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EXHIBIT 10.55
DISTRIBUTION SERVICES AGREEMENT FOR
HOLIDAY INN WORLDWIDE
This Distribution Services Agreement is entered into by and between
HOLIDAY HOSPITALITY CORPORATION (all of the rights, duties and interests of
Holiday Inns, Inc. related to this Agreement having been assigned to and
assumed by Holiday Hospitality Corporation on April 28, 1997) doing business as
Holiday Inn Worldwide ("HIW"), hereinafter referred to as "HHC", and PEGASUS
SYSTEMS, INC., hereinafter referred to as "Pegasus", to be effective as set
forth herein.
1. General Purpose. It is intended by this Agreement to set forth the
mutually agreed terms of an agreement pursuant to which Pegasus is to provide
HHC services for the processing of transactions and distribution of information
in connection with the reservation of HHC hotel rooms as more specifically set
forth herein.
2. Definitions. In connection with this Agreement, the following
definitions shall apply:
(i) Corporate Travel Coordinators. Those persons or entities
responsible for the coordination of travel arrangements for corporate
travel departments who utilize UltraDirect.
(ii) Effective Date. The Effective Date of this Agreement shall be
the date both parties have executed this Agreement.
(iii) GDS. One or more of the following Global Distribution Systems:
Sabre, Galileo, System One, Worldspan or Amadeus or any other Global
Distribution System created in the future resulting from a merger or
acquisition of any of the GDS's named herein or newly formed at any
time during the term of this Agreement with whom HHC has an agreement
and with whom Pegasus or its affiliate has an interface.
(iv) HCC Agreements. Those certain agreements between HCC and Rescom
Services, Inc. and HCC and Holiday Inns, Inc. dated December 21,
1994. All of HII's rights, duties and interests under those
agreements were assigned to, and assumed by HHC on April 28, 1997.
(v) HHC Reservation System. HHC's central reservation system.
(vi) HIW Hotels. HIW Hotels shall mean all Holiday Inn(R) Hotels and,
Crowne Plaza(R) Hotels and Resorts Worldwide, and all other
properties currently participating in the HHC Reservations System,
and at HCC's option, other hotel brands or individual hotels which
HCC may develop or acquire during the term of this Agreement.
INFORMATION CONTAINED IN THIS AGREEMENT HAS BEEN OMITTED SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST AND HAS BEEN FILED SEPARATELY WITH THE S.E.C.
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(vii) Housing Reservation Provider. A Housing Reservation Provider is
any person or entity who has entered into an agreement with Pegasus
whereby Pegasus provides an Interface providing the Housing
Reservation Provider with the ability to make reservations in the HHC
Reservation System.
(viii) Interface. An Interface is the hardware, software and
attendant technical support required to produce computer to computer
communications between the HII Reservation System and any one of the
following: (i) Reservation Providers, (ii) Housing Reservation
Providers, (iii) Third Party Distribution Systems, (iv) TravelWeb or
(v) Corporate Travel Coordinators.
(ix) Lodging Connect. A service of Pegasus providing a connection
with hotel or other lodging entity reservation systems which enables
accessors to make, modify and cancel reservations.
(x) Lodging Select. A service of Pegasus providing a connection with
hotel or other lodging entity reservation systems which enables
accessors to obtain information, including, without limitation,
availability and rates, on hotel and other lodging properties in
response to selected search criteria.
(xi) Net Reservations. Net Reservations within a particular time
period equals the number of reservations processed through one of the
Services within such time period, less the number of reservations as
to which notice of cancellation in one of the Services is received
electronically by one of the Services within such time period and
includes Type A & B reservations and cancellations.
(xii) Pegasus. Pegasus shall mean Pegasus Systems, Inc. and, to the
extent the Services provided pursuant to this Agreement are provided
by any subsidiary of Pegasus, its subsidiary companies The Hotel
Industry Switch Company, The Hotel Clearing Corporation and
TravelWeb, Inc.
(xiii) Private Label Web Site. An Internet site on the World Wide Web
initially developed and subsequently maintained by Pegasus in the
name of and for the use and benefit of HHC and HIW Hotels with an
Interface to Pegasus' Reservation Functionality and HHC's Property
Information Database.
(xiv) Property Information Database. A digital database of HIW Hotels
which is (i) capable of being accessed by Third Party Distribution
Systems and (ii) where functionality exists, capable of permitting
the accessor of the Third Party Distribution System to make, amend
and cancel reservations in the HHC Reservation System.
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(xv) Property Information Distribution Service. A service of Pegasus
to provide access to the Property Information Database to Third Party
Distribution Systems and, where available, to provide accessors of
Third Party Distribution Systems the capability to make and cancel
reservations at participating hotels.
(xvi) Reservation Functionality. The capability to determine room
availability for specific dates and to make, change and cancel
reservations at a hotel participating in the Reservation
Functionality.
(xvii) Reservation Provider. A Reservation Provider is any person or
entity with the present or future capability to connect directly with
the UltraSwitch(R) or via a GDS, a Third Party Distribution System,
the UltraRes Service, the UltraDirect Service, TravelWeb or HII's
Private Label Web Site for the purpose of making reservations with
hotels participating in UltraSwitch.
(xviii) Services. The Services shall mean those services to be
provided by Pegasus as set forth herein and specifically identified
on Exhibits A, B, C, D, E and F hereof.
(xix) Status Messages. A Status Message is a message indicating the
availability of a room type has changed for a single date in a single
property.
(xx) Third Party Distribution Systems. Internet sites or providers of
content to Internet sites with whom Pegasus contracts to provide the
Property Information Database and/or Reservation Functionality.
(xxi) Transactions. For purposes of Sections 7, 12(ii)(c) and 15 of
this Agreement, Transactions shall mean a reservation processed
through UltraSwitch for an HIW Property received via a GDS or from a
person or entity providing Housing Reservation services for meetings
and conventions or from a travel agent or Corporate Travel
Coordinator or from an accessor of the Internet. Notwithstanding the
above, any reservations made by third parties with whom HHC has
created a direct UltraRes or UltraDirect interface shall not
constitute Transactions for purposes of this definition.
(xxii) TravelWeb. The registered trade name and service xxxx of
Pegasus for its service to provide Internet access to information on
hotels, resorts, airlines and other travel and lodging subjects with
the interactive capability to permit an accessor of TravelWeb to make
a reservation at an HIW Hotel.
(xxiii) UltraDirect. A service of Pegasus to provide Corporate Travel
Coordinators access to Lodging Select and Lodging Connect
capabilities
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and direct access by travel agents to a participating hotel
reservation system by-passing the GDSs.
(xxiv) UltraRes(SM). UltraRes(SM) is a service of Pegasus to provide
an Interface between Housing Reservation Providers and the HHC
Reservation System with the capability to provide convention or
meeting group room confirmation numbers.
(xxv) UltraSwitch(R). The UltraSwitch(R) is a service of Pegasus to
provide an Interface between Reservation Providers and hotel
reservation systems with the capability to provide immediate room
confirmation numbers for each hotel property participating in
UltraSwitch(R).
(xxvi) Warrant. The Warrant shall mean that certain Pegasus Systems,
Inc. Common Stock Purchase Warrant substantially in the form attached
hereto and marked Exhibit G.
3. Distribution Services Provided by Pegasus. Pegasus hereby agrees to
provide to HHC the following distribution services:
(i) UltraSwitch services as more specifically set forth on Exhibit A
attached hereto;
(ii) UltraDirect services as more specifically set forth on Exhibit B
attached hereto;
(iii) UltraRes services as more specifically set forth on Exhibit C
attached hereto;
(iv) Property Information Distribution Services as more specifically
set forth on Exhibit D attached hereto;
(v) Subject to the provisions of Exhibit E hereto, Private Label Web
Site services as more specifically set forth on Exhibit E
attached hereto; and
(vi) TravelWeb service as more specifically set forth on Exhibit F
attached hereto.
4. Schedule of Implementation. The parties hereto shall diligently and in
good faith mutually agree upon a schedule of implementation with respect to the
provision of the Services and, upon completion, such schedule shall be attached
hereto as Schedule I (the
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"Schedule of Implementation"). The Schedule of Implementation may be modified
or amended by written agreement of both parties and shall be subject to the
terms and conditions set forth herein.
5. Modifications to HHC Reservation System. HHC agrees to diligently and
in good faith cooperate with Pegasus to create an operable and dependable
Interface as reasonable and necessary for Pegasus to provide the Services. HHC
agrees to modify the HHC Reservation System as required for the Interface as
reasonable and necessary to implement the Services.
6. Designation of Representative. HHC shall designate one person as the
primary point of contact with respect to the coordination, implementation and
provision of the Services as set forth herein. Pegasus shall designate one
person as the primary point of contact with respect to the coordination,
implementation and provision of the Services as set forth herein.
7. GDS Transactions. HHC agrees to process all of the HIW Hotels' GDS
Transactions via UltraSwitch and to use its best efforts to migrate one hundred
percent (100%) of its GDS Transactions to the UltraSwitch by December 31, 1997
but in no event later than March 31, 1998.
8. UltraRes and UltraDirect Specifications. Pegasus hereby grants to HHC
a royalty free right for ten (10) years from the effective date hereof to use
its UltraRes and UltraDirect specifications solely for the purpose of HHC
entering into agreements with third parties with whom Pegasus has not
contracted to create a direct interface between the HHC Reservation System and
providers of meeting and convention reservation services for UltraRes and
Corporate Travel Coordinators or travel agents for UltraDirect, as more
specifically provided on Exhibits B and C hereto.
9. Reports. Pegasus shall provide HHC monthly reports providing the
information set forth on the reports attached hereto as Schedule 2 and
statistical reports of page accesses and reservation transactions on HHC's
Private Label Web Site. HHC may request other reports or customized reports
which Pegasus, if possible, shall provide to HHC for a mutually agreed fee.
10. Term of Agreement. Unless earlier terminated as provided herein, the
term of this Agreement shall begin upon the Effective Date and shall terminate
on the last day of the sixtieth (60th) month after the Effective Date.
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11. GDS Fees. Pegasus will use commercially reasonable efforts to prevent
GDSs from charging HHC any fee or cost for the transfer of HHC's transactions
to UltraSwitch. In the event and to the extent HHC is charged any incremental
transaction fees by a GDS solely as a result of HHC processing transactions
pursuant to this Agreement, Pegasus agrees that it will pay all such fees and
agrees to indemnify HHC from and against the payment of such fees as provided
in Section 23 hereof.
12. Fees and Costs. HHC shall pay to Pegasus a fee for each of the
Services as follows:
i. For Net Reservations processed via the UltraSwitch service --
a. For the first [*] Net Reservations during each calendar
year, [*] per Net Reservation;
b. For the next [*] Net Reservations during each calendar
year, [*] per Net Reservation;
c. For the next [*] Net Reservations during each calendar
year, [*] per Net Reservation;
d. For the next [*] Net Reservations during each calendar
year, [*] per Net Reservation; and
e. For all Net Reservations in excess of [*] during each
calendar year, [*] per Net Reservation.
For purposes of determining the number of Net Reservations processed
via the UltraSwitch service, all Transactions shall be counted.
ii. For Status Messages processed via the UltraSwitch service --
a. For the first [*] Status Messages during each calendar
year, [*] for each Status Message;
b. For the next [*] Status Messages during each calendar
year, [*] for each Status Message; and
c. For all Status Messages in excess of [*] during each
calendar year, [*] for each Status Message provided
however, in the event the ratio of Status Messages to Net
Reservations exceeds [*] during a billing period, there
shall be [*] for Status Messages provided, however,
in the event the ratio of Status Messages to Net
Reservations exceeds [*] during a billing period, all
Status Messages in excess of the [*] ratio shall be
[*]. Notwithstanding the above and foregoing set forth in
this Section 12(ii), subject to HHC's rights of termination
set forth herein, for so long as HHC fully performs this
contract with respect to all of the Services
*Confidential Treatment Requested
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and includes all HIW Hotels and Transactions in the
Services, the total fee for all Status Messages during each
month shall be [*].
iii. For each Net Reservation processed via TravelWeb or a Third
Party Distribution System -- [*].
iv. For each Net Reservation originated by a Corporate Travel
Coordinator processed via the UltraDirect service -- [*].
v. For each Net Reservation originated by a travel agent processed
via the UltraDirect service -- the lesser of [*] or an amount
equal to [*] the Average GDS Fee (as hereinafter defined) but in
no event less than [*]. The Average GDS Fee is defined as the
average per transaction fee charged during the immediately
preceding month to HII by the three largest volume GDSs for
processing a Net Reservation.
vi. For each Net Reservation processed via the UltraRes service --
[*] during the period from the Effective Date to December 31,
1997, [*] during 1998 and [*] from January 1, 1999 to the date
of termination of this Agreement.
vii. For the inclusion of up to [*] properties in the Property
Information Distribution Service -- [*] per property per month
plus [*] per month for each property in excess of [*] included
in the Property Information Distribution Service; provided
however, in the event HHC elects to not utilize the Private
Label Web Site service as provided in Exhibit E the fee for the
Property Information Distribution Service shall be [*] per
property included in the service per month.
viii. Subject to the provisions of Exhibit E hereto, for the Private
Label Web Site Services -- the total fee for all Private Label
Web Site services shall be [*] per month.
