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As filed with the Securities and Exchange Commission on August 22, 1997
Registration No. 333-28237
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 2
TO
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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800 TRAVEL SYSTEMS, INC.
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
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DELAWARE 4724 59-3343338
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
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MARK D. MASTRINI, PRESIDENT
800 TRAVEL SYSTEMS, INC.
4802 GUNN HIGHWAY 4802 GUNN HIGHWAY
TAMPA, FLORIDA 33624 TAMPA, FLORIDA 33624
(813) 908-0404 (813) 908-0404
(Address, including zip code, and telephone (Name, address, including zip code, and
number, including area code, of registrant's telephone number including area code of
principal executive offices) agent for service)
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Copies of communications to:
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VINCENT J. MCGILL RICHARD F. DAHLSON
PHILLIPS NIZER BENJAMIN KRIM & BALLON LLP JACKSON WALKER, L.L.P.
666 FIFTH AVENUE 901 MAIN STREET, SUITE 6000
NEW YORK, NEW YORK 10103-0084 DALLAS, TEXAS 75202-3797
TELEPHONE: (212) 977-9700 TELEPHONE: (214) 953-6000
TELECOPIER: (212) 262-5152 TELECOPIER: (214) 953-5822
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Predecessor Business who chose to convert debt held by them at the rate of
$10.00 of such debt in the Predecessor Business per share of the Company's
Common Stock. Approximately 50 creditors of the Predecessor Business elected to
convert $1,664,340 of such indebtedness for 166,434 shar+es of Common Stock.
The remaining 133,566 shares were issued to S. Travel, Inc. The offering was
made in reliance on Section 4(2) of the Securities Act as a transaction not
involving any public offering to investors believed by the Company to be
sophisticated business-persons and investors.
In November and December 1995, the Company sold and issued 360,000 shares
of Common Stock to 7 investors at a price per share of $1.25. The offering was
made in reliance on Section 4(2) of the Securities Act as a transaction not
involving any public offering, as the offering was made to a limited number of
"accredited investors" (as such term is defined in Rule 501 of the Securities
Act) without general solicitation or advertisements.
In December 1995 through January 1996, in connection with bridge
financings, Company sold and issued 312,500 shares of Common Stock to 4
investors. The offering was made in reliance on Section 4(2) of the Securities
Act as a transaction not involving any public offering, as the offering was
made to a limited number of accredited investors without general solicitation
or advertisements.
In 1996 the Company sold and issued 1,387,500 shares of Common Stock to
investors in a private placement conducted through various broker-dealers
retained by the Company. The Common Stock was sold at an average price per
share of $2.22. The offering was made in reliance on Section 4(2) of the
Securities Act and Regulation D promulgated thereunder, as an offering only to
accredited investors.
During 1996, the Company issued a total of 280,000 shares to officers of
the Company and options to purchase 300,000 shares of Common Stock to a
consultant. Such issuances were made in reliance on Section 4(2) of the
Securities Act as transactions not involving any public offerings, as such
sales was made to a single accredited investor without general solicitation or
advertisements.
During 1996, the Company issued (i) 20,000 shares of Common Stock in
connection with a note payable to an existing lender; (ii) warrants to purchase
275,000 shares of Common Stock to lenders in recognition of extensions on loans
made by such lenders; (iii) 361,209 shares of Common Stock to creditors of the
Company for penalties for past due loans; and (iv) 40,000 shares of Common
Stock to its landlord, valued at the rate of $2.50 of indebtedness per share,
in exchange for a portion of its obligations to the landlord under its lease.
Such issuances were made in reliance on Section 4(2) of the Securities Act as
transactions not involving any public offerings, as such sales was made to a
limited number of sophisticated or accredited investors without general
solicitation or advertisements.
ITEM 27. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits:
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EXHIBIT DESCRIPTION
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1.1 Proposed form of Underwriting Agreement (3)
1.2 Agreement Among Underwriters (3)
1.3 Selected Dealer Agreement (3)
2.1 Asset Purchase Agreement dated as of November 13, 1995 among 1-800
Low-Air Fare, Inc., S. Travel, Inc. and the Company (2)
2.2 Amended and Restated Agreement and Plan of Merger dated November 11,
1996 among the Company, The Joseph Stevens Group, Inc. and The
Joseph Stevens Group, LLC (3)
2.3 Amended and Restated Interim Operating Agreement between the Company
and Joseph Stevens Group, Inc. (3)
3.1 Proposed form of Registrant's Amended and Restated Certificate of
Incorporation (3)
3.2 Proposed form of Registrant's Amended and Restated Bylaws (3)
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4.1 Specimen Common Stock certificate (1)
4.2 Specimen Warrant Certificate and Form of Warrant Agreement (3)
5.1 Opinion of Phillips Nizer Benjamin Krim & Ballon LLP as to the
validity of the Common Stock being registered (1)
10.1 Form of Registrant's 1997 Stock Option Plan (2)
10.2 Promissory Note of the Company dated November 7, 1995 in the amount
of $30,000 to the order of S. Travel, Inc. due and payable November
7, 1997 (2)
10.3 Promissory Note of the Company dated November 7, 1995 in the amount
of $30,000 to the order of S. Travel, Inc. due and payable November
7, 1998 (2)
10.4 Redemption Agreement between the Company and Michael Cantor (2)
10.5 Form of Redemption Agreement between the Company and Jose Colon (3)
10.6 Agreement between the Company and Perry Trebatch (2)
10.7 Lease dated February 10, 1996 by and between JFJ Real Estate Limited
Partnership and the Company (2)
10.8 Airlines Reporting Corporation ("ARC") Agent Reporting Agreement (2)
10.9 Letter dated March 6, 1996 from ARC approving change of ownership (2)
10.10 Subscriber Service Agreement dated November 27, 1995 between the
Company and Payroll Transfers Interstate, Inc. (2)
10.11 Form of Employment Agreement between the Company and Mark D.
Mastrini (2)
10.12 Form of Employment Agreement between the Company and Jerrold B.
Sendrow (2)
10.13 Form of Employment Agreement between the Company and Biagio Bellizzi
(2)
10.14 Form of Consulting Agreement between the Company and Lucien Bittar (3)
10.15 Agreement dated as of March 1, 1997 by and between the Company and
Global Discount Travel Services (3)
10.16* SABRE Subscriber Agreement dated as of January 28, 1994 by and
between S. Travel, Inc., (the Company's predecessor entity), and
American Airlines, Inc.
10.17* Amendment No. 1 to SABRE Subscriber Agreement dated February 14,
1994 by and between 1-800 Low-Air Fare Travel (predecessor entity of
the Company), and American Airlines, Inc.
10.18* Suspension of Service Agreement dated April 3, 1996 by and between
the Company and American Airlines, Inc.
10.19* Amendment to SABRE Subscriber Agreement dated July 19, 1996 by and
between the Company, and American Airlines, Inc.
10.20* SABRE Subscriber Agreement dated November 20, 1996 by and between
the Company and The SABRE Group, Inc.
10.21* Cluster Amendment to SABRE Subscriber Agreement dated November 20,
1996 by and between the Company and The SABRE Group, Inc.
10.22 Lease Agreement effective November 27, 1995 between the Company and
Roque De La Fuente Alexander Revocable Trust No. 1, and addendum
thereto dated June 27, 1995 (3)
11.1 Statement regarding computation of per share earnings (1)
12.1 Statement regarding computation of ratios (1)
21.1 Subsidiaries of the Registrant (3)
23.1 Consent of Phillips Nizer Benjamin Krim & Ballon LLP (to be included
in its opinion to be filed as Exhibit 5.1)
23.2 Consent of Killman, Murrell & Company (2)(3)
23.3 Consent of Acetta and Olmstead, Accountancy Corporation (2)
23.4 Consent of Feldman Radin & Co., P.C. (2)
23.5 Consent of Feldman Radin & Co., P.C. regarding termination of
engagement (3)
24.1 Reference is made to the Signatures section of the Registration
Statement filed on June 2, 1997 for the Power of Attorney contained
therein
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(1) To be filed by amendment.
(2) Filed on June 2, 1997.
(3) Filed on July 24, 1997.
* Portions of this exhibit are the subject of a confidential treatment
request.
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(b) Financial Statement Schedules:
The following supplemental schedules can be found on the indicated pages
of this Registration Statement.
ITEM PAGE
All other schedules for which provision is made in the applicable
accounting regulations of the Commission are not required under the related
instructions or are not applicable, and therefore have been omitted.
ITEM 28. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement;
(iii) To include any additional or changed material information
with respect to the plan of distribution not previously disclosed in the
registration statement; and
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the Offering.
(b) The undersigned Registrant hereby undertakes to provide to the
Underwriters at the closing specified in the Underwriting Agreement
certificates in such denominations and registered in such names as required by
the Underwriters to permit prompt delivery to each purchaser.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
(d) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of a
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of the registration
statement as of the time it was declared effective.
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(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this amendment to registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Tampa,
State of Florida, on August 20, 1997.
800 TRAVEL SYSTEMS, INC.
By:/s/ Mark D. Mastrini
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Mark D. Mastrini, President
Chief Operating Officer and Director
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
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SIGNATURE TITLE DATE
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/s/ Mark D. Mastrini President, August 20, 1997
- ---------------------------------- Chief Operating Officer
Mark D. Mastrini and Director
/s/ Jerrold B. Sendrow Vice President-Finance, Treasurer August 20, 1997
- ---------------------------------- and Secretary (principal accounting
Jerrold B. Sendrow officer)
* Director August 20, 1997
- ----------------------------------
Pasquale Guadagno
* Chairman of the Board August 20, 1997
- ----------------------------------
Michael Gaggi
*By: /s/ Jerrold B. Sendrow
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Jerrold B. Sendrow
Attorney-in-Fact
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EXHIBIT INDEX
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EXHIBIT DESCRIPTION
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1.1 Proposed form of Underwriting Agreement (3)
1.2 Agreement Among Underwriters (3)
1.3 Selected Dealer Agreement (3)
2.1 Asset Purchase Agreement dated as of November 13, 1995 among 1-800
Low-Air Fare, Inc., S. Travel, Inc. and the Company (2)
2.2 Amended and Restated Agreement and Plan of Merger dated November 11,
1996 among the Company, The Joseph Stevens Group, Inc. and The
Joseph Stevens Group, LLC (3)
2.3 Amended and Restated Interim Operating Agreement between the Company
and Joseph Stevens Group, Inc. (3)
3.1 Proposed form of Registrant's Amended and Restated Certificate of
Incorporation (3)
3.2 Proposed form of Registrant's Amended and Restated Bylaws (3)
4.1 Specimen Common Stock certificate (1)
4.2 Specimen Warrant Certificate and Form of Warrant Agreement (3)
5.1 Opinion of Phillips Nizer Benjamin Krim & Ballon LLP as to the
validity of the Common Stock being registered (1)
10.1 Form of Registrant's 1997 Stock Option Plan (2)
10.2 Promissory Note of the Company dated November 7, 1995 in the amount
of $30,000 to the order of S. Travel, Inc. due and payable November
7, 1997 (2)
10.3 Promissory Note of the Company dated November 7, 1995 in the amount
of $30,000 to the order of S. Travel, Inc. due and payable November
7, 1998 (2)
10.4 Redemption Agreement between the Company and Michael Cantor (2)
10.5 Form of Redemption Agreement between the Company and Jose Colon (3)
10.6 Agreement between the Company and Perry Trebatch (2)
10.7 Lease dated February 10, 1996 by and between JFJ Real Estate Limited
Partnership and the Company (2)
10.8 Airlines Reporting Corporation ("ARC") Agent Reporting Agreement (2)
10.9 Letter dated March 6, 1996 from ARC approving change of ownership (2)
10.10 Subscriber Service Agreement dated November 27, 1995 between the
Company and Payroll Transfers Interstate, Inc. (2)
10.11 Form of Employment Agreement between the Company and Mark D.
Mastrini (2)
10.12 Form of Employment Agreement between the Company and Jerrold B.
Sendrow (2)
10.13 Form of Employment Agreement between the Company and Biagio Bellizzi
(2)
10.14 Form of Consulting Agreement between the Company and Lucien Bittar (3)
10.15 Agreement dated as of March 1, 1997 by and between the Company and
Global Discount Travel Services
10.16* SABRE Subscriber Agreement dated as of January 28, 1994 by and
between S. Travel, Inc., (the Company's predecessor entity), and
American Airlines, Inc.
10.17* Amendment No. 1 to SABRE Subscriber Agreement dated February 14,
1994 by and between 1-800 Low-Air Fare Travel (predecessor entity of
the Company), and American Airlines, Inc.
10.18* Suspension of Service Agreement dated April 3, 1996 by and between
the Company and American Airlines, Inc.
10.19* Amendment to SABRE Subscriber Agreement dated July 19, 1996 by and
between the Company, and American Airlines, Inc.
10.20* SABRE Subscriber Agreement dated November 20, 1996 by and between
the Company and The SABRE Group, Inc.
10.21* Cluster Amendment to SABRE Subscriber Agreement dated November 20,
1996 by and between the Company and The
SABRE Group, Inc.
10.22 Lease Agreement effective November 27, 1995 between the Company and
Roque De La Fuente Alexander Revocable Trust No. 1, and addendum
thereto dated June 27, 1995
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11.1 Statement regarding computation of per share earnings (1)
12.1 Statement regarding computation of ratios (1)
21.1 Subsidiaries of the Registrant (3)
23.1 Consent of Phillips Nizer Benjamin Krim & Ballon LLP (to be included
in its opinion to be filed as Exhibit 5.1)
23.2 Consent of Killman, Murrell & Company (2)(3)
23.3 Consent of Acetta and Olmstead, Accountancy Corporation (2)
23.4 Consent of Feldman Radin & Co., P.C. (2)
23.5 Consent of Feldman Radin & Co., P.C. regarding termination of
engagement (3)
24.1 Reference is made to the Signatures section of the Registration
Statement filed on June 2, 1997 for the Power of Attorney contained
therein
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(1) To be filed by amendment.
(2) Filed on June 2, 1997.
(3) Filed on July 24, 1997.
* Portions of this exhibit are the subject of a confidential treatment
request.
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EXHIBIT 10.16
Note: Portions of this exhibit indicated by "[ * ]" are subject to a
confidential treatment request, and have been omitted from this exhibit.
Complete, unredacted copies of this exhibit have been filed with the Securities
and Exchange Commission as part of the Company's confidential treatment
request.
SABRE SUBSCRIBER AGREEMENT - (UNITED STATES)
This SABRE(ct,R)(1) Subscriber Agreement (the "Agreement") is entered
into by and between the SABRE Travel Information Network, a division of
American Airlines, Inc. ("American") and the undersigned ("Customer"), as of
the date executed by American below ("Effective Date") regarding the provision
of products and services set forth herein to Customer's locations within the
United States and its territories.
Article 1 - Lease Term
1.1 Lease. For the term specified in 1.2 below, American shall lease to
Customer the System, as defined herein.
1.2 Term. The lease term of the System identified on Schedule A shall
commence on the date of installation and shall continue for [60] months
("Initial Term"). Any additional System installed subsequent to the date of
execution of this Agreement by American shall be subject to the terms and
conditions of this Agreement and shall have a term of [60] months commencing on
the date of installation ("Additional Term").
Article 2 - Definitions
The following terms shall have the following meanings in this Agreement:
2.1 Agreement means this SABRE Subscriber Agreement, and all Amendments,
Schedules and Supplements made a part hereof.
2.2 Confidential Information means this Agreement, any and all applicable
rights to patents, copyrights, trademarks and trade secrets, proprietary and
confidential information of American or its affiliates, subsidiaries,
successors or assigns concerning their past, present or future research,
development, business activities or affairs, finances, properties, methods of
operation, processes and systems, agreements (including without limitation
private fare or special discount agreements) related to the business of
American.
2.3 Instructions means any and all manuals, operating procedures,
manufacturer's recommendations, rules, and instructions delivered or made
available to Customer (either in hard copy or via SABRE), all of which must be
complied with by Customer. Such Instructions may be unilaterally revised or
amended by American at any time in its sole discretion.
SABRE is a Registered Trademark of American Airlines, Inc.
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2.4 Participant means an air carrier, hotel or rental car company which has
an agreement with American for the sale of its products or services through
SABRE.
2.5 SABRE Bookings means the number of airline, hotel, or rental car
segments (which obligates a Participant to pay a booking fee to American)
created in or processed through SABRE by Customer per video agent set during
any one calendar month.
2.5.1 For airline segments only, SABRE Bookings shall be counted in the month
that they are processed through SABRE, less cancellations made prior to the
date of departure during the same calendar month. Multiple passengers within
the same PNR ("Passenger Name Record") segment shall constitute multiple SABRE
airline bookings. For example, one passenger on a direct flight constitutes
one SABRE airline booking; one passenger on a two segment connecting flight
constitutes two SABRE airline bookings; and two passengers under the same PNR
on a direct flight constitutes two SABRE airline bookings.
2.5.2 A SABRE car or hotel booking shall mean the total automated segments
processed through the SABRE CAARS or SHAARP package by (or secured to) a SABRE
subscriber which contain an action status code of HK, KK or KL. Car and hotel
bookings shall be counted in the month in which the PNR that contains the
booking is purged from SABRE. A PNR will purge forty-eight hours after the
last segment date (including any segments cancelled prior to activity date).
For hotel bookings only, a segment booking means one room, suite or other
accommodation booked for the quantity of occupants using the accommodation for
the entire duration of the booking. For example, if a PNR stipulates three
suites for three persons for six nights then this constitutes three bookings.
For car bookings only, a segment booking means one vehicle booked for the
entire duration of its use.
2.6 SABRE Component means all memory, disk storage space, ports and any other
element of the Standard Equipment.
2.7 SABRE Promotional Support means the total dollar value of incentives
provided to Customer as identified on Schedule A and any Supplement.
2.8 Schedule A means the document reflecting the Charges and any applicable
discounts for the System as amended by any Supplement(s).
2.9 Standard Equipment means the items of computer hardware leased to
Customer in accordance with this Agreement.
