Settlement Agreement and Mutual Release between Expedia, Inc. and Xpedior Incorporated
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Expedia, Inc. and Xpedior Incorporated have agreed to settle a trademark dispute. Xpedior will change its corporate name and stop using the XPEDIOR trademark by December 31, 2003. If Xpedior does not do so by December 31, 2001, it must make quarterly payments to Expedia based on a percentage of its gross revenues until the name change occurs. Expedia has the right to approve or disapprove Xpedior’s new name. Once Xpedior changes its name and stops using the trademark, both parties will release each other from all related legal claims.
EX-10.2 2 0002.txt SETTLEMENT AGREEMENT Exhibit 10.2 SETTLEMENT AGREEMENT AND MUTUAL RELEASE This Agreement is entered into as of this 26th day of July, 2000, by and between Expedia, Inc. ("Expedia"), a Washington corporation, and Xpedior Incorporated ("Xpedior"), a Delaware corporation. Recitals A. Expedia is primarily engaged in the on-line travel services business. Expedia is the owner of the trademark EXPEDIA, which mark has been registered in the United States and in various foreign jurisdictions. B. Xpedior is primarily engaged in e-business consulting. Xpedior is the owner of the trademark XPEDIOR, and has pending applications for registration of that mark in the United States and various foreign jurisdictions. C. Expedia is the plaintiff, and Xpedior is the defendant, in an action currently pending in the United States District Court for the Central District of California, No. 99-13461 R (CTx) (the "Pending Lawsuit"), alleging claims for trademark infringement, trademark dilution, violation of Section 43(a) of the Lanham Act, dilution of federally registered trademark, California unfair competition and California trademark dilution. Xpedior denies the material allegations of Expedia's complaint. D. The parties wish to dismiss the Pending Lawsuit and resolve all disputes between them on the terms and conditions set forth below. Agreement 1. Change of Xpedior's Corporate Name and Cessation of Trademark Usage. On or before December 31, 2003, Xpedior shall change its corporate name and cease using XPEDIOR as a trademark. Until such date, Xpedior may continue to use its corporate name and to use XPEDIOR as a trademark, subject to the terms and conditions set forth below. 2. Payments from Xpedior to Expedia. If Xpedior has not changed its corporate name and ceased using XPEDIOR as a trademark by December 31, 2001, Xpedior shall make quarterly payments to Expedia in accordance with the following schedule, until such time as it has changed its corporate name and ceased using XPEDIOR as a trademark: Time Period Payments From Xpedior to Expedia ----------- -------------------------------- January to June, 2002: 1% of gross revenues from operations July to December, 2002: 2% of gross revenues from operations January to June, 2003: 3% of gross revenues from operations July to December, 2003: 4% of gross revenues from operations Payments due under this paragraph shall be made quarterly within fifteen days after the issuance of Xpedior's quarterly financial report pertaining to such quarter. If the name change and cessation of trademark usage occurs on a date other than the end of a quarter, the amounts due under this paragraph shall be prorated to the date of such change and cessation. 3. Expedia's Right to Disapprove New Name. Expedia shall have the right to disapprove any new name proposed by Xpedior that Expedia reasonably believes infringes upon or dilutes its existing trademarks. Expedia shall have ten business days from the receipt from Xpedior of written notice of a proposed new name to approve or disapprove of such name. Xpedior may submit more than one name at a time for Expedia's consideration. If written notice of disapproval is not given within ten business days after Expedia's receipt of notice of a proposed new name or names by Xpedior to Expedia, such name or names shall be deemed to have been approved. If Xpedior feels that Expedia's rejection of a proposed new name is unreasonable, Xpedior may request expedited mandatory arbitration under Paragraph 17 hereof within ten business days after receipt of Expedia's rejection notice. Expedia shall maintain in confidence all proposed new names submitted by Xpedior under this Paragraph until such time as Xpedior publicly announces its name change. Xpedior shall make no announcement of or make any use of any proposed new name(s), including any trademark use, until such name has been approved either by Expedia as provided in this Paragraph, or by the arbitrator, as provided in Paragraph 17(b) below. If Xpedior breaches this Paragraph by announcing or using the proposed new name(s) prior to completing the agreed-to approval process, Expedia shall be entitled to commence litigation to enforce the terms of this Agreement and to enforce and protect its trademark and related rights in any Court of competent jurisdiction without regard for the arbitration provision in Paragraph 17(b). The approval process described in this Paragraph, including any arbitration proceeding, if necessary, shall not stay, delay or diminish Xpedior's obligation to make payments to Expedia as provided in Paragraph 2, herein. 