Exhibit 10.16
CONFIDENTIAL TREATMENT REQUESTED BY 800 TRAVEL SYSTEMS, INC. FOR PORTIONS OF
THIS AGREEMENT INDICATED BY [**..**] AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.
AGREEMENT FOR DEVELOPMENT SERVICES
November 5, 1999 (the "Effective Date"), for and in consideration of
the mutual promises herein, 800 Travel Systems, Inc. located at 0000 Xxxx
Xxxxxxx, Xxx. 000, Xxxxx, XX 00000 and incorporated in Delaware ("Customer") and
Sabre Inc., formerly known as The SABRE Group, Inc., located at 0000 Xxxx Xxxxxx
Xxxx., Xxxx Xxxxx, Xxxxx 00000 and incorporated in Delaware ("Sabre")
WHEREAS, Sabre provides computerized reservations services with related
data processing activities through its SABRE(R) computer reservation system
("Sabre System"); and
WHEREAS, Customer and Sabre have entered into a Sabre Subscriber
Agreement dated May 21, 1999 ("Subscriber Agreement") for access to and use of
the Sabre System; and
WHEREAS, Customer wishes to obtain and Sabre wishes to provide certain
software development and consulting services related to the creation of an
Internet travel reservation booking site, including its integration with
Customer's interactive chat site, for use in conjunction with the Sabre System
and subject to the provisions of the Subscriber Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained herein, the
parties hereto agree as follows:
1. DESCRIPTION OF SERVICES. Sabre will perform certain consulting and
software development services for Customer upon the terms and
conditions herein, as such services are more particularly described in
Exhibit A, which is attached hereto and incorporated by reference
herein (the "Services"). Any software delivered under Exhibit A as part
of the Services shall be referred to as "the Software." This Agreement
relates only to the Services and does not relate to additional services
as defined below that Sabre may be asked to perform on Customer's
behalf.
2. ACCEPTANCE TESTING. During the thirty (30) day period following
delivery, Customer shall perform user acceptance testing of the
Software deliverable, pursuant to mutually agreed upon
Customer-provided test scripts, to confirm material conformity of the
Software with the functional description identified in Exhibit A. Sabre
shall provide assistance to Customer during such user acceptance
testing at no additional charge. Customer shall notify Sabre
immediately of any material non-conformities between the Software and
the functionality described in Exhibit A. Sabre shall make corrections
in any such material non-conformities of the Software to the
functionality identified in Exhibit A and re-submit such previously
non-conforming portion for re-testing. Acceptance shall take place when
the Software conforms to the functionality identified in Exhibit A or
when the Software is put in productive use by Customer, whichever is
earlier ("Acceptance").
3. PAYMENT. (a) Customer shall pay Sabre [**..**] for the Services due and
payable as follows: [**..**] payable within [**..**] after Acceptance.
(b) Additional services not described in this Agreement ("Additional
Services") which are requested by Customer shall be provided at a rate
of [**..**] per hour per Sabre representative. Such Additional Services
may include, but are not limited to, software modifications that may
alter the function or look of the site (the "Programming Changes").
Sabre shall make all Programming Changes requested by Xxxxxxxx, except
where the Programming Changes would infringe upon Xxxxx's trademark
rights, for a period of [**..**] days following Acceptance and up to a
maximum of [**..**] of labor time or until a Maintenance Agreement or
other Development Agreement has been signed.
(c) In addition, food, lodging and related expenses incurred by a Sabre
representative in connection with any travel requested by Customer in
connection with the Services, will be reimbursed by Customer at the
rate of [**..**] per person ("Per Diem"). The Per Diem is subject to
adjustment from time to time in accordance with rates published by the
U.S. government for the city where the Services are being performed
("CONUS"). Customer shall reimburse Sabre for actual air and local
transportation expenses incurred in connection with the performance of
the Services and approved in advance by Customer.
(d) Customer shall reimburse Sabre as additional fees for (i) all
taxes, excluding any interest or penalties, imposed on Sabre arising
from this Agreement excluding U.S. income taxes, and (ii) any
additional taxes, including U.S. income taxes, imposed on Sabre as a
result of any reimbursements of taxes under clause (i) or (ii) of this
paragraph 3(d).
(e) Fees for additional Services in paragraph 3(b) and expenses in
paragraph 3(c) shall be due thirty (30) days after receipt of invoice
from Sabre. Any request by Customer for back-up documentation relating
to a particular Sabre invoice must be received by Sabre within thirty
(30) days of receipt of such invoice by Customer.
4. OWNERSHIP. Sabre shall retain all right, title and interest in and to
any deliverable provided to Customer hereunder. Sabre hereby grants to
Customer, in consideration for the payment of all fees and charges
identified in paragraph 3 above, a royalty-free, non-exclusive,
non-transferable right and license to use, and copy any Sabre
deliverable solely for the purpose of Customer, its employees and its
customers accessing the Sabre System for travel-related information or
to make travel reservations. Customer shall not market, sub-license or
otherwise transfer any Sabre deliverable to any third party without the
prior written consent of Sabre which consent will not be unreasonably
withheld, unreasonably delayed or unreasonably conditioned. Any
sub-license of the Software will be subject to an additional [**..**]
per sub-licensed site and will require Customer to execute a separate
Software Support and Maintenance Agreement with Sabre for each
sub-licensed site. Any export of the Software or any intellectual
property delivered hereunder shall be in accordance with the U.S.
