<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 13, 2000
Registration No. 333-30798
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
PRE-EFFECTIVE
AMENDMENT NO. 1 TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
TRX, INC.
(Exact name of Registrant as specified in its charter)
------------------------
<TABLE>
<S> <C> <C>
7374
GEORGIA 514210 58-2502748
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
------------------------
6 WEST DRUID HILLS DRIVE
ATLANTA, GEORGIA 30329
(404) 929-6100
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
------------------------
NORWOOD H. DAVIS, III
PRESIDENT AND CHIEF EXECUTIVE OFFICER
TRX, INC.
6 WEST DRUID HILLS DRIVE
ATLANTA, GEORGIA 30329
(404) 929-6100
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------
The Commission is requested to mail copies of all orders, notices and
communications to:
<TABLE>
<S> <C>
JEFFREY K. HAIDET, ESQ. DAVID B. WALEK, ESQ.
LONG ALDRIDGE & NORMAN LLP ROPES & GRAY
SUNTRUST PLAZA, SUITE 5300 ONE INTERNATIONAL PLACE
303 PEACHTREE STREET BOSTON, MASSACHUSETTS 02110
ATLANTA, GEORGIA 30308-3201 (617) 951-7000
(404) 527-4000
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If any of the securities registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act, check
the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
PROPOSED
AMOUNT MAXIMUM AMOUNT OF
TITLE OF SECURITIES TO BE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED OFFERING PRICE FEE(1)(2)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock $.01 par value per share....................... $-- $75,000,000 $19,800
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Calculated pursuant to Rule 457(o) under the Securities Act.
(2) Previously paid.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the expenses in connection with the issuance
and distribution of the securities being registered hereby:
<TABLE>
<S> <C>
SEC Registration Fee........................................ *
NASD Filing Fee............................................. *
Nasdaq National Market Listing Fee.......................... *
Blue Sky Fees and Expenses.................................. *
Printing and Engraving Costs................................ *
Legal Fees and Expenses..................................... *
Accounting Fees and Expenses................................ *
Transfer Agent and Registrar Fees and Expenses.............. *
Miscellaneous............................................... *
---
Total............................................. $
===
</TABLE>
- ---------------
* To be supplied by amendment.
The foregoing, except for the Securities and Exchange Commission
registration fee, the National Association of Securities Dealers, Inc. fee and
the Nasdaq National Market fee, are estimates.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our Articles of Incorporation eliminate, as permitted by Section
14-2-202(b)(4) of the Georgia Business Corporation Code (the "Georgia Code"),
the personal liability of directors and officers for monetary damages to the
corporation or its shareholders for breach of their duty of care and other
duties; provided, however, that our Articles of Incorporation and Section
14-2-202(b)(4) of the Georgia Code do not permit us to eliminate or limit
liability for (i) a breach of duty involving appropriation of a business
opportunity of TRX; (ii) an act or omission which involves intentional
misconduct or a knowing violation of law; (iii) any transaction from which an
improper personal benefit is derived; or (iv) any payments of a dividend or any
other type of distribution that is illegal under Section 14-2-832 of the Georgia
Code. In addition, if at any time the Georgia Code is amended to authorize
further elimination or limitation of personal liability, then the liability of
each director and officer of TRX shall be eliminated or limited to the fullest
extent permitted by such provisions, as so amended, without further action by
the shareholders, unless the provisions of the Georgia Code require such action.
Sections 14-2-850 to 14-2-859, inclusive, of the Georgia Code govern the
indemnification of directors, officers, employees and agents. Section 14-2-851
of the Georgia Code provides for indemnification of a director of TRX for
liability incurred by him in connection with any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative,
arbitrative or investigative and whether formal or informal, in which he may
become involved by reason of being a director of TRX. Section 14-2-851 also
provides such indemnity for directors who, at the request of TRX, act as
directors, officers, partners, trustees, employees or agents of another foreign
or domestic corporation, partnership, joint venture, trust, employee benefit
plan or another enterprise. Section 14-2-851 permits indemnification if the
director acted in a manner he believed in good faith to be in or not opposed to
the best interest of TRX and, in addition, in criminal proceedings, if he had no
reasonable cause to believe his conduct was unlawful. If the required standard
of conduct is met, indemnification may include judgments, settlements,
penalties, fines or reasonable expenses (including attorneys' fees) incurred
with respect to a proceeding. However, if the director is adjudged
II-1
<PAGE> 3
liable to TRX in a derivative action or on the basis that personal benefit was
improperly received by him, the director will only be entitled to such
indemnification for reasonable expenses as a court finds to be proper in
accordance with the provisions of Section 14-2-854.
Section 14-2-852 of the Georgia Code provides that directors who are
successful with respect to any claim brought against them, which claim is
brought because they are or were directors, are entitled to indemnification
against reasonable expenses as of right. Conversely, if the charges made in any
action are sustained, the determination of whether the required standard of
conduct has been met will be made, in accordance with the provisions of Section
14-2-855 of the Georgia Code, as follows: (i) if there are two or more
disinterested members of the board of directors, by the majority vote of a
quorum of the disinterested members of the board of directors, (ii) by a
majority of the members of a committee of two or more disinterested directors,
(iii) by special legal counsel or (iv) by the shareholders, but, in such event,
the shares owned by or voted under the control of directors seeking
indemnification may not be voted.
Section 14-2-857 of the Georgia Code provides that an officer who is not a
director has the mandatory right of indemnification granted to directors under
Section 14-2-852, as described above. In addition, TRX may, as provided by its
Articles, Bylaws, general or specific actions by its Board of Directors, or by
contract, indemnify and advance expenses to an officer, employee or agent who is
not a director to the extent that such indemnification is consistent with public
policy.
Our Articles of Incorporation eliminate the personal liability of our
directors to TRX or our shareholders for monetary damage for any breach of duty
as a director, provided that we cannot eliminate or limit the liability of a
director for:
- a breach of duty involving appropriation of a business opportunity of
TRX;
- an act or omission which involves intentional misconduct or a knowing
violation of law;
- any transaction from which the director receives an improper personal
benefit; or
- unlawful corporate distributions.
In addition, if at any time the Georgia Code is amended to authorize
further elimination or limitation of the personal liability of a director, then
the liability of each of our directors shall be eliminated or limited to the
fullest extent permitted by such provisions, as so amended.
Our bylaws require us to indemnify any director or officer who was or is a
party or is threatened to be made a party, to any threatened, pending or
completed action, suit or proceeding whether civil, criminal, administrative or
investigative (including any action or suit by or in our right) because such
person is or was one of our directors or officers, against liability incurred by
the director of officer in such proceeding except for any liability incurred in
a proceeding in which the director or officer is adjudged liable to us or is
subjected to injunctive relief in our favor for:
- any appropriation, in violation of such director's or officer's
duties, of any business opportunity of TRX;
- acts or omissions which involve intentional misconduct or a knowing
violation of law;
- any transaction from which such officer or director received an
improper personal benefit; or
- unlawful corporate distributions.
We have entered into separate indemnity agreements with each of our
directors and certain of our executive officers, whereby we agree to indemnify
them and to advance them expenses in a manner and subject to terms and
conditions similar to those set forth in our Articles of Incorporation and
bylaws.
II-2
<PAGE> 4
Reference is hereby made to Section [ ] of the Underwriting Agreement,
the form of which is filed as Exhibit 1 hereto, in which the Underwriters agree
to indemnify our directors and officers and certain other persons against
certain civil liabilities.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
In November 1999, BCD Technology S.A. contributed all of its interest in
BCD Technology, Inc. to us in exchange for 7,559,733 shares of our common stock,
and the members of WorldTravel Technologies, L.L.C. other than BCD Technology,
Inc. contributed all of their membership interests in WorldTravel Technologies,
L.L.C. to us in exchange for 1,419,859 shares of our common stock. In this
transaction, the following individuals exchanged their membership interests in
WorldTravel Technologies, L.L.C. for the indicated number of our shares:
<TABLE>
<CAPTION>
TRX SHARES
SHAREHOLDER RECEIVED IN EXCHANGE
- ----------- -------------------------------
<S> <C>
The Alexander Family, L.P............................. 1,061,015
Danny B. Hood......................................... 221,045
Ralph Manaker......................................... 64,327
Steve Reynolds........................................ 36,736
Velva ("Demme") Wiggins............................... 36,736
</TABLE>
In November 1999, the shareholders of International Software Products
exchanged all of their shares of International Software Products for shares of
our common stock and other consideration. In this transaction, Susan R. Hopley
exchanged 6,760 shares of International Software Products for 195,892 shares of
our common stock, approximately $1.1 million in cash and a promissory note
issued by us for $541,000.Christopher M. Brittin exchanged 2,740 shares of
International Software Products for 79,400 shares of our common stock,
approximately $400,000 in cash and a promissory note issued by us for $219,000.
Other shareholders of International Software Products exchanged an aggregate of
500,000 shares of International Software Products for 14,669 shares of our
common stock and promissory notes issued by us for an aggregate of $40,000. In
addition, we satisfied certain debt obligations of International Software
Products to Ms. Hopley, Mr. Brittin and certain affiliates of Mr. Brittin.
The issuances described in this Item 15 were deemed to be exempt from
registration under the Securities Act of 1933, as amended, in reliance upon
Section 4(2) thereof as a transaction by an issuer not involving any public
offering.
II-3
<PAGE> 5
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits.(+)
The following exhibits are filed with this registration statement.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <C> <S>
1 -- Form of Underwriting Agreement.**
2.1 -- Contribution Agreement, dated November 4, 1999, among WT
Technologies, Inc., Arthur H. Ltd., Susan R. Hopley,
Christopher M. Brittin, F. Gilmer Siler and the Smith
Trust.(*)(***)
2.2 -- Contribution Agreement, dated November 4, 1999, among WT
Technologies, Inc., BCD Technology S.A., The Alexander
Family, L.P., Danny B. Hood, Ralph Manaker and Velva
Wiggins.*
3.1 -- Articles of Incorporation of the Registrant.*
3.2 -- Bylaws of the Registrant.*
4.1 -- Shareholders Agreement, dated November 4, 1999, among WT
Technologies, Inc., BCD Technology S.A., Christopher M.
Brittin, Susan R. Hopley, the Smith Trust and F. Gilmer
Siler.*
4.2 -- Shareholders Agreement, dated November 4, 1999, among WT
Technologies, Inc., BCD Technology S.A., The Alexander
Family, L.P., Danny B. Hood, Ralph Manaker, Steve Reynolds
and Velva Wiggins.*
4.3 -- Shareholders Agreement, dated November 5, 1999, as amended
February 18, 2000, among WT Technologies, Inc., Hogg
Robinson International Benefits Limited and BCD Technology
S.A.(*)(***)
4.4 -- Voting and Transfer Restriction Agreement, dated November 4,
1999, among WT Technologies, Inc., Susan R. Hopley and the
Smith Trust.*
4.5 -- Convertible Promissory Note, dated November 5, 1999, between
WT Technologies, Inc. and Hogg Robinson International
Benefits Limited.*
4.6 -- Convertible Promissory Note, dated November 5, 1999, between
WT Technologies, Inc. and BCD Technology S.A.*
5 -- Opinion of Long Aldridge & Norman LLP (including consent).**
10.1 -- Service Agreement, dated October 9, 1996, as amended January
1, 1999, between WorldTravel Partners, L.P. and Microsoft
Corporation.****
10.2 -- Shared Services Agreement, dated November 1, 1999, between
WorldTravel Technologies, L.L.C. and WorldTravel Partners I,
L.L.C.(*)(***)
10.3 -- Master Development Agreement between WorldTravel
Technologies, L.L.C. and WorldTravel Partners I, L.L.C.
10.4 -- End User Software License Agreement, dated November 1, 1999,
between WorldTravel Technologies, L.L.C. and WorldTravel
Partners I, L.L.C.****
10.5 -- Service Bureau Software Services Agreement, dated November
1, 1999, between WorldTravel Technologies, L.L.C. and
WorldTravel Partners I, L.L.C.****
10.6 -- OFS Service Bureau/Outsourcing Agreement, dated November 1,
1999, between WorldTravel Technologies, L.L.C. and
WorldTravel Partners I, L.L.C.****
10.7 -- TRX, Inc. 2000 Stock Incentive Plan*
10.8 -- Employment Agreement, dated December 1, 1999, between WT
Technologies, Inc. and Norwood H. Davis, III.
10.9 -- Employment Agreement, dated November 1, 1999, between
WorldTravel Technologies, L.L.C. and David Fromal.
</TABLE>
II-4
<PAGE> 6
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <C> <S>
10.10 -- Employment Agreement, between TRX, Inc. and Timothy J.
Severt.
10.11 -- Employment Agreement, between TRX, Inc. and Scott Hancock.
10.12 -- Lease Agreement dated October 15, 1995, as amended August 7,
1996, April 8, 1997, December 3, 1997, October 5, 1998,
April 22, 1999 and August 17, 1999, between WorldTravel
Partners, L.P. and Weeks Realty, L.P.*
10.13 -- Lease Agreement, effective October 1, 1999, among
WorldTravel Technologies, L.L.C., Michael Barker and Denver
Horn.*
10.14 -- Lease Agreement, dated October 1, 1999, between WorldTravel
Technologies, L.L.C. and Hefty Publishing Company.*
10.15 -- Lease Agreement, dated September 15, 1997, as amended June
15, 1998, October 1, 1998 and June 15, 1999, between Travel
Technologies Group, L.P. and 4849 Greenville Partners.*
10.16 -- Lease Agreement, dated October 25, 1999, effective November
1, 1999, between Arthur H. Ltd. and Young & Skidmore Co.
10.17 -- Lease Agreement, dated October 25, 1999, effective February
1, 2000, between Arthur H. Ltd. and Young & Skidmore Co.
10.18 -- Shareholders Agreement, dated February 18, 2000, between
Hogg Robinson plc, Hogg Robinson Services Limited, WTT UK
Limited, WT Technologies, Inc. and Fortdove Limited.*
10.19 -- Software License Agreement, dated February 18, 2000, between
WorldTravel Technologies, L.L.C. and Technology Licensing
Company, LLC.*
10.20 -- Software License Agreement, dated February 18, 2000, between
Technology Licensing Company, LLC and Fortdove Limited.*
10.21 -- Service Bureau/Outsourcing Agreement for Online Fulfillment
Services, dated February 18, 2000, between Fortdove Limited
& Hogg Robinson plc.****
10.22 -- Reciprocal Software Development Agreement, dated February
18, 2000, between WorldTravel Technologies, L.L.C. &
Fortdove Limited.*
10.23 -- Service Bureau Software Services Agreement, dated February
18, 2000, between Fortdove Limited & Hogg Robinson plc.*
21 -- Subsidiaries of the Registrant.*
23.1 -- Consent of Arthur Andersen LLP.
23.2 -- Consent of Long Aldridge & Norman LLP (to be contained in
Exhibit 5).**
24 -- Powers of Attorney.*
27 -- Financial Data Schedule (for SEC use only).*
</TABLE>
- ---------------
+ Pursuant to Item 601(b)(4)(iii) of Regulation S-K under the Securities Act,
TRX, Inc. agrees to furnish supplementally to the Commission a copy of
certain omitted promissory notes payable by TRX, Inc.
* Previously filed.
** To be filed by Amendment.
*** TRX, Inc. agrees to furnish supplementally to the Commission a copy of any
omitted schedule or exhibit to such agreement upon request by the
Commission.
**** Confidential treatment pursuant to 17 CFR (sec.sec.) 200.80 and 230.406 has
been requested regarding certain portions of the indicated Exhibit, which
portions have been filed separately with the Commission.
(b) Financial Statement Schedules.
II-5
<PAGE> 7
All schedules have been omitted because they are not required or because
the required information is given in the financial statements or the notes to
those statements.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes to provide to the underwriters
at the closing specified in the underwriting agreements, certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Act 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 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 Act and will be governed by the final adjudication of
such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Act, the
information which may be omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form or 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 this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Act, 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.
II-6
<PAGE> 8
SIGNATURES
Pursuant to the requirements of the Act, the registrant has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Atlanta, State of Georgia, on March 13, 2000.
TRX, Inc.
By: /s/ NORWOOD H. DAVIS, III
------------------------------------
Norwood H. Davis, III
President, Chief Executive 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 dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ NORWOOD H. DAVIS, III President, Chief Executive March 13, 2000
- ----------------------------------------------------- Officer and Director
Norwood H. Davis, III
* Senior Vice President of March 13, 2000
- ----------------------------------------------------- Finance and Treasurer
William J. Billiard (principal financial and
accounting officer)
* Chairman of the Board March 13, 2000
- ----------------------------------------------------- and Director
John C. Alexander
* Director March 13, 2000
- -----------------------------------------------------
John A. Fentener van Vlissingen
* Director March 13, 2000
- -----------------------------------------------------
Gerard Boel
* Director March 13, 2000
- -----------------------------------------------------
David J. C. Radcliffe
* Director March 13, 2000
- -----------------------------------------------------
William C. Nussey
* Director March 13, 2000
- -----------------------------------------------------
John F. Davis, III
*By: /s/ NORWOOD H. DAVIS, III
-------------------------------------------------
Norwood H. Davis, III
Attorney-in-fact
</TABLE>
II-7
<PAGE> 9
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <C> <S>
1 -- Form of Underwriting Agreement.**
2.1 -- Contribution Agreement, dated November 4, 1999, among WT
Technologies, Inc., Arthur H. Ltd., Susan R. Hopley,
Christopher M. Brittin, F. Gilmer Siler and the Smith
Trust.(*)(***)
2.2 -- Contribution Agreement, dated November 4, 1999, among WT
Technologies, Inc., BCD Technology S.A., The Alexander
Family, L.P., Danny B. Hood, Ralph Manaker and Velva
Wiggins.*
3.1 -- Articles of Incorporation of the Registrant.*
3.2 -- Bylaws of the Registrant.*
4.1 -- Shareholders Agreement, dated November 4, 1999, among WT
Technologies, Inc., BCD Technology S.A., Christopher M.
Brittin, Susan R. Hopley, the Smith Trust and F. Gilmer
Siler.*
4.2 -- Shareholders Agreement, dated November 4, 1999, among WT
Technologies, Inc., BCD Technology S.A., The Alexander
Family, L.P., Danny B. Hood, Ralph Manaker, Steve Reynolds
and Velva Wiggins.*
4.3 -- Shareholders Agreement, dated November 5, 1999, as amended
February 18, 2000, among WT Technologies, Inc., Hogg
Robinson International Benefits Limited and BCD Technology
S.A.(*)(***)
4.4 -- Voting and Transfer Restriction Agreement, dated November 4,
1999, among WT Technologies, Inc., Susan R. Hopley and the
Smith Trust.*
4.5 -- Convertible Promissory Note, dated November 5, 1999, between
WT Technologies, Inc. and Hogg Robinson International
Benefits Limited.*
4.6 -- Convertible Promissory Note, dated November 5, 1999, between
WT Technologies, Inc. and BCD Technology S.A.*
5 -- Opinion of Long Aldridge & Norman LLP (including consent).**
10.1 -- Service Agreement, dated October 9, 1996, as amended January
1, 1999, between WorldTravel Partners, L.P. and Microsoft
Corporation.****
10.2 -- Shared Services Agreement, dated November 1, 1999, between
WorldTravel Technologies, L.L.C. and WorldTravel Partners I,
L.L.C.(*)(***)
10.3 -- Master Development Agreement between WorldTravel
Technologies, L.L.C. and WorldTravel Partners I, L.L.C.
10.4 -- End User Software License Agreement, dated November 1, 1999,
between WorldTravel Technologies, L.L.C. and WorldTravel
Partners I, L.L.C.****
10.5 -- Service Bureau Software Services Agreement, dated November
1, 1999, between WorldTravel Technologies, L.L.C. and
WorldTravel Partners I, L.L.C.****
10.6 -- OFS Service Bureau/Outsourcing Agreement, dated November 1,
1999, between WorldTravel Technologies, L.L.C. and
WorldTravel Partners I, L.L.C.****
10.7 -- TRX, Inc. 2000 Stock Incentive Plan*
10.8 -- Employment Agreement, dated December 1, 1999, between WT
Technologies, Inc. and Norwood H. Davis, III.
10.9 -- Employment Agreement, dated November 1, 1999, between
WorldTravel Technologies, L.L.C. and David Fromal.
10.10 -- Employment Agreement, between TRX, Inc. and Timothy J.
Severt.
10.11 -- Employment Agreement, between TRX, Inc. and Scott Hancock.
</TABLE>
II-8
<PAGE> 10
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <C> <S>
10.12 -- Lease Agreement dated October 15, 1995, as amended August 7,
1996, April 8, 1997, December 3, 1997, October 5, 1998,
April 22, 1999 and August 17, 1999, between WorldTravel
Partners, L.P. and Weeks Realty, L.P.*
10.13 -- Lease Agreement, effective October 1, 1999, among
WorldTravel Technologies, L.L.C., Michael Barker and Denver
Horn.*
10.14 -- Lease Agreement, dated October 1, 1999, between WorldTravel
Technologies, L.L.C. and Hefty Publishing Company.*
10.15 -- Lease Agreement, dated September 15, 1997, as amended June
15, 1998, October 1, 1998 and June 15, 1999, between Travel
Technologies Group, L.P. and 4849 Greenville Partners.*
10.16 -- Lease Agreement, dated October 25, 1999, effective November
1, 1999, between Arthur H. Ltd. and Young & Skidmore Co.
10.17 -- Lease Agreement, dated October 25, 1999, effective February
1, 2000, between Arthur H. Ltd. and Young & Skidmore Co.
10.18 -- Shareholders Agreement, dated February 18, 2000, between
Hogg Robinson plc, Hogg Robinson Services Limited, WTT UK
Limited, WT Technologies, Inc. and Fortdove Limited.*
10.19 -- Software License Agreement, dated February 18, 2000, between
WorldTravel Technologies, L.L.C. and Technology Licensing
Company, LLC.*
10.20 -- Software License Agreement, dated February 18, 2000, between
Technology Licensing Company, LLC and Fortdove Limited.*
10.21 -- Service Bureau/Outsourcing Agreement for Online Fulfillment
Services, dated February 18, 2000, between Fortdove Limited
& Hogg Robinson plc.****
10.22 -- Reciprocal Software Development Agreement, dated February
18, 2000, between WorldTravel Technologies, L.L.C. &
Fortdove Limited.*
10.23 -- Service Bureau Software Services Agreement, dated February
18, 2000, between Fortdove Limited & Hogg Robinson plc.*
21 -- Subsidiaries of the Registrant.*
23.1 -- Consent of Arthur Andersen LLP.
23.2 -- Consent of Long Aldridge & Norman LLP (to be contained in
Exhibit 5).**
24 -- Powers of Attorney.*
27 -- Financial Data Schedule (for SEC use only).*
</TABLE>
- ---------------
+ Pursuant to Item 601(b)(4)(iii) of Regulation S-K under the Securities Act,
TRX, Inc. agrees to furnish supplementally to the Commission a copy of
certain omitted promissory notes payable by TRX, Inc.
* Previously filed.
** To be filed by Amendment.
*** TRX, Inc. agrees to furnish supplementally to the Commission a copy of any
omitted schedule or exhibit to such agreement upon request by the
Commission.
**** Confidential treatment pursuant to 17 CFR (sec.sec.) 200.80 and 230.406 has
been requested regarding certain portions of the indicated Exhibit, which
portions have been filed separately with the Commission.
II-9
<PAGE> 1
EXHIBIT 10.1
MICROSOFT CORPORATION/
WORLD TRAVEL PARTNERS
SERVICE AGREEMENT
This Service Agreement (the "Agreement") is entered into by and between
Microsoft Corporation, a Washington corporation ("MS"), and WorldTravel
Partners, L.P., a Georgia Limited Partnership ("WTP") to be effective as of
October 9, 1996 ("Effective Date").
WHEREAS, WTP is a fully-appointed ARC/IATA full service travel agency engaged in
the general business of arranging, planning, reserving, handling en route
changes and ticketing of domestic and international passenger transportation,
lodging, car rentals and other ancillary services;
WHEREAS, MS is a leading consumer, business and operating system software
developer with one of the best brand names in the world;
WHEREAS, MS has developed a proprietary application for arranging, planning and
reserving air, hotel and car rental transactions on the Internet along with
other electronic commerce applications;
WHEREAS, MS intends to establish and operate a web site to be marketed as
"Expedia," (referred to herein as "MS Travel") providing on-line travel
services, using its proprietary application; and
WHEREAS, MS has requested that WTP provide, and WTP has agreed to provide,
certain travel fulfillment services and other services to the customers of MS
Travel.
NOW, THEREFORE, in consideration of the mutual covenants herein, the parties
hereby agree as follows:
1. WTP Services.
(a) WTP agrees to provide travel fulfillment, en route assistance,
quality control and other services, including without limitation those
identified in Exhibit A (the "Services") to customers of MS Travel, on the terms
and conditions provided herein in accordance with (i) MS standard customer
service policies and procedures as detailed in documentation provided by MS to
WTP (including, without limitation, MS policies set forth in Exhibit E), which
may be modified by MS from time to time in its sole discretion; and (ii) the
performance requirements set forth in Exhibit C. WTP shall have sixty (60) days
from the date of its receipt of modifications to any of the foregoing
document(s) to conform to modified requirements, as applicable. The parties
shall mutually prepare a procedures manual prior to launch and maintain such
manual, setting forth detailed procedures to implement the Services.
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[*] The redacted portions indicated by this symbol are the subject of a
confidential treatment request and have been filed separately with the
Securities and Exchange Commission.
<PAGE> 2
(b) WTP agrees to subcontract with its Global Travel Management
member in Canada, Global Travel Solutions ("GTS") as required for provision of
Services in Canada, pursuant to the provisions of Section 11. WTP may also
subcontract with its majority-owned subsidiary, World Travel Technologies,
L.L.C. ("WTT"), and WTT's division, Online Fulfillment Services ("OFS"), to
provide any or all of the Services hereunder. WTP will not otherwise subcontract
any of its obligations hereunder without the prior written approval of MS.
(c) WTP agrees that it shall assign to MS Travel at least one
person at the Druid Hills Facility who is qualified by ARC to perform management
and/or ticketing functions ("ARC Qualifiers"). Such ARC Qualifiers shall be
dedicated to providing only services for or on behalf of MS Travel, and shall
not accept telephone calls or other communications or provide any services for
any third party product(s) or service(s) without the express written consent of
MS.
(d) WTP shall establish and maintain a separate ARC number or
numbers designated as "WTP Doing Business As Microsoft" solely for the provision
of Services under this Agreement, which shall remain the property of MS in the
event of termination or expiration of this Agreement. WTP agrees to use the ARC
and BSP numbers assigned to MS or to WTP (including those numbers assigned to
WTP "Doing Business As Microsoft") when providing the Services under this
Agreement, and to charge the appropriate travel industry supplier the MS
negotiated commission and/or transaction fee when booking reservations, as
detailed in Exhibit A, with the exception of certain international itineraries
as described in the following Section 1(e). WTP agrees to deposit daily to the
MS bank account all transaction fees and/or commissions earned and received on
reservations made using the MS ARC and BSP numbers. If WTP or any of its agents,
contractors or subcontractors utilize an ARC or BSP number assigned to WTP when
booking a reservation for a customer who originally sought a reservation through
MS Travel, all supplier transaction fees and/or commissions resulting therefrom
shall be promptly transferred to the MS bank account.
(e) WTP agrees to provide travel fulfillment for travel involving
international itineraries (other than for Canada as set forth in Section 1(b)
above) as described in Exhibit A. WTP will provide separate accounting for
commissions earned on such transactions, as set forth in Exhibit G, and will
deposit 60% (sixty percent) of such commissions earned and received, within
forty-eight hours of receipt, to the MS bank account.
(f) WTP agrees to use its best efforts and most capable technical
expertise to resolve customer complaints, meeting or exceeding the performance
requirements as set forth in Exhibit C. In the event WTP is unable to resolve a
problem, WTP may escalate the problem to MS-designated representative(s) in
accordance with applicable procedures.
(g) WTP will operate at least two travel fulfillment facilities as
follows (other facilities may be added as mutually agreed by amendment of this
Agreement):
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(i) WTP shall provide, maintain and staff a travel
fulfillment facility in Atlanta at Druid Hills ("Druid Hills Facility")
to provide the Services set forth in Exhibit A. MS will provide certain
software, hardware, equipment and services as set forth in Exhibit B.
MS will own the MS Travel toll-free number and all software and
equipment provided by MS at the Druid Hills Facility as described in
Exhibit B. WTP will install and maintain all of the software, hardware
and telecommunications equipment at the Druid Hills Facility except for
the software, hardware and equipment to be provided and maintained by
MS. It is understood that MS may request WTP to purchase on MS' behalf
software, telecommunications services or equipment which is the
responsibility of MS hereunder to provide. In such event, WTP shall
invoice MS in connection with the monthly statements provided to MS
hereunder and MS shall reimburse WTP for such purchases on the same
timetable as MS' payment of the other amounts owing pursuant to such
monthly statements.
(ii) WTP shall provide, maintain and staff a travel
fulfillment facility in Atlanta at Peachtree City ("Peachtree
Facility") to provide the Services (other than ARC ticketing) set forth
in Exhibit A when the Druid Hills Facility is unable to handle the
volume of calls being routed from MS Travel, due to high volume or loss
of function of the Druid Hills Facility for any reason. MS will provide
certain software, hardware, equipment and services as set forth in
Exhibit B, including appropriate telecommunications equipment to route
calls from the MS Travel toll-free number to WTP. MS will own the MS
Travel toll-free number and the software and equipment provided by MS
at the Peachtree Facility as described in Exhibit B. WTP will ensure
that the Peachtree Facility is able to provide the full level of
Services described in Exhibit A when necessary. WTP will install and
maintain all of the software, hardware and equipment at the Peachtree
Facility except for the software, hardware and equipment to be provided
and maintained by MS. It is understood that MS may request WTP to
purchase on MS' behalf software, telecommunications services or
equipment which is the responsibility of MS hereunder to provide. In
such event, WTP shall invoice MS in connection with the monthly
statements provided to MS hereunder and MS shall reimburse WTP for such
purchases on the same timetable as MS' payment of the other amounts
owing pursuant to such monthly statements.
(iii) It is understood that WTP will provide leasehold
improvements, telecommunication systems, furniture and fixtures, and
proprietary software (such as CoRRe(TM)) and, as between the parties,
this software and equipment will be owned by WTP.
(iv) WTP will maintain an Automatic Call Distribution
("ACD") system capable of providing the information identified in
Exhibit G to MS in a format designated by MS. If WTP changes its
current ACD system or adds facilities, WTP will ensure that any such
new ACD system is capable of providing the
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information set forth in Exhibit G. WTP shall provide MS with standard
specifications and documentation from its ACD system with respect to the
Services provided by WTP under this Agreement.
(h) WTP will ensure that adequate backup and disaster recovery
procedures, including but not limited to the Peachtree Facility, exist to enable
its compliance with the terms of this Agreement. If the Druid Hills facility
suffers loss of function for more than 24 hours, WTP shall immediately secure
from ARC permission to perform ARC ticketing at the Peachtree Facility using the
ARC and BSP numbers assigned to MS and to WTP "Doing Business As Microsoft," and
shall comply with all conditions or requirements imposed by ARC necessary to
obtain such permission. WTP acknowledges that time is of the essence in
fulfilling the provisions of this subsection 1(h).
(i) At MS' discretion, with reasonable advance notice, MS reserves
the right to make onsite visits to all sites where WTP provides the Services
under this Agreement. In connection with such visits, WTP will provide to MS, as
and when required by MS, access for a reasonable number of MS personnel to
office premises at the sites equipped with standard office equipment as
available to personnel of WTP in proximate offices, at no charge.
(j) WTP will ensure that all its employees and MS-permitted
contractors and subcontractors performing any Services hereunder agree to
undertake and successfully complete all training programs provided by MS with
respect to the Services as MS in its sole discretion deems necessary to prepare
WTP to provide the Services outlined in this Agreement. Training will be
conducted at a mutually agreed upon facility where MS shall provide
"train-the-trainer" training at no charge to WTP, except that all travel,
accommodation and related expenses for WTP employees and employees of
contractors or subcontractors shall be the responsibility of WTP, or such
contractors or subcontractors, respectively. WTP acknowledges and agrees that as
a result of MS providing "train-the-trainer" training, WTP shall be responsible
for internal and ongoing training of its personnel after receiving initial
"train-the-trainer" training. WTP will designate one (1) ongoing trainer. MS
agrees to provide the necessary training materials, for limited duplication,
upon request by WTP and following MS approval, to be used by WTP to provide
training as required under the terms of this Agreement.
(k) WTP shall physically isolate the Druid Hills Facility local
area network (LAN) used by WTP personnel in the provision of the Services under
this Agreement (the "MS Travel LAN") from other LANs maintained by WTP. WTP
shall restrict use of the MS Travel LAN solely to WTP personnel providing
Services under this Agreement or similar agreements between MS and WTP. WTP
agrees to notify MS promptly upon discovery of any breach of security in the MS
Travel LAN. The Peachtree Facility LAN will not be similarly isolated; however,
all ticketing functions for MS Travel at the Peachtree Facility will be
segregated from ticketing for WTP customers pursuant to ARC requirements. WTP
shall cause GTS to isolate and restrict the use of the LAN used by GTS personnel
in the provision of services in connection with MS Travel.
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(l) WTP shall provide MS with customized reports on the Services
provided by WTP under this Agreement as specified in Exhibit G, including
management reporting and ARC/IATA accounting.
(m) Nothing contained in this Agreement shall give WTP or its
agents or contractors, including GTS, the right to use, modify, reproduce,
distribute and/or publish any MS Travel customer records, including without
limitation reservations, service records or customer complaints resolved by WTP
during the fulfillment of WTP obligations hereunder, all of which shall be
considered Confidential Information under Section 10 of this Agreement.
2. Payment.
(a) WTP is fully responsible for all costs incurred in providing
the Services under this Agreement and all Exhibits hereto, independent of any
provision for reimbursement set forth herein, except for those items to be
provided by MS as detailed in Exhibit B.
(b) MS will pay WTP the amounts specified in Exhibit D subject to
adjustments, deductions or credits to such amounts as provided for in this
Agreement or any Exhibit hereto. WTP will invoice MS Amounts Payable on a
monthly basis, on or before the 15th day of the month following the month for
which activity is being invoiced, and shall include full documentation
supporting such invoice. Payment terms are net fifteen (15) days after receipt
of invoice. In the event taxes are required by any U.S. (state or federal) or
foreign government to be withheld on payments made hereunder by MS to WTP, MS
may deduct such taxes from the amount owed WTP and pay them to the appropriate
taxing authority. MS shall in turn promptly secure and deliver to WTP an
official receipt for any taxes withheld. MS will use reasonable efforts to
minimize such taxes to the extent permissible under applicable law.
(c) The parties shall undertake a quarterly review of the payment
provisions set forth in Exhibit D and the payment terms set forth in Section
2(b) during the initial six (6) months of the terms of this Agreement, to enable
flexibility in responding to marketplace conditions and to validate initial cost
estimates and cash flow requirements. The parties shall negotiate whether any
changes should be made to any provisions of this Agreement or its Exhibits as a
result of such review. In the event that, within forty-five (45) days after the
end of each such quarter, the parties are unable to agree whether any such
changes should be made, then either party, by written notice to the other, may
require that the matter be settled by binding arbitration, in accordance with
the rules of the American Arbitration Association, and subject to the additional
provisions of Exhibit M, which exhibit shall be negotiated and attached hereto
no later than October 31, 1996. Any decision rendered in any such arbitration
proceeding shall be final and binding on each of the parties hereto immediately
following the end of the quarter being reviewed. Nothing herein shall
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prevent the Parties from agreeing to participate in mediation prior to
submitting such matter to binding arbitration.
3. Ownership and License Grants.
(a) Use of Microsoft Name. This Agreement does not constitute a
trademark or service mark license. As of the Effective Date, MS shall be deemed
to have granted WTP a non-exclusive, personal, non-transferable, non-assignable,
royalty-free license to use the Microsoft(R) name solely in conjunction with
answering incoming calls from, making outbound callbacks to, and providing
travel documents to MS Travel customers as necessary for providing Services
pursuant to the terms of this Agreement. Such license grant shall remain in
effect while this Agreement is in good standing, but shall expire at the
expiration or earlier termination of this Agreement. Specific additional terms
and conditions pertaining to this license grant are set forth in Exhibit H,
which is incorporated herein by this reference. WTP shall at no time in any
forum identify itself as being an outsource provider for MS, except as approved
in writing by MS.
(b) Customer Information. Except as otherwise provided herein, WTP
acknowledges and agrees that the information acquired by WTP in connection with
the provision of Services pursuant to this Agreement, including without
limitation customer and prospect information, sales information, back office and
general ledger data, customer travel reservation and itinerary information, and
MS customer lists and updates (including customer names, addresses and telephone
numbers) (collectively, "Customer Information") shall be considered proprietary
information of MS, including all Customer Information stored using WTP's travel
management database reporting application ("TravelMan"), and all right, title
and interest in the Customer Information is owned by MS. WTP shall use such
Customer Information only as necessary to perform the Services in accordance
with this Agreement and shall maintain such Customer Information in strict
confidence in accordance with the provisions of Section 10 hereof. Upon request
from MS, WTP shall provide MS with any or all Customer Information in WTP's
possession. Upon termination or expiration of this Agreement, WTP shall within
ten (10) days thereafter provide MS with all documents and materials containing
Customer Information (including data stored or maintained in electronic format,
whether or not created or stored using TravelMan), together with all other
materials and property of MS, which are in its possession or under its control.
(c) Custom Tools. At the sole discretion of MS, MS may grant WTP
a non-exclusive, personal, non-transferable, non-assignable, royalty-free
license to access and use certain software tools ("Expedia User Management
Tools") developed or to be developed by MS and to be identified from time to
time during the term of this Agreement solely for the purpose of assisting WTP
in providing the Services to MS customers under this Agreement. Upon the
expiration or termination of this Agreement, WTP's license to use the Expedia
User Management Tools will automatically terminate.
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(d) MS Intellectual Property Rights. MS owns all right, title and
interest in and to any software or other intellectual property it provides to
WTP during the term of this Agreement, including without limitation the items
listed on Exhibit B, any and all Expedia User Management Tools, and training
materials. All software so provided shall be used by WTP in accordance with the
terms of the End User License Agreement ("EULA") accompanying the software,
however, that notwithstanding any provision in a EULA to the contrary, WTP may
not transfer any such software so provided.
(e) WTP Tools. Notwithstanding the foregoing, the parties hereby
acknowledge and agree that, as between the parties, WTP shall be the owner of
all software tools developed by WTP (or licensed by WTP in the case of CoRRe(TM)
and TravelMan), as well as methods and techniques of doing business, including
patents, trade secrets and other proprietary rights associated therewith
(collectively, "WTP Tools"), during the term of this Agreement for use in
providing the Services provided that WTP notifies MS of the existence of the
same and also that MS agrees with WTP's assertion in respect thereof (which
agreement will not be unreasonably withheld or delayed). WTP Tools include, but
are not limited to, WTP's mid-office quality control software (CoRRe(TM)). WTP
will customize, or have customized, CoRRe(TM) on a non-exclusive basis for
utilization by both Druid Hills Facility and Peachtree Facility for quality
control and other electronic travel distribution needs. This proprietary
software is being paid for, and licensed by, OFS, from WTP's related entity,
Travel Technologies Group, L.P. ("TTG"). Upon termination or expiration of this
Agreement, at MS' option and upon, and in full consideration of, payment by MS
to WTP of the total amount paid by OFS to TTG pursuant to the End User Software
License Agreement between OFS and TTG attached hereto as Exhibit L (exclusive of
monthly usage fees and in no event exceeding $[*]) (in the event MS
exercises option (i)(A) following) or agreement by MS to pay TTG the license fee
and maintenance fee (in the event MS exercises option (i)(B) following), WTP
agrees to (i) either, at MS' option, (A) cause OFS to assign to MS for the sole
use of MS Travel such End User Software License Agreement with regard to CoRRe,
and its enhancements, modifications, improvements and customizations for no
additional payment by MS to either OFS or TTG except for the complete assumption
of all on-going obligations to TTG, including without limitation on-going
payment obligations, under such License Agreement (it being understood that such
on-going payment obligations to be assumed shall not exceed the current payment
structure as set forth on Exhibit L attached hereto, and that the $[*] per
reservation monthly usage fees shall be subject to renegotiation at the time of
such assignment) or (B) cause TTG to issue to MS for the sole use of MS Travel a
worldwide license to the object code of CoRRe and its enhancements,
modifications, improvements and customizations with a fair market value license
fee and with a fixed monthly maintenance fee which on an annualized basis shall
not exceed fifteen percent (15%) of the license fee; (ii) assign to MS WTP's
license agreement for TravelMan for no additional payment by MS to TravelMan's
licensor except for the complete assumption of all on-going obligations under
the existing license agreement; and (iii) license to MS on a non-exclusive basis
all of the other WTP Tools, all in order to permit MS to provide uninterrupted
service to its customers. WTP agrees that it will ensure that OFS does not amend
Section 2.2b of the End User Software License Agreement in any way that will
lessen MS' rights to assignment of such agreements or increase the fees that
will be owed as a result thereby; however WTP agrees to cause OFS
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to review the monthly usage fees in the End User Software License Agreement with
TTG at the time of any assignment and to assist MS in the negotiation of lower
fees if commercially reasonable at that time given the experience in using CoRRe
during the term of this Agreement. WTP also agrees that it will, for the
duration of this Agreement, continue to own or control, directly or indirectly,
TTG and OFS; provided, however, that in the event that WTP decides to divest TTG
and/or OFS, it shall require the purchaser of any of such entities to assume the
obligations imposed on WTP hereunder with respect to the maintenance and
assignment of the End User Software License Agreement and/or the license of the
CoRRe technology.
(f) MS Products. MS will provide WTP at no charge with copies of
the MS software products as described in Exhibit B ("MS Products"). Effective
upon the delivery of the MS Products to WTP, MS shall be deemed to have granted
to WTP a non-exclusive, personal, non-transferable, non-assignable, royalty-free
license to use the MS Products at the Druid Hills and Peachtree Facilities under
the terms of the EULA accompanying each of the Products for the sole purpose of
providing Services exclusively to MS customers as provided for under the terms
of this Agreement. Notwithstanding the terms of the EULAs accompanying the MS
Products, WTP shall be entitled to reproduce a number of copies of the MS
Products (including all related documentation) as set forth in Exhibit B. Upon
the expiration or termination of this Agreement, WTP's license to use and
reproduce such MS Products will automatically terminate, and WTP shall within
ten (10) days thereafter either (i) return all copies of the MS Products
including all related documentations licensed to WTP pursuant to this Agreement
in its possession to MS, (ii) provide written certification to MS signed by an
authorized representative of WTP that WTP has destroyed all copies of the
Products (including all related documentation) licensed to WTP pursuant to this
Agreement in its possession, or (iii) if MS has offered to continue the license
of such MS Products to WTP, license such MS Products at their then-current fair
market value.
4. Warranties
(a) WTP warrants that:
(i) It possesses all necessary authority to enter into
this Agreement, and that by so doing it does not violate any other
agreements to which it is a party; and
(ii) The Services will be performed in a professional
manner and shall conform in all material respects with the service
requirements set forth in this Agreement including, without limitation,
those set forth in Exhibits A and C. WTP shall not knowingly or
negligently engage in hidden city ticketing, beyond point ticketing
cross-border ticketing and speculative or abusive bookings or other
violations of any airlines' Conditions of Carriage, tariffs and other
rules and regulations; and
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(iii) The Services will be performed by (i) employees of
WTP acting within the scope of their employment who have signed
confidentiality agreements with WTP (with appropriate acknowledgments
of confidentiality) substantially in the form attached as Exhibit K,
or (ii) by GTS under written contractual obligations to WTP pursuant to
Section 11 below, through employees of GTS acting within the scope of
their employment who have signed confidentiality agreements with GTS
(with appropriate acknowledgments of confidentiality) substantially in
the form attached as Exhibit K; and
(iv) In providing Services to MS Travel customers and any
other persons or entities, WTP shall make no representations nor
undertake any obligations on behalf of MS concerning the Services
and/or any other MS products or services beyond those expressly made or
undertaken by MS Travel and communicated to MS Travel customers on the
MS Travel web site. WTP, including all of WTP's employees, temporary
employees and contractor GTS pursuant to Section 11 below, shall
conform to all applicable laws and government rules and regulations.
WTP assumes all responsibility for providing any training that may be
required to ensure compliance with such legal requirements. WTP shall
offer to MS Travel customers only those Services authorized by this
Agreement, advising customers requesting other services that MS Travel
does not provide such services, and then documenting and advising MS of
all such requests; and
(v) Any and all software and materials WTP publishes or
uses in providing the Services under this Agreement do not and will not
infringe any intellectual property rights owned by MS or any other
person or entity including, but not limited to, any copyright, patent,
trademark or trade secret; and
(vi) Except as otherwise provided in this Agreement, WTP
will not reproduce, sell, publish, or in any manner commercially
exploit the Microsoft(R) name or any information or derivatives of
information acquired in connection with its provision of Services or
allow such reproduction, sale, publication or exploitation by any
employee or person retained for the purpose of providing such services
except as agreed to in writing by MS; and
(vii) Prior to the commencement of the work to be performed
hereunder and throughout the entire performance by WTP, WTP shall
procure and maintain insurance adequate to cover any and all liability
which WTP may incur as a result of the performance of work included in
this Agreement. Such insurance shall be in a form and with insurers
acceptable to MS, and shall comply with the following minimum
requirements:
(A) Commercial General Liability insurance of
the Occurrence Form, with policy limits of not less than Five
Million Dollars ($5,000,000.00) combined single limit each
occurrence for
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Bodily Injury and Property Damage combined, and Five Million
Dollars ($5,000,000) Personal and Advertising Injury Limit.
(B) Professional Liability And Errors &
Omissions Liability Insurance with policy limits of not less
than Five Million Dollars ($5,000,000.00) each claim with a
deductible of not more than $25,000.00. Such insurance shall
include coverage for infringement of proprietary rights of any
third party, including without limitation copyright, trade
secret and trademark infringement as related to WTPs
performance under this Agreement. Throughout the term of this
Agreement, the Professional Liability And Errors & Omissions
Liability Insurance retroactive coverage date will be no later
than the Effective Date of this Agreement. Upon expiration or
termination of this Agreement, WTP will maintain an extended
reporting period providing that claims first made and reported
to the insurance company within one year after the end of this
Agreement will deemed to have been made during the policy
period.
A copy of the certificate of insurance shall be included as Exhibit J.
Failure by WTP to furnish certificates of insurance or failure by MS to request
same shall not constitute a waiver by MS of any of the insurance requirements
set forth herein. WTP shall notify MS in writing at least thirty (30) days
advance if WTP's insurance coverage is to be canceled or materially altered so
as not to comply with the requirements of this section.
In the event of such failure on the part of WTP to provide the
certificates as requested herein, and in the event of liability or expense
incurred by MS as a result of such failure by WTP, WTP hereby agrees to
indemnify MS for all liability and expense (including reasonable attorneys' fees
and expenses associated with establishing the right to indemnity) incurred by MS
as a result of such failure by WTP; and
(viii) Individuals it places in contact with MS Travel Customer
Information or MS Confidential Information shall not have been convicted of a
felony as an adult or released from prison within the last seven (7) years.
(ix) TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, WTP AND ITS
SUPPLIERS DISCLAIM ALL OTHER WARRANTIES AND CONDITIONS, EXPRESS, IMPLIED,
STATUTORY OR OTHERWISE, WITH RESPECT TO THE PRODUCTS AND SERVICES PROVIDED
PURSUANT TO THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED
WARRANTIES AND CONDITIONS OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
AND (EXCEPT AS SET FORTH IN SECTION 7(c)) NON-INFRINGEMENT.
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(b) MS warrants that:
(i) Any MS Products supplied, including but not limited
to those described in Exhibit B, and any services performed by MS
pursuant to this Agreement will, respectively, conform substantially to
the relevant product documentation and be performed in a professional
manner.
(ii) The Expedia User Management Tools do not and will not
so infringe any intellectual property rights owned by any other person
or entity including, but not limited to, any copyright, patent,
trademark or trade secret to the extent that WTP will be required to
refrain from using such toots (and MS will not be able to provide
substitute technology which reasonably provides the same or similar
functionality) with the overall result that WTP will not be able to
reasonably perform the Services as intended herein; and
(iii) TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, MS
AND ITS SUPPLIERS DISCLAIM ALL OTHER WARRANTIES AND CONDITIONS,
EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT TO THE PRODUCTS
AND SERVICES PROVIDED PURSUANT TO THIS AGREEMENT, INCLUDING, BUT NOT
LIMITED TO, THE IMPLIED WARRANTIES AND CONDITIONS OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, AND (EXCEPT AS SET FORTH IN SECTION
7(d)) NON-INFRINGEMENT.
5. Personnel.
(a) WTP personnel assigned to MS Travel shall be employees of WTP
and not employees of MS and shall remain under the direction and control of WTP,
subject to ARC or other regulatory requirements. These WTP personnel shall
receive such salaries, compensation and benefits as WTP shall determine. WTP
agrees to be responsible for all of its federal and state taxes, withholding,
social security, insurance and other benefits, and all salaries, benefits and
other costs of such WTP personnel.
(b) Notwithstanding the foregoing, WTP personnel assigned to MS
Travel shall adhere to MS quality control standards as set forth in Exhibit C
and be qualified to run an ARC-approved travel agency office. An ARC Qualifier
must be present at the Druid Hills Facility to provide Services for MS Travel.
(c) MS shall have the option to participate in any decisions
regarding any assignment of WTP personnel to MS Travel. WTP acknowledges MS'
right to require immediate removal and prompt replacement of any WTP or GTS
employee, or agent performing WTP's obligations under this Agreement who engages
in any conduct prohibited by law or inconsistent with MS policy as set forth in
Exhibit E.
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6. Non-Competition and Non-Solicitation.
(a) WTP personnel shall not target or solicit MS Travel customers
for additional travel business beyond provision of the Services governed by this
Agreement, nor shall WTP use information gained in the provision of the Services
to compete with MS Travel in providing travel services.
(b) Notwithstanding the preceding section 6(a), WTP shall not be
prohibited from providing services to MS Travel customers who contact WTP
independently (other than in conjunction with MS Travel), or whose names appear
on mailing lists developed independently of MS Travel or who were customers of
WTP prior to the Effective Date.
(c) MS shall not solicit WTP personnel assigned to MS Travel to
work for MS without prior notice to senior management of WTP.
7. Indemnification.
(a) WTP General Indemnification. WTP agrees to indemnify, defend,
and hold MS harmless from and against any and all claims, actions, demands, and
costs, including reasonable attorneys' fees and expenses arising out of or in
connection with third party claims as a result of the performance of the
Services provided under this Agreement by WTP or its employees, independent
contractors or subcontractors and agents, including without limitation GTS ("WTP
Indemnified Claims"). Acts for which WTP shall indemnify MS include, but shall
not be limited to, representations or obligations undertaken on behalf of MS
concerning the Services to customers which exceed the scope of the Services as
set forth in this Agreement, any act or omission in violation of any
applicable government statutes, laws, rules and regulations or industry rules
and regulations; or violation of any airline's Conditions of Carriage, tariffs,
or other rules. Omissions for which WTP shall indemnify MS include, but shall
not be limited to, failure to report reservation information accurately and
promptly to ARC. MS reserves the right to control the defense of any WTP
indemnified Claim and to conduct all proceedings or negotiations in connection
therewith, and if it so undertakes, all other proceedings or negotiations to
settle or defend any such WTP Indemnified Claim shall be at MS' expense,
provided that (i) WTP shall have the right to approve of any settlement of any
such WTP Indemnified Claim; such approval shall not be unreasonably withheld,
and (ii) MS shall be responsible for payment of all attorneys' fees incurred by
MS after it his exercised its rights to control the defense. WTP shall pay any
and all expenses and other reasonable costs incurred by MS arising in connection
with its obligations under this Section 7(a) promptly upon demand.
(b) MS General Indemnification. MS agrees to indemnify, defend and
hold WTP harmless from and against any and all claims. actions, demands,
liabilities, and costs, including reasonable attorneys' fees and expenses,
arising out of or in connection with third party claims as a result of (i)
the business of MS Travel unless arising out of or in connection with
circumstances for which WTP is indemnifying MS pursuant to Section.
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7(a) above; and (ii) any injuries to the person or property of any MS Travel
customer while traveling on an MS Travel itinerary unless arising out of or in
connection with the negligence of WTP ("MS Indemnified Claim"). WTP reserves the
right to control the defense of any MS Indemnified Claim and to conduct all
proceedings or negotiations in connection therewith, and, if it so undertakes,
all other proceedings or negotiations to settle or defend any such MS
Indemnified Claim shall be at WTP's expense, provided that (i) MS shall have the
right to approve of any settlement of any such MS Indemnified Claim, such
approval shall not be unreasonably withheld, and (ii) WTP shall be responsible
for payment of all attorneys' fees incurred by WTP after it has exercised its
right to control the defense. MS shall pay any and all expenses and other costs
incurred by WTP arising in connection with its obligations under this Section
7(b) promptly upon demand.
(c) WTP Intellectual Property Indemnification.
(i) Indemnified Claims. WTP agrees to defend MS against,
and pay the amount of any adverse final judgment or settlement to which
WTP consents resulting from, any third party claim(s) ("Indemnified IP
Claims") that any WTP Tools or any portion thereof, or WTP's provision
of any services pursuant to this Agreement, infringes any third party
patent, copyright, trademark or trade secret enforceable under the laws
of the United States; provided that WTP is notified promptly in writing
of the Indemnified IP Claim and has sole control over its defense and
settlement, and MS provides reasonable assistance in the defense and/or
settlement of such claim.
(ii) Exclusions. Notwithstanding Section 7(c)(i) above,
WTP shall have no liability for any intellectual property infringement
claim (including an Indemnified IP Claim) that arises as a result of
(i) MS' use of the WTP Tools after a reasonable time from WTP's written
notice that MS should cease use of the WTP Tools due to such a claim,
provided WTP has delivered a non-infringing substitute that complies
with applicable specifications and is capable of being deployed by MS;
or (ii) MS' combination of the WTP Tools with a non-WTP product,
program or data; or (iii) MS' adaptation or modification of any WTP
Tool. For all claims described in clauses (i)-(iii) above of this
Section 7(c)(ii), MS agrees to defend WTP against, and pay the amount
of any adverse final judgment or settlement to which MS consents
resulting from, such claims, provided that MS is notified promptly in
writing of such a claim and MS has sole control over its defense or
settlement, and WTP provides reasonable assistance in the defense
and/or settlement of such claim.
(iii) WTP' Rights in the Event of Intellectual Property
Infringement Claim. In the event WTP receives information concerning an
intellectual property infringement claim (including and Indemnified IP
Claim) related to the WTP Tools, WTP may at its expense, without
obligation to do so, either (i) procure for MS the right to continue to
use the alleged infringing release of the WTP Tools, or (ii) replace or
modify the release of the WTP Tools to make it non-infringing, and in
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which case, MS shall thereupon cease use of the alleged infringing
release of the WTP Tools.
(d) MS Intellectual Property Indemnification.
(i) Indemnified Claims. MS agrees to defend WTP against,
and pay the amount of any adverse final judgment or settlement to which
MS consents resulting from, any third party claim(s) ("Indemnified IP
Claims") that the MS Tools or any portion thereof, or MS' provision of
any services pursuant to this Agreement, infringe any third party
patent, copyright, trademark or trade secret enforceable under the laws
of the United States; provided that MS is notified promptly in writing
of the Indemnified IP Claim and has sole control over its defense and
settlement, and WTP provides reasonable assistance in the defense
and/or settlement of such claim.
(ii) Exclusions. Notwithstanding Section 7(d)(i) above, MS
shall have no liability for any intellectual property infringement
claim (including an Indemnified IP Claim) that arises as a result of
(i) WTP's use of the MS Products or Expedia User Management Tools (the
"MS Tools") after a reasonable time from MS' written notice that WTP
should cease use of the MS Tools due to such a claim, provided MS has
delivered a non-infringing substitute that complies with applicable
specifications and is capable of being deployed by WTP; or (ii) WTP's
combination of an MS Tool with a non-MS product, program or data; or
(iii) WTP's adaptation or modification of any of the MS Tools. For all
claims described in clauses (i)-(iii) of this Section 7(d)(ii), WTP
agrees to defend MS against, and pay the amount of any adverse final
judgment or settlement to which WTP consents resulting from, such
claims, provided that WTP is notified promptly in writing of such a
claim and WTP has sole control over its defense or settlement, and MS
provides reasonable assistance in the defense and/or settlement of such
claim.
(iii) MS' Rights in the Event of Intellectual Property
Infringement Claim. In the event MS receives information concerning an
intellectual property infringement claim (including an Indemnified IP
Claim) related to the MS Tools, MS may at its expense, without
obligation to do so, either (i) procure for WTP the right to continue
to use the alleged infringing release of the MS Tools, or (ii) replace
or modify the MS Tools to make them non-infringing, and in which case,
WTP shall thereupon cease use of the alleged infringing release of the
MS Tools.
8. Term and Default.
(a) This Agreement shall commence as of the Effective Date, and
shall continue in force for a period of three (3) years thereafter unless
earlier terminated by either party as provided in this Agreement or Exhibits
hereto. This Agreement
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automatically shall be renewed for a further period of one (1) year, unless
either party has notified the other party in writing at least 180 days prior to
the third anniversary of the Effective Date of its intent not to renew, such
renewal to be subject to earlier termination as provided in this Agreement or
Exhibits hereto. Any renewal pursuant to this Section shall be on the same terms
and conditions as are contained in this Agreement.
(b) MS may, in its sole discretion, terminate this Agreement
without cause with 180 days' notice to WTP. In the event of such termination
solely for the convenience of MS, WTP shall be entitled to compensation in
accordance with Section 5 of Exhibit D with any reconciling payments to be
completed no later than sixty (60) days following such termination. The parties
agree that this amount is a fair and reasonable estimate of liquidated damages,
and is not intended as a penalty for termination.
(c) This Agreement may be terminated by either party in the event
the other party (the "Other Party" for the purposes of this subsection)
materially fails to perform or comply with any material provision of this
Agreement and fails to cure such non-performance or non-compliance within thirty
(30) days after receipt of notice thereof, assigns its rights or interest in the
Agreement in contravention of Section 14(f) or suspends performance of its
obligations as described in Section 14(i) or becomes insolvent or admits in
writing its inability to pay its debts as they become due or makes an assignment
for the benefit of creditors or if a petition under any bankruptcy act,
receivership statute or the like, as they now exist or as they may be amended,
is filed by the Other Party or by any third party or an application for a
receiver is made by anyone and such application is not resolved favorably to the
Other Party within sixty (60) days.
(d) This Agreement may be terminated by MS pursuant to the
provisions of Section 9.