4. Certain Definitions. The date that Xpedior shall be deemed to have changed its name shall be the date an amendment to Xpedior's Certificate of Incorporation is filed with the Secretary of State of the State of Delaware. Cessation of trademark usage shall be deemed to have occurred when Xpedior publicly announces its new name and ceases to refer to itself, its services, or its products under the name XPEDIOR; provided, however, that Xpedior may, for a period of six months after changing its name and ceasing trademark usage, refer to itself by its new name, followed by the statement, "formerly known as Xpedior," or words to similar effect. Notwithstanding the foregoing, Xpedior shall not use the statement "formerly known as Xpedior," or words to similar effect, after December 31, 2003. 5. Avoidance of Confusion Prior to Name Change. From the time this Agreement is entered into, until the time that Xpedior changes its name and ceases using XPEDIOR as a trademark, the parties each shall endeavor to avoid any actual confusion concerning their respective names. Whenever it appears there is a likelihood of confusion, either party may send a notice to any third party explaining that Expedia and Xpedior are not related. The notice sent to such third party shall be in substantially the form attached hereto as Exhibit A-1 (in the case of Expedia) or Exhibit A-2 (in the case of Xpedior). With respect to the travel service companies listed on Exhibit B hereto, prior to soliciting business from any such company, Xpedior shall send such company a letter in substantially the form attached hereto as Exhibit A-2. Xpedior shall not provide Internet travel planning, reservation and ticketing services under the XPEDIOR name. 6. Mutual General Release. In consideration for the promises and covenants set forth in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Expedia and Xpedior, on behalf of themselves and 2 their present or former owners, stockholders, fiduciaries, representatives, lawyers, officers, directors, agents, employees, predecessors, successors and assigns, if any (hereinafter "Releasors"), agree that they shall, effective as of the date that Xpedior changes its corporate name and ceases to use XPEDIOR as a trademark, without further act or agreement, release and forever discharge each other, and each other's respective present or former owners, stockholders, fiduciaries, representatives, lawyers, officers, directors, agents, employees, predecessors, successors, and assigns, if any, and all persons acting by, through, under or in concert with them, or any of them, (hereinafter "Releasees"), of and from any and all manner of claim or claims, action or actions, cause or causes of action, in law or in equity, suits, debts, liens, promises, loss, demands, damages, controversies, liabilities, contracts, agreements, cost or expense, of any nature whatsoever, whether known or unknown, fixed or contingent, suspected or unsuspected, which Releasors, or any of them, has against Releasees, or any of them, through and including the date of execution of this Agreement by reason of any cause, matter or thing whatsoever, including any claim arising out of, based upon or related to Xpedior's use of its corporate name or any matters that were alleged, or could have been alleged, in the Pending Lawsuit. This release shall not apply, however, to any breach of this Agreement, or any claim arising subsequent to the date of this Agreement. 7. Future Discovered Facts. In connection with the release set forth in Paragraph 6, above, each party acknowledges that it is aware it may hereafter discover facts in addition to, or different from, those facts which it now knows or believes to be true with respect to the subject matter of this Agreement, but that it is each party's intention to fully, finally and forever release all matters, disputes, differences, known or unknown, suspected or unsuspected, which now exist, or heretofore existed between it and the Releasees, and in furtherance of such intention, the release given herein shall remain in effect notwithstanding the discovery or existence of any additional or different facts. 