13. HHC Internal Development Costs. Pegasus hereby agrees to pay HHC [*]
for HHC's internal development costs associated with the provision of the
Services. Such payment shall be made upon the date HHC begins processing one
hundred percent (100%) of its GDS transactions via the UltraSwitch Service.
14. Waiver of Certain UltraRes and UltraDirect Fees. Notwithstanding the
above, Pegasus shall not charge HHC any fee for Net Reservations or any other
fee arising out of Net Reservations or other transactions made by third parties
with whom HHC contracts direct for UltraRes and UltraDirect service pursuant to
and during the term of the License Agreement attached hereto.
*Confidential Treatment Requested
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15. Fee Contingency. Except as otherwise specifically permitted hereby,
HHC acknowledges and agrees that the fees set forth herein above for the
Services are premised upon and expressly contingent upon HHC fully performing
this contract with respect to each and all of the Services and the continued
performance by HHC of the HCC Agreements and HHC acknowledges and agrees that
in the event HHC shall fail to comply with its obligations to include all HIW
Hotels and Transactions in the Services provided hereby or fail to continue to
perform HCC's obligations under the HCC Agreements, that such failure shall
constitute a breach of the entirety of this Agreement and that HHC shall not be
entitled to the benefit of any of the Services for the fees set forth herein.
16. Billing Statements. Pegasus will provide HHC a monthly billing
statement setting forth the following: (i) the number of Net Reservations
processed via the UltraSwitch Service and the total fee therefor; (ii) the
number of Net Reservations processed via TravelWeb and Third Party Distribution
Systems and the total fee therefor; (iii) the monthly fee for Status Messages;
(iv) the number of Net Reservations originated by a Corporate Travel
Coordinator processed via the UltraDirect Service and the fee therefor; (v) the
number of Net Reservations originated by a travel agent processed via the
UltraDirect Service and the fee therefor (including the calculation of the
Average GDS Fee) and the fee therefor; (vi) the number of Net Reservations
processed via the UltraRes Service and the fee therefor; (vii) the number of
properties included in the Property Information Database and the fee therefor;
(viii) the monthly fee for the Private Label Web Site Services; and (ix) any
costs, credits or debits otherwise due pursuant to this Agreement. All fees and
costs shall be paid in U.S. dollars.
17. Payment of Fees and Costs. Pegasus will invoice HHC monthly for all
fees, and costs owed by HHC to Pegasus pursuant to this Agreement. HHC shall
pay each invoice upon receipt and, in any event, within thirty (30) days of
receipt of each invoice.
18. Pricing Guarantee. Pegasus hereby guarantees that the pricing offered
to any other hotel company for any of the Services shall not be any more
favorable than the pricing set forth herein for the Services provided to HHC.
In the event Pegasus enters into an agreement with any other hotel company with
more favorable pricing than as set forth in this Agreement, either for the
individual services specified herein or for the package, or for any similar or
comparable package of services, Pegasus shall notify of such pricing within
thirty (30) days of any agreement for such more favorable pricing and shall
make such pricing available to HHC and, if accepted by HHC, this Agreement
shall be amended to include such pricing.
19. Right to Audit. HHC shall have the right, upon reasonable notice and
exercisable no more than once each calendar year, to audit the records of
Pegasus as reasonable and necessary to determine that the transactions reported
and the fees paid pursuant to this Agreement are accurate. This right of audit
shall be conducted by a reputable independent certified public accounting firm
on behalf of HHC. The accounting firm shall execute a Confidentiality
Agreement which shall preclude the dissemination of any information to HHC or
any other person or entity except (i) confirmation that the transactions
reported and fees paid are accurate or (ii) a statement that the transactions
reported or the fees paid are inaccurate and a statement of the correct number
of transactions and fees to be paid or (iii) any information consisting of, or
based on, HHC's own data, transactions, or other information. Nothing in this
Agreement shall preclude
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HHC from examining its own data transactions or other information during
business hours and on reasonable notice. All costs incurred with respect to the
audit shall be paid by HHC except in the event the audit reveals overpayment by
HHC in excess of three percent (3%) of the fees payable during the preceding
twelve (12) months or, in the event there has not been transaction processing
for at least twelve (12) months during the term of this Agreement, such lesser
term for which transaction processing has occurred Pegasus shall pay. Pegasus
shall maintain and preserve for at least two (2) years following the end of
this Agreement or any renewals complete and accurate records of transactions
and fees related to the Services under this Agreement. The exercise of the
right to audit by HHC or the acceptance by HHC of any audit reports,
statements, credits, or refunds shall be without prejudice to any rights or
remedies of HHC and shall not prevent HHC from thereafter disputing the
accuracy of any such reports, statements, credits or refunds.
20. Confidential Information and Proprietary Rights. During the term of
this Agreement, it is acknowledged by HHC and Pegasus that each may receive or
have access to confidential and proprietary information of the other party
including, but not limited to, software, codes, specifications, database and
trade secrets ("Confidential Information"). Except as is necessary in
connection with the performance of this Agreement and Pegasus' business,
information regarding the reservations and other transactions of HHC processed
by Pegasus shall be treated as confidential whether or not so marked or
otherwise identified as confidential. Each party acknowledges that it shall not
acquire any ownership or other rights in or to Confidential Information of the
other, and shall use the Confidential Information only for the purposes of the
performance of this Agreement, and shall keep confidential and not disclose the
Confidential Information to any other person, firm or corporation without the
prior written consent of the other party. Each party acknowledges that it will
have no access to and will not use any of the confidential or proprietary
information or related property of the other party, other than as specifically
provided for in this Agreement. The provisions of this section will remain
binding and in force and effect as long as such information remains
confidential (other than by breach of this Agreement), notwithstanding the
expiration or termination of this Agreement at any time. Any Confidential
Information transmitted in writing or by other tangible media shall remain the
property of the owner and all originals of such confidential information shall
be returned to the owner at its request at the conclusion of this Agreement.
Confidential Information shall not include any information which (i) was
publicly known and made generally available in the public domain prior to the
time of disclosure by the disclosing party; (ii) becomes publicly known and
made generally available after disclosure by the disclosing party to the
receiving party through no action or inaction of the receiving party; (iii) is
already in the possession of the receiving party at the time of disclosure by
the disclosing party as shown by the receiving party's files and records
immediately prior to the time of disclosure; (iv) is obtained by the receiving
party from a third party without a breach of such third party's obligations of
confidentiality; (v) is independently developed by the receiving party without
use of or reference to the disclosing party's Information, as shown by
documents and other competent evidence in the receiving party's possession; or
(vi) is required by law to be disclosed by the receiving party, provided that
the receiving party gives the disclosing party prompt written notice of such
requirement prior to such disclosure and assistance in obtaining an order
protecting the information from public disclosure.
21. Use of Trademarks and Tradenames. HHC acknowledges and agrees that
UltraSwitch, TravelWeb, UltraSelect, UltraRes, UltraDirect, Lodging Select,
Lodging
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Connect, NetBooker and Click-it! Weekends are the service marks of Pegasus and
those and any other trademarks owned by Pegasus may not be used by HHC without
the prior written consent of Pegasus. Pegasus acknowledges and agrees that
Holiday Inn(R), Crowne Plaza(R) and Holidex(R) are service marks of HHC and
those and any other service marks owned by HHC may not be used by Pegasus
without the prior written consent of HHC. HHC shall be solely and exclusively
responsible for the inclusion of its trademark and other intellectual property
notices on all information provided to Pegasus in connection with the Services.
Pegasus agrees to take reasonable and necessary actions to prevent the deletion
of such trademark and other intellectual property notices from the information
provided by HHC. Neither party shall have the right to use any intellectual
property rights, including without limitation, copyright, trademarks, service
marks of the other party or any of its subsidiaries or affiliates except with
prior written approval. Neither party acquires any rights in any intellectual
property, including without limitation, any trademarks, service marks or
copyrights of the other, its subsidiaries or affiliates.
22. Software and Intellectual Property.
(i) Each of the parties hereto represents and warrants to the other
that, with respect to all software and other intellectual
property in connection with the Services or otherwise required
to be furnished pursuant to this Agreement (collectively, the
"Intellectual Property"), each either owns the Intellectual
Property furnished by it or is fully authorized to deliver the
Intellectual Property and to allow the Intellectual Property to
be used in connection with the Interface, as contemplated by
this Agreement. Should any claim be raised by any third party
that the use of any of the Intellectual Property or the delivery
of any of the Intellectual Property in connection with this
agreement constitutes infringement of any patent, copyright,
license or other property right (a "Claim"), the party
furnishing such Intellectual Property shall, at its expense,
defend any such Claim in accordance with the provisions of
Section 23 of this Agreement. Should either party be temporarily
or permanently enjoined from using any of the Intellectual
Property as a result of any Claim, the other party, at its
option and own expense, shall either procure the right to
continue to use the Intellectual Property free from any Claim or
replace or modify the offending Intellectual Property so that
its use becomes non-infringing, within fifteen (15) days of the
date on which it receives notice of the claim (either such
corrective action being referred to herein as a "Correction").
If a Correction is not accomplished, the party who furnished the
Intellectual Property resulting in the Claim shall be deemed to
be in default of this Agreement, and in such event, Sections 25,
27 and 28 of this Agreement shall control; provided, however,
that the fifteen (15) day period specified above shall be
deemed to be the applicable cure period under Section 25, and
once that fifteen (15) day period has expired without a
Correction having occurred, the applicable cure period under
Section 25 shall be deemed to have expired. Without limiting
Article 23 of this Agreement, the party who furnished the
Intellectual Property resulting in the Claim shall also be
obligated to indemnify the other party for any of its losses
(such losses being Pegasus' Losses or HHC's Losses, as the case
may be, as defined in Section 23 hereof) in connection with any
Claim for which a Correction is not made within such fifteen
(15) day period, in accordance with this Article 22(i).
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(ii) All reservation transactions and HIW Hotel information and all
other data collected by Pegasus pursuant to this Agreement shall
remain the sole and exclusive property of HHC and such
information and data may not be used in any manner other than in
accordance with this Agreement.
23. Indemnification in the Event of Certain Losses. HHC agrees to
indemnify and hold harmless Pegasus, its parents, subsidiaries, franchisees,
affiliates and their directors, officers, employees and other stockholders,
from and against any losses, claims, liabilities, damages or expenses
(including reasonable attorney's fees) occurring on account of HHC's fault and
through no fault of Pegasus ("Pegasus' Losses"). Pegasus agrees to indemnify
and hold harmless HHC, its parents, subsidiaries, franchisees, affiliates and
their directors, officers, employees and stockholders, from and against any
losses, claims, liabilities, damages or expenses (including reasonable
attorney's fees) (" HHC's Losses") occurring on account of Pegasus' fault and
through no fault of HHC. Promptly after receipt by an indemnified party of
notice of the commencement of any action or the presentation or other assertion
of any claim which could result in any indemnification claim pursuant to this
section, such indemnified party shall give prompt notice thereof to the
indemnifying party and the indemnifying party shall be entitled to participate
therein or, to the extent that it shall wish, assume the defense thereof with
its own counsel. If the indemnifying party elects to assume the defense of any
such action or claim, the indemnifying party shall not be liable to the
indemnified party for any fees of other counsel or other expenses, in each case
subsequently incurred by such indemnified party in connection with the defense
thereof, other than reasonable costs of investigation and preparation, unless
representation of both parties by the same counsel would be inappropriate due
to actual or potential differing interests between them. The parties agree to
cooperate to the fullest extent possible in connection with any claim for which
indemnification is or may be sought under this Agreement.
24. Events of Default. Subject to Section 25 hereof, any one of the
following listed occurrences shall be considered an Event of Default:
(i) The failure to pay any amount due hereunder within the time
required;
(ii) The refusal or failure to diligently and in good faith perform
each and every material provision of this Agreement;
(iii) The failure of Pegasus to provide the Services on a continual
dependable basis; or
(iv) If either Pegasus or HHC (the "Defaulting Party") becomes
insolvent, takes any step leading to its cessation as a going
concern, or ceases business operations for reasons other than a
strike and other than assignment as allowed by this Agreement, then
the other party (the "Insecure Party") may immediately terminate this
Agreement upon written notice to the other party unless the
Defaulting Party immediately gives the Insecure Party adequate
assurance of the future performance of this Agreement. If bankruptcy
proceedings are commenced with respect to the Defaulting Party, and
if this Agreement has not otherwise terminated, then the Insecure
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Party may suspend all further performance of this Agreement until the
Defaulting Party assumes or rejects this Agreement pursuant to
Section 365 of the Bankruptcy Code or any similar or successor
provision. Any such suspension of further performance by the Insecure
Party pending the Defaulting Party's assumption or rejection will not
be a breach of this Agreement.