2.10 Supplement means the document reflecting any changes to the System,
and/or Charges or discounts related thereto. The Supplement shall incorporate
all terms and conditions of the
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Agreement. The parties agree that any such Supplement need not be signed
unless requested by either party and that completion of the change specified on
such Supplement, or the payment of the revised Charges, whichever occurs first,
constitutes acceptance and ratification of the terms and conditions of the
Supplement as though it was fully set forth herein.
2.11 System means the Standard Equipment, SABRE Component, and/or the System
Software as identified on Schedule A and all Supplements.
2.12 System Software means that Software delivered by American to Customer as
identified on Schedule A and all Supplements.
2.13 Transaction means a grouping of characters transmitted to SABRE whether
such transmission is made in SABRE manually or automated. Each transmission to
SABRE from Customer constitutes one Transaction. No input message may exceed
three hundred characters in length.
Article 3 - Charges and Payments
3.1 Prepayment. Upon execution, Customer shall pay to American the
prepayment as shown on Schedule A. If the System is installed, the prepayment
shall be credited against the Customer's first Charges.
3.2 Charges. All amounts payable to American ("Charges") shall be due and
payable within fifteen days of the date of American's invoice, without setoff
or counterclaim.
3.3 Additional Charges. Customer agrees to pay to American an additional
charge at American's then prevailing rate for services and materials including
without limitation the following: (a) the installation or removal of Standard
Equipment; (b) Standard Equipment relocation within the site; (c) each site
disconnect or relocation to different premises; (d) modifications, upgrades,
enhancements or additions of Standard Equipment and/or System Software; (e)
excess cable required for installation; (f) installation of peripheral devices
requested by Customer, and (g) processing Transactions which exceed the level
of one hundred-five Transactions per SABRE Booking.
3.4 Increases. American shall have the right to increase the Charges for the
remaining term of this Agreement upon thirty days written notice to Customer.
If the increase exceeds [ * ] of the Charges in any consecutive twelve month
period, Customer may terminate this Agreement upon written notice to American
within fifteen days of receipt of American's notice of the increase.
Notwithstanding the foregoing, the communication access charge in such Charges
shall be subject to increase, at any time and
[*] The redacted portion, indicated by this symbol, is the subject of a
confidential treatment request.
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without limitation, to cover any increase in the cost imposed upon American.
3.5 SABRE Services. If Customer elects to use certain of SABRE's services
(such as, but not limited to, Ticketing and Invoice/Itinerary functions,
Microfiche), Customer shall pay all charges for such services based on
American's then prevailing rate.
3.6 Interest. Charges not paid when due shall accrue interest at the rate of
eighteen percent per annum or the highest rate permitted by Texas law,
whichever is less.
3.7 Taxes. Customer shall pay any taxes, or assessments including any
interest or penalty thereon levied as a result of this Agreement, excluding
taxes measured by the net income of American. Customer shall indemnify and
hold harmless American from all costs fines and expenses (including reasonable
legal costs) incurred by American resulting from Customer's failure to pay
taxes as provided in this Article.
Article 4 - Installation and Delivery
4.1 Delivery. American shall arrange for delivery of the System F.O.B. the
site, on the estimated installation date, as identified on Schedule A and all
Supplements thereto.
4.2 Installation. Subject to Article 4.3, American shall install, or cause
to be installed, the System at the site.
4.3 Customer's Obligations Prior to Installation. Customer, at its expense,
shall be responsible for preparing, on or before the estimated installation
date, the site for the System in accordance with the Instructions. If
installation of the System is prevented or delayed because of Customer's
failure to prepare the site, American shall use reasonable efforts to install
the System upon Customer's compliance with this Article and upon payment of all
reasonable expenses incurred by American resulting from Customer's failure to
prepare the site.
4.4 Relocation and Possession. Customer shall at all times keep the System
in its sole possession and control at the site. Customer shall not move any
part of the System from the site without first obtaining the written consent of
American.
4.5 Communication Access. American or its designated third party shall
install the necessary communication access device to connect the System to
SABRE. All such devices are either owned by American or such third-party, are
subject to this Agreement, and shall be returned to American or the third-party
as American directs upon termination of the Agreement.
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4.6 Non-Standard System. Customer shall not connect or use any hardware,
software, or firmware not acquired from American with SABRE or the System
without American's prior written consent, which shall be granted provided that
such hardware, software, or firmware is approved by American for use with SABRE
and Customer executes the Non-Standard System Amendment.
4.7 Acceptance of System. Upon installation of the System and establishment
of a successful connection with SABRE, Customer shall be deemed to have
accepted the System. Any use of the System, additional System and/or
non-standard system further constitutes acceptance of the Agreement and
applicable Amendments and Supplements by the Customer.
Article 5 Repairs and Maintenance
5.1 Repairs and Maintenance. Upon prompt notification from Customer,
American, or its designated agent, shall repair and maintain or replace the
Standard Equipment and shall keep it in good working order provided that the
Standard Equipment has been subject to reasonable operation. Customer shall
not make any modifications nor attempt to perform repairs or maintenance of any
kind.
5.2 Notification. Customer shall promptly inform American of any breakdown
of the Standard Equipment by contacting SABRE Customer Services. Customer
shall maintain a record of all occasions upon which repair or maintenance
service is performed and make such records available to American upon request.
5.3 Charges. Repair or maintenance services on Standard Equipment during
normal business hours (9:00 a.m. to 6 00 p.m. local time, Monday through
Friday, excluding legal holidays) are included in the Charges, provided that
the Customer has not been negligent and the Standard Equipment has been subject
to reasonable operation; otherwise, Customer will be charged a service fee in
accordance with American's or its independent contractor's then prevailing
rates.
Article 6 - Title and Ownership of System
6.1 Title and Ownership of System. The System leased hereunder shall remain
the property of American. Customer shall not in any other manner dispose of the
System or any part thereof or suffer any lien or legal process to be incurred
or levied on the System.
6.2 Risk of Loss. Risk of loss for and damage to the System shall pass to
the Customer upon delivery of the System to the site.
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Article 7 - Insurance
7.1 General. Upon delivery of the System to the site, Customer shall
maintain Comprehensive General Liability (including bodily injury, product
liability, property damage and contractual liability) and All Risk Property
Insurance.
7.2 Comprehensive General Liability. The Comprehensive General Liability
coverage shall be in an amount not less than one million dollars combined
single limit. The coverage shall include the following special provisions: (a)
American, its officers, agents and employees, shall be named as additional
insureds; (b) The policy(ies) shall specifically insure the indemnification
provision included in this Agreement; (c) Such insurance shall be primary
without any right of contribution from any insurance maintained by the
additional insureds; and (d) Insurers will provide American with thirty days'
prior written notice of any cancellation or material change.
7.3 All Risk Property. The All Risk Property insurance shall be in an amount
to cover the replacement value of the Standard Equipment as set forth in
Schedule A and all Supplements. Such policy shall: (a) name American as
additional insured; (b) name American as the sole loss payee for loss of the
Standard Equipment; (c) specifically insure the indemnity obligation assumed
by Customer herein; (d) be primary without right of contribution from any
insurance carried by American; and (e) provide that American will be given
thirty days' prior written notice of any cancellation or material change of
such policy.
7.4 Certificates. Customer will provide to American, on or before delivery
of the System to the site, a Certificate issued by its insurer(s), evidencing
the insurance coverage required by this Article. If American does not receive
such Certificate of Insurance prior to delivery of the System, American may
obtain insurance and Customer shall reimburse American for all amounts paid by
American to obtain such insurance.
Article 8 - Title and Ownership of Confidential Information
8.1 The Confidential Information shall remain American's exclusive property.
8.2 Customer shall maintain in perpetuity the confidentiality of the
Confidential Information using the highest degree of care. Customer shall not
use, sell, sublicense, transfer, publish, disclose, display, or otherwise make
available to others, except as authorized in this Agreement, the Confidential
Information or any other material relating to the Confidential Information at
any time before or after the termination of this Agreement nor shall Customer
permit its officers, employees, agents,
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contractors or subcontractors to divulge the Confidential Information without
prior written consent of American.
8.3 Customer shall use the data transmitted under this Agreement ("data")
solely for the benefit of its customers in connection with rendering the
following services: (i) air carrier, hotel, car and rail reservations,
including schedule quotations; (ii) customer accounting and record keeping
activities; or (iii) the sale of or reservations for other miscellaneous
products or services offered in SABRE. Customer shall not publish, disclose or
otherwise make available to any third party any compilation of data obtained
from SABRE. However, Customer may use specific data for the benefit of its
customers in connection with any reservation or schedule quotation production
of a hard copy travel itinerary, invoice, statement or ticket.
Article 9 - System Software License
9.1 Ownership of System Software. Customer acknowledges that American or
the original manufacturer of the System Software, as applicable, owns or has
licensed from the owner, copyrights in the respective System Software and that
ownership and title are retained by the manufacturer or its licensor. All
applicable rights to patents, copyrights, trademarks, and trade secrets
inherent in the System Software and pertinent thereto are and shall remain
American's or the original manufacturer's sole and exclusive property. Any copy
of such Software must incorporate any copyright, trade secret, or trademark
notices or legends appearing in the original version delivered to Customer.
9.2 Grant of License. Subject to the provisions of this Agreement and for
the term specified in Article 1.2, either American or the original manufacturer
grants to Customer a non-transferable, non-exclusive limited license to use the
System Software subject to the following restrictions. (a) Customer shall use
the System Software solely in connection with its use of SABRE, (b) the System
Software shall be used and installed solely at the site and solely used on the
Standard Equipment, or other equipment authorized by American, (c) the System
Software shall be used solely for internal purposes and only in the ordinary
course of business, (d) Customer shall not compile, reverse compile, decompile,
disassemble, reverse assemble or reverse engineer the System Software or any
portion thereof, (e) the System Software shall not be copied or reprinted in
whole or in part except (i) a reasonable number of copies of each program may
be made in machine readable form for reasonable archival or backup purposes or
(ii) when American has granted permission to do so, and (f) Customer shall not
lease, sell, license, sublicense or otherwise transfer the System Software to
any other party. Nothing in this Agreement shall convey title to the System
Software to Customer.
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9.3 Modification Rights. Customer shall not modify the System Software or
merge such software into other programs or create derivative works based on
such software. Additionally, Customer shall not delete or cause to be deleted
the System Software from the System. Notwithstanding anything to the contrary
contained herein, noncompliance with this provision shall constitute an Event
of Default under this Agreement and this Agreement shall immediately terminate
and Customer shall be obligated to pay American damages as specified in Article
14 hereof.
9.4 Upgrades and Modifications. All tangible objects containing or relating
to the System Software are the sole and exclusive property of American or the
manufacturer. In the event American, in its sole discretion, modifies the
System Software, it may deliver such modified System Software to Customer at
its then current charge, if any, and Customer shall promptly return to American
any and all tangible objects relating to the System Software as provided in
Article 15.7. Customer shall be solely responsible for protecting all software
not obtained from American hereunder and the data related thereto in the event
of a software upgrade. Customer, in order to receive an upgraded or updated
program, shall comply with any and all terms and conditions and Instructions
imposed by American.
9.5 Fileserver. Customer shall use the System Software solely on a single
processing unit (the "Fileserver"). In the event a Fileserver is upgraded,
Customer shall be solely responsible for moving and protecting all software not
obtained from American and the data related thereto.
9.6 Operating Program
9.6.1 Customer acknowledges that the System Software incorporates, in part,
copyrighted materials pertinent to the Operating Program as identified on
Schedule A. Customer agrees that such copyrighted portions shall be subject to
the Operating Program copyright and license.
9.6.2 If Customer requires additional Operating Programs, Customer shall
notify American and American will provide Customer with additional programs via
Supplements to support additional video agent sets pursuant to this Agreement.
9.6.3 Customer will look only to American and not to the manufacturer for any
support, maintenance, assistance and upgrades and the like with respect to the
Operating Program and the manufacturer shall have no liability to Customer in
relation to this program.
9.6.4 No action, regardless of form, arising out of the license of the
Operating Program may be brought more than two years after the cause of action
has arisen.
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9.6.5 Customer shall physically retain a copy of the Conditions of Use for
SABRE Users (Attachment I) with the applicable video agent sets or dedicated
fileserver/processor eligible to use such Operating Program.
9.6.6 THE LICENSE OF THE OPERATING PROGRAM, IF MANUFACTURED BY IBM, SHALL BE
CONSTRUED AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK AND THE UNITED
STATES OF AMERICA NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS
AGREEMENT.
9.7 System Software.
9.7.1 Customer acknowledges and agrees that Customer is not entitled to any
greater warranty with respect to the System Software than the warranty received
by American from its supplier of the respective System Software.
9.7.2 EXCEPT AS SPECIFICALLY PROVIDED BELOW, THE SYSTEM SOFTWARE IS PROVIDED
TO CUSTOMER AS IS AND WITH ALL ITS FAULTS WITHOUT ANY WARRANTY WHATSOEVER,
EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR THOSE IMPLIED WARRANTIES
ARISING OUT OF COURSE OF PERFORMANCE, COURSE OF DEALING, USAGE OF TRADE OR ANY
OTHER WARRANTY. THE ENTIRE RISK AS TO THE QUALITY AND PERFORMANCE OF THE
SYSTEM SOFTWARE IS WITH THE CUSTOMER. SHOULD THE SYSTEM SOFTWARE PROVE
DEFECTIVE, CUSTOMER SHALL ASSUME THE ENTIRE COST OF ALL NECESSARY SERVICING,
REPAIR OR CORRECTION. SOME STATES DO NOT ALLOW THE EXCLUSION OF IMPLIED
WARRANTIES, SO THE ABOVE EXCLUSION MAY NOT APPLY TO CUSTOMER. THIS WARRANTY
GIVES CUSTOMER SPECIFIC LEGAL RIGHTS AND CUSTOMER MAY ALSO HAVE OTHER RIGHTS
WHICH VARY FROM STATE TO STATE. ADDITIONALLY, CUSTOMER ASSUMES RESPONSIBILITY
FOR THE SELECTION OF THE SYSTEM SOFTWARE TO ACHIEVE CUSTOMER'S INTENDED
RESULTS, AND FOR THE INSTALLATION AND USE OF AND THE RESULTS OBTAINED FROM THE
SYSTEM SOFTWARE.
9.7.3 Notwithstanding the above, the media on which the SABRE Emulation
Software, SABREworks, SABREmail (if applicable) and the LAN Program are encoded
is warranted to the Customer against defects in material or workmanship for a
period of three months from the date of original purchase by Customer. If
during such period, Customer discovers any defect in the media, Customer may
return the media to American and American shall, as Customer's sole and
exclusive remedy, repair or replace the defective media.
Article 10 - Operation of SABRE and the System
10.1 Operation of System.
10.1.1 SABRE and the System shall be operated by Customer solely for the
purposes and functions expressly permitted by this Agreement and in strict
accordance with the Instructions.
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10.1.2 Customer shall access SABRE only on the System or another system or
device authorized in writing by American.
10.1.3 Customer shall take all precautions necessary to prevent unauthorized
operation or misuse of SABRE or the System, including without limitation,
speculative booking, shell bookings, reservation of space in anticipation of
demand, or improper record or access. In the event of misuse of SABRE or the
System, American reserves the right, in addition to all rights under the
Agreement, to terminate the Agreement.
10.1.4 Customer shall not enter SABRE Bookings into SABRE as GK or HK or YK
("passive bookings") when no corresponding space has been reserved within the
transporting carrier's internal reservation system. Bookings so entered shall
not be calculated in determining productivity levels herein. All passive
bookings shall be removed from SABRE should corresponding space be cancelled
direct via telephone with the transporting carrier.
10.2 Non-Exclusivity. This Agreement is not exclusive and nothing in the
Agreement is intended to preclude or prohibit Customer from using any other
computerized reservation system. The parties agree that Customer's expected use
of the System is the Fixed Monthly Discount Booking Level stated in the
Schedule A and any subsequent Supplements.
10.3 Transaction Volume. Notwithstanding the provisions of Article 3.3(g),
American shall have the right, upon thirty days notice to Customer to limit
Customer to generating no more than one hundred-five Transactions per SABRE
Booking.
10.4 Training. For Standard Equipment leased hereunder, American will make
available the following training allotments:
(a) Two training allotments per video agent set and each
non-standard video agent set triple A which includes a choice of the following
SABRE instructional levels: Fundamental, Intermediate, Accelerated;
(b) One training allotment per Customer site for Train the
Trainer;
(c) Access via Standard Equipment to SABRE Assisted
Instruction ("SAI") lessons to assist Customer in performing recurrent training
and training of new employees.
For purposes of this Article, training allotment shall mean one training class.
10.4.1 Upon written request from Customer, at such time that Customer's free
allotments have been exhausted, additional training allotments will be offered
subject to availability and
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at American's then prevailing rate per person, per class. The additional
training charge will be assessed on Customer's monthly invoice. Training
allotments for Standard Equipment and non-standard video agent set triple A's
installed subsequent to the Effective Date shall be determined as specified in
10.4(a) above.
10.4.2 The training described in Article 10.4 shall be performed at a location
designated by American.
10.4.3 Except as otherwise provided herein, Customer is responsible for all
training of all its employees in the proper use of SABRE.
10.4.4 In addition to the training described in Article 10.4, American may
offer to Customer supplemental training programs on a local level. Such
training may consist of, but not be limited to, workshops, seminars, and
individual consultations.
10.4.5 Customer and its trainees agree to comply with all training procedures
and rules established by American, and American reserves the right to remove
any Customer trainee from the training program if such trainee fails to comply
with such procedures and rules.
10.4.6 American may, at its discretion, monitor or test Customer's employee's
training levels. If American determines the training level of any one or more
of Customer's employees to be insufficient, then Customer will institute such
additional training at its own expense (including, if necessary, additional
training by American at American's then prevailing charges) as may be necessary
to bring Customer's employees to the level of training required by American.