(e) Sections 2, 3(b), 3(c), 3(d), 3(f), 4, 5, 6, 7, 8(e), 8(f),
8(g), 10, 11, 12, 13, and 14 of this Agreement shall survive termination for any
reason.
(f) Upon the expiration or earlier termination of this Agreement,
(i) WTP shall cooperate with MS to assist in the orderly transition of Services
to MS, or to any third party as MS may direct, in a professional manner, with no
disruption to customer service; and (ii) WTP shall remove all software and
equipment provided by MS and shall deliver all such software and equipment to
MS, including but not limited to those items detailed in Exhibit B, subject to
WTP's possible option to purchase set forth in Section 8(g)(i). Upon MS'
request, WTP shall provide "train the trainer" training to MS or a third party
or parties, with the cost of the WTP personnel providing the training to be paid
by MS.
(g) In the event of termination or expiration of this Agreement:
(i) MS, at its option, may make available to WTP all or
substantially all of the software, hardware and equipment provided by
MS at the Druid Hills Facility and Peachtree Facility as described in
Exhibit B for purchase (in the case
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of hardware and equipment) or license (in the case of software). In the
event MS offers such items for purchase or license, the price(s)
therefor shall be based upon their then-current fair market value.
(ii) WTP will make available to MS the leasehold
improvements, telecommunication systems, furniture and fixtures, and
proprietary software (such as CoRRe(TM) and other WTP Tools) set forth
in Section l(g)(iii) for purchase (in the case of equipment and other
tangible property) or license (in the case of the software). The
purchase price(s) for such items other than software shall be based
upon their then-current fair market value. The software shall be
licensed or assigned on the terms set forth in Section 3(e).
9. Default in Performance and Remedies. During the term of this Agreement:
(a) In the event WTP breaches the provisions of Section 10 or if
MS or WTP receives a notice of complaint from ARC as a result of WTP's acts or
omissions, such breach will justify termination for cause, and MS may terminate
this Agreement immediately with no further obligation to WTP.
(b) In the event WTP fails to meet the performance requirements as
specified in this Agreement and in Exhibit C (the "Service Process
Requirements"), MS shall give WTP notice of such non-compliance and WTP shall
have 24 hours after receipt of such notice to correct such non-compliance.
(c) In the event there is a continued failure by WTP to meet the
Service Process Requirements, and MS has not terminated WTP for its first
failure to meet these requirements, WTP shall, at MS' request, provide a
corrective action plan within forty-eight (48) hours, including training and
staffing plans, to MS for approval. MS shall review and approve such corrective
action plan or provide required changes to WTP within five (5) business days
from its receipt of such plan.
(d) In the event the Service Process Requirements are not met by
WTP within the time period set forth in any corrective action plan, as approved
or changed by MS, MS shall have the option to require WTP to pay MS an amount
equaling 15% of average daily gross revenues earned by WTP pursuant to this
Agreement (such average to be based upon the period commencing on the later to
occur of the launch of MS Travel or the Effective Date and ending as of the date
of MS' exercise of its option to collect liquidated damages pursuant to this
Section 9(d), as liquidated damages and not as penalty, for each additional day
WTP fails to meet such Service Process Requirements. Such accrual of liquidated
damages shall terminate upon the termination or expiration of this Agreement;
however, the obligation to pay such accrued liquidated damages shall continue
until paid.
(e) In the event the Service Process Requirements are not met by
WTP within the time period set forth in any corrective action plan, as approved
or changed by MS, MS
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shall have the right to terminate this Agreement for cause, with no further
obligation to WTP under this Agreement.
(f) Any liquidated damages described in this section shall be
deducted from amounts due to WTP under Section 2 and Exhibit D. WTP shall pay
directly to MS any liquidated damages in excess of such amounts due.
(g) The Service Process Requirements set forth in Exhibit C will
be reviewed at the end of the first three months after the launch of MS Travel
and the parties shall consider appropriate revisions thereto.
(h) All remedies set forth in this section shall be in addition to
and not in lieu of any other remedies available to MS under this Agreement at
law or in equity.
10. Confidentiality and Publicity.
(a) MS and WTP agree that the terms of the Non-Disclosure Agreement
executed by the parties, dated and attached hereto as Exhibit I shall be deemed
incorporated herein, and further, that all terms and conditions of this
Agreement shall be deemed Confidential Information as defined in such
Non-Disclosure Agreement.
(b) The parties acknowledge that monetary damages may not be a
sufficient remedy for unauthorized disclosure or use of Confidential Information
and that the parties may seek, without waiving any other rights or remedies,
such injunctive or equitable relief as may be deemed proper by a court of
competent jurisdiction.
(c) WTP shall not issue any press release or advertising
concerning WTP's relationship with MS and the Services hereunder, without MS'
written pre-approval.
11. Services in Canada. WTP will subcontract with GTS to provide
Services in Canada.
(a) The contract between WTP and GTS will require GTS to perform a
subset of the Services described in Exhibit A sufficient to enable WTP to offer
all Services described in Exhibit A, including without limitation the provision
to WTP Of sufficient reports to support WTP's reporting obligations under
Section 1(1) of this Agreement.
(b) MS will compensate WTP for the Services provided in Canada
using the event-based fee schedule in Exhibit D. WTP will be solely responsible
for any payments or other compensation provided to GTS for the Services provided
by GTS to support MS Travel in Canada.
(c) The contract between WTP and GTS shall require GTS to comply
with obligations substantially similar to those imposed on WTP by Section 10
above; further, any such agreement shall expressly provide that MS is a third
party beneficiary of such
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agreement with rights to enforce such agreement. Finally, WTP warrants and
represents that it will ensure that GTS will perform any services in accordance
with the service and performance requirements set forth this in this Agreement
including, without limitation, those set forth in all Exhibits attached hereto,
and abide by all other terms and conditions of this Agreement.
12. Notices and Requests. All notices, authorizations, and requests in
connection with this Agreement shall be deemed given on the day they are (i)
deposited in the mail, postage prepaid, certified or registered, return receipt
requested; or (ii) sent by air courier, charges prepaid, with a confirming
telefax; or (iii) transmitted, if transmitted by facsimile, and addressed as
follows:
Notices to WTP:
WORLDTRAVEL PARTNERS
1055 Lenox Park Blvd., Suite 400
Atlanta, GA 30319
ATTN Danny Hood
Phone: (404) 841-6600
Fax: (404) 814-2983
With a copy to: Demme Wiggim
Notices to MS:
MICROSOFT CORPORATION
One Microsoft Way
Redmond, WA 98052-6399
ATTN: Travel Product Unit Manager
Phone: (206) 882-8080
Fax: (206) 936-7329
With a copy to: Travel Operations Manager
With a copy to: Law & Corporate Affairs
or to such other address as the party to receive the notice or request so
designates by written notice to the other.
13. Audit. WTP shall keep all usual and proper records relating to its
compliance with the terms of this Agreement. MS reserves the right to, through
the use of a mutually agreed to independent auditor, audit WTP's systems and
records specifically related to this Agreement during the term of this Agreement
and for a period of three years
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thereafter, provided that such audit(s) shall be conducted during normal
business hours in such a manner as not to interfere unreasonably with the
operations of WTP. Audit expenses shall be paid by MS unless material
discrepancies are disclosed by the audit, in which case audit expenses shall be
paid by WTP. MS' audit rights referred to in this section shall be reasonable in
scope, but will be of an expansive scope if MS' audit reveals material
discrepancies.
14. General.
(a) This Agreement shall be construed and controlled by the laws
of the State of Washington, and WTP consents to jurisdiction and venue in the
state and federal courts sitting in the State of Washington. Process may be
saved on either party by US Mail, postage prepaid, certified or registered,
return receipt requested, or by such other method as is authorized by law.
(b) Neither this Agreement, nor any terms or conditions contained
herein, shall be construed as creating a partnership, joint venture, agency
relationship, employer/employee relationship or franchise.
(c) This Agreement, including all Exhibits attached hereto,
constitutes the entire agreement between the parties with respect to the subject
matter hereof and supersedes all prior and contemporaneous agreements or
communications with respect to the subject matter hereof, with the exception of
the Non-Disclosure Agreement between the parties referenced herein. This
Agreement shall not be modified except by a written agreement dated subsequent
to the date of this Agreement and signed on behalf of WTP and MS by their
respective duly authorized representatives.
(d) No waiver of any breach of any provision of this Agreement
shall constitute a waiver of any prior, concurrent, or subsequent breach of the
same or any other provisions hereof, and no waiver shall be effective unless
made in writing and signed by an authorized representative of the waiving party.
(e) If any provision of this Agreement shall be held by a court of
competent jurisdiction to be illegal, invalid, or unenforceable, the remaining
provisions shall remain in full force and effect.
(f) The rights and obligations hereunder shall be binding upon and
inure to the benefit of the successors and assigns of the parties hereto,
provided any rights or obligations hereunder shall not be assigned by either
party without the prior written consent of the other party, which consent shall
not be unreasonably withheld. Notwithstanding the foregoing, if WTP is
reorganized into another form of entity with the effect that the new entity owns
substantially all of the current assets and business of WTP and that the new
entity is controlled by the same person(s) as currently control WTP, this
Agreement may be assigned to such new entity without prior written consent of
MS.
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(g) In any suit or action to enforce any right or remedy under
this Agreement or to interpret any provision of this Agreement, the prevailing
party will be entitled to recover its costs, including reasonable attorney's
fees.
(h) The section headings herein are for the convenience of the
parties and shall not be deemed to supersede or modify any provisions.
(i) If either party is unable to perform under this Agreement due
to circumstances or causes beyond its control, and which could not by reasonable
diligence have been avoided, such party shall have the option, without
liability, of suspending performance of its obligations under this Agreement
for the duration of such contingency upon written notice to the other party.
However, either party may terminate this Agreement upon written notice to the
other party in the event that such other party has suspended performance of its
obligations under this Agreement for more than thirty (30) days.
(k) This Agreement does not constitute an offer by MS and shall
not be effective until signed by both parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
MICROSOFT CORPORATION WORLDTRAVEL PARTNERS, L.P.
One Microsoft Way 1055 Lenox Park Blvd., Suite 400
Redmond, WA 98052-6399 Atlanta, GA 30319
/s/ John Neilson /s/ Danny B. Hood
- ---------------------------- ------------------------------------
By By
John Neilson Danny B. Hood
- ---------------------------- ------------------------------------
Name (print) Name (print)
Vice President President - Corporate & Technology
- ---------------------------- ------------------------------------
Title Title
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EXHIBIT A - SERVICES
WTP will provide the following travel services (the "Services"):
<TABLE>
<CAPTION>
SERVICE DESCRIPTION
- ------- -----------
<S> <C>
1. Take call Answer incoming call from MS travel
customer who has made a reservation using
MS Travel but has not completed the
reservation, or from MS Travel customer in
need of en route travel assistance.
2. Complete reservation Obtain any additional information required
from MS Travel Customer, including any
necessary billing information; book travel
reservation using ARC and BSP numbers
assigned to MS or to WTP (including but not
limited to those numbers assigned to WTP
"Doing Business As Microsoft"); validate
reservation and obtain confirmation from
travel supplier.
3. Issue air travel tickets Issue ARC or BSP tickets for airline travel
purchased by MS Travel customer.
4. Distribute travel documents Prepare itinerary for MS Travel customer
showing all travel reservations and
purchases; distribute and deliver to
customer with any tickets issued via
carrier pursuant to Exhibit C, Section 3.
5. Assist traveler Make any necessary changes to reservation;
facilitate exchanges, refunds, rebookings,
and cancellations in the event of travel
interruption for any reason.
6. Perform ARC/IATA Accounting Report to ARC and/or IATA weekly (or on a
more frequent basis if required or
permitted by ARC/IATA) all ARC/IATA
transactions to enable payment of
commissions to MS; provide copies to MS.
7. Invoice deferred payment travel Cooperate with DESIGNATED CRS(S) to
suppliers (non-air) prepare invoices on behalf of MS to car
rental companies, hotels, and any other
travel suppliers who are paid directly by MS
Travel customer at time of travel, using the
MS-negotiated commission/event fee.
8. Collect payments from deferred Operate a lockbox for receipt of
payment travel suppliers commissions/transaction fees from deferred
payment travel suppliers.
9. Reconcile deferred payment Reconcile commissions/transaction fees
commissions/transaction fees received from deferred payment travel
suppliers with reservation records.
10. Account for WTP-assigned MS Travel Account for MS Travel reservations booked
commissions using WTP ARC or BSP numbers; include
commissions/transaction fees so earned in
amounts deposited daily to the MS bank
account.
11. Account for international travel Account for international or other "split
ticketing" transactions from MS Travel
customers referred to WTP outside the U.S.
domestic airline GDS systems; include 60%
of commissions so earned in amounts
deposited daily to the MS bank account.
12. Remit commissions/transaction fees to Deposit daily the commissions/transaction
MS fees earned for MS Travel reservations,
including the MS portion of international
travel reservations, into the MS bank
account.
13. Perform reservation quality control Utilize CoRRe(TM) and/or other quality
control systems to maintain reservation
quality standards pursuant to Exhibit C, to
obtain seat assignments, and to provide
international travel immunization and visa
requirements; provide manual quality
control at time of ticketing for manual
reservations.
14. Provide Services in Canada Contract with GTS to provide travel
services in Canada.
15. Provide full accounting Prepare and submit reports to MS pursuant
to Exhibit G.
</TABLE>
<PAGE> 22
EXHIBIT B - MS DELIVERABLES
1. MS will provide the following equipment to be used by WTP for the sole
purpose of providing the Services under this Agreement:
(a) Thirteen (13) PC workstations to be used at Druid Hills Facility;
(b) Two (2) network servers, one each for Druid Hills Facility and
Peachtree City Facility.
(c) Telecommunications equipment sufficient to provide connectivity
to Redmond from each Facility for access to Expedia User
Management Tools; and
(d) Four (4) GB Server workstations with mirrored drives for
TravelMan.
2. MS will provide the following software products to be used by WTP for the
sole purpose of providing the Services under this Agreement:
(a) Two (2) complete CD-format packages of Microsoft Windows '95, one
for each Facility;
(b) Thirty-five (35) licenses for Windows '95, to be distributed
between the two facilities;
(c) Microsoft Internet Browser for each workstation at each facility;
(d) Microsoft Mail Client for each workstation at each facility;
(e) Access and connection to Redmond to Expedia User Management Tools.
3. MS will provide the following services to assist WTP in providing the
Services under this Agreement:
(a) Installation and maintenance of all equipment and software
described in the preceding Sections 1 and 2 of this Exhibit B;
(b) Train-the-trainer training on each software product described
in Section 2 of this Exhibit B, and for Expedia User Management
Tools.
4. In addition to the equipment, software and services provided above, MS
will pay for the following items used by WTP for the sole purpose of
providing the Services under this Agreement:
(a) Paper consumables and U.S. Postal Service postage (WTP will
purchase directly and back-bill MS on the monthly invoice
submitted pursuant to Section 2 of this Agreement);
(b) Establishment and per-minute charges for the toll-free telephone
number used by MS Travel customers to reach WTP;
(c) Overnight and expedited delivery of travel documents to MS Travel
customers (MS will provide airbills to be used by WTP);
(d) QuikTix Services or similar services, provided that WTP shall
provide all back-office accounting and phone and e-mail customer
support;
(e) Credit card clearing services;
(f) Establishment and maintenance of the lockbox and bank account to
be used by WTP as described in Exhibit A.
Additional equipment and software products to be provided MS will be mutually
agreed upon as necessary to handle volume growth.
<PAGE> 23
EXHIBIT C - SERVICE PROCESS REQUIREMENTS
WTP will provide sufficient staff to meet the following requirements and
standards:
1. With regard to MS Travel Customers
(a) [*]% of calls answered in [*] seconds or less;
(b) Call backs in [*] or less;
(c) [*]% of customers "very satisfied" with service, based on surveys
using measures to be agreed upon by the parties;
(d) Written report within [*] days when research is required;
(e) Formalized escalation procedures and call scripts to be agreed upon by
the parties.
2. With regard to MS
(a) Response to requests from MS Operations Manager within [*] hours;
(b) Sales volume and revenue amounts available on a [*] basis.
3. With regard to travel document delivery
(a) Same day as flight: ETDN or E-Ticket (where applicable)
(b) 1 day before flight: ETDN or E-Ticket (where applicable)
(c) 2 days before flight: ETDN, E-Ticket, overnight service (priority or 2
day if applicable)
(d) 3 days before flight: E-Ticket, overnight service/2 day
(e) 4 - 10 days before flight: E-Ticket, overnight service/2 day
(f) 10+ days before flight: E-Ticket, US Mail
These delivery schedules are subject to change pursuant to the procedures
manual to be prepared and maintained as set forth in Section 1(a) of the
Agreement.
<PAGE> 24
EXHIBIT D - PAYMENTS
1. COMPONENTS OF WTP COMPENSATION: MS will compensate WTP for providing the
Services, including those set forth in Exhibit A based on the following
components: (a) Retail Event Fees; (b) One Time Implementation Fee; and (c)
Fixed Cost Protection Amounts. Each of these components is subject to all
conditions and restrictions as set forth in this Agreement and in this
Exhibit D.
2. DEFINITIONS
(a) "TA/CSR" means a WTP travel agent or customer service representative.
(b) "CRS" means a commercial computer reservation service, such as
Worldspan, Sabre, or Apollo/Galileo.
(c) "NP" means a non participating CRS airline, hotel, or car rental
company.
(d) "Event" means any activity where WTP receives compensation from MS due
to back office processing and/or TA/CRS time.
(e) "Event Class" means a group of one or more Events that incur similar
back office processing costs.
(f) "Event Cost" means a back office processing cost for an Event.
(g) "TA/CSR Cost" means a back office cost for the number of minutes of
TA/CSR time necessary for any Event.
(h) "Management Fee" means an additional compensation payable at 25% of
the Event Costs and TA/CSR Costs. This Management Fee is already
included in the amounts listed in the Retail Event Matrix set forth in
Attachment 1.
(i) "Event Class Fee" means the Event Costs plus the applicable Management
Fee for an Event Class.
(j) "TA/CSR Fee" means the TA/CSR Costs plus the applicable Management
Fee.
(k) "Retail Event Fee" means the total compensation payable per Event,
which includes the Event Costs, TA/CSR Costs and the Management Fee.
(l) "Event Class A" means Events for Air Tickets, PNR rejected and
Traditional TA events (manual bookings made with CRS participating
suppliers).
(m) "Event Class B" means Events for airline: lost tickets, exchange
tickets, void tickets, refund tickets, and debit memos.
(n) "Event Class C" means Events for hotel and/or car reservations that
require documentation.
(o) "Event Class D" means an Event for a manual booking made for a NP
travel agent airline ticket.
(p) "Event Class E" means an Event for a manual booking made for a NP
hotel or car company, a NP Etix air ticket, or a NP ticket-less air
booking.
(q) "Event Class F" means an Event for travel supplier commission
collection.
(r) "Event Class G" means an Event for quality control of a hotel or car
reservation.
(s) "Event Class H" means an Event for the handling and responding of
customer service email inquiries through email.
<PAGE> 25
(t) "Air Tickets" means an Event for bookings for air travel process
electronically through the MS automated reservation system
without intervention of a TA/CSR. Costs cover printing, ticket
packaging, accounting and reporting ("back office functions").
(u) "PNR Rejected" means an Event for a rejection by the CRS after
the electronic booking has been made, due to airline schedule
change(s). The TA/CSR will correct the booking and communicate
the correction to the traveler via phone. Costs cover TA/CSR
minutes and all back office functions.
(v) "Lost Tickets" means an Event for processing a lost airline
ticket application, including TA/CSR minutes and all back office
functions.
(w) "Exchange Tickets" means an Event for processing a new air ticket
in exchange for a previously issued ticket. Costs cover TA/CSR
minutes and all back office functions.
(x) "Void Tickets" means an Event for voiding an air ticket which was
issued but not delivered. Costs cover TA/CSR minutes and all back
office functions.
(y) "Refund Tickets" means an Event for voiding an air ticket which
was issued and delivered. Costs cover TA/CSR minutes and all back
office functions.
(z) "Debit Memo" means an Event for processing an airline debit memo,
resulting from incorrect pricing from either the electronic
reservation system or the CRS. Costs include all back office
functions.
(aa) "Hotel Change/Cancel" means an Event for processing changes or
cancellations to hotel reservations. Costs include TA/CSR minutes
and all back office functions.
(bb) "Car Change/Cancel" means an Event for processing changes or
cancellations to car reservations. Costs include TA/CSR minutes
and all back office functions.
3. RETAIL EVENT FEES.
WTP will reduce the Retail Event Fees in the event that
event thresholds are reached during the term of this Agreement. For
purposes of this calculation, the first year will begin on the announced
launch date for the MS Travel Service and will include events accumulated
during "Alpha" and "Beta" test periods preceding such launch date. The
reduced Retail Event Fees will take effect at the date the threshold is
met. Retail Event Fees are set forth on Attachment 1.
Events and cost per event shall be added to Attachment 1 as agreed to
by the parties.
4. ONE-TIME IMPLEMENTATION FEE. In addition to the Retail Event Fees
payable pursuant to the preceding sections, MS will pay WTP a
one-time implementation fee of $[*], pursuant to Section 2(b)
upon execution of this Agreement. In the event the MS Travel Event
count volume reaches [*] Events during the first full year
following launch of the MS Travel Service (the Event count to also
include the Alpha and Beta test periods prior to such launch), WTP
will reimburse $[*] in the first month following the end of the
first full year following launch of the MS Travel Service.
<PAGE> 26
5. FIXED COST PROTECTION AMOUNTS. In the event the total Retail Event
Fees payable to WTP pursuant to the Retail Event Fee Matrix in Section
3 of this Exhibit D during each of the following Service Periods do
not exceed the Fixed Cost Protection Amounts corresponding to that
Service Period, MS will relinquish to WTP the difference by which the
Fixed Cost Protection Amounts as listed below exceed such fees
payable. Payment and reconciliation shall work as follows: "Alpha" and
"Beta" amounts will be paid by MS to WTP pursuant to Section 2(b) upon
execution of this Agreement. Should total Retail Event Fees exceed the
Fixed Cost Protection Amounts corresponding to that Service Period, MS
will deduct the Fixed Cost Protection Amount from the monthly
compensation payable to WTP after such event occurs pursuant to
Section 2 of this Agreement titled "Payments". In the event that total
Retail Event Fees do not exceed the Fixed Cost Protection Amounts
corresponding to that Service Period, WTP shall retain the portion of
the Fixed Cost Protection Amount which represents the difference
between the Fixed Cost Protection Amount and the total Retail Event
Fees for such Service Period, and shall reimburse MS the remainder of
the Fixed Cost Protection Amount (which remainder should equal the
total Retail Event Fees for such Service Period). Payments under
Section 5 of this Exhibit D are not affected by, nor do they affect,
compensation payable to WTP under this Exhibit D other than Retail
Event Fees, or any other payment described in this Agreement or its
Exhibits.
<TABLE>
<S> <C>
SERVICE PERIOD FIXED COST PROTECTION AMOUNT
"Alpha" Test as designated by MS $[*]
"Beta" Test as designated by MS $[*]
</TABLE>
6. CREDITS: Any payments due WTP pursuant to this Exhibit D may be
reduced by the amount of any payment then due MS from WTP as provided
in this Agreement or any Exhibit hereto.
<PAGE> 27
ATTACHMENT 1 TO EXHIBIT D - PAYMENTS
A. Event Class Fees and TA/CSR Fees to be used to calculate Retail Event Fees:
<TABLE>
<CAPTION>
TOTAL ANNUAL EVENTS
EVENT 0 [*] [*]
CLASS TO TO AND
[*] [*] HIGHER
<S> <C> <C> <C> <C>
Event Class Fee A $[*] $[*] $[*]
Event Class Fee B $[*] $[*] $[*]
Event Class Fee C $[*] $[*] $[*]
Event Class Fee D TBD* TBD* TBD*
Event Class Fee E TBD* TBD* TBD*
Event Class Fee F TBD* TBD* TBD*
Event Class Fee G $[*] $[*] $[*]
Event Class Fee H $[*] $[*] $[*]
TA/CSR Fee per minute $[*] $[*] $[*]
</TABLE>
*To be determined promptly after the expiration of six months after the
Effective Date.
B. Agreed-Upon Retail Event Fees for Specified Events. For each such
specified Event, the Retail Event Fees shall be as indicated irrespective of
actual back office processing costs or TA/CSR minutes for any such event.
RETAIL EVENT FEES
<TABLE>
<CAPTION>
TOTAL ANNUAL RETAIL EVENTS
EVENT EVENT TA/CSR 0 [*] [*]
CLASS MINUTES TO TO AND
[*] [*] HIGHER
<S> <C> <C> <C> <C> <C>
Air Tickets A [*] $[*] $[*] $[*]
PNR Rejected A [*] $[*] $[*] $[*]
Lost Tickets B [*] $[*] $[*] $[*]
Exchange Tickets B [*] $[*] $[*] $[*]
Void Tickets B [*] $[*] $[*] $[*]
Refund Tickets B [*] $[*] $[*] $[*]
Debit Memo B [*] $[*] $[*] $[*]
Hotel Change/Cancel C [*] $[*] $[*] $[*]
with document
Hotel Change/Cancel [*] $[*] $[*] $[*]
without document
Car Change/Cancel C [*] $[*] $[*} $[*]
with document
Car Change/Cancel [*] $[*] $[*] $[*]
without document
Hotel Reservation QC G [*] $[*] $[*] $[*]
Email Inquiries H [*] $[*] $[*] $[*]
</TABLE>
<PAGE> 28
EXHIBIT E - MS POLICIES
INTRODUCTION
The following code of conduct is not a contract. It is intended solely to
provide general guidance to vendors and their representatives to assist them in
functioning smoothly and efficiently while performing work for Microsoft.
Microsoft is committed to promoting a positive work environment. We expect our
vendors and their employees, agents, and subcontractors (collectively,
"representatives") to adhere to the same standards of conduct and behavior that
we expect form our own employees while you and your representatives are on
Microsoft property or doing business with Microsoft.
The information outlined below is important and should be read carefully. All
third party vendors will be required to educate and, when appropriate, train
their representatives to ensure they are aware of Microsoft's expectations
regarding their behavior and the consequences of any breaches of Microsoft
policies.
The policies summarized below are non-exhaustive, and there may be other conduct
not specifically listed that would be unacceptable. Microsoft expects that
vendors and their representatives will conduct themselves in a professional
manner at all times while on Microsoft property or while doing business with
Microsoft. Microsoft may require the immediate removal of any vendor
representative who behaves in a manner that is unlawful or inconsistent with any
Microsoft policy, or that is otherwise deemed harmful to Microsoft's business.
E-MAIL
Electronic mail, or e-mail, provides an easy-to-use, efficient means of
communicating. The following guidelines for preparing and sending e-mail are
designed to ensure that each vendor and its representatives use the e-mail
system in an appropriate manner.
E-mail may not be used as a forum for political, religious, or other debates, or
as a form of entertainment (for example, chain letters). Use of e-mail must be
limited to Microsoft business. All e-mail group aliases (a pre-defined group of
users) must be for Microsoft business.
To informally exchange information over the computer on a variety of topics, use
the Microsoft Bulletin Board system.
Microsoft e-mail names are confidential. Do not give e-mail names to anyone
outside of Microsoft. Do not share your password with anyone, attempt to gain
access to anyone else's e-mail account, or use another's e-mail account without
permission.
<PAGE> 29
Microsoft prohibits obscene, profane, or otherwise offensive material from being
broadcast across the Microsoft network.
NON-SOLICITATION POLICY
Microsoft wants to provide a work environment that allows all employees, and
all vendors and their representatives to complete their tasks with the least
amount of disruption. Accordingly, vendors, their representatives, and any
other non-Microsoft employees are not allowed (while on Microsoft property or
while using Microsoft owned equipment) to engage in solicitation or distribution
of literature. This policy prohibits soliciting or handing out materials for
any purpose.
WTP ACCESS TO INFORMATION AND PROPERTY
E-mail and its contents, as well as any other data stored on or transmitted by
Microsoft-owned equipment, is the property of Microsoft and may be accessed by
Microsoft at any time. Accordingly, the content of e-mail, voice mail, and
similar data should not be regarded as protected by any personal right of
privacy.
Additionally, in order to evaluate and improve customer service, Microsoft may
monitor, as necessary, the telephone calls of vendors and their representatives
who work in customer service positions.
Any facilities or equipment, including but not limited to offices, desks,
computers, electronic media, motor vehicles, or lockers used by vendors and
their representatives while on Microsoft property or while conducting Microsoft
related business, may be accessed by Microsoft as needed. Accordingly, you
should not consider protected by any personal right of privacy anything brought
onto or stored on Microsoft property stored on Microsoft equipment, or used
while working on Microsoft related business. Any Microsoft property used by
vendors and their representatives while performing Microsoft related business
remains the property of Microsoft.
GIFTS
Microsoft employees cannot accept payments of any amount or gifts or favors
valued in excess of $100 from persons or firms with which we have business
dealings, unless prior approval is obtained from a vice president or more
senior company official. Accordingly, you and your representatives should
refrain from giving to Microsoft employees gifts with a value of more than $100.
INSIDER TRADING
All Microsoft employees, agency temporaries, independent contractors, and
vendor representatives are considered "insiders" for the purposes of state or
federal securities
<PAGE> 30
laws that prohibit insider trading. As an insider, no vendor nor vendor
representative may buy or sell Microsoft's or another company's stock when in
possession of information about Microsoft or another company that is not
available to the investing public and that could influence an investor's
decision to buy stock.
New insider-trading laws carry stiff penalties, and the Securities and
Exchange Commission (SEC) has a mandate to enforce these laws aggressively.
Because of Microsoft's visibility and the volatility of our stock, Microsoft is
carefully watched by the SEC. The Company can be negatively affected by insider
trading and may terminate the services of, or refuse to do further business
with, anyone found to have engaged in illegal insider trading.
PROPER USE OF SOFTWARE
The unauthorized duplication and use of software and/or documentation by
Microsoft vendors or contractors is a violation of the copyright laws of the
United States and all the other countries in which Microsoft Corporation and
its subsidiaries maintain offices. This applies equally to Microsoft software,
whether a Beta or a final version, and to non-Microsoft software. Violation of
copyright laws can subject vendors and Microsoft to liability for significant
civil and criminal penalties. In addition, Microsoft devotes considerable
resources around the world to educate software users about their obligation to
use and manage software properly. In order for this effort to be effective and
benefit the software industry, Microsoft must lead by example.
The following practices, unless granted by a specific license, are among those
prohibited by this policy:
Making additional copies of third-party software products for your use on
other computers.
Making copies of software (third-party or Microsoft) for friends or
associates.
Distributing software over a network.
Providing copies of software to bulletin board services
Helpdesk maintains a list of software products that have been licensed to
Microsoft for network use or on a site-license basis. Each department that
acquires third-party software is responsible for retaining proof of proper
licensing of that software, such as end user license agreements, original disks
and manuals, and receipts. If you have questions regarding the terms of any
third-party license agreement, contact Law and Corporate Affairs.
Failure to follow this policy can result in action against the vendor and its
representatives, including termination of the vendor representative's services
and/or termination of Microsoft's contract with the vendor.
CONFIDENTIALITY
All information supplied by Microsoft to vendors and their representatives
should be regarded as confidential unless otherwise notified. Vendors and their
representatives are not authorized to speak to the press on Microsoft's behalf,
unless expressly authorized to do so by Microsoft's Public Relations group.
Prior to performing any work for Microsoft, all vendors will be required to
sign a contract that includes a nondisclosure agreement.
VENDOR STANDARDS
Microsoft expects its chosen vendors to operate in the best interest of the
company at all times. It is expected that all equipment, manpower & services
will be provided at the highest quality level while maintaining flexibility and
cost effectiveness.
It is the responsibility of the vendor to inform its Microsoft contact (or a
member of Microsoft management) when situations develop that require the vendor
to operate in direct violation of the guidelines set forth in this document.
Additionally, in the event a Microsoft employee has a relationship (spouse or
other family relation, friend, domestic partner, etc.) with a vendor that might
create a conflict of interest or the appearance of a conflict of interest,
Microsoft senior management approval is required prior to contracting for the
services of said vendor.
<PAGE> 31
EXHIBIT F - WTP DELIVERABLES
In addition to the Services to be provided by WTP pursuant to Section 1 and
Exhibit A of this Agreement, WTP shall provide the following:
1. Establishment and maintenance of CRS equipment and connectivity to the
Peachtree Facility;
2. IVR phone prompting and reporting (MS reserves the right to assume this
responsibility), including call overflow capabilities to auxiliary facilities;
3. General ledger/back office accounting system sufficient to provide reports
as set forth in Exhibit G and otherwise to provide the Services as set forth in
this Agreement;
4. A copy of travel agency management reporting software used to provide
reports specified in Exhibit G, to be provided to MS, as well as access to the
Travel Agency Management Reporting Software;
5. Storage of agent coupons, voids, ARC sales reports, agent sales summaries,
settlement authorization forms, and other necessary forms;
6. Risk assessment services for international travel;
7. Development of CoRRe to support email capability per TTG development
specifications.
8. CRS scripts to increase agent productivity.
9. Equipment to dynamically change IVR recording and equipment to play "hold"
advertising.
<PAGE> 32
EXHIBIT G - WTP REPORTING REQUIREMENTS
See Attached
<PAGE> 33
TELEPHONE PERFORMANCE REPORT
<TABLE>
<CAPTION>
DAY DATE [ * ] [ * ] [ * ] [ * ]
- --- ------ --------- ------------- -------- -------
<S> <C> <C> <C> <C> <C>
Friday........................................ 1-Nov 021 81 93 62
Saturday...................................... 2-Nov 113 99 94 68
- -------------------------------------------------------------------------------------------------------
Part Week..................................... 215 90 93.5 68
- -------------------------------------------------------------------------------------------------------
Sunday........................................ 3-Nov 94 145 91 62
Monday........................................ 4-Nov 87 305 81 94
Tuesday....................................... 5-Nov 146 146 87 69
Wednesday..................................... 6-Nov 413 161 89 71
Thursday...................................... 7-Nov 199 81 98 70
Friday........................................ 8-Nov 154 99 96 62
Saturday...................................... 9-Nov 216 145 93 61
- -------------------------------------------------------------------------------------------------------
1309 154.57 90.71 94
- -------------------------------------------------------------------------------------------------------
Sunday........................................ 10-Nov 102 305 82 62
Monday........................................ 11-Nov 99 146 89 94
Tuesday....................................... 12-Nov 172 161 88 69
Wednesday..................................... 13-Nov 87 81 99 71
Thursday...................................... 14-Nov 96 99 97 70
Friday........................................ 15-Nov 109 145 89 62
Saturday...................................... 16-Nov 201 305 82 61
- -------------------------------------------------------------------------------------------------------
866 177.43 89.43 71
- -------------------------------------------------------------------------------------------------------
Sunday........................................ 17-Nov 146 146 89 62
Monday........................................ 18-Nov 149 161 88 77
Tuesday....................................... 19-Nov 102 81 95 69
Wednesday..................................... 20-Nov 99 99 96 71
Thursday...................................... 21-Nov 121 145 89 70
Friday........................................ 22-Nov 201 305 86 62
Saturday...................................... 23-Nov 144 146 91 61
- ------------------------------------------------------------------------------------------------------
962 154.71 90.57 77
- ------------------------------------------------------------------------------------------------------
Sunday........................................ 24-Nov 179 161 88 62
Monday........................................ 26-Nov 205 81 99 94
Tuesday....................................... 27-Nov 184 99 98 69
Wednesday..................................... 28-Nov 99 145 89 71
Thursday...................................... 29-Nov 86 305 89 70
Friday........................................ 30-Nov 209 146 89 62
- ------------------------------------------------------------------------------------------------------
Part Week..................................... 962 156.17 91.80 94
- ------------------------------------------------------------------------------------------------------
Total Call.................................... 4314 85
</TABLE>
<PAGE> 34
WORLDTRAVEL PARTNERS
ONLINE FULFILLMENT SERVICES
<TABLE>
<CAPTION>
MICROSOFT CORPORATION MS SKU #......
One Microsoft Way Invoice Date: 9-Nov-96
Redmond WA 98052-6399 Billing Period Oct-96
Attn: Angela Schwartz
<S> <C> <C> <C> <C>
BACK OFFICE EVENTS QUANTITY SVC UNIT COST TOTAL
Transactions Ticketed ............................................. 4790 [ * ] [ * ]
Lost Ticket Applications .......................................... 12 [ * ] [ * ]
Exchange Transactions ............................................. 697 [ * ] [ * ]
Voids ............................................................. 190 [ * ] [ * ]
Refunds ........................................................... 210 [ * ] [ * ]
Debit Memos ....................................................... 3 [ * ] [ * ]
Non-Air Invoices .................................................. 1998 [ * ] [ * ]
Total Back Office Events 7900 [ * ]
ONLINE SUPPORT SERVICES OCCURRENCES TOTAL MINUTES SVC. UNIT COST TOTAL
Reservation Changes ............................................... 910 [ * ] [ * ] [ * ]
Void Requests ..................................................... 190 [ * ] [ * ] [ * ]
Lost Ticket Notifications.......................................... 12 [ * ] [ * ] [ * ]
Cancellation Requests ............................................. 210 [ * ] [ * ] [ * ]
Hotel/Car Change Requests.......................................... 61 [ * ] [ * ] [ * ]
New Air Bookings .................................................. 3 [ * ] [ * ] [ * ]
New Hotel/Car Bookings ............................................ 199 [ * ] [ * ] [ * ]
Misc. Support Requests* ........................................... 215 [ * ] [ * ] [ * ]
OSS Totals 1800 [ * ] [ * ]
FULFILLMENT MANAGEMENT FUNCTIONS................................... [ * ]
Worldwide Car/Hotel Billings Fee ..................................
SUMMARY: OCTOBER CHARGES .......................................... [ * ]
Previous Amount Due ............................................... [ * ]
Payments Received ................................................. [ * ]
TOTAL AMOUNT DUE .................................................. [ * ]
</TABLE>
Make Check Payable to: WorldTravel Partners
6 West Druid Hills Drive
Atlanta, GA 30329
(404) 728-8787
Attn: Accounting
<PAGE> 35
WORLDTRAVEL PARTNERS
ONLINE FULFILLMENT SERVICES
<TABLE>
<S> <C> <C>
MICROSOFT CORPORATION MS SKU #.......
One Microsoft Way Invoice Date: 9-Nov-96
Redmond WA 98052-6399 Billing Period Oct-96
Attn: Angela Schwartz
</TABLE>
<TABLE>
<CAPTION>
BACK OFFICE EVENTS QUANTITY SVC UNIT COST TOTAL
<S> <C> <C> <C>
Transactions Ticketed.............................. [ * ] $ [ * ] $ [ * ]
Lost Ticket Applications........................... [ * ] $ [ * ] $ [ * ]
Exchange Transactions.............................. [ * ] $ [ * ] $ [ * ]
Voids.............................................. [ * ] $ [ * ] $ [ * ]
Refunds............................................ [ * ] $ [ * ] $ [ * ]
Debit Memos........................................ [ * ] $ [ * ] $ [ * ]
Non-Air Invoices................................... [ * ] $ [ * ] $ [ * ]
Total Back Office Events........................... [ * ] [ * ]
</TABLE>
<TABLE>
<CAPTION>
ONLINE SUPPORT SERVICES OCCURRENCES TOTAL MINUTES SVC UNIT COST TOTAL
<S> <C> <C> <C> <C>
Reservation Changes.............. [ * ] [ * ] $ [ * ] $ [ * ]
Void Requests.................... [ * ] [ * ] $ [ * ] $ [ * ]
Lost Ticket Notifications........ [ * ] [ * ] $ [ * ] $ [ * ]
Cancellation Requests............ [ * ] [ * ] $ [ * ] $ [ * ]
Hotel/Car Change Requests........ [ * ] [ * ] $ [ * ] $ [ * ]
New Air Bookings................. [ * ] [ * ] $ [ * ] $ [ * ]
New Hotel/Car Bookings........... [ * ] [ * ] $ [ * ] $ [ * ]
Misc. Support Requests*.......... [ * ] [ * ] $ [ * ] $ [ * ]
OSS Totals....................... [ * ] $ [ * ] $ [ * ]
</TABLE>
<TABLE>
<S> <C>
WORLDWIDE CAR/HOTEL BILLINGS FEE........................................................ $ [ * ]
Summary: October Charges................................................................ $ [ * ]
Previous Amount Due..................................................................... $ [ * ]
Payments Received....................................................................... $ [ * ]
TOTAL AMOUNT DUE........................................................................ $ [ * ]
</TABLE>
<TABLE>
<S> <C>
Make Check Payable to: WorldTravel Partners
6 West Druid Hills Drive
Atlanta, GA 30329
(404) 728-8787
Attn: Accounting
</TABLE>
<PAGE> 36
WORLDTRAVEL PARTNERS
ONLINE FULFILLMENT SERVICES
TRANSACTION DETAIL REPORT
NOVEMBER 01 - NOVEMBER 30, 1996
BACK OFFICE EVENTS
TRANSACTIONS TICKETED
<TABLE>
<CAPTION>
USER EMAIL ADDRESS TRAVELER NAME ITINERARY NUMBER TRVL DATE TKT AMT. TAX COMM. AMT
USER ADDRESS ITINERARY NO. TKTS ISS. DATE A/L DELIVERY
CITY STATE ZIP
- --------------------- ----- ------------------- ----------------- -------- --------- ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
[email protected] Johnson/Pat/Dale 1000233888 1/12/97 $ 820.00 $ 62.00 $ 60.00
1000 99th St. ATL-ORD/MDW-ATL 2 11/1/96 DL X1
Madison VA 99999 Comments:
[email protected] McDonald/Ole 1000372915 11/10/96 $ 299.00 $ 28.15 $ 19.50
999 Harms Way SNA-SFO-SNA 1 11/4/96 US M
Sweetwater DE 11010 Comments:
[email protected] Cyrus/Carla 1000372909 11/30/96 $ 402.00 $36.00 $ 25.00
5550 Montford Hwy ORD-PDX-ORD 1 11/4/96 UA M
Dallas TX 29999 Comments:
</TABLE>
LOST TICKET APPLICATIONS
<TABLE>
<CAPTION>
USER EMAIL ADDRESS TRAVELER NAME ITINERARY NUMBER TRVL DATE TKT AMT LTA FEE REASON
USER ADDRESS ITINERARY NO. LTAS FILE DATE A/L REPLACEMENT TICKET ISSUED?
CITY STATE ZIP
- ----------------- ---- -------------- ----- ---------------- --------- --------- ------- --------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
[email protected] Cyrus/Carla 1000372909 11/30/96 $ 402.00 $ 60.00 Never Delivered
5550 Montford Hwy ORD-PDX-ORD 1 11/28/96 UA N
Dallas TX 29999 Comments: 60.00 Fee will be due from MS in 90 days
</TABLE>
<TABLE>
<CAPTION>
USER EMAIL ADDRESS TRAVELER NAME ITINERARY NUMBER TRVL DATE TKT AMT. TAX COMM. AMT
USER ADDRESS ITINERARY NO. TKTS ISS. DATE A/L DELIVERY
CITY STATE ZIP
- --------------------- ----- ------------------- ----------------- -------- --------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
[email protected] Johnson/Pat/Dale 1000645999 1/19/97 $ 215.00 $ 15.00 $ 60.00
1000 99th St. ATL-ORD/MDW-ATL 2 11/19/96 DL X1
Madison VA 99999 Comments:
</TABLE>
<PAGE> 37
WORLDTRAVEL PARTNERS
ONLINE FULFILLMENT SERVICES
TRANSACTION DETAIL REPORT
NOVEMBER 01-NOVEMBER 30, 1996
ONLINE SUPPORT SERVICES
<TABLE>
<CAPTION>
RESERVATION CHANGES
USER E-MAIL ADDRESS TRAVELER NAME ITINERARY NUMBER TRVL DATE
USER ADDRESS ITINERARY NO. TKTS ISS. DATE A/L DELIVERY
CITY STATE ZIP NEW TKT? MINUTES
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
[email protected] Johnson/Pat/Dale 1000233888 1/12/97 DL X1
1000 99th St. 99999 ATL-ORD/MDW-ATL 2 11/1/96
Madison VA Comments: Y 3.2
[email protected] McDonald/Ole 1000372915 11/10/96
999 Harms Way SNA-SFO-SNA 1 11/4/96 US M
Sweetwater DE 11010 Comments:
[email protected] Cyrus/Carla 1000372909 11/30/96
5550 Montford Hwy ORD-PDX-ORD 1 11/4/96 UA M
Dallas TX 29999 Comments:
<CAPTION>
MANUAL SCHEDULE CHANGES
USER E-MAIL ADDRESS TRAVELER NAME ITINERARY NUMBER TRVL DATE METHOD TYPE
USER ADDRESS ITINERARY NO. TKTS EVENT DATE A/L DELIVERY
CITY STATE ZIP NEW TKT? MINUTES
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
[email protected] Johnson/Pat/Dale 1000233888 1/12/97 Call UC
1000 99th St. ATL-ORD/MDW-ATL 2 11/16/96 DL X1
Madison VA 99999 Comments: Y 1.1
<CAPTION>
CANCELLATION REQUESTS
USER E-MAIL ADDRESS TRAVELER NAME ITINERARY NUMBER TRVL DATE REFUNDABLE?
USER ADDRESS ITINERARY NO. TKTS EVENT DATE A/L DELIVERY
CITY STATE ZIP MINUTES
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
[email protected] Cyrus/Carla 1000372909 11/30/96 N
5550 Montford Hwy ORD-PDX-ORD 1 11/19/96 UA M
Dallas TX 29999 Comments: 0.7
</TABLE>
Page 1
<PAGE> 38
XYZ Company
PERIOD 1: 10/1/94 TO 12/31/94 PERIOD 2: 1/1/94 TO 12/31/94
<TABLE>
<CAPTION>
AIRFARE ANALYSIS PERIOD 1 PERIOD 2
- ---------------- ----------- -----------
<S> <C> <C>
FARE FULL FARE $203,655.27 $800,424.22
SAVINGS TICKET PRICE $106,375.06 $449,718.26
AMOUNT SAVED $ 95,280.21 $350,705.96
% SAVED 46.79 43.82
FARE LOW FARE $ 97,237.10 $406,240.37
LOST FARE LOST $ 11,137.96 $ 43,477.89
% LOST 5.47 5.43
TOTAL # OF TICKETS 167 737
MILEAGE 268,752 1,047,590
AVERAGE TICKET PRICE 648.95 $ 610.20
FLIGHT DISTANCE 1,609 1,421
COST PER MILE $ 0.40 $ 0.43
REFUNDS # OF REFUNDS 21 77
REFUND AMOUNT $(10,539.80) $(42,235.22)
AVERAGE REFUND $ (501.90) $ (548.51)
<CAPTION>
SEGMENT ANALYSIS # OF SEGS AMOUNT
- ---------------- --------- ----------
<S> <C> <C>
ATLANTA, GA/RALEIGH/DURHA 37 $6,638.65
RALEIGH/DURHA/ATLANTA, GA 19 $2,353.65
CHARLOTTE, NC/RALEIGH/DURHA 19 $3,149.62
PHILADELPHIA/RALEIGH/DURHA 16 $3,645.27
CINCINNATI, OH/RALEIGH/DURHA 16 $3,243.63
<CAPTION>
CAR ANALYSIS PERIOD 1 PERIOD 2
- ------------ ---------- ----------
<S> <C> <C>
TOTAL CAR COST $7,475.89 $31,558.96
CARS RENTED 111 479
CAR RENTAL DAYS 187 829
AVERAGE CAR RATE $ 39.98 $ 38.07
RENTAL DAYS 1.68 1.73
<CAPTION>
TOP FIVE CAR CHAINS # OF DAYS AMOUNT
- ------------------- --------- ----------
<S> <C> <C>
BUDGET CAR 126 $4,864.18
AVIS CAR 31 $1,399.49
HERTZ 18 $ 719.97
DOLLAR CAR 6 $ 188.37
THRIFTY CAR 5 $ 233.90
<CAPTION>
HOTEL ANALYSIS PERIOD 1 PERIOD 2
- -------------- ---------- ----------
<S> <C> <C>
TOTAL HOTEL COST $15,604.97 $58,688.21
ROOMS BOOKED 129 532
ROOM NIGHTS 187 748
AVERAGE HOTEL RATE $ 187.00 $ 78.46
LENGTH OF STAY 1.45 1.41
<CAPTION>
TOP FIVE HOTEL CHAINS $ OF NTS AMOUNT
- --------------------- -------- ----------
<S> <C> <C>
HOLIDAY INNS 52 $4,427.13
MARRIOTT 15 $1,761.00
INDEPENDENT HTLS 9 $1,079.45
CTYRD BY MARRIOTT 8 $1,288.00
COMFORT INNS 7 $ 522.00
</TABLE>
Executive Summary
[AIRFARE PAID GRAPH] [AVERAGE TICKET PRICE GRAPH]
[% SAVED/LOST GRAPH] [AVERAGE COST/MILE GRAPH]
[CAR RENTAL DAYS GRAPH] [CAR EXPENDITURES GRAPH]
[HOTEL ROOM NIGHTS GRAPH] [HOTEL EXPENSES GRAPH]
<PAGE> 39
XYZ Company
Department Summary
12/1/94 TO 12/31/94
[DEPARTMENT SUMMARY COMPANY CHART]
<TABLE>
<CAPTION>
DEPT FULL FARE LOW FARE FARE PAID FARE AVOID FARE OVER
---- --------- -------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C>
0012 Administration.......................... $ 36,568 $ 17,744 $ 18,176 $ 18,392 $ 432
0055 Facilities Management................... $ 5,903 $ 2,494 $ 2,494 $ 3,409 $ 0
0060 Plan.................................... $ 27,166 $ 14,113 $ 17,139 $ 10,027 $ 3,026
0082 Sales................................... $252,903 $126,600 $133,785 $119,118 $ 7,185
0084 Service................................. $ 82,500 $ 30,319 $ 31,355 $ 51,145 $ 1,036
0091 Maintenance............................. $ 23,620 $ 11,237 $ 12,050 $ 11,570 $ 813
0092 Planning & Design....................... $114,141 $ 64,351 $ 67,023 $ 47,118 $ 2,672
0095 Finance................................. $ 34,799 $ 18,106 $ 18,187 $ 16,612 $ 81
======== ======== ======== ======== =======
Company Total................................ $577,599 $284,964 $300,208 $277,390 $15,245
</TABLE>
<PAGE> 40
XYZ Company
Dollars Spent by Month
1/1/94 TO 12/31/94
[DOLLARS SPENT COMPANY CHART]
<TABLE>
<CAPTION>
MONTH NAME TICKET PRICE TICKET COUNT AVERAGE TICKET % TO TOTAL # TKTS % TO TOTAL
---------- ------------ ------------ -------------- ---------- -----------------
<S> <C> <C> <C> <C> <C>
Jan........................... $ 42,853.58 77 $556.54 10.5% 9.5%
Feb........................... $ 19,892.00 53 $375.32 4.9% 6.5%
Mar........................... $ 41,189.18 89 $462.80 10.1% 10.9%
Apr........................... $ 37,202.73 83 $448.23 9.1% 10.2%
May........................... $ 40,440.44 78 $518.47 9.9% 9.6%
Jun........................... $ 26,311.17 63 $417.64 6.5% 7.7%
Jul........................... $ 26,336.31 51 $516.40 6.5% 6.3%
Aug........................... $ 35,414.48 63 $562.13 8.7% 7.7%
Sep........................... $ 40,007.89 69 $579.82 9.8% 8.5%
Oct........................... $ 36,071.51 79 $456.60 8.9% 9.7%
Nov........................... $ 27,953.86 52 $537.57 6.9% 6.4%
Dec........................... $ 33,809.89 57 $593.16 8.3% 7.0%
----------- --- ------- ----- -----
TOTALS........................ $407,483.04 814 $500.59 100.0% 100.0%
=========== === ======= ===== =====
</TABLE>
<PAGE> 41
ABC COMPANY
HI-MARK TRAVEL SYSTEMS
TOP 100 CITY PAIRS
01/01/94 TO 09/30/94
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
RANK MARKET TICKETED DL TICKETED DL MKT DL TOTALS TOTAL SEG
CITY SEGMENTS SEGMENTS SHARE DOLLARS VALUE
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 ATL-RDU 513 431 84.0% 64,288.63 74,233.24
2 CLT-RDU 259 0.0% 18,540.03
3 DFW-RDU 230 62 27.0% $ 4,255.42 37,020.04
4 PHL-RDU 155 0.0% 18,270.12
5 ORD-RDU 97 0.0% 19,946.44
6 CLT-GSP 94 0.0% $ 7,144,50
7 BOS-RDU 89 0.0% 15,677.99
8 PIT-RDU 88 0.0% $ 7,482.75
9 DCA-RDU 76 0.0% $ 6,305.53
10 DFW-LAS 69 42 60.9% $ 3,874.83 $ 7,354.78
11 CVG-RDU 67 67 100.0% $ 8,094.41 $ 8,094.41
12 EWR-RDU 67 0.0% $ 9,737.18
13 CHA-CLT 64 0.0% $ 6,739.16
14 BWI-RDU 59 0.0% $ 6,683.04
15 ATL-CHA 57 53 93.0% $ 5,323.65 $ 5,323.65
16 MIA-RDU 46 0.0% $ 2,948.17
17 DTW-RDU 45 0.0% $ 5,055.40
18 ATL-DHN 44 44 100.0% $ 7,797.28 $ 7,797.28
19 ATL-GSO 43 4 9.3% $ 0.00 $ 2,120.08
20 EYW-MIA 39 0.0% $ 2,038.22
21 GRR-PIT 35 0.0% $ 6,485.45
22 DEN-DFW 34 6 17.6% $ 1,459.08 $ 6,800.85
23 MDT-RDU 31 0.0% $ 5,520.06
24 GSP-RDU 30 0.0% $ 3,870.82
25 LGA-RDU 30 0.0% $ 4,347.54
26 BNA-RDU 29 0.0% $ 5,419.54
27 ATL-STR 28 28 100.0% $ 5,559.00 $ 5,559.00
28 ATL-GSP 27 27 100.0% $ 4,121.78 $ 4,121.78
29 LHR-PLH 26 0.0% $ 2,476.80
30 DFW-SJC 26 6 23.1% $ 1,890.00 $ 5,559.13
31 BWI-MDT 26 0.0% $ 1,920.00
32 ATL-LAS 26 26 100.0% $ 0.00 $ 0.00
33 RDU-TPA 25 0.0% $ 2,754.51
34 MDT-PHL 22 0.0% $ 242.73
35 DFW-SFO 21 2 9.5% $ 370.92 $ 3,154.54
36 MCO-RDU 21 0.0% $ 2,071.79
37 CVG-TOL 20 20 100.0% $ 1,291.84 $ 1,291.84
38 ORD-SJC 20 0.0% $ 3,192.73
39 CLE-RDU 19 0.0% $ 3,612.70
40 PHL-YYZ 18 0.0% $ 1,679.00
41 CLT-DTW 17 0.0% $ 1,106.36
- ---------------------------------------------------------------------------
</TABLE>
<PAGE> 42
HI-M (TRAVEL SYSTEMS) AIR TRAVEL REPORT 07/01/94 TO 09/30/94
DEPT: 0081 7 OF 57
<TABLE>
<CAPTION>
ISSUE DEPART FARE REGULAR LOWEST FARE FARE FARE
INVOICE# DATE A/P DATE ORIGIN DESTINATION FLIGHT BASIS FARE PAID PAID AVOIDANCE OVERAGE CD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SIRUR/PRAKASH
SIRUR/PRAKASH 3 Transaction(s) Average Advance Purchase Days = 1.33 4,022.46 2,783.46 2,783.46 1,239.00 0.00
WILLIAMS/MILTON G JR
097036 30-Sep 3 03-Oct RALEIGH/DURHAM ORLANDO, FL AA 1049 H26SPL 1,124.00 470.00 470.00 654.00 0.00 B
ORLANDO, FL MELBOURNE, FL 0
04-Oct MELBOURNE, FL ATLANTA, GA DL 970 HSP6
04-Oct ATLANTA, GA RALEIGH/DURHAM DL 382 HSP6
094627 19-Aug 9 28-Aug RALEIGH/DURHAM CINCINNATI, OH DL 412 C/C6972 3,414.15 1,338.15 3,414.15 0.00 2,076.00 B
28-Aug CINCINNATI, OH FRANKFURT DL 48 C/C6972
03-Sep FRANKFURT CINCINNATI, OH DL 49 C/C6972
03-Sep CINCINNATI, OH RALEIGH/DURHAM DL 1731 C/C6972
WILLIAMS/MILTON 2 Transaction(s) Average Advance Purchase Days = 6.00 4,538.15 1,808.15 3,884.15 654.00 0.00
G JR
YATES/WILLY
096632 22-Sep 4 26-Sep RALEIGH/DURHAM GREENVILLE, S AA 3279 V26SPL 803.00 218.00 218.00 585.00 0.00 B
28-Sep GREENVILLE, S RALEIGH/DURHAM AA 3276 V26SPL
YATES/WILLY 1 Transaction(s) Average Advance Purchase Days = 4.00 803.00 218.00 218.00 585.00 0.00
0081 12 Transaction(s) Average Advance Purchase Days = 4.00 16,071.61 8,065.61 10,721.61 5,350.00 2,656.00
</TABLE>
<PAGE> 43
ADDENDUM NO. 1 TO THE
SERVICE AGREEMENT
BETWEEN MICROSOFT CORPORATION
AND WORLDTRAVEL PARTNERS, L.P.
DATED OCTOBER 9, 1996
This Addendum No. 1 ("Addendum") to the Service Agreement between
Microsoft Corporation ("MS") and WorldTravel Partners, L.P. ("WTP"), dated
October 9, 1996, ("Agreement") is made and entered into as of October 22, 1996
("Addendum Effective Date").
The terms of this Addendum shall amend, modify and supersede to the
extent of any inconsistencies, the provisions of the above-referenced Agreement.
All provisions of the Agreement not so modified remain in full force and effect.
Attachment 1 of Exhibit D of the Agreement is hereby replaced and
superseded in its entirety by the attached.
This Addendum does not constitute an offer by MICROSOFT. All signed
copies of this Addendum shall be deemed originals. This Addendum shall be
effective as of the Addendum Effective Date upon execution on behalf of WTP and
MICROSOFT by the duly authorized representatives.
MICROSOFT CORPORATION WORLDTRAVEL PARTNERS, L.P.