25. Occurrence of Default; Notice and Opportunity to Cure. Upon the
occurrence of an Event of Default, the non-defaulting party shall give written
notice to the defaulting party specifying the alleged default. Except as
otherwise specifically set forth herein, the defaulting party shall then be
entitled to ten (10) days after receipt of such notice within which to cure any
monetary default and thirty (30) days within which to cure any non-monetary
default. If the party entitled to cure the Event of Default does not cure the
Event of Default within the cure period specified above, then such party shall
be deemed to be in default of this Agreement. Any such default shall not
relieve the defaulting party from any of its obligations hereunder, and in the
event of a default, the non-defaulting party hereunder shall, except as
provided in this Agreement, be entitled to whatever remedies at law or in
equity are available to it.
26. Licensee Acknowledgment. Pegasus understands and agrees that most
participating hotels are independently owned and operated by licensees, that
HHC does not control the day to day operations of licensed hotels, that HHC
assumes no liability for the acts or omissions of a licensed hotel. HHC, its
parents, subsidiaries, or affiliated companies shall not be liable for any
activities of a licensed hotel or for any special, incidental, indirect or
consequential damages even if it has been advised of the possibility of such
damage.
27. Termination by HHC. Upon the occurrence of an Event of Default (as
defined in paragraph 24 herein-above) by Pegasus and the failure of Pegasus to
cure such default after notice and opportunity to cure as provided by Section
25 hereof, HHC may terminate this Agreement at any time within thirty (30) days
after the expiration of the cure period provided in Section 25. Notwithstanding
any other provision hereof, HII may terminate this Agreement without cause
during any Additional Term upon one hundred eighty (180) days prior notice.
28. Termination by Pegasus. Upon the occurrence of an Event of Default (as
defined in paragraph 24 herein-above) by HHC and the failure of HHC to cure
such default after notice and opportunity to cure as provided by Section 25
hereof, Pegasus may terminate this Agreement at any time within thirty (30)
days after the expiration of the cure period provided in Section 25.
Notwithstanding any other provision hereof, Pegasus may terminate this
Agreement without cause during any Additional Term upon one hundred eighty
(180) days prior notice.
29. Termination of TravelWeb Service. Notwithstanding any other provision
hereof, after the expiration of [*] from the date the TravelWeb service becomes
operable, HHC may terminate the TravelWeb service upon at least sixty (60) days
prior written notice to Pegasus.
30. Termination of UltraSwitch Service. Notwithstanding any other
provision hereof, after the expiration of [*] after the date the UltraSwitch
service
*Confidential Treatment Requested
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described herein becomes operable, HHC may terminate the UltraSwitch Service
upon at least ninety (90) days prior written notice to Pegasus provided that
HHC has received a bona fide contract offer from a Commercially Viable Entity
(as hereinafter defined) to provide services similar to the UltraSwitch Service
with a per transaction fee of less than [*] per transaction and with guaranteed
levels of performance exceeding those set forth in this Agreement and further
provided HHC has provided the proposed third party agreement to Pegasus and
Pegasus has failed and refused within sixty (60) days of receipt of such
contract to agree to amend the terms of this Agreement to meet or exceed the
terms of the third party contract. A Commercially Viable Entity is defined as a
solvent entity which has, or whose parents, subsidiaries, affiliates,
predecessors or principals have, at least three (3) years experience in
providing substantially the same services as the UltraSwitch Service to the
hotel industry and who has processed at least two million (2,000,000) Net
Reservations during the previous twelve (12) month period.
31. Force Majeure. Except with respect to the payment obligations set
forth herein, it will not constitute an Event of Default if such event listed
in Section 24 hereof is caused by or results from acts of God; fire; war; civil
unrest; power fluctuations or outages; telecommunication fluctuations; outages
or delays; utility failures; or governmental action or other events beyond the
control of the defaulting party. However, if any such occurrence results in any
of the events described in Section 24, and the same continues for more than
thirty (30) consecutive days, either party may terminate this Agreement by
providing notice as required herein.
32. Disclaimer, Limitation of Liabilities and Risk of Internet Usage.
EXCEPT TO THE EXTENT RESULTING FROM PEGASUS' GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT, PEGASUS WILL NOT BE RESPONSIBLE OR LIABLE FOR (i) ANY
FALSIFICATIONS OR INACCURACIES IN ANY OF THE INFORMATION PROCESSED OR
DISTRIBUTED PURSUANT TO THIS AGREEMENT, (ii) ANY CLAIMS OF LIABILITY OF ANY
NATURE ARISING OUT OF ANY RESERVATION TRANSACTION PROCESSED PURSUANT TO THIS
AGREEMENT (iii) ANY ACT OR FAILURE TO ACT WITH RESPECT TO SUCH INFORMATION OR
THE CREATION OR FUNCTIONALITY OF RESERVATION CAPABILITIES UNLESS EXPRESSLY SET
FORTH HEREIN, (iv) ANY CLAIM, DAMAGE, OR LIABILITY OF ANY NATURE ARISING OUT OF
ACCESS TO HHC'S PRIVATE LABEL WEB SITE AND/OR THE MAKING, CHANGING OR CANCELING
OF A RESERVATION AND THE USE OF A CREDIT CARD OR OTHER DEBIT DEVICE IN
CONNECTION THEREWITH, OR (v) ANY CLAIM RESULTING FROM ANY INTERRUPTION,
MALFUNCTION OR CHANGE IN THE USE OF THE INTERNET OR A THIRD PARTY DISTRIBUTION
SYSTEM. EXCEPT AS SET FORTH IN SECTION 33 BELOW, ALL WARRANTIES, EXPRESS OR
IMPLIED, STATUTORY OR OTHERWISE, INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF
FITNESS FOR A PARTICULAR PURPOSE, MERCHANTABILITY, GOOD AND WORKMANLIKE PRODUCT
OR SERVICE OR OTHERWISE ARE DISCLAIMED BY PEGASUS AND WAIVED BY PEGASUS. HHC
ACKNOWLEDGES AND AGREES THAT THE OPERATION OF A SITE ON THE INTERNET IS AT
PEGASUS' OWN RISK.
33. Limited Warranty. Pegasus warrants that the purchased services will be
fit for their intended purpose, will be free from defects, will conform to
stated specifications, will comply with descriptions of the Services set forth
herein and will conform to all applicable codes and standards. Pegasus warrants
that it has obtained appropriate releases granting HHC complete and
unrestricted rights during the term of this Agreement
*Confidential Treatment Requested
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to use the services provided. The above warranty shall be for the benefit of
HHC, its affiliates, franchisees, successors and assigns. The inspection or
acceptance of the Services shall not be a waiver of rights under this warranty.
This warranty shall survive delivery and acceptance of the purchased Services.
Pegasus further warrants that it has, and shall maintain during the term of
this Agreement, a commercially reasonable back-up disaster recovery system.
Pegasus further warrants that it will provide reasonable and customary security
procedures to protect the integrity of the Web sites and Web pages contemplated
by this Agreement.
34. Right to Repair. Notwithstanding any other provision of this
Agreement, in the event Pegasus repairs any material failure in the operation
or performance of the Services within twelve (12) hours of notice from HHC
requesting such repair or actual knowledge of Pegasus of need of the repair
Pegasus shall not be in default of this Agreement and shall not be liable for
any damage resulting from such failure, unless resulting from Pegasus' gross
negligence or willful misconduct.
35. No Consequential Damages. Except with respect to the indemnification
provisions set forth herein, neither party will be liable to the other for any
consequential damages caused or resulting from any breach of this Agreement or
arising out of the performance of this Agreement, and each party hereby
expressly waives such damages.
36. Management Consultation. Pegasus agrees that it will periodically meet
with and provide HHC representatives information regarding service and
financial developments of Pegasus to the extent permitted by applicable law.
37. Warrants. Upon full execution hereof, Pegasus shall execute and
deliver to HHC the Warrants (see Exhibit G).
38. HCC Agreements with Holiday Inns, Inc. and Rescom Services, Inc. It is
acknowledged and agreed that there currently exists between HCC and Holiday
Inns, Inc. on the one hand and HCC and Rescom Services, Inc. on the other hand
two (2) separate agreements relating to Pegasus providing processing services
for payment of travel agent commissions. It is also acknowledged and agreed
that Rescom Services, Inc. has been issued an option to purchase stock in HCC
(the "Option"). With respect to such agreements and the Option, the parties
hereby agree:
(a) upon execution hereof, HHC will execute as assignee of Holiday Inns,
Inc. and Pegasus will cause HCC to execute the First Amendment to HCC
Participant Agreement attached hereto as Exhibit H and HCC will cause
Rescom Services, Inc. to execute and Pegasus will cause HCC to execute the
First Amendment to Agreement Between Rescom Services, Inc. and The Hotel
Clearing Corporation attached hereto as Exhibit I; and
(b) HHC will cause Rescom Services, Inc. and Pegasus will cause HCC to
execute the Termination of Option and Cancellation of Note agreement
attached hereto as Exhibit K at the time of execution of this Agreement.
39. Insurance Certificates. Pegasus shall forward to the Risk Management
Department of HHC at 0 Xxxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000,
certificates
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of general comprehensive liability insurance coverage issued by the insuring
carrier or carriers for the benefit of Pegasus with limits of not less than
those set forth on Exhibit L attached hereto. HHC shall be given thirty (30)
days prior written notice of cancellation or adverse material change of the
insurance to which the certificates relate. The fulfillment of these insurance
obligations shall not relieve Pegasus of any liability assumed by Pegasus in
this Agreement or in any way modify Pegasus' contractual or common law
obligations to indemnify HHC.
40. Compliance With Law. Each party shall, at its own expense, comply with
all applicable federal, state, county and local laws, ordinances, regulations
and orders in the performance of this Agreement. Pegasus represents that the
fees set forth herein include all applicable sales, use or other similar taxes
and warrants that it is registered and will file and pay all such taxes which
may arise as a result of this Agreement.
41. Equal Opportunity Company. Each party represents and warrants that it
will not discriminate against any employee or applicant for employment because
of race, color, religion, sex, national origin, age or any other unlawful
criterion, and it shall comply with all applicable laws against discrimination
and all applicable rules, regulations and orders issued thereunder or in
implementation thereof. The Equal Opportunity clauses set forth in 41 C.F.R.
Sections 60-1.4(a), 60-250.5(a) and 60-741.5(a) are incorporated by reference
herein.
42. Severability. If any provision of this Agreement or the application of
any provision hereof is held invalid, the remainder of this Agreement and the
application of such provision shall not be affected unless the provision held
invalid shall substantially impair the benefits of the remaining portions of
this Agreement.
43. Notices. All notices, requests, consents, payments and other
communications contemplated hereby shall be in writing and (a) personally
delivered, (b) deposited in the United States mail, first-class, registered or
certified mail, return receipt requested, with postage prepaid, (c) sent by
overnight courier service (for next business day delivery), shipping prepaid,
or (d) transmitted by facsimile/telecopy in combination with any other
permitted form of notice as follows:
If to If to
PEGASUS: HHC:
0000 Xxxxxx Xxxxx Xxxx. #0000 Xxxxx Xxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, XX 00000 Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxx, III Attention: Xxxxxx Xxxxxxx
If by facsimile/telecopy to: If by facsimile/telecopy to:
000-000-0000 000-000-0000
cc: Xxx X. Xxxxx cc: D. Xxxxxxxx Xxxxx, Xx.
0000 Xxxxxx Xxxxx Xxxxxxxxx Three Ravinia Drive, Suite 2900
0000 Xxxxxx Xxxxx Xxxxxx Xxxxxxx, XX 00000
Dallas, Texas 00000 000-000-0000 (phone)
000-000-0000 (phone) 000-000-0000 (facsimile)
000-000-0000 (facsimile)
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or such persons or addresses as any party may request by notice duly given
hereunder. Except as otherwise specified herein, notices shall be deemed given
and received at the time of personal delivery or, if sent by U.S. mail, three
(3) business days after mailing, or, if sent by overnight courier, one (1)
business day after such sending or, if sent by facsimile or telecopy, upon
verified receipt of same.
44. Non-Exclusive Arrangement. Except as otherwise provided herein,
nothing in this Agreement shall be construed as requiring HHC to work with
Pegasus exclusively with respect to the subject matter of this Agreement.