8. California Civil Code Section 1542. Each party further agrees, represents and warrants that, with respect to the subject matter of Paragraphs 6 and 7 above, it has been advised by counsel and does expressly waive and relinquish, to the fullest extent permitted by law, the provisions, rights and benefits of Section 1542 of the California Civil Code, which statute provides A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR Each party also waives and relinquishes, to the fullest extent permitted by law, any and all provisions, rights and benefits of any similar statute or law of California or of any other jurisdiction. 9. Dismissal of Pending Lawsuit. Within five days after this Agreement is fully executed, Expedia shall deliver to counsel for Xpedior an executed stipulation of dismissal of the 3 Pending Lawsuit, without prejudice. At such time as Xpedior changes its corporate name and ceases using XPEDIOR as a trademark, as provided in Paragraph 4 above, Expedia agrees to take such steps as are necessary to cause the Pending Lawsuit to be dismissed with prejudice. 10. Abandonment of Trademark Applications. Xpedior shall take prompt steps after this Agreement is fully executed to expressly abandon its applications filed with the United States Patent and Trademark Office and any other applications filed in other jurisdictions for the following trademarks: XPEDIOR; THE XPEDIOR PROCESS; EBUSINESS XPEDIATORS; XPEDIOR with a stylized "X;" and XPDR. The parties agree and acknowledge, however, that "XPDR" is Xpedior's trading symbol and that it may continue to use it as such. 11. Agreement Not an Admission. Each party acknowledges that this is a settlement and release of disputed facts and issues. Neither party admits the truth or validity of any assertion or denial made by any other party. Furthermore, neither party admits any liability to the other party or any wrongful conduct. 12. Review of Agreement. Each party acknowledges and represents that such party has been represented by and has had the opportunity to consult with counsel of its choice in connection with the Agreement; has been provided sufficient time to carefully review the contents of this Agreement; and that such party has carefully read and understands the Agreement. This Agreement shall be construed as though each party participated equally in drafting it and any uncertainty or ambiguity shall not be interpreted against any one party. 13. Binding Authority. Each party represents that the individuals signing this Agreement on behalf of such party have lawful authority to do so, and to bind such party to the terms and conditions set forth herein. 14. Entire Agreement. This Agreement, including the Exhibits attached hereto, constitutes the sole, complete and entire agreement of the parties relating to the subject matter hereof, and no statements, promises or representations have been made by any party to the other party, other than as set forth herein. This Agreement fully supersedes any and all prior agreements, negotiations or understandings between the parties hereto. 15. Modification and Amendment. Any modification of any of the terms and provisions set forth herein shall be effective only if in writing and signed by all of the parties. 16. Notices. Any notice required to be given pursuant to this Agreement shall be in writing and mailed by certified or registered mail, return receipt requested, or delivered by a national overnight express service, return receipt requested, to the following addresses. 4 To Expedia: To Xpedior: Expedia, Inc. Xpedior Incorporated Attention: Mark Britton Attention: Caesar Belbel 13810 SE Eastgate Way, Suite 400 Xpedior Incorporated Bellevue, Washington 98008 35 Corporate Drive, 4th Floor Burlington, Massachusetts 01803 Copy to: Copy to: Arnold & Porter Latham & Watkins Attn: Suzanne V. Wilson Attn: Morris A. Thurston 777 South Figueroa St., 44th Floor 650 Town Center Drive, 20th Floor Los Angeles, California 90017-5844 Costa Mesa, California 92626 17. Applicable Law and Dispute Resolution. (a) This Agreement is made and is to be governed by and construed under the laws of the State of California, except in connection with Xpedior's selection of a new name, which shall be governed by federal law. Other than as provided in subparagraph (b) of this Paragraph, any and all disputes, claims or controversies arising out of or relating to this Agreement that are not resolved by mutual agreement may be determined and resolved by any Court of competent jurisdiction and the prevailing party of such action shall be entitled to an award of all costs, fees and expenses, including its attorney's fees, to be paid by the non-prevailing party. The parties agree to submit to the exclusive jurisdiction of the state and federal