, or any right or obligation under this Agreement, by operation of law or otherwise, without the prior written consent of each Carrier. Contractor will cause its authorized subcontractors, agents, franchisees and third party distributors to comply with the terms and conditions of this Agreement and will be liable to each Carrier for any of their booking, ticketing, and other activities related to this Agreement. 16. Waiver. A failure or delay by a Carrier to require strict performance of or to enforce any provision of this Agreement or a previous waiver by a Carrier of any performance or provision shall in no way be construed as a waiver or continuing waiver of any provision of this Agreement by that Carrier. 17. Severability. In the event any one or more of the provisions of this Agreement shall for any reason be held to be invalid, illegal, or unenforceable, the remaining provisions of this Agreement shall be unimpaired. The invalid, illegal, or unenforceable provisions shall be replaced by a mutually acceptable and valid provision that comes closest to the intention of the parties underlying the invalid, illegal, or unenforceable provision. 18. Books and Records. Contractor shall at all times keep complete and accurate books, records and accounts from which each Carrier can determine Contractor s performance under this Agreement over the preceding two years. The books, records, and accounts of Contractor pertinent to this Agreement shall be retained for a period of at least two (2) years after the termination or expiration of this Agreement. These books and records will, at all reasonable times, be accessible to and open for inspection, examination, audit and copying by each Carrier. 19. Governing Law. Except as otherwise agreed to in a Carrier s Governing Travel Agency Addendum(a), this Agreement will be governed by and interpreted pursuant to the laws of the State of New York without giving effect to its principles of conflicts of law. In connection with any claim, demand, proceeding, suit or action arising out of or resulting from this Agreement (or the Attachments), the parties hereby submit and consent to the exclusive jurisdiction of the United States District Court for the Southern District of New York and the courts of the State of New York for all these disputes and waive any claim of lack of jurisdiction or forum non conveniens. 20. Notice. Unless otherwise provided in this Agreement, any notices under this Agreement shall be in writing, and shall be delivered in person or by a recognized courier or certified mail service that provides acknowledgement of receipt. Notices shall be addressed to the party at the address set forth in this Agreement, or as a party may designate for itself from time to time by written notice to the other party. 21. No Third Party Beneficiaries. Except as otherwise expressly provided in this Agreement, no provision of this Agreement is intended to create any rights in persons or entities other than the parties hereto, their successors and permitted assigns. 22. Counterparts and Signatures. This Agreement may be executed in any number of counterparts with the same effect as if the parties thereto had signed the same document. Execution may be effected by delivery of electronic copies of signed signature pages (and the parties will follow such delivery by prompt delivery of originals of such pages). Electronic copies will have the same binding effect as original signatures. 23. Further Assurances. Contractor will execute and deliver such further documents and instruments as each Carrier may reasonably request to effectuate the purposes of this Agreement. 24. Limitation of Liability. NO PARTY WILL BE LIABLE TO THE OTHER PARTIES FOR ANY CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES ARISING FROM ANY PERFORMANCE OF THIS AGREEMENT OR ANY BREACH OR DEFAULT UNDER THIS AGREEMENT, EXCEPT FOR PATENT INFRINGEMENT OR A PARTY S INDEMNIFICATION OBLIGATIONS OR BREACH OF OBLIGATIONS REGARDING CONFIDENTIALITY, DATA PRIVACY, DATA SECURITY OR USE OF A CARRIER S INTELLECTUAL PROPERTY.
6 25. Attorneys Fees. In the event that any legal proceeding at law or in equity arises in connection with a breach of this Agreement by Contractor (including any appellate proceedings or bankruptcy proceedings), Carriers will be awarded costs, reasonable expert witness fees, and reasonable attorneys' fees incurred in connection with such legal proceedings. 26. Survival. Provisions of this Agreement that are to be performed after termination to effectuate the intent and purpose shall survive termination of this Agreement, including, without limitation, Sections 2 (Data and Discrepancies); 3 (Billings and Debit Memos); 9 (Indemnification); 11 (Confidentiality); 13 (Taxes); 18 (Books and Records); 19 (Governing Law); 23 (Further Assurances); 24 (Limitation of Liability); 25 (Attorneys Fees); 28 (Successors and Assigns); and 30 (Refunds). 27. Amendments. This Agreement may be amended and/or supplemented only by written agreement of the applicable parties or as otherwise expressly provided for in this Agreement. For the avoidance of doubt, in the case of an Agreement between Contractor and the Atlantic Joint Business, amendments must be agreed to in writing by the Contractor and each Atlantic Joint Business Carrier, but not JL; amendments to an Agreement between the Contractor and the Pacific Joint Business should be agreed to in writing between the Contractor and the Pacific Joint Business Carrier, but not BA, IB, or AY. 28. Successors and Assigns. This Agreement shall be binding upon, and shall inure to the benefit of each of the parties hereto and their respective successors and permitted assigns. 29. Representations and Warranties. Contractor represents and warrants to each Carrier that (a) Contractor has full power to conduct its business as presently conducted, including the marketing, ticketing or other activities contemplated by this Agreement, (b) Contractor has all requisite power and authority to execute, enter into and carry out the terms and conditions of this Agreement and to perform its obligations under this Agreement, (c) neither the execution or delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will conflict with or result in the breach of any term or provision of, or constitute a default under any contract or law to which Contractor is a party or by which Contractor is bound, (d) this Agreement has been duly executed and delivered and is a legal, valid and binding agreement of Contractor, enforceable in accordance with its terms, except to the extent such enforceability is limited by bankruptcy, insolvency, reorganization or other similar laws or principles of equity, and (e) no consent, approval, or filing with, any governmental authority is required on the part of Contractor in connection with the transactions contemplated by this Agreement, except for those consents that have already been obtained. 30. Refunds. All refunds to passengers shall be Contractor s responsibility. If Contractor fails to promptly make any required refund, each Carrier shall have the right but not the obligation to make such refunds to passengers and on demand collect from Contractor such payments, which will include any Commission deducted. Contractor shall have the right to establish its own refund policy provided that such policy shall not be inconsistent with each Carrier s conditions of carriage.