45. Assignment. This Agreement is not assignable by Pegasus or HHC without
the prior written consent of the non-assigning party, and such consent shall
not be unreasonably withheld or delayed provided that Pegasus or HHC may assign
this Agreement to a parent, subsidiary or affiliate without consent and either
party may assign this Agreement without consent in the event of a merger,
consolidation, or sale of substantially all of its assets.
46. Controlling Law. This Agreement shall be interpreted pursuant to the
laws of the State of Texas without reference to its conflict of laws
principles. In the event litigation is initiated by HHC, venue for such action
shall be in the state or federal courts located in Dallas County, Texas. In the
event Pegasus initiates the litigation, venue for such litigation shall be in
the state or federal courts located in Dekalb County, Georgia.
47. Entire Agreement. This Agreement and the exhibits attached hereto
constitute the entire agreement between Pegasus and HHC with respect to the
provision of the Services and supersedes and replaces any and all other
agreements and representations, verbal or written, with respect to the subject
matter of this Agreement. There are no representations, warranties or
agreements made or relied upon by either party with respect to the subject
matter of this Agreement which are not contained in this Agreement. Headings
are for reference only and are not intended to affect the meaning of any terms.
48. Confidentiality of the Agreement. The parties agree that the terms and
provisions of this Agreement shall be kept confidential and shall be disclosed
only to those persons and entities as required by law or as permitted by the
other party hereto. The parties may, however, disclose the existence of this
Agreement to any person or entity. The Mutual Non-Disclosure Agreement to
Protect Release of Confidential Information, executed by Pegasus on May 1, 1997
and by HHC on May 6, 1997, is incorporated herein and attached hereto as
Exhibit J.
49. Status of Parties. This Agreement shall not constitute a partnership,
joint venture or similar arrangement. The parties hereto are separate and
distinct entities independently contracting with each other at arms length.
Pegasus shall not be deemed by this Agreement to be granting a license to HHC,
with respect to UltraSwitch(R) or any software or service xxxx related thereto,
or otherwise, this being a contract for the use and rendering of services only.
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50. No Waiver. A party's failure at any time to enforce any of the
provisions of this Agreement or any right with respect thereto, will not be
construed to be a waiver of such provision or rights, not to affect the
validity of this Agreement. The exercise by a party of any rights provided by
this Agreement shall not preclude or prejudice the exercise thereafter of the
same or other rights under this Agreement.
51. Amendments/Modifications. This Agreement may not be amended or
modified except in a writing signed by an officer of both parties. Any
attempted amendment or modification not in writing and signed by an officer of
both parties shall be null and void.
AGREED to this 13th day of May, 1997.
PEGASUS SYSTEMS, INC. HOLIDAY HOSPITALITY CORPORATION
By: /s/ XXXX X. XXXXX, III By: /s/ XXXX X. XXXXXXXXX
----------------------------- -----------------------------
Xxxx X. Xxxxx, III (name) Xxxx X. Xxxxxxxxx
President -------------------------
(title) Executive Vice President
-------------------------
May 12, 1997
By:
-----------------------------
(name)
-------------------------
(title)
-------------------------
APPROVED
BUSINESS TERMS ________________
LEGAL FORM ____________________
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TABLE OF EXHIBITS
Exhibit A UltraSwitch Service
Exhibit B UltraDirect Service
Exhibit C UltraRes Service
Exhibit D Property Information Distribution Services
Exhibit E Private Label Web Site Service
Exhibit F TravelWeb Service
Exhibit G Common Stock Purchase Warrant
Exhibit H First Amendment to HCC Participant Agreement
Exhibit I First Amendment to Agreement Between Rescom
Services, Inc. and The Hotel Clearing Corporation
Exhibit J Mutual Non-Disclosure Agreement to Protect Release
of Confidential Information
Exhibit K Termination of Option and Cancellation of Note
Exhibit L Schedule of Insurance
Schedule I Schedule of Implementation
Schedule II Reports
19
EXHIBIT "A"
ULTRASWITCH SERVICE
Pegasus shall create, operate and maintain an Interface between the HHC
Reservations System and all major GDSs. Subject to the duties of HHC set forth
in this Exhibit A below, Pegasus shall provide all reasonable and necessary
technical support, hardware and software and modifications to the UltraSwitch
to maintain the Interface between HHC and all major GDSs. Subject to Section 31
hereof, delays caused by GDSs, HHC or other third parties, the UltraSwitch
Interface will provide room confirmation numbers for each booking at an HIW
Hotel made through a Reservation Provider within an average determined over
each rolling ninety (90) day period of [ * ] within the contiguous forty eight
(48) United States and District of Columbia and [ * ] elsewhere. Pegasus will
provide host to host or bulk data transfer processes for the purposes of
updating room rates in each of the GDSs. This will include, but not be limited
to, adds, deletes, and total refresh application.
Pegasus shall not be responsible for, but will use reasonable and
necessary efforts to require, UltraSwitch users to return response messages
within the response time requirements set forth in the immediately preceding
sentence.
Subject to Section 31 hereof, the UltraSwitch service will be available,
operational and fully functional to process HIW Hotel's customer reservations
ninety nine percent (99%) of the time each calendar month. Pegasus will not
discriminate among hotel participants in processing reservations through the
UltraSwitch.
Through the UltraSwitch Interface, HHC will permit all Reservation
Providers utilizing the UltraSwitch the full and complete right to check
availability, reserve and cancel rooms authorized for sale by HIW Hotels and
receive a confirmation acknowledgment of any such transaction. All information
provided by HII Hotels with respect to rooms and facilities shall be complete
and accurate and shall be consistent with and inclusive of all of the
information provided and rates available to a direct caller to HII's
(Central) Reservation System to the fullest extent each Reservation Provider
database will permit. HHC is not responsible for information provided by HIW
Hotels.
HHC shall use all reasonable and necessary efforts and shall cooperate
fully with and provide support for Pegasus' personnel with respect to the
creation of the Interface with Pegasus UltraSwitch Service including, but not
limited to, undertaking all reasonable and necessary modifications to the HHC
Reservation System to cause it to be compatible with the UltraSwitch Interface.
HHC shall use its best efforts to cause all of its GDS transactions to be
processed via the UltraSwitch Service no later than December 31, 1997.
*Confidential Treatment Requested
20
EXHIBIT "B"
ULTRADIRECT SERVICE
Pegasus shall create, operate and maintain on a continual basis a
dependable and operative Interface between HHC's Reservation System and
Corporate Travel Coordinators, travel agents and other entities utilizing
UltraDirect and will provide access to Lodging Select and Lodging Connect
capabilities. Pegasus will provide all reasonable and necessary technical
support, hardware and software, without cost to HHC, so as to enable Corporate
Travel Coordinators to access HHC's Reservation System and perform the
capabilities of Lodging Select and Lodging Connect.
Pegasus will provide to HHC specifications for its UltraDirect service
and, for a period of ten (10) years from the effective date hereof, shall
permit HHC to utilize the UltraDirect specifications to create a direct
interface between HHC and any Corporate Travel Coordinator or travel agent with
whom Pegasus is not under contract to provide the UltraDirect service. HHC
shall be solely responsible for the creation and implementation of each
UltraDirect interface it elects to create with any third party and, in
connection with the utilization of the UltraDirect specifications to create the
interface, HHC agrees to cause each third party to whom the UltraDirect
specifications are disclosed to execute a Non-Disclosure Agreement to Protect
Release of Confidential Information in form and substance identical to Exhibit
L attached hereto. HHC shall be solely and exclusively responsible for the
installation and operation of the UltraDirect interface and all maintenance in
connection therewith provided however Pegasus shall, without incurring any
cost, provide telephonic technical advice with respect to the initial
installation of an UltraDirect interface by HHC. HHC hereby indemnifies and
holds harmless Pegasus of and from any and all claims or liability of any
nature arising out of the UltraDirect specifications and the creation of an
UltraDirect interface by HHC, if caused by the negligent or intentional acts or
omissions of HHC. In no event shall Pegasus be liable to HHC or any other
person or entity for any damages, including any incidental or consequential
damages, expenses, lost profits, lost savings, or other damages or any other
form of liability arising out of the use of the UltraDirect specifications by
HHC or any third party or any UltraDirect interface created by HHC unless
caused by the negligent or intentional acts or omissions of Pegasus.
21
EXHIBIT "C"
ULTRARES SERVICE
Pegasus shall create, operate and maintain an Interface between HHC's
Reservation System and Housing Reservation Providers utilizing Pegasus'
UltraRes service. Pegasus will provide all reasonable and necessary technical
support, hardware and software, at no cost to HHC, to maintain the Interface
between HHC's Reservation System and a Housing Reservation Provider utilizing
Pegasus' UltraRes service.
Pegasus will provide to HHC specifications for its UltraRes service and
shall, for a period of ten (10) years from the effective date hereof, permit
HHC to utilize the UltraRes specifications to create a direct interface between
HHC and any person or entity providing housing reservation services for
meetings and conventions with whom Pegasus is not under contract to provide the
UltraRes service. HHC shall be solely responsible for the creation and
implementation of each UltraRes interface it elects to create with any third
party and, in connection with the utilization of the UltraRes specifications to
create the interface, HHC agrees to cause each third party to whom the UltraRes
specifications are disclosed to execute a Non-Disclosure Agreement to Protect
Release of Confidential Information in form and substance identical to Exhibit
L attached hereto. HHC shall be solely and exclusively responsible for the
installation and operation of the UltraRes interface and all maintenance in
connection therewith provided however Pegasus shall, without incurring any
cost, provide telephonic technical advice with respect to the initial
installation of an UltraRes interface by HHC. HHC hereby indemnifies and holds
harmless Pegasus of and from any and all claims or liability of any nature
arising out of the UltraRes specifications and the creation of an UltraRes
interface by HHC, if caused by the negligent or intentional acts or omissions
of HHC. In no event shall Pegasus be liable to HHC or any other person or
entity for any damages, including any incidental or consequential damages,
expenses, lost profits, lost savings, or other damages or any other form of
liability arising out of the use of the UltraRes specifications by HHC or any
third party or any UltraRes interface created by HHC unless caused by negligent
or intentional acts or omissions of Pegasus.
22
EXHIBIT "D"
PROPERTY INFORMATION DISTRIBUTION SERVICES
Pegasus will provide HHC with the ability to create a digital database of
HIW Hotels which is (i) capable of being accessed by Third Party Distribution
Systems with whom Pegasus contracts and (ii) where functionality exists,
capable of permitting the accessors of the database to make, amend and cancel
reservations with HIW Hotels. Pegasus will contract with Third Party
Distribution Systems and develop Interfaces with Third Party Distribution
Systems which will permit accessors of Third Party Distribution Systems to view
HHC's HIW Hotels database and make, amend and cancel reservations for HIW
Hotels. Pegasus shall maintain a continual operable Interface with those Third
Party Distribution Systems with whom it contracts during the term of such
contract, subject to the termination rights contained therein. All updates and
edits of HHC's Property Information Database shall be accessible by Third Party
Distribution Systems within two business days of receipt by Pegasus of such
update or edit.
HHC is solely responsible for providing to Pegasus the HHC Property
Information Database pursuant to Pegasus' prescribed methods. HHC shall
maintain an accurate and current Property Information Database. HHC is not
responsible for information provided by HIW Hotels.
23
EXHIBIT "E"
PRIVATE LABEL WEB SITE SERVICE
Pursuant to mutually agreed commercially reasonable requirements, Pegasus
shall create and maintain a Private Label Web Site for HII. Pegasus shall
provide all reasonable and necessary technical support, hardware and software
to provide a continually operable Private Label Web Site. The Private Label Web
Site shall provide HHC and HIW Hotels with the capability to create multiple
site views, make unlimited changes or modifications to the proprietary views,
update HHC's Property Information Database using the remote authoring or batch
processing and make changes to the Property Information Database to include
additional property information as mutually agreed. The Private Label Web Site
shall also include information and reservation functionality for other travel
suppliers, weather information, mapping capability and an ad banner management
system all of which may be accepted or rejected by HHC. No later than December
31, 1997, the Private Label Web Site shall have city availability search and
alternate property display functionality. Pegasus shall conduct a semi-annual
security audit and shall provide for commercially reasonable disaster recovery
procedures. Subject to Sections 31 and 32 hereof, interruptions in the
operation of the Internet and delays caused by HHC, accessors to the Private
Label Web Site or other third parties, HHC's Private Label Web Site shall be
available, operational and fully functional to process reservations by
accessors to HHC's Private Label Web Site ninety nine point five percent
(99.5%) of the time over a rolling one hundred eighty (180) day period and
accessors shall receive a room confirmation for each reservation within an
average determined over each calendar month of twelve (12) seconds or less.