Article 11 - Warranty, and Limitation of Warranty,
Liability and Remedy
11.1 SABRE Warranty. American agrees to use reasonable efforts to maintain
the availability of SABRE, but shall have no liability for interruptions in the
operation of SABRE except as specifically provided herein. Subject to the terms
hereof, in the event that SABRE is not operable at least ninety-five percent of
the total normal business hours each month, excluding periods for maintenance
of Standard Equipment or other scheduled down time ("Normal Time"), American
will reduce the monthly charges (on a pro-rata basis according to the
percentage of Normal Time during which SABRE was not operable at least
ninety-five percent of the Normal Time. For purposes of this paragraph, normal
business hours shall be 9:OO a.m. to 6:00 p.m., local time, Monday through
Saturday. SABRE shall be deemed inoperable if Customer is unable, after calling
SABRE Customer Service to make any SABRE Bookings as a result of a failure
attributable to SABRE. To request a
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reduction under this Article ll.1, Customer shall submit a written record to
American and request an adjustment in the monthly charges. Customer's written
records must be submitted in a timely manner and include, at a minimum, the
date and time which the outage occurred, the time the outage was reported to
SABRE Customer Service, the time SABRE was restored (within normal business
hours as defined above) and the type of outage.
11.2 Data. CUSTOMER ACKNOWLEDGES THAT NEITHER AMERICAN NOR THE OFFICIAL
AIRLINE GUIDE INC. ("OAG"), THE SUPPLIER OF CERTAIN DATA PROVIDED UNDER THE
AGREEMENT, WARRANTS THE ACCURACY, MERCHANTABILITY, OR THE FITNESS FOR A
PARTICULAR PURPOSE OR THE NON-INFRINGEMENT OF ANY DATA PROVIDED UNDER THIS
AGREEMENT. NEITHER AMERICAN NOR OAG SHALL BE LIABLE TO CUSTOMER FOR ANY
INJURY, LOSS, CLAIM OR DAMAGE CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE, OF
AMERICAN OR OAG OR BY CONTINGENCIES BEYOND THEIR RESPECTIVE CONTROL IN
PROCURING, COLLECTING, COMPILING, ABSTRACTING, INTERPRETING, COMMUNICATING,
PROCESSING OR DELIVERING ANY SUCH DATA. HOWEVER, IF ANY ERRORS IN DATA
TRANSMITTED ARE DUE TO CIRCUMSTANCES UNDER AMERICAN'S DIRECT CONTROL, AMERICAN
SHALL USE REASONABLE EFFORTS TO CORRECT SUCH ERRORS IN A TIMELY MANNER. IN THE
EVENT A PASSENGER USES A CONFIRMED TICKET FOR AIR TRANSPORTATION ISSUED BY
CUSTOMER BY MEANS OF SABRE AND IS REFUSED CARRIAGE BECAUSE OF AN OVERSALE OF
SEATS OR THE LACK OF RECORD OF SUCH RESERVATION, THE SOLE REMEDY OF CUSTOMER
SHALL BE AS SET FORTH IN THE TARIFF OF THE REFUSING CARRIER OR APPLICABLE TERMS
AND CONDITIONS OF THE CARRIER'S CONTRACT OF CARRIAGE.
11.3 Standard Equipment. The Standard Equipment shall be delivered and
installed in good working order.
11.4 Limitation of Warranty. THE LIMITED EXPRESS WARRANTIES SPECIFIED HEREIN
ARE THE ONLY WARRANTIES MADE BY AMERICAN AND THE MANUFACTURER AND THERE ARE NO
OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR INTENDED USE BY OPERATION OF LAW
OR OTHERWISE OF SABRE OR THE SYSTEM OR ANY COMPONENTS THEREOF. NO
REPRESENTATION OR OTHER AFFIRMATION OF FACT, INCLUDING WITHOUT LIMITATION
STATEMENTS REGARDING CAPACITY, SUITABILITY FOR USE, OR PERFORMANCE OF SABRE,
THE SYSTEM OR ANY COMPONENTS THEREOF, WHETHER MADE BY AMERICAN OR OTHERWISE,
WHICH IS NOT CONTAINED IN THIS AGREEMENT, SHALL BE DEEMED TO BE A WARRANTY FOR
ANY PURPOSE OR GIVE RISE TO ANY LIABILITY OF AMERICAN OR THE MANUFACTURER.
11.5 Limitation of Remedies. In the event of a material malfunction or
defect in an unaltered component of the System that can be reproduced by
American, American will provide reasonable services to correct such malfunction
or defect. Customer will supply American with such input files and other
materials as may be necessary to enable American to diagnose and correct the
malfunction or defect. THE FOREGOING SHALL BE
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CUSTOMER'S SOLE AND EXCLUSIVE PRIMARY REMEDY FOR ANY MALFUNCTION OR DEFECT IN
THE SYSTEM. IF SUCH MALFUNCTION OR DEFECT MATERIALLY IMPAIRS CUSTOMER'S USE OF
THE SYSTEM AND CANNOT BE CURED AS PROVIDED IN THIS PARAGRAPH, THEN CUSTOMER'S
ALTERNATE SOLE AND EXCLUSIVE REMEDY SHALL BE TO TERMINATE THIS AGREEMENT
WITHOUT FURTHER LIABILITY TO AMERICAN FOR DAMAGES HEREUNDER.
11.6 Limitation of Liability. CUSTOMER WAIVES ALL LIABILITY IN TORT, OF
AMERICAN AND THE RESPECTIVE MANUFACTURER INCLUDING WITHOUT LIMITATION ANY
LIABILITY ARISING FROM NEGLIGENCE. NOTWITHSTANDING THE FOREGOING, AMERICAN'S
LIABILITY TO CUSTOMER HEREUNDER SHALL BE LIMITED TO THE TOTAL AMOUNT OF CHARGES
ACTUALLY PAID BY CUSTOMER TO AMERICAN PURSUANT TO THIS AGREEMENT. NEITHER
AMERICAN NOR ANY MANUFACTURER SHALL BE LIABLE TO CUSTOMER FOR ANY INCIDENTAL,
OR CONSEQUENTIAL DAMAGES, UNDER ANY CIRCUMSTANCES, INCLUDING BUT NOT LIMITED TO
LOST PROFITS, REVENUE OR SAVINGS, OR THE LOSS OF USE OF ANY DATA, EVEN IF
AMERICAN OR THE MANUFACTURER HAS BEEN ADVISED OF, KNEW, OR SHOULD HAVE KNOWN,
OF THE POSSIBILITY THEREOF.
Article 12 - Indemnification
12.1 Each of Customer and American ("Indemnitor") hereby agree to indemnify
and hold each other, their affiliates, subsidiaries, successors and assigns and
their officers, directors, agents and employees ("Indemnitees") harmless from
and against third-party liabilities, including, but not limited to, attorneys'
fees, and other expenses incident thereto, ("Claims") which may be threatened
against, or recoverable from the Indemnitees by reason of any injuries to or
death of persons or loss of, damage to, or destruction of property to the
extent arising out of or in connection with any act, or omission of the
Indemnitor.
12.2 Customer will indemnify American for any Claims arising from Customer's
misuse of SABRE including without limitation, making fraudulent bookings.
Article 13 - Assignment
13.1 Assignment Or Sublease By Customer. CUSTOMER SHALL NOT SUBLEASE,
TRANSFER OR ASSIGN THIS AGREEMENT OR ANY PORTION THEREOF, OR ANY RIGHT OR
OBLIGATION HEREUNDER, UNLESS CUSTOMER HAS OBTAINED THE PRIOR WRITTEN CONSENT OF
AMERICAN. ANY ATTEMPTED ASSIGNMENT IN VIOLATION OF THIS ARTICLE SHALL BE VOID.
13.2 Assignment by American. American shall have the right to sell, transfer,
assign or delegate its interests, rights and/or obligations, without the prior
consent of Customer, and, provided that such transferee or assignee assumes all
of American's obligations, American shall be released of all obligations after
the effective date of such sale, transfer, delegation or assignment.
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Article 14 - Termination and Default
14.1 Default By Customer. The occurrence of any one or more of the following
events shall constitute a non-exclusive event of default (the "Event of
Default") pursuant to the terms of this Agreement.
14.1.1 Customer fails to pay any amount when due;
14.1.2 Any representation by Customer is discovered to be materially
misleading or inaccurate, or Customer fails to perform any material covenant,
agreement, obligation, term or condition contained herein;
14.1.3 Customer terminates or cancels this Agreement or any portion thereof,
except as expressly permitted in Article 14.3;
14.1.4 Customer ceases to do business as a going concern, makes an assignment
for the benefit of creditors, admits in writing its inability to pay debts as
they become due, acquiesces in the appointment of a trustee, receiver or
liquidator for it or any substantial part of its assets or properties. Sells,
or executes an agreement to sell all or substantially all of its assets without
the consent of American.
14.1.5 Fails to secure and maintain ARC/BSP/SSP accreditation for ticketing of
reservations;
14.1.6 Events of Default described in 14.1.1, 14.1.2, and 14.1.4 shall not be
cause for termination if Customer cures such failure within fifteen days after
date of written notice from American. If Customer cures its failure as provided
in this provision, said failure shall not be considered to be an Event of
Default for the purposes of Article 14.2.
14.2 American's Rights Upon Termination. Upon the occurrence of an Event of
Default and subject to Article 14.1.6, American shall have the right to any one
or more of the following remedies; (i) terminate this Agreement and Customer's
access to SABRE; (ii) seek all legal and equitable remedies to which it is
entitled, and (iii) retake immediate possession of the System. If Customer's
Event of Default results in termination Customer agrees to pay to American, in
full settlement of the damages American will suffer as a result of such Event
of Default, an amount calculated to estimate American's damages as liquidated
damages as follows:
14.2.1 the applicable charge to disconnect the Standard Equipment; plus
14.2.2 the amount of the Total Fixed Monthly Charges, multiplied by the number
of months remaining under the term of the lease of
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the Standard Equipment, including any renewal thereof, and the product thereof
multiplied by .80; plus
14.2.3 the total number of Customer's video agent sets and video agent set
triple A's multiplied by Customer's expected Fixed Monthly Discount Booking
Level as described in Schedule A and any subsequent Supplements multiplied by
the prevailing booking fee that American charges to airlines that participate
in the full availability features of SABRE, and the product thereof multiplied
by the number of months of the term remaining under this Agreement, including
any renewal thereof; plus
14.2.4 the amount of SABRE Promotional Support provided to Customer together
with interest at the rate of eighteen percent per annum compounded annually and
applied from the date of the provision of the SABRE Promotional Support until
the date of payment.
14.3 Termination By Customer. In the event that American breaches any
material term of this Agreement, which breach continues for a period of fifteen
days after date of written notice from Customer, then Customer may terminate
this Agreement immediately upon written notice to American. Except as limited
by this Agreement, upon termination, Customer may seek all legal and equitable
remedies to which it is entitled. Customer may not otherwise cancel, terminate,
modify, repudiate, excuse or substitute this Agreement without American's prior
written consent, which American may withhold in its absolute discretion.
Article 15 - Miscellaneous
15.1 Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF TEXAS AND THE UNITED STATES OF AMERICA. CUSTOMER HEREBY SUBMITS AND
CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS AND THE COURTS OF THE STATE OF TEXAS IN ANY
DISPUTE ARISING OUT OF THIS AGREEMENT AND AGREES THAT SERVICE OF PROCESS SHALL
BE SUFFICIENT IF MADE ON THE SECRETARY OF STATE OF THE STATE OF TEXAS WITH A
COPY TO BE SENT, REGISTERED MAIL TO THE CUSTOMER AT THE ADDRESS SET FORTH IN
SCHEDULE A OR SUCH OTHER ADDRESS AS CUSTOMER MAY LATER SPECIFY BY WRITTEN
NOTICE TO AMERICAN.
15.2 Binding Effect. Except as otherwise provided, this Agreement shall
inure to the benefit of and bind the successors and assigns of the parties
hereto.
15.3 Deletion of Equipment. During the term of the Agreement, Customer may
delete up to [ * ] of the productive video agent sets and video agent set
triple A's, with a minimum of [ * ], and [ * ] of the printers identified
on Schedule A and/or subsequent Supplements, provided that Customer complies
with the
[*] The redacted portion, indicated by this symbol, is the subject of a
confidential treatment request.
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following conditions: (a) Customer provides documentation, satisfactory to
American, of a substantial decrease in the number of SABRE Bookings, which
decrease is solely the result of a loss of its commercial accounts and/or
customer base; (b) Customer notifies American, in writing, of the description
and location of the equipment to be deleted (the "Deleted Equipment"); (c)
Customer pays to American the then current deinstallation charges for the
Deleted Equipment. In addition, Customer shall pay to American any outstanding
Charges for such Deleted Equipment up through the Stop Billing Date; (d)
Customer will forfeit all right and equity, if any, in the Deleted Equipment
removed from Customer's location.
15.3.1 If Customer complies with the requirements identified in 15.3 above,
American shall deinstall the Deleted Equipment and disconnect it from the
System.
15.3.2 American shall defer Customer's obligation to pay the Charges
identified in Schedule A and any Supplement thereto (the "Deferred Payment"),
which would otherwise be due and payable to American with regard to the Deleted
Equipment, provided that Customer complies with the following conditions: (a)
If Customer installs additional computer reservations equipment after it
deletes the Deleted Equipment such equipment, up to the amount of the Deleted
Equipment (or such lesser amount as agreed by American) shall be Standard
Equipment and shall be installed and reconnected by American; (b) Customer
shall pay to American its then current installation charges with respect to the
Deleted Equipment which is reinstalled and reconnected; (c) Customer shall pay
to American its then current equipment lease and maintenance and use charges
with respect to such equipment and such equipment shall be deemed covered by
the provisions of the Agreement; and (d) Customer does not breach any term or
provision of the Agreement.
15.3.3 The Deferred Payment shall be deemed waived by American at the end of
the Initial Term of the Agreement or any renewal thereof if Customer has not
breached or otherwise failed to comply with the Agreement. If Customer fails
to comply with the Agreement, American shall be entitled to exercise all of its
rights under law and under the Agreement, including the collection of all
liquidated damages identified in Article 14 of the Agreement with respect to
the Deleted Equipment. Interest shall accrue on the Deferred Payment at the
maximum rate allowed by applicable law from the date of the deferral until
payment.
15.4 Entire Agreement. This Agreement and the Instructions constitute the
entire agreement of the parties as to the matters set forth herein and shall
supersede any previous understandings, agreements, representations, statements,
negotiations and undertakings, whether written or oral, between the parties
relating to the matters set forth herein. Any amendment to this
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Agreement must be in writing and signed by the authorized representatives of
both parties.
15.5 Force Majeure. American shall be relieved of its obligations hereunder
in the event and to the extent that performance is delayed or prevented by any
cause reasonably beyond its control, including, but not limited to, acts of
God, public enemies, war, civil disorder, fire, flood, explosion, labor
disputes or strikes, or any acts or orders of any governmental authority,
inability to obtain supplies and materials (including without limitation
computer hardware) or any delay or deficiency caused by the electrical or
telephone line suppliers or other third parties.
15.6 Notices. Unless otherwise stated, notices given or required under this
Agreement must be in writing and shall be deemed delivered (i) upon deposit
through the United States Mail, to American at P.0. Box 619616, MD 3562,
Dallas/Fort Worth, Texas, 75261-9616 (to be sent to the attention of SABRE
Travel Information Network, Financial Services) or to the Customer at the
address set forth in Schedule A, or (ii) upon dispatch, if sent by SABRE as
follows: If to American: QP/ZFSC and if to Customer: to the Pseudo City Code as
set forth in Schedule A or Supplement.
15.7 Return of System. Upon the termination of this Agreement for any
reason, Customer, at its sole cost and expense, shall return the System and all
Confidential Information as requested by American, in good repair, condition
and working order, less normal and ordinary wear and tear, by delivering it to
a common carrier selected and designated by American, F.O.B. the destination
designated by American in writing.
15.8 SABRE Modification. American retains the right to modify the System,
at its discretion at any time during the term of this Agreement. However, such
modifications will not materially impair Customer's ability to access and use
SABRE in the manner expressly permitted in this Agreement.
15.9 Severability. Any provision of this Agreement which may be determined
by a court or other competent governmental authority to be prohibited or
unenforceable in ally jurisdiction shall, as to such jurisdiction, be
ineffective only to the extent of such prohibition or unenforceability, without
invalidating the remaining provisions thereof, unless said prohibition or
unenforceability materially alters the rights or obligations of either party.
15.10 Subsequent Acts of Government. In the event that there is any change in
any statute, rule, regulation or order governing the operation of airline
computerized reservations systems, or air transportation generally or the
System, which in any way
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materially impairs the benefits of this Agreement to American, then the parties
hereto will commence consultation in order to determine what, if any, changes
to this Agreement are necessary or appropriate, including, but not limited to,
early termination of this Agreement. If the parties hereto are unable to agree
upon changes in the Agreement in response to such new statute, rule, order or
regulation within ten days after commencement of such consultation, this
Agreement may be cancelled by American upon giving Customer thirty days prior
written notice of such cancellation. If American elects to terminate the
Agreement pursuant to this Article 15.10, except for Customer's obligation to
pay any and all charges incurred through the date of termination, each party
shall be relieved of any future obligations under this Agreement as of the
effective date of cancellation. Each party shall bear its own costs and
expenses incurred as a result of said termination. Upon termination, Customer
shall return the pro-rata portion of the SABRE Promotional Support calculated
for the remainder of the term of the Agreement. Customer does not have the
right to terminate the Agreement under this provision.
15.11 Surviving Sections. If the term of the Agreement expires or is
otherwise terminated for any reason before Customer has paid to American all of
the sums due, the Agreement the Schedule A and all Supplements shall survive
such expiration or termination to the extent necessary to protect American's
rights until all sums owed to American have been paid. Notwithstanding
anything to the contrary referenced herein, Articles 6, 8, 11 and 12 shall
survive the termination of this Agreement.
15.12 Waiver. A failure or delay of either party to require strict performance
to enforce a provision of this Agreement or a previous waiver or forbearance by
either party shall in no way be construed as a waiver or continuing waiver of
any provision of this Agreement.