/s/ Danny B. Hood
- ------------------------------ -------------------------------------
By By
Danny B. Hood
- ------------------------------ -------------------------------------
Name (Print) Name (Print)
President-Travel & Technology
- ------------------------------ -------------------------------------
Title Title
10/25/96
- ------------------------------ -------------------------------------
Date Date
<PAGE> 44
<TABLE>
<CAPTION>
MICROSOFT FEE SCHEDULE RUN RATE
------------------------------------
TOTAL [*] to
CHARGES [*] [*] [*]
<S> <C> <C> <C>
FIXED FEE EVENT CHARGES FEE PER EVENT
------------------------------------
1 Expedia only air ticket......... $[*] $[*] $[*]
2 PNR Rejected.................... $[*] $[*] $[*]
3 Lost Ticket..................... $[*] $[*] $[*]
5 Exchange........................ $[*] $[*] $[*]
6 Void............................ $[*] $[*] $[*]
7 Refund.......................... $[*] $[*] $[*]
8 Debit Memo...................... $[*] $[*] $[*]
9 Hotel Chg w/Doc................. $[*] $[*] $[*]
10 Hotel Chg w/o Doc............... $[*] $[*] $[*]
11 Car Chg w/Doc................... $[*] $[*] $[*]
12 Car Chg w/o Doc................. $[*] $[*] $[*]
13 Hotel Reservation QC............ $[*] $[*] $[*]
14 E Mail Inquiries................ $[*] $[*] $[*]
====================================
VARIABLE RATE EVENT CHARGES CHARGE PER TA/CSR MINUTE
----------------------------------
1 Manual air booking Note[A] $[*] $[*] $[*]
2 Business and Expedia Support $[*] $[*] $[*]
3 En route support & manual air changes $[*] $[*] $[*]
4 Difficult Email Note[b] $[*] $[*] $[*]
5 Concierge services $[*] $[*] $[*]
6 Promotional Event Support $[*] $[*] $[*]
==================================
</TABLE>
[a] Total fee per manual ticket capped at [*]/ticket
[b] Difficult email defined as resolution exceeding [*] minutes. Total time
allotted per difficult Email capped at [*] minutes
<PAGE> 45
CONTRACT NUMBER:________________
AMENDMENT NUMBER 1 TO
MICROSOFT CORPORATION/WORLD TRAVEL PARTNERS
SERVICE AGREEMENT
This AMENDMENT NUMBER 1 is made to that certain MICROSOFT CORPORATION/
WORLDTRAVEL PARTNERS SERVICE AGREEMENT, effective as of October 9, 1996 (the
"Original Agreement"), by and between MICROSOFT CORPORATION, a Washington
corporation ("MS"), and WORLD TRAVEL PARTNERS, L.P., a Georgia Limited
Partnership ("WTP"). This AMENDMENT NUMBER 1 is effective as of January 1, 1999
("Effective Date of AMENDMENT NUMBER 1"), and is executed as of the latter of
the two signature dates below ("Execution Date of AMENDMENT NUMBER 1"). The
Original Agreement as amended by this AMENDMENT NUMBER 1 is hereby defined as
the "Agreement."
All initially capitalized terms shall have the meanings provided to them
in the Original Agreement unless otherwise defined in this AMENDMENT NUMBER 1.
The parties agree as follows:
1. To reflect the fact that WTP has assigned the Original Agreement to
WorldTravel Technologies, L.L.C., a Georgia Limited Liability Company
("WTT") (which no longer has a direct relationship to WTP), and WTT has
agreed to assume and perform all of the obligations of WTP under the
Original Agreement, the parties therefore agree that this AMENDMENT
NUMBER 1, together with a separate Guarantee Agreement between MS and
WTP dated March 18, 1999, is intended to effect a change in the
contracting parties to MS and WTT, and all references in the Original
Agreement to "WTP" shall be construed as references to "WTT."
2. Section l(b) of the Original Agreement is amended and restated in its
entirety as follows:
"(b) WTT may subcontract collection services to a third party so
long as (i) MS, at its discretion, may elect at any time to assume
responsibility for collection, (ii) WTT obtains MS, prior consent for
settlements of bad debt that results in forgiveness of fifteen percent
(15%) or more of the bad debt; and (iii) in the event the subcontracted
collection services are not effective, WTT and MS shall discuss
appropriate corrective steps. WTT may also select vendors to provide
services relating to the Services so long as such vendors are not
directly servicing customers of MS Travel. WTT shall remain fully
responsible and accountable for the performance of its subcontractors
and vendors. Unless otherwise expressly set forth in this Agreement,
WTT will not otherwise subcontract any of its obligations hereunder
without the prior written approval of MS."
3. Section 2(a) of the Original Agreement is amended and restated in its
entirety as follows:
"(a) (i) WTT shall pay and be solely responsible for all costs
incurred in providing the Services under this Agreement indicated in
Exhibit D as being "WTT Costs." MS shall pay and be solely responsible
for all costs with respect to the Services indicated in Exhibit D as
being "MS Costs." In the event that WTT Costs exceed an average of [*]
per Ticket (as defined in Exhibit D) in any one calendar month after
the Effective Date of AMENDMENT NUMBER 1, then MS agrees to pay to WTT
the amount of the WTT Costs that exceed [*] per Ticket for such
calendar month. WTT shall include a charge for the MS Costs and any
excess WTT Costs (in the event that WTT incurs WTT Costs in excess of
an average of [*] per Ticket in the calendar month), in the monthly
statement described in Section 2(b)(iii) below and shall provide
sufficient back-up to substantiate the charges.
(ii) Additionally, WTT shall be solely responsible for all
Customer Charge-Backs as described in Exhibit D in an amount up to an
average of [*] per Ticket in any
1
<PAGE> 46
calendar year. MS agrees to reimburse WTT for all Customer Charge-Backs
that are in excess of an average of [*] per Ticket incurred in a
calendar year (regardless of when the Customer Charge-Back may have
been received by WTT). However, if a Customer Charge Back is received
more than one calendar year after it was incurred, that Customer Charge
Back will be attributed to the year it was received. In the event that
the Customer Charge-Backs in any calendar year after the Effective Date
of the AMENDMENT NUMBER 1 exceed an average of [*] per Ticket, WTT
shall include a charge to MS for such excess Customer Charge-Backs
along with sufficient back-up to substantiate such excess Customer
Charge-Backs in the monthly statements described in Section 2(b)(iii)
below during the subsequent calendar year.
(iii) MS agrees that it will request WorldSpan to make
payments with respect to errors made by WorldSpan's system in
connection with Tickets directly to WTT and will provide reasonable
assistance to WTT (to the extent requested by WTT) to collect such
amount directly from WorldSpan. If WorldSpan acknowledges the errors
were made by its system in connection with Tickets, but in
documentation submitted to WTT (and provided to MS) states that
WorldSpan will not reimburse WTT the full amount for such errors
because of separate financial or business arrangements with MS, then
WTT shall invoice MS for such amounts within sixty (60) days after the
end of the calendar year in which the WorldSpan payments were due."
4. Section 2(b) of the Original Agreement is amended and restated in its
entirety as follows:
"(b) MS will pay WTT the following amounts:
(i) Within thirty (30) days after the Execution Date of
AMENDMENT NUMBER 1, MS shall pay to WTT all amounts that are due to
WTT, as of the Effective Date of AMENDMENT NUMBER 1, in connection with
the Original Agreement.
(ii) MS shall pay an initial advance against the fees for
the Services as set forth in Exhibit D (the "Fees"), which amount shall
be equal to [*] multiplied by three times the greatest total number of
Tickets (as defined in Exhibit D) sold by WTT in connection with the
Services in a calendar month during the six-month period immediately
prior to the Effective Date of AMENDMENT NUMBER 1 (the "Initial
Advance"). MS shall pay the Initial Advance to WTT within thirty (30)
days after the Execution Date of AMENDMENT NUMBER 1.
(A) The Current Advance Balance (as defined below) shall be
applied against any earned Fees during the last three months
immediately prior to the end of the term of this Agreement,
subject to paragraph 8 of this AMENDMENT NUMBER 1. At the end
of each calendar month during the three (3) month period
immediately prior to the end of the term of the Agreement, WTT
will provide MS with a statement setting forth the total
number of Tickets sold that calendar month in connection with
the Services and the applicable Fees. The statement shall
include information sufficient to discern how the Fees were
calculated and shall be in a format to be provided by MS. If
the statement indicates that the Fees for that calendar month
exceeded any funds remaining in the Current Advance Balance
then MS shall pay, within thirty (30) days after receipt of
the statement, any additional amount of Fees that may properly
be due, and the Current Advance Balance shall be deemed
exhausted.
(B) At the end of each calendar year during the term of the
Agreement, the parties shall agree to adjust the Current
Advance Balance in an amount calculated as follows ("Advance
Adjustment"): the difference between the applicable Fee at the
end of such calendar year multiplied by three times the
greatest total number of Tickets sold in connection with the
Services in a calendar month during the six-month period
immediately prior to the end of such calendar year minus the
Current Advance Balance. In the event that the above
calculation of the Advance Adjustment results in a negative
number, then WTT will refund the amount represented by that
negative number to MS within thirty (30) days, and the Current
Advance Balance will be deemed reduced by the amount of such
refund.
2
<PAGE> 47
WTT shall invoice MS for the applicable Advance Adjustment,
if any, in the first month's statement in the new
calendar year in accordance with Section 2(b)(iii).
(C) For the purpose of this Section the sum of the Initial Advance
and any Advance Adjustment then in effect, less any refund to
MS pursuant to Section 2(b)(ii)(B) and less any offsets
pursuant to Section 2(b)(ii)(A), is defined as the "Current
Advance Balance."
(iii) MS shall pay WTT the Fees as set forth in Exhibit D (except
with respect to the last three months immediately prior to the end of
the term of this Agreement, which period is covered in Section 2(b)(ii)
above). WTT shall invoice MS on a monthly basis, on or before the 15th
day of the month following the month for which the Fees (and any
applicable MS Costs or Customer Charge-Backs) are being invoiced. The
invoice shall include a statement setting forth the total number of
Tickets sold that calendar month by WTT in connection with the Services
and the applicable Fees and any applicable MS Costs or Customer
Charge-Backs for which MS is responsible in accordance with Section
2(a) of the Agreement. The statement shall include information
sufficient to discern how the Fees were calculated and shall be in a
format to be provided by MS. MS shall pay the amount indicated in the
invoice within thirty (30) days after receipt of the invoice. Late
payments shall accrue interest at a rate of one percent (1%) per month
unless MS notifies WTT that MS disagrees with the calculation of the
invoiced amount. In the event taxes are required by any U.S. (state or
federal) or foreign government to be withheld on payments made
hereunder by MS to WTT, MS may deduct such taxes from the amount owed
WTT and pay them to the appropriate taxing authority. MS shall in turn
promptly secure and deliver to WTT an official receipt for any taxes
withheld. MS will use reasonable efforts to minimize such taxes to the
extent permissible under applicable law."
5. Section 2(c) of the Original Agreement is deleted in its entirety.
6. Section 8(a) is amended to extend the term of the Agreement for a
period of five (5) years after the Effective Date of AMENDMENT NUMBER 1
unless earlier terminated by either party as provided in this
Agreement.
7. Section 8(b) is amended and restated in its entirety as follows:
"(b) MS may, in its sole discretion, terminate this Agreement
without cause with one hundred and eighty (180) days' prior written
notice to WTT. In the event of such termination solely for the
convenience of MS (and in no other event of termination), MS agrees to
pay WTT the amount indicated below.
<TABLE>
<CAPTION>
Effective date of termination
(in terms of months after the Effective Date
of AMENDMENT NUMBER 1) Amount
-------------------------------------------- ------
<S> <C>
0-12 months 18 Average Month's Fees
13-24 mouths 12 Average Month's Fees
25-36 months 9 Average Month's Fees
37-48 months 6 Average Month's Fees
48-60 months 3 Average Month's Fees
</TABLE>
An "Average Month's Fees" shall be determined by averaging the actual
Fees paid by MS for the six (6) months immediately prior to the
effective date of termination. The parties agree that this amount is a
fair and reasonable estimate of liquidated damages, and is not intended
as a penalty for termination. Additionally, MS may terminate this
Agreement (i) immediately with written notice to WTT in the event MS
ceases to directly and solely operate and control the MS Travel service
for U.S. consumers, or (ii) with one hundred eighty (180) days' prior
written notice to WTT in the event MS sells a majority or more of the MS
Travel assets to a third party, provided, however, that in either case
such termination event shall not be considered a termination for
convenience by MS.
3
<PAGE> 48
Any amounts that may be owed by MS pursuant to this Section 8(b) shall
be paid within sixty (60) days after the effective date of
termination."
8. The following sentence shall be added at the end of Section 3(g) of the
Original Agreement:
"(g) (iii) In addition, within sixty (60) days after the
effective date of termination or expiration of this Agreement, the
parties shall reconcile all accounts hereunder and WTT shall promptly
refund and return to MS any unearned portion of the Current Advance
Balance and MS shall promptly pay to WTT any amounts that it may
property owe to WTT in accordance with this Agreement."
9. Section 9 of the Original Agreement is amended and restated in its
entirety as follows:
"Default in Performance and Remedies. During the term of this Agreement:
(a) In the event WTT breaches the provisions of Section
10 or if MS or WTT receives a notice of complaint from ARC as a result
of WTT's acts or omissions, such breach will justify termination for
cause, and MS may terminate this Agreement immediately with no further
obligation to WTT.
(b) In the event WTT fails to meet the performance
requirements as specified in this Agreement and Minimum Service
Criteria set forth in Exhibit C (the "Service Process Requirements"),
MS shall give WTT notice of such non-compliance and WTT shall have 24
hours after receipt of such notice to correct such non-compliance. WTT
shall take all reasonable actions to correct such noncompliance as soon
as practicable.
(c) In the event there is a continued failure by WTT to
meet the Service Process Requirements within the time period referred
to in Section 9(b), WTT shall, at MS' request, provide a corrective
action plan within forty-eight (48) hours, including training and
staffing plans, to MS for approval. MS shall review and approve such
corrective action plan or provide reasonable required changes to WTT
within five (5) business days from its receipt of such plan.
(d) In the event the Service Process Requirements are not
met by WTT within the time period set forth in any corrective action
plan, as approved or changed by MS, MS shall have the option to require
WTT to pay MS an amount equaling 10% of average daily gross revenues
earned by WTT pursuant to this Agreement (such average to be based upon
the period of three (3) months prior to the date of MS' exercise of its
option to collect liquidated damages pursuant to this Section 9(d)), as
liquidated damages and not as penalty, for each additional day WTT
fails to meet such Service Process Requirements. Such accrual of
liquidated damages shall terminate upon the termination or expiration
of this Agreement; however, the obligation to pay such accrued
liquidated damages shall continue until paid.
(e) In the event the Service Process Requirements are not
met by WTT within the time period set forth in any corrective action
plan, as approved or changed by MS, MS shall have the right to
terminate this Agreement for cause, with no further obligation to WTT
under this Agreement.
(f) Any liquidated damages described in this section
shall be deducted from amounts due to WTT under Section 2 and Exhibit
D. WTT shall pay directly to MS any liquidated damages in excess of
such amounts due. The calculation of payments of liquidated damages
shall be made as part of the regular monthly invoice described in
Section 2, and WTT shall have 30 days from the date of such invoice to
make any required payments to MS.
(g) All remedies set forth in this section shall be in
addition to and not in lieu of any other remedies available to MS under
this Agreement at law or in equity."
4
<PAGE> 49
10. The references to GTS (Global Travel Services) in the Original
Agreement are hereby deleted and shall be replaced with another
subcontractor to WTT (which subcontractor shall be approved in writing
by MS, which approval will not be unreasonably withheld) to perform the
Services in Canada in accordance with Section 11 of the Agreement. The
first sentence in Section 11(b) of the Original Agreement is amended to
delete the terms "event-based," and the parties agree that the terms
set forth in this AMENDMENT NUMBER 1 shall apply to the Services with
respect to the Canadian version of MS Travel.
11. Section 14(f) of the Original Agreement is amended and restated in its
entirety as follows:
"(f) The rights and obligations hereunder shall be binding upon and
inure to the benefit of the successors and assigns of the parties
hereto, provided any rights or obligations hereunder shall not be
assigned by either party without the prior written consent of the other
party, which consent shall not be unreasonably withheld.
Notwithstanding the foregoing restriction with respect to assignment,
(i) MS may assign this Agreement to an entity that will control a
majority of the MS Travel business without the prior written consent of
WTT and (ii) if WTT is reorganized into another form of entity with the
effect that the new entity owns substantially all of the current assets
and business of WTT and that the new entity is controlled (directly or
indirectly) by the same person(s) as currently control WTT or if WTT
effects an initial public offering of shares of its stock, this
Agreement may be assigned to such new entity without prior written
consent of MS."
12. A new Section 14(l) is added as follows:
"(l) In order to reduce costs associated with the provision of the
Services, MS agrees to make certain changes to MS Travel as described
in and on the schedule set forth in Appendix 1 to this AMENDMENT NUMBER
1. Such changes will be subject to the conditions outlined in Appendix
1. WTT may also participate in and provide input at appropriate
meetings for the purpose of identifying ways to reasonably reduce the
costs of providing the Services. MS shall control the prioritization,
timing and method for considering WTT's suggestions or input. MS has
agreed to a policy whereby hard copy receipts for E-Tickets may be
eliminated by December 6, 1998 and replaced with electronic receipts
and MS agrees that it will not take actions on MS Travel that will
materially and negatively impact the number of E-Tickets. However, WTT
will place an appropriate phone number in the email so that customers
may request paper receipts if customers need them."
13. A new Section 12(m) is added as follows:
"(m) The parties will discuss in good faith appropriate
opportunities to feature WTT services in the "tour and cruise" category
in the Expedia Travel Network program. Additionally, MS agrees that it
will inform WTT when MS will need travel fulfillment services for
international version of MS Travel and will provide WTT with reasonable
time period (not to exceed thirty (30) days) to first offer to provide
such fulfillment services."
14. A new Section 12(n) is added as follows:
"(n) In the event that WTT secures additional revenue resulting
from base commissions exceeding the published Internet commission rate
for air tickets, the parties agree that such additional revenue shall
be divided as follows: eighty percent (80%) to MS and twenty percent
(20%) to WTT. In the event that WTT secures other additional revenue
during the term of the Agreement in connection with the Services
provided to MS Travel, the parties agree that MS shall receive one
hundred percent (100%) of such other additional revenue. Both parties
understand that it may be necessary for WTT to use an ARC number
different from the current ARC number owned by MS for purposes of
collecting additional commission. Additionally, in the event of a
material airline industry reduction in base commissions for either
online or offline agencies that
5
<PAGE> 50
negatively and significantly impacts either party, both parties shall
agree to re-evaluate the economic terms of this Agreement in accordance
with Section 15 of the Agreement."
15. A new Section 15 is added to the Agreement as follows:
"MS and WTT agree that in the event that there are (i) significant
economic changes in the travel industry, (ii) material changes in the
scope of work contemplated by this Agreement, or (iii) global political
events that significantly affect the travel industry and such changes
or events significantly and adversely impact the economic terms of this
Agreement, then the parties will agree in good faith to re-negotiate
new economic terms for this Agreement in light of such change or event.
If the parties fail to agree upon new economic terms the parties agree
first to try in good faith to settle the dispute by mediation
administered by the American Arbitration Association under its
Commercial Mediation Rules, with each party bearing its own expenses
with respect to the mediation. Notwithstanding the foregoing paragraph,
the parties acknowledge that nothing herein shall limit in any manner
the ability of either party to terminate the Agreement in accordance
with Section 8(b) of the Agreement and that any such termination shall
not be considered a breach of the mediation provision set forth in this
paragraph."
16. Section 14(i) of the Original Agreement is amended and restated as
follows.
"(i) If either party is unable to perform under this Agreement due
to circumstances or causes beyond its control that (i) it could not by
reasonable diligence have avoided and (ii) are not the same as the
circumstances or causes described in Section 15, such party shall have
the option, without liability, of suspending performance of its
obligations under this Agreement for the duration of such contingency
upon written notice to the other party. However, either party may
terminate this Agreement upon written notice to the other party in the
event that such other party has suspended performance of its
obligations under this Agreement for more than thirty (30) days,
provided however, such termination, if effected by MS, shall not be
considered a termination of convenience."
17. Section 4 of Exhibit B (MS Deliverables) is deleted in its entirety.
18. Section 10(c) of the Original Agreement is amended and restated in its
entirety as follows:
"(c) WTT shall not issue any press release or advertising
concerning WTT's relationship with MS without MS' prior written
consent, except if WTT or a successor entity becomes a publicly traded
company, and publicity is necessary, in the opinion of counsel, to
comply with the requirements of (i) any stock exchange on which the
shares of WTT or such successor entity may be listed or (ii) any law,
governmental regulation or order; and even then only after making a
reasonable effort to consult with MS as to the contents of any such
publicity. The limitations in this Section 10(c) are not intended to
restrict WTT's ability to make any filings with the US Securities and
Exchange Commission or similar state agencies that may be legally
required if WTT or a successor entity becomes publicly traded."
19. Exhibit C (Service Process Requirements) is amended and restated in its
entirety set forth in the new Exhibit C attached hereto.
20. Exhibit D (Payments) is amended and restated in its entirety as set
forth in the new Exhibit D attached hereto.
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<PAGE> 51
All other terms not expressly amended herein shall remain in full force and
effect as set forth in the Original Agreement.
MICROSOFT CORPORATION WORLDTRAVEL TECHNOLOGIES, L.L.C
/s/ /s/ John C. Alexander
- ------------------------------- -------------------------------
By By
/s/ Richard Barton /s/ John C. Alexander
- ------------------------------- -------------------------------
Richard Barton John C. Alexander
Name (Print) Name (Print)
General Mgr. Travel Bus. Unit. Chief Executive Officer
- ------------------------------- -------------------------------
Title:
4/1/99 3-26-99
- ------------------------------- -------------------------------
Date Date
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<PAGE> 52
EXHIBIT C - SERVICE PROCESS REQUIREMENTS
1. MINIMUM SERVICE CRITERIA: The Minimum Service Criteria (which are indicated
as averages on a calendar month basis) from the Effective Date through
December 2001 are set forth below. The Minimum Service Criteria shall apply
so long as the phone and email ratios (averaged on a calendar month basis)
are equal to or less than the phone and email ratios set forth in part 2 of
Exhibit D. The parties further agree that Call Backs shall not exceed ten
percent (10%) of all phone calls in any hour in connection with the
Service. If the average phone ratio for a calendar year is less than the
phone ratio set forth in part 2 of Exhibit D, then the "Percentage of Call
Backs" set forth below shall be decreased on a pro-rata basis for the
following calendar year. The parties agree that none of the liquidated
damages and termination provisions of Section 9 will apply to WTT (xx) if
the Minimum Service Criteria are not in effect because the phone and email
ratios (average for the calendar month) are greater than the phone and
email ratios set forth in part 2 of Exhibit D, or (yy) if the applicable MS
forecast report provided to WTT for the calendar month (as described in
paragraph 2(b) of this Exhibit C) underestimated the actual number of
Tickets to be sold during the month by more than twenty percent (20%). The
Minimum Service Criteria for the last two years of the Agreement shall be
determined at the same time as when the Fees for the last two years of the
Agreement are determined in accordance with part 2 of Exhibit D, provided
however, that at no time during the term of the Agreement shall the new
Minimum Service Criteria Goals be less than the Minimum Service Criteria
set forth below.
<TABLE>
<CAPTION>
METRIC MINIMUM SERVICE CRITERIA
- ---------------------------------------------------------------------
<S> <C>
Service Level - [*]%
% of Calls Answered [*]
- ---------------------------------------------------------------------
Abandon Rate - [*]%
% of Call Abandon [*]
- ---------------------------------------------------------------------
Percentage of "Call Backs" - [*]%
% of Calls Answered as CB w/CBs made in
[*]
- ---------------------------------------------------------------------
Call Backs Customer Survey - [*]%*
% of Respondents "Satisfied" to "Very
Satisfied"
- ---------------------------------------------------------------------
E-mail Response [*] [*] Hours
- ---------------------------------------------------------------------
Call Center Customer Survey -
% of Respondents "Satisfied": to "Very
Satisfied":
- Overall Experience [*]%
- -
- Agent's Professionalism [*]%
- ---------------------------------------------------------------------
</TABLE>
* The liquidated damages and termination provisions of Section 9 shall not
apply in the event that WTT fails to satisfy the "Call Backs Customer
Survey" Minimum Service Criteria. However, if WTT fails to satisfy the
"Calls Backs Customer Survey" Minimum Service Criteria in any calendar
month, then the parties shall promptly discuss and agree upon an
appropriate corrective action to be implemented by WTT.
2. SERVICE CRITERIA GOALS; CONSEQUENCES FOR EXCEEDING OR FAILING TO MEET THE
SERVICE CRITERIA GOALS: The Service Criteria Goals (which are indicated as
averages on a calendar month basis) from the Effective Date through
December 2001 are set forth below. The Service Criteria Goals shall apply
so long as the phone and email ratios (averaged on a calendar month basis)
are equal to or less than the phone and email ratios set forth in part 2
of Exhibit D. The parties agree that the liquidated damages and
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<PAGE> 53
termination provisions set forth in Section 9 shall not apply in the event
WTT fails to satisfy these Service Criteria Goals. The Service Criteria
Goals for the last two years of the Agreement shall be determined at the
same time as when the Fees for the last two years of the Agreement are
determined in accordance with part 2 of Exhibit D, provided, however, that
at no time during the term of the Agreement shall the new Service Criteria
Goals be less than the Minimum Service Criteria set forth above.
<TABLE>
<CAPTION>
METRIC 1999 GOALS 2000 GOALS 2001 GOALS
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Call Backs Customer Survey - [*] [*] [*]
% of Respondents "Satisfied" to "Very
Satisfied"
- ------------------------------------------------------------------------------------------
E-mail Response ([*] SL) [*] Hours [*] Hours [*] Hours
- ------------------------------------------------------------------------------------------
Call Center Customer Survey -
% of Respondents "Satisfied" to "Very
Satisfied":
- Overall Experience [*]% [*]% [*]%
- Agent's Professionalism [*]% [*]% [*]%
- ------------------------------------------------------------------------------------------
</TABLE>
(a) If WTT in any calendar month exceeds all the Service Criteria Goals
set forth above or other service criteria set from time to time by the
parties, then MS shall pay [*] per Ticket sold during that calendar
month ("Incentive Amount"). The Incentive Amount shall be matched by
WTT and the total sum shall be allocated by WTT for "rewards" or
"incentives" for those WTT employees who directly or indirectly
provide the Services. Within fifteen (15) days after the end of each
calendar month during the term of the Agreement, WTT shall invoice MS
for any Incentive Amount that WTT may have earned during the calendar
month. WTT shall include a statement in sufficient detail to determine
the calculation of the Incentive Amount. MS shall pay the Incentive
Amount within thirty (30) days after receipt of the applicable
invoice. WTT shall additionally provide MS with reports on a calendar
month basis detailing how prior Incentive Amounts were distributed to
WTT employees.
(b) If WTT in any calendar month fails to satisfy the Services Criteria
Goals set forth above or other service criteria set from time-to-time
by the parties, then in addition to any other rights and remedies that
MS may have, WTT shall pay [*] per Ticket sold during that calendar
month ("Penalty Amount"). Within fifteen (15) days after the end of
each calendar month during the term of the Agreement, WTT shall pay MS
any Penalty Amount that WTT may owe to MS during the calendar month
and shall include a statement in sufficient detail to determine the
calculation of the Penalty Amount. Notwithstanding the foregoing,
however, no Penalty Amount for a calendar month shall be owing to MS
if the applicable MS forecast report provided to WTT for that month,
which MS will provide to WTT at two months prior to the commencement
of that month, underestimated the actual number of Tickets to be sold
during the month by more than twenty percent (20%) or the average
phone and email ratios for the calendar month are greater than the
phone and email ratios set forth in part 2 of Exhibit D.
3. WTT shall provide MS with daily reports regarding WTT's performance of
the Service in accordance with the Minimum Service Criteria and the
Service Criteria Goals.
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<PAGE> 54
EXHIBIT D - TICKETS/FEES/COSTS
1. Definition of "Ticket"; all air tickets sold on MS Travel, less voids,
based upon reports received from ADS (WTT back office accounting system.) By
way of example, if during a given month there were 100 tickets ordered, but 10
Tickets were voided, then the total of Tickets which will appear on the ADS
Report will be 90. The payment of fees shall only apply to these 90 Tickets. By
way of further example, if during a given month there are 100 Tickets issued,
but 5 of the Tickets were refunded, the total of Tickets for the month, against
which fees would be charged would be charged would be 100. The ADS Report for
that month would also show 100 Tickets even though commission was only being
received on 95 Tickets. As long as refunds do not exceed 1% of Tickets in which
case the parties will discuss how the split of costs above that level.
2. Fees for Services
(a) Fees through September 30, 2001:
November 1, 1998 - June 30, 1999 $[*] per Ticket plus $[*],
due 30, days after the Execution
Date of AMENDMENT NUMBER 1
July 1, 1999 - June 30, 2000 $[*] per Ticket
July 1, 2000 - September 30, 2001 $[*] per Ticket
The Fees are based upon reasonable contact rations (phone ration of 0.5
(call-backs not included) and email ration of 0.4 contacts per Ticket
averaged over a calendar month). Fees for Services above these levels will
during the full term of the Agreement carry a $[*] per minute surcharge
for the phone time and $[*] per additional email.
(b) Fees for Services after September 30, 2001 and the remaining term of
the agreement shall not exceed $5.00 per Ticket and will be calculated as
follows:
(i) DETERMINATION OF BASE COSTS: "Base Costs" shall be the lesser of
$[*] or the average WTT Cost per Ticket for the period January 1,
2001 through December 31, 2001. by the end of the first calendar
quarter of 2002, WTT and MS shall determine the Base Cost.
In addition to rights under the Original Agreement, starting from
September 30, 2001 and during the remaining term of the Agreement, MS
shall have the right to audit WTT's records relating to WTT Costs and
the determination of Base Cost. The MS finance team may conduct the
audit and MS shall bear the costs of the audit. MS at that time may
determine the appropriate costs basis (e.g., fully allocated or
variable) in its sole discretion for setting the Base Cost. the same
method will be used for both the base and subsequent periods.
(ii) FEE FOR OCTOBER 1, 2001 - JUNE 30, 2002; FEE FOR JULY 1, 2002 - JUNE
30, 2003: For the period October 1, 2001 through June 30, 2002, if the
average WTT Cost per Ticket (measured as the average of WTT Costs for
the calendar months March, April and May 2002) is less than the Base
Costs, MS shall determine the difference (the "Difference"), and the
new Fee shall be set as [*] minus [*] of the Difference. (For example:
the Fee per Ticket is [*], and if the average WTT Cost per Ticket is
$[*], and the Base Cost $[*], then the new Fee will be [*] per Ticket
([*] - ([*] base - $[*] costs = $[*] cost reduction * 50% savings
share)). Alternatively, if the WTT Cost per Ticket is equal to or
greater than the Base Costs, then there will be no adjustment to the
Fee. (For example: the Fee per Ticket is $[*] and the average WTT Cost
per Ticket is $[*], then the new Fee will remain $[*] per Ticket.)
The new Fee shall apply to the Tickets sold between October 1, 2001
through June 30, 2002. A retroactive credit of the Difference times
the number of Tickets sold between
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<PAGE> 55
October 1, 2001 through June 30, 2002 will be paid by WTT to MS
on or before July 31, 2002.
This new Fee shall also apply to Tickets sold during the period
July 1, 2002 through June 30, 2003.
(iii) Fee for July 1, 2003 - December 31, 2003: To determine the Fee for
the period July 1, 2003 through December 31, 2003, the parties
shall again perform the calculation described in the preceding
paragraph 2(B)(ii) for the new period, using the same figure for
Base Cost but using the average WTT Cost per Ticket for the
calendar months March, April and May, 2003.
(iv) Notwithstanding any language in this paragraph, the parties agree
that at any time after September 30, 2001 and during the remaining
term of the Agreement, if the Fees are above the competitive market
rates, the parties shall renegotiate the Fees so that the new Fees
are competitive with the then-current market rates.
3. COSTS
(a) MS shall bear the costs for the following items in connection with the
Services ("MS Costs"):
Costs for recalls of commissions; customer payouts and debit memos each to
the extent associated with application issues; costs generated directly
from MS decisions to ignore vendor demanded terms, like DL requiring
instant ticketing; costs for credit card clearing service; and costs for
establishment and maintenance of the lockbox and bank account to be used by
WTT as described in Exhibit A. Additionally, if WorldSpan charges WTT for
costs directly related to MS Travel (e.g., printers, gateways, fileservers,
hits, line charges, Tas), MS will pay WorldSpan or reimburse WTT for these
expenses accrued after WTT changes the ownership of the WorldSpan SID to MS
and provides MS with written confirmation of such change in ownership.
(b) WTT shall bear all traditional costs associated with providing the
Services ("WTT Costs"). Traditional costs are all costs that have been borne by
WTT and MS as of the Execution Date of the AMENDMENT NUMBER 1 except for the MS
Costs defined above.
(c) "Customer Charge-Backs" in connection with the Services is defined as
follows:
customer charge-backs related to (i) credit card charges that are denied or
rejected by the credit card issuer, or (ii) customer fraud. All Customer
Charge-Backs must be documented in either debit memos or letter from credit
card issuers.
11
<PAGE> 56
APPENDIX 1
CHANGES TO MS TRAVEL
Within sixty (60) days after the Execution Date of AMENDMENT NUMBER 1 and each
anniversary after the Effective Date thereafter, WTT shall present its list of
requested product changes to MS. MS will commit up to 10,000 hours in MS Travel
changes requested by WTT and agreed to by MS (annually approximately 2,000
hours) provided, however if a proposed change is strategic to the business of MS
Travel then MS shall determine, in its sole discretion, whether to make the
proposed change. MS will deliver this value through up to 10 text changes on the
site and two (2) feature changes on the site per year on a schedule to be
reasonably agreed upon by the parties. MS will be solely responsible for
estimating the number of hours associated with building and implementing The MS
Travel product changes and determining the appropriate manner in which to build
and implement such changes.
12
<PAGE> 1
EXHIBIT 10.3
MASTER DEVELOPMENT AGREEMENT
This Master Development Agreement (the "Agreement") is between
WorldTravel Partners I, L.L.C., with its principal place of business at 1055
Lenox Park Boulevard, Atlanta, Georgia 30329 ("WTP") and WorldTravel
Technologies, L.L.C., with its principal place of business at 6 W. Druid Hills
Drive, Atlanta, Georgia 30329 ("WTT"). WTP may require from time to time certain
professional services from WTT related to software development ("Services") and
this Agreement sets forth the general terms and conditions, which apply to the
provision of such services. WTT agrees to provide to WTP the services described
herein, or in any Delivery Order referencing this Agreement, in accordance with
the terms and conditions of this Agreement. In the event of any conflict between
any Delivery Order and this Agreement, the terms of this Agreement shall
control.
1. DEFINITIONS
1.1. "APPLICATION SOFTWARE" shall mean the software modules or components
which perform the functions and comply with the proposal and specifications
identified or set forth in the Design Specifications. Each Application Software
module or component, specification and proposal included or referred to in the
Design Specifications is expressly incorporated herein by reference. The
Application Software shall be delivered in machine readable object code form.
1.2. "CONFIDENTIAL INFORMATION" shall mean any data or information, other
than Trade Secrets, that is of value to a party to this Agreement and is not
generally known outside of such party. To the extent consistent with the
foregoing, Confidential Information includes, but is not limited to, information
about the parties' employees, the parties' business methods, and contracts and
contractual relations with the parties' vendors. Confidential Information also
includes any information described in this paragraph which either party obtains
from another party which the receiving party treats as proprietary or designates
as confidential information, whether or not owned or developed by the receiving
party.
1.3. "CUSTOM SOFTWARE" shall mean the Application Software and the
Documentation.
1.4. "CUSTOMERS" shall mean an entity doing business, relating to travel
services, with a given party on the date in question. For corporate entities,
only those divisions or portions of a corporation doing business with such party
on the date in question are considered to be included in the definition of
Customer.
1.5. "DESIGN SPECIFICATIONS" shall mean, at a minimum, system flow charts,
program descriptions, file layouts, database structures, report layouts and
screen layouts, interface requirements and layouts, conversion requirements and
layouts, refined equipment requirements, acceptance criteria and acceptance test
scripts for improvements or enhancements to the Licensed Products or for new
products related to the Licensed Products.
1.6. "DOCUMENTATION" shall mean all operator and user manuals, training
materials, guides, listings, specifications and other materials necessary for
the complete understanding and utilization of the functionality of the
Application Software, including materials useful for design (e.g., logic
manuals, flow diagrams and principles of operation) and machine-readable text of
graphic files subject to display or print-out.
1.7. "END USER AGREEMENT" shall mean that agreement between the parties
executed concurrently with this Agreement under which WTT licenses the use of
certain WTT software and products to WTP.
1
<PAGE> 2
1.8. "LICENSED PRODUCTS" shall mean those WTT products licensed to WTP under
separate license agreements between the parties.
1.9 "NEWCO" shall mean a company organized under the laws of England and
Wales, which is equally owned by Hogg Robinson, plc and WTT UK.
1.10 "OFS SERVICE BUREAU/OUTSOURCING AGREEMENT" shall mean that agreement
between the parties executed concurrently with this Agreement under which WTT
provides Online Fulfillment Services (OFS) to WTP.
1.11 "TTG SERVICE BUREAU AGREEMENT" shall mean that agreement between the
parties executed concurrently with this Agreement under which WTT, through its
Travel Technologies Group, provides certain services and data information to
WTP.
1.12 "TRADE SCRETS" shall mean any information of either party , including
but not limited to technical or non-technical data, a formula, a pattern, a
compilation, a program, a device, a method, a technique, a drawing, a process,
financial data, financial plans, product plans, or a list of actual or potential
customers or suppliers, which (i) derives economic value, actual or potential,
from not being generally known to and not being readily ascertainable by proper
means by other persons who can obtain economic value from its disclosure or use
and (ii) is the subject of efforts that are reasonable under the circumstances
to maintain its secrecy.
1.13 "WTP CUSTOM SOFTWARE" shall mean all software for which WTP pays market
rate for development.
1.14 "USERS" shall mean entities and individuals who use WTT products and/or
service bureau offerings. Users shall not include WTP.
2. SERVICES TO BE PROVIDED BY WTT
2.1. SERVICES
The parties acknowledge and agree that WTP may from time to time desire
the development of Custom Software. WTP agrees that WTT shall have the right of
first refusal to perform such development services for WTP on the term and
conditions set forth herein. The terms and conditions of this Agreement, as
applicable, shall apply to each assignment proposed by WTP, which is accepted by
WTT. Each assignment will generally be in the form of a Delivery Order, in a
form substantially similar to that of Exhibit A, which will describe the work to
be performed, the period within which the work is to be completed and the amount
or method of payment therefor. WTT is not obligated to bid on Customer-specific
or non-generic products, which are not related to the service bureau or other
business lines of WTT. In the event that WTT does not bid or refuses to do the
development requested by WTP hereunder, WTT shall give WTP access to relevant
interface definitions or source code as reasonably necessary for WTP to perform
such development, subject to WTP's agreement to appropriate confidentiality
provisions for such definitions and source code.
Any newly developed WTT products or service bureau offerings shall be
made available to WTP before such products or offerings are made available to
other Users, unless such products were funded by a third party who paid for such
development. All new products and service bureau offerings made
2
<PAGE> 3
available to Users will be made available to WTP pursuant to WTT's then-current
rate or less, at WTT's discretion.
3. PROJECT MANAGEMENT; DELIVERY
3.1. DESIGNATION OF PROJECT COORDINATORS
WTT shall designate a project manager for the work hereunder (the "WTT
Project Coordinator"), who shall be assigned by WTT to supervise the work
hereunder, and shall serve as WTP's point of contact for the resolution of
problems. WTP shall also designate an employee who shall be assigned by WTP to
coordinate WTP's involvement in the work hereunder (the "WTP Project
Coordinator"), and shall serve as WTT's point of contact for the resolution of
problems. Either party may change its Project Coordinator from time to time and
shall immediately notify the other party of any such change. For purposes of any
Delivery Order, the WTT Project Coordinator and the WTP Project Coordinator
shall also coordinate the services provided by WTT under a Delivery Order,
unless otherwise agreed.
3.2. PERIODIC PROGRESS REPORTS
WTT shall provide periodic progress reports as required in any
applicable Delivery Order.
3.3. CHANGE ORDER PROCEDURE
All changes to the mutually agreed upon Design Specifications or to any
Delivery Order must be requested in writing and require mutual agreement, in
accordance with the procedure set forth in Exhibit B attached hereto and
incorporated herein by reference. Evaluation and/or implementation of requested
changes may or may not result in any modification to the Development Fee,
Implementation Schedule (hereinafter defined) or other terms of this Agreement.
WTT assumes the risk of any work performed or action taken by WTT based upon
oral statements, or on documents or notations, not in accordance with the Design
Specifications, this Section 3.3, any Delivery Order and Exhibit B hereto.
4. IMPLEMENTATION AND ACCEPTANCE OF SPECIFICATIONS AND CUSTOM SOFTWARE
4.1. IMPLEMENTATION SCHEDULE
The Implementation Schedule, as contained in any Delivery Order, sets
forth the expectations of the parties as to the timing of the various stages of
any project undertaken in a Delivery Order. WTT recognizes that time and timely
performance are of the essence in this Agreement. In the event any milestone set
forth in the Implementation Schedule is not met due to any delay caused by WTT's
acts or omissions, WTP shall not be required to remit the payment except for
actual out of pocket expenses, as evidenced by appropriate written
documentation, which is associated with such milestone until such milestone is
met. Additionally, WTT shall use commercially reasonable efforts to ensure that
such delay does not result in slippage of later milestones.
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<PAGE> 4
4.2. DESIGN SPECIFICATIONS
On execution of a Delivery Order hereunder, WTT shall, with WTP's
cooperation, gather the necessary detailed requirements and develop and deliver
to WTP a set of Design Specifications meeting WTP's requirements as set out in
such Delivery Order. An authorized representative of WTT shall certify to WTP in
writing that the Design Specifications are fully capable of meeting WTP's
requirements as contained in the Delivery Order, except as expressly agreed to
otherwise in writing by WTP. If such Design Specifications are prepared by WTT
at WTP's request and initiation under such a Delivery Order, the Delivery Order
shall provide for WTP to pay for the preparation of such Design Specifications
at cost. The Design Specifications shall be delivered to WTP on or before the
specified time set forth in the Implementation Schedule. Within a mutually
agreed upon date after the delivery of the Design Specifications to WTP, WTP
shall notify WTT in writing of its acceptance or rejection of the Design
Specifications. If the Design Specifications are rejected, WTP will specify the
reasons for such rejection and WTT shall revise and re-deliver amended Design
Specifications to WTP for acceptance. If WTP rejects the amended Design
Specifications, WTP shall have the right to terminate that project pursuant to
Section 9.2 herein. If WTP has neither accepted nor rejected the Design
Specifications within a reasonable amount of time after the delivery thereof,
the Design Specifications shall be deemed to have been accepted by WTP.
4.3. WTP ACCEPTANCE TESTING OF CUSTOM SOFTWARE
4.3.1 ALPHA TESTING
After WTT has certified to WTP in writing that the Custom Software has
been delivered and installed, that WTT testing of the Custom Software is
completed, and that the Custom Software is fully operational, fully integrated
with any and all pre-existing software or equipment in the WTP environment in
which it must operate and ready for acceptance testing by WTP, WTP shall
conduct WTP Alpha Tests as set forth in the Design Specifications (the "WTP
Alpha Testing"). WTT personnel will be present at such WTP Alpha Testing, if
requested by WTP, at cost. All WTP Alpha Testing will be conducted in accordance
with the Implementation Schedule of any relevant Delivery Order.
If the Custom Software fails to pass WTP Alpha Testing, WTP shall so
notify WTT in writing specifying the nature of such failure, and WTT shall use
all reasonable effort to correct such failure after which WTP shall repeat WTP
Alpha Testing. In the event of termination, WTP shall pay WTT for all work
performed through the date of termination, provided that such payment shall not
be greater than the payment that would have been due if the work had been
completed.
4.3.2 BETA TESTING
Upon completion of Alpha Testing, WTP shall utilize the Custom Software
for an initial thirty (30) day period, as set forth in the relevant
Implementation Schedule, for the processing of WTP's data in a production-like
environment (the "Beta Test"). The Beta Test shall be successfully completed
upon notice from WTP to WTT that WTP is satisfied, in its reasonable discretion,
that for a mutually agreed upon period (i) all of the functions of the Custom
Software have been provided and perform in accordance with this Agreement and
the Design Specifications, and (ii) all reliability and performance standards
have been met or exceeded (the "Final Custom Software Acceptance").
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<PAGE> 5
If the Custom Software fails to pass the Beta Test, WTP shall so notify
WTT in writing specifying the nature of such failure(s) in reasonable detail and
WTT shall use all reasonable efforts to correct the specified failure(s) after
which WTP shall commence another Beta Test. In the event of termination, WTP
shall pay WTT for all work performed through the date of termination, provided
that such payment shall not be greater than the payment that would have been due
if the work had been completed.
5. COMPENSATION
5.1. INSTALLMENT PAYMENTS FOR DEVELOPMENT
As consideration for the development of the Design Specifications and
the discharge of all of WTT's obligations under this Agreement, WTP agrees to
pay WTT a fee as follows (the "Development Fee"):
(a) For developments related to the service bureau or other
business lines of WTT, as requested by WTP, the Development Fee shall be WTT's
actual costs of development. WTT shall share with WTP twenty percent (20%) of
the profits generated by WTT in licensing such products to offset, but not to
exceed, the development costs;
(b) For development of WTP Customer-specific products or
non-generic products the Development Fee shall be equal to WTT's market rates;
(c) For developments related to MeetingsAssist, WTP shall pay
one-third of the research and development costs associated with the
MeetingsAssist development for the next two (2) years. By January 1, 2002, WTT
shall either: i) assign all right, title and interest in and to MeetingsAssist
and all developments related thereto to WTP, in which event WTP shall pay WTT
market rate for any further development related to MeetingsAssist, or ii) retain
title to MeetingsAssist and provide support and hosting for MeetingsAssist at
cost plus twenty percent (20%), in which event WTP's obligation to pay any
portion of the Meeting Assist research and development costs shall terminate.
(d) Notwithstanding the foregoing or anything to the contrary
contained elsewhere in this Agreement, all development services provided by WTT
to WTP from the Effective Date through December 31, 1999 shall be at no cost to
WTP. All development from January 1, 2000 shall be paid for by WTP in accordance
with (a) through (c) above.
The Development Fee will be paid in installments in accordance with
the payment schedule set forth in the Delivery Order, and each installment shall
be payable upon completion of each milestone by WTT and acceptance by WTP in
accordance with Section 4 hereof. The Development Fees payable hereunder shall
be effective for the first five (5) years of the Agreement and shall be
renegotiated by the parties prior to the end of year five (5) of the Agreement.
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5.2. REVIEW OF FEES
WTT will submit the charges to be invoiced for services performed and
the applicable time reports or documentation required hereunder to the WTP
Project Coordinator for review and approval prior to actual invoicing. The
charges and/or expenses invoiced in accordance with this Article V, except for
any amounts disputed by WTP, shall be payable by WTP within thirty (30) days of
WTP's receipt of each invoice. Any disputed charges shall not affect payment of
non-disputed charges and/or expenses, in accordance with the terms of this
Agreement.
5.3. RECORDS
WTT shall maintain complete and accurate accounting records, in a form
in accordance with generally accepted accounting principles, to substantiate
WTT's charges hereunder and WTT shall retain such records for a period of three
(3) years from the date of final payment hereunder.
5.4. AUDIT RIGHTS
WTP shall have the right to audit or have audited the books and records
of WTT relating to the amounts invoiced to WTP hereunder for the purpose of
verifying the amounts due and payable hereunder, upon at least five (5) business
days' notice to WTT. The cost of such audit shall normally be at WTP's expense;
provided, however, that WTT will bear the cost of the audit if the audit reveals
any overpayment which, in the aggregate, is greater than three percent (3%) of
the amount which was actually due for the period being audited.
6. WARRANTIES AND REPRESENTATIONS
WTT hereby warrants and represents to WTP as follows:
6.1. The work to be performed hereunder shall be of professional quality and
will conform to generally accepted standards for software in the software
development field. Any services performed by WTT which are determined by WTP to
be of less than professional quality or which contain errors or defects shall be
corrected by WTT without charge.
6.2. The Design Specifications and Custom Software will contain only (i)
original material created by WTT or (ii) material which has been properly
licensed from third parties and has been used by WTT in accordance with the
licenses for such materials, provided that the inclusion of all such third party
materials shall have been agreed to by WTP.
6.3. Neither the Design Specifications nor WTP-Custom Software has been or
will be assigned, transferred or otherwise encumbered, and neither the Design
Specifications nor WTP-Custom Software nor any portion thereof, infringes any
patents, copyrights, trade secrets, or other proprietary rights of any third
party, and WTT has no reason to believe that any such infringement or claims
thereof could be made by third parties.
6.4. WTT has obtained or will obtain all necessary rights and licenses to
third party materials included in the Design Specifications and Custom Software
to enable WTP to use the Design Specifications and Custom Software for the
purposes allowed hereunder and has provided to WTP copies of all documents
granting all such rights and licenses.
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6.5. Unless expressly agreed otherwise by the parties and excepting those
time bombs or disabling devices that will be resident in the Application
Software until such time as final payment for any such Software has been
received by WTT from WTP, to the best of WTT's knowledge the Application
Software, upon acceptance by WTP, shall be free of any and all "time bombs,"
disabling mechanisms and copy protect mechanisms which may disable the
Application Software or such other software, and WTT agrees to ensure against
any data lost as a result of same that was present in the Application Software
when accepted by WTP. In addition, WTT warrants that its quality assurance
procedures include testing the Custom Software for viruses to the extent that
virus testing utilities are commercially available.
6.6. The Custom Software shall function properly and in substantial
conformity with any specifications contained within the applicable Delivery
Order for a period of six (6) months after WTP's acceptance of such software.
During such warranty period, WTT shall correct any defects identified by WTT or
by WTP at no cost.
6.7. NO OTHER WARRANTY, EXPRESS OR IMPLIED, IS MADE WITH RESPECT TO THE
CUSTOM SOFTWARE, OTHER SOFTWARE OR SERVICES TO BE SUPPLIED HEREUNDER, INCLUDING
WITHOUT LIMITATION ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
7. CONFIDENTIALITY, OWNERSHIP AND NON-SOLICITATION
7.1. CONFIDENTIALITY
7.1.1. The parties acknowledge that the Design Specifications and Custom
Software developed hereunder will constitute either WTT's or WTP's Trade Secrets
depending on which party owns such Design Specifications and Custom Software in
accordance with Paragraph 7.2 below. Additionally, the parties acknowledge that
in the course of developing the Design Specifications and Custom Software each
party may have access to other Trade Secrets and Confidential Information of the
other party. The parties agree that they will only make their Trade Secrets and
Confidential Information available to the other on an as needed basis. The
receiving party agrees to make such Confidential Information and Trade Secrets
available only to those employees, agents, or authorized third parties who have
signed appropriate confidentiality agreements covering such Trade Secrets and
Confidential Information. The parties agree that they will not discuss or
otherwise make available such information to any third parties without the prior
written consent of the other, and will use such information only in accordance
with the provisions of this Agreement. Accordingly, the parties agree that (i)
during the term of this Agreement and after the termination or expiration
hereof, the parties will not, except as expressly authorized or directed by the
other, use, copy, or disclose, or permit any unauthorized person access to, any
Trade Secrets; and (ii) during the term hereof and for a period of two (2) years
after the termination or expiration of this Agreement, the parties will not use,
copy, or disclose, or permit any unauthorized person access to, any Confidential
Information.
7.1.2. Except as otherwise provided in this Agreement, upon the termination or
expiration of this Agreement, both parties shall deliver to each other all
memoranda, notes, records, tapes, documentation, disks, manuals, files or other
documents, and all copies thereof, concerning or containing Confidential
Information or Trade Secrets that are in either party's possession. Further,
both parties shall ensure that upon the termination or expiration of this
Agreement all Trade Secrets and Confidential Information belonging to the other
party are purged from the receiving party's computer memory.
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7.2. OWNERSHIP
7.2.1. WTP agrees that any and all intellectual property which is conceived,
first reduced to practice, made or developed in the course of work performed
under this Agreement by WTT or by one or more of WTT's employees, consultants,
representatives or agents, including, but not limited to, all software and
documentation, and all copyrights subsisting therein, except as provided in
Paragraph 7.2.2, are and shall remain the exclusive property of WTT, and WTP
agrees to assign to WTT all rights and title to such intellectual property,
provided, however, WTT hereby grants WTP a non-exclusive, perpetual, paid-up
non-transferable license to such intellectual property with no right to
sublicense without WTT consent. WTP shall use such intellectual property only
for the purpose of providing services to its Customers. In no event shall WTP
use such intellectual property for service bureau use absent a separate written
agreement explicitly providing for such use. All use of the intellectual
property by WTP shall be consistent with the provisions of this Agreement, and
such other terms and conditions on which the parties may mutually agree,
including the End User Agreement.
7.2.2. WTT agrees that any and all intellectual property which is conceived,
first reduced to practice, made or developed in the course of work performed
under this Agreement by WTT or by one or more of WTT's employees, consultants,
representatives or agents, including, but not limited to, all software and
documentation, and all copyrights subsisting therein, which is WTP Custom
Software, shall be considered a "work for hire" and shall be the exclusive
property of WTP. WTT agrees to assign to WTP all rights and title to such
intellectual property.
7.2.3. Each party agrees that it will promptly sign all papers and do all acts
which may be reasonably necessary to enable the party owning intellectual
property in accordance with this Paragraph 7.2, at the owning party's expense,
to file and prosecute applications for copyrights, patents, and/or trademarks
for the intellectual property owned by such party hereunder.
7.3 NON-SOLICITATION
7.3.1 During the term of this Agreement and for any individual employee for
six months following termination or resignation of such employee, neither party
shall employ, solicit or make any offers to employ any employees of the other
party used by the original employing party in the performance of the Services or
additional services, without the prior written consent of the original employer.
The original employer shall be entitled, in addition to any other remedies it
may have at law or in equity, to a payment from the hiring party in an amount
equal to one year's salary of any employee the hiring party employs, solicits or
offers to employ in violation of this Section.
8. INDEMNIFICATION
8.1. INFRINGEMENT INDEMNITY
WTT shall indemnify, defend and hold WTP and its officers, directors,
agents and employees harmless from and against any and all liabilities, damages,
losses, expenses, claims, demands, suits, fines or judgments, including
reasonable attorneys' fees, and costs and expenses incidental thereto, which may
be suffered by, accrued against, charged to or recoverable from WTP or any of
its officers, directors, agents or employees, arising out of a claim that any
Custom Software, or any portion thereof, infringes or misappropriates any United
States or foreign patent, copyright, trade secret or other proprietary right.
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8.2. GENERAL INDEMNITY BY WTT
WTT shall indemnify, defend and hold WTP and its officers, directors,
agents and employees harmless from and against any and all liabilities, damages,
losses, expenses, claims, demands, suits, fines or judgments, including
reasonable attorneys' fees, and costs and expenses incidental thereto, which may
be suffered by, accrued against, charged to or recoverable from WTP or any of
its officers, directors, agents or employees, arising out of or resulting from
claims of bodily injury, loss, claim or damage or physical destruction of
property and any claims of third parties arising out of the performance of this
Agreement and/or any breach of this Agreement by WTT, its officers, directors,
agents, employees and subcontractors.
8.3. LITIGATION
Promptly after receipt by WTP of a threat of any action, or a notice of
the commencement or filing of any action against which WTP may be indemnified
hereunder, WTP shall give notice thereof to WTT, provided that failure to give
or delay in giving such notice to WTT shall not relieve WTT of any liability it
may have to WTP hereunder except to the extent that WTT's defense of such action
is prejudiced thereby. WTT shall have sole control of the defense and of all
negotiations for settlement of such action, except that no compromise or
settlement thereof may be effected or committed to by WTT without WTP's
consent. WTP agrees to reasonably cooperate with WTT in the defense or
settlement of any such claim. If all or any part of the Custom Software is, or
in the opinion of WTT may become, the subject of any claim or suit for
infringement of any intellectual property rights, WTT may, and in the event of
any adjudication that the Custom Software or any part thereof does infringe, or
if the use of the Custom Software or any part thereof is enjoined, WTT shall, at
its expense do one of the following things: (1) procure for WTP the right to use
the Custom Software or the affected part thereof; (2) replace the Custom
Software or affected part with other suitable programs; or (3) modify the Custom
Software or affected part to make it non-infringing.
9. TERM AND TERMINATION
9.1. TERM
The term of this Agreement will begin on November 1, 1999 (the
"Effective Date") and will continue until the latter of (a) the tenth
anniversary of the Effective Date, (b) the date that this Agreement expires
following the extension of its term (unless terminated sooner in accordance with
this Agreement), or (c) the termination of any one of the End User License
Agreement, the OFS Service Bureau/Outsourcing Agreement, or the TTG Service
Bureau Agreement.
9.2 TERMINATION
(A) TERMINATION FOR BREACH
Either party may terminate this Agreement at any time in the event of a
material breach of the terms hereof by the other party if such party shall fail
to cure such material breach within thirty (30) days of receipt of written
notice thereof.
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(B) TERMINATION BY WTP
WTP may terminate projects upon written notice to WTT in the event
that: (A) WTP rejects any amended Design Specifications pursuant to
Section 4.2 hereof or (B) the Custom Software fails to pass Acceptance
Testing as more particularly described in Section 4.3 hereof.
9.3. WTP OBLIGATIONS UPON TERMINATION
In the event of termination of this Agreement by WTT, WTT will work
together with WTP or a designated third party to identify the
information, materials and resources WTP is entitled to receive and to
develop an overall plan for transitioning such items to WTP in
accordance with the following provisions (collectively, "Termination
Assistance"). The terms of this Agreement as they relate to Termination
Assistance shall remain in effect until WTP has completed its
Termination Assistance. WTT will provide the Termination Assistance
described below for a period of no less than ninety (90) days and no
more than six (6) months per WTP's written request, except as provided
in this Section. WTT's obligation to provide Termination Assistance
will be conditioned upon WTP paying to WTT all outstanding invoices
prior to the commencement of any Termination Assistance and will be
conditioned upon WTP continuing to pay when due any and all fees due
hereunder during the Termination Assistance period. WTP shall pay WTT's
standard hourly rates and reasonable expenses for any Termination
Assistance provided by WTT. This fee is in addition to any other
payments required under this Agreement. Notwithstanding the termination
or expiration of this Agreement, the terms and conditions of this
Agreement will apply to all services provided by WTT during such
period. If WTP requests Termination Assistance beyond the available
capacity of the WTT on-site staff, such request will be treated as a
request for additional services and WTT will pay the agreed upon charge
for such additional services. The provisions of this Section will
survive the expiration or termination of this Agreement for any reason.