Department of Commerce regulations and all applicable laws or
regulations.
5. NON-DISCLOSURE. This Agreement and any information disclosed by either
party to the other pursuant to this Agreement, will be governed by that
certain Non-Disclosure Agreement and its Supplement entered into
between the parties dated November 5, 1999.
6. RELATIONSHIP. Sabre shall be and act as an independent contractor
hereunder and no employee of Sabre shall be deemed to be an employee of
the Customer for any purpose whatsoever.
7. INDEMNIFICATION. (a) Sabre will defend, indemnify and hold harmless
Customer, its affiliates, subsidiaries, successors and assigns and
their officers, directors, agents and employees, jointly and severally,
at Sabre's expense, from, against, and with respect to any claim,
action, suit or other proceeding arising out of or in any manner,
incident, relating, or attributable to third party claims of direct
infringement of any duly issued United States patent, copyright,
trademark, service mark, trade dress, trade secret, or other
proprietary right resulting from the supply to Customer by Sabre, or
the use by Customer or its approved sub-licensees, of the Software as
delivered ("Infringement"). Sabre shall pay all damages and costs
(including without limitation reasonable attorney's fees) finally
awarded against Customer which are attributable to such Infringement.
(b) Should the Software as delivered by Sabre hereunder
become, or in Sabre's opinion be likely to become the subject of a
claim of Infringement, then Sabre may, at its option and expense; (i)
procure for Customer the right to use the Software free of any
liability for Infringement; (ii) replace or modify the Software with a
non-Infringing substitute otherwise complying with all the
functionality identified in Exhibit A, or (iii) repurchase the Software
for its depreciated value (based upon a three year straight line
depreciation schedule), and thereby terminate this Agreement. Sabre
shall not be obligated to defend, or be liable for costs and damages,
if the Infringement arises out of (1) modification of the Software
other than by Sabre or its agent, (2) the compliance with Customer's
specifications in Exhibit A (to the extent the same go beyond
specifications of Software previously developed by Sabre), (3) use of
the Software in combination with or in addition to the equipment or
computer programs not licensed or developed by Sabre, or (4) a breach
of this Agreement by Customer.
(c) Each party agrees to indemnify and hold each other, their
affiliates, subsidiaries, successors and assigns and their officers,
directors, agents and employees, jointly and severally, harmless
against any suit, claim, damages and expense (including reasonable
attorneys' fees) by reason of (i) any personal injuries or tangible
property damage which may occur as the result of its acts or omissions
in the course of the performance of this Agreement, or (ii) breach of
its obligations under this Agreement.
(d) Except as expressly provided for in this paragraph 7,
Customer shall defend, indemnify and hold harmless Sabre from any and
all claims or causes of action arising out of Customer's or any of its
approved sub-licensee's use of the Software, and pay any and all
damages and expenses (including reasonable attorneys fees incurred by
Sabre) in connection therewith, regardless of the circumstances of the
claim or damage.
(e) All indemnification obligations under this paragraph 7
will be subject to the following requirements: (i) the indemnified
party shall provide the indemnifying party with prompt written notice
of any claim; (ii) the indemnified party shall permit the indemnifying
party to assume and control the defense of any action upon the
indemnifying party's written acknowledgment of the obligation to
indemnify (unless, in the opinion of counsel of the indemnified party,
such assumption would result in a material conflict of interest); and
(iii) the indemnifying party shall not enter into any settlement or
compromise of any claim without the indemnified party's prior written
consent, which shall not be unreasonably withheld. In addition, the
indemnified party may, at its own expense, participate in its defense
of any claim.
8. WARRANTY. SABRE DISCLAIMS, AND CUSTOMER HEREBY WAIVES ALL EXPRESS AND
IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO ANY IMPLIED WARRANTY
OF MERCHANTABILITY OR FITNESS FOR PURPOSE OF ANY PRODUCTS OR SERVICES
FURNISHED HEREUNDER. CUSTOMER UNDERSTANDS THAT PRODUCTS AND SERVICES
ARE PROVIDED "AS IS".