15.13 Acknowledgment. Customer hereby acknowledges that American has offered
Customer a SABRE Subscriber Agreement with a three year term with reasonable
terms and conditions.
18
<PAGE> 19
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth below.
AMERICAN AIRLINES, INC.
By:[/s/ GURRIERO SALVATORE] By: [/s/ JEANNE M. HALL]
---------------------------- -------------------------------
(Signature) (Signature)
Name: [GURRIERO SALVATORE] Name: [JEANNE M. HALL]
------------------------- -----------------------------
(Print Name) (Print Name)
Title:[PRES.] Title: Manager - Financial
------------------------- Services
SABRE Travel
Information Network
Date: [01/28/94] Date: [2/24/94]
------------------------- -----------------------------
Agency Name: [S TRAVEL INC.] PCC: [4C62]
--------------------------
19
<PAGE> 20
ATTACHMENT I
Conditions of Use for SABRE Users
1. Qualifying Use. The manufacturer has made this package available to you
through the vendor, whether directly or indirectly, on the understanding that
it is being supplied to you primarily for use with the vendors' SABRE
reservation system, and not with a view to resale or other remarketing.
2. Other Terms and Conditions. Any other Terms and Conditions and/or
Program License Agreement, which may appear printed inside the package, is
inapplicable and should be ignored.
Copyright and Other Rights
The manufacturer's programs contain material in which the manufacturer and in
many cases the manufacturer's suppliers, retain proprietary rights. The
manufacturer wants these programs to be fully usable by you for the purpose for
which they are supplied, that is, in connection with a computer. No
infringement of the rights of the manufacturer or of the manufacturer's
suppliers will occur provided that the following conditions are observed with
respect to each program:
1. The program is used only on:
(a) a single machine; or
(b) on any workstation connected to a single fileserver which is
primarily used in connection with the SABRE reservation system.
2. The program is copied into machine-readable or printed form for backup
or modification purposes only in support of use on a single machine, or on a
workstation connected to the SABRE reservation system;
However, certain diskettes marked "Copy Protected" may include mechanisms to
limit or inhibit copying of the program;
3. The program is modified or merged into another program only for use on a
single machine or on a workstation connected to the SABRE reservation system.
Any portion so merged continues to be subject to these conditions;
4. The copyright notice is reproduced and included in any copy or
modifications made of the program and in any program merged into other
programs; and
20
<PAGE> 21
5. If the program package is transferred to another party, all copies and
modifications made of the program must be transferred or destroyed. You do not
retain any right with respect to the transferred package. The other party
agrees to observe all of these Conditions of Use.
Any other act involving reproduction or use of, or other dealing in the program
is prohibited.
You are reminded that it may be necessary to obtain local and United States
licenses to export or re-export this package.
No statements contained in this package shall affect the statutory rights of
any person.
PSEUDO CITY CODE: [4C62]
00102
By [/s/ GURRIERO SALVATORE] By [/s/ JEANNE M. HALL]
------------------------- ----------------------------
(Signature) (Signature)
Name [GURRIERO SALVATORE] Name [JEANNE M. HALL]
------------------------- ----------------------------
(Print Name) (Print Name)
Title: [PRES.] Title [MANAGER]
------------------------ ------------------------------
SABRE Travel Information
Network
Date: [01/28/94] Date: [2/24/94]
-- -- -- - -- --
21
<PAGE> 22
===============================================================================
SCHEDULE A
- -------------------------------------------------------------------------------
To SABRE Subscriber Agreement between Customer and American (The
"Agreement").
ARC #..:33-884841
CUSTOMER NAME: S TRAVEL INC PSEUDO :
(include DBA): 1-800-LOW-AIR-FARE ORDER #:O/U 9540605
SITE (Loc.)..: 100 WALL ST, 15TH FLOOR
NEW YORK, NY 10005
EFFECTIVE DATE:
(For Contract Renewal Only)
CONTRACT TERM : 60 Months
ESTED. INSTALL: 02/01/94
1) SYSTEM DESCRIPTION:
======================
<TABLE>
<CAPTION>
QTY. Rate per Unit Total Total
- -------- ------------- Monthly Insurance
Lea Own DESCRIPTION Lease SMU Charges Value
=== === ========================= ===== ===== ======= =========
<S> <C> <C> <C> <C> <C> <C>
A) HARDWARE:
------------
[*] SABRE/IBT TWO-WAY DATA LINE(S) [*] [*] [*] [*]
[*] DF/S GRID 486/25.425MG/8MB... [*] [*] [*] [*]
[*] G/W GRID 486/25.....DL/4MB... [*] [*] [*] [*]
[*] W/S GRID 486/25.....DL/4MB... [*] [*] [*] [*]
[*] W/S GRID 486/25.....FD/4MB... [*] [*] [*] [*]
[*] W/S GRID 486/25..240MB/4MB... [*] [*] [*] [*]
[*] NoAAA GRID 486/25 120MB/4MB+. [*] [*] [*] [*]
[*] Printer Brother.............. [*] [*] [*] [*]
[*] Printer Datamax 5000-OCR..... [*] [*] [*] [*]
[*] Printer TI 885-Basic......... [*] [*] [*] [*]
[*] Printer TI 8920.............. [*] [*] [*] [*]
[*] Tape Backup Unit............. [*] [*] [*] [*]
[*] DM 1000 Coupon Output Hopper. [*] [*] [*] [*]
[*] Optical Storage Unit-OSU..... [*] [*] [*] [*]
[*] Controller Card-LG ATT/GRID.. [*] [*] [*] [*]
[*] Graphic Card(s)-Initial/Del.. [*] [*] [*] [*]
----- ----- -------
[*] Total Hardware Monthly Charge [*] [*] [*]
----- ----- ------- ---------
Total Insurance Value...............................$ [*]
=========
2) ONE-TIME CHARGES:
====================
A) PREPAYMENT:
--------------
Prepayment (New SABRE Location Only)......................
B) SYSTEM:
----------
SABRE Installation Charges................................
Integrated Business Technologies (IBT) Interface..........
SABREvision Install/Deinstall Charges.....................
C) SYSTEM SOFTWARE:
-------------------
SABRE Emulation Software...@ [*]................. [*]
MS-DOS/SABRE with Windows).@ [*]................. [*]
NetWare (LAN Program)......@ [*]................. [*]
[*] SABREworks.................@ [*]Per Fileserver... [*]
[*] SABREmail Plus.............@ [*]Per Fileserver... [*]
---------
Total One-Time Charges...................................$ [*]
=========
</TABLE>
===============================================================================
[SSI SKI] Rvsd. 9/20/93 Page 1
[*] The redacted portion, indicated by this symbol, is the subject of a
confidential treatment request.
<PAGE> 23
PSEUDO CITY CODE: 4CG2
G0102
3) DISCOUNTS:
=========
A) FIXED MONTHLY DISCOUNTS:
-----------------------
Fixed Monthly Discount - Booking Level ....... [*]
Fixed Monthly Discount - SABRE ............... $ [*]
Fixed Monthly Discount - IBT ................. $ [*]
-------
Total Fixed Monthly Discount .............. $ [*]
=======
American agrees to provide Customer a fixed monthly discount to such Total
Monthly Charges if Customer meets all the terms and conditions of this
Agreement.
B) SUSPENDED CHARGES - INITIAL TERM: MONTHLY TOTAL
-------------------------------- ------- -----
Ticketing...................... 60 Months @ $ [*] $ [*]
I/I ........................... 60 Months @ [*] [*]
Option 6 ...................... 60 Months @ [*] [*]
SRM: Major Mkt. Bkg. Net. 60 Months @ [*] [*]
SRM: Major Mkt. Bkg. Prg. 60 Months @ [*] [*]
Microfiche .................... 60 Months @ [*] [*]
Bargain Finder Plus ........... 60 Months @ [*] [*]
------- -------
Total Suspended Charges-Initial Term..... $ [*] [*]
------- -------
C) ONE-TIME CHARGES DISCOUNTED:
---------------------------
SABRE Installation/Implementation ....................... [*]
Integrated Business Technologies - IBT Instl/Interface... [*]
SABREvision Hardware Installation/Deinstallation ........ [*]
Application Software(s) ................................. [*]
-------
Total One-Time Charges Discounted .......................$ [*]
-------
Customer acknowledges that the Total SABRE Promotional Support constitutes the
full value of incentive received in consideration of Customer's execution and
complete performance and compliance with all provisions of the Agreement.
TOTAL SABRE PROMOTIONAL SUPPORT ..................................$ [*]
=======
4) OTHER CONDITIONS OF DISCOUNT:
============================
A. The SABRE Booking level is based on all productive Video Agent Sets
and Video Agent Sets AAAs installed at the above stated Pseudo City
Code (PCC).
B. American shall perform the SABRE Booking measurements at the end of
each measurement period. In the event that the Agreement terminates
during a measurement period, the measurement will be from the
beginning of the current measurement period to the date of termination.
Measurement period every ......... 6 Months
Commencing ....................... 6 Months After Installation
C. Add-On productive Video Agent Sets will be added at the same SABRE
Booking level as the original productive Video Agent
[ SS1 SK1 ] Rvsd. 9/20/93 Page 2
[*] The redacted portion, indicated by this symbol, is the subject of a
confidential treatment request.
<PAGE> 24
PSEUDO CITY CODE: 4CG2
00102
Sets.
D. Deletion of Standard Equipment will be in accordance with the
provisions identified in Articles 15.3 through 15.3.3 of the Agreement.
E. Customer must be current in its SABRE/IBT payments due under the
Agreement in order to receive the above stated discount.
F. The discounts for all additional Video Agent Sets and/or Video Agent
Sets AAA's that are associated with SABRE access will be calculated as a
standard percentage based on the length of the Agreement at the time
of order placement. The percentage that will be applied to the total
monthly charges are as follows:
36 month Agreement [*] Discount
60 month Agreement [*] Discount
The above discount percentages are not available for the addition of
Video Agent Sets that are not capable of generating SABRE Bookings. All
Video Agents Sets and/or Video Agent Sets AAA's added under this
provision will be subject to the booking level(s) stated in the
Discounts section of this Schedule A or Supplement of, if applicable,
in the Cluster Amendment. Measurement for additional Video Agent Sets
and/or Video Agent Set AAA's installed or implemented in a calendar
month will commence on the first day of the next month.
5) BOOKINGS BELOW FIXED MONTHLY DISCOUNT BOOKINGS LEVEL:
====================================================
IF CUSTOMER DOES NOT ACHIEVE [*] OF THE FIXED MONTHLY DISCOUNT BOOKING
LEVEL, AS STATED IN 3) A) ABOVE, FOR ANY MEASUREMENT PERIOD, AMERICAN
WILL CHARGE CUSTOMER AN AMOUNT EQUAL TO THE PREVAILING BOOKING FEE THAT
AMERICAN CHARGES TO AIRLINES THAT PARTICIPATE IN THE FULL AVAILABILITY
FEATURES OF SABRE MULTIPLIED BY THE DIFFERENCE BETWEEN THE FIXED
MONTHLY DISCOUNT BOOKING LEVEL IN 3) A) ABOVE AND THE ACTUAL SABRE
BOOKING LEVEL, MULTIPLIED FURTHER BY THE TOTAL NUMBER OF PRODUCTIVE
VIDEO AGENT SETS AND VIDEO AGENT SET TRIPLE A'S AT THE PSEUDO CITY CODE
IDENTIFIED ON PAGE 1 OF THIS SCHEDULE A AND BY THE NUMBER OF MONTHS IN
THE MEASUREMENT PERIOD. HOWEVER, AMERICAN AGREES THAT AS LONG AS
CUSTOMER PROCESSES AN AVERAGE OF [*] SABRE BOOKINGS PER VIDEO AGENT SET
AND VIDEO AGENT SET TRIPLE A'S PER MONTH DURING THE MEASUREMENT PERIOD,
THE MAXIMUM AMOUNT CHARGED WILL NOT EXCEED THE TOTAL FIXED MONTHLY
DISCOUNT, STATED IN 3) A), MULTIPLIED BY THE NUMBER OF MONTHS IN THE
MEASUREMENT PERIOD.
APPLICABLE TAXES NOT INCLUDED IN ABOVE RATES
STANDARD EQUIPMENT ORDERED IS CONTINGENT UPON AVAILABILITY
IF CUSTOMER DELETES STANDARD EQUIPMENT, THE CHARGES AND ANY DISCOUNTS SHALL BE
DELETED.
ALL CHARGES AND APPLICABLE DISCOUNTS ARE STATED AND PAYABLE IN U.S. DOLLARS.
ALL SIGNATURES MUST BE IN BLACK INK
CUSTOMER AMERICAN AIRLINES, INC.
- -------------------------- --------------------------
[ SS1 SK1 ] Rvsd. 9/30/93 Page 3
[*] The redacted portion, indicated by this symbol, is the subject of a
confidential treatment request.
<PAGE> 1
EXHIBIT 10.17
Note: Portions of this exhibit indicated by "[ * ]" are subject to a
confidential treatment request, and have been omitted from this exhibit.
Complete, unredacted copies of this exhibit have been filed with the Securities
and Exchange Commission as part of the Company's confidential treatment
request.
AMENDMENT NO. 1 TO SABRE SUBSCRIBER AGREEMENT
This Amendment to the SABRE Subscribed Agreement made and entered into
this [14] day of [FEB] 1994, between American Airlines, Inc. ("American") and
1-800 Low Air Fare Travel ("Customer").
RECITALS
WHEREAS, American and Customer have entered into that certain SABRE
Subscriber Agreement, dated as of __________ _; (the "Agreement") and
WHEREAS, it is in the best interest of the parties to modify certain
provisions of the Agreement.
NOW THEREFORE, in consideration of the mutual covenants contained
herein, American and Customer agree as follows:
1. Effective Date. The effective date of this Amendment is [UPON
INSTALL].
2. Credit Bank. American and Customer agree that when Customer exceeds
the SABRE Booking level of [ * ] per video agent set and video agent set
triple A's per month for each measurement period, as described in the Schedule
A and Supplement, American shall establish a credit of [ * ] per SABRE
Booking per video agent set and video agent set triple A's in excess of the
SABRE Booking level stated herein. This amount will be applied automatically
toward the payment of SABRE Charges. This credit may be converted to cash upon
completion of each measurement period; provided, however, that Customer is
current in its payments due American including any charges due American should
Customer not achieve the minimum SABRE Booking level as described on the
Schedule A. Any unused portion of the credit bank shall revert to American and
be unavailable for Customer's use upon the happening of either of the following
events: (i) the expiration of the Initial Term as defined in the Agreement or
(ii) termination of the Agreement for any reason.
3. Confidentiality. It is expressly understood and agreed that this
Amendment and the Agreement, and each and every provision hereof, shall be held
and treated as confidential and shall not be disclosed by Customer to any other
person, firm, organization, association, or entity, of any and every kind,
whether public, private or governmental, for any reason, or at any time,
without the prior written consent of American, unless such disclosure is
requested by law or legal process relating to proceedings between a party
hereto and any third party. In the event of such disclosure, this Amendment
and the Agreement may be terminated immediately by American, without notice to
Customer, and American
[*] The redacted portion, indicated by this symbol, is the subject of a
confidential treatment request.
1
<PAGE> 2
shall have the right to pursue any remedies available to it in law or in
equity.
4. Defined Terms. The defined terms not otherwise defined in this
Amendment shall have the meaning given to them as in the Agreement.
5. Agreement. Except as otherwise provided herein, all other terms of
the Agreement remain in full force and effect. In the event of any conflict
between the terms of the Agreement and this Amendment, the Amendment shall
control.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
day and year written above.
1-800-LOW AIR FARE TRAVEL AMERICAN AIRLINES, INC.
By:[/s/ GEORGE CARAPELLA V.P.] By: [/s/ JEANNE M. HALL]
--------------------------- -------------------------
(Signature) (Signature)
Name: [GEORGE CARAPELLA] Name: [JEANNE M. HALL]
------------------------ -----------------------
(Print Name) (Print Name)
Title:[VICE PRESIDENT] Title:[MANAGER]
------------------------ -----------------------
SABRE Travel
Information Network
Date: [2/15/94] Date: [2-24-94]
------------------------ -----------------------
PCC: 4C62
2
<PAGE> 1
EXHIBIT 10.18
Note: Portions of this exhibit indicated by "[ * ]" are subject to a
confidential treatment request, and have been omitted from this exhibit.
Complete, unredacted copies of this exhibit have been filed with the Securities
and Exchange Commission as part of the Company's confidential treatment
request.
SUSPENSION OF SERVICE AGREEMENT
DATE: April 3, 1996
CUSTOMER NAME: 800 Travel Systems Inc. ("Customer")
(include DBA) 1 800 Low Air Fare
E (location): 3018 US Highway 301 North PSEUDO CITY CODE; 4CG2
Tampa, FL 33619 BILLING CUSTOMER:
NUMBER: N/A
ARR - 10884845
As to certain financial considerations you have requested that all
SABRE Agreement(s) ("Agreement") between Customer and American be suspended.
American will suspend the Agreement(s) on the following terms and conditions:
American, or its designated agents, will remove from SABRE access, all
Standard Equipment as defined in the Agreement(s) and listed on the signature
page of this document, as of a stop billing date of 04/01/96. The Standard
Equipment will be physically removed from your place of business as soon as
practical at the convenience of American, if the Standard Equipment is deemed
returnable by American.
Customer hereby forfeits all rights and equity, if any, in the Standard
Equipment removed from Customer's place of business whether owned or unowned.
Customer hereby agrees to pay to American all costs associated with
removal of the Standard Equipment prior to such removal. The removal fee for
your Standard Equipment is as follows (with a minimum charge of $[*]USD for [*]
devices or [*]. Please note that Raytheon and ICOT 260 Processors count
as two (2) devices:
$[*]USD per data line
$[*]USD per video agent set
$[*]USD per printer or any other device
Customer hereby agrees to pay to American all charges due under the
Agreement, including, but not limited to, unpaid amounts due American for
not achieving the established SABRE Booking level through the stop billing date
as indicated in paragraph 1 above. Thereafter, during the suspension period
Customer will not be required to pay monthly charges or liquidated damage
under the Agreement.