WTP and WTT will jointly develop a plan (the "Transition Plan") to
effect the orderly transition and migration to WTP or a designated
third party from WTT of all services then being performed or managed by
WTT under this Agreement (the "Termination Transition"). The Transition
Plan will indicate the schedule on which WTT will turn over
responsibility for each service to WTP. The Transition Plan will set
forth the tasks to be performed by WTP and WTT, the time for completing
such tasks and the criteria for declaring the transition "completed".
The parties and their employees and agents will cooperate in good faith
to execute the plan and each party agrees to perform those tasks
assigned to it in the Transition Plan. WTT will direct the execution of
the Transition Plan. The Transition Plan will include the following
tasks and such other tasks as may be agreed upon by WTP and WTT:
(i) Providing WTP access to necessary data files and
programs, certain non-proprietary operational
procedures and data and documentation in WTT's
possession related to the Services.
(ii) Returning all WTP confidential and proprietary
information in WTT's possession, except for one copy
which WTT may retain, subject to its confidentiality
obligations, for internal recordkeeping purposes and
for compliance with applicable professional
standards.
(iii) Returning all WTP software to WTP with data and
documentation. WTT will deliver to WTP all WTP data
in a format applicable for use by WTP and will
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seek to minimize the amount of manual data entry or
re-keying necessary in connection with the transfer
of such data to WTP.
9.4. OBLIGATION TO MINIMIZE DAMAGES.
Both parties shall have an obligation to take such steps as may be
reasonably necessary to minimize damages to the parties on termination,
including, but not limited to, minimizing all contractual obligations
that but for the existence of this Agreement, neither party would have
entered into.
10. DESIGNEES.
10.1. JOC PROCEDURES. The following representatives will comprise a joint
oversight committee (the "JOC") which will meet at least quarterly. The
functions of such committee, among other things, will be to provide input on
design direction and development, product direction, review and analyze changes
in the market, prioritize resources to effectuate performance of the parties
obligations hereunder, and review and analyze the performance of the parties in
accordance with the applicable statements of work and milestones.
WTT Designee: Steve Reynolds
WTP Designee: Brenda Catanesi
Newco Designee:
-----------------------------
If a JOC Member resigns or leaves its employer, the party with a vacancy will
promptly appoint a replacement.
10.2. MANAGEMENT REPRESENTATIVES. Each party hereby appoints the following
individual as its Management Representative for purposes of this Agreement:
WTT: President or CEO
WTP: W. Thomas Barahm
If a Management Representative resigns or leaves its employer, the party with a
vacancy will promptly appoint a replacement.
11. DISPUTE RESOLUTION.
11.1. INITIAL PROCEDURES. The parties shall make all reasonable efforts to
resolve all disputes without resorting to litigation. If a dispute arises
between the parties, the JOC Representatives will attempt to reach an amicable
resolution. If either JOC Representative determines that an amicable resolution
cannot be reached, such JOC Representative shall submit such dispute in writing
to the Management Representatives, who shall use their best efforts to resolve
it or to negotiate an appropriate modification or amendment.
11.2. ESCALATION. Except as otherwise provided in the termination provisions
hereof, neither party shall be permitted to exercise any other remedies until
the later of (i) the date that either Management Representative concludes in
good faith that an amicable resolution of the dispute through continued
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negotiation is unlikely, or (ii) sixty (60) days following the date that both
parties have notified a Management Representative pursuant to Section 11.1. If
either party fails to designate a Management Representative at its own
initiative, it shall do so within three business days of a request from the
other party to do so.
11.3. ARBITRATION. If the parties are unable to reach a resolution of any
matter within the negotiation procedures outlined herein, the parties may submit
such matter to arbitration under the rules of the American Arbitration
Association. If the parties resort to arbitration, no arbitrator shall be
entitled to award punitive damages.
12. GENERAL TERMS
12.1. GOVERNING LAW - This Agreement shall be governed by and construed
according to the laws of the State of Georgia of the United States of America,
without regard to its choice of laws provisions.
12.2. NOTICES - All notices required to be sent under this Agreement,
including notices of address change, shall be sent by registered or certified
mail, return receipt requested, by nationally recognized overnight delivery
service or courier, or by facsimile. Notice so sent shall be deemed to have been
given when mailed or transmitted to the following addresses:
if to WTP : Timothy J. Severt
WorldTravel Partners I, L.L.C.
1055 Lenox Park Boulevard
Atlanta, GA 30319
if to WTT: Ralph Manaker
General Counsel
WorldTravel Technologies, L.L.C.
6 W. Druid Hills Drive
Atlanta, GA 30329
12.3. SEVERABILITY - In the event that any one or more of the provisions of
this Agreement is determined by a court of competent jurisdiction to be invalid,
unenforceable or illegal, such invalidity, unenforceability or illegality shall
not affect any other provisions of this Agreement and the Agreement shall be
construed as if the challenged provision had never been contained herein. The
parties further agree that in the event such provision is an essential part of
this Agreement, they will immediately begin negotiations for a suitable
replacement provision.
12.4. NO WAIVER - The failure of either party at any time to require
performance by the other party of any provision of this Agreement shall in no
way affect that party's right to enforce such provisions, nor shall the waiver
by either party of any breach of any provision of this Agreement be taken or
held to be a waiver of any further breach of the same provision.
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12.5. ASSIGNMENT - It is understood and agreed by the parties that the
services of WTT are unique and personal in nature and WTT shall not assign its
required performance to any other individual, firm or entity without the express
written consent of WTP, which consent shall not be unreasonably withheld.
Notwithstanding the foregoing, WTT may assign its required performance to Newco
or a WTT subsidiary or affilite without such written consent.
12.6. SURVIVAL - The provisions of Sections 5.3 and 5.4 and Sections 6, 7, 8,
9, 11 and 12 of this Agreement shall survive the expiration or other termination
of this Agreement.
12.7. TIME OF THE ESSENCE - Time shall be of the essence with respect to the
duties, obligations and performance of the parties under this Agreement.
12.8. REMEDIES - The rights and remedies of the parties set forth in this
Agreement are not exclusive and are in addition to any other rights and remedies
available to it at law or in equity.
12.9. MULTIPLE COUNTERPARTS - This Agreement may be executed in several
counterparts, all of which taken together shall constitute one single agreement
between the parties.
12.10. RELATIONSHIP BETWEEN THE PARTIES - The relationship of WTT to WTP is
that of an independent contractor. Under no circumstances shall any employees of
one party be deemed to be the employees of the other for any purpose. Each party
shall pay all compensation and benefits due its respective employees relative to
this Agreement and shall be responsible for all obligations respecting them
relating to income tax withholdings, unemployment insurance premiums, pension
plan contributions, and other similar responsibilities. Nothing contained herein
shall be construed as implying a joint venture or partnership or franchise
relationship between the parties hereto. Neither party has the right or
authority to assume or to create any obligation or responsibility on behalf of
the other party, except as may from time to time be provided by written
instrument signed by both parties.
12.11. FORCE MAJEURE - No delay or default in performance of any obligation by
either party, excepting all obligations to make payments hereunder, shall
constitute a breach of this Agreement to the extent caused by force majeure.
12.12. TAXES - In addition to the other charges payable under this Agreement,
WTT shall be solely responsible for the payment of any taxes and duties based
upon the facilities, assets, and Services, any additional services and/or
products provided by WTT, exclusive of any taxes based upon WTT's income. Both
parties agree to take all reasonable steps to minimize all taxes, which might be
assessed on either party based on the parties' performance hereunder.
12.13. ENTIRE AGREEMENT - This Agreement, together with any Delivery Order
executed by the parties, constitutes the complete understanding between the
parties with regard to the subject matter herein and supersedes all previous and
contemporaneous agreements and representations, whether written or oral. This
Agreement may not be modified, supplemented, or amended except in a writing
signed by an authorized representative of each party.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered by their duly authorized representatives, as of the date first
written above.
WORLDTRAVEL TECHNOLOGIES, L.L.C. WORLDTRAVEL PARTNERS I, L.P.
By: /S/ Ralph Manaker By: /S/ Danny Hood
----------------------------- --------------------------
Ralph Manaker Danny Hood
President President
ATTACHMENTS TO THIS AGREEMENT:
Exhibit A - Delivery Order Form
Exhibit B - Change Order Procedure
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EXHIBIT A
DELIVERY ORDER #_________
TO LICENSE AND DEVELOPMENT AGREEMENT
BETWEEN WORLDTRAVEL TECHNOLOGIES, L.L.C.
AND WORLDTRAVEL PARTNERS I, L.L.C.
I. STATEMENT OF WORK
II. DELIVERABLES
III. IMPLEMENTATION SCHEDULE AND PAYMENT
IV. PERSONNEL
IN WITNESS WHEREOF, the parties hereto have caused this Delivery Order to be
executed and delivered by their duly authorized representatives, as of the date
first written above, and such Delivery Order is hereby incorporated into the
above-referenced Agreement.
WORLDTRAVEL TECHNOLOGIES, L.L.C. WORLDTRAVEL PARTNERS I, L.L.C.
By: By:
----------------------------- ---------------------------
Authorized Signature Authorized Signature
Name: Name:
--------------------------- ------------------------
Title: Title:
--------------------------- ------------------------
<PAGE> 16
EXHIBIT B
CHANGE ORDER PROCEDURE
Step 1. Change Identification
WTP will identify the need for a change in the Design Specifications. This
request shall be in writing, authorized by the WTP Project Coordinator, and
submitted to the WTT Project Coordinator.
Step 2. Analysis
The WTT Project Coordinator will handle all initial requests submitted by WTP,
and will assign the appropriate level of technical support personnel to review
each such request. WTT personnel will review each request and produce a proposal
with initial designs addressing the parameters specified by WTP. The proposal
will also address the effect, if any, of the change on the Implementation
Schedule and/or other terms and conditions of the Software Development
Agreement. The WTT Project Coordinator will submit the proposal to WTP for its
review and approval.
Step 3. Analysis Review.
WTP will review WTT 's proposal and will authorize WTT in writing to perform one
of the following actions:
A. cancel initial request (no charges incurred, no change to the
Design Specifications)
B. perform change at rates and upon terms specified in the
proposal submitted by WTT pursuant to Step 2 above
C. enter negotiations as to rates and/or terms which will apply
to the change
Step 4. Implementation
WTT will respond to the corresponding WTP authorization (as set forth in Step 3
above) as follows:
A. cancel all efforts
B. begin implementation of change
C. negotiate rates quoted and/or terms and conditions specified
in the proposal submitted by WTT pursuant to Step 2 (results
of negotiation to be reflected in a revised proposal by WTT
pursuant to Step 2)
Step 5. Delivery/Acceptance
If the proposed change does not provide for an acceptance procedure, then upon
completion of any change undertaken by WTT pursuant to Step 4, item B above, WTT
will deliver the completed products to WTP for its review and acceptance in
accordance with WTT's proposal. WTP will notify WTT in writing if the products
delivered do not meet the specifications contained within WTT's proposal in
accordance with the terms and conditions of this Agreement and/or the amendment
pertaining to the change.
<PAGE> 1
EXHIBIT 10.4
WORLDTRAVEL TECHNOLOGIES, L.L.C.
END USER SOFTWARE LICENSE AGREEMENT
This End User Software License Agreement (this "Agreement") is made and entered
into this first day of November, 1999 by and between WORLDTRAVEL TECHNOLOGIES,
L.L.C., a Georgia limited liability company located at 6 W. Druid Hills Drive,
Atlanta, GA 30329 (hereinafter "WTT") and WORLDTRAVEL PARTNERS I, L.L.C.,
located at 1055 Lenox Park Blvd., Atlanta, GA 30319 (hereinafter "WTP").
Subject to the following terms and conditions, WTT hereby grants WTP a
non-exclusive license to use the WTT software product(s) and related manuals and
documentation specified on Exhibit A attached hereto.
1. DEFINITIONS
1.1 Customer - Customer shall mean an entity doing business,
relating to travel agency services, with a given party on the
date in question. For corporate entities, only those divisions
or portions of a corporation doing business with such party on
the date in question are considered to be included in the
definition of Customer.
1.2 Enhancement - Changes to the Product that provide additional
features and/or functionality, expanding the capabilities of
the Product, or so significantly expands a function as to be
considered a new function.
1.3 Improvements - New functionality that addresses areas that
were not covered in the Initial Software Release for the
Product, or so significantly expands a function as to be
considered a new function.
1.4 Master Development Agreement - That agreement between the
parties executed concurrently with this Agreement under which
WTT shall perform certain software development services for
WTP.
1.5 Modification - Changes to the Product that affect existing
functionality. Normally this includes streamlining processes,
revising screens for clarity, etc.
1.6 OFS Service Bureau/Outsourcing Agreement - That agreement
between the parties executed concurrently with this Agreement
under which WTT provides Online Fulfillment Services (OFS) to
WTP.
1.7 Product - A logical grouping of WTT software which is sold by
a specific product name. The Product(s) which are licensed
under this Agreement are described on Exhibit A.
[*] The redacted portions indicated by this symbol are the subject of a
confidential treatment request and have been filed separately with the
Securities and Exchange Commission.
<PAGE> 2
1.8 Software Release - A complete or partial delivery of one or
more WTT Products. Normally on magnetic media, but may be
transmitted electronically, at WTT's discretion. There are
several kinds of Software Releases, determined by their own
reason, as listed below.
1.8.1 Initial Software Release - The initial delivery of
the Product(s) licensed from WTT.
1.8.2 Upgrade Release (Upgrade) - Changes to the Product
delivered after the Initial Software Release. WTT
reserves the right to charge an additional fee for
Upgrades which add Enhancements or Improvements to
the Initial Software Release.
1.8.3 Corrective Release (Fix) - Changes to the Product
delivered to correct a bug that impairs the normal
operation of the Product. May be inclined as part of
an Upgrade Release, or covered under a support
agreement.
1.9 Software - Means, collectively, all of the Software Releases
provided by WTT from time to time, with respect to the
Product(s) licensed under this Agreement.
1.10 TTG Service Bureau Agreement - That agreement between the
parties executed concurrently with this Agreement under which
WTT, through its Travel Technologies Group, provides certain
services and data information to WTP.
1.11 Users - Entities and individuals who use the services bureau
offering. Users shall not include WTP.
2. SCOPE OF LICENSE
2.1 WTT hereby licenses to WTP the Software under the terms and
conditions outlined herein. WTP may sublicense such Software
in certain limited situations. Any and all right to sublicense
a particular Product shall be listed on Exhibit A hereto. In
any event, WTP is prohibited from, and shall prohibit its
sublicensees from, using the Products for service bureau use
or for use on behalf of other travel agencies or corporations
who are not WTP Customers.
2.2 The Software and its related documentation cannot be
transferred, sold, or otherwise made available by WTP to
another party without WTT's express written consent. As a
condition to any such consent, WTT may require the execution
of a new License Agreement and payment of a fee equal to the
difference between the license fee paid for the Initial
Software Release and the then-current Product Price as
specified in the applicable WTT price list.
2.3 An Upgrade Release, if provided by WTT and accepted by WTP,
replaces part or all of the Software for the Product
previously licensed. This Agreement applies to
<PAGE> 3
the Initial Software Release and all subsequent Software
Releases, whether supplied under this Agreement or otherwise.
2.4 WTT shall provide WTP with support services for the software
Products licensed in Section 2.1 above. Such services shall be
provided through WTT under the terms and conditions listed in
Exhibit B.
2.5 Any new WTT Products, Enhancements and Improvements, shall be
made available to WTP before such Products are made available
to other Users, unless such Products were funded by a third
party who paid for such development. All new Products,
Enhancements and Improvements offered to Users will be made
available to WTP pursuant to WTT's then-current rates or less,
at WTT's discretion.
3. WTT'S PROPRIETARY RIGHTS; WTP RESTRICTIONS
3.1 WTP acknowledges that the Software and its related
documentation are proprietary to WTT and are protected by
United States copyright law and international treaty. By
virtue of this Agreement, WTP acquires only the non-exclusive
right to use the Software and related user documentation and
does not acquire any rights of ownership in such materials.
WTT, or its licensor, shall at all times retain all rights,
title and interest in the Software, related documentation, and
any derivatives thereof.
3.2 WTP agrees not to cause or permit the reverse engineering,
disassembly, copying or recompilation of the Software, except
to reproduce machine-readable object code portions for back-up
purposes and installation of new Software Releases, under
penalty of termination but not exclusive of any other
remedies.
3.3 WTP may copy the Software for installation, back-up or other
purposes as described in the documentation. WTP may not copy,
or permit others to copy the Software or any Software Release
for any other purpose.
3.4 WTP agrees not to remove, alter, or conceal any product
identification, copyright notices, or proprietary restrictions
from the Software, the media on which it is delivered, or
related user documentation and to reproduce all such notices
on any copies of the Product and user documentation created by
WTP.
3.5 WTP may not copy or allow others to copy any part of the user
documentation or other printed material provided with the
Product or Software Release by any means, including data
transmission or translation.
<PAGE> 4
4. PRICING AND PAYMENT
4.1 The license fees for the Product(s) licensed pursuant to this
Agreement are set forth on Exhibit A hereto. Prices are quoted
and payments must be made in US dollars. Payments are due in
accordance with the terms set forth in Exhibit A. Any payment
not received within thirty (30) days of the date due shall
bear interest, at the rate of one and one-half percent (1.5%)
per month, on the amount over thirty days past due. Payment
for additional Products licensed from WTT shall be due on the
same terms, unless otherwise agreed in writing by WTT.
4.2 The license fees do not include any charge for taxes and WTP
is solely responsible for paying any and all federal, state
and local taxes attributable to its purchase, possession or
use of the Product(s) or any services rendered by WTT in
connection with this Agreement, excluding only taxes based
upon the net income of WTT.
5. LIMITED WARRANTY
5.1 WTT represents and warrants to WTP that it has the right to
license the Software as provided herein. WTT further warrants
to WTP that for a period of three months from the date of
delivery of the Initial Software Release (the "Warranty
Period"), the Software shall operate substantially in
accordance with its then-current functional specifications as
published by WTT, including any subsequent modifications to
such specifications mutually accepted by WTP and WTT. If
during the Warranty Period WTP determines that this software
is unfit for WTP's intended purpose for any reason and
provided WTT is unwilling or unable to correct all identified
deficiencies, incompatibilities, defects or errors identified
in the Software with a new copy of the Software that does not
contain all identified deficiencies, incompatibilities,
defects or errors within reasonable time frame acceptable to
both parties, WTP may terminate this Agreement. WTP may obtain
from WTT a refund of the related license fee paid for the
Software.
5.2 WTP shall notify WTT (in writing) of failure of the Software
to operate in conformity with the functional specifications
promptly following discovery thereof. Provided that WTP
notifies WTT of such failure prior to expiration of the
Warranty Period, WTT will investigate and take corrective
action as expeditiously as is reasonably possible. If any
Software fails to operate in accordance with the related
functional specifications, WTT will use its best efforts to
correct the Software so that it will operate substantially in
accordance with the relevant functional specifications. If WTT
determines that the reported error or non-conformity is not
due to any error or defect in the Software supplied by WTT,
WTP shall compensate WTT for its services on a time and
materials basis at WTT's then-prevailing rates.
5.3 WTT shall not be liable to WTP for any claim or defect arising
from or based upon (i) any alteration or modification of any
Software not provided by WTT;
<PAGE> 5
(ii) problems with WTP's equipment or other software; or (iii)
any other cause beyond the control of WTT.
5.4 WTT further warrants to WTP that the disks on which the
Software is recorded be free from defects in materials and
workmanship under normal use and service for a period of
ninety (90) days from the last day of Meeting Partner and
Airline CRS Interface installation and training to be held at
the user site, whichever comes later.
5.5 EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION 5, NO EXPRESS OR
IMPLIED WARRANTY IS MADE BY WITT WITH RESPECT TO ANY PRODUCT,
ANY SOFTWARE RELEASE THE DOCUMENTATION OR ANY OTHER MATTER,
INCLUDING WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. WITT DOES
NOT WARRANT THAT ALL ERRORS IN THE PRODUCT CAN OR WILL BE
CORRECTED OR THAT THE FUNCTIONALITY OF THE PRODUCT WILL MEET
WTP'S REQUIREMENTS.
6. PATENT, COPYRIGHT OR TRADEMARK INFRINGEMENT
6.1 Subject to the terms of this Section 6, WTT will defend WTP
against any claim that the Software furnished hereunder
infringes any United States patent, copyright, trade secret or
trademark, and will indemnify WTP against any liability,
damage, or expense (including court costs and reasonable
attorneys' fees) arising from a final award against WTP based
on such claims, provided WTP: (i) promptly notifies WTT in
writing of any claim or judgment of infringement; (ii) permits
WTT to exclusively defend, compromise, settle or appeal any
such claim or judgment (at the expense of WTT); (iii) assists
and cooperates with WTT, as reasonably requested by WTT, to
enable WTT to defend, compromise, settle or appeal any such
claim, suit, demand or judgment; and (iv) has complied with
the terms of this Agreement. The provisions of this Section 6
shall not prohibit WTP's participation with WTT in the defense
or appeal of any such claim or judgment should WTP choose to
participate, at its own expense (such expense not being
indemnified by WTT) and with attorneys of its own choice,
provided that WTT shall have sole control and authority with
respect to any such defense, compromise, settlement, appeal or
similar action.
6.2 WTT shall have no obligation to WTP under this Section 6 if
the actual or alleged infringement is based upon (i) any
modification or alteration of the Software that was not
supplied by WTT, or (ii) the use of the Software in
combination with any other software or equipment, as such
actual or alleged infringement would not have arisen absent
such combination.
6.3 Should WTP's right to continue to use the Software pursuant
hereto be enjoined by a court because the Software is declared
to infringe a valid United States
<PAGE> 6
patent, copyright, trade secret or trademark, WTT shall not be
in breach of this Agreement if WTT either: (i) procures for
WTP the right to continue to use the Software; (ii) modifies
the Software to render it non-infringing but substantially
functionally equivalent to the Software prior to such
modification; or (iii) replaces the Software with
non-infringing software that is substantially functionally
equivalent to the Software. In the event that none of the
options set forth in this Section 6.3 are reasonably possible
or effective, WTT shall be entitled to terminate this
Agreement and the license granted herein and refund to WTP the
license fee paid for the particular Product or Software
Release found to be infringing, less 1/60 of such amount for
each month following the expiration of the Warranty Period in
which WTP maintained possession of the Product or Software
Release.
6.4 THIS SECTION 6 STATES WTT'S ENTIRE OBLIGATION TO WTP REGARDING
ANY ACTUAL OR ALLEGED INFRINGEMENT, VIOLATION OR
MISAPPROPRIATION OF ANY THIRD PARTY'S PATENT, COPYRIGHT,
TRADEMARK OR OTHER PROPRIETARY RIGHTS RELATING TO THE
SOFTWARE.
7. LIMITATIONS OF LIABILITY
7.1 EXCEPT AS PROVIDED IN SECTION 6, NEITHER WTT OR ITS OFFICERS,
DIRECTORS, EMPLOYEES OR AGENTS, WILL BE LIABLE TO WTP FOR ANY
SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF
THIS AGREEMENT OR THE BREACH THEREOF, OR ARISING OUT OF WTP'S
POSSESSION OF, USE OF OR INABILITY TO USE THE SOFTWARE, OR ANY
PORTION THEREOF. SUCH EXCLUDED DAMAGES INCLUDE, WITHOUT
LIMITATION, DAMAGES OR COSTS INCURRED AS A RESULT OF LOSS OF
TIME, LOSS OF DATA OR LOSS OF PROFITS THAT MAY ARISE IN
CONNECTION WITH THE USE OF OR INABILITY TO USE THE SOFTWARE,
REGARDLESS OF WHETHER SUCH DAMAGES OR CLAIMS ARE BASED ON
BREACH OF WARRANTY OR CONTRACT, NEGLIGENCE, STRICT LIABILITY,
TORT, PRODUCTS LIABILITY OR OTHERWISE.
7.2 WTT WILL NOT BE LIABLE FOR ANY CLAIM AGAINST WTP BY ANY THIRD
PARTY, INCLUDING TIMESHARING CUSTOMERS.
7.3 EXCEPT AS PROVIDED IN SECTION 6, IN NO EVENT WILL WTT'S
LIABILITY FOR ANY DAMAGES OR INJURIES TO WTP EVER EXCEED THE
LICENSE FEE PAID BY WTP FOR THE PRODUCT, REGARDLESS OF THE
FORM OF ACTION, WHETHER IN CONTRACT, NEGLIGENCE, STRICT
LIABILITY, TORT, PRODUCTS LIABILITY OR OTHERWISE.
<PAGE> 7
8. TERM AND TERMINATION
8.1 This Agreement shall be effective on the date above written
and shall continue indefinitely unless terminated as provided
herein.
8.2 Either party may terminate this Agreement and the license and
right granted herein if the other party breaches any of the
provisions of this Agreement and (i) fails to remedy such
breach within thirty (30) days after receiving written notice
thereof; or (ii) provided the breach does not relate to a
monetary obligation, fails to (a) commence a good faith action
to remedy such breach within thirty (30) days after receiving
written notice thereof, and (b) diligently pursue such action
to conclusion. This Agreement shall automatically and
immediately terminate on the termination or expiration of any
one of the OFS Service Bureau/Outsourcing Agreement, the TTG
Service Bureau Agreement or the Master Development Agreement.
Termination of this Agreement shall not constitute WTT's
exclusive remedy breach or non-performance by WTP and WTT
shall be entitled to seek all other available remedies, both
legal and equitable, including injunctive relief.
8.3 Upon termination of this Agreement for any reason, WTP shall
immediately cease all use of the Software, remove all copies
of the Product from its computers and return to WTT all
Software Releases and related documentation.
8.4 The provisions of Sections 3, 5, 6, 7 and 10 hereof shall
survive the termination of this Agreement.
9. NON-SOLICITATION
9.1 The Parties agree that the education, training and retention
of their respective employees are essential, and each party
agrees that during the term of this Agreement and, in the case
of any individual employee for a period of six months, after
termination or resignation of such employee, neither party
shall, directly or indirectly, recruit, solicit or hire any
employee of the other without prior written consent of the
other party. In the event either party shall violate the terms
of this paragraph, the soliciting or hiring party shall pay
the other party, upon receipt of written demand, an amount
equal to the greater of one (1) year's compensation for such
employee at the rate paid immediately prior to such hiring.
10. GENERAL
10.1 This Agreement, including Exhibits A and B attached hereto,
represents the entire understanding and agreement between the
parties, and supersedes any and all previous discussions and
communications. Any subsequent amendments and/or additions
hereto shall be effective only if in writing and signed by
both parties. This Agreement shall be binding upon and inure
to the benefit of the successors and assigns of the respective
parties hereto.
<PAGE> 8
10.2 This Agreement shall be interpreted under the laws of the
State of Georgia, and any legal action resulting from it shall
be held within the jurisdiction of the State of Georgia. It is
understood that the parties shall use their best endeavors to
amicably resolve any dispute or difference arising from this
Agreement.
10.3 Headings of paragraphs in this Agreement are inserted for
convenience only, and are in no way intended to limit or
define the scope and/or interpretation of this Agreement.
10.4 This Agreement does not include any professional services or
on-going maintenance and support that may be needed to
install, implement, train, support or otherwise make
operational the Product on WTP's hardware platform.
10.5 WTP shall be entitled to a copy of and shall have the right to
use the source code for the Product(s) licensed hereunder if:
i) WTT becomes insolvent or a party to any bankruptcy or
receivership proceedings or makes an assignment for the
benefit of creditors; or ii) WTT is in material default of
performance under this Agreement or of any software support
agreement then in effect between the parties relating to the
Product(s); or iii) WTT ceases to market or support the
Product(s) and such marketing/support is not continued by
another corporation or entity, or is continued by another
corporation or entity, which WTP for reasonable cause deems
unsatisfactory.
10.6 Any notice given pursuant to this Agreement is to be in
writing and delivered personally or sent by certified mail,
return receipt requested, or by air express, return receipt
requested to the individuals shown below, or to such other
persons or addresses as the parties may designate in a notice
conforming with the requirements of this Section. Any such
notice, when delivered in the manner aforesaid, shall be
deemed given on the date of receipt.
For WTP: Timothy J. Severt
WorldTravel Partners, I, L.L.C.
1055 Lenox Park Boulevard
Atlanta, GA 30319
For WTT: Ralph Manaker
General Counsel
WorldTravel Technologies, L.L.C.
6 W. Druid Hills Road
Atlanta, GA 30329
<PAGE> 9
IN WITNESS WHEREOF, the undersigned duly authorized representatives of
the parties hereto made and entered in this Agreement as of the date
first above written.
WORLDTRAVEL TECHNOLOGIES, L.L.C. WORLDTRAVEL PARTNERS I, L.L.C.
By: /s/ Ralph Manaker By: /s/ John C. Alexander
----------------------------- -------------------------------
Ralph Manaker John C. Alexander
President President
<PAGE> 10
EXHIBIT A: PRODUCTS
1. The parties understand and agree that the fees outlined in the TTG
Service Bureau Agreement, include payment for the licenses granted
hereunder. Should the OFS Service Bureau/Outsourcing Agreement, the
TTG Service Bureau Agreement or the Master Development Agreement
terminate, the parties shall negotiate an appropriate license fee for
the Product(s) licensed hereunder in the event that the parties decide
to allow the terms and conditions of this Agreement to continue in
full force and effect.
2. Listed below are the licensed Products and any applicable license fees:
Licensed Products Initial License Fees
CRS Screen Highlighter 4.2 Covered under the TTG Service
SW Direct Bureau Agreement
MeetingsAssist 2.1 See below*
3. WTP shall have the right to sublicense to Customers for Customers'
internal use only, and only on the prior written approval of WTT, the
following products: Highlighter, SWDirect, and MeetingsAssist. WTP
shall require such sublicensees to sign a support and maintenance
agreement consistent with the agreement attached hereto as Exhibit B,
which is incorporated herein by reference.
* WTP shall pay [*] per Qualified Transaction, as defined in the TTG
Service Bureau Agreement, commencing on January 1, 2000 until December 31, 2001,
plus [*] of the research and development costs associated with the
MeetingsAssist development for the next two (2) years in accordance with the
Master Development Agreement. As provided in the Master Development agreement,
by January 1, 2002, WTT shall either assign all right, title and interest in and
to MeetingsAssist to WTP or retain title to MeetingsAssist and provide support
and hosting for MeetingsAssist at cost plus [*], in which event WTP's obligation
to pay a fee per transaction and a portion of the research and development costs
shall terminate and WTP's license shall continue at no cost, but otherwise in
accordance with the terms and conditions of this Agreement
<PAGE> 1
EXHIBIT 10.5
WORLDTRAVEL TECHNOLOGIES, L.L.C.
SERVICE BUREAU SOFTWARE SERVICES AGREEMENT
This Service Bureau Software Services Agreement (this "Agreement") is
made and entered into this first day of November, 1999 (the "Effective Date") by
and between WORLDTRAVEL TECHNOLOGIES, L.L.C. located at 6 W. Druid Hills Drive,
Atlanta, GA 30329, (hereinafter "WTT") and WORLDTRAVEL PARTNERS I, L.L.C.
located at 1055 Lenox Park Boulevard, Atlanta, GA 30319 (hereinafter "User").
Subject to the terms and conditions in this Agreement, WTT hereby agrees to
provide WTP certain services through the use of WTT's software product(s) and
related manuals and documentation specified on Exhibit A attached hereto and
incorporated herein.
1. DEFINITIONS
1.1 Customer - Customer shall mean an entity doing business,
relating to travel agency services, with a given party on the
date in question. For corporate entities, only those divisions
or portions of a corporation doing business with such party on
the date in question are considered to be included in the
definition of Customer.
1.2 End User Agreement - That agreement between the parties
executed concurrently with this Agreement under which WTT
licenses the use of certain WTT software and products to WTP.
1.3 Global Distribution System or GDS - A computer system or
network used to check and make reservations of a travel
related nature.
1.4 Master Development Agreement - That agreement between the
parties executed concurrently with this Agreement under which
WTT shall perform certain software development services for
WTP.
1.5 Modifications - Changes to the Product that provide additional
features and/or functionality, expanding the capabilities of
the Product in existing functional areas, or affect existing
functionality.
1.6 OFS Service Bureau/Outsourcing Agreement - That agreement
between the parties executed concurrently with this Agreement
under which WTT provides Online Fulfillment Services (OFS) to
WTP.
1.7 Product - A logical grouping of WTT software, in object code
only, and related documentation which are sold by a specific
product name.
1.8 Qualified Transactions - All ticketed reservations less voids
reported from WTP's back office accounting system.
[*] The redacted portions indicated by this symbol are the subject of a
confidential treatment request and have been filed separately with the
Securities and Exchange Commission.
<PAGE> 2
1.9 Service Bureau - Computer facility located at WTT's Dallas
office, or other facilities from time to time as designated by
WTT, from which WTT, through its Travel Technologies Group
division ("TTG") will provide Services and data information to
the WTP.
1.10 Services - Those services listed in Exhibit A.
1.11 Software - Collectively, all of the software programs created
by WTT from time to time, with respect to the Product
identified on Exhibits A and B, and all Software Releases.
1.12 Software Release - A complete or partial delivery of Software
implemented at WTT's discretion on the servers which reside at
the WTT Dallas facility or such other facility as designated
by WTT from time to time.
1.13 Users - Entities and individuals who use the service bureau
offering. Users shall not include WTP.
2. SCOPE OF SERVICES
2.1 The Software will run and reside at the WTT service bureau
offices located at 7557 Rambler Road, Dallas, TX 75231, or
such other facilities as designated by WTT from time to time.
The Software will be run by WTT according to WTP's specific
needs and requests (to be mutually determined and outlined by
the parties). WTT will compile the data and forward it to a
person designated by WTP on a monthly basis.
2.2 The Service Bureau will process transactions from WTP's
company-owned locations in the United States and Canada only.
Transactions from other locations will be covered under a
separate agreement. The parties acknowledge that WTP has the
right to resell the Services to its Customers. Such right
shall not be affected by this Agreement.
2.3 The Software will include adaptations for use with the
specified GDS. From time to time, WTP may request other
specific Modifications to the Software. The development of any
and all Modifications requested by WTP for the Software shall
be covered by that Master Development Agreement executed
between the parties concurrently with this Agreement. For any
such Modifications and new Products, WTT agrees that all such
Modifications shall first be made available to WTP and then
the Modification(s) may be made available to all other Users
of the Software unless such Modifications or new Products were
funded by a third party who paid for such development. All
Modifications and new Products offered to other Users will be
made available to WTP pursuant to WTT's then-current rate or
less, at WTT's discretion. All such Modifications shall be
loaded on WTT's server as part of the service bureau system.
<PAGE> 3
2.4 The Joint Oversight Committee or JOC (as defined in Section 9)
of this Agreement shall set priorities for the allocation of
WTT resources necessary to adequately perform under this
Agreement. Once the JOC sets a start date for any project or
other matter to be undertaken under this Agreement, such start
date cannot be changed by WTT, unless the scope of the project
has been changed by the parties. In setting such priorities
and start dates the JOC shall take into consideration other
business issues facing WTT and other commitments of WTT.
2.5 Both parties will periodically discuss and review WTP's
competitive environment which would include a review of WTP's
competitors' technology, cost or pricing structure and service
offerings, to the extent such information is known (and with
respect to WTT, to the extent that disclosure of such
information is not restricted by a third party). If the
parties determine that there is significant financial impact
from new or improved technology: (1) which would reduce costs
or improve service; (2) which would make competitors' costs
for services at or below WTP's cost for comparable services;
or (3) which would make competitors' service offerings
superior to those of WTP, then, the parties shall jointly
determine, in good faith, if a change in technology, cost or
services should be made, in accordance with the provisions of
Section 10.
2.6 WTP shall run all Qualified Transactions through the Service
Bureau. WTT shall have the right to audit WTP's division
financial statements for discrepancies.
3. WTT'S PROPRIETARY RIGHTS; WTP RESTRICTIONS
3.1 WTP acknowledges that the Software, related documentation and
the data compiled hereunder, embody valuable confidential and
proprietary information of WTT, the development of which
required the expenditure of considerable time and money by
WTT, and are protected by United States copyright law and
international treaty. WTP shall treat such information so
received in confidence and shall not use, copy disclose, nor
permit any of its personnel (excepting those employees with a
"need to know" and who have signed appropriate confidentiality
agreements) to use, copy, or disclose the same, or the
existence of same, for any purpose that is not specifically
authorized under this Agreement. By virtue of this Agreement,
WTP acquires only the non-exclusive right as described above
to receive the Services provided by WTT through the use of its
proprietary Software and related documentation, and does not
acquire any license thereto or any rights of ownership in such
materials. WTP is specifically prohibited from reselling or
sublicensing the Products or establishing its own Service
Bureau without the prior written consent of WTT, except as set
forth in a separate agreement between the parties'
subsidiaries, Travel Technologies Group LLC, and WorldTravel
Partners Affiliates, Inc. In the event such written permission
is given by WTT, an appropriate royalty or sales commission
shall be negotiated between the parties. WTT, or its licensor,
at all times retain all right, title and interest in the
Software, related documentation, and any derivatives thereof.
<PAGE> 4
3.2 WTP agrees not to remove, alter or conceal any product
identification, copyright notices, or other notices or
proprietary restrictions from the monthly data information
reports provided to WTP by WTT and to reproduce any and all
such notices on any copies of such materials.
3.3 WTP recognizes and acknowledges that any use or unauthorized
disclosure of the Software by WTP may cause WTT irreparable
damage for which other remedies may be inadequate, and WTP
hereby acknowledges as proper any request to a court of
competent jurisdiction by WTT for injunctive or other
equitable relief seeking to restrain such use or disclosure.
3.4 WTP has selected the Services provided hereunder and assumes
full responsibility for the data provided, stored or
transmitted by means of the Software, and the use of such
data, including the results obtained therefrom.
3.5 Except for WTT's obligations under Section 5, WTP shall
defend, indemnify and hold harmless WTT from any demand, suit,
cause of action, judgment, liability, cost of expense
(including court costs and reasonable attorneys fees) arising
out of the Services provided and the data compiled hereunder.
4. PRICING AND PAYMENT
4.1 The fees for the Services provided pursuant to this Agreement
are set forth in Section 4.3 below. All payments will be made
within thirty (30) days of receipt of invoice in immediately
available U.S. Dollars without withholding, deduction or
offset and regardless of whether WTP collects any fees from
its customers. WTP shall pay interest on all amounts not paid
when due at the rate of 1.5% per month or the highest lawful
rate, whichever is less. WTT has the right to suspend the
Services for non-payment upon thirty (30) days written notice.
All fees shall be valid for five (5) years from the Effective
Date of this Agreement. By the end of the fourth year of this
Agreement, the parties shall renegotiate the fees for services
hereunder. If the parties cannot agree, then this Agreement
will terminate on the fifth anniversary of the Effective Date.
4.2 The fees for the Services do not include any charge for taxes
and WTP is solely responsible for paying any and all national
and local taxes (including any and all export/import taxes and
customs duties) attributable to the Services rendered by WTT
or any authorized distributor in connection with this
Agreement, excluding only taxes based upon the net income of
WTT or an authorized distributor. In the event that any new
taxes are imposed by any authority, the parties shall review
the competitive environment in accordance with the provisions
of Section 2.5 hereunder to determine if any changes should be
made in technology, cost or services. Both parties agree to
take all reasonable steps to minimize taxes, which might be
assessed on either party based on the parties' performance
hereunder.
4.3 For the term of this Agreement, WTP shall pay WTT [*] per
Qualified Transaction in accordance with Exhibit A. This fee
does not cover
<PAGE> 5
Meeting Assist, which is priced separately as outlined in
Exhibit A. WTP shall run all Qualified Transactions through
WTT in accordance with the licenses granted under this
Agreement for as long as WTT is offering such Products. WTT
will not discontinue any Products licensed hereunder without
WTP's consent. If WTT discontinues a Product, then the cost
per transaction listed herein shall be adjusted to reflect a
pro rata reduction.
4.4 Should third party CRS access fees change so that WTT would
suffer increased costs in providing the Services hereunder,
the parties shall renegotiate the financial and/or services
terms of this Agreement in accordance with the provisions of
Section 7.6.
5. LIMITED WARRANTY
5.1 WTT represents and warrants that it will provide the Services
hereunder in a timely, workmanlike fashion and in accordance
with industry standards. WTT will not be liable to WTP for any
claim or defect arising from or based upon any cause beyond
the control of WTT.
5.2 EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION 5, NO EXPRESS OR
IMPLIED WARRANTY IS MADE BY WTT WITH RESPECT TO ANY SERVICE,
PRODUCT, SOFTWARE RELEASE, DATA COMPILATION OR ANY OTHER
MATTER, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES
OR CONDITIONS OF MERCHANTABILITY, SATISFACTORY QUALITY OR
FITNESS FOR A PARTICULAR PURPOSE. WTT DOES NOT WARRANT THAT
ALL ERRORS IN THE SOFTWARE CAN OR WILL BE CORRECTED OR THAT
THE FUNCTIONALITY OF THE SOFTWARE WILL MEET WTP'S
REQUIREMENTS.
6. LIMITATIONS OF LIABILITY
6.1 NEITHER WTP, WTT NOR THEIR RESPECTIVE OFFICERS, DIRECTORS,
EMPLOYEES OR AGENTS, WILL BE LIABLE TO THE OTHER FOR ANY
CLAIMS OR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING
OUT OF THE SERVICES PROVIDED BY THIS AGREEMENT OR A BREACH OF
THE AGREEMENT, WHETHER SUCH DAMAGES OR CLAIMS ARE BASED ON
BREACH OF WARRANTY OR CONTRACT, NEGLIGENCE, STRICT LIABILITY,
TORT, PRODUCTS LIABILITY OR OTHERWISE.
6.2 IN NO EVENT WILL EITHER PARTY'S LIABILITY FOR ANY DAMAGES OR
INJURIES TO EITHER PARTY HEREUNDER EVER EXCEED THE TOTAL
SERVICE FEE PAID BY WTP FOR THE SERVICES PROVIDED HEREUNDER,
REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT,
NEGLIGENCE, STRICT LIABILITY, TORT, PRODUCTS LIABILITY OR
OTHERWISE.
<PAGE> 6
7. TERM AND TERMINATION
7.1 The term of this Agreement will begin on November 1, 1999 (the
"Effective Date"), and will continue until the latter of (a)
the tenth anniversary of the Effective Date, or (b) the date
that this Agreement expires following the extension of its
term (unless terminated sooner in accordance with this
Agreement), or (c) the termination of any one of the End User
License Agreement, Master Development Agreement, or the OFS
Service Bureau/ OutsourcingAgreement.
7.2 Extension and Renewal. Unless terminated earlier, if upon the
ninth anniversary of the Effective Date, the parties have not
agreed to a written Amendment extending this Agreement, this
Agreement shall terminate at the end of the tenth year of its
initial ten (10) year term.
7.3 Either party may terminate this Agreement and the rights
granted herein if the other party breaches any of the
provisions of this Agreement and (i) fails to remedy such
breach within thirty (30) days after receiving written notice
thereof, or (ii) provided the breach does not relate to a
monetary obligation, fails to (a) commence a good faith action
to remedy such breach within thirty (30) days after receiving
written notice thereof, and (b) diligently pursue such action
to conclusion. In the event WTT fails to meet the Service
Performance requirements, as specified in this Agreement, WTP
shall give WTT notice of such non-compliance and WTT shall
take all reasonable actions to correct such non-compliance as
soon as practicable. In the event that there is a continued
failure by WTT to meet the Service Performance requirements,
WTP shall give WTT notice of such non-compliance and within
five (5) days of receiving such notice, WTT shall provide a
corrective action plan to WTP for approval. WTP shall review
and approve such corrective action plan or provide reasonable
required changes to WTT within five (5) days from WTP's
receipt of such plan. In the event that WTT does not meet the
Service Performance requirements within the time period set
forth in any corrective action plan, WTP may terminate this
Agreement for cause pursuant to the notice provisions provided
in Section 7.3 (i) and (ii). Termination of this Agreement
does not constitute either parties' exclusive remedy for
breach or non-performance by the other party and each party is
entitled to seek all other available remedies, both legal and
equitable, including injunctive relief.
7.4 Should either party (1) admit in writing its inability to pay
its debts generally as they become due; (2) make a general
assignment for the benefit of creditors; (3) institute
proceedings to be adjudicated a voluntary bankrupt; (4)
consent to the filing of a petition of bankruptcy against it;
(5) be adjudicated by a court of competent jurisdiction as
being bankrupt or insolvent; (6) seek reorganization under any
bankruptcy act; (7) consent to the filing of a petition
seeking such reorganization; or (8) have a decree entered
against it by a court of competent jurisdiction appointing a
receiver, liquidator, trustee, or assignee in bankruptcy or in
insolvency covering all or substantially all of such party's
property or providing for the liquidation of such party's
property or business affairs; then, in
<PAGE> 7
any such event, the other party, at its option and without
prior notice, may terminate this Agreement effective
immediately.
7.5 Upon termination of this Agreement for any reason, WTT's
obligation to provide the Services hereunder will immediately
cease. If the Agreement is terminated due to a breach by WTT,
WTT will be responsible for submitting to WTP the data
compilation for the portion of the month up to and including
the effective termination date. If the Agreement is terminated
due to a breach by WTP, WTT will have no such obligation to
provide a data compilation to WTP for the month when
termination became effective.
7.6 Should there by any material change, as determined by either
party; (1) in any laws, ordinances, orders, rules or
regulations governing the way the parties may operate; (2) in
travel industry conditions, including but not limited to,
airfares (e.g., net fares or net/net fare arrangements) or
compensation to WTP, by action of any industry vendor,
governing body or client; or (3) in technology including but
not limited to computer reservation systems or the Internet;
which material change has the effect of materially increasing
or decreasing the cost of doing business; then, either party
shall have the right to provide written notice to the other
party of such change and both parties agree to renegotiate in
good faith the financial and/or service terms of this
Agreement in accordance with the provisions of Section 10. If
the parties are unsuccessful in renegotiating mutually
satisfactory terms, either party shall have the right to
terminate this Agreement at any time thereafter with thirty
(30) days advance written notice.
7.7 WTP Obligations Upon Termination . In the event of termination
of this Agreement by WTT, WTT will work together with WTP or a
designated third party to identify the information, materials
and resources WTP is entitled to receive and to develop an
overall plan for transitioning such items to WTP in accordance
with the following provisions (collectively, "Termination
Assistance"). The terms of this Agreement as they relate to
Termination Assistance shall remain in effect until WTT has
completed its Termination Assistance. WTT will provide the
Termination Assistance described below for a period of no less
than ninety (90) days and no more than six (6) six months per
WTP's written request, except as provided in this Section.
WTT's obligation to provide Termination Assistance will be
conditioned upon WTP paying to WTT all outstanding invoices
prior to the commencement of any Termination Assistance and
will be conditioned upon WTP continuing to pay when due any
and all fees due hereunder during the Termination Assistance
period. WTP shall pay WTT standard hourly rates and reasonable
expenses for any Termination Assistance provided by WTT. This
fee is in addition to any other payments required under this
Agreement. Notwithstanding the termination or expiration of
this Agreement, the terms and conditions of this Agreement
will apply to all services provided by WTT during such period.
If WTP requests Termination Assistance beyond the available
capacity of the WTT on-site staff, such request will be
treated as a request for additional services and WTP will pay
the agreed upon charge for such additional services. The
provisions of this Section will
<PAGE> 8
survive the expiration or termination of this Agreement for
any reason.
WTP and WTT will jointly develop a plan (the "Transition
Plan") to effect the orderly transition and migration to WTP
or a designated third party from WTT of all services then
being performed or managed by WTT under this Agreement (the
"Termination Transition"). The Transition Plan will set forth
the tasks to be performed by WTP and WTT, the time for
completing such tasks and the criteria for declaring the
transition "completed". The parties and their employees and
agents will cooperate in good faith to execute the plan and
each party agrees to perform those tasks assigned to it in the
Transition Plan. WTT will direct the execution of the
Transition Plan. The Transition Plan will include the
following tasks and such other tasks as may be agreed upon by
WTP and WTT:
(i) Providing WTP access to necessary data files and
programs, certain non-proprietary operational
procedures and data and documentation in WTT's
possession related to the Services.
(ii) Returning all WTP confidential and proprietary
information in WTT's possession, except for one copy
which WTT may retain, subject to its confidentiality
obligations, for internal recordkeeping purposes and
for compliance with applicable professional
standards.
(iii) Returning all WTP data and documentation. WTT will
deliver to WTP all WTP data in a format application
for use by WTP and will seek to minimize the amount
of manual data entry or re-keying necessary in
connection with the transfer of such data to WTP.
7.8 Obligation To Minimize Damages. Both parties shall have an
obligation to take such steps as may be reasonably necessary
to minimize damages to the parties on termination, including,
but not limited to, minimizing all contractual obligations
that but for the existence of this Agreement, neither party
would have entered into.
7.9 The provisions of Sections 3, 5, 6, 7, 8 , 10 and 11 hereof
survive the termination of this Agreement.
8. NON-SOLICITATION AND CONFIDENTIALITY
8.1 During the term of this Agreement and, for any individual
employee for six months following termination or resignation
of such employee, neither party shall employ, solicit or make
any offers to employ any employees of the other party used by
the original employing party in the performance of the
Services or Additional Services, without the prior written
consent of the original employer. The original employer shall
be entitled, in addition to any other remedies it may have at
law or in equity, to a payment from the hiring party in an
amount equal to
<PAGE> 9
one year's salary of any employee the hiring party employs,
solicits or offers to employ in violation of this Section.
8.2 During the course of this Agreement the parties may come into
possession of technology, computer software, documentation,
trade secrets, products, copyrights or other confidential and
proprietary information ("Confidential Information") of the
other. Each party agrees to refrain from distributing,
copying, disclosing or disseminating in any form the
Confidential Information of the other party to any person or
entity except to those employees or agent who have a need to
know and who are obligated to maintain the confidentiality of
such Confidential Information. Neither party shall use the
Confidential Information of the other for any purpose other
than that for which it was disclosed. All Confidential
Information of a party shall remain the property of that party
and will be promptly returned upon request or at the
termination of this Agreement. Each party's obligation with
respect to the Confidential Information of the other party
shall expire three (3) years after the termination of this
Agreement.
8.3 During the term of this Agreement, unless requested by WTP,
WTT will not sell or license any Services or Products directly
to WTP's Customers receiving travel management Services
without giving notice to WTP and sharing equally with WTP any
profits received.
9. JOINT OVERSIGHT COMMITTEE
9.1 JOC Procedures. The following representatives will comprise a
joint oversight committee (the "JOC") which will meet at least
quarterly. The functions of such committee, among other
things, will be to review and analyze the performance of the
parties based on the service performance standards specified
in this Agreement.
WTT Designee: WTT Account Representative
WTP Designee: Brenda Catanesi
If a JOC Member resigns or leaves its employer, the party with a
vacancy will promptly appoint a replacement.
9.2 Management Representatives
Each party hereby appoints the following individual as its
Management Representative for purposes of this Agreement:
WTT: Steve Reynolds
WTP: W. Thomas Barahm
If a Management Representative resigns or leaves its employer,
the party with a vacancy will promptly appoint a replacement.
<PAGE> 10
9.3 Report Contents. WTT will prepare (i) a listing of key service
activities, and (ii) definitions of measurements of
qualitative and quantitative service performance levels for
each such key service activity, and will submit such listings
and definitions to the JOC for approval. Such service
performance levels will be used to measure WTP's and WTT's
performance of their responsibilities under this Agreement.
9.4 Performance Levels. WTT will deliver to the JOC for each
calendar quarter (within thirty (30) days of the end of such
quarter), commencing with the calendar quarter beginning
December 1, 1999, service performance reports ("Service
Performance Reports") that identify, for each JOC approved key
service activity, the performance level for that activity. The
JOC will review the parties' performance during the relevant
time period (including but not limited to the information,
contained in the Service Performance Reports), and will
provide feedback to both WTT and WTP regarding the performance
of their respective responsibilities under this Agreement. The
JOC will also periodically review the definitions and
measurements used in the Service Performance Reports and
revise them as necessary to reflect the most appropriate
measures of WTT and WTP performance. The initial failure by
WTT to meet any service performance level shall not be
considered a breach of this Agreement, until the provisions of
Section 7.3 have been satisfied.
10. DISPUTE RESOLUTION.
10.1 Initial Procedures. The parties shall make all reasonable
efforts to resolve all disputes without resorting to
litigation. If a dispute arises between the parties, the JOC
Representatives will attempt to reach an amicable resolution.
If either JOC Representative determines that an amicable
resolution cannot be reached, such JOC Representative shall
submit such dispute in writing to the Management
Representatives, who shall use their best efforts to resolve
it or to negotiate an appropriate modification or amendment.
10.2 Escalation. Except as otherwise provided in the termination
provisions hereof, neither party shall be permitted to
exercise any other remedies until the later of (i) the date
that either Management Representative concludes in good faith
that an amicable resolution of the dispute through continued
negotiation is unlikely, or (ii) sixty (60) days following the
date that both parties have notified a Management
Representative pursuant to Section 10.1. If either party fails
to designate a Management Representative at its own
initiative, it shall do so within three business days of a
request from the other party to do so.
11. GENERAL
11.1 This Agreement, including the Exhibits attached hereto,
represents the entire understanding and agreement between the
parties, and supersedes any and all
<PAGE> 11
previous discussions and communications. No employee or agent
of WTT nor any distributor is authorized to make any
additional representations or warranties related to the
Services provided hereunder or the Software. Any subsequent
amendments and/or additions hereto are effective only if in
writing and signed by both parties. WTP may not assign its
rights or obligations under this Agreement without the prior
written consent of WTT. Subject to the foregoing limitation on
assignment, this Agreement is binding upon and inures to the
benefit of the successors and assigns of the respective
parties hereto.
11.2 This Agreement is to be interpreted in accordance with the
laws of the State of Georgia. Any legal action resulting from
it is to be held within the jurisdiction of the applicable
state and federal courts of Atlanta, Georgia. It is understood
and agreed that the parties will use their best endeavors to
amicably resolve any dispute or difference arising from this
Agreement.
11.3 Headings of paragraphs in this Agreement are inserted for
convenience only, and are in no way intended to limit or
define the scope and/or interpretation of this Agreement.
11.4 The failure of either party at any time to require performance
by the other party of any provision hereof is not to affect in
any way the full rights of such party to require such
performance at any time thereafter, nor is the waiver by
either party of a breach of any provision hereof to be taken
or held to be a waiver of the provision itself or any future
breach.
11.5 The parties hereto are independent contractors, and nothing in
this Agreement is to be construed to create a partnership,
joint venture, or agency relationship between WTT and WTP.
11.6 If any part, term, or provision of this Agreement is held to
be illegal, unenforceable, or in conflict with any law of a
federal, state, or local government having jurisdiction over
this Agreement, the validity of the remaining portions or
provisions are not to be affected thereby.
11.7 Any notice given pursuant to this Agreement is to be in
writing and delivered personally or sent by certified mail,
return receipt requested, or by air express, return receipt
requested, to the individuals shown below, or to such other
persons or addresses as the parties may designate in a notice
conforming with the requirements of this Section. Any such
notice, when delivered in the manner aforesaid, shall be
deemed given on the date of receipt.
For WTP: Timothy J. Severt
WorldTravel Partners I, L.L.C.
1055 Lenox Park Boulevard
Atlanta, GA 30319
<PAGE> 12
For WTT: Ralph Manaker
General Counsel
WorldTravel Technologies, L.L.C.
6 W. Druid Hills Road
Atlanta, GA 30329
(SIGNATURES ON FOLLOWING PAGE)
<PAGE> 13
IN WITNESS WHEREOF, the undersigned duly authorized representatives of
the parties hereto have made and entered into this Agreement as of the Effective
Date.
WorldTravel Technologies, L.L.C. WorldTravel Partners I, L.L.C.
Signed: /S/ Ralph Manaker Signed: /S/ Danny Hood
----------------------------- ----------------------
Ralph Manaker Danny Hood
President President
<PAGE> 14
EXHIBIT A: SERVICES BUREAU SERVICES
CoRRe: an acronym for Centrally Oriented ResReview Edition is a quality control
robot running a series of tests against record files stored in an automated
reservation system. It also consists of the following modules:
QualityCheck: allows you to define QC checks and comprehensive "PNR routines"
for reservation completion, error identification and/or correction;
SeatFinder: assures you that the best possible seat is offered, based on the
passengers' preference;
FareFinder: assures that the lowest possible fare is offered on the request or
alternate itinerary;
Clearance: repeatedly attempts to clear previously waitlisted flights and fares;
UpGrade: automatically moves your frequently flyers into first or business class
in compliance with airline and CRS rules;
ForeCast: a complete pre-trip report library and report generator
which lets you create customized reports for your customers.
Now they can act before travel $[*]/Transaction
ResAssist is a corporate Self Reservation system based on
internet technology. It enables flight, hotel and car reservation
with automatic pricing. It enables preferred vendor displays and
policy control. $[*]/Transaction
MeetingsAssist(1) is a Group and Meetings Management software
Product suite for planning and managing corporate meetings.
Other Services: Technical Sales Support and Collateral
Technical Consulting to Corporations Product Expertise at
Service Bureau Tradeshow Support ACTW and NBTA
Marketing Benefits of Technology. $[*]/Transaction
LICENSES
Highlighter $[*]/Transaction
SW Direct $[*]/Transaction
Profile Management $[*]/Transaction
$[*]/Transaction
- -----------
(1) MeetingsAssist support and or hosting will be billed at [*]. The license
fee is covered in the Transaction pricing above, but not support or hosting
fees.
<PAGE> 15
EXHIBIT B: LICENSES
EncoRRE1.1
CoRRe 2.3
ResAssist 5.0
ProfileSync 1.1
Infosync 1.1
MeetingsAssist 2.2
CRS Screen Highlighter 4.52
SW Direct
<PAGE> 1
EXHIBIT 10.6
WORLDTRAVEL TECHNOLOGIES, L.L.C.
OFS SERVICE BUREAU/OUTSOURCING AGREEMENT
This Service Bureau/Outsourcing Agreement (this "Agreement") is made
and entered into this first day of November, 1999 (the "Effective Date") by and
between WORLDTRAVEL TECHNOLOGIES, L.L.C. located at 6 W. Druid Hills Drive,
Atlanta, GA 30329, (hereinafter "WTT") and WORLDTRAVEL PARTNERS I, L.L.C.
located at 1055 Lenox Park Boulevard, Atlanta, GA 30319 (hereinafter "WTP").
Subject to the terms and conditions in this Agreement, WTT hereby agrees to
provide WTP certain services through the use of WTT's software product(s) and
related manuals and documentation specified on Exhibit A attached hereto, and
incorporated herein.
1. DEFINITIONS
1.1 Corporate Travel Services - Travel services provided to a
business entity's employees and/or contractors are paid for or
reimbursed by a company that has contracted directly with WTP
or with a travel agency, web portal, or other entity who has
contracted with a company to provide such services.