The Private Label Web Site shall contain the HHC Property Information
Database created by HHC and Reservation Functionality. Pegasus will provide HHC
with the ability to create a digital database of HIW Hotels (the HHC Property
Information Database) which is capable of being accessed via the Private Label
Web Site and capable of permitting accessors of the Private Label Web Site to
make, amend and cancel reservations in the HHC Reservation System.
Notwithstanding the above, HHC shall have a period of [*] from the date
hereof to analyze and consider whether or not to utilize the Private Label Web
Site service and HHC may, prior to the expiration of [*] from the date hereof,
give written notice to Pegasus to not utilize the Private Label Web Site
service and, in such event, Pegasus shall have no obligation to provide the
Private Label Web Site service and HHC shall incur no fees for this service.
*Confidential Treatment Requested
24
EXHIBIT "F"
TRAVELWEB SERVICE
Pegasus shall create, operate and maintain on a continual basis a
dependable and operative Interface between HHC's Reservation System and
Pegasus' TravelWeb Internet Site. Pegasus will provide all reasonable and
necessary technical support, hardware and software so as to enable all
accessors of Pegasus' TravelWeb site to access HHC's Reservation System and
Property Information Database.
25
EXHIBIT G
No.1 PEGASUS SYSTEMS, INC.
For the purchase of
259,292 Shares
COMMON STOCK PURCHASE WARRANT
THIS CERTIFIES that HOLIDAY HOSPITALITY CORPORATION
(hereinafter called the "Holder") is entitled to purchase from PEGASUS SYSTEMS,
INC., a Delaware corporation (hereinafter called the "Company"), upon the
surrender of this Warrant to the Company at the principal office in Dallas,
Texas, at any time on and after May 13, 1997 (the "Detachment Date"), and
before the close of business on May 12, 1999 (the"Termination Date"), the
number of fully paid and nonassessable shares of Common Stock, par value $.01
per share ("Common Stock"), set forth above, evidenced by a certificate
therefor, upon payment of the lesser of $9.60 per share or 85% of the initial
public offering price per share of the Company's Common Stock (the "Warrant
Price") for the number of shares set forth herein above; provided, however,
that under certain conditions set forth hereinafter, the number of shares of
Common Stock purchasable upon the exercise of this Warrant may be increased or
reduced and the Warrant Price may be adjusted. The Warrant Price shall be
payable in cash, or by certified or official bank check, in United States
dollars, to the order of the Company. No adjustment shall be made for any cash
dividends on any shares of stock issuable upon exercise of this Warrant. The
right of purchase represented by this Warrant is exercisable by Holder, its
parent, subsidiary, affiliate or any other successor to all or substantially all
of its business by sale of stock, sale of assets, merger or otherwise only, in
its entirety only and only in respect of all of such shares. In the event this
Warrant has not been exercised as required herein before the close of business
on the Termination Date, it shall automatically terminate and be of no force
and effect.
Subject to the provisions hereof, Holder shall have the right
to purchase from the Company (and the Company shall issue and sell to Holder)
the number of fully paid and nonassessable shares of Common Stock specified in
this Warrant, upon surrender of this Warrant to the Company at its office in
Dallas, Texas and upon payment to the Company of the Warrant Price for the
number of shares of Common Stock for which this Warrant is issued and any
applicable taxes. Upon surrender of this Warrant, and payment of the Warrant
Price as aforesaid, the Company shall issue and cause to be delivered with all
reasonable dispatch to Holder a certificate for the number of full shares of
Common Stock so purchased upon the exercise of this Warrant. Such certificate
shall be deemed to have been issued and Holder shall be deemed to have become a
holder of record of such shares as of the date of the surrender of this Warrant
and payment of the Warrant Price as aforesaid. The rights of purchase
represented by this Warrant shall be exercisable, at the election of Holder,
once only for all and not less than all of the shares specified herein and, in
the event this Warrant is exercised in respect of less than all of the shares
specified therein such exercise shall be invalid and of no force or effect.
There have been reserved, and the Company shall at all times keep
reserved, out of the authorized and issued shares of Common Stock, a number of
shares sufficient to provide for the exercise of the rights of purchase
represented by this Warrant, and the transfer Agent for the Common Stock and
every subsequent Transfer Agent for any shares of the Company's capital stock
issuable upon the exercise of any of the rights of purchase aforesaid are
hereby irrevocably
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authorized and directed at all times to reserve such number of authorized and
unissued shares as shall be requisite for such purpose.
The Warrant Price and number of shares subject to this Warrant shall
be subject to adjustment from time to time as follows:
a. In case the Company shall at any time subdivide its
outstanding shares of Common Stock into a greater number of shares, the Warrant
Price in effect immediately prior to such subdivision shall be proportionately
reduced and, in case the outstanding shares of the Common Stock of the Company
shall be combined into a smaller number of shares, the Warrant Price in effect
immediately prior to such combination shall be proportionately increased.
b. Upon each adjustment of the Warrant Price pursuant to
the provisions hereof, the number of shares issuable upon the exercise of this
Warrant shall be adjusted by multiplying the Warrant Price in effect prior to
the adjustment by the number of shares of Common Stock covered by the Warrant
and dividing the product so obtained by the adjusted Warrant Price.
c. Except upon consolidation or reclassification of the shares of
Common Stock of the Company as provided for in subsections (a) or (f) hereof,
the Warrant Price in effect at any time may not be adjusted upward or increased
in any manner whatsoever.
d. Irrespective of any adjustment or change in the Warrant Price
or the number of shares of Common Stock actually purchasable under this
Warrant, this Warrant shall continue to express the Warrant Price per share and
the number of shares purchasable hereunder as the Warrant Price per share and
the number of shares purchasable were expressed in this Warrant when initially
issued with the adjustment or change reflected as set forth in subsection (g)
hereof.
e. If any capital reorganization or reclassification of the
capital stock of the Company or consolidation or merger of the Company with
another corporation or the sale of all or substantially all of its assets to
another corporation shall be effected, then, as a condition of such
reorganization, reclassification, consolidation, merger or sale, lawful and
adequate provision shall be made whereby Holder shall have the right to
purchase and receive upon the basis and upon the terms and conditions specified
herein and in lieu of the shares of the Common Stock of the Company immediately
theretofore purchasable and receivable upon the exercise of the rights
represented by each such Warrant, such shares of stock, securities or assets as
may be issued or payable with respect to or in exchange for a number of shares
of such Common Stock purchasable upon the exercise of the rights represented by
this Warrant had such reorganization, reclassification, consolidation, merger
or sale not taken place, and in any such case appropriate provisions shall be
made with respect the rights and interests of Holder to the end that the
provisions hereof (including without limitation provisions for adjustment of
the Warrant Price and of the number of shares purchasable upon the exercise of
this Warrant) shall thereafter be applicable, as nearly as may be in relation
to the shares of stock thereafter deliverable upon the exercise of this
Warrant.
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f. No adjustment of the Warrant Price shall be made in connection
with the issuance or sale of Common Stock issuable pursuant to any stock option
plan or incentive compensation arrangements now or hereafter granted to
employees of the Company or any of its subsidiaries in connection with their
employment or the issuance or sale of shares of Preferred Stock.
g. Whenever the Warrant Price is adjusted as herein provided,
the Company shall provide a written statement to Holder showing in detail the
facts requiring such adjustment and the Warrant Price and the number of shares
of Common Stock purchasable upon exercise of this Warrant after such
adjustment.
h. The Company may retain a firm of independent certified
public accountants of recognized standing (which may be the firm that regularly
examines the financial statements of the Company) selected by the Board of
Directors of the Company or the Executive Committee of said Board to make any
computation required hereunder and a certificate signed by such firm shall be
conclusive evidence of the correctness of any such computation. If Holder does
not agree as to the correctness of such computation. Holder at their own
expense may retain a firm of independent certified public accountants of
recognized standings to develop a second computation. Such accounting firms
shall attempt to resolve any differences of opinion with respect to such
computations, but in the absence of such resolution, the matter shall be
submitted to binding arbitration in Dallas, Texas in accordance with the then
applicable rules of the American Arbitration Association.
Notwithstanding any other provision hereof, to the extent permitted
by applicable law, the Company shall provide written notice to Holder at least
ten (10) days prior to the record date or other effective date for any of the
following actions: dividends, mergers, liquidations, consolidations,
reclassifications of stock, sale of substantially all of the assets or any
other action for which stockholder approval is required by Delaware law.
The Company shall issue a new warrant to be issued in place of this
Warrant in the event this Warrant has been lost, stolen, defaced, worn-out,
or destroyed, upon the making of an affidavit of that fact by Holder. When
issuing a new warrant, the Company may, as a condition precedent thereto, (a)
require the Holder of a defaced or worn out warrant to deliver such warrant to
the Company and order the cancellation of the same, and (b) require the Holder
of any lost, stolen or destroyed warrant or its legal representative, to
advertise the same in such manner as the Company shall require and to give the
Company a bond in such sum as it may direct as indemnity against any claim that
may be made against the Company with respect to the warrant alleged to have
been lost, stolen or destroyed. Thereupon, the Company may cause to be issued to
Holder a new warrant in replacement for the warrant alleged to have been lost,
stolen, defaced, worn out or destroyed. Upon the new warrant so issued shall be
noted the fact of such issue and the number, date, and name of the registered
Holder of the lost, stolen, defaced, worn out, or destroyed warrant in lieu of
which the new warrant is issued. Every warrant issued hereunder shall be issued
without payment to the Company for such warrant, provided that, there shall be
paid to the Company a sum equal to any exceptional expenses incurred by the
Company in providing for or obtaining any such indemnity and security as is
referred to herein.
-3-
28
Notwithstanding any other provision hereof, in the event this
Warrant is exercised in connection with an initial public offering of the
Company's stock or the sale of the Company, such exercise may be conditioned
upon and subject to the consummation of such initial public offering or sale.
The Company shall not be required to issue fractions of shares
of Common Stock on the exercise or conversion of this Warrant. If any fraction
of a share of Common Stock would, except for the provisions of this paragraph,
be issuable on the exercise or conversion of this Warrant, the Company shall
purchase such fraction for an amount in cash equal to the current fair market
value of such fraction.
The right to exercise this Warrant and purchase the stock as
provided herein is expressly contingent upon and conditioned upon Holder being
in material compliance with all of the material terms of that certain
Distribution Services Agreement for Holiday Inn Worldwide between the Company
and Holder and further provided that Holder has not terminated any of the
Services (as defined therein), unless as a result of a breach of the Agreement
by the Company, as of the exercise of this Warrant.
Except as otherwise provided herein, nothing contained in this
Warrant shall be construed as conferring upon Holder the right to vote or to
consent or to receive notice as a stockholder in respect of the meetings of
stockholders for the election of directors of the Company or any other matters,
or any rights whatsoever as a stockholder of the Company.
Any notice pursuant to this Warrant to be given or made by Holder or
the Company shall be sufficiently given or made if sent by first-class mail,
postage prepaid, or by next day delivery service for personal delivery,
addressed (until another address is provided in writing by the Company or
Holder) as follows with a copy to the Company's or Holder's legal departments:
President Senior Vice President, Worldwide Reservations
Pegasus Systems, Inc. Holiday Hospitality Corporation
0000 Xxxxxx Xxxxx Xxxxxxxxx Three Ravinia Drive
Suite 1100 Suite 2900
Dallas, Texas 75219 Xxxxxxx, Xxxxxxx 00000
All the covenants and provisions of this Warrant by or for the benefit
of the Company or Holder shall bind and inure to the benefit of their respect
successors and assigns hereunder.
This Warrant shall be deemed to be a contract made under the laws of
the State of Texas and for all purposes shall be construed in accordance with
the laws of said State.
Nothing herein shall be construed to give to any person or
corporation other than the Company and Holder any legal or equitable right,
remedy or claim hereunder, but the terms of this Warrant shall be for the sole
and exclusive benefit of Holder and the Company.
Except as otherwise provided herein, this Warrant is not transferable.
-4-
29
In connection with the exercise of this Warrant, Holder agrees to
execute the Investment Representative Statement (or a substantially similar
document) attached hereto as Exhibit A.
IN WITNESS WHEREOF, this Warrant is hereby executed by the President
and Secretary of Pegasus Systems, Inc. as the act of the Company.
Date: May 27, 1997
PEGASUS SYSTEMS, INC.
By: /s/ XXXX X. XXXXX, III
----------------------------------
Xxxx X. Xxxxx, III, President
ATTEST:
By: /s/ XXX X. XXXXX
----------------------------------
Xxx X. Xxxxx, Secretary
-5-
30
INVESTMENT REPRESENTATION STATEMENT
In connection with the exercise of Warrant Number 1 of Pegasus
Systems, Inc. and the purchase of the Securities described therein, the
undersigned Holder represents to the Company the following:
(a) Holder is aware of the Company's business affairs and
financial condition and has acquired sufficient information about the Company
to reach an informed and knowledgeable decision to acquire the Securities.