If Customer decides to reinstall a computer reservation system at any
time during the term of the Agreement, Customer thereby agrees to accept from
American an equal number of devices (or such lesser amount as agreed by
American) of whatever equipment provides the same capabilities as the Standard
Equipment previously installed under the suspended Agreement. Customer further
agrees to pay American's then current installation charge and will contract
that equipment under terms and conditions offered at the time of that
reinstallation.
Customer hereby agrees to indemnify and hold harmless American, its
employees and agents from any and all liabilities, damages, losses,
expenses, claims, fines, demands, suits and judgments, including but not
limited to attorneys' fees, costs and expenses incident thereto suffered by
or recoverable against American or its employees or agents arising out of or
related to the suspension of the Agreement.
If Customer should sell or otherwise transfer or assign the assets or
legal ownership of the location(s) subject to the Agreement, in whole or in
part, Customer agrees that all contractual obligations suspended under the
Agreement shall automatically resume and become fully enforceable retroactive
to the stop billing date indicated in paragraph 1 above. Further, without
limitation, this Suspension of Service Agreement shall not accrue to the
benefit of any of Customer's successors or signs.
[*] The redacted portion, indicated by this symbol, is the subject of a
confidential treatment request.
<PAGE> 2
The individual signing this Suspension of Service Agreement on behalf
of Customer, or if more than one, each of them, represents and warrants that
(i) he is duly authorized to execute this Suspension of Service Agreement on
behalf of Customer, (ii) he has full power and authority to bind the Customer
to the terms and conditions hereof; (iii) Customer has not sold, reffered or
otherwise assigned the assets or legal ownership of the company either in whole
or in part; and (iv) no representatives or warranties of Customer or the
undersigned, nor any statements, written or oral, made or furnished to American
nor herein or with respect to the organization or business of Customer,
contains any untrue statement of a material fact or a material fact necessary
to make the representation, warranty, or statement not misleading.
Customer agrees to keep the terms of this Suspension of Service
Agreement in the strictest confidence and secrecy. Customer shall not disclose,
in whole or in part, the terms of this Suspension of Service Agreement to any
third party (except the attorneys, accountants, and tax return preparers)
without the prior written consent of American, or unless disclosure is spelled
by subpoena or other lawful order.
If Customer fails to comply with any term or condition of this
Suspension of Service Agreement or if any representation warranty contained in
Paragraph 8 proves not be true and correct, then all contractual obligations
under the Agreement will automatically resume and become fully enforceable.
THE ABOVE TERMS AND CONDITIONS ARE ACCEPTABLE, AND THE REPRESENTATIONS AND
WARRANTIES CONTAINED IN PARAGRAPH 8 ARE TRUE AND CORRECT, PLEASE INDICATE YOUR
CONSENT BY EXECUTING AND RETURNING THIS SUSPENSION OF SERVICE AGREEMENT TO:
SABRE TRAVEL INFORMATION NETWORK
???? Box 619616 MD 3553
??? Airport, TX 75261-9616
PROVED AND ACCEPTED:
CUSTOMER AMERICAN AIRLINES, INC.
/s/ LUCIEN BITTAR By: /s/ S. McPHERSON
- --------------------------- ---------------------------------
(Signature) (Signature)
Name: Lucien Bittar Name: S. McPherson
--------------------- --------------------------------
(Print Name) (Print Name)
Title: President Title: Manager Financial Services
--------------------- --------------------------------
SABRE Travel Information Network
Date: 4-10-96 Date: 4-22-96
--------------------- --------------------------------
???signment Configuration Covered by this Suspension of Service Agreement:
_Video Agent Set(s) - Model Type: DED AST 730/16MB FS To Be Returned: __No__
_Video Agent Set(s) - Model Type: DED AST FD GW To Be Returned: __No__
_Video Agent Set(s) - Model Type: AST 170MB WS To Be Returned: __No__
_Video Agent Set(s) - Model Type: AST 170MB WS To Be Returned: __No__
_Video Agent Set(s) - Model Type: ADMIN AST 170MB WS To Be Returned: __No__
_Printer(s) - Model Type: TI1600 To Be Returned: __No__
_Printer(s) - Model Type: DOCUMAX 3300 To Be Returned: __No__
_Printer(s) - Model Type: TI8920 To Be Returned: __No__
_Printer(s) - Model Type: TI885/BASIC To Be Returned: __No__
_Misc - Model Type: BACKUP TAPE UNIT To Be Returned: __No__
ALL EQUIPMENT BEING ADDED/CONSOLIDATED AT BSTE**
??Rvsd 8/1/95 2
<PAGE> 1
EXHIBIT 10.19
Note: Portions of this exhibit indicated by "[ * ]" are subject to a
confidential treatment request, and have been omitted from this exhibit.
Complete, unredacted copies of this exhibit have been filed with the Securities
and Exchange Commission as part of the Company's confidential treatment
request.
AMENDMENT TO SABRE SUBSCRIBER AGREEMENT
This Amendment to that certain SABRE Subscriber Agreement is made and
entered into this ____ day of _________________, 1996 between American
Airlines, Inc. ("American") and 800 Travel Systems Inc DBA 1-800 Low Air Fare
("Customer").
RECITALS
WHEREAS, American and Customer have entered into that certain SABRE
Subscriber Agreement, dated as of April 1, 1996 (the "Agreement"); and
WHEREAS, it is in the best interest of the parties to modify certain
provisions of the Agreement.
NOW THEREFORE, in consideration of the mutual covenants contained
herein, American and Customer hereby agree as follows:
1. EFFECTIVE DATE. The effective date of this Amendment is April 1, 1996.
2. CASH ADVANCE. American agrees to pay to Customer, as SABRE
Promotional Support, the sum of [ * ] within 30 days after (i) the Agreement
and this Amendment have been signed by both Customer and American, and (ii) any
applicable installation has been completed. If an event of default, as
described in Article 14.1 of the Agreement occurs, American's obligations under
this Amendment are nullified and Customer will be immediately obligated to
repay to American all monies paid by American to Customer pursuant to this
Amendment.
3. PRODUCTIVITY CASH ADVANCE. American agrees to pay to Customer [ * ]
as SABRE Promotional Support, on the first anniversary of the Effective Date of
the Agreement provided that (i) the Agreement and this Amendment have been
signed by both Customer and American, and (ii) any applicable installation has
been completed, and (ii) Customer has processed a minimum of [ * ] SABRE
Bookings based on all of Customer's video agent sets and video agent set
terminal addresses. Further, American agrees to provide an additional annual
payment to Customer, provided that Customer has processed SABRE Bookings based
on the following schedule:
[ * ] provided that Customer has processed a minimum of
[ * ] SABRE Bookings, or
[ * ] provided that Customer has processed a minimum of
[ * ] SABRE Bookings, or
[ * ] provided that Customer has processed a minimum of
[ * ] SABRE Bookings, or
[ * ] provided that Customer has processed a minimum of
[ * ] SABRE Bookings, or
[ * ] provided that Customer has processed a minimum of
[ * ] SABRE Bookings
If an event of default, as described in Article 14.1 of the Agreement, occurs
American's obligations under this Amendment are nullified and Customer will be
immediately obligated to repay to American all monies paid by American to
Customer pursuant to this Amendment and American shall have no obligation to
pay Customer any amounts stated herein after such termination.
4. LINES OF CREDIT. American shall extend to Customer lines of credit in
the amount of (i) [ * ] which amount will be applied automatically toward the
payment of TurboSABRE Charges only, and (ii) [ * ] per year for years
1996-1999 for a total of [ * ] which amount will be applied automatically
toward the payment of TurboSABRE Charges only for the Additional Standard
Equipment as described in Paragraph 6 below.
Such lines of credit shall be applied each month until the total amount is
exhausted; provided, however that the unused portion of such lines of credit
shall revert to American and be unavailable for Customer's use upon the
happening of either of the following events: (i) the expiration of the Initial
Term of the Agreement or (ii) termination of the Agreement for any reason.
5. CREDIT BANK. American and Customer agree that when Customer exceeds
the Fixed Monthly Discount Booking Level of [ * ] SABRE Bookings per video
agent set and video agent set terminal address per month for the measurement
period, as
[*] The redacted portion, indicated by this symbol, is the subject of a
confidential treatment request.
<PAGE> 2
described in the Schedule A and any subsequent Supplement, American will
establish a credit of [ * ] per SABRE Booking per video agent set and video
agent set terminal address in excess of [ * ] SABRE Bookings.
In addition, American and Customer agree that when Customer (i) exceeds [ * ]
SABRE Bookings per video agent set and video agent set terminal address per
month for the measurement period, American will establish a credit of [ * ]
per SABRE Booking per video agent set and video agent set terminal address in
excess of [ * ] SABRE Bookings, and (ii) exceeds [ * ] SABRE Bookings per
video agent set and video agent set terminal address per month for the
measurement period, American will establish a credit of [ * ] per SABRE
Booking per video agent set and video agent set terminal address in excess of
[ * ] SABRE Bookings.
This amount will be applied automatically toward the payment of SABRE/ADS/IBT
Charges. However, this credit may be converted to cash upon completion of each
measurement period; provided, however, that Customer is current in its payments
due American including any Charges due American should Customer not achieve the
Fixed Monthly Discount Booking Level as described on the Schedule A. Any
unused portion of the credit bank shall revert to American and be unavailable
for Customer's use upon the happening of either of the following events: (i)
the expiration of the Initial Term as defined in the Agreement or (ii)
termination of the Agreement for any reason.
6. LEASE CHARGES FOR ADDITIONAL STANDARD EQUIPMENT. Upon request from
Customer, American shall lease to Customer, as additional Standard Equipment, a
maximum of [ * ] video agent sets (referred to herein as the "Additional
Standard Equipment") for use at Customer's current and future locations on the
following terms and conditions:
A. The Additional Standard Equipment must be available for
purchase by American on reasonable terms and conditions from
the manufacturer;
B. The Customer shall receive, as SABRE Promotional Support, an
offsetting discount in an amount equal to the monthly lease
Charge and the installation Charge for the Additional Standard
Equipment,
C. The Additional Standard Equipment shall have an Initial Term
of 60 months from the date of installation.
7. MAINTENANCE AND USE CHARGES FOR ADDITIONAL STANDARD EQUIPMENT. With
respect to the Additional Standard Equipment provided under paragraph 6 above
American shall provide, as SABRE Promotional Support, an offsetting discount in
an amount equal to the monthly SMU Charge and [ * ] data line Charges for
such Additional Standard Equipment for a period of 60 months from the date of
installation of the Additional Standard Equipment.
8. SABRE WITH WINDOWS.(TM) American agrees to provide Customer SABRE
with Windows for the Additional Standard Equipment, described in Paragraph 6
above, at no charge to Customer.
9. VARIABLE CHARGES. American agrees to suspend Customer's obligation to
pay the prevailing Charges for the following variables, for a period of sixty
(60) months from the date of installation of the Additional Standard Equipment
described in Paragraph 6 above: Invoice and Itinerary, Interface, Ticketing,
and Bargain Finder Plus.
10. CONFIDENTIALITY. It is expressly understood and agreed that this
Amendment and the Agreement, and each and every provision hereof, shall be held
and treated as confidential and shall not be disclosed by Customer to any other
person, firm, organization, association, or entity, of any and every kind,
whether public, private or governmental, for any reason, or at any time,
without the prior written consent of American, unless such disclosure is
requested by law or legal process relating to proceedings between a party
hereto and any third party. In the event of such disclosure, this Amendment and
the Agreement may be terminated immediately by American, without notice to
Customer, and American shall have the right to pursue any remedies available to
it in law or in equity.
11. DEFINED TERMS. The defined terms used in this Amendment shall have
the meaning assigned to such terms in the Agreement.
12. AGREEMENT. Except as otherwise provided herein, all other terms of
the Agreement remain in full force and effect. In the event of any conflict
between the terms of the Agreement and this Amendment, the Amendment shall
control.
[*] The redacted portion, indicated by this symbol, is the subject of a
confidential treatment request.
<PAGE> 3
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
day and year written above.
<TABLE>
<S> <C>
800 TRAVEL SYSTEMS INC AMERICAN AIRLINES, INC.
By: /s/ Lucien Bittar By: /s/ Bob Quinn
-------------------------- --------------------------------
(Signature) (Signature)
Name: [Lucien Bittar] By: [Bob Quinn]
-------------------------- --------------------------------
(Print Name) (Print Name)
Title:[President] Title:[Manager]
-------------------------- -----------------------------
SABRE Travel Information Network
Date: [July 19, 1996] Date: [07/25/96]
-------------------------- ------------------------------
PCC:
--------------------------
</TABLE>
<PAGE> 1
EXHIBIT 10.20
Note: Portions of this exhibit indicated by "[ * ]" are subject to a
confidential treatment request, and have been omitted from this exhibit.
Complete, unredacted copies of this exhibit have been filed with the Securities
and Exchange Commission as part of the Company's confidential treatment
request.
SABRE SUBSCRIBER AGREEMENT - (UNITED STATES)
This SABRE Subscriber Agreement (the "Agreement") is entered into
by and between the SABRE Travel Information Network, a division of The SABRE
Group, Inc. ("SGI") and the undersigned ("Customer"), as of the date executed
by SGI Below ("Effective Date") regarding the provision of products and
services set forth herein to Customer's locations within the United States and
its territories.
ARTICLE 1 - LEASE TERM
1.1 LEASE. For the term specified in 1.2 below, SGI shall lease to Customer
the System, as defined herein.
1.2 TERM. The lease term of the System identified on Schedule A shall
commence on the date of installation and shall continue for [60] months
("Initial Term"). Any additional System installed subsequent to the date of
execution of this Agreement by SGI shall be subject to the same terms and
conditions as this Agreement and shall have a term of [60] months commencing on
the date of installation ("Additional Term").
ARTICLE 2 - DEFINITIONS
The following terms shall have the following meanings in this Agreement:
2.1 AGREEMENT means this SABRE Subscriber Agreement, and all Amendments,
Schedules and Supplements made a part hereof.
2.2 CONFIDENTIAL INFORMATION means this Agreement, any and all applicable
rights to patents, copyrights, trademarks and trade secrets, proprietary and
confidential information of SGI its affiliates, subsidiaries, successors or
assigns concerning their past, present or future research, development,
business activities or affairs, finances, properties, methods of operation,
processes and systems, agreements (including without limitation private fare or
special discount agreements) related to the business of SGI.
2.3 INSTRUCTIONS means any and all manuals, operating procedures,
manufacturer's recommendations, rules, and instructions delivered or made
available to Customer either in hard-copy or via the SABRE system, and which
must be complied with by Customer. Such Instructions may be unilaterally
revised or amended by SGI at any time in its sole discretion.
2.4 PNR means a passenger name record created in the SABRE system.
2.5 PARTICIPANT means any air carrier (including scheduled, charter,
domestic and international airlines) care rental company, surface
transportation carrier, hotel or lodging provider, railroad, steamship company,
cruise or tour operator or other vendor of travel related products, information
or services which has an agreement with SGI for the display of information
regarding its products or services in the SABRE system.
2.6 PROHIBITED SEGMENT means a Travel Service Segment for which no
corresponding space has been reserved within the transporting carrier's
internal reservations system.
2.7 SABRE BOOKING means an airline, hotel, tour, rental car or any other
product or service Segment that obligates a Participant to pay a booking fee to
SGI and that is created in or processed through the SABRE system by Customer
per video agent set during any one calendar month or that is secured to
Customer's location, less cancellations made prior the Segment Activity Date.
Bookings are credited in the latter of (i) the calendar month in which the
Segment Activity Date occurs or (ii)the calendar month in which the Segment is
actually processed by the SABRE system for booking fee purposes.
SABRE is a trademark of a subsidiary of the SABRE GROUP, INC.
2.8 SABRE COMPONENT means all memory, disk storage space, ports and any
other element of the Standard Equipment.
<PAGE> 2
2.9 SABRE PROMOTIONAL SUPPORT means the total dollar value of incentives
provided to Customers as identified on Schedule A and any Supplement.
2.10 SCHEDULE A means the document reflecting the Charges an any applicable
discounts for the System as amended by any Supplement(s).
2.11 SEGMENT means (a) for airline bookings, each separate flight segment
reservation identified by a separate flight number in a PNR, multiplied by the
number of passengers booked in such PNR for such flight segment: (b) for hotel
bookings, each separate reservation that is processed through SABRE SHARP with
an action status code of HK, KK or KL regardless of the number of rooms, suites
or other accommodations or the number of persons or the duration of stay; (c)
for car rental bookings, each separate reservation that is processed through
SABRE CARS with an action status code of HK, KK or KL regardless of the number
of vehicles or persons or the duration of the rental; and (d) for any other
product or service, each separate reservation for such product or service that
is processed through the SABRE system with an action status code of HK, KK or
KL regardless of the number of product or services or the number of persons or
the duration of the products or services. The term Segment does not include
Prohibited Segments.
2.12 SEGMENT ACTIVITY DATE means the first date listed in a PNR for the
relevant Segment.
2.13 STANDARD EQUIPMENT means the items of computer hardware leased to
Customer in accordance with this Agreement.
2.14 SUPPLEMENT means the document reflecting any changes to the System,
and/or Charges or discounts related thereto. The Supplement shall incorporate
all terms and conditions of the Agreement. The parties agree that any such
Supplement need not be signed unless requested by either party and that
completion of the change specified on such Supplement, or the payment of the
revised Charges, whichever occurs first, constitutes acceptance and
ratification of the terms and conditions of the Supplement as though it was
fully set forth herein.
2.15 SYSTEM means the Standard Equipment, SABRE Component, and/or the System
Software as identified on Schedule A and all Supplements.
2.16 SYSTEM SOFTWARE means that Software delivered by SGI to Customer as
identified on Schedule A and all Supplements.
2.17 TRANSACTION means a grouping of characters transmitted to the SABRE
system whether such transmission is made in the SABRE system manually or
automated. Each transmission to the SABRE system from Customer constitutes one
Transaction. No input message may exceed three hundred characters in length.