1.2 Consumer Travel Services - Travel services for air, car, train
and hotel accommodations offered and provided on an
individual, per item basis to the general public. This
includes charter and consolidator services for air
transportation.
1.3 Customer - Customer shall mean an entity doing business,
relating to travel agency services, with a given party on the
date in question. For corporate entities, only those divisions
or portions of a corporation doing business with such party on
the date in question are considered to be included in the
definition of Customer.
1.4 End User Agreement - That agreement between the parties
executed concurrently with this Agreement under which WTT
licenses the use of certain WTT software and products to WTP.
1.5 Global Distribution System or GDS - A computer system or
network used to check and make reservations of a travel
related nature.
1.6 Leisure Travel Services - Travel services offered to the
general public that represent a combination of travel products
that are pre-packaged as tours, cruises, and other specialty
leisure services.
1.7 Master Development Agreement - That agreement between the
parties executed concurrently with this Agreement under which
WTT shall perform certain software development services for
WTP.
[*] The redacted portions indicated by this symbol are the subject of a
confidential treatment request and have been filed separately with the
Securities and Exchange Commission.
<PAGE> 2
1.8 Modifications - Changes to the Product that provide additional
features and/or functionality, expanding the capabilities of
the Product in existing functional areas, or affect existing
functionality.
1.9 OFS Account - An account in which OFS is providing Corporate
Travel Services.
1.10 Product - Those services listed on Exhibit A.
1.11 Service Bureau - Computer facility located at WTT's Atlanta
office, or at other facilities as designated by WTT from time
to time, from which WTT, through its OFS Online Fulfillment
Services division ("OFS") will provide Services and data
information to WTP.
1.12 Services - Those online fulfillment services listed on Exhibit
A. This Agreement only covers OFS services and CORRE service
bureau services for transactions processed under this
Agreement. Any other CORRE service bureau services shall be
the subject of a separate agreement.
1.13 Software - Collectively, all of the software programs created
by WTT from time to time, with respect to the Product
identified on Exhibit B and all Software Releases.
1.14 TTG Service Bureau Agreement - That agreement between the
parties executed concurrently with this Agreement under which
WTT, through its Travel Technologies Group, provides certain
services and data information to WTP.
1.15 Users - Entities and individuals who use the service bureau
offering. User shall not include WTP.
2. SCOPE OF SERVICES
2.1 WTT shall provide certain Services to WTP related to Internet
transaction processing for WTP's Corporate Travel Service
Customer accounts. Leisure Travel Services and Consumer Travel
Services accounts are not covered by this Agreement. The
Software required to provide these Services will run and
reside at the WTT service bureau offices located at 6 W. Druid
Hills Road, Atlanta, GA 30329 or at other facilities as
designated by WTT from time to time. The Software will be run
by WTT according to WTP's specific needs and requests (to be
mutually determined and outlined by the parties) in the
provision of Services hereunder. WTT shall provide information
and reports to WTP as WTT fulfills the Services, as outlined
in Exhibit A.
2.2 The Service Bureau will process transactions from WTP's
company-owned locations in the United States and Canada only.
Transactions from other locations will be covered under a
separate agreement. The parties acknowledge that WTP
<PAGE> 3
has the right to resell the Services to its Customers. Such
right shall not be affected by this Agreement.
2.3 The Software will include adaptations for use with the
specified GDS. From time to time, WTP may request other
specific Modifications to the Software. The development of any
and all Modifications requested by WTP for the Software shall
be covered by that Master Development Agreement executed
between the parties concurrently with this Agreement. For any
such Modifications or new Products, WTT agrees that all such
Modifications shall be made available to WTP and then the
Modifications may be made available to all other Users of the
Service Bureau, unless such Modifications or new Products were
funded by a third party who paid for such development. All
Modifications and new Products offered to Users will be made
available to WTP pursuant to WTT's then-current rate or less,
at WTT's discretion. All such Modifications shall be loaded on
WTT's server as part of the service bureau system.
2.4 The Joint Oversight Committee or JOC (as defined in Section 9)
of this Agreement shall set priorities for the allocation of
WTT resources necessary to adequately perform under this
Agreement. Once the JOC sets a start date for any project or
other matter to be undertaken under this Agreement, such start
date cannot be changed by WTT, unless the scope of the project
has been changed by the parties. In setting such priorities
and start dates the JOC shall take into consideration other
business issues facing WTT and other commitments of WTT.
2.5 Both parties will periodically discuss and review WTP's
competitive environment which would include a review of WTP's
competitors' technology, cost or pricing structure and service
offerings, to the extent such information is known (and with
respect to WTT, to the extent that disclosure of such
information is not restricted by a third party). If the
parties determine that there is significant financial impact
from new or improved technology: (1) which would reduce costs
or improve service; (2) which would make competitors costs for
services at or below WTP's cost for comparable services; or
(3) which would make competitors' service offerings superior
to those of WTP, then, the parties shall jointly determine, in
good faith, if a change in technology, cost or services should
be made pursuant to the provisions of Section 10.
3. WTT'S PROPRIETARY RIGHTS; WTP RESTRICTIONS
3.1 WTP acknowledges that the Software, related documentation and
the data compiled hereunder, embody valuable confidential and
proprietary information of WTT, the development of which
required the expenditure of considerable time and money by
WTT, and are protected by United States copyright law and
international treaty. WTP shall treat such information so
received in confidence and shall not use, copy disclose, nor
permit any of its personnel (excepting those employees with a
"need to know" and who have signed appropriate confidentiality
agreements) to use, copy, or disclose the same, or the
existence of
<PAGE> 4
same, for any purpose that is not specifically authorized
under this Agreement. By virtue of this Agreement, WTP
acquires only the non-exclusive right as described above to
receive the Services provided by WTT through the use of its
proprietary Software and related documentation, and does not
acquire any license thereto or any rights of ownership in such
materials, except as may be set forth in a separate agreement.
WTP is specifically prohibited from reselling or sublicensing
the Services or establishing its own Service Bureau without
the prior written consent of WTT. In the event such written
permission is given by WTT, an appropriate royalty or sales
commission shall be negotiated between the parties. WTT, or
its licensor, at all times retain all right, title and
interest in the Software, related documentation, and any
derivatives thereof.
3.2 WTP agrees not to remove, alter or conceal any product
identification, copyright notices, or other notices or
proprietary restrictions from the monthly data information
reports provided to WTP by WTT and to reproduce any and all
such notices on any copies of such materials.
3.3 WTP recognizes and acknowledges that any use or unauthorized
disclosure of the Software by WTP may cause WTT irreparable
damage for which other remedies may be inadequate, and WTP
hereby acknowledges as proper any request to a court of
competent jurisdiction by WTT for injunctive or other
equitable relief seeking to restrain such use or disclosure.
3.4 WTP has selected the Services provided hereunder and assumes
full responsibility for the data provided, stored or
transmitted by means of the Software, and the use of such
data, including the results obtained therefrom.
3.5 Except for WTT's obligations under Section 5, WTP shall
defend, indemnify and hold harmless WTT from any demand, suit,
cause of action, judgment, liability, cost or expense
(including court costs and reasonable attorneys fees) arising
out of the Services provided hereunder.
4. PRICING AND PAYMENT
4.1 The price list of fees for the Services provided pursuant to
this Agreement are set forth on Exhibit C attached hereto.
Prior to the startup of a WTP Customer under this Agreement,
the parties will agree in writing to a specific fee structure
for that Customer based upon the specific Customer
requirements. Both parties acknowledge that the service
offering under this Agreement is a startup operation and both
parties will review the pricing in good faith after the
Services have been operating for six (6) months or longer if
agreed upon between the parties. All payments will be made
within thirty (30) days of receipt of invoice in immediately
available U.S. Dollars without withholding, deduction or
offset according to the payment schedule set forth on Exhibit
C, and regardless of whether WTP collects any fees from its
customers. WTP shall pay interest on all
<PAGE> 5
amounts not paid when due at the rate of 1.5% per month or the
highest lawful rate, whichever is less. WTT has the right to
suspend the Services for non-payment upon thirty (30) days
written notice. All fees shall be valid for five (5) years
from the Effective Date of this Agreement. By the end of the
fourth year of this Agreement, the parties shall renegotiate
the fees for the Services hereunder. If the parties cannot
agree, then this Agreement will terminate on the fifth
anniversary of the Effective Date.
4.2 The fees for Services do not include any charge for taxes and
WTP is solely responsible for paying any and all national and
local taxes (including any and all export/import taxes and
customs duties) attributable to the Services rendered by WTT
or any authorized distributor in connection with this
Agreement, excluding only taxes based upon the net income of
WTT or an authorized distributor. In the event that any new
taxes are imposed by any authority, the parties shall review
the competitive environment in accordance with the provisions
of Section 2.5 hereunder to determine if any changes should be
made in technology, cost or services. Both parties agree to
take all reasonable steps to minimize taxes, which might be
assessed on either party based on the parties' performance
hereunder.
4.3 WTT agrees to treat WTP as its most favored customer. WTT
represents that in the aggregate all of the prices and other
terms of this Agreement are substantially or materially
comparable to or better than the aggregate prices and other
terms being offered by WTT to any of its other customers
having regard to type and volume of service. If WTT offers
more favorable aggregate prices and other terms to any
customer during the term of this Agreement, such terms shall
be made available to WTP. To review compliance with this
provision, WTP may designate an independent auditor who, at
WTP's expense will be permitted to examine WTT's charges to
other customers, provided, however, that such auditor must
sign a non-disclosure agreement with WTT prior to commencing
any examination. WTP's auditor will be permitted to report to
WTP only the fact that WTT is or is not in compliance with
this provision and will not be permitted to disclose any
specific information to WTP regarding WTT's customers. If the
auditor reports that WTT is not in compliance with this
provision, the auditor will report to WTT the discrepancies
found and WTT will correct the discrepancy.
4.4 Each party shall be responsible for all costs associated with
errors made by its agents.
5. LIMITED WARRANTY
5.1 WTT represents and warrants that it will provide the Services
hereunder in a timely, workmanlike fashion and in accordance
with industry standards. WTT will not be liable to WTP for any
claim or effect arising from or based upon any cause beyond
the control of WTT.
<PAGE> 6
5.2 EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION 5, NO EXPRESS OR
IMPLIED WARRANTY IS MADE BY WTT WITH RESPECT TO ANY SERVICE,
PRODUCT, SOFTWARE RELEASE, DATA COMPILATION OR ANY OTHER
MATTER, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES
OR CONDITIONS OF MERCHANTABILITY, SATISFACTORY QUALITY OR
FITNESS FOR A PARTICULAR PURPOSE. WTT DOES NOT WARRANT THAT
ALL ERRORS IN THE SOFTWARE CAN OR WILL BE CORRECTED OR THAT
THE FUNCTIONALITY OF THE SOFTWARE WILL MEET WTP'S
REQUIREMENTS.
6. LIMITATIONS OF LIABILITY
6.1 NEITHER WTP, WTT NOR THEIR RESPECTIVE OFFICERS, DIRECTORS,
EMPLOYEES OR AGENTS, WILL BE LIABLE TO THE OTHER FOR ANY
CLAIMS OR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING
OUT OF THE SERVICES PROVIDED BY THIS AGREEMENT OR A BREACH OF
THE AGREEMENT, WHETHER SUCH DAMAGES OR CLAIMS ARE BASED ON
BREACH OF WARRANTY OR CONTRACT, NEGLIGENCE, STRICT LIABILITY,
TORT, PRODUCTS LIABILITY OR OTHERWISE.
6.2 IN NO EVENT WILL EITHER PARTY'S LIABILITY FOR ANY DAMAGES OR
INJURIES TO EITHER PARTY HEREUNDER EVER EXCEED THE TOTAL
SERVICE FEE PAID BY WTP FOR THE SERVICES PROVIDED HEREUNDER,
REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT,
NEGLIGENCE, STRICT LIABILITY, TORT, PRODUCTS LIABILITY OR
OTHERWISE.
7. TERM AND TERMINATION
7.1 The term of this Agreement will begin on November 1, 1999 (the
"Effective Date") and will continue until the latter of (a)
the tenth anniversary of the Effective Date, (b) the date that
this Agreement expires following the extension of its term
(unless terminated sooner in accordance with this Agreement),
or (c) the termination of any one of the End User License
Agreement, Master Development Agreement, or the TTG Service
Bureau Agreement.
7.2 Extension and Renewal. Unless terminated earlier, if upon the
ninth anniversary of the Effective Date, the parties have not
agreed to a written Amendment extending this Agreement, this
Agreement shall terminate at the end of the tenth (10) year of
its initial ten (10) year term.
7.3 Either party may terminate this Agreement and the rights
granted herein if the other party breaches any of the
provisions of this Agreement and (i) fails to remedy such
breach within thirty (30) days after receiving written notice
thereof, or (ii) provided the breach does not relate to a
monetary obligation, fails to (a)
<PAGE> 7
commence a good faith action to remedy such breach within
thirty (30) days after receiving written notice thereof, and
(b) diligently pursue such action to conclusion. In the event
WTT fails to meet the Service Performance requirements, as
specified in this Agreement, WTP shall give WTT notice of such
non-compliance and WTT shall take all reasonable actions to
correct such non-compliance as soon as practicable. In the
event that there is a continued failure by WTT to meet the
Service Performance requirements, WTP shall give WTT notice of
such non-compliance and within five (5) days of receiving such
notice, WTT shall provide a corrective action plan to WTP for
approval. WTP shall review and approve such corrective action
plan or provide reasonable required changes to WTT within five
(5) days from WTP's receipt of such plan. In the event that
WTT does not meet the Service Performance requirements within
the time period set forth in any corrective action plan, WTP
may terminate this Agreement for cause pursuant to the notice
provisions provided in Section 7.3 (i) and (ii). Termination
of this Agreement does not constitute either parties'
exclusive remedy for breach or non-performance by the other
party and each party is entitled to seek all other available
remedies, both legal and equitable, including injunctive
relief.
7.4 Should either party (1) admit in writing its inability to pay
its debts generally as they become due; (2) make a general
assignment for the benefit of creditors; (3) institute
proceedings to be adjudicated a voluntary bankrupt; (4)
consent to the filing of a petition of bankruptcy against it;
(5) be adjudicated by a court of competent jurisdiction as
being bankrupt or insolvent; (6) seek reorganization under any
bankruptcy act; (7) consent to the filing of a petition
seeking such reorganization; or (8) have a decree entered
against it by a court of competent jurisdiction appointing a
receiver, liquidator, trustee, or assignee in bankruptcy or in
insolvency covering all or substantially all of such party's
property or providing for the liquidation of such party's
property or business affairs; then, in any such event, the
other party, at its option and without prior notice, may
terminate this Agreement effective immediately.
7.5 Upon termination of this Agreement for any reason, WTT's
obligation to provide the Services hereunder will immediately
cease. If the Agreement is terminated due to a breach by WTT,
WTT will be responsible for submitting to WTP all information
and reports required under Exhibit A for the portion of the
month up to and including the effective termination date. If
the Agreement is terminated due to a breach by WTP, WTT will
have no such obligation to provide such information and
reports to WTP for the month when termination became
effective.
7.6 Should there by any material change, as determined by either
party; (1) in any laws, ordinances, orders, rules or
regulations governing the way the parties may operate; (2) in
travel industry conditions, including but not limited to,
airfares (e.g., net fares or net/net fare arrangements) or
compensation to WTP, by action of any industry vendor,
governing body or client; or (3) in technology including
<PAGE> 8
but not limited to computer reservation systems or the
internet; which material change has the effect of materially
increasing or decreasing the cost of doing business; then,
either party shall have the right to provide written notice to
the other party of such change and both parties agree to
renegotiate in good faith the financial and/or service terms
of this Agreement in accordance with Section 10. If the
parties are unsuccessful in renegotiating mutually
satisfactory terms, either party shall have the right to
terminate this Agreement at any time thereafter with thirty
(30) days advance written notice.
7.7 WTT Obligations Upon Termination. In the event of termination
of this Agreement by WTT, WTT will work together with WTP or a
designated third party to identify the information, materials
and resources WTP is entitled to receive and to develop an
overall plan for transitioning such items to WTP in accordance
with the following provisions (collectively, "Termination
Assistance"). The terms of this Agreement as they relate to
Termination Assistance shall remain in effect until WTT has
completed its Termination Assistance. WTT will provide the
Termination Assistance described below for a period of no less
than ninety (90) days and no more than six (6) months per
WTP's written request, except as provided in this Section.
WTT's obligation to provide Termination Assistance will be
conditioned upon WTP paying to WTT all outstanding invoices
prior to the commencement of any Termination Assistance and
will be conditioned upon WTP continuing to pay when due any
and all fees due hereunder during the Termination Assistance
period. WTP shall pay WTT standard hourly rates and reasonable
expenses for any Termination Assistance provided by WTT. This
fee is in addition to any other payments required under this
Agreement. Notwithstanding the termination or expiration of
this Agreement, the terms and conditions of this Agreement
will apply to all services provided by WTT during such period.
If WTP requests Termination Assistance beyond the available
capacity of the WTT on-site staff, such request will be
treated as a request for additional services and WTP will pay
the agreed upon charge for such additional services. The
provisions of this Section will survive the expiration or
termination of this Agreement for any reason.
WTP and WTT will jointly develop a plan (the "Transition
Plan") to effect the orderly transition and migration to WTP
or a designated third party from WTT of all services then
being performed or managed by WTT under this Agreement (the
"Termination Transition"). The Transition Plan will set forth
the tasks to be performed by WTP and WTT, the time for
completing such tasks and the criteria for declaring the
transition "completed". The parties and their employees and
agents will cooperate in good faith to execute the plan and
each party agrees to perform those tasks assigned to it in the
Transition Plan. WTT will direct the execution of the
Transition Plan. The Transition Plan will include the
following tasks and such other tasks as may be agreed upon by
WTP and WTT:
(i) Providing WTP access to necessary data files and
programs, certain non-proprietary operational
procedures and data and documentation in WTT's
<PAGE> 9
possession related to the Services.
(ii) Returning all WTP confidential and proprietary
information in WTT's possession, except for one copy
which WTT may retain, subject to its confidentiality
obligations, for internal recordkeeping purposes and
for compliance with applicable professional
standards.
(iii) Returning all WTP data and documentation. WTT will
deliver to WTP all WTP data in a format application
for use by WTP and will seek to minimize the amount
of manual data entry or re-keying necessary in
connection with the transfer of such data to WTP.
7.8 Obligation To Minimize Damages. Both parties shall have an
obligation to take such steps as may be reasonably necessary
to minimize damages to the parties on termination, including,
but not limited to, minimizing all contractual obligations
that but for the existence of this Agreement, neither party
would have entered into.
7.9 The provisions of Sections 3, 5, 6, 7, 8, 10 and 11 hereof
shall survive the termination of this Agreement.
8. NON-SOLICITATION AND CONFIDENTIALITY
8.1 During the term of this Agreement and for any individual
employee, for six months following termination or resignation
of such employee, neither party shall employ, solicit or make
any offers to employ any employees of the other party used by
the original employing party in the performance of the
Services or Additional Services, without the prior written
consent of the original employer. The original employer shall
be entitled, in addition to any other remedies it may have at
law or in equity, to a payment from the hiring party in an
amount equal to one year's salary of any employee the hiring
party employs, solicits or offers to employ in violation of
this Section.
8.2 During the course of this Agreement the parties may come into
possession of technology, computer software, documentation,
trade secrets, products, copyrights or other confidential and
proprietary information ("Confidential Information") of the
other. Each party agrees to refrain from distributing,
copying, disclosing or disseminating in any form the
Confidential Information of the other party to any person or
entity except to those employees or agent who have a need to
know and who are obligated to maintain the confidentiality of
such Confidential Information. Neither party shall use the
Confidential Information of the other for any purpose other
than that for which it was disclosed. All Confidential
Information of a party shall remain the property of that party
and will be promptly returned upon request or at the
termination of this Agreement. Each party's obligation with
respect to the Confidential Information of the other party
shall expire three (3) years after the termination of this
Agreement.
<PAGE> 10
8.3 During the term of this Agreement, WTT will not sell or
license any services or Products licensed under this Agreement
directly to WTP's Customers receiving travel management
services without giving notice to WTP, requesting sales
assistance, and sharing any profits received from such sale or
license with WTP as outlined below.
(a) For any accounts won by WTT that WTT and WTP jointly
solicited and on which WTP provides sales assistance,
WTT and WTP shall share the profits equally on a
quarterly basis, after first deducting amortization,
start-up and implementation costs.
(b) For any accounts won by WTT that WTP did not provide
assistance in soliciting, WTT shall keep all profits.
(c) For WTP clients, should a client or vendor request
that WTP be omitted from the processing of travel
transactions or being involved in the actual sales
process, WTT shall share equally with WTP all profits
in excess of fifty cents ($ .50) on each such
transaction.
8.4 During the term of this Agreement, WTT may compete with WTP
for new accounts, which shall include divisions, affiliates or
subsidiaries of WTP's accounts, which are not existing
Customers, but WTT shall in no event undercut prices offered
by WTP.
8.5 For all existing and new OFS Accounts that have no travel
agency, WTT hereby grants to WTP a right of first refusal to
provide travel management services to OFS for such accounts on
an outsourced basis as requested by corporate clients. All
such services shall be provided as private label services
under OFS' name.
9. JOINT OVERSIGHT COMMITTEE
9.1 JOC Procedures. The following representatives will comprise a
joint oversight committee (the "JOC") which will meet at least
quarterly. The functions of such committee, among other
things, will be to review and analyze the performance of the
parties based on the service performance standards.
WTT Designee: Sales Account Representative
WTP Designee: Brenda Catanesi
If a JOC Member resigns or leaves its employer, the party with
a vacancy will promptly appoint a replacement.
9.2 Management Representatives
Each party hereby appoints the following individual as its
Management Representative for purposes of this Agreement:
<PAGE> 11
WTT: President and CEO
WTP: Tom Barham
If a Management Representative resigns or leaves its employer,
the party with a vacancy will promptly appoint a replacement.
9.3 Report Contents. WTT will prepare (i) a listing of key service
activities, and (ii) definitions of measurements of
qualitative and quantitative service performance levels for
each such key service activity, and will submit such listings
and definitions to the JOC for approval. Such service
performance levels will be used to measure WTP's and WTT's
performance of their responsibilities under this Agreement.
9.4 Performance Levels. WTT will deliver to the JOC for each
calendar quarter (within thirty (30) days of the end of such
quarter), commencing with the calendar quarter beginning
December 1, 1999, service performance reports ("Service
Performance Reports") that identify, for each JOC approved key
service activity, the performance level for that activity. The
JOC will review the parties' performance during the relevant
time period (including but not limited to the information,
contained in the Service Performance Reports), and will
provide feedback to both WTT and WTP regarding the performance
of their respective responsibilities under this Agreement. The
JOC will also periodically review the definitions and
measurements used in the Service Performance Reports and
revise them as necessary to reflect the most appropriate
measures of WTT and WTP performance. The initial failure by
WTT to meet any service performance level shall not be
considered a breach of this Agreement, until the provisions of
Section 7.3 have been satisfied.
10. DISPUTE RESOLUTION
10.1 Initial Procedures. The parties shall make all reasonable
efforts to resolve all disputes without resorting to
litigation. If a dispute arises between the parties, the JOC
Representatives will attempt to reach an amicable resolution.
If either JOC Representative determines that an amicable
resolution cannot be reached, such JOC Representative shall
submit such dispute in writing to the Management
Representatives, who shall use their best efforts to resolve
it or to negotiate an appropriate modification or amendment.
10.2 Escalation. Except as otherwise provided in the termination
provisions hereof, neither party shall be permitted to
exercise any other remedies until the later of (i) the date
that either Management Representative concludes in good faith
that an amicable resolution of the dispute through continued
negotiation is unlikely, or (ii) sixty (60) days following the
date that both parties have notified a Management
Representative pursuant to Section 10.1. If either party fails
to designate a Management Representative at its own
initiative, it shall do so within
<PAGE> 12
three business days of a request from the other party to do
so.
11. GENERAL
11.1 This Agreement, including the Exhibits attached hereto,
represents the entire understanding and agreement between the
parties, and supersedes any and all previous discussions and
communications. No employee or agent of WTT nor any
distributor is authorized to make any additional
representations or warranties related to the services provided
hereunder or the Software. Any subsequent amendments and/or
additions hereto are effective only if in writing and signed
by both parties. WTP may not assign its rights or obligations
under this Agreement without the prior written consent of WTT.
Subject to the foregoing limitation on assignment, this
Agreement is binding upon and inures to the benefit of the
successors and assigns of the respective parties hereto.
11.2 This Agreement is to be interpreted in accordance with the
laws of the State of Georgia. Any legal action resulting from
it is to be held within the jurisdiction of the applicable
state and federal courts of Atlanta, Georgia. It is understood
and agreed that the parties will use their best endeavors to
amicably resolve any dispute or difference arising from this
Agreement.
11.3 Headings of paragraphs in this Agreement are inserted for
convenience only, and are in no way intended to limit or
define the scope and/or interpretation of this Agreement.
11.4 The failure of either party at any time to require performance
by the other party of any provision hereof is not to affect in
any way the full rights of such party to require such
performance at any time thereafter, nor is the waiver by
either party of a breach of any provision hereof to be taken
or held to be a waiver of the provision itself or any future
breach.
11.5 The parties hereto are independent contractors, and nothing in
this Agreement is to be construed to create a partnership,
joint venture, or agency relationship between WTT and WTP.
11.6 If any part, term, or provision of this Agreement is held to
be illegal, unenforceable, or in conflict with any law of a
federal, state, or local government having jurisdiction over
this Agreement, the validity of the remaining portions or
provisions are not to be affected thereby.
11.7 Any notice given pursuant to this Agreement is to be in
writing and delivered personally or sent by certified mail,
return receipt requested, or by air express, return receipt
requested, to the individuals shown below, or to such other
persons or addresses as the parties may designate in a notice
conforming with the requirements of this Section. Any such
notice, when delivered in the manner aforesaid, shall be
deemed given on the date of receipt.
<PAGE> 13
For WTP: Tim Severt
WorldTravel Partners I, L.L.C.
1055 Lenox Park Boulevard
Atlanta, GA 30319
For WTT: Ralph Manaker
General Counsel
WorldTravel Technologies, L.L.C.
6 W. Druid Hills Road
Atlanta, GA 30329
(SIGNATURES ON FOLLOWING PAGE)
<PAGE> 14
IN WITNESS WHEREOF, the undersigned duly authorized representatives of
the parties hereto have made and entered into this Agreement as of the Effective
Date.
WorldTravel Technologies, L.L.C. WorldTravel Partners I, L.L.C.
Signed: /s/ Ralph Manaker Signed: /s/ Danny Hood
------------------------------ ----------------------------
Ralph Manaker Danny Hood
President President
<PAGE> 15
EXHIBIT A: SERVICES
OFS OFFERING TO WTP
<TABLE>
<CAPTION>
AREA DESCRIPTION HANDLED BY:
<S> <C> <C>
Quality Control Automated quality control tests as defined OFS
by policy. This will include all e-mail
sent from CoRRe(TM) re: quality control,
schedule changes, industry notifications,
etc.
Non-Client contact 1. Schedule Changes -- Automated OFS
Support schedule changed will be changes that
do not require any contact with the
client. this service is provided to
"weed-out" PNRs from the schedule
change queues that do not require
agent interaction.
2. Client contact that is e-mail driven to a
mass audience. An example would be
a new change in the industry such as
security measures changing (Gulf
War) where all clients must be
advised. Bulk e-mail would be sent.
Technical and 1. Technical support for users OFS
Navigational Support experiencing technical problems
(Telephone) outside the application (example:
browser issues)
2. Coaching for inexperienced or
confused users on functionality of the
application
Technical and 1. Technical support for users OFS
Navigational Support experiencing technical problems
(Email) outside the application (example:
browser issues)
2. Coaching for inexperienced or
confused users on functionality of the
application
Application Anomalies or problems with the OFS
Management application are logged, researched to
(Incident reporting) identify root cause (i.e. CRS, application,
training, content, etc.) and reported to
responsible party for correction.
Ticketing Ticketing -- Paper tickets are driven to OFS
printers residing at the appropriate
location (OFS or the agency of record. E-
tickets are driven from OFS but recorded
on appropriate ARC location.)
Itinerary/Receipt E-ticket receipts and/or itineraries can be OFS
Distribution distributed via e-mail, fax or U.S. Mail
ARC Processing 1. IAR processing. This will be OFS
determined by ticketing requirements.
2. OFS will process all ARC reports for
tickets by accessing the back-office
system being used for that office's
ARC report
Customer Resolution Post-ticketing issues are researched, i.e. OFS
debit memos, lost tickets, voids, customer
satisfaction problems, etc.)
Travel Support 1. Original booking, pre-ticket changes, WTP office of
(Telephone and En-route support, and all other calls record
Email) for users (changes, seat upgrades,
questions, exchanges, refunds, etc).
2. Schedule changes that require manual
intervention.
3. OFS will provide access to Message
Partner for all itineraries and travel
related questions and e-mail inquiries
and communication.
Packaging & 1. Paper Tickets -- OFS or remote office WTP office of
Distribution satellite ticket printers (STP's). record or OFS
(Shipping) 2. Exchange Tickets will be driven from
OFS since the majority will be issued
from there originally.
3. Overnight Mail -- OFS
Note: All consumable costs are passed to
WTP (envelopes, postage, overnight
services, ticket jackets, invoices).
MIS Providing travel management data to WTP
clients
(feed of all transactions will be provided
to WTP by OFS for consolidation)
Accounting 1. Billing the customer on chargeable
activities
2. Hotel and car commission tracking
3. Overrides and revenue sharing
Account Management Traditional management provided by
WTP today
Note: OFS will provide a Program
Manager to work with the account
manager and travel manager as needed
Manual Transaction Manual bookings made by agents WTP office of
Processing record
Schedule Change Automated processing of schedule OFS and WTP
Processing changes -- Note: PNRs requiring client office of record
contact will be sent to WTP and those that
can be handled via email will be
processed by OFS
</TABLE>
<PAGE> 16
EXHIBIT B: SOFTWARE
Message Partner
Ticket Partner
Scholar
KinKade (Consolidating Reproting)
CoRRe 2.3
EncoRRe 1.1
<PAGE> 17
EXHIBIT C: PAYMENT SCHEDULES
WTP/OFS Outsource
"Corporate OFS"
Account by Account basis
Serviced in OFS Facilities
Assumes Travel Agency takes ALL calls
[*] emails per ticket (excess emails charged at [*] per email)
<TABLE>
<CAPTION>
TICKET VOLUME PRICE OFS COST WTP PROFIT OFS PROFIT
MINIMUM MAXIMUM
<S> <C> <C> <C> <C>
-- [*] [*] [*] [*] [*]
[*] [*] [*] [*] [*] [*]
[*] [*] [*] [*] [*] [*]
[*] [*] [*] [*] [*] [*]
[*] [*] [*] [*] [*] [*]
[*] [*] [*] [*] [*] [*]
[*] [*] [*] [*] [*]
</TABLE>
<PAGE> 1
EXHIBIT 10.8
EMPLOYMENT CONTRACT
THIS EMPLOYMENT CONTRACT made as of the 1st day of December, 1999 (the
"Effective Date") between NORWOOD H. DAVIS, III (hereinafter referred to as
"Employee") and WT TECHNOLOGIES, INC., a Georgia corporation (hereinafter
referred to as the "Company").
WITNESSETH
WHEREAS, the Company desires to employ Employee, and Employee desires
to be employed by the Company, and
WHEREAS, the parties intend to supersede all prior correspondence,
letters, and negotiations between them with the terms set forth herein;
NOW, THEREFORE, it is hereby agreed as follows.
1. Employment of Employee. The Company hereby employs Employee for a
period of three (3) years commencing on the Effective Date of this Employment
Contract (the "Initial Term"). Employee agrees to such employment on the terms
and conditions herein set forth and agrees to devote his best efforts to his
duties under this Employment Contract and to perform such duties diligently and
efficiently and in accordance with the directions of the Company.
2. Duties and Residence. The Employee shall be employed as President
and Chief Executive Officer of the Company, reporting directly to the Chairman
of the Board of the Company. As President and Chief Executive Officer, the
Employee shall have overall, day-to-day management responsibilities of the
Company, in addition to any specific related duties and responsibilities as may
be assigned to him by the Chairman of the Board of the Company.
Further, upon approval by the Board of Directors, the Employee shall
become a member of the Board of Directors of the Company, with full voting
privileges, and shall serve in such capacity for the Term of this Employment
Agreement.
During the Term of this Employment Contract, Employee shall be
permitted to retain his primary residence in Charlottesville, Virginia. The
Employee shall be accessible during normal business day working hours, shall be
available to travel at the direction of the Chairman and shall regularly visit
the Company's locations as he deems necessary to properly manage the Company.
The Employee shall devote substantially all of his business time, attention,
and energies to the Company, shall act at all times in the best interests of the
Company, and shall not during the term
Page 1
<PAGE> 2
of this Employment Contract be engaged in any other business activity, whether
or not such business is pursued for gain, profit, or other pecuniary advantage.
Notwithstanding the foregoing, this Employment Contract shall not be construed
as preventing Employee from investing his personal assets in any form or manner
that will not require any services by Employee in the operation of the affairs
of the business in which such investments are made; provided, however, that
Employee shall not be permitted to make any investment in any business competing
with the business of the Company. Further, notwithstanding the foregoing
provisions, this Employment Contract shall not be construed as preventing the
Employee from serving as a member of the board of directors of any company as
long as such service has been approved by the Chairman of the Board and such
service does not distract the Employee from his duties hereunder.
3. Compensation and Benefits.
(a) Base Salary. Employee's annual salary during the first twelve (12)
months of the term of this Employment Contract shall be $250,000 (the "Base
Salary"). The Base Salary shall be paid by the Company monthly in arrears or in
accordance with the Company's regular payroll practice. Pursuant to the
Employee's satisfactory performance reviews, the Employee's Base Salary shall
increase by a minimum of five percent (5%) on each anniversary date of the
Effective Date of this Agreement.
(b) Signing Bonus. In recognition of the loss of income the Employee
will suffer from the forfeiture of stock rights with his former employer, the
Company agrees to pay the Employee a one-time signing bonus of $250,000. This
bonus shall be payable in a lump sum cash payment to the Employee (assuming that
the Employee is employed by the Company on that date) on the first payroll
period of the year 2000.
(c) Annual Discretionary Bonus. Employee shall be eligible for an
annual discretionary bonus under the terms and conditions of a short-term
incentive compensation program to be approved and adopted by the Board of
Directors. The Chairman of the Board of the Company shall determine the amount
of the Employee's annual discretionary bonus, if any, based on both the
performance of the Company and the performance of the Employee, provided,
however, that to receive the bonus, Employee must be an "active employee in good
standing" on the date that the bonus is paid. For purposes of this Employment
Contract, an "active employee in good standing" shall mean that Employee (i) has
not terminated employment with the Company for any reason; (ii) is not on
probation of any kind from the Company; (iii) has not given notice under this
Employment Contract pursuant to Section 5 hereof; and (iv) has not received
written notice from the Company pursuant to Section 5 hereof.
(d) Long-Term Incentive Compensation. As of the Effective Date, the
Employee shall receive a nonqualified stock option to purchase 350,000 shares of
the Company's common stock at a discounted exercise price of $5.00 per share,
issued under the Company's 1999 Stock Incentive Plan. This option shall become
exercisable in twenty percent (20%) increments on each of the first four
anniversaries of the Effective Date, with the final increment becoming
Page 2
<PAGE> 3
exercisable on date six months after the fourth anniversary of the Effective
Date. In addition, immediately prior to or contemporaneously with an initial
public offering of the Company's common stock, the Employee shall receive an
incentive stock option to purchase 150,000 shares of the Company's common stock
at a per share exercise price equal to the initial public offering price, which
option shall also be issued under the Company's 1999 Stock Incentive Plan. The
options described in this paragraph shall be subject to the terms and conditions
of the Company's 1999 Stock Option Plan. In the event the Company has formally
engaged an underwriter for an initial public offering and then, prior to such
public offering and prior to the grant of the 150,000 share option to the
Employee, substantially all of the stock or assets of the Company is sold, the
Company agrees to treat the Employee as if he held the option for 150,000 shares
of the Company's common stock at the time of such sale. In addition, the Company
agrees to instruct the committee administering the 1999 Stock Incentive Plan to
permit the Employee to transfer, at his election, one or both of the above stock
options to an immediate family member, a trust (with beneficiaries of only
immediate family members), or a family limited partnership (with general
partners and limited partners of only immediate family members).
(e) Employee Benefits. The Company shall provide Employee medical
coverage and other employee benefits substantially similar to, and on the same
basis as, the coverage provided to employees of the Company.
(f) Vacation. The Employee shall be eligible for one week of paid
vacation during the year 1999. Thereafter, the Company agrees that Employee
shall be entitled to five (5) weeks of paid vacation per calendar year;
provided, however, that if this Employment Contract is not in effect for any
full calendar year; Employee shall have only a pro rata portion of such paid
vacation during that calendar year.
(g) Automobile Allowance. The Employee shall receive a monthly
allowance of $500.00 in cash to assist him in obtaining and maintaining an
automobile for his business use. The Employee shall be responsible for any and
all costs and liabilities, including insurance, related to such automobile.
(h) Good Standing. Employee understands and agrees that he must be an
active Employee in good standing of the Company on the date any of the payments
in his Section 2 become due and payable in order to receive such payments.
4. Personnel Policies. Employee shall conduct himself at all times in a
businesslike and professional manner as appropriate for a person in his position
and shall represent the Company in all respects as complies with good business
and ethical practices. In addition, Employee shall be subject to and abide by
the policies and procedures of the Company applicable to personnel of the
Company, as adopted from time to time.
5. Business Expenses. Employee shall be reimbursed monthly by the
Company for ordinary, necessary and reasonable expenses incurred by him in the
performance of his duties for the Company, provided that Employee shall first
document said business expenses in the manner
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generally required by the Company under its policies and procedures, and in any
event, the manner required to meet applicable regulations of the Internal
Revenue Service relating to the deductibility of such expenses.
6. Termination and Renewal.
(a) Termination Due to Death or Discharge for Good Cause. This
Employment Contract shall terminate immediately upon the death of Employee or
upon the discharge of Employee for "good cause". For the purposes of this
Employment Contract, "good cause" means any act of fraud or dishonesty (whether
or not in connection with the Company's Business as hereinafter defined),
competing with the Business of the Company either directly or indirectly, the
breach of any provision of this Employment Contract by Employee, failure to
comply with the decisions of the Company, failure to discharge Employee's duty
of loyalty to the Company, or any other matter constituting "good cause" under
the laws of the State of Georgia. In the event of termination under this
section, any earned but unpaid Base Salary and any other benefits provided
herein shall be paid to Employee up to the effective date of termination of
this Employment Contract for whatever reason, including the death of Employee,
and not thereafter, subject to the specific provisions of subsection 2(c).
(b) Termination Due to Disability. This Employment Contract also shall
terminate immediately upon written notice to Employee if Employee shall at any
time be unable to perform the essential functions of his job hereunder, by
reason of a physical or mental illness or condition, with or without reasonable
accommodation, for a continuous period of three (3) consecutive calendar
months. In the event of termination due to disability under this section, any
earned but unpaid Base Salary and any other benefits provided herein shall be
paid to Employee up to the effective date of termination of this Employment
Contract for whatever reason, including the death of Employee, and not
thereafter, subject to the specific provisions of subsection 2(c).
(c) Termination by the Company Without Cause. If the Company terminates
this Employment Contract without Cause during the Initial Term, the Company
shall pay the Employee any earned but unpaid Base Salary accrued through the
date of termination plus the Base Salary and benefits due the Employee for the
remainder of the Initial Term. In the event the Company terminates the
Employment Contract without Cause after the end of the Initial Term but during
the Term of this Agreement, the Company shall either give the Employee six (6)
months' advance notice of such termination or pay to the Employee an amount
equal to six (6) months' of Base Salary, in addition to any earned but unpaid
Base Salary accrued through the date of termination. In addition to the
foregoing, in the event of a termination of the Employee's employment by the
Company without Cause, the stock options described in Section 3(d) hereof (to
the extent previously granted) shall immediately become exercisable.
(d) Voluntary Termination by the Employee. If the Employee terminates
this Employment Contract within the Initial Term, he shall be liable to the
Company for any and all expenses, costs and other damages of the Company
resulting therefrom. In the event the Employee terminates this Employment
Contract after the Initial Term but during the Term of this
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Agreement, the Employee shall either give the Company six (6) months' advance
notice of such termination or pay to the Company an amount equal to any and all
expenses, costs and other damages of the Company resulting from the lack of
such notice.
(e) Termination Upon Expiration of Term. If not otherwise
terminated hereunder, the Employment Agreement shall terminate at the end of
the Initial Term; however, prior to the expiration of the Initial Term, the
Company and the Employee may elect, in writing, to renew this Agreement for
successive two (2) year terms (which successive terms, if elected, shall
together with the Initial Term constitute the "Term" of the Agreement).
7. Restrictive Covenants.
(a) Covenants to Prior Employers. Upon execution of this
Agreement, the Employee hereby represents that he is not a party to, subject to
or otherwise covered by any agreement or understanding (written or oral) with
a prior employer that would restrict or in any manner limit the performance of
his duties under this Agreement. Employee acknowledges that he has been
instructed by the Company not to reveal or use any trade secret information
from any former employer or reveal or use confidential information in violation
of any agreement with any former employer.
(b) Acknowledgment of Damage Resulting From Employee's Competition
with the Company. Employee understands and acknowledges that the Company and
its related entities are engaged in the business of providing travel
arrangement, reservation, ticketing and related services and products (the
"Business"), and that because of his position with the Company, he has or will
obtain (i) intimate knowledge of the Business and including, but not limited to,
knowledge of "Confidential Information" (as hereinafter defined), and (ii)
knowledge of and relationships with the customers and suppliers used in
connection with the Business of the Company and its related entities. Employee
agrees and acknowledges that such knowledge, access, and relationships are such
that if Employee were to compete with the Company or its related entities
engaged in the Business, by engaging in the Business within the Restricted
Territory (as hereinafter defined) at any time during the two (2) year period
from the date of Employee's termination of employment with the Company, the
Company or its related entities would suffer harm, and the benefits that the
parties bargained for under this Employment Contract would be severely and
irreparably damaged. Further, Employee acknowledges and agrees that this
Employment Contract, and the covenants not to solicit or compete contained
herein, were a fundamental element of the transactions contemplated by this
Employment Contract and that the transactions contemplated therein would not
have been consummated in the absence of this Section 7. Employee agrees that the
covenants contained in this Section 6 are reasonable and necessary to protect
the confidentiality of the Trade Secrets, and other "Confidential Information"
concerning the Company acquired by Employee.
For purposes of this Employment Contract, "Trade Secret" shall be as
defined by applicable state law. The provisions of this Section shall be
interpreted so as to protect those trade secrets and "Confidential
Information," and to secure for the Company the exclusive benefits of the work
performed on behalf of the Company by the Employee under this
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Employment Contract, and not to unreasonably limit his ability to engage in
employment and consulting activities in noncompetitive areas which do not
endanger the Company's legitimate interests expressed in this Employment
Contract. Employee also understands and agrees that the Company can reasonably
amend the definition of the Business or the scope of the Business at any time
upon notice to Employee. For purposes of this Agreement, the term "Restricted
Territory" shall mean the United States of America, which the parties agree is
a reasonable and necessary geographical limitation due to the nature of the
Business.
(c) Covenant Not to Compete with the Company. Employee agrees that,
during the term of his employment under this Employment Contract and for a
period of two (2) years following the termination of his employment under this
Employment Contract for whatever reasons, with or without "good cause" or
otherwise, Employee will not, directly or indirectly, expressly or tacitly, for
himself or on behalf of any entity anywhere within the Restricted Territory,
(i) act as an officer, manager, advisor, executive, controlling shareholder, or
consultant to any business in which his duties at or for such business include
oversight of or actual involvement in providing services which are competitive
with the services or products being provided or which are being produced or
developed by the Company or its related entities, or are under investigation by
the Company or its related entities at the termination of this Employment
Contract, (ii) recruit investors on behalf of an entity which engages in
activities which are competitive with the services or products being provided
or which are being produced or developed by the Company or its related
entities, or are under investigation by the Company or its related entities at
the termination of this Employment Contract, or (iii) become employed by such
an entity in any capacity which would require Employee to carry out, in whole
or in part, the duties Employee has performed for the Company or its related
entities which are competitive with the services or products being provided or
which are being produced or developed by the Company or its related entities,
or are under active investigation by the Company or its related entities at the
termination of this Employment Contract.
(d) Nonsolicitation of Customers. During Employee's employment with
the Company, Employee shall not, directly or indirectly without the Company's
prior written consent, contact or solicit any customers or clients of the
Company of its related entities, or prospective customers with whom the Company
or its related entities have solicited business within the last twelve (12)
months and with whom Employee had material contact ("Customers"), for business
purposes unrelated to furthering the Business of the Company or its related
entities. For a period of two (2) years following termination of Employee's
employment with the Company, Employee shall not, directly or indirectly, (i)
contact, solicit, divert or take away, any Customer for purposes of, or with
respect to, selling a product or service which competes with the Business, or
(ii) take any affirmative action in regard to establishing or continuing a
relationship with a Customer for purposes of making or which directly or
indirectly results in, a sale of a product or service which competes with the
Business.
(e) Nonsolicitation of Employees. Employee shall not at any time
within two (2) years after the termination of his employment, directly or
indirectly, solicit, employ, or endeavor to entice away from the Company or its
related entities any person who is or has been an employee of the Company or
its related entities during the Employee's employment or during the two-year
nonsolicitation period.
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(f) Confidentiality. Employee hereby acknowledges and agrees that
during the Employment Contract, Employee will have access to Trade Secrets and
"Confidential Information" of the Company or its related entities, Employee
also acknowledges that Employee will not disclose or use, directly or
indirectly, any Trade Secrets Employee obtains during the course of Employee's
employment related to the Business for two (2) years from the date of
Employee's termination of employment with the Company. Employee also recognizes
that the services performed by Employee hereunder are special, unique and
extraordinary and that by reason of Employee's employment with the Company,
Employee will receive, develop, or otherwise acquire "Confidential Information"
(as hereinafter defined). Except as required by the pursuit of Employee's
duties with the Company or as it is authorized in writing by the Company,
Employee acknowledges that Employee will not disclose or use, directly or
indirectly, any Confidential Information related to the Business during the
course of Employee's employment and for a period of two (2) years after the
date of Employee's termination under this Employment Contract.
The term "Confidential Information" shall mean and include any
information, data and know-how relating to the Business of the Company or its
related entities that is disclosed to Employee by the Company or known to
Employee as a result of Employee's relationship with the Company and not
generally within public domain (whether constituting a Trade Secret or not),
including without limitation, all administrative procedures, product
development and technical data, sales and/or marketing information, customer
account records, payment plans, training and operations material, memoranda and
manuals, personnel records, pricing information, and financial information
concerning or relating to the Business and/or the Customers, employees and
affairs of the Company or its related entities.
(g) Severability of Agreement Provisions. In the event any or all of
the covenants of this Section 7 are deemed overly broad, the parties hereto
agree that the covenants shall be enforced to the extent that they are not
overly broad.
8. Products, Notes, Records and Software. All memoranda, notes,
records and other documents and computer software made or compiled by Employee
or made available to him during the term of this Employment Contract concerning
the Business of the Company or its related entities, including, without
limitation, all customer data, billing information, service data, and other
technical material of the Company or its related entities, shall be the
Company's property and shall be delivered to the Company within two (2) days of
the termination of this Employment Contract.
9. Ownership of Inventions.
(a) Disclosure to Company. Employee agrees to disclose promptly, in
writing, to the Company's Board of Directors any patentable or unpatentable,
copyrightable or uncopyrightable, idea, invention, work of authorship
(including, but not limited to computer programs, software and documentation),
formula, device, improvement, method, process or discovery (each, an
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"Invention") which relates to the Company's business that Employee conceives,
makes, develops, or works on, in whole or in part, solely or jointly with
others during the term of Employee's employment regardless of whether (i) such
invention was conceived, made, developed or worked on during Employee's regular
hours of employment or his time away from work; (ii) the Invention was made at
the suggestion of the Company; or (iii) the Invention was reduced to drawing,
written description, documentation, models or other tangible form.
(b) Made for Hire Status of the Inventions. It is expressly agreed that
the Inventions created by Employee hereunder shall be considered specially
ordered or commissioned "works made for hire", as such term is defined under the
United States Copyright Act of 1976, as amended (the "Act"), and that such works
and copyright interests therein and thereto shall belong solely and exclusively
to the Company and shall be considered the property of the Company for purposes
of this Agreement. To the extent that such works do not constitute "works made
for hire" under the Act, Employee, in consideration of $1.00 and other good and
valuable consideration, the receipt and adequacy of which hereby are
acknowledged, hereby irrevocably assigns to the Company, its successors and
assigns, without royalty or any other further consideration, (i) all rights,
title and interests in and to the copyrights of the Inventions and all renewals
and extensions of the copyrights that may be secured under existing or future
laws, and (ii) all other rights, title and interests he may have in the
Inventions. Accordingly, the Company will have the right to register, in the
office of the Registrar of the Copyrights of the United States, the Inventions
in the Company's name as the owner and author of such Inventions. Employee
shall, upon request by the Company and at the Company's expense, promptly
execute, acknowledge or deliver any documents or instruments deemed reasonably
necessary by the Company to document, enforce, protect or otherwise perfect the
Company's copyright and other interests in the Inventions.
(c) Assignment to Company. Without limitation the generality or effect
of any other provision of this Agreement, Employee agrees to assign to the
Company without royalty or any other further consideration his entire right,
title and interest in and to any Invention Employee is required to disclose
hereunder.
(d) Records. Employee agrees to make and maintain adequate and current
written records of all Inventions covered by this Agreement. These records shall
be and remain the property of the Company.
(e) Patents and Proprietary Rights. Employee agrees to assist the
Company in obtaining, maintaining, and enforcing patents and other proprietary
rights in connection with any Invention covered this Agreement for which the
Company has or obtains any right, title or interest. Employee further agrees
that his obligations under this subsection shall continue beyond the termination
of the term of this Agreement, but if Employee is called upon to render such
assistance after the termination of the term of this Agreement, but if Employee
is called upon to render such assistance after the termination of the term of
this Agreement, Employee shall be entitled a fair and reasonable rate of
compensation for such assistance. Employee shall, in addition, be entitled to
reimbursement of any out-of-pocket expenses incurred at the request of the
Company relating to such assistance.
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(f) Other Assignments or Contracts. Employee represents that there are no
other contracts to assign inventions that are now in existence between the
Employee and any former employer or other person or entity. Employee further
represent that he has no other employments or undertakings which might restrict
or impair his performance of this Agreement.
10. Applicable Law. This Employment Contract is being executed in the
State of Georgia and shall be construed and enforced in accordance with the laws
of said jurisdiction.
11. Waiver of Breach. The waiver by the Company of a breach of any
provision of this Employment Contract by Employee shall not operate or be
construed as a waiver of any subsequent breach by Employee.
12. Successors and Assigns. This Employment Contract shall inure to the
benefit of the Company, its subsidiaries and affiliates, and their respective
successors and assigns. This Employment Contract and benefits hereunder are
personal to Employee and may not be assigned or transferred by Employee.
13. Entire Agreement. This instrument contains the entire agreement of the
parties and supersedes all prior agreements regarding Employee's employment by
the Company, including, but not limited to, oral discussions, letter agreements,
or any other document concerning the possibility of employment with the Company.
This Employment Contract may not be changed orally but only by an agreement in
writing signed by the party against whom enforcement of any waiver, changes,
modification, extension, or discharge is sought.
14. Invalidity of any Provision. It is the intention of the parties hereto
that the provisions of this Employment Agreement shall be enforced to the
fullest extent permissible under the laws and public policies of each state and
jurisdiction in which such enforcement is sought, but that the unenforceability
(or the modification to conform with such laws or public policies) of any
provision hereof shall not render unenforceable or impair the remainder of this
Employment Agreement which shall be deemed amended to delete or modify, as
necessary, the invalid or unenforceable provisions. The parties further agree to
alter the balance of the Employment Agreement in order to render the same valid
and enforceable.
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IN WITNESS WHEREOF, the parties hereto have executed this Employment
Contract under seal as of the date first above shown.
EMPLOYEE
/s/ Norwood H. Davis, III
-----------------------------------
Norwood H. Davis, III
COMPANY
WT TECHNOLOGIES, INC.
/s/ J. Alexander
-----------------------------------
Title: Chairman
(CORPORATE SEAL)
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EXHIBIT 10.9
EMPLOYMENT CONTRACT
THIS EMPLOYMENT CONTRACT made as of the 1st day of November, 1999 (the
"Effective Date") between David Fromal (hereinafter referred to as "Employee")
and WorldTravel Technologies, LLC, a Georgia limited liability company
(hereinafter referred to as the "Company").
WITNESSETH
WHEREAS, the Company desires to employ Employee, and Employee desires
to be employed by the Company; and
WHEREAS, the parties intend to supersede all prior correspondence,
letters, and negotiations between them with the terms set forth herein;
NOW, THEREFORE, it is hereby agreed as follows:
1. EMPLOYMENT OF EMPLOYEE. The Company hereby employs Employee for a
period of three (3) years commencing on the Effective Date of this Employment
Contract (the "Initial Term"). Employee agrees to such employment on the terms
and conditions herein set forth and agrees to devote his best efforts to his
duties under his Employment Contract and to perform such duties diligently
and efficiently and in accordance with the directions of the Company.
During the term of his Employment Contract, Employee shall be employed
as Executive Vice President--Sales & Marketing of WorldTravel Technologies,
reporting directly to the CEO of the Company, and shall be responsible for
various sales, marketing and budgeting and for such other further
responsibilities as are from time to time assigned to him by the CEO of the
Company.
Employee shall devote substantially all of his business time,
attention and energies to the Company, shall act at all times in the best
interests of the Company, and shall not during the term of this Employment
Contract be engaged in any other business activity, whether or not such
business is pursued for gain, profit, or other pecuniary advantage, but his
Employment Contract shall not be construed as preventing Employee from
investing his personal assets in any form or manner that will not require any
services by Employee in the operation of the affairs of the business in which
such investments are made; provided; however, that Employee shall not be
permitted to make any investment in any business competing with the business of
the Company.
2. COMPENSATION AND BENEFITS.
(a) Employee's annual salary during the first year of the term of
his Employment Contract shall be $140,000 (the "Base Salary"). The Base Salary
shall be paid by the Company monthly in arrears or in accordance with the
Company's regular payroll practice.
(b) Employee shall be eligible for a discretionary bonus at each
year end. The CEO shall determine the amount, if any, based on the performance
of the Company, and the Employee provided, however, that to receive the Bonus,
Employee must be an "active employee in good standing" on the date that the
Bonus is paid. For purposes of this Employment Contract, "active employee in
good standing" shall mean that Employee (i) has not terminated employment with
the Company for any reason; (ii) is not on probation of any kind from the
Company; (iii) has not given notice under this Employment Contract pursuant to
Section 6 hereof; and (iv) has not
<PAGE> 2
received written notice from the Company pursuant to Section 6 hereof. Bonuses
are subject to the Company's sole discretion as to the occurrence and amount of
any such Bonus; provided however, that to receive any such Bonus, Employee must
be an "active employee in good standing" on the date any such Bonus is paid.
Additionally, the Bonus, if any, shall not exceed 150% of Employee's annual
base salary during any year of this Agreement. Each year, the Employee and CEO
shall agree on a sales performance component (to be formulated at a future
date) and discretionary potential based on account reviews, road show
presentations, sales management and sales goals.
(c) Additionally, it is the Company's intent to include
Employee in the group of WorldTravel Technology management who may be eligible
to receive long term incentive compensation in the form of stock options as may
be determined by the board of directors of the Company.
(d) The Company shall provide Employee medical coverage
substantially similar to the coverage promised to employees of the Company.
(e) The Company also agrees that Employee shall be entitled to
four (4) weeks of paid vacation per calendar year; provided, however, that if
his Employment Contract is not in effect for any full calendar year, Employee
shall have only a pro rata portion of such paid vacation during that calendar
year.
(f) Employee understands and agrees that he must be an active
employee in good standing of the Company on the date any of the payments in
this Section 2 become due and payable in order to receive such payments.
3. PERSONNEL POLICIES. Employee shall conduct himself at all times in a
businesslike and professional manner as appropriate for a person in his
position and shall represent the Company in all respects as complies with good
business and ethical practices. In addition, Employee shall be subject to and
abide by the policies and procedures of the Company applicable to personnel of
the Company, as adopted from time to time.
4. BUSINESS EXPENSES. Employee shall be reimbursed monthly by the Company
for ordinary, necessary and reasonable expenses incurred by him in the
performance of his duties for the Company, provided that Employee shall first
document said business expenses in the manner generally required by the Company
under its policies and procedures, and in any event, the manner required to
meet applicable regulations of the Internal Revenue Service relating to the
deductibility of such expenses.
5. AUTOMOBILE EXPENSES. The Company shall pay a monthly allowance of
$500.00 in order to defray a portion of the costs of Employee providing and
making available the use of an automobile. Prior to the initial reimbursement
hereunder and at all times thereafter, Employee shall provide the Company with
proof of insurance coverage for the operation of his automobile in such form
and amounts as is reasonably satisfactory to the Company. In addition, upon
the request of the Company and the agreement of the Company to pay the costs
hereto, such insurance policies shall name the Company as an additional
insured. The Company shall have
<PAGE> 3
the option to provide automobile insurance for Employee if it is able to
provide such insurance coverage at a cost less than that presently being borne
by Employee for the same or similar coverage. In the event that the Company
exercise such option, the monthly allowance of $500.00 will be adjusted to
reflect the amount of automobile insurance coverage being provided by the
Company.
6. TERMINATION AND RENEWAL.
(a) This Employment Contract shall terminate immediately upon the
death of Employee or upon the discharge of Employee for "good cause". For the
purposes of this Employment Contract, "good cause" means any act of fraud or
dishonesty (whether or not in connection with the Company's Business as
hereinafter defined), competing with the Business of the Company either
directly or indirectly, the breach of any provision of this Employment Contract
by Employee, failure to comply with the decisions of the Company, failure to
discharge Employee's duty of loyalty to the Company, or any other matter
constituting "good cause" under the laws of the State of Georgia.
(b) This Employment Contract also shall terminate immediately upon
written notice to Employee if Employee shall at any time be unable to perform
the essential functions of his job hereunder, by reason of a physical or mental
illness or condition, with or without reasonable accommodation, for a
continuous period of three (3) consecutive calendar months.
(c) Any earned but unpaid Base Salary and any other benefits provided
herein shall be paid to Employee up to the effective date of termination of
this Employment Contract for whatever reason, including the death of Employee,
and not thereafter, subject to the specific provisions of subsection 2(b).