courts of the State of California for the resolution of such disputes, claims or controversies. (b) Notwithstanding the provisions in Paragraph 16(a), any and all disputes, claims or controversies arising out of Xpedior's selection of a new name, or Expedia's disapproval of such name, shall be submitted to final and binding arbitration before JAMS, or its successor, pursuant to the United States Arbitration Act, 9 U.S.C. Sec. 1 et seq. It is understood that the purpose for this arbitration clause is to provided an expedited procedure for the determination of any disputes, claims or controversies arising out of Xpedior's selection of a new name, or Expedia's disapproval of such name, and each party agrees to cooperate with the other in good faith to bring any such dispute to resolution as quickly as possible. The determination of any disputes, claims or controversies submitted to arbitration under this subparagraph shall be governed and construed under the laws of the United States relating to the protection and enforcement of trademark rights, including without limitation the federal Lanham Act, 15. U.S.C., Sections 1051, et seq. Either party may commence the arbitration process called for in this agreement by filing a written demand for arbitration with JAMS, with a copy to the other party. The arbitration will be conducted in accordance with the provisions of JAMS Streamlined Arbitration Rules and Procedures in effect at the time of filing of the 5 demand; provided however, that the parties have agreed to the selection of either retired Judge Eugene Lynch or Judge Charles Renfrew as an arbitrator. In the event that neither Judge Lynch or Judge Renfrew are able to act as an arbitrator, the parties will cooperate with JAMS and with one another in selecting a different arbitrator, however the parties agree that any selected arbitrator must have substantial trademark law experience. Notwithstanding the designation in this paragraph of certain arbitrators, at the time of selection, the selected arbitrator must make any disclosures mandated by California law and the parties shall be entitled to object to the selected arbitrator accordingly. The parties covenant that they shall participate in the arbitration in good faith, and that they shall share equally in its costs. However, the arbitrator shall have the discretion to award the prevailing party its reasonable attorneys' fees, arbitration fees and costs and expenses incurred in the arbitration. The parties also agree that the locale for any arbitration under this subparagraph shall be in the County of Los Angeles, State of California. The provisions of this Paragraph may be enforced by any Court of competent jurisdiction, and the party seeking enforcement shall be entitled to an award of all costs, fees and expenses, including attorneys fees, to be paid by the party against whom enforcement is ordered. 18. Agreement Binding On Successors. This Agreement shall be binding on and shall inure to the benefit of the parties hereto, and to their successors, and assigns. 19. Captions and Paragraph Headings. Captions and paragraph headings used herein are for convenience only, and are not a part of this Agreement and shall not be used in construing it. 20. Severability. The provisions of this Agreement are severable. If any provision of this Agreement shall be held to be invalid or otherwise unenforceable, in whole or in part, the remaining provisions or enforceable parts thereof shall not be affected thereby and shall be enforced to the fullest extent permitted by law. 21. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, all of which together shall constitute one and the same instrument. A signature to this Agreement transmitted via facsimile shall be deemed as effective as an original signature. 6 WHEREFORE this Agreement is deemed effective as of the date set forth in the first paragraph hereof. EXPEDIA, INC. XPEDIOR INCORPORATED By: /s/ Mark S. Britton By: /s/ David N. Campbell -------------------------- --------------------------- Name: Mark S. Britton Name: David N. Campbell Title: VP & General Counsel Title: President and Chief Executive Officer 7 Exhibit A-1 (A letter in substantially this form may be sent by Expedia, Inc. whenever it feels there is likelihood of confusion.) Expedia, Inc. Letterhead ------------------------ Date Name, Title Company Street Address City, State, Zip Dear ____________: As you may know, Expedia, Inc. (Nasdaq: EXPE) and Xpedior Incorporated (Nasdaq: XPDR) are separate public companies. The purpose of this letter is merely to clarify that these companies are not related to each other in any way. The following are brief descriptions of what each of these companies do. Expedia, Inc. is a leading