2.18 TRAVEL SERVICE SEGMENT means a booking segment entered in the SABRE
system with an action status code of GK, GL, BK, BL, YK, HK*, or HL*.
ARTICLE 3 - CHARGES AND PAYMENTS
3.1 PREPAYMENT. Upon execution, Customer shall pay to SGI the prepayment as
shown on Schedule A. If the System is installed, the prepayment credited
against the Customer's first Charges.
3.2 CHARGES. All amounts payable to SGI ("Charges") shall be due and
payable on the within fifteen days of the date of SGI's invoice, without setoff
or counterclaim.
3.3 ADDITIONAL CHARGES. Customer agrees to pay to SGI an additional charge
at SGI's then prevailing rate for services and materials including without
limitation the following: (a) the installation or removal of Standard
Equipment; (b) Standard Equipment relocation within the site; (c) each site
disconnect or relocation to different premises; (d) modifications, upgrades,
enhancements or additions of Standard Equipment and/or System Software; (e)
installation of peripheral devices requested by Customer; (f) materials for use
with the Standard Equipment, including, but not limited to, ticket stock for
use with thermal ticket printers; and (g) processing Transactions which exceed
the level of one hundred twenty-five Transactions per SABRE Booking.
2
<PAGE> 3
3.4 INCREASES. SGI shall have the right to increase the Charges for the
remaining term of this Agreement upon thirty days written notice to Customer.
If the increase exceeds [ * ] of the Charges in any consecutive twelve month
period, Customer may terminate this Agreement upon written notice to SGI within
fifteen days of receipt of SGI's notice of the increase. Notwithstanding the
foregoing, the communication access charge in such Charges shall be subject to
increase, at any time and without limitation, to cover any increase in the cost
imposed upon SGI.
3.5 SABRE SERVICES. If Customer elects to use certain of SGI's services
such as, but not limited to, Ticketing and Invoice/Itinerary functions,
Microfiche, Customer shall pay Charges for such services based on SGI's then
prevailing rates.
3.6 INTEREST. Charges not paid when due shall accrue interest at the rate
of eighteen percent per annum or the highest rate permitted by Texas law,
whichever is less.
3.7 TAXES. Customer shall pay any taxes, or assessments including any
interest or penalty thereon levied as a result of this Agreement, excluding
taxes measured by the net income of SGI. Customer shall indemnify and hold
harmless SGI from all costs, fines and expenses (including reasonable legal
costs) incurred by SGI resulting from Customer's failure to pay taxes as
provided in this Article.
ARTICLE 4 - INSTALLATION AND DELIVERY
4.1 DELIVERY. SGI shall arrange for delivery of the System F.O.B. the site,
on the estimated installation date, as identified on Schedule A and all
Supplements thereto.
4.2 INSTALLATION. Subject to Article 4.3, SGI shall install, or cause to be
installed, the System at the site. Customer shall allow installation of the
System at the site. Customer's failure to do so or to give adequate assurance
that it will do on the estimated installation date, will constitute an Event of
Default pursuant to Article 14.1.2.
4.3 CUSTOMER'S OBLIGATIONS PRIOR TO INSTALLATION. Customer, at its expense,
shall be responsible for preparing, on or before the estimated installation
date, the site for the System in accordance with the Instructions. If
installation of the System is prevented or delayed because of Customer's
failure to prepare the site, SGI shall use reasonable efforts to install the
System upon Customer's compliance with this Article and upon payment of all
reasonable expenses incurred by SGI resulting from Customer's failure to
prepare the site.
4.4 RELOCATION AND POSSESSION. Customer shall at all times keep the System
in its sole possession and control at the site. Customer shall not move any
part of the System from the site without first obtaining the written consent of
SGI.
4.5 COMMUNICATION ACCESS. SGI or its designated third party shall install
the necessary communication access device to connect the System to the SABRE
system. All such devices are either owned by SGI or such third-party, are
subject to this Agreement, and shall be returned to SGI or the third-party as
SGI directs upon termination of the Agreement.
4.6 NON-STANDARD SYSTEM. Customer shall not connect or use any hardware,
software, or firmware not acquired from SGI with SABRE or the System without
SGI's prior written consent, which shall be granted provided that such
hardware, software, or firmware is approved by SGI for use with SABRE and
Customer executes the Non-Standard System Amendment.
4.7 ACCEPTANCE OF SYSTEM. Upon installation of the System and establishment
of a successful connection with the SABRE System, Customer shall be deemed to
have accepted the System. Any use of the System, additional System and/or non-
standard system further constitutes acceptance of the Agreement and applicable
Amendments and Supplements by the Customer.
[*] The redacted portion, indicated by this symbol, is the subject of a
confidential treatment request.
3
<PAGE> 4
ARTICLE 5 - REPAIRS AND MAINTENANCE
5.1 REPAIRS AND MAINTENANCE. Upon prompt notification from Customer, SGI,
or its designated agent, shall repair and maintain or replace the Standard
Equipment and shall keep it in good working order provided that the Standard
Equipment has been subject to reasonable operation. Customer shall not make
any modifications nor attempt to perform repairs or maintenance of any kind.
5.2 NOTIFICATION. Customer shall promptly inform SGI of any breakdown of
the Standard Equipment by contacting SABRE Customer Services. Customer shall
maintain a record of all occasions upon which repair or maintenance service is
performed and make such records available to SGI upon request.
5.3 CHARGES. Repair or maintenance services on Standard Equipment during
normal business hours (9:00 a.m. to 6:00 p.m. local time, Monday through
Friday, excluding legal holidays) are included in the Charges, provided that
the Customer has not been negligent and the Standard Equipment has been subject
to reasonable operation, otherwise, Customer will be charged a service fee in
accordance with SGI's or its independent contractor's then prevailing rates.
ARTICLE 6 - TITLE AND OWNERSHIP OF SYSTEM
6.1 TITLE AND OWNERSHIP OF SYSTEM. The System leased hereunder shall remain
the property of SGI. Customer shall not in any other manner dispose of the
System or any part thereof or suffer any lien or legal process to be incurred
or levied on the System.
6.2 RISK OF LOSS. Risk of loss for and damage to the System shall pass to
the Customer upon delivery of the System to the site.
ARTICLE 7 - INSURANCE
7.1 GENERAL. Upon delivery of the System to the site, Customer shall
maintain Comprehensive General Liability (including bodily injury, product
liability, property damage and contractual liability) and All Risk Property
Insurance.
7.2 COMPREHENSIVE GENERAL LIABILITY. The Comprehensive General Liability
coverage shall be an amount not less than one million dollars combined single
limit. The coverage shall include the following special provisions: (a) SGI,
its officers, agents and employees, shall be named as additional insureds; (b)
The policy(ies) shall specifically insure the indemnification provision
included in this Agreement; (c) Such insurance shall be primary without any
right of contribution from any insurance maintained by the additional insureds;
and (d) Insureds will provide SGI with thirty days' prior written notice of any
cancellation of material change.
7.3 ALL RISK PROPERTY. The All Risk Property insurance shall be in an
amount to cover the replacement value of the Standard Equipment as set forth in
Schedule A and all Supplements. Such policy shall: (a) name SGI as additional
insured; (b) name SGI as the sole loss payee for loss of the Standard
Equipment; (c) specifically insure the indemnity obligation assumed by Customer
herein; (d) be primary without right of contribution from any insurance carried
by SGI; and (e) provide that SGI will be given thirty days' prior written
notice of any cancellation or material change of such policy.
7.4 CERTIFICATES. Customer will provide to SGI, on or before delivery of
the System to the site, a Certificate issued by its insurer(s), evidencing the
insurance coverage required by this Article. If SGI does not receive such
Certificate of insurance prior to delivery of the System, SGI may obtain
insurance and Customer shall reimburse SGI for all amounts paid by SGI to
obtain such insurance.
ARTICLE 8 - TITLE AND OWNERSHIP OF CONFIDENTIAL INFORMATION
8.1 The Confidential Information shall remain SGI's exclusive property.
4
<PAGE> 5
8.2 Customer shall maintain in perpetuity the confidentiality of the
Confidential Information using the highest degree of care. Customer shall not
use, sell, sublicense, transfer, publish, disclose, display, or otherwise make
available to others, except as authorized in this Agreement, the Confidential
Information or any other material relating to the Confidential Information at
any time before or after the termination of this Agreement nor shall Customer
permit its officers, employees, agents, contractors or subcontractors to
divulge the Confidential Information without prior written consent of SGI.
8.3 Customer shall use the data transmitted under this Agreement ("data")
solely for the benefit of its customers in connection with rendering the
following services: (i) air carrier, hotel, car and rail reservations,
including schedule quotation; (ii) customer accounting record keeping
activities; or (iii) the sale of or reservations for other miscellaneous
products or services offered in the SABRE system. Customer shall not publish,
disclose or otherwise make available to any third party any compilation of data
obtained from the SABRE system. However, Customer may use specific data for
the benefit of its customers in connection with any reservation or schedule
quotation production of a hard copy travel itinerary, invoice, statement or
ticket.
ARTICLE 9 - SYSTEM SOFTWARE LICENSE
9.1 OWNERSHIP OF SYSTEM SOFTWARE. Customer acknowledges that SGI or the
original manufacturer of the System Software, as applicable, owns has licensed
from the owner, copyrights in the respective System Software and that ownership
and title are retained by the manufacturer or its licensor. All applicable
right to patents, copyrights, trademarks, and trade secrets inherent in the
System Software and pertinent thereto are and shall remain SGI's the original
manufacturer's sole and exclusive property. Any copy of such Software must
incorporate any copyright, trade secret, or trademark notices or legends
appearing in the original version delivered to Customer.
9.2 GRANT OF LICENSE. Subject to the provisions of this Agreement and for
the term specified in Article 1.2, either SGI or the original manufacturer
grants to Customer a non-transferable, non-exclusive limited license to use the
System Software subject to the following restrictions: (a) Customer shall use
the System Software solely in connection with its use of the SABRE system, (b)
the System Software shall be used and installed solely at the site and solely
used on the Standard Equipment, or other equipment authorized by SGI, (c) the
System Software shall be used solely for internal purposes and only in the
ordinary course of business, (d) Customer shall not compile, reverse compile,
decompile, disassemble or reverse engineer the System Software or any portion
thereof, (e) the System Software shall not be copied or reprinted in whole or
in part except (i) a reasonable number of copies of each program may be made in
machine readable form for reasonable archival or backup purposes or (ii) when
SGI has granted permission to do so, and (f) Customer shall not lease, sell,
license, sublicense or otherwise transfer the System Software to any other
party, (g) the terms of this Agreement shall govern the System Software license
unless modified by a license which may be associated with a particular software
product, wherein the license associated with that particular software product
shall govern. Nothing in this Agreement shall convey title to the System
Software to Customer.
9.3 MODIFICATION RIGHTS. Customer shall not modify the System Software or
merge such software into other programs or create derivative works based on
such software. Additionally, Customer shall not delete or cause to be deleted
the System Software from the System. Notwithstanding to the contrary contained
herein, noncompliance with this provision shall constitute an Event of Default
under this Agreement and this Agreement shall immediately terminate and
Customer shall be obligated to pay SGI damages as specified in Article 14
hereof.
9.4 UPGRADES AND MODIFICATIONS. All tangible objects containing or relating
to the System Software are the sole and exclusive property of SGI or the
manufacture. In the event SGI, in its sole discretion, modifies the System
Software, it may deliver such modified System Software to Customer at its then
current charge, if any, and Customer shall promptly return to SGI any and all
tangible objects relating to the System Software as provided in Article 15.7.
Customer shall be solely responsible for protecting all software not obtained
from SGI hereunder and the data related thereto in the event of a software
upgrade. Customer, in order to receive an upgraded or updated program, shall
comply with any and all terms and conditions and Instructions imposed by SGI.
5
<PAGE> 6
9.5 FILESERVER. Customer shall use the System Software solely on a single
processing unit (the "Fileserver"). In the event a Fileserver is upgraded,
Customer shall be solely responsible for moving and protecting all software not
obtained from SGI and the data related thereto.
9.6 OPERATING PROGRAM.
9.6.1 Customer acknowledges that the System Software incorporates, in part,
copyrighted materials pertinent to the Operating Program as identified on
Schedule A. Customer agrees that such copyrighted portions shall be subject to
the Operating Program copyright and license.
9.6.2 If Customer requires additional Operating Programs, Customer shall
notify SGI and SGI will provide Customer with additional programs to support
additional video agent sets pursuant to this Agreement.
9.6.3 Customer will look only to SGI and not to the manufacturer for any
support, maintenance, assistance and upgrades and the like with respect to the
Operating Program and the manufacturer shall have no liability to Customer in
relation to this program.
9.6.4 No action, regardless of form, arising out of the license of the
Operating Program may be brought more than two years after the cause of action
has arisen.
9.6.5 Customer shall physically retain a copy of the Conditions of Use for
SABRE Users (Attachment) with the applicable video agent sets or dedicated
fileserver/processor eligible to use such Operating Program.
9.6.6 THE LICENSE OF THE OPERATING PROGRAM, IF MANUFACTURED BY IBM, SHALL BE
CONSTRUED AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK AND THE UNITED
STATES OF AMERICA NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS
AGREEMENT.
9.7 SYSTEM SOFTWARE.
9.7.1 Customer acknowledges and agrees that Customer is not entitled to any
greater warranty with respect to the System Software that the warranty received
by SGI from its supplier of the respective System Software.
9.7.2 EXCEPT AS SPECIFICALLY PROVIDED BELOW, THE SYSTEM SOFTWARE IS PROVIDED
TO CUSTOMER AS IS AND WITH ALL ITS FAULTS WITHOUT ANY WARRANTY WHATSOEVER,
EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR THOSE IMPLIED WARRANTIES
ARISING OUT OF COURSE OF PERFORMANCE, COURSE OF DEALING USAGE OF TRADE OR ANY
OTHER WARRANTY. THE ENTIRE RISK AS TO THE QUALITY AND PERFORMANCE OF THE
SYSTEM SOFTWARE IS WITH THE CUSTOMER. SHOULD THE SYSTEM SOFTWARE PROVE
DEFECTIVE CUSTOMER SHALL ASSUME THE ENTIRE COST OF ALL NECESSARY SERVICING
REPAIR OR CORRECTION. SOME STATES DO NOT ALLOW THE EXCLUSION OF IMPLIED
WARRANTIES, SO THE ABOVE EXCLUSION MAY NOT APPLY TO CUSTOMER. THIS WARRANTY
GIVE CUSTOMER SPECIFIC LEGAL RIGHTS AND CUSTOMER MAY ALSO HAVE OTHER RIGHTS
WHICH VARY FROM STATE TO STATE. ADDITIONALLY, CUSTOMER ASSUMES RESPONSIBILITY
FOR THE SELECTION OF THE SYSTEM SOFTWARE TO ACHIEVE CUSTOMER'S INTENDED
RESULTS, AND FOR THE INSTALLATION AND USE OF AND THE RESULTS OBTAINED FROM THE
SYSTEM SOFTWARE.
9.7.3 Notwithstanding the above, the media on which the SABRE Emulation
Software, SABREworks, SABREmail (if applicable) and the LAN Program are encoded
is warranted to the Customer against defects in material or workmanship for a
period of three months from the date of original purchase by Customer. If
during such period, Customer discovers any defect in the media, Customer may
return the media to SGI and SGI shall as Customer's sole and exclusive remedy,
repair or replace the defective media.
6
<PAGE> 7
ARTICLE 10 - OPERATION OF SABRE AND THE SYSTEM
10.1 OPERATION OF SYSTEM.
10.1.1 The SABRE system and the System shall be operated by Customer solely for
the purposes and functions expressly permitted by this Agreement and in strict
accordance with the Instructions.
10.1.2 Customer shall access the SABRE system only on the System or another
system or device authorized in writing by SGI.
10.1.3 Customer shall take all precautions necessary to prevent unauthorized
operation or misuse of the SABRE system or the System, including without
limitation, speculative booking, shell bookings, reservation of space in
anticipation of demand, or improper record or access. In the event of misuse
of the SABRE system or the System, SGI reserves the right, in addition to all
rights under the Agreement, to terminate the Agreement.
10.1.4 Customer shall not enter any Prohibited Segments in the SABRE system.
Prohibited Segments so entered shall not be calculated in determining
productivity levels under the Agreement. All Travel Service Segments shall be
removed from the SABRE system should corresponding space be cancelled direct
via telephone with the transporting carrier.
10.2 NON-EXCLUSIVITY. This Agreement is not exclusive and nothing in the
Agreement is intended to preclude or prohibit Customer from using any other
computerized reservation system. The parties agree that Customer's expected
use of the System is the Fixed Monthly Discount Booking Level stated in the
Schedule A or as amended by another document and any subsequent Supplements.
10.3 TRANSACTION VOLUME. Notwithstanding the provisions of Article 3.3(g),
SGI shall have the right, upon thirty days notice to Customer to limit Customer
to generating no more than one hundred twenty-five Transactions per SABRE
Booking.
10.4 TRAINING. SGI will make available introductory SABRE training during
the installation process. For purposes of this Article, the installation
process is defined as anytime between contract signing by both Customer and SGI
through two months after installation is complete.
10.4.1 Upon written request from Customer, at such time that installation is
complete, additional training may be offered subject to availability and at
SGI's then prevailing rate per person, per class. The additional training
charge will be assessed on Customer's monthly invoice.
10.4.2 The training described in Article 10.4 shall be performed at a location
designed by SGI.
10.4.3 Except as otherwise provided herein, Customer is responsible for all
training of all its employees in the proper use of the SABRE system.
10.4.4 In addition to the training described in Article 10.4, SGI may offer to
Customer supplemental training programs on a local level at SGI's then
prevailing rate and method of delivery. Such training may consist of, but not
be limited to, workshops, seminars, self-paced instruction and individual
consultations.
10.4.5 Customer and its trainees agree to comply with all training procedures
and rules established by SGI, and SGI reserves the right to remove any Customer
trainee from the training program if such trainee fails to comply with such
procedures and rules.