(d) The Company may terminate this Employment Contract immediately
upon the payment to Employee of six (6) months Base Salary (less applicable
withholdings) in which case no further payments under this Employment
Contract shall be made to Employee, provided, however, if the Company
discharges Employee for "good cause", no notice is required and the Company
shall be obligated to pay only for accrued Base Salary (less applicable
withholdings) through the date of discharge.
(e) If not otherwise terminated hereunder, the Employment Agreement
shall terminate at the end of the current Term. This Agreement may be
terminated during the current term provided that Company delivers to the other
six (6) months prior written notice. Upon expiration of the current Term, the
Company may elect to renew this Agreement for two one (1) year terms.
7. RESTRICTIVE COVENANTS.
(a) Acknowledgment of Damage Resulting From Employee's Competition
with the Company. Employee understands and acknowledges that the Company and
its related entities are engaged in the business of providing travel
arrangement, reservation, ticketing and related services and products (the
"Business"), and that because of his position with the Company, he
<PAGE> 4
has or will obtain (i) intimate knowledge of the Business and including, but not
limited to, knowledge of "Confidential Information" (as hereinafter defined),
and (ii) knowledge of and relationships with the customers and suppliers used in
connection with the Business of the Company and its related entities. Employee
agrees and acknowledges that such knowledge, access, and relationships are such
that if Employee were to compete with the Company or its related entities
engaged in the Business, by engaging in the Business within the territory
described on Exhibit "A" at any time during the two (2) year period from the
date of Employee's termination of employment with the Company, the Company or
its related entities would suffer harm, and the benefits that the parties
bargained for under this Employment Contract would be severely and irreparably
damaged. Further, Employee acknowledges and agrees that this Employment
Contract, and the covenants not to solicit or compete contained herein, were a
fundamental element of the transactions contemplated by this Employment Contract
and that the transactions contemplated therein would not have been consummated
in the absence of this Section 6. Employee agrees that the covenants contained
in this Section 6 are reasonable and necessary to protect the confidentiality of
the Trade Secrets, and other "Confidential Information" concerning the Company
acquired by Employee. For purposes of this Employment Contract, "Trade Secret"
shall be as defined by applicable state law. The provisions of this Section
shall be interpreted so as to protect those trade secrets and "Confidential
Information", and to secure for the Company the exclusive benefits of the work
performed on behalf of the Company by the Employee under this Employment
Contract, and not to unreasonably limit his ability to engage in employment and
consulting activities in noncompetitive areas which do not endanger the
Company's legitimate interests expressed in this Employment Contract. Employee
also understands and agree that the Company can reasonably amend the definition
of the Business or the scope of the Business at any time upon notice to
Employee.
(b) Covenant Not to Compete with the Company. Employee agrees that,
during the term of this employment under this Employment Contract for a period
of two (2) years following the termination for whatever reasons, with or
without "good cause" or otherwise, of her employment under this Employment
Contract, Employee will not, directly or indirectly, expressly or tacitly, for
himself or on behalf of any entity anywhere within the territory described on
Exhibit "A", (i) act as an officer, manager, advisor, executive, controlling
shareholder, or consultant to any business in which her duties at or for such
business include oversight of or actual involvement in providing services which
are competitive with the services or products being provided or which are being
produced or developed by the Company or its related entities, or are under
investigation by the Company or its related entities at the expiration of this
Employment Contract, (ii) recruit investors on behalf of an entity which
engages in activities which are competitive with the services or products being
provided or which are being produced or developed by the Company or its related
entities, or are under investigation by the Company or its related entities at
the expiration of this Employment Contract, or (iii) become employed by such an
entity in any capacity which would require Employee to carry out, in whole or
in part, the duties Employee has performed for the Company or its related
entities which are competitive with the services or products being provided or
which are being produced or developed by the Company or its related entities,
or are under active investigation by the Company or its related entities at the
termination of the Employment Contract.
(c) Nonsolicitation of Customers. During Employee's employment with the
<PAGE> 5
Company, Employee shall not, directly or indirectly without the Company's prior
written consent, contact or solicit any customers or clients of the Company of
its related entities, or prospective customers with whom the Company or its
related entities have solicited business within the last twelve (12) months
and with whom Employee had material contact ("Customer"), for business purposes
unrelated to furthering the Business of the Company or its related entities. For
a period of two (2) years following termination of Employee's employment with
the Company, Employee shall not, directly or indirectly, (i) contact, solicit,
divert or take away, any Customer for purposes of, or with respect to, selling a
product or service which competes with the Business, or (ii) take any
affirmative action in regard to establishing or continuing a relationship with a
Customer for purposes of making or which directly or indirectly results in, a
sale of a product or service which competes with the Business.
(d) Nonsolicitation of Employees. Employee shall not at any time
within two (2) years after the termination of her employment, directly or
indirectly, solicit, employ, or endeavor to entice away from the Company or its
related entities any person who may during Employee's employment or during the
two-year non-solicitation period have been an employee of the Company or its
related entities.
(e) Confidentiality. Employee hereby acknowledges and agrees that
during the Employment Contract, Employee will have access to Trade Secrets and
"Confidential Information" of the Company or its related entities, Employee also
acknowledges that Employee will not disclose or use, directly or indirectly, any
Trade Secrets Employee obtains during the course of Employee's employment
related to the Business for two (2) years from the date of Employee's
termination of employment with the Company. Employee also recognizes that the
services performed by Employee hereunder, are special, unique and extraordinary
and that by reason of Employee's employment with the Company, Employee will
receive, develop, or otherwise acquire "Confidential Information" expect as
required by the pursuit of Employee's duties with the Company or as it is
authorized in writing by the Company, Employee acknowledges that Employee will
not disclose or use, directly or indirectly, any Confidential Information
related to the Business during the course of Employee's employment and for a
period of two years after the date of Employee's termination under this
Employment Contract. The term "Confidential Information" shall mean and include
any information, data and know-how relating to the Business of the Company or
its related entities that is disclosed to Employee by the Company or known to
Employee as a result of Employee's relationship with the Company and not
generally within public domain (whether constituting a Trade Secret or not),
including without limitation, all administrative procedures, product development
and technical data, sales and/or marketing information, customer account
records, payment plans, training and operations material, memoranda and manuals,
personnel records, pricing information, and financial information concerning or
relating to the Business and/or the Customer, employees and the affairs of the
Company or its related entities.
(f) Employee agrees, upon the Company's request, to amend Exhibit "A"
to reflect any changes in the geographical areas in which the Company operates;
and
(g) In the event the covenant of this paragraph are deemed overly
broad, the parties hereto agree that the covenants shall be enforced to the
extent that they are not overly broad.
<PAGE> 6
8. Products, Notes, Records and Software. All memoranda, notes, records
and other documents and computer software made or compiled by Employee or made
available to him during the term of this Employment Contract concerning the
Business of the Company or its related entities, including, without limitation,
all customer data, billing information, service data, and other technical
material of the Company or its related entities, shall be the Company's
property and shall be delivered to the Company within two (2) days of the
termination of this Employment Contract.
9. "Ownership of Program materials. Employee acknowledges and agrees that
all right, title and interest in and to any patentable, copyrightable or
uncopyrightable idea, invention, work of authorship (including, but not
limited to, computer programs, software and documentation), formula, device,
improvement, method, process or discovery (any of the foregoing items
hereinafter referred to as an "Invention") generated or developed by Employee
pursuant to this Employment Agreement, furnished by the Company to Employee, or
produced by the Company, shall be and remain the property of the Company.
Employee specifically agrees that all copyrightable inventions generated or
developed pursuant to this Employment Agreement shall be considered works made
for hire and that such Inventions shall, upon creation, be owned exclusively by
the Company. To the extent that any such Inventions, under applicable law, may
not be considered works made for hire, Employee hereby assigns to the Company
without royalty or any other further consideration, all of Employee's right,
title and interest in and to all such Inventions.
Employee shall perform any acts that may be deemed necessary or desirable by the
Company to evidence more fully transfer of ownership of all Inventions
designated pursuant to this Section 9 to the Company, including, but not limited
to, the making of further written assignments in a form determined by the
Company. To the extent that any preexisting rights owned by Employee are
embodied or reflected in the Inventions, Employee hereby grants to the Company
an irrevocable, perpetual, non-exclusive, worldwide, royalty-free right and
license to use, execute, reproduce, display, perform, distribute copies of, and
prepare derivative works based upon such preexisting rights and any derivative
works thereof.
Employee represents and warrants that he has the full right and authority to
perform his obligations and grant the rights and licenses herein granted, and
that he has neither assigned nor otherwise entered into any agreement by which
he purports to assign or transfer his right, title, or any interests in the
Inventions or intellectual property rights inherent therein which would conflict
with his obligations under this Employment Agreement. Employee further covenants
and agrees that he shall not enter into any such agreements."
10. Applicable Law. This Employment Contract is being executed in the
State of Georgia and shall be construed and enforced in accordance with the
laws of said jurisdiction.
11. Waiver of Breach. The waiver by the Company of a breach of any
provision of this Employment Contract by Employee shall not operate or be
construed as a waiver of any subsequent breach by Employee.
<PAGE> 7
12. SUCCESSORS AND ASSIGNS. This Employment Contract shall inure to the benefit
of the Company, its subsidiaries and affiliates, and their respective
successors and assigns. This Employment Contract and benefits hereunder are
personal to Employee and may not be assigned or transferred by Employee.
13. ENTIRE AGREEMENT. This instrument contains the entire agreement of the
parties and supersedes all prior agreements regarding Employee's employment by
the Company, including, but not limited to, oral discussions, letter
agreements, or any other document concerning the possibility of employment with
the Company. This Employment Contract may not be changed orally but only by an
agreement in writing signed by the party against whom enforcement of any
waiver, changes, modification, extension, or discharge is sought.
14. INVALIDITY OF ANY PROVISION. It is the intention of the parties hereto
that the provisions of this Employment Agreement shall be enforced to the
fullest extent permissible under the laws and public policies of each state and
jurisdiction in which such enforcement is sought, but that the unenforceability
(or the modification to conform with such laws or public policies) of any
provision hereof shall not render unenforceable or impair the remainder of this
Employment Agreement which shall be deemed amended to delete or modify, as
necessary, the invalid or unenforceable provisions. The parties further agree
to alter the balance of the Employment Agreement in order to render the same
valid and enforceable.
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Contract under seal as of the date first above shown.
EMPLOYEE
/s/ David Fromal
------------------------------
David Fromal
COMPANY
WorldTravel Technologies, LLC
By: /s/ Danny Hood
---------------------------
Title: President
------------------------
(CORPORATE SEAL)
<PAGE> 8
EXHIBIT "A"
*Markets shall include surrounding geographical areas:
United States of America
<PAGE> 1
EXHIBIT 10.10
EMPLOYMENT CONTRACT
THIS EMPLOYMENT CONTRACT made as of the 1st day of February, 2000 (the
"Effective Date") between TIMOTHY J. SEVERT (hereinafter referred to as
"Employee") and TRX, Inc., a Georgia corporation (hereinafter referred to as
the "Company").
WITNESSETH:
WHEREAS, the Company desires to employ Employee, and Employee desires
to be employed by the Company; and
WHEREAS, the parties intend to supersede all prior correspondence,
letters, and negotiations between them with the terms set forth herein;
NOW, THEREFORE, it is hereby agreed as follows:
1. Employment of Employee. The Company hereby employs Employee for a
period of three (3) years commencing on the Effective Date of this Employment
Contract (the "Initial Term"). Employee agrees to such employment on the terms
and conditions herein set forth and agrees to devote his best efforts to his
duties under this Employment Contract and to perform such duties diligently and
efficiently and in accordance with the directions of the Company.
2. Duties. The Employee shall be employed as Executive Vice President
- - Administration of the Company, reporting directly to the Chief Executive
Officer of the Company. As Executive Vice President-Administration, the
Employee shall have such duties as are customarily performed by individuals
acting in such a position, as well as any specific related duties and
responsibilities as may be assigned to him by the Chief Executive Officer of
the Company.
Further, upon approval by the Board of Directors, the Employee shall
become the Corporate Secretary for the Company and shall serve in such capacity
for the Term of this Employment Agreement.
The Employee shall devote substantially all of his business time,
attention, and energies to the Company, shall act at all times in the best
interests of the Company, and shall not during the term of this Employment
Contract be engaged in any other business activity, whether or not such
business is pursued for gain, profit, or other pecuniary advantage.
Notwithstanding the foregoing, this Employment Contract shall not be construed
as preventing Employee from investing his personal assets in any form or manner
that will not require any services by Employee in the operation of the affairs
of the business in which such investments are made; provided; however, that
Employee shall not be permitted to make any investment in any business
<PAGE> 2
competing with the business of the Company. Further, notwithstanding the
foregoing provisions, this Employment Contract shall not be construed as
preventing the Employee from serving as a member of the board of directors of
any company as long as such service has been approved by the Chief Executive
Officer and such service does not distract the Employee from his duties
hereunder.
3. Compensation and Benefits.
(a) Base Salary. Employee's annual salary during the first twelve (12)
months of the term of this Employment Contract shall be $150,000 (the "Base
Salary"). The Base Salary shall be paid by the Company monthly in arrears or in
accordance with the Company's regular payroll practice. Pursuant to the
Employee's satisfactory performance reviews, the Employee's Base Salary shall
increase by a minimum of five percent (5%) on each anniversary date of the
Effective Date of this Agreement.
(b) Annual Discretionary Bonus. Employee shall be eligible for an
annual discretionary bonus under the terms and conditions of a short-term
incentive compensation program to be approved and adopted by the Board of
Directors. The Chief Executive Officer of the Company shall determine the
amount of the Employee's annual discretionary bonus, if any, based on both the
performance of the Company and the performance of the Employee; provided,
however, that to receive the bonus, Employee must be an "active employee in
good standing" on the date that the bonus is paid. For purposes of this
Employment Contract, an "active employee in good standing" shall mean that
Employee (i) has not terminated employment with the Company for any reason;
(ii) is not on probation of any kind from the Company; (iii) has not given
notice under this Employment Contract pursuant to Section 5 hereof; and (iv)
has not received written notice from the Company pursuant to Section 5 hereof.
(c) Long-Term Incentive Compensation. Upon an initial public offering
of the Company's common stock, the Company shall grant to Employee a
nonqualified stock option to purchase 40,000 shares of the Company's common
stock, at an exercise price of the price at which the initial public offering
of the stock is made, issued under the Company's 2000 Stock Incentive Plan.
This option shall become exercisable in twenty percent (20%) increments on each
of the first four anniversaries of the Effective Date, with the final increment
becoming exercisable on date six months after the fourth anniversary of the
Effective Date. To the maximum extent possible, this option shall be granted as
an ISO, with the remainder of the grant as an NQSO. The options described in
this paragraph shall be subject to the terms and conditions of the Company's
2000 Stock Incentive Plan. [In the event the Company has formally engaged an
underwriter for an initial public offering and then, prior to such public
offering and prior to the grant of the 40,000 share option to the Employee,
substantially all of the stock or assets of the Company is sold, the Company
agrees to treat the Employee as if he held the option for 40,000 shares of the
Company's common stock at the time of such sale.] In addition, the Company
agrees to instruct the committee administering the 2000 Stock Incentive Plan to
permit the Employee to transfer, at his election, one or both of the above
stock options to an immediate family member, a trust (with beneficiaries of
only immediate family members), or a family limited partnership (with general
partners and limited partners of only immediate family
<PAGE> 3
members). Such stock options referenced herein shall be adjusted for any stock
splits as to the number of shares which occur after the Effective Date herein.
(d) Employee Benefits. The Company shall provide Employee medical
coverage and other employee benefits substantially similar to, and on the same
basis as, the coverage provided to employees of the Company.
(e) Vacation. The Employee shall be entitled to four (4) weeks of paid
vacation per calendar year; provided, however, that if this Employment Contract
is not in effect for any full calendar year; Employee shall have only a pro
rata portion of such paid vacation during that calendar year.
(f) Automobile Allowance. The Employee shall receive a monthly
allowance of $500.00 in cash to assist him in obtaining and maintaining an
automobile for his business use. The Employee shall be responsible for any and
all costs and liabilities, including insurance, related to such automobile.
4. Personnel Policies. Employee shall conduct himself at all times in
a businesslike and professional manner as appropriate for a person in his
position and shall represent the Company in all respects as complies with good
business and ethical practices. In addition, Employee shall be subject to and
abide by the policies and procedures of the Company applicable to personnel of
the Company, as adopted from time to time.
5. Business Expenses. Employee shall be reimbursed monthly by the
Company for ordinary, necessary and reasonable expenses incurred by him in the
performance of his duties for the Company, provided that Employee shall first
document said business expenses in the manner generally required by the Company
under its policies and procedures, and in any event, the manner required to
meet applicable regulations of the Internal Revenue Service relating to the
deductibility of such expenses.
6. Termination and Renewal.
(a) Termination Due to Death or Discharge for Good Cause. This
Employment Contract shall terminate immediately upon the death of Employee or
upon the discharge of Employee for "good cause". For the purposes of this
Employment Contract, "good cause" means any act of fraud or dishonesty (whether
or not in connection with the Company's Business as hereinafter defined),
competing with the Business of the Company either directly or indirectly, the
breach of any provision of this Employment Contract by Employee, failure to
comply with the decisions of the Company, failure to discharge Employee's duty
of loyalty to the Company, or any other matter constituting "good cause" under
the laws of the State of Georgia. In the event of termination under this
section, any earned but unpaid Base Salary and any other benefits provided
herein shall be paid to Employee up to the effective date of termination of
this Employment Contract for whatever reason, including the death of Employee,
and not thereafter,
<PAGE> 4
subject to the specific provisions of subsection 2(c).
(b) Termination Due to Disability. This Employment Contract also shall
terminate immediately upon written notice to Employee if Employee shall at any
time be unable to perform the essential functions of his job hereunder, by
reason of a physical or mental illness or condition, with or without reasonable
accommodation, for a continuous period of three (3) consecutive calendar
months. In the event of termination due to disability under this section, any
earned but unpaid Base Salary and any other benefits provided herein shall be
paid to Employee up to the effective date of termination of this Employment
Contract for whatever reason, including the death of Employee, and not
thereafter, subject to the specific provisions of subsection 2(c).
(c) Termination by the Company Without Cause. If the Company
terminates this Employment Contract without Cause during the Initial Term, the
Company shall pay the Employee any earned but unpaid Base Salary accrued
through the date of termination plus the Base Salary and benefits due the
Employee for the remainder of the Initial Term. In the event the Company
terminates the Employment Contract without Cause after the end of the Initial
Term but during the Term of this Agreement, the Company shall either give the
Employee six (6) months' advance notice of such termination or pay to the
Employee an amount equal to six (6) months' of Base Salary, in addition to any
earned but unpaid Base Salary accrued through the date of termination. In
addition to the foregoing, in the event of a termination of the Employee's
employment by the Company without Cause, the stock options described in Section
3(d) hereof (to the extent previously granted) shall immediately become
exercisable.
(d) Voluntary Termination by the Employee due to Relocation. If the
Company requires the Employee to relocate his office from the Atlanta
metropolitan area, the Employee may voluntarily terminate this Agreement upon
30 days' advance written notice. Upon such a voluntary termination due to
relocation, any outstanding stock options held by the Employee shall
immediately become exercisable.
(e) Voluntary Termination by the Employee. If the Employee terminates
this Employment Contract within the Initial Term for any reason other than as
provided in subsection (d) hereof, he shall be liable to the Company for any
and all expenses, costs and other damages of the Company resulting therefrom.
In the event the Employee terminates this Employment Contract after the Initial
Term but during the Term of this Agreement for any reason other than as
provided in subsection (d) hereof, the Employee shall either give the Company
six (6) months' advance written notice of such termination or pay to the
Company an amount equal to any and all expenses, costs and other damages of the
Company resulting from the lack of such notice.
(f) Termination Upon Expiration of Term. If not otherwise terminated
hereunder, the Employment Agreement shall terminate at the end of the Initial
Term; however, prior to the expiration of the Initial Term, the Company and the
Employee may elect, in writing, to renew this Agreement for successive two (2)
year terms (which successive terms, if elected, shall together with the Initial
Term constitute the "Term" of the Agreement).
<PAGE> 5
7. Restrictive Covenants.
(a) Covenants to Prior Employers. Upon execution of this Agreement,
the Employee hereby represents that he is not a party to, subject to or
otherwise covered by any agreement or understanding (written or oral) with a
prior employer, other than WorldTravel Partners I, LLC, that would restrict or
in any manner limit the performance of his duties under this Agreement.
Employee acknowledges that he has been instructed by the Company not to reveal
or use any trade secret information from any former employer or reveal or use
confidential information in violation of any agreement with any former
employer.
(b) Acknowledgment of Damage Resulting From Employee's Competition
with the Company. Employee understands and acknowledges that the Company and
its related entities are engaged in the business of providing travel
arrangement, reservation, ticketing and related services and products (the
"Business"), and that because of his position with the Company, he has or will
obtain (i) intimate knowledge of the Business and including, but not limited
to, knowledge of "Confidential Information" (as hereinafter defined), and (ii)
knowledge of and relationships with the customers and suppliers used in
connection with the Business of the Company and its related entities. Employee
agrees and acknowledges that such knowledge, access, and relationships are such
that if Employee were to compete with the Company or its related entities
engaged in the Business, by engaging in the Business within the Restricted
Territory (as hereinafter defined) at any time during the two (2) year period
from the date of Employee's termination of employment with the Company, the
Company or its related entities would suffer harm, and the benefits that the
parties bargained for under this Employment Contract would be severely and
irreparably damaged. Further, Employee acknowledges and agrees that this
Employment Contract, and the covenants not to solicit or compete contained
herein, were a fundamental element of the transactions contemplated by this
Employment Contract and that the transactions contemplated therein would not
have been consummated in the absence of this Section 7. Employee agrees that
the covenants contained in this Section 6 are reasonable and necessary to
protect the confidentiality of the Trade Secrets, and other "Confidential
Information" concerning the Company acquired by Employee.
For purposes of this Employment Contract, "Trade Secret" shall be as
defined by applicable state law. The provisions of this Section shall be
interpreted so as to protect those trade secrets and "Confidential
Information," and to secure for the Company the exclusive benefits of the work
performed on behalf of the Company by the Employee under this Employment
Contract, and not to unreasonably limit his ability to engage in employment and
consulting activities in noncompetitive areas which do not endanger the
Company's legitimate interests expressed in this Employment Contract. Employee
also understands and agrees that the Company can reasonably amend the
definition of the Business or the scope of the Business at any time upon notice
to Employee. For purposes of this Agreement, the term "Restricted Territory"
shall mean the United States of America, which the parties agree is a
reasonable and necessary geographical limitation due to the nature of the
Business.
(c) Covenant Not to Compete with the Company. Employee agrees that,
during the term of his employment under this Employment Contract and for a
period of two (2) years following the termination of his employment under this
Employment Contract for whatever
<PAGE> 6
reasons, with or without "good cause" or otherwise, Employee will not, directly
or indirectly, expressly or tacitly, for himself or on behalf of any entity
anywhere within the Restricted Territory, (i) act as an officer, manager,
advisor, executive, controlling shareholder, or consultant to any business in
which his duties at or for such business include oversight of or actual
involvement in providing services which are competitive with the services or
products being provided or which are being produced or developed by the Company
or its related entities, or are under investigation by the Company or its
related entities at the termination of this Employment Contract, (ii) recruit
investors on behalf of an entity which engages in activities which are
competitive with the services or products being provided or which are being
produced or developed by the Company or its related entities, or are under
investigation by the Company or its related entities at the termination of this
Employment Contract, or (iii) become employed by such an entity in any capacity
which would require Employee to carry out, in whole or in part, the duties
Employee has performed for the Company or its related entities which are
competitive with the services or products being provided or which are being
produced or developed by the Company or its related entities, or are under
active investigation by the Company or its related entities at the termination
of this Employment Contract.
(d) Nonsolicitation of Customers. During Employee's employment with
the Company, Employee shall not, directly or indirectly without the Company's
prior written consent, contact or solicit any customers or clients of the
Company of its related entities, or prospective customers with whom the Company
or its related entities have solicited business within the last twelve (12)
months and with whom Employee had material contact ("Customers"), for business
purposes unrelated to furthering the Business of the Company or its related
entities. For a period of two (2) years following termination of Employee's
employment with the Company, Employee shall not, directly or indirectly, (i)
contact, solicit, divert or take away, any Customer for purposes of, or with
respect to, selling a product or service which competes with the Business, or
(ii) take any affirmative action in regard to establishing or continuing a
relationship with a Customer for purposes of making or which directly or
indirectly results in, a sale of a product or service which competes with the
Business.
(e) Nonsolicitation of Employees. Employee shall not at any time
within two (2) years after the termination of his employment, directly or
indirectly, solicit, employ, or endeavor to entice away from the Company or its
related entities any person who is or has been an employee of the Company or
its related entities during the Employee's employment or during the two-year
nonsolicitation period.
(f) Confidentiality. Employee hereby acknowledges and agrees that
during the Employment Contract, Employee will have access to Trade Secrets and
"Confidential Information" of the Company or its related entities, Employee
also acknowledges that Employee will not disclose or use, directly or
indirectly, any Trade Secrets Employee obtains during the course of Employee's
employment related to the Business for two (2) years from the date of
Employee's termination of employment with the Company. Employee also recognizes
that the services performed by Employee hereunder are special, unique and
extraordinary and that by reason of Employee's employment with the Company,
Employee will receive, develop, or otherwise acquire "Confidential Information"
(as hereinafter defined). Except as required by the pursuit of Employee's
duties with the Company or as it is authorized in writing by the Company,
<PAGE> 7
Employee acknowledges that Employee will not disclose or use, directly or
indirectly, any Confidential Information related to the Business during the
course of Employee's employment and for a period of two (2) years after the
date of Employee's termination under this Employment Contract.
The term "Confidential Information" shall mean and include any
information, data and know-how relating to the Business of the Company or its
related entities that is disclosed to Employee by the Company or known to
Employee as a result of Employee's relationship with the Company and not
generally within public domain (whether constituting a Trade Secret or not),
including without limitation, all administrative procedures, product
development and technical data, sales and/or marketing information, customer
account records, payment plans, training and operations material, memoranda and
manuals, personnel records, pricing information, and financial information
concerning or relating to the Business and/or the Customers, employees and
affairs of the Company or its related entities.
(g) Severability of Agreement Provisions. In the event any or all of
the covenants of this Section 7 are deemed overly broad, the parties hereto
agree that the covenants shall be enforced to the extent that they are not
overly broad.
8. Products, Notes, Records and Software. All memoranda, notes,
records and other documents and computer software made or compiled by Employee
or made available to him during the term of this Employment Contract concerning
the Business of the Company or its related entities, including, without
limitation, all customer data, billing information, service data, and other
technical material of the Company or its related entities, shall be the
Company's property and shall be delivered to the Company within two (2) days of
the termination of this Employment Contract.
9. Ownership of Inventions.
(a) Disclosure to Company. Employee agrees to disclose promptly, in
writing, to the Company's Board of Directors any patentable or unpatentable,
copyrightable or uncopyrightable, idea, invention, work of authorship
(including, but not limited to computer programs, software and documentation),
formula, device, improvement, method, process or discovery (each, an
"Invention") which relates to the Company's business that Employee conceives,
makes, develops, or works on, in whole or in part, solely or jointly with
others during the term of Employee's employment regardless of whether (i) such
invention was conceived, made, developed or worked on during Employee's regular
hours of employment or his time away from work; (ii) the Invention was made at
the suggestion of the Company; or (iii) the Invention was reduced to drawing,
written description, documentation, models or other tangible form.
(b) Made For Hire Status of the Inventions. It is expressly agreed
that the Inventions created by Employee hereunder shall be considered specially
ordered or commissioned "works made for hire", as such term is defined under
the United States Copyright Act of 1976, as amended (the "Act"), and that such
works and the copyright interests therein and thereto shall
<PAGE> 8
belong solely and exclusively to the Company and shall be considered the
property of the Company for purposes of this Agreement. To the extent that such
works do not constitute "works made for hire" under the Act, Employee, in
consideration of $1.00 and other good and valuable consideration, the receipt
and adequacy of which hereby are acknowledged, hereby irrevocably assigns to
the Company, its successors and assigns, without royalty or any other further
consideration, (i) all rights, title and interests in and to the copyrights of
the Inventions and all renewals and extensions of the copyrights that may be
secured under existing or future laws, and (ii) all other rights, title and
interests he may have in the Inventions. Accordingly, the Company will have the
right to register, in the office of the Registrar of Copyrights of the United
States, the Inventions in the Company's name as the owner and author of such
Inventions. Employee shall, upon request by the Company and at the Company's
expense, promptly execute, acknowledge or deliver any documents or instruments
deemed reasonably necessary by the Company to document, enforce, protect or
otherwise perfect the Company's copyright and other interests in the
Inventions.
(c) Assignment to Company. Without limiting the generality or effect
of any other provision of this Agreement, Employee agrees to assign to the
Company without royalty or any other further consideration his entire right,
title and interest in and to any Invention Employee is required to disclose
hereunder.
(d) Records. Employee agrees to make and maintain adequate and current
written records of all Inventions covered by this Agreement. These records
shall be and remain the property of the Company.
(e) Patents and Proprietary Rights. Employee agrees to assist the
Company in obtaining, maintaining, and enforcing patents and other proprietary
rights in connection with any Invention covered this Agreement for which the
Company has or obtains any right, title or interest. Employee further agrees
that his obligations under this subsection shall continue beyond the
termination of the term of this Agreement, but if Employee is called upon to
render such assistance after the termination of the term of this Agreement,
Employee shall be entitled to a fair and reasonable rate of compensation for
such assistance. Employee shall, in addition, be entitled to reimbursement of
any out-of-pocket expenses incurred at the request of the Company relating to
such assistance.
(f) Other Assignments or Contracts. Employee represents that there are
no other contracts to assign inventions that are now in existence between the
Employee and any former employer or other person or entity. Employee further
represents that he has no other employments or undertakings which might
restrict or impair his performance of this Agreement.
10. Applicable Law. This Employment Contract is being executed in the
State of Georgia and shall be construed and enforced in accordance with the
laws of said jurisdiction.
11. Waiver of Breach. The waiver by the Company of a breach of any
provision of this Employment Contract by Employee shall not operate or be
construed as a waiver of any subsequent breach by Employee.
<PAGE> 9
12. Successors and Assigns. This Employment Contract shall inure to
the benefit of the Company, its subsidiaries and affiliates, and their
respective successors and assigns. This Employment Contract and benefits
hereunder are personal to Employee and may not be assigned or transferred by
Employee.
13. Entire Agreement. This instrument contains the entire agreement of
the parties and supersedes all prior agreements regarding Employee's employment
by the Company, including, but not limited to, oral discussions, letter
agreements, or any other document concerning the possibility of employment with
the Company. This Employment Contract may not be changed orally but only by an
agreement in writing signed by the party against whom enforcement of any
waiver, changes, modification, extension, or discharge is sought.
14. Invalidity of any Provision. It is the intention of the parties
hereto that the provisions of this Employment Agreement shall be enforced to
the fullest extent permissible under the laws and public policies of each state
and jurisdiction in which such enforcement is sought, but that the
unenforceability (or the modification to conform with such laws or public
policies) of any provision hereof shall not render unenforceable or impair the
remainder of this Employment Agreement which shall be deemed amended to delete
or modify, as necessary, the invalid or unenforceable provisions. The parties
further agree to alter the balance of the Employment Agreement in order to
render the same valid and enforceable.
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Contract under seal as of the date first above shown.
EMPLOYEE
/s/ Timothy J. Severt
----------------------------
TIMOTHY J. SEVERT
COMPANY
TRX, INC.
By: /s/ Norwood H. Davis III
-------------------------
Title: President & CEO
----------------------
<PAGE> 1
EXHIBIT 10.11
EMPLOYMENT CONTRACT
THIS EMPLOYMENT CONTRACT made as of the 1st day of December, 1999 (the
"Effective Date") between SCOTT R. HANCOCK (hereinafter referred to as
"Employee") and WT TECHNOLOGIES, INC., a Georgia corporation (hereinafter
referred to as the "Company").
WITNESSETH:
WHEREAS, the Company desires to employ Employee, and Employee desires
to be employed by the Company; and
WHEREAS, the parties intend to supersede all prior correspondence,
letters, and negotiations between them with the terms set forth herein;
NOW, THEREFORE, it is hereby agreed as follows:
1. Employment of Employee. The Company hereby employs Employee for a
period of three (3) years commencing on the Effective Date of this Employment
Contract (the "Initial Term"). Employee agrees to such employment on the terms
and conditions herein set forth and agrees to devote his best efforts to his
duties under this Employment Contract and to perform such duties diligently and
efficiently and in accordance with the directions of the Company.
2. Duties and Responsibilities. The Employee shall be employed as
Executive Vice President-Operations of the Company, reporting directly to the
President of the Company. As Executive Vice President-Operations, the Employee
shall have day-to-day responsibilities related to management, finance,
operations, analysis of business, in addition to any specific related duties
and responsibilities as may be assigned to him by the President of the Company.
3. Compensation and Benefits.
(a) Base Salary. Employee's annual salary during the first twelve (12)
months of the term of this Employment Contract shall be $180,000 (the "Base
Salary"). The Base Salary shall be paid by the Company monthly in arrears or in
accordance with the Company's regular payroll practice.
(b) Annual Discretionary Bonus. Upon completion of a year of
employment, Employee shall be eligible for an annual discretionary bonus of up
to 50 percent (50%) of Base Salary under the terms and conditions of a
short-term incentive compensation program to be
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approved and adopted by the Board of Directors. The President of the Company
shall determine the amount of the Employee's annual discretionary bonus, if
any, based on both the performance of the Company and the performance of the
Employee; provided, however, that to receive the bonus, Employee must be an
"active employee in good standing" on the date that the bonus is paid. For
purposes of this Employment Contract, an "active employee in good standing"
shall mean that Employee (i) has not terminated employment with the Company for
any reason; (ii) is not on probation of any kind from the Company; (iii) has
not given notice under this Employment Contract pursuant to Section 5 hereof;
and (iv) has not received written notice from the Company pursuant to Section 5
hereof.
(d) Long-Term Incentive Compensation. As of the Effective Date, the
Employee shall receive a nonqualified stock option to purchase 40,000 shares of
the Company's common stock at a discounted exercise price of $5.00 per share,
issued under the Company's 1999 Stock Incentive Plan. This option shall become
exercisable in twenty percent (20%) increments on each anniversary of the date
of grant. In addition, immediately prior to or contemporaneously with an
initial public offering of the Company's common stock, the Employee shall
receive a stock option to purchase 40,000 shares of the Company's common stock
at a per share exercise price equal to the initial public offering price, which
option shall also be issued under the Company's 1999 Stock Incentive Plan. The
options described in this paragraph shall be subject to the terms and
conditions of the Company's 1999 Stock Option Plan.
(e) Employee Benefits. The Company shall provide Employee medical
coverage and other employee benefits substantially similar to, and on the same
basis as, the coverage provided to employees of the Company.
(f) Vacation. Employee shall be entitled to four (4) weeks of paid
vacation per calendar year; provided, however, that if this Employment Contract
is not in effect for any full calendar year; Employee shall have only a pro
rata portion of such paid vacation during that calendar year.
(g) Automobile Allowance. The Employee shall receive a monthly
allowance of $500.00 in cash to assist him in obtaining and maintaining an
automobile for his business use. The Employee shall be responsible for any and
all costs and liabilities, including insurance, related to such automobile.
(h) Moving Expenses. The Company agrees to pay the actual costs
related to the move of the Employee's household goods to Atlanta.
(i) Good Standing. Employee understands and agrees that he must be an
active Employee in good standing of the Company on the date any of the payments
in his Section 2 become due and payable in order to receive such payments.
4. Personnel Policies. Employee shall conduct himself at all times in
a businesslike and professional manner as appropriate for a person in his
position and shall represent the Company in all respects as complies with good
business and ethical practices. In addition,
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Employee shall be subject to and abide by the policies and procedures of the
Company applicable to personnel of the Company, as adopted from time to time.
5. Business Expenses. Employee shall be reimbursed monthly by the
Company for ordinary, necessary and reasonable expenses incurred by him in the
performance of his duties for the Company, provided that Employee shall first
document said business expenses in the manner generally required by the Company
under its policies and procedures, and in any event, the manner required to
meet applicable regulations of the Internal Revenue Service relating to the
deductibility of such expenses.
6. Termination and Renewal.
(a) Termination Due to Death or Discharge for Good Cause. This
Employment Contract shall terminate immediately upon the death of Employee or
upon the discharge of Employee for "good cause". For the purposes of this
Employment Contract, "good cause" means any act of fraud or dishonesty (whether
or not in connection with the Company's Business as hereinafter defined),
competing with the Business of the Company either directly or indirectly, the
breach of any provision of this Employment Contract by Employee, failure to
comply with the decisions of the Company, failure to discharge Employee's duty
of loyalty to the Company, or any other matter constituting "good cause" under
the laws of the State of Georgia. In the event of termination under this
section, any earned but unpaid Base Salary and any other benefits provided
herein shall be paid to Employee up to the effective date of termination of
this Employment Contract for whatever reason, including the death of Employee,
and not thereafter, subject to the specific provisions of subsection 2(c).
(b) Termination Due to Disability. This Employment Contract also shall
terminate immediately upon written notice to Employee if Employee shall at any
time be unable to perform the essential functions of his job hereunder, by
reason of a physical or mental illness or condition, with or without reasonable
accommodation, for a continuous period of three (3) consecutive calendar
months. In the event of termination due to disability under this section, any
earned but unpaid Base Salary and any other benefits provided herein shall be
paid to Employee up to the effective date of termination of this Employment
Contract for whatever reason, including the death of Employee, and not
thereafter, subject to the specific provisions of subsection 2(c).
(c) Termination by the Company Without Cause. If the Company
terminates this Employment Contract without Cause during the Initial Term, the
Company shall pay the Employee any earned but unpaid Base Salary accrued
through the date of termination plus the Base Salary and benefits due the
Employee for the remainder of the Initial Term. In the event the Company
terminates the Employment Contract without Cause after the end of the Initial
Term but during the Term of this Agreement, the Company shall either give the
Employee six (6) months' advance notice of such termination or pay to the
Employee an amount equal to six (6) months' of Base Salary, in addition to any
earned but unpaid Base Salary accrued through the date of termination. In
addition to the foregoing, in the event of a termination of the Employee's
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employment by the Company without Cause, the stock options described in Section
3(d) hereof (to the extent previously granted) shall immediately become
exercisable.
(d) Voluntary Termination by the Employee. If the Employee terminates
this Employment Contract within the Initial Term, he shall be liable to the
Company for any and all expenses, costs and other damages of the Company
resulting therefrom. In the event the Employee terminates this Employment
Contract after the Initial Term but during the Term of this Agreement, the
Employee shall either give the Company six (6) months' advance notice of such
termination or pay to the Company an amount equal to any and all expenses,
costs and other damages of the Company resulting from the lack of such notice.
(e) Termination Upon Expiration of Term. If not otherwise terminated
hereunder, the Employment Agreement shall terminate at the end of the Initial
Term; however, prior to the expiration of the Initial Term, the Company and the
Employee may elect, in writing, to renew this Agreement for an additional two
(2) year term (which additional term, if elected, shall together with the
Initial Term constitute the "Term" of the Agreement).
7. Restrictive Covenants.
(a) Covenants to Prior Employers. Upon execution of this Agreement,
the Employee hereby represents that he is not a party to, subject to or
otherwise covered by any agreement or understanding (written or oral) with a
prior employer that would restrict or in any manner limit the performance of
his duties under this Agreement. Employee acknowledges that he has been
instructed by the Company not to reveal or use any trade secret information
from any former employer or reveal or use confidential information in violation
of any agreement with any former employer. Notwithstanding the foregoing, in
the event the Employee is subjected to claims of violating any noncompetition
agreement with his prior employer that immediately precedes the Company,
subject to mutual agreement between the Company and the Employee as to the
selection of legal counsel and defense strategy, the Company agrees to
reimburse the Employee for up to 70 percent (70%) of any actual costs paid by
him for legal fees or final judgment amounts with regard to such claims.
(b) Acknowledgment of Damage Resulting From Employee's Competition
with the Company. Employee understands and acknowledges that the Company and
its related entities are engaged in the business of providing travel
arrangement, reservation, ticketing and related services and products (the
"Business"), and that because of his position with the Company, he has or will
obtain (i) intimate knowledge of the Business and including, but not limited
to, knowledge of "Confidential Information" (as hereinafter defined), and (ii)
knowledge of and relationships with the customers and suppliers used in
connection with the Business of the Company and its related entities. Employee
agrees and acknowledges that such knowledge, access, and relationships are such
that if Employee were to compete with the Company or its related entities
engaged in the Business, by engaging in the Business within the Restricted
Territory (as hereinafter defined) at any time during the two (2) year period
from the date of Employee's termination of employment with the Company, the
Company or its related entities would suffer harm, and the benefits that the
parties bargained for under this Employment
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Contract would be severely and irreparably damaged. Further, Employee
acknowledges and agrees that this Employment Contract, and the covenants not to
solicit or compete contained herein, were a fundamental element of the
transactions contemplated by this Employment Contract and that the transactions
contemplated therein would not have been consummated in the absence of this
Section 7. Employee agrees that the covenants contained in this Section 6 are
reasonable and necessary to protect the confidentiality of the Trade Secrets,
and other "Confidential Information" concerning the Company acquired by
Employee.
For purposes of this Employment Contract, "Trade Secret" shall be as
defined by applicable state law. The provisions of this Section shall be
interpreted so as to protect those trade secrets and "Confidential
Information," and to secure for the Company the exclusive benefits of the work
performed on behalf of the Company by the Employee under this Employment
Contract, and not to unreasonably limit his ability to engage in employment and
consulting activities in noncompetitive areas which do not endanger the
Company's legitimate interests expressed in this Employment Contract. Employee
also understands and agrees that the Company can reasonably amend the
definition of the Business or the scope of the Business at any time upon notice
to Employee. For purposes of this Agreement, the term "Restricted Territory"
shall mean the United States of America, which the parties agree is a
reasonable and necessary geographical limitation due to the nature of the
Business.
(c) Covenant Not to Compete with the Company. Employee agrees that,
during the term of his employment under this Employment Contract and for a
period of two (2) years following the termination of his employment under this
Employment Contract for whatever reasons, with or without "good cause" or
otherwise, Employee will not, directly or indirectly, expressly or tacitly, for
himself or on behalf of any entity anywhere within the Restricted Territory,
(i) act as an officer, manager, advisor, executive, controlling shareholder, or
consultant to any business in which his duties at or for such business include
oversight of or actual involvement in providing services which are competitive
with the services or products being provided or which are being produced or
developed by the Company or its related entities, or are under investigation by
the Company or its related entities at the termination of this Employment
Contract, (ii) recruit investors on behalf of an entity which engages in
activities which are competitive with the services or products being provided
or which are being produced or developed by the Company or its related
entities, or are under investigation by the Company or its related entities at
the termination of this Employment Contract, or (iii) become employed by such
an entity in any capacity which would require Employee to carry out, in whole
or in part, the duties Employee has performed for the Company or its related
entities which are competitive with the services or products being provided or
which are being produced or developed by the Company or its related entities,
or are under active investigation by the Company or its related entities at the
termination of this Employment Contract.
(d) Nonsolicitation of Customers. During Employee's employment with
the Company, Employee shall not, directly or indirectly without the Company's
prior written consent, contact or solicit any customers or clients of the
Company of its related entities, or prospective customers with whom the Company
or its related entities have solicited business within the last twelve (12)
months and with whom Employee had material contact ("Customers"), for business
purposes unrelated to furthering the Business of the Company or its
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related entities. For a period of two (2) years following termination of
Employee's employment with the Company, Employee shall not, directly or
indirectly, (i) contact, solicit, divert or take away, any Customer for
purposes of, or with respect to, selling a product or service which competes
with the Business, or (ii) take any affirmative action in regard to
establishing or continuing a relationship with a Customer for purposes of
making or which directly or indirectly results in, a sale of a product or
service which competes with the Business.
(e) Nonsolicitation of Employees. Employee shall not at any time
within two (2) years after the termination of his employment, directly or
indirectly, solicit, employ, or endeavor to entice away from the Company or its
related entities any person who is or has been an employee of the Company or
its related entities during the Employee's employment or during the two-year
nonsolicitation period.
(f) Confidentiality. Employee hereby acknowledges and agrees that
during the Employment Contract, Employee will have access to Trade Secrets and
"Confidential Information" of the Company or its related entities, Employee
also acknowledges that Employee will not disclose or use, directly or
indirectly, any Trade Secrets Employee obtains during the course of Employee's
employment related to the Business for two (2) years from the date of
Employee's termination of employment with the Company. Employee also recognizes
that the services performed by Employee hereunder are special, unique and
extraordinary and that by reason of Employee's employment with the Company,
Employee will receive, develop, or otherwise acquire "Confidential Information"
(as hereinafter defined). Except as required by the pursuit of Employee's
duties with the Company or as it is authorized in writing by the Company,
Employee acknowledges that Employee will not disclose or use, directly or
indirectly, any Confidential Information related to the Business during the
course of Employee's employment and for a period of two (2) years after the
date of Employee's termination under this Employment Contract.
The term "Confidential Information" shall mean and include any
information, data and know-how relating to the Business of the Company or its
related entities that is disclosed to Employee by the Company or known to
Employee as a result of Employee's relationship with the Company and not
generally within public domain (whether constituting a Trade Secret or not),
including without limitation, all administrative procedures, product
development and technical data, sales and/or marketing information, customer
account records, payment plans, training and operations material, memoranda and
manuals, personnel records, pricing information, and financial information
concerning or relating to the Business and/or the Customers, employees and
affairs of the Company or its related entities.
(g) Severability of Agreement Provisions. In the event any or all of
the covenants of this Section 7 are deemed overly broad, the parties hereto
agree that the covenants shall be enforced to the extent that they are not
overly broad.
8. Products, Notes, Records and Software. All memoranda, notes,
records and other documents and computer software made or compiled by Employee
or made available to him during the term of this Employment Contract concerning
the Business of the Company or its
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related entities, including, without limitation, all customer data, billing
information, service data, and other technical material of the Company or its
related entities, shall be the Company's property and shall be delivered to the
Company within two (2) days of the termination of this Employment Contract.
9. Ownership of Inventions.
(a) Disclosure to Company. Employee agrees to disclose promptly, in
writing, to the Company's Board of Directors any patentable or unpatentable,
copyrightable or uncopyrightable, idea, invention, work of authorship
(including, but not limited to computer programs, software and documentation),
formula, device, improvement, method, process or discovery (each, an
"Invention") which relates to the Company's business that Employee conceives,
makes, develops, or works on, in whole or in part, solely or jointly with
others during the term of Employee's employment regardless of whether (i) such
invention was conceived, made, developed or worked on during Employee's regular
hours of employment or his time away from work; (ii) the Invention was made at
the suggestion of the Company; or (iii) the Invention was reduced to drawing,
written description, documentation, models or other tangible form.
(b) Made For Hire Status of the Inventions. It is expressly agreed
that the Inventions created by Employee hereunder shall be considered specially
ordered or commissioned "works made for hire", as such term is defined under
the United States Copyright Act of 1976, as amended (the "Act"), and that such
works and the copyright interests therein and thereto shall belong solely and
exclusively to the Company and shall be considered the property of the Company
for purposes of this Agreement. To the extent that such works do not constitute
"works made for hire" under the Act, Employee, in consideration of $1.00 and
other good and valuable consideration, the receipt and adequacy of which hereby
are acknowledged, hereby irrevocably assigns to the Company, its successors and
assigns, without royalty or any other further consideration, (i) all rights,
title and interests in and to the copyrights of the Inventions and all renewals
and extensions of the copyrights that may be secured under existing or future
laws, and (ii) all other rights, title and interests he may have in the
Inventions. Accordingly, the Company will have the right to register, in the
office of the Registrar of Copyrights of the United States, the Inventions in
the Company's name as the owner and author of such Inventions. Employee shall,
upon request by the Company and at the Company's expense, promptly execute,
acknowledge or deliver any documents or instruments deemed reasonably necessary
by the Company to document, enforce, protect or otherwise perfect the Company's
copyright and other interests in the Inventions.
(c) Assignment to Company. Without limiting the generality or effect
of any other provision of this Agreement, Employee agrees to assign to the
Company without royalty or any other further consideration his entire right,
title and interest in and to any Invention Employee is required to disclose
hereunder.
(d) Records. Employee agrees to make and maintain adequate and current
written records of all Inventions covered by this Agreement. These records
shall be and remain the property of the Company.
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(e) Patents and Proprietary Rights. Employee agrees to assist the
Company in obtaining, maintaining, and enforcing patents and other proprietary
rights in connection with any Invention covered this Agreement for which the
Company has or obtains any right, title or interest. Employee further agrees
that his obligations under this subsection shall continue beyond the
termination of the term of this Agreement, but if Employee is called upon to
render such assistance after the termination of the term of this Agreement,
Employee shall be entitled to a fair and reasonable rate of compensation for
such assistance. Employee shall, in addition, be entitled to reimbursement of
any out-of-pocket expenses incurred at the request of the Company relating to
such assistance.
(f) Other Assignments or Contracts. Employee represents that there are
no other contracts to assign inventions that are now in existence between the
Employee and any former employer or other person or entity. Employee further
represents that he has no other employments or undertakings which might
restrict or impair his performance of this Agreement.
10. Applicable Law. This Employment Contract is being executed in the
State of Georgia and shall be construed and enforced in accordance with the
laws of said jurisdiction.
11. Waiver of Breach. The waiver by the Company of a breach of any
provision of this Employment Contract by Employee shall not operate or be
construed as a waiver of any subsequent breach by Employee.
12. Successors and Assigns. This Employment Contract shall inure to
the benefit of the Company, its subsidiaries and affiliates, and their
respective successors and assigns. This Employment Contract and benefits
hereunder are personal to Employee and may not be assigned or transferred by
Employee.
13 Entire Agreement. This instrument contains the entire agreement of
the parties and supersedes all prior agreements regarding Employee's employment
by the Company, including, but not limited to, oral discussions, letter
agreements, or any other document concerning the possibility of employment with
the Company. This Employment Contract may not be changed orally but only by an
agreement in writing signed by the party against whom enforcement of any
waiver, changes, modification, extension, or discharge is sought.
14. Invalidity of any Provision. It is the intention of the parties
hereto that the provisions of this Employment Agreement shall be enforced to
the fullest extent permissible under the laws and public policies of each state
and jurisdiction in which such enforcement is sought, but that the
unenforceability (or the modification to conform with such laws or public
policies) of any provision hereof shall not render unenforceable or impair the
remainder of this Employment Agreement which shall be deemed amended to delete
or modify, as necessary, the
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invalid or unenforceable provisions. The parties further agree to alter the
balance of the Employment Agreement in order to render the same valid and
enforceable.
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Contract under seal as of the date first above shown.
EMPLOYEE
/s/ Scott Hancock
----------------------------
SCOTT HANCOCK
COMPANY
WT TECHNOLOGIES, INC.
By: /s/ Norwood H. Davis III
-------------------------
Title: President & CEO
----------------------
(CORPORATE SEAL)
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EXHIBIT 10.16
24. CONDEMNATION
OFFICE LEASE AGREEMENT
McLEAN PROFESSIONAL PARK
MCLEAN, VIRGINIA
THIS LEASE AGREEMENT made and entered into on this the 25th day of October,
1999, by and between Young & Skidmore Co., whose address for purposes hereof is
4545 42nd St., N.W. #301, Wash. D.C. 20016 hereinafter called "Lessor", and
Arthur H., Ltd. hereinafter called "Lessee".
WITNESSETH, That, for and in consideration of the rents, mutual covenants
and agreements hereinafter set forth, the parties hereto do hereby mutually
agree as follows:
1. PREMISES LEASED AND DEMISED
The Lessor does hereby lease to Lessee, and Lessee does hereby lease from
Lessor, for the term and upon the conditions hereinafter provided in the office
building situated at 1489 Chain Bridge Road, (such space being hereinafter
referred to as the "demised premises"). The demised premises have been assigned
Suites 300 & 301.
2. LEASE TERM
Subject to and upon the terms and conditions set forth herein, or in any
exhibit or addendum hereto, the term of this lease shall be for an initial
period of 27 Months beginning on the First day of November, 1999, and ending on
the 31st day of January, 2002.
3. USE OF DEMISED PREMISES
Lessee will use and occupy the demised premises solely for administrative,
sales & executive offices purposes and under the trade name Arthur H., Ltd.
which trade name shall be used by lessee throughout the term hereof and lessee
shall not use or trade under or advertise itself under any other name, style or
designation. Lessee's use shall be in accordance with the use permitted under
applicable municipal regulations and without the prior written consent of
lessor, the demised premises will not be used for any other purpose. Lessee will
not use or occupy the demised premises for any unlawful purpose and will comply
with all present and future laws, ordinances, regulations, and orders of the
United States of America, the State of Virginia, and any other public authority
having jurisdiction over the demised premises, to which the lessee is subject.
4. BASE RENTAL
The annual rent to be paid for said premises during said term, which lessee
hereby agrees to pay to lessor in advance, and lessor hereby agrees to accept,
shall be the sum of Thirty Three Thousand Five Hundred Thirty Six Dollars &
25/100 ($33,536.25) payable in equal monthly installments on the first day of
each calendar month during the term of this lease. Such rental shall be base
rental and subject to escalation as hereinafter provided. The annual base rent
to be paid for said demised premises during the term hereof, and any additional
rent shall be paid without demand, diminution, deduction, or set-off, or prior
demand, in monthly installments during the term of this lease, all as together
with additional rent hereinafter provided. If the obligation of the lessee to
pay rent hereunder begins on a day other than on the first day of a month, rent
from such date until the first day of the following month shall be prorated at
the rate of one-thirtieth (1/30) of the fixed monthly rental for each day
payable in advance. The lessee will pay, without demand, said rent by check to
Thomas P. Brown Management, Inc., 4545 42nd Street, N.W. #301, Wash., D.C.
20016, or to such other party or to such other address as lessor may designate
from time to time by written notice to lessee, without demand and without
deduction, set-off or counterclaim. If lessor shall at any time or times accept
said rent after it shall become due and payable, such acceptance shall not
excuse delay upon subsequent occasions, or constitute, or be construed as, a
waiver of any or all of the lessor's rights hereunder.
Lessor acknowledges receipt from lessee of one twelfth of the initial
annual base rent to be held as collateral security for the payment of any
rentals and other sums of money payable by lessee under this lease, and for the
faithful performance of all other covenants and agreements of lessee hereunder.
The amount of said deposit shall be repaid to lessee after the termination of
this lease and any renewal thereof, provided lessee shall have made all
payments and performed all covenants and agreements. Upon any default by lessee
hereunder, all or part of said deposit may, at lessor's sole option, be applied
on account of such default, and thereafter lessee shall promptly restore the
resulting deficiency in said deposit.
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The initial Annual Base Rent shall be multiplied by a fraction the denominator
of which shall be the Consumer Price Index (CPI) now known as the "U.S.
Department of Labor, Bureau of Labor Statistics, Consumer Price Index, United
State City Average for Urban Wage Earners and Clerical Workers, All Items (1982
- - 1984 = 100) for the month which is two months prior to the commencement of
this lease (i.e. The numerical figure for the CPI for 1999, to be inserted when
available.) and the numerator of which shall be such CPI for the month which is
two months prior to the first month of the succeeding lease year. In the event
that the Consumer Price Index is no longer furnished, the parties hereto agree
to substitute a comparable index therefor.
In no event shall the annual rent payable by Lessee during a lease year be less
than the prior year's annual rent as adjusted herein. Notwithstanding the above
formula, in no event will the annual CPI increase be less than 3%, and no more
than 6%. The anniversary date for the CPI increase each year is November.
6. ASSIGNMENT AND SUBLETTING
a. Lessee will not assign, transfer, mortgage or encumber this lease
without obtaining the prior written consent of lessor; nor shall any assignment
or transfer of this lease be effectuated by operation of law or otherwise
without the prior written consent of lessor, which will not be unreasonably
withheld. Lessee will not sublet (or permit occupancy or use by another of) or
the demised premises, or any part thereof, without obtaining the prior written
consent of Lessor. The consent by lessor to any assignment, transfer, or
subletting to any party, shall not be construed as a waiver or release of lessee
from the terms of any covenant or obligation under this lease, nor shall the
collection or acceptance of rent from any such assignee, transferee, subtenant
or occupant constitute a waiver or release of lessee of any covenant or
obligation contained in this lease, nor shall any such assignment or subletting
be construed to relieve lessee from obtaining the consent in writing of lessor
to any further assignment or subletting. In the event that lessee defaults
hereunder, lessee hereby assigns to lessor the rent due from any subtenant of
lessee and hereby authorizes each such subtenant to pay said rent directly to
lessor.
b. If lessee is a corporation and if any transfer, sale, pledge or other
disposition of 50% or more of the common stock shall occur, or power to vote the
majority of the outstanding capital stock be changed, then lessee shall so
notify lessor.
7. INSURANCE
a. Lessee shall obtain and at all times during the term hereof maintain,
at its sole cost and expense, policies of insurance covering its fixtures and
equipment installed and located on the demised premises, or otherwise
constituting a part of the lessee's work in an amount of not less than eighty
(80) percent of the replacement cost of said items within the classification
"fire and extended coverage," together with insurance against vandalism,
malicious mischief, and sprinkler leakage or other sprinkler damage; and any
proceeds of such insurance, so long as this lease shall remain in effect, shall
be used only to repair or replace the items so insured.
b. Lessee shall also provide and keep in force during the term of this
lease, for the benefit of lessor and lessee, general liability insurance in any
insurance company licensed to do business in the State of Virginia in the
amount of One Million Dollars in respect to injuries to one person, one
accident, and One Hundred Thousand Dollars in respect to any property damage in
any one occurrence. Any insurance policies herein required to be procured by
lessee shall contain an express waiver of any right of subrogation by the
insurance company against the lessor. Neither the issuance of any insurance
policy required hereunder, nor the minimum limits specified herein with respect
to lessee's insurance coverage, shall be deemed to limit or restrict in any way
lessee's liability arising under or out of this lease. In addition, all
insurance required of lessee hereunder shall be written as a primary policy
coverage, and not contributing with or in excess of any coverage which lessor
may carry, and shall cover and insure lessor as an additional insured. All
public liability and property damage policies shall contain a provision that
lessor, although named therein as an insured, shall nevertheless be entitled to
recovery under said policies for any loss occasioned to it, its officers,
servants, agents or employees, by reason of the negligence or fault of lessee,
its servants, agents, employees, invitees or customers.
c. Lessee agrees to deliver certificates of such insurance to lessor at
the beginning of the term of this lease and thereafter not less than five (5)
days prior to the expiration of any such policy. In the event that lessee shall
fail promptly to furnish any insurance herein required, lessor may effect the
same and pay the premium therefor for a period of not exceeding one year and
the premium so paid by lessor shall be immediately payable by lessee as
additional rent.
d. Indemnity. Lessee shall indemnify and hold harmless lessor from and
against any and all liabilities, fines, claims, damages and actions, costs and
expenses of any kind or nature, including attorney's fees, and of anyone
whatsoever (1) relating to the demised premises due to or arising out of any
act or neglect of lessee or of anyone holding under lessee or of any of their
employees, agents or invitees, (2) due to or arising out of mechanic's liens
filed against the land and the building in which the demised premises are
located for labor performance or for materials furnished to lessee, and (3) due
to or arising out of any breach, violation or non-performance of any covenants,
condition or agreement in this lease set forth and contained on the part of
lessee to be fulfilled, kept, observed and performed.