9. LIMITATION OF LIABILITY. EXCEPT FOR SABRE'S INDEMNIFICATION OBLIGATIONS
UNDER PARAGRAPHS 7(a) AND 7(c), CUSTOMER WAIVES ALL LIABILITY IN TORT
OF SABRE, INCLUDING, WITHOUT LIMITATION, ANY LIABILITY ARISING FROM
NEGLIGENCE. SABRE SHALL NOT BE LIABLE TO CUSTOMER FOR ANY INCIDENTAL OR
CONSEQUENTIAL DAMAGES, UNDER ANY CIRCUMSTANCES, INCLUDING, BUT NOT
LIMITED TO, LOST PROFITS, REVENUE OR SAVINGS, OR THE LOSS OF USE OF ANY
DATA, EVEN IF SABRE HAD BEEN ADVISED OF, KNEW, OR SHOULD HAVE KNOWN, OF
THE POSSIBILITY THEREOF. EXCEPT FOR XXXXX'S INDEMNIFICATION OBLIGATIONS
UNDER PARAGRAPH 7(a) AND, WITH REGARD TO CLAIMS ARISING FROM SABRE'S
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, UNDER PARAGRAPH 7(c), UNDER NO
CIRCUMSTANCES SHALL SABRE'S LIABILITY IN CONNECTION WITH THE SERVICES
EXCEED IN THE AGGREGATE THE TOTAL AMOUNT OF CHARGES ACTUALLY PAID TO
SABRE PURSUANT TO THIS AGREEMENT.
10. CHOICE OF LAW. THIS AGREEMENT AND ANY DISPUTE ARISING HEREUNDER SHALL
BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF TEXAS WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS.
11. TERM. This Agreement shall be effective as of the Effective Date and
shall continue in effect until termination or expiration of the
Subscriber Agreement , or any renewal thereof.
12. NOTICES. Any notice, demand or document which any party is required or
desires to give or deliver to or make upon the other party shall be in
writing and shall be (a) personally delivered or (b) delivered by
depositing in the United States Mail, registered or certified, return
receipt requested, with postage prepaid, addressed as follows:
If to Sabre:
0000 Xxxx Xxxxxx Xxxxxxxxx
XX0000
Xxxx Xxxxx, XX 00000
ATTN: President
with cc to General Counsel: 0000 Xxxx Xxxxxx Xxxxxxxxx
XX0000
Xxxx Xxxxx, XX 00000
ATTN: General Counsel
If to Customer: 0000 Xxxx Xxxxxxx, Xxx. 000
Xxxxx, XX 00000
ATTN: Xxxx Xxxxxxxx
or to such other address as the respective parties hereto shall
designate by notice similarly given to the other party. Any such
notice, demand or document shall be deemed to be effective upon receipt
of the same by the party to whom said notice, demand or document is
addressed.
13. SAVINGS CLAUSE. If any provision of this Agreement is prohibited by law
or held to be invalid, illegal or unenforceable, the remaining
provisions hereof shall not be affected, and this Agreement shall
continue in full force and effect as if such prohibited, illegal or
invalid provision had never constituted a part hereof, with this
Agreement being enforced to the fullest extent possible.
14. ENTIRE AGREEMENT. This Agreement, together with Exhibit A, constitutes
the entire agreement between the parties related to the subject matter
hereof, supersedes any prior agreement between the parties relating to
the subject matter hereof, and shall not be changed except by written
agreement signed by a duly authorized representative of each party.
15. PROMOTIONS. Notwithstanding anything herein to the contrary, Sabre or
Customer may publicly disclose that Sabre and Customer have entered
into this Agreement and that Sabre has agreed to provide the Services
to Customer.
16. OTHER PRODUCTS. Except for the parties' obligations under Paragraphs 4
and 5, nothing herein shall prohibit, or in any way limit, the parties'
rights to use, develop or market existing or subsequently developed or
modified software, technology or concepts, or to use their expertise,
skills or knowledge acquired during the performance of the Services
rendered under this Agreement in any current or subsequent endeavors.
17. FORCE MAJEURE. Sabre shall be excused from performing hereunder to the
extent that it is prevented from performing as a result of any act or
event which occurs and is beyond the reasonable control of Sabre,
including, without limitation, acts of God, war, or any action of a
governmental entity; provided that Sabre provides Customer with prompt
written notice thereof and uses all reasonable efforts to remove or
avoid such causes.
19. MISCELLANEOUS. Any rights and obligations which expressly or by their
nature are intended to survive and continue after termination of this
Agreement, including, without limitation, paragraphs 4, 5, 7, 8, 9 and
16 shall so survive and bind the parties, their successors and assigns.
The parties warrant and represent that they are authorized to enter
into this Agreement and that this Agreement is binding and enforceable
against them.
IN WITNESS WHEREOF, the Customer and Xxxxx have executed this Agreement
on the date set out below.
800 Travel Systems, Inc. Sabre Inc.
By: By:
----------------------------------------- ----------------------------------
(Signature) (Signature)
Name: Xxxx Xxxxxxxx Name: Xxxxxxx Xxxxx
----------------------------------------- ----------------------------------
(Print Name) (Print Name)
Title: Chief Executive Officer Title: Vice President
----------------------------------------- ----------------------------------
PCC: B8T3 Date:
EXHIBIT A
PHASE I/II CUSTOMER SYSTEM REQUIREMENTS
The following exhibit enumerates the specific functionality of the Software, to
be delivered and available for Customer's testing within [**..**] of the
execution of this Agreement by Xxxxx, provided however, delivery of the Services
may be extended by 12 weeks by Xxxxx as a result of Sabre's Year 2000
freeze-related delays upon prior written notice to Customer. Any functionality
not specifically delineated in this exhibit will not be provided, except as an
enhancement to be separately negotiated following completion of the Services.
[**..**]