10.4.6 SGI may, at its discretion, monitor or test Customer's employee's
training levels. If SGI determines the training level of any one or more of
Customer's employees to be insufficient, then Customer will institute such
additional training at its own expense (including, if necessary, additional
training by SGI at SGI's then prevailing charges) as may be necessary to bring
Customer's employees to the level of training required by SGI.
7
<PAGE> 8
ARTICLE 11 - WARRANTY, AND LIMITATION OF WARRANTY, LIABILITY AND REMEDY
11.1 SABRE WARRANTY. SGI agrees to use reasonable efforts to maintain the
availability of the SABRE system, but shall have no liability for interruptions
in the operation of the SABRE system except as specifically provided herein.
Subject to the terms hereof, in the event that the SABRE system is not operable
ninety-five percent of the total normal business hours each month, excluding
periods for maintenance of Standard Equipment or other scheduled down time
("Normal Time"), SGI will reduce the monthly charges (on a pro-rata basis
according to the percentage of Normal Time during which the SABRE system was
not operable at least ninety-five percent of the Normal Time. For purposes of
this article, normal business hours shall be 9:00 a.m. to 6:00 p.m. local time,
Monday through Saturday. The SABRE system shall be deemed inoperable if
Customer is unable, after calling SABRE Customer Service to make any SABRE
Bookings as a result of a failure attributable to the SABRE system. To request
a reduction under this Article 11.1, Customer shall submit a written record to
SGI and request an adjustment in the monthly charges. Customer's written
records must be submitted in a timely manner and include, at a minimum, the
date and time which the outage occurred, the time the outage was reported to
SABRE Customer Service, the time the SABRE system was restored (within normal
business hours as defined above) and the type of outage.
11.2 DATA. CUSTOMER ACKNOWLEDGES THAT NEITHER SGI NOR REED ELSEVIER, INC.
("REED") THE PUBLISHER OF THE OFFICIAL AIRLINE GUIDE AND SUPPLIER OF CERTAIN
DATA PROVIDED UNDER THE AGREEMENT, WARRANTS THE ACCURACY, MERCHANTABILITY, OR
THE FITNESS FOR A PARTICULAR PURPOSE OR THE NON-INFRINGEMENT OF ANY DATA
PROVIDED UNDER THIS AGREEMENT. NEITHER SGI NOR REED SHALL BE LIABLE TO
CUSTOMER FOR ANY INJURY, LOSS, CLAIM OR DAMAGE CAUSED IN WHOLE OR IN PART BY
THE NEGLIGENCE, OF SGI OR REED OR BY CONTINGENCIES BEYOND THEIR RESPECTIVE
CONTROL IN PROCURING, COLLECTING, COMPILING, ABSTRACTING, INTERPRETING,
COMMUNICATING, PROCESSING OR DELIVERING ANY SUCH DATA. HOWEVER, IF ANY ERRORS
IN DATA TRANSMITTED ARE DUE TO CIRCUMSTANCES UNDER SGI'S DIRECT CONTROL, SGI
SHALL USE REASONABLE EFFORTS TO CORRECT SUCH ERRORS IN A TIMELY MANNER. IN THE
EVENT A PASSENGER USES A CONFIRMED TICKET FOR AIR TRANSPORTATION ISSUED BY
CUSTOMER BY MEANS OF THE SABRE SYSTEM AND IS REFUSED CARRIAGE BECAUSE OF AN
OVERSALE OF SEATS OR THE LACK OF RECORD OF SUCH RESERVATION, THE SOLE REMEDY OF
CUSTOMER SHALL BE SET FORTH IN THE TARIFF OF THE REFUSING CARRIER OR APPLICABLE
TERMS AND CONDITIONS OF THE CARRIER'S CONTRACT OF CARRIAGE.
11.3 STANDARD EQUIPMENT. The Standard Equipment shall be delivered and
installed in good working order.
11.4 LIMITATION OF WARRANTY. THE LIMITED EXPRESS WARRANTIES SPECIFIED HEREIN
ARE THE ONLY WARRANTIES MADE BY SGI AND THE MANUFACTURER AND THERE ARE NO OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION AND IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR INTENDED USE BY OPERATION OF LAW
OR OTHERWISE OF THE SABRE SYSTEM OR THE SYSTEM OR ANY COMPONENTS THEREOF. NO
REPRESENTATION OR OTHER AFFIRMATION OF FACT, INCLUDING WITHOUT LIMITATION
STATEMENTS REGARDING CAPACITY, SUITABILITY FOR USE, OR PERFORMANCE OF THE SABRE
SYSTEM, THE SYSTEM OR ANY COMPONENTS THEREOF, WHETHER MADE BY SGI OR OTHERWISE,
WHICH IS NOT CONTAINED IN THIS AGREEMENT, SHALL BE DEEMED TO BE A WARRANTY FOR
ANY PURPOSE OR GIVE RISE TO ANY LIABILITY OF SGI OR THE MANUFACTURER.
11.5 LIMITATION OF REMEDIES. In the event of a material malfunction or
defect in an unaltered component of the System that can be reproduced by SGI,
SGI will provide reasonable services to correct such malfunction or defect.
Customer will supply SGI with such input files and other materials as may be
necessary to enable SGI to diagnose and correct the malfunction or defect. THE
FOREGOING SHALL BE CUSTOMER'S SOLE AND EXCLUSIVE PRIMARY REMEDY FOR ANY
MALFUNCTION OR DEFECT IN THE SYSTEM. IF SUCH MALFUNCTION OR DEFECT MATERIALLY
IMPAIRS CUSTOMER'S USE OF THE SYSTEM AND CANNOT BE CURED AS PROVIDED IN THIS
PARAGRAPH, THEN CUSTOMER'S ALTERNATE SOLE AND EXCLUSIVE REMEDY SHALL BE TO
TERMINATE THIS AGREEMENT WITHOUT FURTHER LIABILITY TO SGI FOR DAMAGES
HEREUNDER.
8
<PAGE> 9
11.6 LIMITATION OF LIABILITY. CUSTOMER WAIVES ALL LIABILITY IN TORT, OF SGI
AND THE RESPECTIVE MANUFACTURER INCLUDING WITHOUT LIMITATION ANY LIABILITY
ARISING FROM NEGLIGENCE. NOTWITHSTANDING THE FOREGOING, SGI'S LIABILITY TO
CUSTOMER HEREUNDER SHALL BE LIMITED TO THE TOTAL AMOUNT OF CHARGES ACTUALLY
PAID BY CUSTOMER TO SGI PURSUANT TO THIS AGREEMENT. NEITHER SGI NOR ANY
MANUFACTURER SHALL BE LIABLE TO CUSTOMER FOR ANY ACCIDENTAL, OR CONSEQUENTIAL
DAMAGES, UNDER ANY CIRCUMSTANCES, INCLUDING BUT NOT LIMITED TO LOST PROFITS,
REVENUE OR SAVINGS, OR THE LOSS OF USE OF ANY DATA, EVEN IF SGI OR THE
MANUFACTURER HAS BEEN ADVISED, OF, KNEW, OR SHOULD HAVE KNOWN, OF THE
POSSIBILITY THEREOF.
ARTICLE 12 - INDEMNIFICATION
12.1 Customer and SGI ("Indemnitor") hereby agree to indemnify and hold each
other, their affiliates, subsidiaries, successors and assigns and their
officers, directors, agents and employees ("Indemnitees") harmless from and
against third-party liabilities, including, but not limited to, attorneys'
fees, and other expenses incident thereto. ("Claims") which may be threatened
against, or recoverable from the Indemnitees by reason of any injuries to or
death of persons or loss of, damage to, or destruction of property to the
extent arising out of or in connection with any act, or omission of the
Indemnitor.
12.2 Customer will indemnify SGI for any Claims arising from Customer's
misuse of the SABRE system including without limitation, making fraudulent
bookings.
ARTICLE 13 - ASSIGNMENT
13.1 ASSIGNMENT OR SUBLEASE BY CUSTOMER SHALL NOT SUBLEASE, TRANSFER OR
ASSIGN THIS AGREEMENT OR ANY PORTION THEREOF, OR ANY RIGHT OR OBLIGATION
HEREUNDER, UNLESS CUSTOMER HAS OBTAINED THE PRIOR WRITTEN CONSENT OF SGI. ANY
ATTEMPTED ASSIGNMENT IN VIOLATION OF THIS ARTICLE SHALL BE VOID.
13.2 ASSIGNMENT BY SGI. SGI shall have the right to sell, transfer, assign
or delegate its interests, rights and/or obligations without the prior consent
of Customer, and, provided that such transferee or assignee assumes all of
SGI's obligations, SGI shall be released of all obligations after the effective
date of such sale, transfer, delegation or assignment.
ARTICLE 14 - TERMINATION AND DEFAULT
14.1 DEFAULT BY CUSTOMER. The occurrence of any one or more of the following
events shall constitute a non-exclusive event of default (the "Event of
Default") pursuant to the terms of this Agreement.
14.1.1 Customer fails to pay any amount when due;
14.1.2 Any representation by Customer is discovered to be materially misleading
or inaccurate, or Customer fails to perform any material covenant, agreement,
obligation, term or condition contained herein;
14.1.3 Customer terminates or cancels this Agreement or any portion thereof,
except as expressly permitted in Article 14.3;
14.1.4 Customer ceases to do business as a going concern, makes an assignment
for the benefit of creditors, admits in writing its inability to pay debts as
they become due, acquiesces in the appointment of a trustee, receiver or
liquidator for it or any substantial part of its assets or properties. Sells,
or executes an agreement to sell all or substantially all of its assets without
the consent of SGI.
9
<PAGE> 10
14.1.5 Fails to secure and maintain Airlines Reporting Corporation ("ARC")
accreditation for ticketing of reservations.
14.1.6 Events of Default described in 14.1.1, 14.1.2 and 14.1.4 shall not be
cause for termination if Customer cures such failure within fifteen days after
date written notice from SGI. If Customer cures its failure as provided in this
provision, said failure shall not be considered to be an Event of Default for
the purposes of Article 14.2
14.2 SGI's Rights Upon Termination. Upon the occurrence of an Event of
Default and subject to Article 14.1.6, SGI shall have the right to any one or
more of the following remedies; (i) terminate this Agreement and Customer's
access to SABRE; (ii) seek all legal and equitable remedies to which it is
entitled, and (iii) retake immediate possession of the System. If Customer's
Event of Default results in termination, Customer agrees to pay to SGI damages
suffered by SGI as a result of such Event of Default.
14.3 TERMINATION BY CUSTOMER. In the event that SGI breaches any material
term of this Agreement, which breach continues for a period of fifteen days
after SGI receives from Customer written notice which sets forth the legal and
equitable intent to terminate the Agreement if such breach is not cured, then
Customer may immediately terminate the Agreement upon separate written notice
to SGI. Except as limited by this Agreement, upon termination, Customer may
seek a remedies to which it is entitled. Customer may not otherwise cancel,
terminate, modify, repudiate, excuse or substitute this Agreement without SGI's
prior written consent, which SGI may withhold in its absolute discretion.
ARTICLE 15 - MISCELLANEOUS
15.1 APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF TEXAS AND THE UNITED STATES OF AMERICA. CUSTOMER HEREBY SUBMITS AND
CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS AND THE COURTS OF THE STATE OF TEXAS IN ANY
DISPUTE ARISING OUT OF THIS AGREEMENT AND AGREES THAT SERVICE OF PROCESS SHALL
BE SUFFICIENT IF MADE ON THE SECRETARY OF STATE OF THE STATE OF TEXAS WITH A
COPY TO BE SENT, REGISTERED MAIL TO THE CUSTOMER AT THE ADDRESS SET FORTH IN
SCHEDULE A OR SUCH OTHER ADDRESS AS CUSTOMER MAY LATER SPECIFY BY WRITTEN
NOTICE TO SGI.
15.2 BINDING EFFECT. Except as otherwise provided, this Agreement shall
inure to the benefit of and bind the successors and assigns of the parties
hereto.
15.3 DELETION OF EQUIPMENT. During the term of the Agreement, Customer may
delete up to [ * ] of the productive video agent sets and video agent set
terminal addresses and [ * ] of the printers, with a minimum of [ * ],
identified on Schedule A and/or subsequent Supplements, provided that Customer
complies with the following conditions: (a) Customer provides documentation,
satisfactory to SGI, of a substantial decrease in the number of SABRE Bookings,
which decrease is solely the result of a loss of its commercial accounts and/or
customer base; (b) Customer notifies SGI, in writing, of the description and
location of the equipment to be deleted (the "Deleted Equipment"); (c) Customer
pays to SGI the then current deinstallation charges for the Deleted Equipment.
In addition, Customer shall pay to SGI any outstanding Charges for such Deleted
Equipment up through the Stop Billing Date; (d) Customer will forfeit all right
and equity, if any, in the Deleted Equipment removed from Customer's location.
15.3.1 If Customer complies with the requirements identified in 15.3 above, SGI
shall deinstall the Deleted Equipment and disconnect it from the System.
15.3.2 SGI shall defer Customer's obligation to pay the Charges identified in
Schedule A and any Supplement thereto (the "Deferred Payment"), which would
otherwise be due and payable to SGI with regard to the Deleted Equipment,
provided that Customer complies with the following conditions: (a) If Customer
installs additional computer reservations equipment after it deletes the
Deleted Equipment such equipment, up to the amount of the Deleted Equipment (of
such lesser amount as agreed by SGI) shall be Standard Equipment and shall be
installed and reconnected by SGI; (b) Customer shall pay to SGI its then
current installation charges with respect to the Deleted Equipment which is
reinstalled and reconnected; (c) Customer shall pay to SGI its then current
equipment lease and maintenance and use charges with respect to such equipment
and such equipment shall be deemed covered by the provisions of the Agreement;
and (d) Customer does not breach any term or provision of the Agreement.
[*] The redacted portion, indicated by this symbol, is the subject of a
confidential treatment request.
10
<PAGE> 11
15.3.3 The Deferred Payment shall be deemed waived by SGI at the end of the
Initial Term of the Agreement or any renewal thereof if Customer has not
breached or otherwise failed to comply with the Agreement. If Customer fails
to comply with the Agreement, SGI shall be entitled to exercise all of its
rights under law and under the Agreement, including the collection of all
damages identified in Article 14 of the Agreement with respect to the Deleted
Equipment. Interest shall accrue on the Deferred Payment at the maximum rate
allowed by applicable law from the date of the deferral until payment.
15.4 ENTIRE AGREEMENT. This Agreement and the Instructions constitute the
entire agreement of the parties as to the matters set forth herein and shall
supersede any previous understandings, agreements, representations, statements,
negotiations and undertakings, whether written or oral between the parties
relating to the matters set forth herein. Any amendment to this Agreement must
be in writing and signed by the authorized representatives of both parties.
15.5 FORCE MAJEURE. SGI shall be relieved of its obligations hereunder in
the event and to the extent performance is delayed or prevented by any cause
reasonably beyond its control, including, but not limited to, acts of God,
public enemies, war, civil disorder, fire, flood, explosion, labor disputes or
strikes, or any acts or orders of any governmental authority, inability to
obtain supplies and materials (including without limitation computer hardware)
or any delay or deficiency caused by the electrical or telephone line suppliers
or other third parties.
15.6 NOTICES. Unless otherwise stated, notices given or required under this
Agreement must be in writing and shall be deemed delivered (i) upon deposit
through the United States Mail, to The SABRE Group, Inc. at P.O. Box 619616, MD
_______________, Dallas/Fort Worth, Texas 75261-9616 (to be sent to the
attention of SABRE Travel Information Network, Financial Services) or to the
Customer at the address set forth in Schedule A, or (ii) upon dispatch, if sent
by SABRE as follows: If to SGI: QP/_______ and if to Customer: to Customer's
Pseudo City Code as set forth in Schedule A or Supplement.
15.7 RETURN OF SYSTEM. Upon the termination of this Agreement for any
reason, Customer, at its sole cost and expense, shall return the System and all
Confidential Information as requested by SGI, in good repair, condition and
working order, less normal and ordinary wear and tear, by delivering it to a
common carrier selected and designated by SGI, F.O.B. the destination
designated by SGI in writing.
15.8 SABRE MODIFICATION. SGI retains the right to modify the SABRE system,
at its discretion at any time during the term of this Agreement. However, such
modifications will not materially impair Customer's ability to access and use
the SABRE system in the manner expressly permitted in this Agreement.
15.9 SEVERABILITY. Any provision of this Agreement which may be determined
by a court or other competent governmental authority to be prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective only to the extent of such prohibition or unenforceability, without
invalidating the remaining provisions thereof, unless said prohibition or
unenforceability materially alters the rights or obligations if either party.
15.10 SUBSEQUENT ACTS OF GOVERNMENT. In the event that there is any change in
any statute, rule, regulation or order governing the operation of airline
computerized reservations systems, or air transportation generally or the
System, which in any way materially impairs the benefits of this Agreement to
SGI, then the parties hereto will commence consultation in order to determine
what if any, changes to this Agreement are necessary or appropriate, including,
but not limited to, early termination of this Agreement. If the parties hereto
are unable to agree upon changes in the Agreement in response to such new
statute, rule, order or regulation within ten days after commencement of such
consultation, this Agreement may be canceled by SGI upon giving Customer thirty
days prior written notice of such cancellation. If SGI elects to terminate the
Agreement pursuant to this Article 15.10, except for Customer's obligation to
pay any and all charges incurred through the date of termination, each party
shall be relieved of any future obligations under this Agreement as of the
effective date of cancellation. Each party shall bear its own costs and
expenses incurred as a result of said termination. Customer does not have the
right to terminate the Agreement under this provision.
15.11 SURVIVING SECTIONS. If the term of the Agreement expires or is
otherwise terminated for any reason before Customer has paid to SGI all of the
sums due, the Agreement, the Schedule A and all Supplements shall survive such
expiration or termination to
11
<PAGE> 12
the extent necessary to protect SGI's rights until all sums owed to SGI have
been paid. Notwithstanding anything to the contrary referenced herein,
Articles 6, 8, 11 and 12 shall survive the termination of this Agreement.