8. MAINTENANCE BY LESSEE
a. Lessee will keep the demised premises and the fixtures and equipment
therein clean, safe and sanitary condition, will take good care thereof, will
suffer no waste or injury thereto, and will, at the expiration or other
termination of the term of this Lease, surrender the same, broom clean, in the
same order and condition in which they are on the commencement of the term of
this Lease, ordinary wear and tear and damage by the elements, fire and other
casualty not due to the negligence of the Lessee excepted; and upon such
termination of this Lease, Lessor shall have the right to re-enter and resume
possession of the lease premises.
b. When necessary by reason of accident or other cause occurring in the
building or in the demised premises, or in order to make any repairs or
alterations or additions or improvements in or relating to the building or the
demised premises lessor reserves the right to interrupt the supply to the
demised premises or to the common areas of steam, electricity, water, and other
utilities and also to suspend the operation of the heating or air-conditioning
system, in or to any portion of the building and the building, until said
repairs, alterations, additions or improvements shall have been completed.
Provided lessor shall pursue such work with reasonable diligence, there shall
be no abatement in rent because of any such interruption or suspension.
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9. ALTERATIONS
Lessee will not make or permit anyone to make any alterations, additions
or improvements, particularly such as would have the effect of increasing
lessee's rental area, structural or otherwise, in or to the demised premises or
the building, or attach anything to the exterior of the building without the
prior written consent of lessor. As a condition precedent to such written
consent of lessor, lessee agrees to obtain and deliver to lessor written and
unconditional waivers of mechanics' lien upon the real property of which the
demised premises are a part, for all work, labor and services to be performed,
and materials to be furnished, by them in connection with such work, signed by
all contractors, subcontractors, material men and laborers to become involved
in such work. If, notwithstanding the foregoing, any mechanic's lien is filed
against the demised premises, or the real property of which the demised
premises are a part, for work claimed to have been done, for, or materials
claimed to have been furnished to, lessee, such mechanic's lien shall be
discharged by lessee within ten (10) days thereafter, at lessee's sole cost and
expense, by the payment thereof or by filling any bond required by law. If
lessee shall fail to discharge and such mechanic's lien, lessor may, at its
option, discharge the same and treat the cost thereof as additional rent
payable with the monthly installment of rent next becoming due; it being hereby
expressly covenanted and agreed that such discharge by lessor shall not be
deemed to waive, or release, the default of lessee in not discharging the same.
Lessee will indemnify and hold harmless from and against any and all expenses,
liens, claims or damages to person or property which may or might arise by
reason of the making of any such alterations, additions or improvements. If any
such alteration, decoration, addition or improvement is made without the prior
written consent of lessor, lessor may correct or remove the same, and lessee
shall be liable for any and all expenses incurred by lessor in the performance
of this work. All alterations, additions or improvements in or to the demised
premises or building made by either party shall immediately become the property
of lessor and shall remain upon and be surrendered with the demised premises as
a part thereof at the end of the term hereof without disturbance, molestation
or injury; provided, however, that if lessee is not in default in the
performance of any of its obligations under this lease, lessee shall have the
right to remove, prior to the expiration or termination of the term of this
lease, all movable furniture, furnishings or equipment installed in the demised
premises at the expense of lessee, and if such property of lessee is not
removed by lessee prior to the expiration or termination of this lease the same
shall become the property of lessor and shall be surrendered with the demised
premises as a part thereof. Should the lessor elect that alterations, additions
or improvements upon the demised premises be removed, upon termination of this
lease or upon termination of any renewal period thereof, lessee hereby agrees
to cause same to be removed at lessee's sole cost and expense and should lessee
fail to remove the same, then and in such event, the lessor shall cause same to
be removed at the lessee's sole cost and expense and should lessee fail to
remove the same, then and in such event, the lessor shall cause same to be
removed at the lessee's expense and the lessee hereby agrees to reimburse the
lessor for the cost of such removal together with any and all damages which the
lessor may suffer and sustain by reason of the failure of lessee to remove same.
10. PRE-OCCUPANCY TENANT WORK
The design of all work and installations undertaken by lessee shall be
subject to the written approval of lessor and shall not be commenced until such
approval is obtained. All work undertaken by lessee shall be at lessee's
expense, in accordance with the provision in this lease for alterations. The
work to be done by the lessee shall be in accordance with the tenant work
procedures promulgated by the lessor.
11. SIGNS, ADVERTISING, ETC.
a. The demised premises, including lessee's windows and signs, shall be
kept neat, clean and in good order by lessee, at lessee's expense.
b. Lessee shall not cause or permit any unusual or objectionable noise or
odors to emanate from the demised premises, or permit the playing or making of
any music, sound, or advertising matter which can be heard or experienced
outside of the demised premises.
c. Lessee shall not obstruct, encumber or use for any purpose other than
ingress or egress to and from the demised premises, the sidewalks in front of
or abutting any part of the building, or the entrances, vestibules, stairways
or halls thereof, and shall not engage in or permit any selling, merchandising,
display, advertising or soliciting anywhere within the building outside of the
demised premises, unless the same be expressly permitted by this lease, or by
lessor in writing.
d. Lessee shall conduct selling, merchandising, display, advertising or
soliciting in connection with its business inside the demised premises in a
dignified manner and in conformity with the highest standards of practice
obtaining among superior types of concerns dealing in the same or similar
merchandise. Lessee shall not install any exterior lighting or plumbing
fixtures, shades or awnings or any interior decorations or painting, or build
any fence or make any changes to lessee's exterior or in its appearance without
lessor's prior written consent.
e. No auction or fire or bankruptcy or going-out-of-business sale shall be
conducted at the premises, nor shall any special sale or sales be carried on
therein other than such as are incident to the normal routine of lessee's
exterior or in its appearance without lessor's prior written consent.
f. Any business conduct or practice promulgated, carried on or maintained
by lessee which, in the reasonably exercised judgment of the lessor, may harm,
or tend to harm, the business or reputation of lessor, or reflect, or tend to
reflect, unfavorably on either the building, lessor, or other tenants, or which
might confuse or mislead, or tend to confuse or mislead, the public, shall be
immediately discontinued by lessee upon the written demand of the lessor.
g. Lessee shall not operate or conduct in the demised premises any retail
goods type of business. Lessee shall not, unless otherwise expressly permitted
to do so hereunder, use or permit the use of or operate any coin or token
operated vending machine or similar device for the sale of any goods, wares,
merchandise, food, beverage, or services, including but not limited to pay
telephones, pay lockers, pay toilets, scales, amusement devices, and machines
for the sale of beverages, foods, candy, cigarettes or other commodities.
Lessee, unless otherwise expressly permitted so to do hereunder, shall not
operate or conduct any part of the business generally conducted by any bank,
branch bank, trust company, mutual savings bank, building and loan association,
savings and loan association, finance company, or any other institution of any
kind which has the right to receive deposits of money or to make loans,
provided however that the foregoing provisions shall not be deemed to prevent
lessee from extending to its customers in the normal course of lessee's
business credit facilities of the nature commonly made available to customers,
nor to prevent the establishment and operation of a credit union of the
employees of the lessee. Lessee shall use the demised premises only for the
purposes described hereinabove in this lease. Notwithstanding any other
provision hereof, any substantial addition to or change in the type, or price
lines, or quality of merchandise or services, or any substantial other change
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in the type of business permitted to be carried on by lessee hereunder, without
the express prior written consent of lessor (which consent may be granted or
withheld in lessor's sole and absolute discretion, and with or without statement
of or necessity for reason therefor, and which, if granted, may be conditioned,
among other things, upon lessee's agreement to comply with new and additional
requirements not set forth or contained in this lease which may be applicable to
all or any part of the demised premises without regard to the prior or
prospective use thereof, and including but not limited to requirement of payment
of an increased or additional rent over the rent prescribed herein) may be
deemed to be a breach and violation of this lease at lessor's sole and absolute
discretion.
h. Lessee shall not permit the accumulation or placing of rubbish, trash,
garbage, debris, boxes, cans or other articles of any kind or description
whatsoever in the demised premises, or in the area immediately surrounding the
demised premises or in any other part of the building. Lessee shall not permit
any vehicle used by it in its business to be parked in such manner and for such
period of time as to create traffic hazards and congestion in or about the
building, and all deliveries to and pickups from the demised premises whether
made by lessee's vehicles or by other vehicles, shall be promptly expedited and
the vehicles making such deliveries or pickups shall be promptly removed after
making same.
i. Lessee shall be responsible for and shall pay before delinquency all
municipal, county or state taxes assessed during the term of this lease against
any leasehold interest or personal property of any kind, owned by or placed in,
upon or about the demised premises by the lessee.
j. Lessee shall provide on the exterior of the demised premises a sign or
signs of such size, design and character, and in such location only, as lessor
shall approve in writing. Lessee hereby expressly covenants and agrees that such
signs shall comply in all respects with the provisions and requirements of the
Sign Regulations of the State of Virginia and those promulgated by lessor and as
the same may be amended or modified from time to time by lessor in its sole
option and discretion. No other signs, lights, lettering or other forms of
inscription or advertising or display devices shall be displayed on the exterior
of the demised premises or on the inner or on the outer face of the windows,
entrances, doors, or transoms or in any other location within the demised
premises from which such signs, lights, or other forms of inscription or
advertising or display devises may readily be seen from outside the demised
premises, without prior written approval of lessor. If lessee shall erect,
install or maintain any sign, lights, or other forms of inscription or
advertising or display device outside, in or upon the demised premises in
violation of this paragraph, and shall not immediately upon notice from lessor,
cause the same to be removed or discontinued, lessor, in addition to any other
rights or remedies to which it may be entitled hereunder or as a matter or law
or in equity, may enter upon the demised premises without thereby causing an
eviction of lessee from said premises or interference with lessee's right of
quiet use and enjoyment thereof, and cause said sign, lights, or other form of
inscription or advertising or display device to be removed or discontinued, and
the costs of such removal or discontinuance shall be paid by lessee as
additional rent on the first day of the month following said removal or
discontinuance. Lessee shall not at any time display on the exterior of the
demised premises or on or in any other location therein from which it may
readily be seen from outside the demised premises any sign or notice of removal
of lessee or its business to any other location therein from which it may
readily be seen from out side the demised premises any sign or notice of removal
of lessee or its business to any other location, except, with lessor's prior
written approval.
12. ENTRY FOR REPAIRS AND INSPECTIONS
a. Lessee shall permit lessor to erect, use and maintain all pipes and
conduits in and though the demised premises as shall be contemplated by the
plans for the building, including any changes or additions as lessor may from
time to time make thereof. Lessor or lessor's agents shall have the right to
enter upon the demised premises at all reasonable times to examine same for the
purpose of determining whether or not they are being kept neat, clean and in
good order by the lessee, as required by the terms hereof, and to make
recommendations or requirements with respect to performance of lessee's
obligations hereunder, and to make such decorations, repairs, alterations,
improvements or additions in the building or in the demised premises as may be
required of or permitted to lessor pursuant hereto and lessor shall be allowed
to take all materials into and upon said premises that may be required therefor
without the same constituting an eviction of lessee, or interference with
lessee's right of quiet use and enjoyment thereof, in whole or in part, and the
rent shall in no-wise abate which such examinations, decorations, repairs,
alterations, improvements or additions are being made by reason of loss or
interruption of the business of lessee because of the prosecution of any such
work.
b. Lessor or lessor's agents shall also have the right to enter upon the
demised premises at reasonable times to show them to prospective purchasers or
lessees of the building. During the six (6) months prior to the expiration of
the terms of this lease lessor may show the demised premises to prospective
tenants. During said period, lessor may also place upon the demised premises
"For Rent," sign, which notices lessee shall permit to remain thereon without
molestation. If, during the last month of the term Lessee shall have removed all
or substantially all of its property therefrom, lessor may immediately enter and
alter, renovate and redecorate the demised premises without elimination or
abatement of rent or other compensation and such action shall have no effect
upon this lease. Nothing herein contained, however, shall be deemed or construed
to impose upon lessor any obligations, responsibility or liability whatsoever
for the care, supervision or repair of the building or of the demised premises,
other than as is in this lease otherwise provided.
13. INSURANCE RATING
Lessee will not conduct or permit to be conducted any activity, or place
any equipment in or about the demised premises, which will, in any way increase
the rate of fire insurance or other insurance on the building; and if any
increase in the rate of fire insurance or other insurance is stated by any
insurance company or by the applicable Insurance Rating Bureau to be due to
activity or equipment in or about the demised premises, such statement shall be
conclusive evidence that the increase in such rate is due to such activity or
equipment and, as a result thereof, lessee shall be liable for such increase and
shall reimburse lessor therefor.
14. LESSEE'S EQUIPMENT
No installation of any of the following shall be made by lessee without
lessor's prior written consent:
(1) Ventilating or air-conditioning apparatus, other than as merchandise
held for, or for demonstration purposes in connection with, sale, pursuant to
the business purposes for which lessee is permitted to occupy the demised
premises.
(2) Machines or machinery of any kind, other than as merchandise held for,
or for demonstration purposes in connection with sale, pursuant to the business
purposes for which lessee is permitted to occupy the demised premises, excepting
office equipment normally used in an administrative, sales, executive office.
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<PAGE> 5
(3) Safes or other objects whose weight exceeds the lawful load for the
area upon which it would stand.
(4) Awnings or other projections over or around the windows or entrances of
the demised premises.
Movable office furniture and trade fixtures which are installed by lessee
at its expense, shall remain its property and may be removed at any time,
provided lessee promptly repairs any damage caused by such removal, and provided
that lessee shall not then be in default under the terms of this lease, in which
event such furniture, fixtures or equipment shall be and become a part of the
real property and the property of lessor, and provided further that all rent due
hereunder as of and through the date of removal of such property shall have
been paid. Business machines and mechanical equipment belonging to lessee which
cause noise or vibration that may be transmitted to the structure of the
building or to any space therein to such a degree as to be objectionable to
lessor or to any tenant in the building shall be installed and maintained by
lessee, at lessee's expense, on vibration eliminators or other devices
sufficient to eliminate such noise and vibration.
15. INDEMNITY
Lessee will indemnify and hold harmless lessor from and against any loss,
damage or liability occasioned by or resulting from any default hereunder or
any willful or negligent act on the part of lessee, its agents, employees, or
invitees, or persons permitted on the demised premises by lessee.
16. UTILITIES
(a) Installation by Lessor--Lessor shall install, without expense to
Lessee, the necessary mains, feeders, pipes, ducts and conduits to bring
electricity, water and telephone services into the leased premises.
(b) Electricity--Lessee shall pay directly to the public utility company
promptly when and as due all separately metered charges for electricity supplied
to the leased premises.
(c) Telephone--Lessee will pay for its own telephone service.
LESSOR SHALL BE RESPONSIBLE FOR THE MAINTENANCE OF HEATING/AIR
CONDITIONING/PLUMBING EQUIPMENT.
Interruption or impairment of any such utility or other service provided by
lessor, caused by or necessitated by repairs, improvements, alterations or
additions in or to the building or any part thereof, or by hazard, failure or
interruption beyond the reasonable control of lessor shall not give rise to any
right or cause of action against lessor by lessee in damages or any claim for
rebate of rent on account of such interruptions in service. Lessor shall furnish
the described services at such times, in such amounts normally and usually
furnished commercial tenants in modern buildings in the State of Virginia.
17. RESPONSIBILITY FOR CERTAIN DAMAGE AND BREAKAGE
All injury to the demised premises or the building of which they are a
part, and all breakage and damage caused by lessee or the agents, servants,
employees and visitors of lessee, shall be repaired by the lessee, at the
expense of the lessee. In the event that the lessee shall fail so to do, then
the lessor shall have the right to make such necessary repairs, alterations and
replacements, structural, non-structural, or otherwise, and any charge or cost
so incurred by the lessor shall be paid by the lessee with the right on the part
of the lessor to elect in its discretion to regard the same as additional rent
payable with the installments of rent next becoming due or thereafter falling
due under the terms of this lease. This provision shall be construed as an
additional remedy granted to the lessor and not in limitation of any other
rights and remedies which the lessor has or may have in said circumstances.
18. BANKRUPTCY
If at any time after the execution and delivery of this lease and before
commencement of the term or if during the term hereby demised, a petition shall
be filed, either by or against the lessee, in any Court or pursuant to any
Federal, State or Municipal statute whether in bankruptcy, insolvency, for the
appointment of a receiver of the lessee's property or because of any general
assignment made by the lessee of the lessee's property for the benefit of the
lessee's property or because of any general assignment made by the lessee of the
lessee's property for the benefit of the lessee's creditors, then immediately
upon the happening of any such event, and without an entry or other act by the
lessor, this lease, at lessor's option, shall cease and come to an end with the
same force and effect as if the date of the happening of any such event were the
date herein fixed for the expiration of the term of this lease. It is further
stipulated and agreed that, in the event of the termination of the term of this
lease by the happening of any such event, the lessor shall forthwith, upon such
termination, and any other provisions of this lease to the contrary
notwithstanding, become entitled to recover as and for liquidated damages caused
by such breach of the provisions of this lease, an amount equal to the
difference between the then cash value of the rent reserved hereunder for the
unexpired portion of the term and then cash rental value of the demised premises
for such unexpired portion of the term hereby demised, unless the statute which
governs or shall govern the proceeding in which such damages are to be proved
limits or shall limit the amount of such claim capable of being so proved, in
which case the lessor shall be entitled to prove as and for liquidated damages
an amount equal to that allowed by or under any such statute. The provisions of
this paragraph of this lease shall be without prejudice to the lessor's right to
prove in full damages for rent accrued prior to the termination of this lease,
but not paid. This provision of this lease shall be without prejudice to any
rights given to the lessor by any pertinent statute to prove for any amounts
allowed thereby.
In making any such computation, the then cash rental value of the demised
premises shall be deemed prima facie to be the rental realized upon any
re-letting, if such re-letting can be accomplished by the lessor within a
reasonable time after such termination of this lease, and the then present cash
value of the future rents hereunder reserved to the lessor for the unexpired
portion of the term hereby demised shall be deemed to be such sum, if invested
at four percent (4%) simple interest, as will produce the future over the period
of time in question.
In the event of lessee's bankruptcy, lessor has the right to enter and
re-let the demised premises.
19. LIABILITY FOR DAMAGE TO PERSONAL PROPERTY AND PERSON
All personal property of the lessee, its employees, agents, business
invitees, licensees, customers, clients, family members, guests or trespassers,
in and on said premises, shall be and remain at their sole risk, and lessor
shall not be liable to them for any damage to, or loss of such personal property
arising from any act of negligence of any other persons nor from the leaking
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<PAGE> 6
of the roof, or from the bursting, leaking or overflowing of water, sewer or
steam pipes, or from heating or plumbing fixtures, or from electrical wires or
fixtures, or from air-conditioning failure, or from any other cause whatsoever,
nor shall the lessor be liable for the interruption or loss to lessee's
business arising from any of the above described acts or causes, nor shall the
lessor be liable for any personal injury to the lessee, its employees, agents,
business invitees, licensees, customers, clients, family members, guests or
trespassers arising from the use, occupancy and condition of the demised
premises; the lessee especially agreeing to save the lessor harmless in all
such cases.
20. DAMAGE TO THE DEMISED PREMISES
If the demised premises shall be partially damaged by fire or other cause
without the fault or neglect of lessee, lessor shall diligently and as soon as
practicable after such damage occurs (taking into account the time necessary to
effectuate a satisfactory settlement with any insurance company) repair such
damage at the expense of the lessor, and the rent and additional rent shall be
reduced in proportion of the extent the demised premises are rendered
untenantable, until such repairs are completed, provided, however, that if the
building is damaged by fire or other cause to such extent that the damage
cannot be fully repaired within sixty (60) days from the date of such damage,
lessor shall have the option of terminating this lease by giving written notice
to lessee of such decision and the term of this lease shall terminate on the
day such notice is given. Except as set forth in this paragraph, lessor shall
not be liable for any damage that may be suffered by lessee by reason of any
casualty damage to the demised premises and the deprivation of lessee's
possession thereof.
21. DEFAULT OF LESSEE
If lessee shall fail to pay any monthly installment of rent as aforesaid
(although no legal or formal demand has been made therefor), or shall violate
or fail to perform any of the other conditions, covenants or agreements herein
made by lessee, and such violation or failure shall continue for a period of
ten (10) days after written notice thereof to lessee by lessor, (but no written
notice to lessee is necessary in the event of failure to pay a monthly
installment of rent), then and in any of said events this lease shall, at the
option of lessor, cease and terminate and shall operate as a notice to quit,
any notice to quit or of lessor's intention to re-enter being hereby expressly
waived, and lessor may proceed to recover possession under and by virtue of
the provisions of the laws of the State of Virginia, or by such other
proceedings, including re-entry and possession, as may be applicable. If lessor
elects to terminate this lease, everything herein contained on the part of
lessor to be done and performed shall cease without prejudice to the right of
lessor to recover from lessee all rental accrued up to the time of termination
of the term of this lease, the demised premises may be relet by lessor for such
rent and upon such terms as are not unreasonable under the circumstances and,
if the full rental hereinabove provided shall not be realized by lessor, lessee
shall be liable for all damages sustained by lessor, including, without
limitation, deficiency in rent, reasonable attorney's fees, brokerage fees, and
expenses of placing the demised premises in first class rentable condition.
Lessor shall not be required to so relet the demised premises, either pursuant
to this lease or by any requirement of law or equity, to any person who, in
lessor's sole judgment, shall not be of sound financial standing and ability,
and possess good reputation, business judgment and operating ability, or for
any use or purpose which, in lessor's judgment, shall not be the same or
substantially the same as the uses of the demised premises permitted under this
lease, or shall not be in keeping with the caliber and quality of the building
and its other tenants. In addition, if lessee shall have failed to move into or
take possession of the demised premises within fifteen (15) days after the
commencement of the term of this lease if the date fixed for such commencement
shall be postponed as herein provided and to open the demised premises for
business fully fixtured, stocked and staffed within the time herein provided,
then the lessor shall have, in addition to any and all remedies herein
provided, the right at its sole option and discretion to collect the minimum
rent herein provided, for each and every day that the lessee shall fail to
commence to do business as herein provided. Any damage or loss of rental
sustained by lessor may be recovered by lessor at lessor's option, at the time
of relocation in separate actions, from time to time, as said damage shall have
been made more easily ascertainable by successive relettings, or, at lessor's
option, may be deferred until the expiration of the term of this lease, in
which event the cause of action shall not be deemed to have accrued until the
date of expiration of said term. If lessor should commence any summary
proceeding for non-payment of rent by lessee, lessee shall not interpose any
counterclaim of any nature or description in any such proceeding. The
provisions contained in this paragraph shall be in addition to and shall not
prevent the enforcement of any claim lessor may have against lessee for
anticipatory breach of the unexpired term of this lease. In the event that
lessee continues to occupy the demised premises after the expiration of the
term of this lease, with the express or implied consent of lessor, such tenancy
shall be from month to month and shall not be renewal of the term of this lease
or a tenancy from year to year. All rights and remedies of lessor under this
lease shall be cumulative and shall not be exclusive of any other rights and
remedies provided to lessor under applicable law.
22. WAIVER
If under the provisions hereof lessor shall institute proceedings and a
compromise or settlement thereof shall be made, the same shall not constitute a
waiver of any covenant herein contained nor of any of lessor's rights
hereunder. No waiver by lessor of any breach of any covenant, condition or
agreement herein contained shall operate as a waiver of such covenant,
condition, or agreement itself, or of any subsequent breach thereof. No payment
by lessee or receipt by lessor of a lesser amount than the monthly installments
of rent herein stipulated shall be deemed to be other than on account of the
earliest stipulated rent nor shall any endorsement or statement on any check or
letter accompanying a check for payment of rent be deemed an accord and
satisfaction and lessor may accept such check or payment without prejudice to
lessor's right to recover the balance of such rent or to pursue any other
remedy provided in this lease. No re-entry by lessor, and no acceptance by
lessor of keys from lessee, shall be considered an acceptance of a surrender of
the lease.
23. SUBORDINATION
This lease is subject and subordinate to the lien of all and any first
mortgages (which term "mortgages" shall include both construction and permanent
financing and shall include deeds of trust and similar security instruments)
which may not or hereafter encumber or otherwise affect the real estate
(including the building) of which the demised premises form a part, and to all
and any renewals, extensions, modifications, recastings or refinancings
thereof. In confirmation of such subordination, lessee shall, at lessor's
request, promptly execute any requisite or appropriate certificate or other
document. Lessee hereby constitutes and appoints lessor as lessee's
attorney-in-fact to execute any such certificate or certificates for or on
behalf of lessee. Lessee agrees that in the event that any proceedings are
brought for the foreclosure of any such mortgages, lessee shall attorn to the
purchaser at such foreclosure sale, if requested to do so by such purchaser and
to recognize such purchaser as the lessor under this lease, and lessee waives
the provisions of any statute or rule of law, now or hereafter in effect, which
may give or purport to give lessee any right to terminate or otherwise
adversely affect this lease and the obligations of lessee hereunder in the
event that any such foreclosure proceeding is prosecuted or completed.
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24. CONDEMNATION
If the whole or a substantial part of the demised premises shall be taken
forceably, leased or condemned by any governmental authority for any public or
quasi-public use of purpose, then the term of this lease shall cease and
terminate as of the date when title vests in such governmental authority, and
lessee shall have no claim against lessor or the condemning authority for any
portion of the amount that may be awarded damages as a result of such taking or
condemnation or for the value of any unexpired term of the lease. Lessee,
however, shall be entitled to claim, prove and receive in the condemnation
proceeding such awards as may be allowed for fixtures and other equipment
installed by it which shall not, under the terms of this lease be or become the
property of the lessor at the termination hereof, but only if such awards
shall be made by the condemnation court in addition to and stated separately
from the award made by it for the land and building or part thereof so taken.
The annual rental, however, shall be abated on the date when such title vests
in such governmental authority. If less than a substantial part of the demised
premises is taken or condemned by any governmental authority for any public or
quasi-public use of purpose, the rent shall be equitably adjusted on the
proportion which the floor area of the demised premises included in the space
taken bears to the floor area of the entire demised premises immediately prior
to such taking on the date when title vests in such governmental authority and
the lease shall otherwise continue in full force and effect. For purposes of
this Article, a substantial part of the demised premises shall be considered to
have been taken if more than fifty percent (50%) of the demised premises are
unusable by lessee. For purposes of this provision any purchase by competent
authority of the whole or a substantial part of the demised premises in lieu of
condemnation thereof under the power of eminent domain shall be deemed an
actual taking.
25. RULES AND REGULATIONS
Lessee, its agents, servants and concessionaires and employees shall abide
by and observe the rules and regulations promulgated by lessor. Lessee, its
agents, servants, employees and concessionaries shall abide by and observe the
rules or regulations promulgated from time to time by lessor for the operation
and maintenance of the building provided that the same are in conformity with
common practice and usage in similar buildings and are not inconsistent with
the provisions of this lease and a copy thereof is sent to lessee. Such rules
shall apply generally to all tenants, shall not unreasonably interfere with the
conduct of lessee's business and in no way shall limit any of the lessor's
covenants and obligations hereunder. Lessor shall use its best efforts to
enforce its rules as to all tenants and the breach or failure to comply with
any rule shall constitute a breach of the terms of this lease. Lessor, however,
shall not be liable to lessee for violation of the same by any other tenant,
its employees, agents, business invitees, licensees, customers, clients, family
members or guests.
26. RIGHT OF LESSOR TO CURE LESSEE'S DEFAULT
If lessee defaults in the making of any payment of, in the doing of any act
herein required to be made or done by lessee, then lessor may, but shall not be
required to, make such payment or do such act, and the amount of the expense
thereof, if made or done by lessor, with interest thereon at the rate of eight
percent (8%) per annum from the date paid by lessor, shall be paid by lessee
to lessor and shall constitute additional rent hereunder due and payable with
the next monthly installment of rent; but the making of such payment or the
doing of such act by lessor shall not operate to cure such default or to estop
lessor from the pursuit of any remedy to which lessor would otherwise be
entitled.
27. NO REPRESENTATIONS BY LESSOR
Neither lessor nor any agent or employee of lessor has made any
representations or promises with respect to the demised premises or the
building except as herein expressly set forth, and no rights, privileges,
easements or licenses are acquired by lessee except as herein set forth. The
lessee, by taking possession of the demised premises, shall accept the same
"as is," and such taking of possession shall be conclusive evidence that the
demised premises and the building are in good and satisfactory condition at the
time of such taking of possession.
28. WAIVER OF JURY TRIAL
Lessor and lessee hereby waive trial by jury in any action, proceeding or
counterclaim brought by either of the parties hereto against the other on or in
respect of any matter whatsoever arising out of or in any way connected with
this lease, the relationship of lessor and lessee hereunder, lessee's use or
occupancy of the demised premises, and/or claim of injury or damage.
29. NO OPTION
The submission of this lease for examination or consideration by lessee or
discussion between lessee or lessor does not constitute a reservation of or
option for the demised premises, and this lease shall be and become effective
as a lease and agreement only upon executive and delivery hereof by lessor and
lessee.
30. MODIFICATIONS
Notwithstanding acceptance and execution of this lease by the parties
hereto, it is understood and agreed that the terms hereof shall be modified, if
so required, for the purpose of complying with or fulfilling the requirements
of any mortgagee or trustee named in or secured by a first mortgage or first
trust deed that may not or hereafter be placed or secured upon the demised
premises provided, however, that such modification shall not be in substantial
derogation or diminution of any of the rights of the parties hereunder, nor
substantially increase any of the obligations or liabilities of the parties
hereunder.
31. ESTOPPEL CERTIFICATES
Lessee agrees, at any time and from time to time, upon not less than five
(5) days prior to written notice by lessor, to execute, acknowledge and deliver
to lessor a statement in writing (i) certifying that this lease is unmodified
and in full force and effect (or if there have been modifications), (ii)
stating the dates to which the rent and other charges hereunder have been paid
by lessee (iii) stating whether or not to the best knowledge of lessee, lessor
is in default in the performance of any covenant, agreement or condition
contained in this lease, and, if so, specifying each such default of which
lessee may have knowledge, and (iv) stating the address to which notices to
lessee should be sent. Any such statement delivered pursuant hereto may be
relied upon by any Lessor's interest, or any prospective assignee of any such
mortgage.
-7-
<PAGE> 8
ADDENDUM TO McLEAN PROFESSIONAL PARK LEASE
This Addendum is hereby made a part of the Lease bearing even date between the
undersigned parties hereto covering premises at 1489 Chain Bridge Road, McLean,
Virginia, Suites 300 and 301.
Premises is leased in "AS IS" condition. However, Lessor will remove the wall
and floor cabinets from the room to the right of the Suite entry door, repair
walls and paint areas.
It is agreed that if any monthly installment of rent shall remain unpaid for
more than seven days after the due date, the amount of the installment shall be
increased by five percent of the installment as a service charge for the
purpose of defraying expenses incident to handling delinquent payments.
Fourteen days after the due date, the amount of the installment shall be
increased by an additional five percent (a total of ten percent), and after
twenty-one days, the amount of the installment shall be increased by an
additional five percent (a total of fifteen percent) of the amount of the
installment. In addition, a service charge of $25.00 will be added to any
installment for handling a returned check.
The hereto attached Lease Agreement, as amended by this Addendum, shall
constitute the entire Agreement between the parties hereto.
IN WITNESS WHEREOF, THE Lessor and Lessee have hereunto set their hands and
acknowledge having read the entire Lease, all this ____ day of ____________,
1999.
WITNESS: LESSOR:
YOUNG & SKIDMORE COMPANY
BY:
___________________________ _______________________________
BERNARD J. YOUNG
WITNESS LESSEE:
ARTHUR H. LTD.
BY:
/s/ TERRI P. DECATUR /s/ CHRISTOPHER M. BRITBER
___________________________ _______________________________
<PAGE> 9
CORPORATE RESOLUTION
RESOLVED, that Arthur H. Ltd., a Virginia Corporation, enters into a Lease with
Young & Skidmore Company, for the premises known as 1489 Chain Bridge Road,
Suites 300 and 301, McLean, Virginia, under the terms and conditions contained
in the Lease, hereto annexed and made a part hereof, that the President be, and
is hereby authorized to execute and acknowledge all papers and documents
necessary for the proper execution of said Lease.
I, Susan R. Hopley, Secretary of Arthur H. Ltd., do hereby certify that the
foregoing is a true copy of a Resolution, unanimously adopted at the Board of
said Corporation, held on the 25th day of October, 1999, due notice of such
meeting having been given.
/s/ Susan R. Hopley
------------------------
Secretary
CORPORATE SEAL
<PAGE> 1
EXHIBIT 10.17
OFFICE LEASE AGREEMENT
McLEAN PROFESSIONAL PARK
McLean, Virginia
THIS LEASE AGREEMENT made and entered into on this the 25th day of October,
1999, by and between Young & Skidmore Co., whose address for purposes hereof is
4545 42nd St., N.W. #301, Wash., D.C. 20016 hereinafter called "Lessor", and
Arthur H., Ltd. hereinafter called "Lessee".
WITNESSETH, That, for and in consideration of the rents, mutual covenants
and agreements hereinafter set forth, the parties hereto do hereby mutually
agree as follows:
1. PREMISES LEASED AND DEMISED
The Lessor does hereby lease to Lessee, and Lessee does hereby lease from
Lessor, for the term and upon the conditions hereinafter provided in the office
building situated at 1477 Chain Bridge Road, (such space being hereinafter
referred to as the "demised premises"). The demised premises have been assigned
Suite S 200, 201 & 202.
2. LEASE TERM
Subject to and upon the terms and conditions set forth herein, or in any
exhibit or addendum hereto, the term of this lease shall be for an initial
period of Two years, beginning on the First day of February 2000, and ending on
the 31st day of January 2002.
3. USE OF DEMISED PREMISES
Lessee will use and occupy the demised premises solely for administrative,
sales & executive offices purposes and under the trade name Arthur H., Ltd.,
which trade name shall be used by lessee throughout the term hereof and lessee
shall not use or trade under or advertise itself under any other name, style or
designation. Lessee's use shall be in accordance with the use permitted under
applicable municipal regulations and without the prior written consent of
lessor, the demised premises will not be used for any other purpose. Lessee will
not use or occupy the demised premises for any unlawful purpose and will comply
with all present and future laws, ordinances, regulations, and orders of the
United States of America, the State of Virginia, and any other public authority
having jurisdiction over the demised premises, to which the lessee is subject.
4. BASE RENTAL
The annual rent to be paid for said premises during said term, which lessee
hereby agrees to pay to lessor in advance, and lessor hereby agrees to accept,
shall be the sum of Fifty One Thousand Eight Hundred Eighty One Dollars & 25/100
($51,881.25) payable in equal monthly installments on the first day of each
calendar month during the term of this lease. Such rental shall be base rental
and subject to escalation as hereinafter provided. The annual base rent to be
paid for said demised premises during the term hereof, and any additional rent
shall be paid without demand, diminution, deduction, or set-off, or prior
demand, in monthly installments during the term of this lease, all as together
with additional rent hereinafter provided. If the obligation of the lessee to
pay rent hereunder begins on a day other than on the first day of a month, rent
from such date until the first day of the following month shall be prorated at
the rate of one-thirtieth (1/30) of the fixed monthly rental for each day
payable in advance. The lessee will pay, without demand, said rent by check to
Thomas P. Brown Management, Inc., 4545 42nd Street, N.W. #301, Wash., D.C.
20016, or to such other party or to such other address as lessor may designate
from time to time by written notice to lessee, without demand and without
deduction, set-off or counterclaim. If lessor shall at any time or times accept
said rent after it shall become due and payable, such acceptance shall not
excuse delay upon subsequent occasions, or constitute, or be construed as, a
waiver of any or all of the lessor's rights hereunder.
Lessor acknowledges receipt form lessee of transfer of security deposits
of $1,050, under lease dated 1/30/98 & $2,240, under lease dated 1/14/97 to be
held as collateral security for the payment of any rentals and other sums of
money payable by lessee under this lease, and for the faithful performance of
all other covenants and agreements of lessee hereunder. The amount of said
deposit shall be repaid to lessee after the termination of this lease and any
renewal thereof, provided lessee shall have made all payments and performed all
covenants and agreements. Upon any default by lessee hereunder, all or part of
said deposit may, at lessor's sole option, be applied on account of such
default, and thereafter lessee shall promptly restore the resulting deficiency
in said deposit.
5. ADDITIONAL RENT -- COST OF LIVING INCREASE
Commencing with the beginning of the second lease year and for each
succeeding one year term of this Lease, the annual rent reserved herein shall
be computed as follows:
<PAGE> 2
The initial Annual Base Rent shall be multiplied by a fraction the
denominator of which shall be the Consumer Price Index (CPI) now known as the
"U.S. Department of Labor, Bureau of Labor Statistics, Consumer Price Index,
United State City Average for Urban Wage Earners and Clerical Workers. All items
for the month which is two months prior to the commencement of this lease (i.e.
* ) and the numerator of which shall be such CPI for the month which is two
months prior to the first month of the succeeding lease year. In the event that
the Consumer Price Index is no longer published, the parties hereto agree to
substitute a comparable index therefor.
The numerical figure for the C.P.I. for December 1999, to be inserted when
available. In no event shall the annual rent payable by Lessee during a lease
year be less than the prior year's annual rent as adjusted herein.
Notwithstanding the above formula, in no event will the annual CPI increase be
less than 3%, and no more than 6%. The anniversary date for the C.P.I. increase
will be February each year.
6. ASSIGNMENT AND SUBLETTING
a. Lessee will not assign, transfer, mortgage or encumber this lease
without obtaining written consent of lessor; nor shall any assignment or
transfer of this lease be effectuated by operation of law or otherwise without
the prior written consent of lessor, which will not be unreasonably withheld.
Lessee will not sublet (or permit occupancy or use by another of) or the demised
premises, or any part thereof, without obtaining the prior written consent of
Lessor. The consent by lessor to any assignment, transfer, or subletting to any
party, shall not be construed as a waiver or release of lessee from the terms of
any covenant or obligation under this lease, nor shall the collection or
acceptance of rent from any such assignee, transferee, subtenant or occupant
constitute a waiver or release of lessee of any covenant or obligation contained
in this lease, nor shall any such assignment or subletting be construed to
relieve lessee from obtaining the consent in writing of lessor to any further
assignment or subletting. In the event that lessee defaults hereunder, lessee
hereby assigns to lessor the rent due from any subtenant of lessee and hereby
authorizes each such subtenant to pay said rent directly to lessor.
b. If lessee is a corporation and if any transfer, sale, pledge or other
disposition of 50% or more of the common stock shall occur, or power to vote
the majority of the outstanding capital stock be changed, then lessee shall so
notify lessor.
7. INSURANCE
a. Lessee shall obtain and at all times during the term hereof maintain,
at its sole cost and expense, policies of insurance covering its fixtures and
equipment installed and located on the demised premises, or otherwise
constituting a part of the lessee's work in an amount of not less than eighty
(80) percent of the replacement cost of said items within the classification
"fire and extended coverage," together with insurance against vandalism,
malicious mischief, and sprinkler leakage or other sprinkler damage; and any
proceeds of such insurance, so long as this lease shall remain in effect, shall
be used only to repair or replace the items so insured.
b. Lessee shall also provide and keep in force during the term of this
lease, for the benefit of lessor and lessee, general liability insurance in any
insurance company licensed to do business in the State of Virginia in the amount
of One Hundred Thousand ($100,000) dollars. Any insurance policies herein
required to be procured by lessee shall contain an express waiver of any right
of subrogation by the insurance company against the lessor. Neither the issuance
of any insurance policy required hereunder, nor the minimum limits specified
herein with respect to lessee's insurance coverage, shall be deemed to limit or
restrict in any way lessee's liability arising under or out of this lease. In
addition, all insurance required of lessee hereunder shall be written as a
primary policy coverage, and not contributing with or in excess of any coverage
which lessor may carry, and shall cover and insure lessor as an additional
insured. All public liability and property damage policies shall contain a
provision that lessor, although named therein as an insured, shall nevertheless
be entitled to recovery under said policies for any loss occasioned to it, its
officers, servants, agents or employees, by reason of the negligence or fault of
lessee, its servants, agents, employees, invitees or customers.
c. Lessee agrees to deliver certificates of such insurance to lessor at
the beginning of the term of this lease and thereafter not less than five (5)
days prior to the expiration of any such policy. In the event that lessee shall
fail promptly to furnish any insurance herein required, lessor may effect the
same and pay the premium therefor for a period of not exceeding one year and
the premium so paid by lessor shall be immediately payable by lessee as
additional rent.
d. Indemnity. Lessee shall indemnify and hold harmless lessor from and
against any and all liabilities, fines, claims, damages and actions, costs and
expenses of any kind or nature, including attorney's fees, and of anyone
whatsoever (1) relating to the demised premises due to or arising out of any act
or neglect of lessee or of anyone holding under lessee or of any of their
employees, agents or invitees, (2) due to or arising out of mechanics's liens
filed against the land and the building in which the demised premises are
located for labor performance or for materials furnished to lessee, and (3) due
to or arising out of any breach, violation or non-performance of any covenants,
condition or agreement in this lease set forth and contained on the part of
lessee to be fulfilled, kept, observed and performed.
8. MAINTENANCE BY LESSEE
a. Lessee will keep the demised premises and the fixtures and equipment
therein in clean, safe and sanitary condition, will take good care thereof,
will suffer no waste or injury thereto, and will, at the expiration or other
termination of the term of this Lease, surrender the same, broom clean, in the
same order and condition in which they are on the commencement of the term of
this Lease, ordinary wear and tear and damage by the elements, fire and other
casualty not due to the negligence of the Lessee, excepted; and upon such
termination of this Lease, Lessor shall have the right to re-enter and resume
possession of the leased premises.
b. When necessary by reason of accident or other cause occurring in the
building or in the demised premises, or in order to take any repairs or
alterations or additions or improvements in or relating to the building or the
demised premises lessor reserves the right to interrupt the supply to the
demised premises or to the common areas of steam, electricity, water, and other
utilities and also to suspend the operation of the heating or air-conditioning
system, in or to any portion of the building and the building, until said
repairs, alterations, additions or improvements shall have been completed.
Provided lessor shall pursue such work with reasonable diligence, there shall
be no abatement in rent because of any such interruption or suspension.
2) One Million Dollars in respect to injuries to one person, one accident, and
One Hundred Thousand Dollars in respect to any property damage in any one
occurrence.
-2-
<PAGE> 3
McLean, Virginia
THIS LEASE AGREEMENT made and entered into on this the 25th day of October,
1999, by and between Young & Skidmore Co., whose address for purposes hereof is
4545 42nd St., N.W. #301, Wash., D.C. 20016 hereinafter called "Lessor", and
Arthur H., Ltd. hereinafter called "Lessee".
WITNESSETH, That, for and in consideration of the rents, mutual covenants
and agreements hereinafter set forth, the parties hereto do hereby mutually
agree as follows:
1. PREMISES LEASED AND DEMISED
The Lessor does hereby lease to Lessee, and Lessee does hereby lease from
Lessor, for the term and upon the conditions hereinafter provided in the office
building situated at 1477 Chain Bridge Road, (such space being hereinafter
referred to as the "demised premises"). The demised premises have been assigned
Suite S 200, 201 & 202.
2. LEASE TERM
Subject to and upon the terms and conditions set forth herein, or in any
exhibit or addendum hereto, the term of this lease shall be for an initial
period of Two years, beginning on the First day of February 2000, and ending on
the 31st day of January 2002.
3. USE OF DEMISED PREMISES
Lessee will use and occupy the demised premises solely for
administrative, sales & executive offices purposes and under the trade name
Arthur H., Ltd., which trade name shall be used by lessee throughout the term
hereof and lessee shall not use or trade under or advertise itself under any
other name, style or designation. Lessee's use shall be in accordance with the
use permitted under applicable municipal regulations and without the prior
written consent of lessor, the demised premises will not be used for any other
purpose. Lessee will not use or occupy the demised premises for any unlawful
purpose and will comply with all present and future laws, ordinances,
regulations, and orders of the United States of America, the State of Virginia,
and any other public authority having jurisdiction over the demised premises,
to which the lessee is subject.
4. BASE RENTAL
The annual rent to be paid for said premises during said term, which lessee
hereby agrees to pay to lessor in advance, and lessor hereby agrees to accept,
shall be the sum of Fifty One Thousand Eight Hundred Eighty One Dollars & 25/100
($51,881.25) payable in equal monthly installments on the first day of each
calendar month during the term of this lease. Such rental shall be base rental
and subject to escalation as hereinafter provided. The annual base rent to be
paid for said demised premises during the term hereof, and any additional rent
shall be paid without demand, diminution, deduction, or set-off, or prior
demand, in monthly installments during the term of this lease, all as together
with additional rent hereinafter provided. If the obligation of the lessee to
pay rent hereunder begins on a day other than on the first day of a month, rent
from such date until the first day of the following month shall be prorated at
the rate of one-thirtieth (1/30) of the fixed monthly rental for each day
payable in advance. The lessee will pay, without demand, said rent by check to
Thomas P. Brown Management, Inc., 4545 42nd Street, N.W. #301, Wash., D.C.
20016, or to such other party or to such other address as lessor may designate
from time to time by written notice to lessee, without demand and without
deduction, set-off or counterclaim. If lessor shall at any time or times accept
said rent after it shall become due and payable, such acceptance shall not
excuse delay upon subsequent occasions, or constitute, or be construed as, a
waiver of any or all of the lessor's rights hereunder.
Lessor acknowledges receipt from lessee of transfer of security deposits
of $1,050, under lease dated 1/30/98 & $2,240, under lease dated 1/14/97, to be
held as collateral security for the payment of any rentals and other sums of
money payable by lessee under this lease, and for the faithful performance of
all other covenants and agreements of lessee hereunder. The amount of said
deposit shall be repaid to lessee after the termination of this lease and any
renewal thereof, provided lessee shall have made all payments and performed all
covenants and agreements. Upon any default by lessee hereunder, all or part of
said deposit may, at lessor's sole option, be applied on account of such
default, and thereafter lessee shall promptly restore the resulting deficiency
in said deposit.
5. ADDITIONAL RENT -- COST OF LIVING INCREASE
Commencing with the beginning of the second lease year and for each
succeeding one year term of this Lease, the annual rent reserved herein shall
be computed as follows:
-3-
<PAGE> 4
in the type of business permitted to be carried on by lessee hereunder, without
the express prior written consent of lessor (which consent may be granted or
withheld in lessor's sole and absolute discretion, and with or without
statement of or necessity for reason therefor, and which, if granted, may be
conditioned, among other things, upon lessee's agreement to comply with new and
additional requirements not set forth or contained in this lease which may be
applicable to all or any part of the demised premises without regard to the
prior or prospective use thereof, and including but not limited to requirement
of payment of an increased or additional rent over the rent prescribed herein)
may be deemed to be a breach and violation of this lease at lessor's sole and
absolute discretion.
h. Lessee shall not permit the accumulation or placing of rubbish, trash,
garbage, debris, boxes, cans or other articles of any kind or description
whatsoever in the demised premises, or in the area immediately surrounding the
demised premises or in any other part of the building. Lessee shall not permit
any vehicle used by it in its business to be parked in such manner and for such
period of time as to create traffic hazards and congestion in or about the
building, and all deliveries to and pickups from the demised premises whether
made by lessee's vehicles or by other vehicles, shall be promptly expedited and
the vehicles making such deliveries or pickups shall be promptly removed after
making same.
i. Lessee shall be responsible for and shall pay before delinquency all
municipal, county or state taxes assessed during the term of this lease against
any leasehold interest or personal property of any kind, owned by or placed in,
upon or about the demised premises by the lessee.
j. Lessee shall provide on the exterior of the demised premises a sign or
signs of such size, design and character, and in such location only, as lessor
shall approve in writing. Lessee hereby expressly covenants and agrees that such
signs shall comply in all respects with the provisions and requirements of the
Sign Regulations of the State of Virginia and those promulgated by lessor and as
the same may be amended or modified from time to time by lessor in its sole
option and discretion. No other signs, lights, lettering or other forms of
inscription or advertising or display devices shall be displayed on the exterior
of the demised premises or on the inner or on the outer face of the windows,
entrances, doors, or transoms or in any other location within the demised
premises from which such signs, lights, or other forms of inscription or
advertising or display devices may readily be seen from outside the demised
premises, without prior written approval of lessor. If lessee shall erect,
install or maintain any sign, lights, or other forms of inscription or
advertising or display devises may readily be seen from outside the demised
premises, without prior written approval of lessor. If lessee shall erect,
install or maintain any sign, lights, or other forms of inscription or
advertising or display device outside, in or upon the demised premises in
violation of this paragraph, and shall not immediately upon notice from lessor,
cause the same to be removed or discontinued, lessor, in addition to any other
rights or remedies to which it may be entitled hereunder or as a matter or law
or in equity, may enter upon the demised premised without thereby causing an
eviction of lessee from said premises or interference with lessee's right of
quiet use and enjoyment thereof, and cause said sign, lights, or other form of
inscription or advertising or display device to be removed or discontinued, and
the costs of such removal or discontinuance shall be paid by lessee as
additional rent on the first day of the month following said removal or
discontinuance. Lessee shall not at any time display on the exterior of the
demised premises or on or in any other location therein from which it may
readily be seen from outside the demised premises any sign or notice of removal
of lessee or its business to any other location, except, with lessor's prior
written approval.
12. ENTRY FOR REPAIRS AND INSPECTIONS
a. Lessee shall permit lessor to erect, use and maintain all pipes and
conduits in and through the demised premises as shall be contemplated by the
plans for the building, including any changes or additions as lessor may from
time to time make thereof. Lessor or lessor's agents shall have the right to
enter upon the demised premises at all reasonable times to examine same for the
purpose of determining whether or not they are being kept neat, clean and in
good order by lessee, as required by the terms hereof, and to make
recommendations or requirements with respect to performance of lessee's
obligations hereunder, and to make such decorations, repairs, alterations,
improvements or additions in the building or in the demised premises as may be
required of or permitted to lessor pursuant hereto and lessor shall be allowed
to take all materials into and upon said premises that may be required therefor
without the same constituting an eviction of lessee, or interference with
lessee's right of quiet use and enjoyment thereof, in whole or in part, and the
rent shall in no-wise abate while such examinations, decorations, repairs,
alterations, improvements or additions are being made by reason of loss or
interruption of the business of lessee because of the prosecution of any such
work.
b. Lessor or lessor's agents shall also have the right to enter upon the
demised premises at reasonable times to show them to prospective purchasers or
lessees of the building. During the six (6) months prior to the expiration of
the term of this lease lessor may show the demised premises to prospective
tenants. During said period, lessor may also place upon the demised premises
"For Rent," sign, which notices lessee shall permit to remain thereon without
molestation. If, during the last month of the term Lessee shall have removed all
or substantially all of its property therefrom, lessor may immediately enter and
alter, renovate and redecorate the demised premises without elimination or
abatement of rent or other compensation and such action shall have no effect
upon this lease. Nothing herein contained, however, shall be deemed or construed
to impose upon lessor any obligations, responsibility or liability whatsoever
for the care, supervision or repair of the building or of the demised premises,
other than as is in this lease otherwise provided.
13. INSURANCE RATING
Lessee will not conduct or permit to be conducted any activity, or place
any equipment in or about the demised premises, which will, in any way increase
the rate of fire insurance or other insurance on the building; and if any
increase in the rate of fire insurance or other insurance is stated by any
insurance company or by the applicable Insurance Rating Bureau to be due to
activity or equipment in or about the demised premises, such statement shall be
conclusive evidence that the increase in such rate is due to such activity or
equipment and, as a result thereof, lessee shall be liable for such increase
and shall reimburse lessor therefor.
14. LESSEE'S EQUIPMENT
No installation of any of the following shall be made by lessee without
lessor's prior written consent:
(1) Ventilating or air-conditioning apparatus, other than as merchandise
held for, or for demonstration purposes in connection with, sale, pursuant to
the business purposes for which lessee is permitted to occupy the demised
premises.
(2) Machines or machinery of any kind, other than as merchandise held for,
or for demonstration purposes in connection with, sale, pursuant to the
business purposes for which lessee is permitted to occupy the demised premises,
excepting office equipment normally used in an administrative, sales, executive
office.
-4-
<PAGE> 5
(3) Safes or other objects whose weight exceeds the lawful load for the
area upon which it would stand.
(4) Awnings or other projections over or around the windows or entrances
of the demised premises.
Movable office furniture and trade fixtures which are installed by lessee
at its expense, shall remain its property and may be removed at any time,
provided lessee promptly repairs any damage caused by such removal, and
provided that lessee shall not then be in default under the terms of this
lease, in which event such furniture, fixtures or equipment shall be and become
a part of the real property and the property of lessor, and provided further
that all rent due hereunder as of and through the date of removal of such
property shall have been paid. Business machines and mechanical equipment
belonging to lessee which cause noise or vibration that may be transmitted to
the structure of the building or to any space therein to such a degree as to be
objectionable to lessor or to any tenant in the building shall be installed and
maintained by lessee, at lessee's expense, on vibration eliminator or other
devices sufficient to eliminate such noise and vibration.
15. INDEMNITY
Lessee will indemnify and hold harmless lessor from and against any loss,
damage or liability occasioned by or resulting from any default hereunder or
any willful or negligent act on the part of lessee, its agents, employees, or
invitees, or persons permitted on the demised premises by lessee.
16. UTILITIES
(a) Installation by Lessor - Lessor shall install, without expense to
Lessee, the necessary mains, feeders, pipes, ducts and conduits to bring
electricity, water and telephone services into the leased premises.
(b) Electricity - Lessee shall pay directly to the public utility company
promptly when and as due all separately metered charges for electricity
supplied to the leased premises.
(c) Telephone - Lessee will pay for its own telephone service equipment.
Lessor shall be responsible for the maintenance of heating/air conditioning/
plumbing. Interruption or impairment of any such utility or other service
provided by lessor, caused by or necessitated by repairs, improvements,
alterations or additions in or to the building or any part thereof, or by
hazard, failure or interruption beyond the reasonable control of lessor shall
not give rise to any right or cause of action against lessor by lessee in
damages or any claim for rebate of rent on account of such interruptions in
service. Lessor shall furnish the described services at such times, in such
amounts normally and usually furnished commercial tenants in modern buildings in
the State of Virginia.
17. RESPONSIBILITY FOR CERTAIN DAMAGE AND BREAKAGE
All injury to the demised premises or the building of which they are a
part, and all breakage and damage caused by lessee or the agents, servants,
employees and visitors of lessee, shall be repaired by the lessee, at the
expense of the lessee. In the event that the lessee shall fail so to do, then
the lessor shall have the right to make such necessary repairs, alterations and
replacements, structural, non-structural, or otherwise, and any charge or cost
so incurred by the lessor shall be paid by the lessee with the right on the
part of the lessor to elect in its discretion to regard the same as additional
rent payable with the installments of rent next becoming due or thereafter
falling due under the terms of this lease. This provision shall be construed as
an additional remedy granted to the lessor and not in limitation of any other
rights and remedies which the lessor has or may have in said circumstances.
18. BANKRUPTCY
If at any time after the execution and delivery of this lease and before
commencement of the term or if during the term hereby demised, a petition shall
be filed, either by or against the lessee, in any Court or pursuant to any
Federal, State or Municipal statute whether in bankruptcy, insolvency, for the
appointment of a receiver of the lessee's property or because of any general
assignment made by the lessee of the lessee's property for the benefit of the
lessee's creditors, then immediately upon the happening of any such event, and
without any entry or other act by the lessor, this lease, at lessor's option,
shall cease and come to an end with the same force and effect as if the date of
the happening of any such event were the date herein fixed for the expiration of
the term of this lease. It is further stipulated and agreed that, in the event
of the termination of the term of this lease by the happening of any such event,
the lessor shall forthwith, upon such termination, and any other provisions of
this lease to the contrary notwithstanding, become entitled to recover as and
for liquidated damages caused by such breach of the provisions of this lease, an
amount equal to the difference between the then cash value of the rent reserved
hereunder for the unexpired portion of the term and the then cash rental value
of the demised premises for such unexpired portion of the term hereby demised,
unless the statute which governs or shall govern the proceeding in which such
damages are to be proved limits or shall limit the amount of such claim capable
of being so proved, in which case the lessor shall be entitled to prove as and
for liquidated damages an amount equal to that allowed by or under any such
statute. The provisions of this paragraph of this lease shall be without
prejudice to the lessor's right to prove in full damages for rent accrued prior
to the termination of this lease, but not paid. This provision of this lease
shall be without prejudice to any rights given to the lessor by any pertinent
statute to prove for any amounts allowed thereby. In making any such
computation, the then cash rental vale of the demised premises shall be deemed
prima facie to be the rental realized upon any re-letting, if such re-letting
can be accomplished by the lessor within a reasonable time after such
termination of this lease, and the then present cash value of the future rents
hereunder reserved to the lessor for the unexpired portion of the term hereby
demised shall be deemed to be such sum, if invested at four percent (4%) simple
interest, as will produce the future over the period of time in question. In the
event of lessee's bankruptcy, lessor has the right to enter and re-let the
demised premises.
19. LIABILITY FOR DAMAGE TO PERSONAL PROPERTY AND PERSON
All personal property of the lessee, its employees, agents, business
invitees, licensees, customers, clients, family members, guests or trespassers,
in and on said demised premises, shall be and remain at their sole risk, and
lessor shall not be liable to them for any damage to, or loss of such personal
property arising from any act of negligence of any other persons nor from the
leaking
-5-
<PAGE> 6
of the roof, or from the bursting, leaking or overflowing of water, sewer or
steam pipes, or from heating or plumbing fixtures, or from electrical wires or
fixtures, or from air-conditioning failure, or from any other cause whatsoever,
nor shall the lessor be liable for the interruption or loss to lessee's
business arising from any of the above described acts or causes, nor shall the
lessor be liable for any personal injury to the lessee, its employees, agents,
business invitees, licensees, customers, clients, family members, guests or
trespassers arising from the use, occupancy and condition of the demised
premises; the lessee especially agreeing to save the lessor harmless in all
such cases.