Holder is acquiring these Securities for investment for Holder's own account
only and not with a view to, or for resale in connection with, any
"distribution" thereof within the meaning of the Securities Act of 1933, as
amended (the "Securities Act").
(b) Holder acknowledges and understands that the
Securities constitute "restricted securities" under the Securities Act and have
not been registered under the Securities Act in reliance upon a specific
exemption therefrom, which exemption depends upon, among other things, the bona
fide nature of Holder's investment intent as expressed herein. Holder further
understands that the Securities must be held indefinitely unless they are
subsequently registered under the Securities Act or an exemption from such
registration is available. Holder further acknowledges and understands that the
Company is under no obligation to register the Securities. Holder understands
that the certificate evidencing the Securities will be imprinted with a legend
which prohibits the transfer of the Securities unless they are registered or
such registration is not required in the opinion of counsel satisfactory to the
Company and any other legend required under then applicable state or federal
securities laws.
(c) Holder is familiar with the provisions of Rule 701
and Rule 144, each promulgated under the Securities Act, which, in substance,
permit limited public resale of "restricted securities" acquired, directly or
indirectly from the issuer thereof, in a non-public offering subject to the
satisfaction of certain conditions. Rule 701 provides that if the issuer
qualifies under Rule 701 at the time of the issuance of the Warrant to the
Holder, the exercise will be exempt from registration under the Securities Act.
In the event the Company becomes subject to the reporting requirements of
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") ninety (90) days thereafter (or such longer period as any
market stand-off agreement may require) the Securities exempt under Rule 701
may be resold, subject to the satisfaction of certain of the conditions
specified by Rule 144, including: (1) the resale being made through a broker in
an unsolicited "brokers transaction" or in transactions directly with a market
maker (as said term is defined under the Exchange Act); and, in the case of an
affiliate, (2) the availability of certain public information about the
Company, (3) the amount of Securities being sold during any three month period
not exceeding the limitations specified in Rule 144(e), and (4) the timely
filing of a Form 144, if applicable.
-6-
31
EXHIBIT "A"
TO
COMMON STOCK PURCHASE WARRANT
In the event that the Company does not qualify under Rule 701
at the time of issuance of the Warrant, then the Securities may be resold in
certain limited circumstances subject to the provisions of Rule 144, which
requires the resale to occur not less than one year after the later of the date
the Securities were sold by the Company or the date the Securities were sold by
an affiliate of the Company, within the meaning of Rule 144; and, in the case
of acquisition of the Securities by an affiliate, or by a non-affiliate who
subsequently holds the Securities less than two years, the satisfaction of the
conditions set forth in sections (1), (2), (3) and (4) of the paragraph
immediately above.
(d) Holder further understands that in the event all of
the applicable requirements of Rule 701 or 144 are not satisfied, registration
under the Securities Act, compliance with Regulation A under the Securities Act
or some other registration exemption will be required; and that, notwithstanding
the fact that Rules 144 and 701 are not exclusive, the Staff of the Securities
and Exchange Commission has expressed its opinion that persons proposing to
sell private placement securities other than in a registered offering and
otherwise than pursuant to Rules 144 or 701 will have a substantial burden of
proof in establishing that an exemption from registration is available for such
offers or sales, and that such persons and their respective brokers who
participate in such transactions do so at their own risk. Holder understands
that no assurances can be given that any such other registration exemption will
be available in such event.
HOLIDAY HOSPITALITY CORPORATION, HOLDER
By:
-------------------------------------
Its:
-------------------------------
Date:
-------------------------
-7-
32
EXHIBIT "H"
FIRST AMENDMENT TO HCC PARTICIPANT AGREEMENT
This First Amendment to HCC Participant Agreement is entered into by and
between THE HOTEL CLEARING CORPORATION, hereinafter called "HCC", and HOLIDAY
HOSPITALITY CORPORATION, Assignee of Holiday Inns, Inc. hereinafter called
"Participant", to be effective the __ day of ___, 1997.
AGREED FACTS
1. HCC and Participant have heretofore entered into an HCC Participant
Agreement dated effective December 21, 1994 (hereinafter called the
"Participant Agreement").
2. HCC and Participant have mutually agreed to amend the term of the
Participant Agreement.
3. HCC and Participant intend for this First Amendment to set forth in
its entirety their agreement to amend the term of the Participant
Agreement.
AGREEMENT
FOR AND IN CONSIDERATION of the above-stated facts, which are hereby
acknowledged as true and correct, and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, HCC and
Participant hereby agree as follows:
1. Section 5.1 of the Participant Agreement is hereby deleted in its
entirety and is replaced with the following:
"5.1 Term of Agreement. Unless earlier terminated as provided herein,
the term of this Agreement shall begin upon the Effective Date
and shall terminate on the last day of the [*] after the
Effective Date."
2. This First Amendment shall be and hereby is incorporated into the
Participant Agreement for all intents and purposes and all terms,
provisions and definitions of the Participant Agreement shall apply.
3. Except for the provisions inconsistent with the terms of this First
Amendment, the Participant Agreement is hereby ratified and affirmed
in all respects.
This First Amendment is effective as of the date stated above and executed
on the dates indicated below.
THE HOTEL CLEARING CORPORATION
By:
----------------------------
Xxxx X. Xxxxx, III
President
Date:
--------------------------
*Confidential Treatment Requested
33
HOLIDAY HOSPITALITY CORPORATION
By: /s/ XXXX X. XXXXXXXXX
----------------------------------------------
Its: Xxxx X. Xxxxxxxxx - Executive Vice President
---------------------------------------------
Date: May 12, 1997
--------------------------------------------
APPROVED
BUSINESS TERMS ________________
LEGAL FORM ____________________
34
EXHIBIT "I"
FIRST AMENDMENT TO
AGREEMENT BETWEEN RESCOM SERVICES, INC. AND
THE HOTEL CLEARING CORPORATION
This First Amendment to AGREEMENT BETWEEN RESCOM SERVICES, INC.
AND THE HOTEL CLEARING CORPORATION is entered into by and between THE
HOTEL CLEARING CORPORATION, hereinafter called "HCC", and RESCOM
SERVICES, INC., hereinafter called "Participant", to be effective the
day of 1997.
---- ------------,
AGREED FACTS
------------
1. HCC and Participant have heretofore entered into an
Agreement Between Rescom Services, Inc. and The Hotel
Clearing Corporation dated effective December 21, 1994
(hereinafter called the "Rescom Agreement").
2. HCC and Participant have mutually agreed to amend the
Rescom Agreement as specifically set forth herein.
3. HCC and Participant intend for this First Amendment to set
forth in its entirety their agreement to amend the Rescom
Agreement with respect to the matters set forth herein.
AGREEMENT
---------
FOR AND IN CONSIDERATION of the above-stated facts, which are hereby
acknowledged as true and correct and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, HCC and Participant
hereby agree as follows:
1. On the first day of the month following the first month Holiday
Hospitality Corporation processes all of its properties' GDS
transactions via Pegasus Systems, Inc.'s UltraSwitch service, section
4.1 of the Rescom Agreement shall be deleted in its entirety and is
hereby replaced with the following:
"4.1 [*] For each [*] processed by a [*] pursuant to [*] a [*] (the
[*]) as follows (based upon an [*] and hereinafter defined, of between
[*] and [*]
For any month wherein the [*] of [*] is greater than [*] of [*]
each [*];
For any month wherein the [*] of [*] is greater than [*] a
[*] of [*] each [*];
For any month wherein the [*] of [*] is greater than [*] of [*]
each [*];
For any month wherein the [*] of [*] is greater than [*] a
[*] of [*] each [*]; and
For any month wherein the [*] of [*] processed each month in
excess [*] each [*]
*Confidential Treatment Requested
35
2. Section [*] of the Rescom Agreement is hereby amended to delete the
[*] contained in the first line below [*] and replace it with [*]
The following is also added to Section 4.2:
Average [*] Effect on [*]
[*] to [*] reduced by $[*]
[*] to [*] reduced by $[*]
[*] to [*] reduced by $[*]
[*] to [*] reduced by $[*]
[*] to [*] reduced by $[*]
[*] or less reduced by $[*]
3. Notwithstanding any other provision hereof, in the event Pegasus
Systems, Inc. does not undertake an initial public offering of its
stock within twenty four (24) months of the effective date of this
First Amendment, Section 2 of this First Amendment shall be deleted
as of the expiration of twenty four (24) months after the effective
date of this First Amendment and the provisions contained within the
original Rescom Agreement with respect to Section 4.2 shall be in
force and effect as of that date forward.
4. Section 4.4 of the Rescom Agreement is hereby deleted in its entirety.
5. Section 5.1 of the Rescom Agreement is hereby deleted in its entirety.
6. This First Amendment shall be and hereby is incorporated into the
Rescom Agreement for all intents and purposes and all terms,
provisions and definitions of the Rescom Agreement shall apply.
7. Except for the provisions inconsistent with the terms of this First
Amendment, the Rescom Agreement is hereby ratified and affirmed in
all respects.
This First Amendment is effective as of the date stated above and
executed on the dates indicated below.
THE HOTEL CLEARING CORPORATION
By:
------------------------------------
Xxxx X. Xxxxx, III
President
Date:
-----------------------
RESCOM SERVICES, INC.
By:
------------------------------------
Its:
------------------------------------
By:
------------------------------------
Its:
------------------------------------
Date:
------------------------------------
*Confidential Treatment Requested
36
MUTUAL NON-DISCLOSURE AGREEMENT TO PROTECT
RELEASE OF CONFIDENTIAL INFORMATION
In the course of our past, presently ongoing, and forthcoming
discussions and negotiations involving Pegasus Systems, Inc. (including its
affiliates and subsidiaries The Hotel Industry Switch Company, The Hotel
Clearing Corporation and TravelWeb. Inc.), hereinafter collectively called
"Pegasus," and Holiday Hospitality Corporation ("HHC") (all of the rights and
interests of Holiday Inns, Inc. related to this Agreement having been assigned
to, and assumed by, HHC on April 28, 1997), doing business as Holiday Inn
Worldwide, and our respective company's products and/or services and relating
to the consideration of a business transaction or the purchase of one or more
products and/or services, we may reveal to each other certain confidential or
proprietary information with respect to corporate existence, ownership and
governance and/or produce and/or services, financial condition or otherwise.
The confidential and proprietary information in this context includes but is
not limited to all information relative to our respective businesses, business
plans, strategies or affiliations, corporate existence, ownership and
governance and products and services (now existing or proposed), and any and
all information generated by such products or services. Furthermore, we may
have prior to the date of this Agreement, disclosed to each other certain
confidential and proprietary information with respect to products and/or
services and our respective businesses. in the interest of avoiding any
misunderstandings about the basis on which this information ("Information") has
been or will be disclosed, we mutually agree to the following:
We mutually agree to not disclose to any person, except our own
respective employees on a need-to-know basis, any information disclosed
except as may be specifically authorized in writing by an officer or
authorized representative of the disclosing party or as otherwise
permitted by this Agreement. We mutually agree to require each of our
employees, representatives and agents to agree to comply with our
obligations under this Agreement before authorizing them to have access
to such Information and to obtain the prior approval of the disclosing
party for any such further dissemination of the Information to persons
other than our own employees. We also mutually agree to do all things
reasonably necessary to prevent any of our employees, representatives
and agents from disclosing any such Information to any third parties.
Additionally, we mutually agree that we will disclose such Information
solely to those additional persons to whom it is absolutely necessary
to disclose such Information and only on a need-to-know-basis.
We further agree to use any Information disclosed solely for the
purpose of determining whether or not to enter into a business
transaction with each other and/or to purchase each other's products
and/or services. On termination or expiration of our discussions and
the failure to enter into a business transaction or to purchase
products and/or services, we agree to return all originals of all such
Information to the disclosing party.
Such Information shall not include any information which (i) was
publicly known and made generally available in the public domain prior to the
time of disclosure by the disclosing party; (ii) becomes publicly known and
made generally available after disclosure by the disclosing party to the
receiving party through no action or inaction of the receiving party; (iii) is
already in the possession of the receiving party at the time of disclosure by
he disclosing party as shown by the receiving party's files and records
immediately prior to the time of disclosure and is not subject to another
confidentiality agreement (iv) is obtained by the receiving party from a third
party without a breach of such third party's obligations of confidentiality;
(v) is independently acquired or developed by the receiving party without use
of or reference to the disclosing party's Information, as shown by documents
and other competent evidence in the receiving party's possession; or (vi) is
required by law to be disclosed by the receiving party, provided that the
receiving party gives the disclosing party prompt written notice of such
requirement prior to such disclosure and assistance in obtaining an order
protecting the Information from public disclosure.