15.12 WAIVER. A failure or delay of either party to require strict
performance to enforce a provision of this Agreement or a previous waiver or
forbearance of either party shall in no way be construed as a waiver or
continuing waiver of any provision of this Agreement.
15.13 ACKNOWLEDGMENT. Customer hereby acknowledges that SGI has offered
Customer a SABRE Subscriber Agreement with a three year term with reasonable
terms and conditions.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth below.
SGI RESERVES THE RIGHT TO CHANGE THE SABRE GUARANTEE PROGRAM RULES,
REGULATIONS, AND SPECIAL OFFERS WITHOUT NOTICE, AND TO END THE SABRE GUARANTEE
PROGRAM WITHOUT NOTICE
ALL SIGNATURES MUST BE IN BLACK INK
<TABLE>
<CAPTION>
CUSTOMER THE SABRE GROUP, INC.
<S> <C>
By: /S/ Jerry Sendrow /S/ Scott Eley
-------------------------------------------------------------------------------------------
(Signature) (Signature)
Name: [Jerry Sendrow] [Scott Eley]
------------------------------------ ---------------------------------------------
(Print Name) (Print Name)
Title: [Vice-President/CFO] [Manager]
------------------------------------ ---------------------------------------------
Date: [11/20/96] [11/25/96]
------------------------------------ ---------------------------------------------
AGENCY NAME: [800 TRAVEL SYSTEM INC.,] PCC:[I944]
------------------------------ -----------------------------------------
[d.b.a 1-800 Low Air Fare]
[a.k.a. 800 Fly For Less]
</TABLE>
12
<PAGE> 13
ATTACHMENT I
CONDITIONS OF USE FOR SABRE USERS
1. QUALIFYING USE. The manufacturer has made this package available to you
through the vendor, whether directly or indirectly, on the understanding
that it is being supplied to you primarily for use with the vendors'
SABRE reservation system, and not with a view to resale or other
remarketing.
2. OTHER TERMS AND CONDITIONS. Any other Terms and Conditions and/or
Program License Agreement, which may appear printed inside the package,
is inapplicable and should be ignored.
COPYRIGHT AND OTHER RIGHTS
The manufacturer's programs contain material in which the manufacturer and in
many cases the manufacturer's suppliers, retain proprietary rights. The
manufacturer wants these programs to be fully usable by you for the purpose of
which they are supplied, that is, in connection with a computer. No
infringement of the rights of the manufacturer or of the manufacturer's
suppliers will occur provided that the following conditions are observed with
respect to each program.
1. The program is used only on:
(a) a single machine; or
(b) on any workstation connected to a single fileserver which is
primarily used in connection with the SABRE reservation system.
2. The program is copied into machine-readable or printed form for backup
or modification purposes only in support of use on a single machine, or on a
workstation connected to the SABRE reservation system;
However, certain diskettes marked "Copy Protected" may include mechanisms to
limit or inhibit copying of the program;
3. The program is modified or merged into another program only for use on a
single machine or on a workstation connected to the SABRE reservation system.
Any portion so merged continues to be subject to these conditions;
4. The copyright notice is reproduced and included in any copy or
modifications made of the program and in any program merged into other
programs; and
5. If the program package is transferred to another party, all copies and
modifications made of the program must be transferred or destroyed. You do not
retain any right with respect to the transferred package. The other party
agrees to observe all of these Conditions of Use.
Any other act involving reproduction or use of, or other dealing in the program
is prohibited.
You are reminded that it may be necessary to obtain local and United States
licenses to export re-export this package.
No statements contained in this package shall affect the statutory rights of
any person.
<PAGE> 14
I944
555
COVERED BY B8T3 EXPANSIONARY AGREEMENT
===============================================================================
[SS SK1] [AF-] SCHEDULE A PCC I944
===============================================================================
To SABRE Subscriber Agreement between Customer and American
(The Agreement).
CUSTOMER NAME: 800 TRAVEL SERVICES INC. PCC____: I944
(include DBA): 800 FLY FOR LESS ARC# REMOTE
SITE (Loc.)__: 5440 MOREHOUSE DRIVE
SAN DIEGO, CA. 92121
CONTRACT TERM : 60 Months
EFFECTIVE DATE: UPON INSTALL
Order Number: 2246206, 2247175, 2250473, ESTED. INSTALL : 12/01/96
2250916, 2250469
1 ) SYSTEM DESCRIPTION:
== ====================
A) HARDWARE:
-----------
<TABLE>
<CAPTION>
Rate per Unit
QTY. ------------- Total Total
- ------- Monthly Monthly Monthly Insurance
Lea Own DESCRIPTION Lease SMU Charges Value
=== === =========== ======= ======= ======= =========
<S> <C> <C> <C> <C> <C> <C>
[*] SABRE/IBT TWO-WAY DATA LINE(S) [*] [*] [*] [*]
[*] DF/S Pntium/100/1.2G/24MBwCD/ [*] [*] [*] [*]
[*] DG/W Pntium/100/1.2G/24MBwCD/ [*] [*] [*] [*]
[*] W/S Pentium/100/1.2G/16MB.... [*] [*] [*] [*]
[*] Printer Documax A3300 w/Stand [*] [*] [*] [*]
[*] 17" Monitor (Turbo SABRE Upgr) [*] [*] [*] [*]
----- ----- -----
Total Hardware Monthly Charge [*] [*] [*]
----- ----- ----- -----
Total Insurance Value .................................. $ [*]
=====
</TABLE>
2 ) ONE-TIME CHARGES:
== ==================
A) PREPAYMENT:
--------------
Prepayment (New SABRE Location Only)............................ [*]
B) SYSTEM:
----------
SABRE Installation Charges...................................... [*]
C) SYSTEM SOFTWARE/LICENSE:
---------------------------
Operating Prgm. MS-DOS.............@ [*] ................... [*]
Per Fileserver.....
Per Fileserver.....
[*] Turbo SABRE Software Pkg...........@ [*] Per License x CRT.. [*]
D) ACCESSORIES:
---------------
[*] Mouse & Pad Kit....................@ [*] each.............. [*]
-------
Total One-Time Charges.......................................... $ [*]
=======
3 ) DISCOUNTS:
== ===========
A) FIXED MONTHLY DISCOUNTS:
---------------------------
* Fixed Monthly Discount - Booking Level............ ......... [*]
(per video agent set and video agent set terminal address)
Fixed Monthly Discount Amount - SABRE....................... $ [*]
-------
Total Fixed Monthly Discount Amount..................... $ [*]
=======
[*] The redacted portion, indicated by this symbol, is the subject of a
confidential treatment request.
<PAGE> 15
===============================================================================
[SS SK1] [AF-] SCHEDULE A PCC I944
===============================================================================
American agrees to provide Customer a fixed monthly discount to the
Total Fixed Monthly Charges if Customer meets all the terms and
conditions of those discounts as set forth in this Schedule A.
<TABLE>
<CAPTION>
B) SUSPENDED CHARGES - Initial Term: MONTHLY TOTAL
----------------------------------- ------- -------
<S> <C> <C>
Ticketing. . . . . . . . . . . . . . 60 Months @ [ * ] [ * ]
I/I. . . . . . . . . . . . . . . . . 60 Months @ [ * ] [ * ]
Option 6 . . . . . . . . . . . . . . 60 Months @ [ * ] [ * ]
Branch Access. . . . . . . . . . . . 60 Months @ [ * ] [ * ]
Bargain Finder Plus. . . . . . . . . 60 Months @ [ * ] [ * ]
------- -------
Total Suspended Charges-Initial Term . . . . . . $[ * ] $[ * ]
------- -------
C) ONE-TIME CHARGES DISCOUNTED:
------------------------------
SABRE Installation/Implementation. . . . . . . . . . . . . [ * ]
Application Software(s). . . . . . . . . . . . . . . . . . [ * ]
System Accessories . . . . . . . . . . . . . . . . . . . . [ * ]
-------
Total One-Time Charges Discounted. . . . . . . . . . . . . $[ * ]
-------
TOTAL SABRE PROMOTIONAL SUPPORT . . . . . . . . . . . . . . . . $[ * ]
=======
</TABLE>
* TAKEN FROM B8T3 EXPANSIONARY AGREEMENT
Customer acknowledges that the total SABRE Promotional Support constitutes
the full value of incentive received in consideration of Customer's
execution and complete performance and compliance with all provisions of
the Agreement.
4) OTHER CONDITIONS OF DISCOUNT:
===============================
A. The SABRE Booking level is based on all productive video agent sets
and video agent sets terminal address installed at the above stated
Pseudo City Code (PCC).
B. American shall perform the SABRE Booking measurements at the end of
each measurement period. In the event that the Agreement terminates
during a measurement period, the measurement will be from the
beginning of the current measurement period to the date of termination.
Measurement period every . . . 6 Months
Commencing . . . . . . . . . . Upon Installation
C. Add-On productive video agent sets will be added at the same SABRE
Booking level as the original productive video agent sets.
D. Deletion of Standard Equipment will be in accordance with the
provisions identified in Articles 15.3 through 15.3.3 of the Agreement.
E. Customer must be current in its SABRE/IBT payments due under the
Agreement in order to receive the above stated discounts.
F. The discounts for all additional video agent sets and/or video agent
sets terminal address that are associated with SABRE access will be
calculated as a standard percentage based on the length of the
Agreement at the time of order placement. The percentage that will be
applied to the total monthly charges are as follows:
36 month Agreement [ * ] Discount
60 month Agreement [ * ] Discount
[SS SK1] Rvsd. 10/31/95 Page
[*] The redacted portion, indicated by this symbol, is the subject of a
confidential treatment request.
<PAGE> 16
================================================================================
[SS SK1][AF-] SCHEDULE A PCC I944
================================================================================
addition of vido agent sets that are not capable of generating SABRE
Bookings. All video agents sets and/or video agent sets terminal
address added under this provision will be subject to the booking
level(s) stated in the Discount section of this Schedule A or, if
applicable, in the Cluster Amendment. Measurement for additional video
agent sets and/or video agent set terminal address installed or
implemented in a calendar month will commence on the 1st day of the
next month.
G. Any discounts in section 3) above shall not be applicable until the
installation or access to SABRE has completed.
5) BOOKINGS BELOW FIXED MONTHLY DISCOUNT BOOKINGS LEVEL:
IF CUSTOMER DOES NOT ACHIEVE [*] OF THE FIXED MONTHLY DISCOUNT BOOKING
LEVEL PER VIDEO AGENT SET AND VIDEO AGENT SET TERMINAL ADDRESS, AS STATED
IN 3) A) ABOVE, FOR ANY MEASUREMENT PERIOD, AMERICAN WILL CHARGE CUSTOMER
AN AMOUNT EQUAL TO THE PREVAILING BOOKING FEE THAT AMERICAN CHARGES TO
AIRLINES THAT PARTICIPATE IN THE FULL AVAILABILITY FEATURES OF SABRE
MULTIPLIED BY THE DIFFERENCE BETWEEN THE FIXED MONTHLY DISCOUNT BOOKING
LEVEL IN 3) A) ABOVE AND THE ACTUAL SHARE BOOKING LEVEL, MULTIPLIED
FURTHER BY THE TOTAL NUMBER OF PRODUCTIVE VIDEO AGENT SETS AND VIDEO
AGENT SET TERMINAL ADDRESS AT THE PSEUDO CITY CODE IDENTIFIED ON PAGE
ONE OF THIS SCHEDULE A, AND MULTIPLIED BY THE NUMBER OF MONTHS IN THE
MEASUREMENT PERIOD. HOWEVER, AMERICAN AGREES THAT AS LONG AS CUSTOMER
PROCESSES AN AVERAGE OF [*] SABRE BOOKING PER VIDEO AGENT SET AND VIDEO
AGENT SET TERMINAL ADDRESS PER MONTH DURING THE MEASUREMENT PERIOD, THE
MAXIMUM AMOUNT CHAREGED WILL NOT EXCEED THE TOTAL FIXED MONTHLY DISCOUNT,
AS STATED IN 3) A), MULTIPLIED BY THE NUMBER OF MONTHS IN THE MEASUREMENT
PERIOD.
APPLICABLE TAXES NOT INCLUDED IN ABOVE RATES
STANDARD EQUIPMENT ORDERED IS CONTINGENT UPON AVAILABILITY
IF CUSTOMER DELETES STANDARD EQUIPMENT, THE CHARGES AND ANY
DISCOUNTS SHALL BE DELETED.
ALL CHARGES AND APPLICABLE DISCOUNTS ARE STATED AND PAYABLE
IN U.S. DOLLARS.
ALL SIGNATURES MUST BE IN BLACK INK
CUSTOMER AMERICAN AIRLINES, INC.
By : /s/ JERRY ANDREW By : /s/ SCOTT ELEY
------------------------ ---------------------
Name : JERRY ANDREW Name : SCOTT ELEY
------------------------ ---------------------
Title: Vice President/ CFO Title: Manager
------------------------ ---------------------
Date : 11/20/96 Date : 11/25/96
-- -- -- -- -- --
[SS SK1] Rvsd. 10/31/95 Page 3
[*] The redacted portion, indicated by this symbol, is the subject of a
confidential treatment request.
<PAGE> 1
EXHIBIT 10.21
Note: Portions of this exhibit indicated by "[ * ]" are subject to a
confidential treatment request, and have been omitted from this exhibit.
Complete, unredacted copies of this exhibit have been filed with the Securities
and Exchange Commission as part of the Company's confidential treatment
request.
CLUSTER AMENDMENT TO SABRE SUBSCRIBER AGREEMENT
This Amendment to that certain SABRE Subscriber Agreement is made and
entered into this ______ day of ____________, 19 ____, between The SABRE Group,
Inc. ("SGI") and [800 Travel Systems, Inc., d.b.a., 1-800 Low Air
Fare]("Customer").
RECITALS
WHEREAS, SGI and Customer have entered into that certain SABRE
Subscriber Agreement, dated as of _______ (the "Agreement"); and
WHEREAS, it is in the best interests of the parties to modify certain
provisions of the Agreement.
NOW THEREFORE, in consideration of the mutual covenants contained
herein, SGI and Customer hereby agrees as follows:
1. EFFECTIVE DATE. The effective date of this Amendment is [upon
install].
2. LOCATION IN CLUSTER. This Amendment will allow multiple locations of
a commonly owned travel agency to combine the SABRE Bookings from all noted
locations for purposes of measuring such SABRE Bookings. The following Pseudo
City Codes ("PCC") shall hereby designate all locations in the cluster:
Main Office PCC: [B8T3]
Branches:
<TABLE>
<CAPTION>
PCC LOCATION TYPE LOCATION ADDRESS
<S> <C> <C>
[I944] [Remote] [5440 Morehouse Drive, San Diego, CA 92121]
- ----------- ----------------- -------------------------------------------------
- ----------- ----------------- -------------------------------------------------
- ----------- ----------------- -------------------------------------------------
- ----------- ----------------- -------------------------------------------------
- ----------- ----------------- -------------------------------------------------
- ----------- ----------------- -------------------------------------------------
</TABLE>
3. Modification to the List of Locations in Cluster.
A. Locations being added or deleted from the cluster shall be
listed below by PCC, and identified with an "A" for add and "D" for delete.
B. This Amendment may be superseded from time to time to reflect
changes in the Fixed Monthly Discount Booking Level. Should a location leave
the cluster, the individual PCC"s Fixed Monthly Discount Booking Level shall be
in effect.
<PAGE> 2
<TABLE>
<CAPTION>
TYPE OF CHANGE PCC LOCATION TYPE LOCATION ADDRESS
- ------------------------------------------------------------------------------------------------------------------
(Branch, Remote, STP)
<S> <C> <C> <C>
[A] [I944] [Remote] [5440 Morehouse Drive, San Diego, CA 92121
-------- ---------- ------------------- ------------------------------------------------
-------- ---------- ------------------- ------------------------------------------------
-------- ---------- ------------------- ------------------------------------------------
-------- ---------- ------------------- ------------------------------------------------
-------- ---------- ------------------- ------------------------------------------------
-------- ---------- ------------------- ------------------------------------------------
-------- ---------- ------------------- ------------------------------------------------
</TABLE>
4. NEW CLUSTERED FIXED MONTHLY DISCOUNT BOOKING LEVEL. The Fixed Monthly
Discount Booking Level for each of the PCC's listed above shall be averaged.
This average shall be calculated by multiplying the Fixed Monthly Discount
Booking Level for each PCC by the total number of productive video agent sets
and video agent set terminal addresses for each PCC, and dividing the sum by
the total number of productive video agent sets and video agent set terminal
addresses at all PCC's. This average cluster Fixed Monthly Discount Booking
level is subject to change automatically, without notice, if any of the
following events occur (i) the Fixed Monthly Discount Booking Level changes,
(ii) the number of productive video agent sets video agent set terminal
addresses at any of the PCC's listed above changes, (iii) the number of
Customer's locations changes, (iv) a non-productive device is added to or
deleted from a location, (v) SABRE Services are added to or deleted from a
location. Currently, the average cluster Fixed Monthly Discount Booking level
is [ * ].
5. MEASUREMENT PERIOD. SGI shall perform the SABRE Booking measurements
at the end of each measurement period. In the event that the Agreement
terminates during a measurement period, the measurement period will be from the
beginning of the current measurement period to the date of termination.
Measurement period is every: [3] months commencing: [1-01-97]
----- -----------
6. DEFINED TERMS. The defined terms used in this Agreement shall have
the same meaning assigned to such terms in the Agreement.
7. AGREEMENT. Except as otherwise provided herein, all other terms
of the Agreement remain in full force and effect. In the event of any conflict
between the terms of the Agreement and this Amendment, the Amendment shall
control.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
day and year written above.
CUSTOMER THE SABRE GROUP, INC.
By: /s/ Jerry Sendrow By: /s/ Scott Eley
Name: [Jerry Sendrow] Name: [Scott Eley]
Title: [Vice President/CFO] Title: [Manager]
Date: [11/20/96] Date: [11/25/96]
[*] The redacted portion, indicated by this symbol, is the subject of a
confidential treatment request.
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