20. DAMAGE TO THE DEMISED PREMISES
If the demised premises shall be partially damaged by fire or other cause
without the fault or neglect of lessee, lessor shall diligently and as soon as
practicable after such damage occurs (taking into account the time necessary to
effectuate a satisfactory settlement with any insurance company) repair such
damage at the expense of the lessor, and the rent and additional rent shall be
reduced in proportion of the extent the demised premises are rendered
untenantable, until such repairs are completed, provided, however, that if the
building is damaged by fire or other cause to such extent that the damage
cannot be fully repaired within sixty (60) days from the date of such damage,
lessor shall have the option of terminating this lease by giving written notice
to lessee of such decision and the term of this lease shall terminate on the
day such notice is given. Except as set forth in this paragraph, lessor shall
not be liable for any damage that may be suffered by lessee by reason of any
casualty damage to the demised premises and the deprivation of lessee's
possession thereof.
21. DEFAULT OF LESSEE
If lessee shall fail to pay any monthly installment of rent as aforesaid
(although no legal or formal demand has been made therefor), or shall violate
or fail to perform any the other conditions, covenants or agreements herein
made by lessee, and such violation or failure shall continue for a period of
ten (10) days after written notice thereof to lessee by lessor, (but no written
notice to lessee is necessary in the event of failure to pay a monthly
installment of rent), then and in any of said events this lease shall, at the
option of lessor, cease and terminate and shall operate as a notice to quit,
any notice to quit or of lessor's intention to re-enter being hereby expressly
waived, and lessor may proceed to recover possession under and by virtue of the
provisions of the laws of the State of Virginia, or by such other proceedings,
including re-entry and possession, as may be applicable. If lessor elects to
terminate this lease, everything herein contained on the part of the lessor to
be done and performed shall cease without prejudice to the right of lessor to
recover from lessee all rental accrued up to the time of termination of the
term of this lease, the demised premises may be relet by lessor for such rent
and upon such terms as are not unreasonable under the circumstances and, if the
full rental hereinabove provided shall not be realized by lessor, lessee shall
be liable for all damages sustained by lessor, including, without limitation,
deficiency in rent, reasonable attorney's fees, brokerage fees, and expenses of
placing the demised premises in first class rentable condition. Lessor shall
not be required to so relet the demised premises, either pursuant to this lease
or by any requirement of law or equity, to any person who, in lessor's sole
judgment, shall not be of sound financial standing and ability, and possess
good reputation, business judgment and operating ability, or for any use or
purpose which, in lessor's judgment, shall not be the same or substantially the
same as the uses of the demised premises permitted under this lease, or shall
not be in keeping with the caliber and quality of the building and its other
tenants. In addition, if lessee shall have failed to move into or take
possession of the demised premises within fifteen (15) days after the
commencement of the term of this lease if the date fixed for such commencement
shall be postponed as herein provided and to open the demised premises for
business fully fixtured, stocked and staffed within the time herein provided,
then the lessor shall have, in addition to any and all remedies herein
provided, the right at its sole option and discretion to collect the minimum
rent herein provided, for each and every day that the lessee shall fail to
commence to do business as herein provided. Any damage or loss of rental
sustained by lessor may be recovered by lessor at lessor's option, at the time
of relocation in separate actions, from time to time, as said damage shall have
been made more easily ascertainable by successive relettings, or, at lessor's
option, may be deferred until the expiration of the term of this lease, in
which event the cause of action shall not be deemed to have accrued until the
date of expiration of said term. If lessor should commence any summary
proceeding for non-payment of rent by lessee, lessee shall not interpose any
counterclaim of any nature or description in any such proceeding. The
provisions contained in this paragraph shall be in addition to and shall not
prevent the enforcement of any claim lessor may have against lessee for
anticipatory breach of the unexpired term of this lease. In the event that
lessee continues to occupy the demised premises after the expiration of the
term of this lease, with the express or implied consent of lessor, such tenancy
shall be from month to month and shall not be renewal of the term of this lease
or a tenancy from year to year. All rights and remedies of lessor under this
lease shall be cumulative and shall not be exclusive of any other rights and
remedies provided to lessor under applicable law.
22. WAIVER
If under the provisions hereof lessor shall institute proceedings and a
compromise or settlement thereof shall be made, the same shall not constitute a
waiver of any covenant herein contained nor of any of lessor's rights
hereunder. No waiver by lessor of any breach of any covenant, condition or
agreement herein contained shall operate as a waiver of such covenant,
condition, or agreement itself, or of any subsequent breach thereof. No payment
by lessee or receipt by lessor of a lesser amount than the monthly installments
of rent herein stipulated shall be deemed to be other than on account of the
earliest stipulated rent nor shall any endorsement or statement on any check or
letter accompanying a check for payment of rent be deemed an accord and
satisfaction and lessor may accept such check or payment without prejudice to
lessor's right to recover the balance of such rent or to pursue any other remedy
provided in this lease. No re-entry by lessor, and no acceptance by lessor of
keys from lessee, shall be considered an acceptance of a surrender of the lease.
23. SUBORDINATION
This lease is subject and subordinate to the lien of all and any first
mortgages (which term "mortgages" shall include both construction and permanent
financing and shall include deeds of trust and similar security instruments)
which may not or hereafter encumber or otherwise affect the real estate
(including the building) of which the demised premises form a part, and to all
and any renewals, extensions, modifications, recastings or refinancings
thereof. In confirmation of such subordination, lessee shall, at lessor's
request, promptly execute any requisite or appropriate certificate or other
document. Lessee hereby constitutes and appoints lessor as lessee's
attorney-in-fact to execute any such certificate or certificates for or on
behalf of lessee. Lessee agrees that in the event that any proceedings are
brought for the foreclosure of any such mortgages, lessee shall attorn to the
purchaser at such foreclosure sale, if requested to do so by such purchaser and
to recognize such purchaser as the lessor under ??? lease, and lessee waives
the provisions of any statute or rule of law, now or hereafter in effect, which
may give or purport to give lessee any right to terminate or otherwise
adversely affect this lease and the obligations of lessee hereunder in the
event that any such foreclosure proceeding is prosecuted or completed.
-6-
<PAGE> 7
24. CONDEMNATION
If the whole or a substantial part of the demised premises shall be taken
forceably, leased or condemned by any governmental authority for any public or
quasi-public use of purpose, then the term of this lease shall cease and
terminate as of the date when title vests in such governmental authority, and
lessee shall have no claim against lessor or the condemning authority for any
portion of the amount that may be awarded damages as a result of such taking or
condemnation or for the value of any unexpired term of the lease. Lessee,
however, shall be entitled to claim, prove and receive in the condemnation
proceeding such awards as may be allowed for fixtures and other equipment
installed by it which shall not, under the terms of this lease be or become the
property of the lessor at the termination hereof, but only if such awards
shall be made by the condemnation court in addition to and stated separately
from the award made by it for the land and building or part thereof so taken.
The annual rental, however, shall be abated on the date when such title vests
in such governmental authority. If less than a substantial part of the demised
premises is taken or condemned by any governmental authority for any public or
quasi-public use of purpose, the rent shall be equitably adjusted on the
proportion which the floor area of the demised premises included in the space
taken bears to the floor area of the entire demised premises immediately prior
to such taking on the date when title vests in such governmental authority and
the lease shall otherwise continue in full force and effect. For purposes of
this Article, a substantial part of the demised premises shall be considered to
have been taken if more than fifty percent (50%) of the demised premises are
unusable by lessee. For purposes of this provision any purchase by competent
authority of the whole or a substantial part of the demised premises in lieu of
condemnation thereof under the power of eminent domain shall be deemed an
actual taking.
25. RULES AND REGULATIONS
Lessee, its agents, servants and concessionaires and employees shall abide
by and observe the rules and regulations promulgated by lessor. Lessee, its
agents, servants, employees and concessionaries shall abide by and observe the
rules or regulations promulgated from time to time by lessor for the operation
and maintenance of the building provided that the same are in conformity with
common practice and usage in similar buildings and are not inconsistent with
the provisions of the lease and a copy thereof is sent to lessee. Such rules
shall apply generally to all tenants, shall not unreasonably interfere with the
conduct of lessee's business and in no way shall limit any of the lessor's
covenants and obligations hereunder. Lessor shall use its best efforts to
enforce its rules as to all tenants and the breach or failure to comply with
any rule shall constitute a breach of the terms of this lease. Lessor, however,
shall not be liable to lessee for violation of the same by any other tenant,
its employees, agents, business invitees, licensees, customers, clients, family
members or guests.
26. RIGHT OF LESSOR TO CURE LESSEE'S DEFAULT
If lessee defaults in the making of any payment of, in the doing of any act
herein required to be made or done by lessee, then lessor may, but shall not be
required to, make such payment or do such act, and the amount of the expense
thereof, if made or done by lessor, with interest thereon at the rate of eight
percent (8%) per annum from the date paid by lessor, shall be paid by lessee
to lessor and shall constitute additional rent hereunder due and payable with
the next monthly installment of rent; but the making of such payment or the
doing of such act by lessor shall not operate to cure such default or to estop
lessor from the pursuit of any remedy to which lessor would otherwise be
entitled.
27. NO REPRESENTATIONS BY LESSOR
Neither lessor nor any agent or employee of lessor has made any
representations or promises with respect to the demised premises or the
building except as herein expressly set forth, and no rights, privileges,
easements or licenses are acquired by lessee except as herein set forth. The
lessee, by taking possession of the demised premises, shall accept the same
"as is," and such taking of possession shall be conclusive evidence that the
demised premises and the building are in good and satisfactory condition at the
time of such taking of possession.
28. WAIVER OF JURY TRIAL
Lessor and lessee hereby waive trial by jury in any action, proceeding or
counterclaim brought by either of the parties hereto against the other on or in
respect of any matter whatsoever arising out of or in any way connected with
this lease, the relationship of lessor and lessee hereunder, lessee's use or
occupancy of the demised premises, and/or claim of injury or damage.
29. NO OPTION
The submission of this lease for examination or consideration by lessee or
discussion between lessee or lessor does not constitute a reservation of or
option for the demised premises, and this lease shall be and become effective
as a lease and agreement only upon executive and delivery hereof by lessor and
lessee.
30. MODIFICATIONS
Notwithstanding acceptance and execution of this lease by the parties
hereto, it is understood and agreed that the terms hereof shall be modified, if
so required, for the purpose of complying with or fulfilling the requirements
of any mortgagee or trustee named in or secured by a first mortgage or first
trust deed that may not or hereafter be placed or secured upon the demised
premises provided, however, that such modification shall not be in substantial
derogation or diminution of any of the rights of the parties hereunder, nor
substantially increase any of the obligations or liabilities of the parties
hereunder.
31. ESTOPPEL CERTIFICATES
Lessee agrees, at any time and from time to time, upon not less than five
(5) days prior to written notice by lessor, to execute, acknowledge and deliver
to lessor a statement in writing (i) certifying that this lease is unmodified
and in full force and effect (or if there have been modifications), (ii)
stating the dates to which the rent and other charges hereunder have been paid
by lessee (iii) stating whether or not to the best knowledge of lessee, lessor
is in default in the performance of any covenant, agreement or condition
contained in this lease, and, if so, specifying each such default of which
lessee may have knowledge, and (iv) stating the address to which notices to
lessee should be sent. Any such statement delivered pursuant hereto may be
relied upon by any owner of the Building, any prospective purchaser of the
Building, any mortgage or prospective mortgagee of the Building or of Lessor's
interest, or any prospective assignee of any such mortgage.
-7-
<PAGE> 8
32. HOLDING OVER
In the event that Lessee shall not immediately surrender the demised
premises on the date of expiration of the term hereof, Lessee shall, by virtue
of the provisions hereof, become a Lessee by the month at the monthly rental in
effect during the last month of the term of this lease, which said monthly
tenancy shall commence with the first day next after the expiration of the term
of this lease. The Lessee as a monthly Lessee shall be subject to all of the
conditions and covenants of this lease as though the same had originally been a
monthly tenant. In the event of hold over, Lessee shall give to Lessor at least
thirty (30) days written notice of any intention to quit the demised premises,
and Lessee shall be entitled to thirty (30) days written notice to quit the
demised premises, except in the event of nonpayment of rent in advance or of the
breach of any other covenant by the Lessee, in which event Lessee shall not be
entitled to any notice to quit, the usual thirty (30) days notice to quit being
hereby expressly waived. Notwithstanding the foregoing provisions of this
paragraph, in the event that Lessee shall hold over after the expiration of the
term hereby created, and if Lessor shall desire to regain possession of the
demised premises promptly at the expiration of the term of this Lease, then at
any time prior to Lessor's acceptance of rent from Lessee as a monthly tenant
hereunder, Lessor, at its option, may forthwith re-enter and take possession of
the demised premises without process, or by any legal process in force in the
County of Fairfax, Virginia.
33. COVENANTS OF LESSOR
Lessor covenants that it has the right to make this lease for the term
aforesaid, and that if lessee shall pay the rental and perform all of the
covenants, terms, and conditions of this lease to be performed by lessee, lessee
shall, during the term hereby created, freely, peaceably and quietly occupy and
enjoy the full possession of the demised premises without molestation or
hindrance by lessor or any party claiming through or under lessor. Lessor agrees
to provide char service Monday through Friday of each week, except holidays.
34. LIEN FOR RENT
In consideration of the mutual benefits arising under this agreement,
lessee hereby grants to lessor a lien on all property of lessee now or
hereafter placed in or on the premises (except such part of any property as may
be exchanged, replaced, or sold from time to time in the ordinary course of
business operation or trade) and such property shall be and remain subject to
such lien of lessor for payment of all rent and other sums agreed to be paid by
lessee herein. Said lien shall be in addition to and cumulative upon the
lessor's liens provided by law.
35. GENDER
Feminine or neuter pronouns shall be substituted for those of the
masculine form, and the plural shall be substituted for the singular number, in
any place or places herein which the context may require such substitution or
substitutions.
36. BENEFIT AND BURDEN
The provisions of this lease shall be binding upon and shall inure to the
benefit of the parties hereto and each of their respective representatives,
successors and assigns. Lessor may freely and full assign its interest
hereunder.
37. ENTIRE AGREEMENT
This lease together with Exhibits Addendum, attached hereto and made a
part hereof, contain and embody the entire agreement of the parties hereto, and
no representations, inducements, or agreements, oral or otherwise, between the
parties not contained and embodied in said lease and exhibits, shall be of any
force or effect, and that same may not be modified, changed or terminated in
whole or in part in any manner other than by an agreement in writing duly
signed by all parties hereto.
IN WITNESS WHEREOF, Lessor has hereunto set his hand and seal, and Lessee
has signed these presents and affixed his seal the day and year first
hereinabove written.
LESSOR:
WITNESS: Young & Skidmore Co.
By
- -------------------------------------- -----------------------------------
Partner
WITNESS: LESSEE: ARTHUR H., LTD.
/s/ Terri P. Decatur /s/ Christopher Brittin, President
- -------------------------------------- --------------------------------------
By: Christopher Brittin, President
- -------------------------------------- --------------------------------------
- -------------------------------------- --------------------------------------
The undersigned hereby guarantee the faithful performance by lessee of all
the conditions, covenants and agreements of the foregoing lease including, but
not limited to, the payment of all rent due and we hereby waive any right to
notice of any default by lessee.
WITNESS:
/s/ Terri P. Decatur /s/ Christopher Brittin, President
- -------------------------------------- --------------------------------------
By: Christopher Brittin, President
- -------------------------------------- --------------------------------------
- -------------------------------------- --------------------------------------
-8-
<PAGE> 9
ADDENDUM TO McLEAN PROFESSIONAL PARK LEASE
This Addendum is hereby made a part of the Lease bearing even date between the
undersigned parties hereto covering premises at 1477 Chain Bridge Road, McLean,
Virginia, Suites 200, 201 and 202.
Premises is leased in "AS IS" condition.
It is agreed that if any monthly installment of rent shall remain unpaid for
more than seven days after the due date, the amount of the installment shall be
increased by five percent of the installment as a service charge for the
purpose of defraying expenses incident to handling delinquent payments.
Fourteen days after the due date, the amount of the installment shall be
increased by an additional five percent (a total of ten percent), and after
twenty-one days, the amount of the installment shall be increased by an
additional five percent (a total of fifteen percent) of the amount of the
installment. In addition, a service charge of $25.00 will be added to any
installment for handling a returned check.
The hereto attached Lease Agreement, as amended by this Addendum, shall
constitute the entire Agreement between the parties hereto.
IN WITNESS WHEREOF, THE Lessor and Lessee have hereunto set their hands and
acknowledge having read the entire Lease, all this ___ day of ____________,
1999.
WITNESS: LESSOR:
YOUNG & SKIDMORE COMPANY
BY:
- --------------------------- -------------------------------
BERNARD J. YOUNG
WITNESS LESSEE:
ARTHUR H. LTD.
BY:
/s/ TERRI P. DECATUR /s/ CHRISTOPHER M. BRITBER
- --------------------------- -------------------------------
<PAGE> 10
CORPORATE RESOLUTION
RESOLVED, that Arthur H. Ltd., a Virginia Corporation, enters into a Lease with
Young & Skidmore Company, for the premises known as 1477 Chain Bridge Road,
Suites 200, 201 and 202, McLean, Virginia, under the terms and conditions
contained in the Lease, hereto annexed and made a part hereof, that the
President be, and is hereby authorized to execute and acknowledge all papers
and documents necessary for the proper execution of said Lease.
I, Susan R. Hopley, Secretary of Arthur H. Ltd., do hereby certify that the
foregoing is a true copy of a Resolution, unanimously adopted at the Board of
said Corporation, held on the 25th day of October, 1999, due notice of such
meeting having been given.
/s/ SUSAN R. HOPLEY
-------------------
SECRETARY
CORPORATE SEAL
<PAGE> 1
EXHIBIT 10.21
Execution Draft
FORTDOVE LIMITED
AND
HOGG ROBINSON PLC
---------------------------------------------------------------------------
SERVICE BUREAU/OUTSOURCING AGREEMENT
FOR
ONLINE FULFILMENT SERVICES
---------------------------------------------------------------------------
CLIFFORD CHANCE
[*] The redacted portions indicated by this symbol are the subject of a
confidential treatment request and have been filed separately with the
Securities and Exchange Commission.
<PAGE> 2
CONTENTS
CLAUSE PAGE
----
1. Definitions.................................................... 2
2. Scope Of Services.............................................. 4
3. NEWCO's Proprietary Rights; HR Restrictions.................... 5
4. Pricing And Payment............................................ 6
5. Limited Warranty............................................... 7
6. Limitation Of Liability........................................ 7
7. Force Majeure.................................................. 8
8. Term........................................................... 9
9. Termination.................................................... 9
10. Non-Solicitation............................................... 11
11. Confidentiality................................................ 11
12. Non-Competition................................................ 12
13. Joint Oversight Committee...................................... 13
14. Governing Law And Dispute Resolution........................... 14
15. General........................................................ 15
16. Counterparts................................................... 16
SCHEDULE 1 SERVICES......................................... 17
SCHEDULE 2 CHARGES.......................................... 22
(i)
<PAGE> 3
THIS SERVICE BUREAU/OUTSOURCING AGREEMENT (this "Agreement") is made this ___
day of ___________, 2000 between
(1) FORTDOVE LIMITED company number 3841799 with registered address 200
Aldersgate Street, London, EC1A 4JJ ("NEWCO"); and
(2) HOGG ROBINSON PLC company number 2107443 with registered address, Abbey
House, 181 Farnborough Road, Farnborough, Hampshire ("HR").
WHEREAS
(A) The HR Group of companies wish to offer on-line travel booking services
to certain customers;
(B) NEWCO provides certain services to the travel industry, including an
online booking fulfilment service bureau for the servicing of
electronic transactions;
(C) HR and NEWCO wish to enter into an agreement for the provision by NEWCO
to the HR Group of Services (as defined below), on the terms and
conditions set out herein.
1. DEFINITIONS
In this Agreement:
1.1 CHARGES means the charges payable by HR to NEWCO in respect of the
Services, as set out in Schedule 2;
1.2 CONSUMER TRAVEL SERVICES means travel services for air, car, train and
hotel accommodations offered and provided on an individual, per item
basis to the general public. This includes charter and consolidator
services for air transportation;
1.3 CORPORATE TRAVEL SERVICES means travel services provided to a business
entity's employees and/or contractors which are paid for or reimbursed
by such entity which contracted directly with HR or with a travel
agency, web portal, or other entity to provide such services;
1.4 CUSTOMER means an entity doing business, relating to travel agency
services, with a given party on the date in question. For corporate
entities, only those divisions or portions of a corporation doing
business with such party on the date in question are considered to be
included in the definition of Customer;
1.5 EFFECTIVE DATE means the date of this Agreement, unless otherwise
agreed between the parties;
1.6 GLOBAL DISTRIBUTION SYSTEM OR ("GDS") means the Sabre, Amadeus,
Worldspan and the International version of Galileo computer system and
networks used to check and make reservations of a travel related nature
and such other global distribution systems as may be agreed from time
to time;
1.7 GROUP means, in relation to a company, that company and each subsidiary
of the company and its subsidiaries for the time being;
1.8 HR GROUP means the Group of companies of which Hogg Robinson plc is the
ultimate holding company, together with all the travel franchisees of
that Group;
1
<PAGE> 4
1.9 JOC means the joint oversight committee to be established in accordance
with Clause 13;
1.10 LEISURE TRAVEL SERVICES means travel services offered to the general
public that represent a combination of travel products that are
pre-packaged as tours, cruises, and other speciality leisure services;
1.11 MODIFICATIONS means changes to the Product that provide additional
features and/or functionality, expanding the capabilities of the
Product in existing functional areas, or affect existing functionality;
1.12 PRODUCT means the logical grouping of the Software, in object code
only, and related documentation which is sold by a specific product
name and which is employed in the provision of the Services;
1.13 SERVICE BUREAU means the computer facilities located at NEWCO offices
of and/or its subsidiaries from which NEWCO, through its Online
Fulfilment Services division ("OFS") will provide the Services and data
information to HR;
1.14 SERVICES means those online transaction processing and fulfilment
services as set out within Schedule 1, as amended from time to time by
agreement between the parties;
1.15 SHAREHOLDERS AGREEMENT means the Shareholders Agreement of on or about
even date entered into between Newco, WTT Inc and HR for the
establishment and operation of Newco as a joint venture company;
1.16 SOFTWARE means all of the software programs licensed to or created by
NEWCO from time to time and used by NEWCO in the provision of the
Services, being the Products identified in Schedule 1 as amended from
time to time by written agreement between the parties and all
associated Software releases;
1.17 TERM means the term of this Agreement, as set out in Clause 8;
1.18 VALUE ADDED TAX means value added tax as provided for in the Value
Added Tax Act 1994 and any other tax of a similar fiscal nature whether
imposed in the United Kingdom (instead of or in addition to value added
tax) or elsewhere;
1.19 WTT INC means WT Technologies Inc, with its principal place of business
at 6 W Druid Hills Drive, Atlanta, Georgia, 30329, USA.
1.20 In this Agreement, a reference to:
1.20.1 a "subsidiary" or "holding company" is to be construed in
accordance with section 736 of the Companies Act 1985 and a
"subsidiary undertaking" or "parent undertaking" is to be
construed in accordance with section 258 of the Companies Act
1985;
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1.20.2 a statutory provision includes a reference to the statutory
provision as modified or re-enacted or both from time to time
before/whether before or after the date of this Agreement and
any subordinate legislation made or other thing done under the
statutory provisions before/whether before or after the date
of this Agreement;
1.20.3 a document is a reference to that document as modified from
time to time;
1.20.4 a person includes a reference to a government, state, state
agency, corporation, body corporate, association or
partnership;
1.20.5 a person includes a reference to that person's legal personal
representatives, successors and permitted assigns;
1.20.6 the singular includes the plural and vice versa unless the
context otherwise requires;
1.20.7 a clause or schedule, unless the context otherwise requires,
is a reference to a clause of a schedule to this Agreement.
1.21 The headings in this Agreement do not affect its interpretation.
2. SCOPE OF SERVICES
2.1 NEWCO shall provide the Services to HR during the Term subject to the
terms and conditions of this Agreement for Corporate Travel Services
Customer Accounts of all travel agencies within the HR Group, with the
exception of any such travel agency located in the United States and
Rider Travel in Canada. HR may use the Services to provide support for
its Leisure Travel Services and Consumer Travel Services functions,
subject to the limitations contained in the Shareholders Agreement and
in the Software Licence of on or about even date between Technology
Licensing Company LLC and NEWCO. In addition, the rights conferred on
HR under this Agreement to use the Services expressly exclude the right
of HR or the HR Group to use the Services to provide online fulfilment
services to any travel agencies not within the HR Group.
2.2 The Software required to provide the Services will run and reside at
the Service Bureau. The Software will be run by NEWCO in consultation
with HR to meet HR's specific needs and requests, (to be mutually
determined and outlined by the JOC), in the provision of Services
hereunder. NEWCO shall provide information and reports to HR on the
performance of the Services as reasonably required by HR.
2.3 At the request of HR, the Service Bureau will process transactions from
HR's company-owned locations Corporate Travel Service Customers
everywhere in the world, with the exception of the United States and
Rider Travel in Canada. HR may obtain rights to acquire a licence to
the Software and support services under a separate agreement with
NEWCO.
2.4 The Software will include adaptations for efficient use with each GDS.
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2.5 From time to time, HR may request specific Modifications to the
Software. NEWCO agrees to negotiate in good faith with HR towards the
development of such Modifications and, subject to the outcome of such
negotiations, HR agrees to pay for such requested Modification(s) on
the terms set out in the Software Development Agreement of even date
between the parties hereto.
2.6 All Modifications shall be made available to HR prior to or at the same
time as being made available to all other (if any) joint funders of the
Modifications, users and licensees of the Software, unless such
Modifications were totally funded by a third party. Subject to Clause
4.4, all Modifications offered as part of the Services to other users
and licensees will be made available to HR at NEWCO's then current
rates or less, at NEWCO's discretion. All such Modifications shall be
loaded on NEWCO's server as part of the Service Bureau.
2.7 All new Products shall be made available to HR prior to or at the same
time as being made available to other (if any) joint funders of the
Product, users and licensees of the Software, unless such Products were
totally funded by a third party. Subject to Clause 4.4, all new
Products offered as part of the Services to other users and licensees
will be made available to HR at NEWCO's then current rates or less, at
NEWCO's discretion, having regard to any funding provided to NEWCO by
HR.
2.8 The JOC shall set priorities for the allocation of NEWCO resources
necessary to adequately perform under this Agreement. Once the JOC sets
a start date for any project or other matter to be undertaken under
this Agreement, such start date cannot be changed by NEWCO unless by
written agreement between the parties. In setting such priorities and
start dates the JOC shall take into consideration other business issues
facing NEWCO and HR and other commitments of NEWCO and HR.
2.9 The JOC will periodically discuss and review HR's competitive
environment which shall include a review of HR's competitors'
technology, cost or pricing structure and service offerings, to the
extent such information is known (and to the extent that disclosure of
such information is not restricted by a third party). If the JOC
determines that NEWCO has ceased to be competitive in terms of the
technology associated with the Services, the Charges or the quality of
the Services then, the parties shall jointly determine, in good faith,
if a change in technology, cost or services should be made.
3. NEWCO'S PROPRIETARY RIGHTS; HR RESTRICTIONS
3.1 HR acknowledges that the Software, and the related documentation embody
valuable confidential and proprietary information of NEWCO and/or its
licensors, the development of which required the expenditure of
considerable time and money by NEWCO and/or its licensors, and are
protected by copyright law and international treaty. HR shall treat
such information so received in confidence and shall not use, copy,
disclose, nor permit any of its personnel, agents or sub-contractors to
use, copy, or disclose the same, for any purpose that is not
specifically authorised under this Agreement.
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3.2 By virtue of this Agreement, HR acquires only the non-exclusive right
as described above to receive the Services provided by NEWCO through
the use of the Software and related documentation, and does not acquire
any licence thereto or any rights of ownership in such materials,
except as may be set forth in a separate agreement. HR shall not
establish its own Service Bureau using the Product (with the exception
of the CORRE family of Products, use of which is governed by the
Service Bureau Software Services Agreement between the parties of even
date) during the Term without the prior written consent of NEWCO,
except as provided in the Shareholders Agreement. Nothing in this
sub-clause shall affect HR's entitlement to use the Services and
Product for the provision of services to its clients under Clause 2.1.,
subject to the terms of any separate agreement between the parties in
respect of such Product.
3.3 NEWCO, and/or its licensors, at all times retain all right, title and
interest in the Software, related documentation, and any derivatives
thereof.
3.4 HR agrees not to remove, alter or conceal any product identification,
copyright notices, or other notices or proprietary restrictions from
the monthly data information reports provided to HR by NEWCO and to
reproduce any and all such notices on any copies of such materials.
3.5 HR recognises and acknowledges that any use or disclosure of the
Software by HR in breach of this Agreement may cause NEWCO irreparable
damage for which other remedies may be inadequate, and HR hereby
acknowledges as proper any request to a court of competent jurisdiction
by NEWCO for injunctive or other equitable relief seeking to restrain
such use or disclosure.
3.6 HR assumes full responsibility for the quality, accuracy and
completeness of the data transmitted or provided by HR or its Customers
to the Service Bureau, whether by means of the Software or otherwise,
including any inaccurate results obtained as a result of such data
where supplied corrupted, inaccurate or incomplete.
4. PRICING AND PAYMENT
4.1 The Charges are set forth on Schedule 2 attached hereto. Prior to the
startup of an HR Customer under this Agreement, the parties will agree
in writing to a specific fee structure for that Customer based upon the
specific Customer requirements. Both parties acknowledge that the
service offering under this Agreement is a startup operation and both
parties will review the pricing in good faith after the Services have
been operating for six (6) months or longer if agreed upon between the
parties. HR shall make all payments of Charges in sterling within
thirty (30) days of receipt of invoice (the "DUE DATE") according to
the payment schedule set forth on Schedule 2, and regardless of whether
HR collects any fees from its Customers. NEWCO shall be entitled to
charge interest on all amounts not paid on the Due Date at the rate of
2% above Barclays Bank plc base rate, from time to time in force. NEWCO
has the right to suspend performance of the Services on 15 days'
written notice if payment of any Charge remains outstanding (and is not
disputed by HR) for more than 30 days following the Due Date.
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4.2 The Charges do not include any charge for Value Added Tax and HR is
solely responsible for paying any and all Value Added Tax arising in
connection with the Services rendered to HR under this Agreement.
4.3 Both parties agree to take all reasonable steps to minimize taxes,
which might be assessed on either party based on the parties'
performance hereunder.
4.4 NEWCO agrees to treat HR as its most favoured customer in respect of
the Services. NEWCO represents that, in the aggregate all of the
Charges and other terms of this Agreement are substantially or
materially comparable to or better than the aggregate charges and other
terms being offered by NEWCO to any of its other customers for the
Services (or services substantially comparable), having regard to the
type and volume of services. If NEWCO offers more favourable aggregate
prices and other terms to any customer during the Term, such terms
shall be made available to HR.
4.5 To review compliance with Clause 4.4, HR may designate an independent
auditor who, at HR's expense will be permitted to examine NEWCO's
charges to other customers, provided, however, that such auditor must
sign a non-disclosure agreement with NEWCO prior to commencing any
examination. NEWCO shall afford reasonable access to the auditor to its
books and records, for the purpose of carrying out such an inspection.
4.6 HR's auditor will be permitted to report to HR only the fact that NEWCO
is or is not in compliance with this provision and will not be
permitted to disclose any specific information to HR regarding NEWCO's
customers. If the auditor reports that NEWCO is not in compliance with
clause 4.4, the auditor will report to NEWCO the changes which need to
be made to the charges and other terms of supply of the Services in
order for NEWCO to be in compliance with clause 4.4 and NEWCO shall
implement such changes within a reasonable period and upon request from
HR, and the auditor shall certify to HR that NEWCO is in compliance
with this provision once the changes have been made.
5. LIMITED WARRANTY
5.1 NEWCO represents and warrants that it will provide the Services with
reasonable skill and care, in a timely, workmanlike fashion and in
accordance with industry standards.
5.2 NEWCO will not be liable to HR for any claim or effect arising from any
cause beyond the control of NEWCO, including any act of Force Majeure
as defined under Clause 7.
5.3 EXCEPT AS EXPRESSLY PROVIDED IN THIS CLAUSE, NO EXPRESS OR IMPLIED
WARRANTY IS MADE BY NEWCO WITH RESPECT TO ANY SERVICE, PRODUCT,
SOFTWARE RELEASE, DATA COMPILATION OR ANY OTHER MATTER, INCLUDING,
WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OR CONDITIONS OF
MERCHANTABILITY, SATISFACTORY QUALITY OR FITNESS FOR A PARTICULAR
PURPOSE. WITHOUT PREJUDICE TO THE WARRANTY GIVEN UNDER CLAUSE 5.1,
NEWCO DOES
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NOT WARRANT THAT ALL ERRORS IN THE SOFTWARE CAN OR WILL BE CORRECTED OR
THAT THE FUNCTIONALITY OF THE SOFTWARE WILL MEET HR'S REQUIREMENTS.
6. LIMITATION OF LIABILITY
6.1 NEITHER HR, NEWCO NOR THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES
OR AGENTS, WILL BE LIABLE TO THE OTHER FOR ANY CLAIMS FOR SPECIAL,
INDIRECT OR CONSEQUENTIAL DAMAGES ARISING OUT OF THE SERVICES PROVIDED
BY THIS AGREEMENT OR A BREACH OF THE AGREEMENT, EVEN IF THAT DAMAGE WAS
REASONABLY FORESEEABLE OR EITHER PARTY WAS AWARE OF THE POSSIBILITY OF
THAT LOSS OR DAMAGE ARISING, WHETHER SUCH DAMAGES OR CLAIMS ARE BASED
ON BREACH OF WARRANTY OR CONTRACT, NEGLIGENCE, STRICT LIABILITY, TORT,
PRODUCTS LIABILITY OR OTHERWISE.
6.2 IN NO EVENT WILL EITHER PARTY'S LIABILITY FOR ANY DAMAGES OR INJURIES
TO EITHER PARTY HEREUNDER EVER EXCEED THE TOTAL CHARGES PAID BY HR FOR
THE SERVICES PROVIDED HEREUNDER, REGARDLESS OF THE FORM OF ACTION,
WHETHER IN CONTRACT, NEGLIGENCE, STRICT LIABILITY, TORT, PRODUCT
LIABILITY OR OTHERWISE.
6.3 Nothing in this Agreement shall operate to limit or exclude the
liability of either party in respect of death or personal injury
arising as a result of the negligence of that party.
7. FORCE MAJEURE
7.1 If a party (the "AFFECTED PARTY") is prevented, hindered or delayed
from or in performing any of its obligations under this Agreement by a
Force Majeure Event:
7.1.1 the Affected Party's obligations under this Agreement are
suspended while the Force Majeure Event continues and to the
extent that it is prevented, hindered or delayed;
7.1.2 as soon as reasonably possible after the start of the Force
Majeure the Affected Party shall notify the other party in
writing of the Force Majeure Event, the date on which the
Force Majeure Event started and the effects of the Force
Majeure Event on its ability to perform its obligations under
this Agreement;
7.1.3 the Affected Party shall make all reasonable efforts to
mitigate the effects of the Force Majeure Event on the
performance of its obligations under this Agreement; and
7.1.4 as soon as reasonably possible after the end of the Force
Majeure Event the Affected Party shall notify the other party
in writing that the Force Majeure Event has ended and resume
performance of its obligations under this Agreement.
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7.2 If the Force Majeure Event continues for more than [three] months
starting on the day the Force Majeure Event starts, a party may
terminate this Agreement by giving not less than 30 days' written
notice to the other party.
7.3 In Clause 7, "FORCE MAJEURE EVENT" means an event beyond the reasonable
control of the Affected Party including, without limitation, act of
God, war, riot, civil commotion, malicious damage, compliance with a
law or governmental order, rule, regulation or direction, accident or
breakdown of plant or machinery not due to the negligence of the
Affected Party, fire, flood and storm.
8. TERM
8.1 The initial term of this Agreement shall be ten years from the
Effective Date. Upon the expiration of the initial term this Agreement
shall be automatically renewed for a consecutive additional one (1)
year terms, unless either party provides the other with notice of
cancellation of this Agreement at least thirty (30) days prior to
expiration of the then current term in which case this Agreement shall
expire at the end of such current term or unless otherwise terminated
under this Clause.
9. TERMINATION
9.1 A party (the "INITIATING PARTY") may terminate this Agreement with
immediate effect by written notice to the other party (the "BREACHING
PARTY") on or at any time after the occurrence of an event specified in
clause 9.2 in relation to the Breaching Party.
9.2 The events are:
9.2.1 the Breaching Party being in material breach of an obligation
under this Agreement and, if the breach is capable of remedy,
failing to remedy the breach within 30 days starting on the
day after receipt of written notice from the Initiating Party
giving details of the breach and requiring the Breaching Party
to remedy the breach;
9.2.2 the Breaching Party passing a resolution for its winding up or
a court of competent jurisdiction making an order for the
Breaching Party's winding up or dissolution;
9.2.3 the making of an administration order in relation to the
Breaching Party or the appointment of a receiver over, or an
encumbrancer taking possession of or selling, an asset of the
Breaching Party;
9.2.4 the Breaching Party making an arrangement or composition with
its creditors generally or making an application to a court of
competent jurisdiction for protection from its creditors
generally;
9.3 HR may terminate this Agreement with immediate effect upon written
notice to NEWCO within 60 days following a change of control of NEWCO
(whether such control is exercised as sole or joint control, with a
third party) occurring other than as a result of a change of control of
HR; in this clause , "CONTROL" means the ability to
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direct the affairs of another whether by way of contract, ownership of
shares or otherwise howsoever/has the meaning given by section 416 or
section 840 of the Income and Corporation Taxes Act 1988 so that there
is a change of control whenever there is a change of control as defined
in either section 416 or section 840.
9.4 If there is any material change, as determined by either party; (1) in
any laws, ordinances, orders, rules or regulations governing the way
the parties may operate; (2) in travel industry conditions, including
but not limited to, airfares (e.g., net fares or net/net fare
arrangements) or compensation to HR, by action of any industry vendor,
governing body or client; or (3) in technology including but not
limited to computer reservation systems or the internet; which material
change has the effect of materially increasing or decreasing the cost
of doing business; then, either party shall have the right to provide
written notice to the other party of such change and both parties agree
to renegotiate in good faith the financial and/or service terms of this
Agreement. If the parties are unsuccessful in renegotiating mutually
satisfactory terms within 30 days of such material change, either party
shall have the right to terminate this Agreement at any time thereafter
with sixty (60) days' advance written notice. Following such
termination the parties shall co-operate to ensure that termination
assistance is provided to HR at a cost which is reasonable in the light
of the material change in circumstances.
9.5 Both parties shall have an obligation to take such steps as may be
reasonably necessary to minimize damages to the parties on termination,
including, but not limited to, minimising all contractual obligations
that but for the existence of this Agreement, neither party would have
entered into.
9.6 Without prejudice to each party's accrued rights and obligations, upon
termination of this Agreement for any reason, the parties' further
obligations hereunder will immediately cease. If the Agreement is
terminated due to a breach by NEWCO, NEWCO will be responsible for
submitting to HR all information and reports required under Exhibit A
for the portion of the month up to and including the effective
termination date. If the Agreement is terminated due to a breach by HR,
NEWCO will have no such obligation to provide such information and
reports to HR for the month when termination became effective.
9.7 In the event of termination of this Agreement by Newco, Newco will work
together with HR or a designated third party to identify the
information, materials and resources HR is entitled to receive and to
develop an overall plan for transitioning such items to HR in
accordance with the following provisions (collectively, "Termination
Assistance"). The terms of this Agreement as they relate to Termination
Assistance shall remain in effect until Newco has completed its
Termination Assistance. Newco will provide the Termination Assistance
described below for a period of no less than ninety (90) days and no
more than six (6) months per HR's written request, except as provided
in this Section. Newco's obligation to provide Termination Assistance
will be conditioned upon HR paying to Newco all outstanding invoices
prior to the commencement of any Termination Assistance and will be
conditioned upon HR
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continuing to pay when due any and all fees due hereunder during the
Termination Assistance period. HR shall pay Newco standard hourly rates
and reasonable expenses for any Termination Assistance provided by
Newco. This fee is in addition to any other payments required under
this Agreement. Notwithstanding the termination or expiration of this
Agreement, the terms and conditions of this Agreement will apply to
all services provided by Newco during such period. If HR requests
Termination Assistance beyond the available capacity of the Newco
on-site staff, such request will be treated as a request for additional
services and HR will pay the agreed upon charge for such additional
services. The provision of this Section will survive the expiration or
termination of this Agreement for any reason.
9.8 HR and Newco will jointly develop a plan (the "Transition Plan") to
effect the orderly transition and migration to HR or a designated third
party from Newco of all services then being performed or managed by
Newco under this Agreement (the "Termination Transition"). The
Transition Plan will set forth the tasks to be performed by HR and
Newco, the time for completing such tasks and the criteria for
declaring the transition "completed". The parties and their employees
and agents will co-operate in good faith to execute the plan and each
party agrees to perform those tasks assigned to it in the Transition
Plan. Newco will direct the execution of the Transition Plan. The
Transition Plan will include the following tasks and such other tasks
as may be agreed upon by HR and Newco:
9.8.1 Providing HR access to necessary data files and programs,
certain non-proprietary operational procedures and data and
documentation in Newco's possession related to the Services;
9.8.2 Returning all HR confidential and proprietary information in
Newco's possession, except for one copy which Newco may
retain, subject to its confidentiality obligations, for
internal record keeping purposes and for compliance with
applicable professional standards; and
9.8.3 Returning all HR data and documentation. Newco will deliver to
HR all HR data in a format application for use by HR and will
seek to minimise the amount of manual data entry or re-keying
necessary in connection with the transfer of such data to HR.
9.9 Obligation To Minimise Damages. Both parties shall have an obligation
to take such steps as may be reasonably necessary to minimise damages
to the parties on termination, including, but not limited to, minimise
all contractual obligations that but for the existence of this
Agreement, neither party would have entered into.
9.10 Such provisions of this Agreement as are required to survive its
termination or expiry in order to give full force and effect to the
rights and obligations of the parties hereunder shall be deemed to so
survive.
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9.11 Termination of this Agreement does not constitute either party's
exclusive remedy for breach or non-performance by the other party and
each party is entitled to seek all other available remedies, both legal
and equitable, including injunctive relief.
10. NON-SOLICITATION
10.1 During the Term, neither party shall employ, solicit or make any offers
to employ any employees used by the other in connection with the
performance of the Services, without the prior written consent of the
other, which consent shall not be unreasonably withheld. The
non-breaching party shall be entitled, in addition to any other
remedies it may have at law or in equity, to a payment from the party
in breach of this Clause in an amount equal to three months' salary of
any employee that party employs, solicits or offers to employ in breach
of this Clause.
11. CONFIDENTIALITY
11.1 During the course of this Agreement a party (the "Receiving Party") may
come into possession of technology, computer software, documentation,
trade secrets, products, copyrights or other confidential and
proprietary information ("Confidential Information") of the other (the
"Disclosing Party").
11.2 The Receiving Party:
11.2.1 may not use Confidential Information for a purpose other than
the performance of its obligations under this Agreement;
11.2.2 may not disclose Confidential Information to a person except
with the prior written consent of the Disclosing Party or in
accordance with clauses 11.3 and 11.4; and
11.2.3 shall make every effort to prevent the use or disclosure of
Confidential Information.
11.3 The Receiving Party may disclose Confidential Information to any of its
directors, other officers, employees and sub-contractors (a
"RECIPIENT") to the extent that disclosure is desirable for the
purposes of this Agreement.
11.4 The Receiving Party shall ensure that a Recipient is made aware of and
complies with the Receiving Party's obligations of confidentiality
under this Agreement as if the Recipient was a party to this Agreement.
11.5 Clauses 11.2 to 11.4 do not apply to Confidential Information which:
11.5.1 is at the date of this Agreement, or at any time after that
date becomes, publicly known other than by the Receiving
Party's or Recipient's breach of this Agreement;
11.5.2 can be shown by the Receiving Party to the Disclosing Party's
reasonable satisfaction to have been known by the Receiving
Party before disclosure by the Disclosing Party to the
Receiving Party; or
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11.5.3 is required to be disclosed by law or any regulatory
authority.
11.6 The Receiving Party`s obligation with respect to the Confidential
Information of the Disclosing Party shall survive the termination or
expiry of this Agreement.
12. NON-COMPETITION
12.1 The parties agree to be bound by the restrictions placed upon them in
Clause 10 of the Shareholders Agreement.
12.2 During the term of this Agreement, NEWCO will not sell or license any
services or Products licensed under this Agreement directly to HR's
Customers receiving travel management services without giving notice to
HR, requesting sales assistance, and sharing any profits received from
such sale or license with HR as outlined below:
(a) For any accounts won by NEWCO that NEWCO and HR jointly
solicited and on which HR provides sales assistance, NEWCO and
HR shall share the NEWCO profits equally on a quarterly basis,
after first deducting amortization, start-up and
implementation costs;
(b) For any new accounts won by NEWCO that HR did not provide
assistance in soliciting, NEWCO shall keep all profits.
12.3 Should an HR Customer request that HR be omitted from the processing
cycle on any transaction, NEWCO shall share equally with HR all profits
which NEWCO makes in excess of fifty cents ($ .50) on each such
transaction.
12.4 During the Term, NEWCO may compete with HR for new accounts including
from divisions, affiliates or subsidiaries of HR's Customers which are
not existing customers of HR, provided that NEWCO does not undercut HR.
12.5 For all NEWCO Customers who do not use the services of a travel agency,
NEWCO hereby grants to HR a right of first refusal to provide travel
management services to NEWCO for such Customers on an outsourced basis.
All such services shall be provided to the Customer as private label
services under NEWCO's OFS brand name.
12.6 Except to the extent that this Agreement, or any agreement or
arrangement of which it forms part, is a non-notifiable agreement
pursuant to Section 27A of the Restrictive Trade Practices Act 1976
(the "ACT"), no provision of this Agreement, or of any agreement or
arrangement of which it forms part, by virtue of which such agreement
or arrangement is subject to registration under the Act shall take
effect until the day after particulars of such agreement or arrangement
have been duly furnished to the Director General of Fair Trading
pursuant to Section 24 of the Act.
13. JOINT OVERSIGHT COMMITTEE
13.1 JOC PROCEDURES. The following representatives will comprise a joint
oversight committee (the "JOC") which will meet at least quarterly. The
functions of such committee, among other things, will be to carry out
its obligations as expressed
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throughout this Agreement, to provide Product and Services direction,
review and analyze changes in the market, prioritize resources to
improve performance of the parties' obligations hereunder, review and
analyze the performance of the parties, and to review recommendations
and suggestions to enhance the performance of the Services.
NEWCO Designees (2): Bill Brindle
Tony Berry
HR Designees (2): Barry Wheeler
Nigel Meyer
13.2 If a JOC Member resigns or leaves its employer or for any other reason
ceases to be a JOC Member, the party with a vacancy will promptly
appoint a replacement.
13.3 JOC PROCEDURES. All actions of the JOC will be subject to the following
process. An equal number of appointed representatives from each party
must be in attendance for the JOC to conduct a meeting.
13.3.1 Each party hereby appoints the following individual as its
Management Representative for purposes of this Agreement:
NEWCO: Chris Fry
HR: David Young
13.3.2 Thirty (30) days prior to replacing its Management
Representative, HR or NEWCO, as the case may be, shall notify
the other in writing identifying its proposed replacement.
13.4 REPORT CONTENTS. NEWCO will prepare (i) a listing of key Service
activities, and (ii) definitions of measurements of qualitative and
quantitative service performance levels for each such key Service
activity ("Service Performance Levels"), and will submit such listings
and definitions to the JOC for approval. The Service Performance Levels
will be used to measure HR's and NEWCO's performance of their
responsibilities under this Agreement.
13.5 Performance Levels. NEWCO will deliver to the JOC for each calendar
quarter (within thirty (30) days of the end of such quarter),
commencing with the calendar quarter beginning April 1, 2000, service
performance reports ("SERVICE PERFORMANCE REPORTS") that identify, for
each JOC approved key Service activity, the Service Performance Level
for that activity. The JOC will review the parties' performance during
the relevant time period (including but not limited to the information,
contained in the Service Performance Reports), and will provide
feedback to both NEWCO and HR regarding the performance of their
respective responsibilities under this Agreement. The JOC will also
periodically review the definitions and measurements
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used in the Service Performance Reports and revise them as necessary to
reflect the most appropriate measures of NEWCO and HR performance.
14. GOVERNING LAW AND DISPUTE RESOLUTION
14.1 This Agreement is governed by and shall be construed in accordance with
English law.
14.2 INITIAL PROCEDURES. The parties shall make all reasonable efforts to
resolve all disputes without resorting to litigation. If a dispute
arises between the parties, the JOC Representatives will attempt to
reach an amicable resolution. If either JOC Representative determines
that an amicable resolution cannot be reached, such JOC Representative
shall submit such dispute in writing to the Management Representatives
(a "Dispute Notice"), who shall use their best efforts to resolve it or
to negotiate an appropriate modification or amendment.
14.3 ESCALATION. Except as otherwise provided in this Agreement, neither
party shall be permitted to bring proceedings against the other (save
for injunctive relief) until the earlier of (i) the date the Management
Representatives conclude in good faith that an amicable resolution of
the dispute through continued negotiation is unlikely, or (ii) sixty
days from the date of submission of a Dispute Notice by either party.
14.4 The courts of England and Wales have exclusive jurisdiction to hear and
decide any suit, action or proceedings, and to settle any disputes,
which may arise out of or in connection with this Agreement
(respectively, "PROCEEDINGS" and "Disputes") and, for these purposes,
each party irrevocably submits to the jurisdiction of the courts of
England and Wales.
14.5 Each party irrevocably waives any objection which it might at any time
have to the courts of England and Wales being nominated as the forum to
hear and decide any Proceedings and to settle any Disputes and agrees
not to claim that the courts of England and Wales are not a convenient
or appropriate forum.
15. GENERAL
15.1 This Agreement, including the Exhibits attached hereto, represents the
entire understanding and agreement between the parties relating to the
subject matter, and supersedes any and all previous discussions and
communications. No employee or agent of NEWCO nor any distributor is
authorized to make any additional representations or warranties related
to the services provided hereunder or the Software. Any subsequent
amendments and/or additions hereto are effective only if in writing and
signed by both parties.
15.2 All media releases, public announcements and public disclosures by
either party relating to this Agreement, but not including any
disclosure required by legal, accounting or regulatory requirements,
shall be approved by both parties prior to such release.
15.3 Neither party may assign or delegate its rights or obligations under
this Agreement without the prior written consent of the other, save
that a party shall not unreasonably
14
<PAGE> 17
withhold its consent to the assignment or delegation by the other of
its rights and/or obligations to a majority-owned subsidiary of that
party, provided that it is satisfied that such subsidiary has the
financial and other resources in order properly to perform that party's
obligations hereunder. Subject to the foregoing limitation on
assignment, this Agreement is binding upon and inures to the benefit of
the successors and assigns of the respective parties hereto.
15.4 NEWCO acknowledges that HR is entering into this agreement on behalf of
and for the benefit of its subsidiaries and its subsidiaries shall
accordingly have the benefit of and shall be entitled to enforce all
rights granted to HR under this Agreement.
15.5 The failure of either party at any time to require performance by the
other party of any provision hereof is not to affect in any way the
full rights of such party to require such performance at any time
thereafter, nor is the waiver by either party of a breach of any
provision hereof to be taken or held to be a waiver of the provision
itself or any future breach.
15.6 The parties hereto are independent contractors, and nothing in this
Agreement is to be construed to create a partnership, joint venture, or
agency relationship between NEWCO and HR.
15.7 If any provision of this Agreement, other than Clause 12, is found to
be prohibited by or invalid under applicable law, such provision shall
be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining
provisions of this Agreement which shall remain in force.
15.8 A notice under or in connection with this Agreement shall be in writing
and shall be delivered personally or sent by first class post pre-paid
recorded delivery (or air mail if overseas) or by telex or by fax, to
the party due to receive the notice, at its address set out in this
Agreement or another address specified by that party by written notice
to the other.
15.9 In the absence of evidence of earlier receipt, a notice is deemed
given:
15.9.1 if delivered personally, when left at the address referred to
in clause 15.6;
15.9.2 if sent by post except air mail, two days after posting it;
15.9.3 if sent by air mail, six days after posting it;
15.9.4 if sent by telex, when the proper answer-back is received; and
15.9.5 if sent by fax, on completion of its transmission.
16. COUNTERPARTS
This Agreement may be executed in any number of counterparts, which
shall together constitute one Agreement.
15
<PAGE> 18
IN WITNESS WHEREOF, the undersigned duly authorized representatives of the
parties hereto have made and entered into this Agreement.
Fortdove Limited Hogg Robinson plc
Signed: Signed:
---------------------------- ---------------------------
16
<PAGE> 19
SCHEDULE 1
SERVICES
SERVICE BUREAU/OUTSOURCING AGREEMENT
FOR ONLINE FULFILMENT SERVICES
OFS SOFTWARE LICENSE AGREEMENT:
<TABLE>
<CAPTION>
PRODUCT MODULES GDS VERSION DATE AVAIL. COMMENTS
- ------- ------- --- ------- ----------- --------
<S> <C> <C> <C> <C> <C>
OFS Ticket Partner.................. Sabre June '00 Dates for delivery of this product are
tentative
OFS Ticket Partner.................. Amadeus June '00 pending development meetings with OFS
OFS Ticket Partner.................. Galileo June '00 for HR BOS integration.
OFS Message Partner................. April '00 Available 30 days after data centre build.
Project Kincade..................... 4Q '00
OFS Scholar......................... July '00
</TABLE>
NOTES:
1 Assumes latest release and components of OFS Ticket Partner along with
future upgrades and releases. Ticket Partner collects data from a ticketed
PNR which is also now an internet application.
2 Assumes latest release and components of OFS Message Partner along with
future upgrades and releases. Message Partner is a total E-mail management
system.
3 Assumes latest release and components of OFS Scholar along with future
upgrades and releases. Scholar is an online knowledge base application for
staff to access processes, procedures, technology and product updates.
4 Assumes latest release and components of the application known as Project
Kincade. This product facilitates the consolidation of client data from the
OFS transaction dealing components (Ticket Partner, Message Partner, CoRRe
and Voice).
5 Assumes International variants of GDS (Global Distribution Systems) and not
US Domestic variants.
6 The software will be modified to run independently of Sabre's Tbase system.
Data streams will be structured to allow connection to other back office
systems.
17
<PAGE> 20
<TABLE>
<S> <C> <C>
- --------------------------------------------------------------------------------
AREA DESCRIPTION HANDLED BY:
- --------------------------------------------------------------------------------
Quality Control Automated quality control tests as OFS
defined by policy. This will include
email sent from CoRRe(TM) re: quality
control, schedule changes, industry
notifications, etc.
- --------------------------------------------------------------------------------
Non-Client contract 1. Schedule Changes - Automated OFS
Support schedule changes will be changes
that do not require any contact
with the client. This service is
provided to "weed out" PNRs from
the schedule change queues that
do not require agent information.
2. Client contact that is e-mail OFS
driven to a mass audience. An
example would be a new change
in the industry such as security
measures changing (Gulf War)
where all clients must be advised.
Bulk e-mail would be sent.
- --------------------------------------------------------------------------------
Technical and 1. Technical support for users OFS
Navigational Support experiencing technical problems
(Telephone) outside the application (example:
browser issues).
2. Coaching for inexperienced or OFS
confused users on functionality
of the application.
- --------------------------------------------------------------------------------
Technical and 3. Technical support for users OFS
Navigational Support experiencing technical problems
(Email) outside the application (example:
browser issues).
4. Coaching for inexperienced or OFS
confused users on functionality
of the application.
- --------------------------------------------------------------------------------
Application Anomalies or problems with the OFS
Management (Incident application are logged, researched
Reporting) to identify root cause (i.e. CRS,
application, training, content, etc.)
and reported to responsible party for
correction.
- --------------------------------------------------------------------------------
Ticketing Ticketing - Paper tickets are OFS
driven to printers residing at the
appropriate location (OFS or the
agency of record. E-tickets are
driven from OFS but recorded on
appropriate BSP location.
- --------------------------------------------------------------------------------
Itinery/Receipt E-ticket receipts and/or itineraries OFS
Distribution can be distributed via e-mail, fax or
mail.
- --------------------------------------------------------------------------------
BSP Processing 5. IAR processing. This will be HR
determined by ticketing
requirements.
6. OFS will process all BSP reports
for tickets by accessing the
back-office system being used
for that office's BSP report.
- --------------------------------------------------------------------------------
Customer Resolution Post-ticketing issues are OFS
researched, i.e. debit memos, lost
tickets, voids, customer
satisfaction problems, etc.)
- --------------------------------------------------------------------------------
Travel Support 7. Original booking, pre-ticket HR office of
(Telephone and Email) changes, En-route support, and record
all other calls for users
(changes, seat upgrades,
questions, exchanges, refunds,
etc).
8. Schedule changes that require
manual intervention.
9. OFS will provide access to
Message Partner for all
itineraries and travel related
questions and e-mail inquiries
and communication.
- --------------------------------------------------------------------------------
Packaging & 10. Paper Tickets - OFS or remote HR office of
Distribution (Shipping) office satellite ticket record or OFS
printers (STP's).
11. Exchange Tickets will be
driven from OFS since the
majority will be issued
from there originally.
12. Overnight Mail - OFS.
Note: All consumable costs are
passed to HR (envelopes, postage,
overnight services, ticket
jackets, invoices).
- --------------------------------------------------------------------------------
MIS Providing travel management data HR
to clients (feed of all
transactions will be provided
to HR by OFS for consolidation).
- --------------------------------------------------------------------------------
Accounting 13. Billing the customer on
chargeable activities.
14. Hotel and car commission
tracking.
15. Overrides and revenue
sharing.
- --------------------------------------------------------------------------------
Accounting Traditional management provided HR
Management by HRP today.
Note: OFS will provide a Program.
Manager to work with the account
manager and travel manager as
needed.
- --------------------------------------------------------------------------------
Manual Transaction Manual bookings made by agents. HR office of
Processing record
- --------------------------------------------------------------------------------
Schedule Change Automated processing of schedule OFS and HR
Processing changes - Note: PNRs requiring office of
client contact will be sent to HR record
and those that can be handled via
email will be processed by OFS.
================================================================================
</TABLE>
<PAGE> 21
SCHEDULE 2 CHARGES
NEWCO -- Hogg Robinson Outsource "Corporate OFS"
Account by Account basis
Serviced in OFS Facilities
Assumes Travel Agency takes ALL calls
[*] emails per ticket (excess emails charged at $[*] per email)
Price [*]/ticket
23
<PAGE> 1
EXHIBIT 23.1
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the use of our reports
(and to all references to our Firm) included in or made part of this
registration statement.
/s/ Arthur Andersen LLP
Atlanta, Georgia
March 13, 2000