-1-
37
We mutually acknowledge that we would not enter into or continue
discussions without mutual agreement to the terms hereof and we each confirm
that it is not our intent to use the specific Information disclosed under this
agreement except for the purposes stated herein.
HHC may assign this Agreement to a parent, subsidiary, or affiliate
without consent.
A facsimile transmittal of signatures to this Agreement shall be
sufficient for all purposes.
ACCEPTED AND AGREED: HOLIDAY HOSPITALITY CORPORATION
PEGASUS SYSTEMS, INC.
By: /s/ XXXX X. XXXXX, III By: /s/ XXXXX XXXXXXX
------------------------- -------------------------
Its: Its:
------------------------ ------------------------
Date: 5/1/97 Date: 5/6/97
----------------------- -----------------------
-2-
38
EXHIBIT "K"
TERMINATION OF OPTION AND CANCELLATION OF NOTE
RESCOM SERVICES, INC. (hereinafter called "Rescom") and THE HOTEL CLEARING
CORPORATION (hereinafter called "HCC") hereby agree as follows:
AGREED FACTS
1. HCC granted to Rescom the option to purchase one share of HCC stock
as specifically set forth in that certain Stock Purchase Option with
an effective date of December 22, 1994 (the "Stock Purchase Option").
2. As partial consideration for the Stock Purchase Option, Rescom
executed and tendered to HCC a note in the principal amount of One
Hundred Thousand Dollars ($100,000.00) dated December 21, 1994
payable to HCC (the "Note").
3. For their mutual benefit, Rescom and HCC are desirous of terminating
the Stock Purchase Option and canceling the Note and intend for this
document to set forth their agreement in that regard.
AGREEMENT
In consideration of the above-stated agreed facts which are hereby
acknowledged and confessed as true and correct by Rescom and HCC and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, it is hereby mutually agreed as follows:
1. The Stock Purchase Option is hereby terminated as of the effective
date hereof and is declared to be void and of no further force and
effect.
2. The Note is hereby canceled as of the effective date hereof and is
declared to be void and of no further force and effect.
3. Any and all rights and/or obligations arising out of the Stock
Purchase Option and/or the Note are hereby terminated effective as of
the effective date hereof and declared to be void and of no further
force and effect.
4. The effective date of this Agreement shall be the Effective Date as
defined in that certain Distribution Services Agreement for Holiday
Inn Worldwide entered into of even date herewith by and between
Holiday Hospitality Corporation and Pegasus Systems, Inc.
39
REPRESENTATIONS
The parties hereto represent as follows:
1. Rescom hereby represents and warrants to HCC that as of the effective
date hereof it is the sole and exclusive holder and owner of the
Stock Purchase Option, that no other person or entity has any other
rights with respect to the Stock Purchase Option and that Rescom has
the full and complete right and authority to enter into this
Agreement and to effectuate the provisions hereof.
2. HCC hereby represents and warrants to Rescom that as of the effective
date hereof it is the sole and exclusive holder and owner of the
Note, that no other person or entity has any other rights with
respect to the Note and that HCC has the full and complete right and
authority to enter into this Agreement and to effectuate the
provisions hereof.
This Termination of Option and Cancellation of Note agreement is entered
into this 13th day of May, 1997 with an effective date as provided herein.
THE HOTEL CLEARING CORPORATION RESCOM SERVICES, INC.
By: /s/ XXXX X. XXXXX, III By: /s/ XXXXXXX X. XXXXXXX
-------------------------- ---------------------------
Xxxx X. Xxxxx, III Xxxxxxx X. Xxxxxxx
President
Its: Vice President
--------------------------
May 12, 1997
--------------------
APPROVED
BUSINESS TERMS /s/ LS
-----------
LEGAL FORM /s/ DM
--------------
-2-
40
EXHIBIT "L"
SCHEDULE OF INSURANCE [XXXXXXX
XXXXXXXX
& LAFITTE
PEGASUS SYSTEMS, INC.; THISCO & HOTEL LOGO]
CLEARING CORP.; TRAVELWEB, INC.
Two Turtle Creek Village
0000 Xxx Xxxx Xxx., Xxxxx 000
Xxxxxx, Xxxxx 00000-0000
(000)000-0000*FAX(214)000-0000
DATE: February 20, 1997
COVERAGE LIMITS EXPIRES COMPANY POLICY # PREMIUM COMMENT
Commercial Package:
Contents: $ 700,000 01/01/98 Xxxxxx Insurance TKP76473903 $10,567.00 $1,000 Ded
Extra Expense 200,000 Included $1,000 Ded
General Liability
Occurrence 1,000,000 Included
Aggregate 2,000,000
Fire Damage 50,000
Medical Exp. 5,000
Electronic Equipment (Texas) 600,000 Included $1,000 Ded
Transit/Temp. Loc. 25,000
Commercial Crime: 01/01/98 Xxxxxx Insurance 3F78976604 $ 1,054.00 $5,000 Ded
Employee Dishonesty $ 250,000
Forgery/Alteration $ 250,000
Workers Compensation 500/500/500 01/01/98 Xxxxxx Insurance 3BG04035804 $11,624.00
Auto: Hired/Non Owned Liab. $1,000,000 01/01/98 Xxxxxx Insurance E3H00650003 $ 675.00
Hired/Non Owned Phy. Damage ACV or $25,000 whichever less
Umbrella $5,000,000 01/01/98 Xxxxxx Insurance 3SB04723204 $ 2,250.00 $10,000 Retained Limit
Electronic Equipment (Arizona) $1,500,000 01/01/98 Xxxxxx Insurance 3AT62283804 $ 5,000.00 $1,000 Ded
Business Interruption 500,000 Included $1,000 Ded
THIS SCHEDULE LISTS THE INSURANCE POLICIES WE PROVIDE FOR YOU. IF YOU HAVE
POLICIES FROM OTHER INSURANCE OFFICES, WE SUGGEST YOU ADD THEM TO THIS LIST.
REMEMBER THIS SCHEDULE IS ONLY A SUMMARY. REFER TO THE ACTUAL POLICIES FOR
SPECIFIC DETAILS.
41
SCHEDULE I
SCHEDULE OF IMPLEMENTATION
42
SCHEDULE II
REPORTS
43
ULTRASWITCH SYSTEM DOWNTIME REPORT
HOTELS
Saturday, 01 March, 1997 through Monday, 31 March, 1997
LOG NUMBER RFC DATE TIME PARTICIPANT REASON MINUTES
8302 0 24-Mar-97 14:29 -B UltraSwitch Software 9
PCD card link level software malfunction
8602 0 27-Mar-97 02:57 -A S/W Maintenance 18
Xxxx X. stopped kivanet to tpe1 to remount drives
under the fallover program*********XXXX X.
CHECK ON THIS WITH XXXX X.
8602 0 27-Mar-97 02:57 -B S/W Maintenance 18
Xxxx X. sopped kivanet to tpe1 to remount drives
under this fallover program*********XXXX X.
CHECK ON THIS WITH XXXX X.
8604 0 27-Mar-97 03:29 -A UltraSwitch Software 31
TPE1 panicked and went into kernal debugger.
8604 0 27-Mar-97 03:29 B UltraSwitch Software 31
TPE1 panicked and went into kernal debugger.
8605 0 27-Mar-97 03:03 -A S/W Maintenance 12
Software install-Adding hotels type A&B for
all GDS's
8605 0 27-Mar-97 03:03 -B S/W Maintenance 12
Software install-Adding hotels type A&B for
all GDS's
44
GRAPHICAL STATISTICS REPORT
----------------------------------------------------------------------------------------------------------------------------------
HOTELS CORPORATION
----------------------------------------------------------------------------------------------------------------------------------
NET BOOKINGS
------------
MAR '96 APR'96 MAY'96 JUN'96 JUL'96 AUG'96 SEP'96 OCT'96 NOV'96 DEC'96 JAN'97 FEB'97 MAR'97
----------------------------------------------------------------------------------------------------------------------------------
Type A Net Bookings
52,847 46,229 45,534 41,484 34,114 6,697 8,127 10,742 8,588 6,460 10,472 9,997 8,901
----------------------------------------------------------------------------------------------------------------------------------
Type B Net Bookings
-22,321 -19,435 -20,958 -20,155 -12,872 -000 -000 -000 -000 -000 -000 -000 -000
----------------------------------------------------------------------------------------------------------------------------------
Total Net Bookings
30,526 26,794 24,576 21,329 21,242 6,548 8,015 10,623 8,341 6,290 10,168 9,760 8,213
----------------------------------------------------------------------------------------------------------------------------------
STATUS MESSAGES:
----------------------------------------------------------------------------------------------------------------------------------
Status Message Segments
1,196,924 2,891,098 5,306,908 4,819,517 4,319,454 2,024,576 1,992,662 2,181,671 1,735,110 1,302,636 1,869,098 2,128,449 2,147,646
----------------------------------------------------------------------------------------------------------------------------------
Ratio of Status Messages
to Net Bookings
39.21 107.90 215.94 225.96 203.34 309.19 248.62 205.37 208.02 207.10 183.82 218.08 261.49
----------------------------------------------------------------------------------------------------------------------------------
UltraSwitch(R) Ratio
30.78 32.37 33.06 40.10 39.39 37.73 41.63 40.33 37.36 45.27 34.71 43.04 47.50
----------------------------------------------------------------------------------------------------------------------------------
TYPE A RESPONSE TIME:
2.69 3.28 3.59 3.49 3.56 3.19 3.37 3.72 2.76 2.65 2.64 2.70 2.82
----------------------------------------------------------------------------------------------------------------------------------
All Others
2.36 2.24 2.31 2.48 2.47 2.17 2.34 2.01 1.85 1.71 1.93 2.03 1.98
----------------------------------------------------------------------------------------------------------------------------------
UltraSwitch(R)
0.22 0.21 0.21 0.22 0.22 0.22 0.25 0.21 0.22 0.23 0.23 0.23 0.23
----------------------------------------------------------------------------------------------------------------------------------
TYPE B DWELL TIME IN ULTRASWITCH(R):
----------------------------------------------------------------------------------------------------------------------------------
Type B Bookings
----------------------------------------------------------------------------------------------------------------------------------
All Others
----------------------------------------------------------------------------------------------------------------------------------
Status Messages
----------------------------------------------------------------------------------------------------------------------------------
All Others
----------------------------------------------------------------------------------------------------------------------------------
[GRAPH] [GRAPH] [GRAPH]
[GRAPH] [GRAPH] [GRAPH]
45
ULTRASWITCH SYSTEM DOWNTIME REPORT
HOTELS
Saturday, 01 March, 1997 through Monday, 31 March, 1997
LOG NUMBER RFC DATE TIME PARTICIPANT REASON MINUTES
6203 0 03-Mar-97 13:00 -B UltraSwitch Software 1
1A-KSF reported full. 1A-KSF had a stuck message.
6403 0 05-Mar-97 08:25 -A UltraSwitch Software 1
Kivanet Shared memory kill kivanet on tpe2.
6403 0 05-Mar-97 08:25 -B UltraSwitch Software 1
Kivanet Shared memory kill kivanet on tpe2.
7208 0 13-Mar-97 02:58 -A S/W Maintenance 3
Software install-RFC#3367 Remove ksf from
statsub, increase max-outstanding on ksf for 1A to 8.
7208 0 13-Mar-97 02:58 -B S/W Maintenance 4
Software install-RFC#3367 Remove ksf from
statsub, increase max-outstanding on ksf for 1A to 8.
7708 0 18-Mar-97 03:11 A S/W Maintenance 3
Software install-Poll test with sabre DCA and
southern Pacific (sp), update statsub comm engines
production comm engines will have letters, test
comm engines will have numbers. New covia ip for
rate changes.
7708 0 18-Mar-97 03:11 -B S/W Maintenance 3
Software install-Poll test with sabre DCA and
southern Pacific (sp), update statsub comm engines
production comm engines will have letters, test
comm engines will have numbers. New covia ip for
rate changes.
7807 0 19-Mar-97 20:18 -A Transaction Processing Engine Outage 61
Out of swap space.
7807 0 19-Mar-97 20:18 B Transaction Processing Engine Outage 61
Out of swap space.
7812 0 19-Mar-97 03:48 -A S/W Maintenance 9
Software install-RFC#3367.
7812 0 19-Mar-97 03:48 -B S/W Maintenance 9
Software install-RFC#3367
7904 0 20-Mar-97 02:44 -A S/W Maintenance 3
Software install-moving type A to comm
engine CEF.
7904 0 20-Mar-97 02:44 -B S/W Maintenance 3
Software install-moving type A to comm
engine CEF.