provider of branded online travel services for leisure and small business travelers. We operate our own website, located at Expedia.com, with localized versions in the United Kingdom, Germany and Canada. We offer one-stop travel shopping and reservation services, providing reliable, real-time access to schedule, pricing and availability information for over 450 airlines, 40,000 hotels and all major car rental companies. Expedia also offers Internet consulting services, including the licensing of its proprietary software, relating to ticketing and reservation technologies to third party companies, enabling them to offer their own ticketing and reservation services directly to consumers through Internet websites. Xpedior Incorporated is an eBusinesses consulting firm. Its eBusiness expertise falls into the three fundamental service disciplines--strategic, creative and technical. Professionals from each of the three disciplines work together to maximize the efficiency and speed of solution development. Xpedior's clients benefit from customized solutions based on their specific strategy, requirements, and infrastructure. If you have any questions concerning the services offered by Expedia, Inc., please feel free to contact us at the address or telephone listed above. If you have any questions concerning the services offered by Xpedior Incorporated, please feel free to contact Xpedior at ###-###-####. Truly yours, Name 8 Exhibit A-2 (A letter in substantially this form may be sent by Xpedior Incorporated whenever it feels there is likelihood of confusion, and shall be sent to Exhibit B companies prior to any solicitation of those companies.) Xpedior Incorporated Letterhead ------------------------------- Date Name, Title Company Street Address City, State, Zip Dear ____________: As you may know, Xpedior, Incorporated (Nasdaq: XPDR) and Expedia, Inc. (Nasdaq: EXPE) are separate public companies. The purpose of this letter is merely to clarify that these companies are not related to each other in any way. The following are brief descriptions of what each of these companies do. Xpedior Incorporated is an eBusinesses consulting firm. Our eBusiness expertise falls into the three fundamental service disciplines--strategic, creative and technical. Professionals from each of the three disciplines work together to maximize the efficiency and speed of solution development. Xpedior's clients benefit from customized solutions based on their specific strategy, requirements, and infrastructure. Expedia, Inc. is a leading provider of branded online travel services for leisure and small business travelers. Expedia operates its own website, located at Expedia.com, with localized versions in the United Kingdom, Germany and Canada. It offers one-stop travel shopping and reservation services, providing reliable, real-time access to schedule, pricing and availability information for over 450 airlines, 40,000 hotels and all major car rental companies. Expedia also offers Internet consulting services, including the licensing of its proprietary software, relating to ticketing and reservation technologies to third party companies, enabling them to offer their own ticketing and reservation services directly to consumers through Internet websites. If you have any questions concerning the services offered by Expedior Incorporated, please feel free to contact us at the address or telephone listed above. If you have any questions concerning the services offered by Expedia, Inc., please feel free to contact Expedia at ###-###-####. Truly yours, Name Exhibit B Companies in the Travel Services Industry AIRLINES -------- AB Shannon Air India Access Air Air Jamaica ACES Air Lanka Adria Airways Air Liberte Aer Arann Air Lithuania Aer Lingus Air Littoral Aero California Air Malta Aero Continente Air Moldova Aero Lloyd Air Nevada Aeroflot-Russian International Airlines Air New Zealand Aerolineas Internacionales Air One Aerolines Argentinas Air Ostrava Aeromar Airlines Air Pacific Aeromexico Air Portugal Aeroperu Air Sask Aviation AeroRepublica Air St Thomas Aerosweet Airlines Air Transat Air Afrique Air Ukraine Air Algerie Air Vanuatua Air Aruba Air Zimbabwe Air Baltic AirTran Airways Air Burkina Alaska Airlines Air Canada Alaska Central Express Air China Albanian Airlines Mak S.H.P.K. Air Dolomiti Alitalia Air Engiadina All Nippon Airways Air Europa ALM-Antillean Airlines Air Europe Aloha Airlines Air Fiji Alpine Aviation Air France America West Airlines Air Greece American Airlines American Trans Air Copa Ansett Australia Corporate Express AOM French Airline Croatia Airlines - ---------------------------------------------------------------------------------------
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