Exhibit 10.5
EXECUTION COPY
TRANSITION SERVICES
AGREEMENT
by and between
IAC/INTERACTIVECORP
and
EXPEDIA, INC.
DATED AS OF August 9,
2005
TRANSITION SERVICES
AGREEMENT
This TRANSITION SERVICES AGREEMENT,
dated as of August 9, 2005 (this “ Services
Agreement ”), is entered into by and between
IAC/InterActiveCorp, a Delaware corporation (“ IAC
”), and Expedia, Inc., a Delaware corporation and wholly
owned Subsidiary of IAC (“ Expedia ”).
Capitalized terms used herein but not defined herein shall have the
meaning set for the in that certain Separation Agreement, dated as
of the date hereof, by and between IAC and Expedia (the “
Separation Agreement ”).
WHEREAS, the Board of Directors of
IAC has determined it is appropriate and desirable to
separate IAC and Expedia into two publicly-traded companies by
separating IAC’s principal travel and travel-related
businesses, and related assets and liabilities, and contributing
them to Expedia and effecting a reclassification of the capital
stock of IAC;
WHEREAS, IAC and Expedia expect to
enter into the Separation Agreement on the date hereof, which sets
forth, among other things, the assets, liabilities, rights and
obligations of each of the Parties for purposes of effecting the
separation of IAC and Expedia; and
WHEREAS, in connection therewith,
(a) Expedia desires to procure certain services from IAC, and
IAC is willing to provide such services to Expedia, during a
transition period commencing on the Effective Date, on the terms
and conditions set forth in this Services Agreement; and
(b) IAC desires to procure certain services from Expedia, and
Expedia is willing to provide such services to IAC, during a
transition period commencing on the Effective Date, on the terms
and conditions set forth in this Services Agreement.
NOW THEREFORE, in consideration of
the mutual agreements, covenants and other provisions set forth in
this Services Agreement, the Parties hereby agree as
follows:
ARTICLE I
Definitions
1.01.
All terms used herein and not
defined herein shall have the meanings assigned to them in the
Separation Agreement.
ARTICLE II
Agreement To Provide and Accept
Services
2.01.
Provision of Services
.
(a)
On the terms and subject to the conditions contained herein, IAC
shall provide, or shall cause its Subsidiaries and Affiliates and
their respective employees designated by IAC (such designated
Subsidiaries, Affiliates and employees, together with IAC, being
herein collectively referred to as the “ IAC Service
Providers ”) to provide, to Expedia the services (“
IAC Services ”) listed on the attached Schedules (the
“ Schedules ”) as being performed by the
IAC. Subject to Section 3.01 , any decisions as
to which of the IAC Service Providers (including the decisions to
use third parties) shall provide the IAC Services shall be made by
IAC in its sole
discretion, except to the extent
specified in the applicable Schedule. Each IAC Service shall
be provided in exchange for the consideration set forth with
respect to such IAC Service on the applicable Schedule or as
the Parties may otherwise agree in writing. Each IAC Service
shall be provided and accepted in accordance with the terms,
limitations and conditions set forth herein and on the applicable
Schedule.
(b)
On the terms and subject to the conditions contained herein,
Expedia shall provide, or shall cause its Subsidiaries and
Affiliates and their respective employees designated by it (such
designated Subsidiaries, Affiliates and employees, together with
Expedia, being herein collectively referred to as the “
Expedia Service Providers ” and together with the IAC
Service Providers, the “ Service Providers ”) to
provide, to IAC the services (“ Expedia Services
” and together with the IAC Services, the “
Services ”) listed on the attached Schedules as being
performed by Expedia. Subject to Section 3.01 ,
any decisions as to which of the Expedia Service Providers
(including the decisions to use third parties) shall provide the
Expedia Services shall be made by Expedia in its sole discretion,
except to the extent specified in the applicable Schedule.
Each Expedia Service shall be provided in exchange for the
consideration set forth with respect to such Service on the
applicable Schedule or as the Parties may otherwise agree in
writing. Each Expedia Service shall be provided and accepted
in accordance with the terms, limitations and conditions set forth
herein and on the applicable Schedule.
(c)
As used in this Services Agreement, the term “ Receiving
Party ” shall mean the Party receiving
Services.
2.02.
Books and Records; Availability
of Information .
Each Party shall create and maintain accurate books in connection
with the provision of the Services performed by it and, upon
reasonable notice from the other Party, shall make available for
inspection and copy by such other Party’s agents such records
during reasonable business hours. Each Party shall make
available on a timely basis to the Service Providers all
information and materials reasonably requested by such Service
Providers to enable them to provide the Services. Each Party
shall provide to the Service Providers reasonable access to such
Party’s premises to the extent necessary for the purpose of
providing the Services.
ARTICLE III
Services; Payment; Independent
Contractors
3.01.
Services To Be
Provided .
(a) Unless otherwise agreed by the Parties (including to the
extent specified in the applicable Schedule), (i) the Service
Providers shall be required to perform the Services only in a
manner, scope, nature and quality as provided by or within IAC that
is similar in all material respects to the manner in which such
Services were performed immediately prior to the Effective Date,
and (ii) the Services shall be used for substantially the same
purposes and in substantially the same manner (including as to
volume, amount, level or frequency, as applicable) as the Services
have been used immediately prior to the Effective Date;
provided , however , that the applicable
Schedule shall control the scope of the Service to be
performed (to the extent provided therein), unless otherwise agreed
in writing. Each Party and the Service Providers shall act
under this Services Agreement solely as an independent contractor
and not as an agent or employee of any other Party or any of such
Party’s Affiliates.
(b)
The provision of Services by Service Providers shall be subject to
Article V hereof.
(c)
Each Party agrees to use its reasonable efforts to reduce or
eliminate its dependency on the Services as soon as is reasonably
practicable; provided that a breach of this
Section 3.01(c) shall not affect a Service
Provider’s obligation to provide any Service through the term
applicable to such Service.
3.02.
The Parties will use good-faith
efforts to reasonably cooperate with each other in all matters
relating to the provision and receipt of Services. Such
cooperation shall include obtaining all consents, licenses or
approvals necessary to permit each Party to perform its obligations
hereunder; provided , however , under no
circumstances shall any Service Provider be required to make any
payments to any third party in respect of any such consents,
licenses or approvals nor shall any Service Provider be required to
make any alternative arrangements in the event that any such
consents, licenses or approvals are not obtained.
3.03.
Additional Services
.
(a)
From time to time during the term, each of IAC and Expedia may
request the other Party (i) to provide additional (including
as to volume, amount, level or frequency, as applicable) or
different services which the other Party is not expressly obligated
to provide under this Agreement if such services are of the type
and scope provided within IAC during fiscal year 2005 or
(ii) expand the scope of any Service (such additional or
expanded services, the “ Additional Services
”). The Party receiving such request shall consider
such request in good faith and shall use commercially reasonable
efforts to provide such Additional Service; provided , no
Party shall be obligated to provide any Additional Services if it
does not, in its reasonable judgment, have adequate resources to
provide such Additional Services or if the provision of such
Additional Services would interfere with the operation of its
business. The Party receiving the request for Additional
Services shall notify the requesting Party within fifteen (15) days
as to whether it will or will not provide the Additional
Services.
(b)
If a Party agrees to provide Additional Services pursuant to
Section 3.03(a), then a representative of each party shall in
good faith negotiate the terms of a supplemental Schedule to
this Agreement which will describe i