46
ULTRASWITCH PARTICIPANT DOWNTIME REPORT
HOTELS
Saturday, 01 March, 1997 through Monday, 31 March, 1997
LOG NUMBER RFC DATE TIME PARTICIPANT REASON MINUTES
0 0 11-Mar-97 14:05 -B Participant Related Downtime 1
Participant
0 0 13-Mar-97 -A Participant Related Downtime 4
Participant
0 0 17-Mar-97 14:14 -A Participant Related Downtime 4
Participant
0 0 17-Mar-97 14:14 -B Participant Related Downtime 4
Participant
0 0 25-Mar-97 02:00 -A Participant Related Downtime 1
Participant
0 0 26-Mar-97 14:23 -B Participant Related Downtime 1
Participant
47
UltraSwitch(R) Billing Summary
03/01/97 through 03/31/97
Global Distribution System: ALL
Hotel Reservation System:
TYPE-A TRANSACTION SUMMARY
Booking Requests
ET 0 HK 380 IG 0 IN 0
IS 0 IX 0 NN 0 SS 7590
XX 2346 ZZ 0 Other 0
Booking Responses
EK 0 HK 7849 HX 2088 IK 0
NN 0 NO 0 UC 353 UX 26
XK 0 Other 0
TYPE-B TRANSACTION SUMMARY
Booking Requests from Global Distribution Systems
AS 0 CA 0 ET 0 FS 0
HK 0 0 HN 0 HQ 0
HS 0 IG 0 IN 0 IS 0
IX 0 KK 0 LK 0 LL 0
LQ 0 NA 0 NN 0 NO 0
NS 0 OX 0 PN 0 RL 0
SK 0 SQ 0 SS 0 TL 0
UC 0 XL 0 XR 0 XX 0
Other 0
Booking Responses from Hotels
AS 0 CA 0 CC 0 EK 0
HK 980 HS 0 HX 0 IK 0
KK 0 KL 0 LL 0 NN 0
NO 283 SK 0 TK 0 TL 0
UC 174 UN 0 US 0 UU 0
UX 0 XR 0 XX 0 Other 0
Status/Rate Update Requests from Hotels
HCV 0 XXX 0 XXX 0 XXX 0
XXX 00000 HVC 121135 XXX 0 XXX 0
XXX 00000 HVQ 0 HVR 0 HVS 0
Other 0
Status Responses from Global Distribution Systems
AVH 7249
Unknown Type B messages to HRS: 0
Unknown Type B messages to GDS: 0
Other: Messages with action/status codes not on the list.
48
UltraSwitch(R) Transaction Report
03/01/97 through 03/31/97
Global Distribution System: ALL
Hotel Reservation System:
TYPE-A TRANSACTION SUMMARY
Booking Requests
ET 0 HK 1250 IG 0 IN 0
IS 0 IX 0 NN 0 SS 16532
XX 4417 ZZ 0 Other 0
Booking Responses
EK 0 HK 15352 HX 1722 IK 0
NN 1 NO 0 UC 4842 UX 282
XK 0 Other 0
TYPE-B TRANSACTION SUMMARY
Booking Requests from Global Distribution Systems
AS 0 CA 0 ET 0 FS 0
HK 0 0 HN 0 HQ 0
HS 0 IG 0 IN 0 IS 0
IX 0 KK 0 LK 0 LL 0
LQ 0 NA 0 NN 0 NO 0
NS 0 OX 0 PN 0 RL 0
SK 0 SQ 0 SS 0 TL 0
UC 0 XL 0 XR 0 XX 0
Other 0
Booking Responses from Hotels
AS 0 CA 0 CC 0 EK 0
HK 272 HS 0 HX 0 IK 0
KK 0 KL 0 LL 0 NN 0
NO 150 SK 0 TK 0 TL 0
UC 81 UN 0 US 0 UU 0
UX 0 XR 0 XX 0 Other 0
Status/Rate Update Requests from Hotels
HCV 0 XXX 0 XXX 0 XXX 0
XXX 000000 HVC 956346 XXX 0 XXX 0
XXX 000000 HVQ 0 HVR 0 HVS 0
Other 0
Status Responses from Global Distribution Systems
AVH 9331
Unknown Type B messages to HRS: 0
Unknown Type B messages to GDS: 0
Other: Messages with action/status codes not on the list.
49
UltraSwitch(R) Transaction Report
03/01/97 through 03/31/97
Global Distribution System: ALL
Hotel Reservation System:
TYPE-A TRANSACTION SUMMARY
Booking Requests
ET 0 HK 1630 IG 0 IN 0
IS 0 IX 0 NN 0 SS 24122
XX 6763 ZZ 0 Other 0
Booking Responses
EK 0 HK 23201 HX 3810 IK 0
NN 0 NO 0 UC 5195 UX 308
XK 0 Other 0
TYPE-B TRANSACTION SUMMARY
Booking Requests from Global Distribution Systems
AS 0 CA 0 ET 0 FS 0
HK 0 0 HN 0 HQ 0
HS 0 IG 0 IN 0 IS 0
IX 0 KK 0 LK 0 LL 0
LQ 0 NA 0 NN 0 NO 0
NS 0 OX 0 PN 0 RL 0
SK 0 SQ 0 SS 0 TL 0
UC 0 XL 0 XR 0 XX 0
Other 0
Booking Responses from Hotels
AS 0 CA 0 CC 0 EK 0
HK 1252 HS 0 HX 0 IK 0
KK 0 KL 0 LL 0 NN 0
NO 433 SK 0 TK 0 TL 0
UC 255 UN 0 US 0 UU 0
UX 0 XR 0 XX 0 Other 0
Status/Rate Update Requests from Hotels
HCV 0 XXX 0 XXX 0 XXX 0
XXX 000000 HVC 1077481 XXX 0 XXX 0
XXX 000000 HVQ 0 HVR 0 HVS 0
Other 0
Status Responses from Global Distribution Systems
AVH 16580
Unknown Type B messages to HRS: 0
Unknown Type B messages to GDS: 0
Other: Messages with action/status codes not on the list.
50
UltraSwitch(R) Billing Summary
03/01/97 through 03/31/97
Global Distribution System: ALL
Hotel Reservation System:
BILLING FORMULA FOR TYPE A TRANSACTIONS
Confirmed Booking Requests 5217
Cancellation Responses (-) 2320
---------------------------------------------------------------------------------------------------------
Total Type A Net Bookings 2897
BILLING FORMULA FOR TYPE B TRANSACTIONS
Reservations
IS to HRS (sell) 0
SS to HRS (sell) (+) 0
NN to HRS (Need, reply required) (+) 0
IN to HRS (sell, possible dup) (+) 0
UX from HRS (no cancel) (+) 0
---------------------------------------------------------------------------------------------------------
Total Type B Reservations 0
Cancellations
XX to HRS (cancel) 0
IX to HRS (cancel) (+) 0
NO from HRS (+) 283
NN from HRS (denial of booking) (+) 0
UC from HRS (could not sell) (+) 174
---------------------------------------------------------------------------------------------------------
Total Type B Cancellations 457
Type B Net Booking Summary
Reservations 0
Cancellations (-) 457
---------------------------------------------------------------------------------------------------------
Total Type B Net Bookings -457
NET BOOKING SUMMARY
Type A Net Bookings 2897
Type B Net Bookings (+) -457
---------------------------------------------------------------------------------------------------------
Total Net Bookings 2440
BILLING FORMULA FOR STATUS MODIFICATIONS
HVC (from HRS) 121135
HVO (from HRS) (+) 74956
HVA (from HRS) (+) 90925
HVR (from HRS) (+) 0
HVN (from HRS) (+) 0
HVS (from HRS) (+) 0
HVQ (from HRS) (+) 0
HVM (from HRS) (+) 0
---------------------------------------------------------------------------------------------------------
Total Status Modifications 287016
51
UltraSwitch(R) Billing Summary
03/01/97 through 03/31/97
Global Distribution System: ALL
Hotel Reservation System:
BILLING FORMULA FOR TYPE A TRANSACTIONS
Confirmed Booking Requests 10138
Cancellation Responses (-) 4134
---------------------------------------------------------------------------------------------------------
Total Type A Net Bookings 6004
BILLING FORMULA FOR TYPE B TRANSACTIONS
Reservations
IS to HRS (sell) 0
SS to HRS (sell) (+) 0
NN to HRS (Need, reply required) (+) 0
IN to HRS (sell, possible dup) (+) 0
UX from HRS (no cancel) (+) 0
---------------------------------------------------------------------------------------------------------
Total Type B Reservations 0
Cancellations
XX to HRS (cancel) 0
IX to HRS (cancel) (+) 0
NO from HRS (+) 150
NN from HRS (denial of booking) (+) 0
UC from HRS (could not sell) (+) 81
---------------------------------------------------------------------------------------------------------
Total Type B Cancellations 231
Type B Net Booking Summary
Reservations 0
Cancellations (-) 231
---------------------------------------------------------------------------------------------------------
Total Type B Net Bookings -231
NET BOOKING SUMMARY
Type A Net Bookings 6004
Type B Net Bookings (+) -231
---------------------------------------------------------------------------------------------------------
Total Net Bookings 5773
BILLING FORMULA FOR STATUS MODIFICATIONS
HVC (from HRS) 956346
HVO (from HRS) (+) 256627
HVA (from HRS) (+) 647657
HVR (from HRS) (+) 0
HVN (from HRS) (+) 0
HVS (from HRS) (+) 0
HVQ (from HRS) (+) 0
HVM (from HRS) (+) 0
---------------------------------------------------------------------------------------------------------
Total Status Modifications 1860630
52
UltraSwitch(R) Billing Summary
03/01/97 through 03/31/97
Global Distribution System: ALL
Hotel Reservation System:
BILLING FORMULA FOR TYPE A TRANSACTIONS
Confirmed Booking Requests 15355
Cancellation Responses (-) 6454
-------------------------------------------------------------------------
Total Type A Net Bookings 8901
BILLING FORMULA FOR TYPE B TRANSACTIONS
Reservations
IS to HRS (sell) 0
SS to HRS (sell) (+) 0
NN to HRS (Need, reply required) (+) 0
IN to HRS (sell, possible dup) (+) 0
UX from HRS (no cancel) (+) 0
-------------------------------------------------------------------------
Total Type B Reservations 0
Cancellations
XX to HRS (cancel) 0
IX to HRS (cancel) (+) 0
NO from HRS (+) 433
NN from HRS (denial of booking) (+) 0
UC from HRS (could not sell) (+) 255
-------------------------------------------------------------------------
Total Type B Cancellations 688
Type B Net Booking Summary
Reservations 0
Cancellations (-) 688
-------------------------------------------------------------------------
Total Type B Net Bookings -688
NET BOOKING SUMMARY
Type A Net Bookings 8901
Type B Net Bookings (+) -688
-------------------------------------------------------------------------
Total Net Bookings 8213
BILLING FORMULA FOR STATUS MODIFICATIONS
HVC (from HRS) 1077481
HVO (from HRS) (+) 331583
HVA (from HRS) (+) 738582
HVR (from HRS) (+) 0
HVV (from HRS) (+) 0
HVS (from HRS) (+) 0
HVQ (from HRS) (+) 0
HVM (from HRS) (+) 0
-------------------------------------------------------------------------
Total Status Modifications 2147646
53
SUB-CHAIN STATISTICS REPORT
------------------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL
MAR '96 APR '96 MAY '96 JUN '96 JUL '96 AUG '96 SEP '96 OCT '96 NOV '96 DEC '96 JAN '97 FEB '97 MAR'97
------------------------------------------------------------------------------------------------------------------------------------
NET BOOKINGS:
------------
------------------------------------------------------------------------------------------------------------------------------------
Type A Net
Bookings 5,876 5,852 6,292 5,952 5,245 2,788 3,437 3,899 3,416 2,344 3,904 3,667 2,897
------------------------------------------------------------------------------------------------------------------------------------
Type B Net
Bookings -2,021 -1,932 -2,314 -2,031 -1,428 -000 -00 -00 -000 -000 -000 -000 -000
------------------------------------------------------------------------------------------------------------------------------------
Total Net
Bookings 3,855 3,920 3,978 3,921 3,817 2,674 3,366 3,837 3,242 2,225 3,706 3,515 2,440
------------------------------------------------------------------------------------------------------------------------------------
STATUS
MESSAGES:
------------
------------------------------------------------------------------------------------------------------------------------------------
Status Message
Segments 65,041 279,476 588,223 652,903 624,085 262,016 316,791 261,590 235,216 158,968 304,652 419,970 287,016
------------------------------------------------------------------------------------------------------------------------------------
Ratio of Status
Messages to
Net Bookings 16.87 71.29 142.84 166.51 163.50 97.99 94.11 68.18 72.55 70.55 82.21 119.48 117.63
------------------------------------------------------------------------------------------------------------------------------------
UltraSwitch(R)
Ratio 30.78 32.37 33.06 40.10 39.39 37.73 41.63 40.33 37.36 45.27 34.71 43.04 47.50
------------------------------------------------------------------------------------------------------------------------------------
