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EXHIBIT 10.5
FORM OF MANAGEMENT SERVICES AGREEMENT
This MANAGEMENT SERVICES AGREEMENT, dated as of _________, 2000, is
made and entered into by and between, XXXXXXXXXXX.XXX LP, a Delaware limited
partnership (the "Partnership"), and TRAVELOCITY HOLDINGS, INC., a Delaware
corporation (the "Manager"). Capitalized terms not otherwise defined herein
shall have the respective meanings set forth in the Partnership Agreement (as
defined below).
WHEREAS, the Partnership was formed pursuant to the Agreement of
Limited Partnership of Xxxxxxxxxxx.xxx LP, dated September 30, 1999 (as
modified, amended or supplemented from time to time, the "Partnership
Agreement") to provide consumer-direct travel content and travel reservation
services through an internet web site or web sites, online, wireless, cable or
other consumer-direct services.
WHEREAS, the parties hereto desire to enter into this Management
Services Agreement, pursuant to which the Manager will supervise and manage the
day-to-day operations of the Partnership, subject to the direction and oversight
of the Board of Directors of the Partnership (the "Board of Directors"), on the
terms set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the parties hereto agree as follows:
ARTICLE I
APPOINTMENT OF THE MANAGER
1.1. Appointment. The Partnership hereby engages the Manager as its
exclusive agent to provide, and the Manager hereby agrees to provide, the
management services described in Section 2.1 hereof (the "Services"), on the
terms and conditions set forth in this Agreement.
ARTICLE II
DUTIES OF THE MANAGER
2.1 Supervision of Operations. Subject to the direction and oversight
of the Board of Directors and its authority to delegate, the Manager shall
supervise and manage the day-to-day operations of the Partnership, and in
furtherance thereof, the Manager shall have authority on behalf of the
Partnership to take all actions and make all decisions, other than as provided
in Article III. Without limiting the generality of the
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foregoing, except as otherwise provided in Article III, the Manager shall have
the authority, in the name and on behalf of the Partnership:
(a) to develop and prepare a business plan each year
which will set forth the operating goals and plans
for the Partnership;
(b) to execute, deliver and perform, or authorize the
execution, delivery and performance of, contracts,
deeds, leases, licenses, and other instruments in the
ordinary course of business;
(c) subject to Sections 2.2 and 2.3 hereof to employ,
retain, consult with and dismiss such personnel of
the Partnership as may be required for the
accomplishment of the Partnership's business;
(d) to supervise, direct and control such personnel of
the Partnership in operating the Partnership's
business;
(e) to establish and enforce limits of authority and
internal controls with respect to all personnel and
functions;
(f) to engage attorneys, consultants and accountants for
the Partnership;
(g) to develop or cause to be developed accounting
procedures for the maintenance of the Partnership's
books of account;
(h) to appoint auditors; and
(i) to do all such acts as shall be authorized in this
Agreement or by the Board of Directors in writing
from time to time.
2.2 Designation of Executive Officers. The executive officers of the
Partnership shall be designated by the Manager, subject to the approval of the
Board of Directors.
2.3 Removal of Executive Officers. Any executive officer may be removed
by the Board of Directors with or without cause. If an executive officer is
removed by the Board of Directors, the Manager shall designate a successor,
subject to the approval of the Board of Directors.
2.4 Personnel. The Manager shall provide and make available as
necessary all professional, supervisory, managerial, administrative and other
personnel as are necessary to perform its obligations hereunder. All persons
performing services under this
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Agreement, including persons serving as executive officers of the Partnership,
shall be employed and paid by the Manager and shall be considered employees of
the Manager for all purposes.
2.5 Standard of Performance. The Manager shall perform its obligations
hereunder in a prudent and efficient manner and shall perform its obligations
hereunder in accordance with all applicable laws, rules and regulations.
2.6 Manager's Right to Request Instructions. At any time, the Manager
may, if it reasonably deems it necessary or appropriate, request written
instructions from the Partnership's Board of Directors within a reasonable
period of time prior to the taking of action with respect to any matter
contemplated by this Agreement, and may defer action thereon pending receipt of
such instructions. Actions taken by the Manager in accordance with the written
instructions of the Partnership's Board of Directors, or failure to act pending
the receipt of such written instructions, shall be deemed to be proper conduct
within the scope of the Manager's authority under this Agreement.
2.7 Books and Records. The Manager shall maintain the books of account
and other records of the Partnership, including without limitation all tax
returns, financial statements, contracts and licenses of the Partnership at all
times at such place or places approved by the Board of Directors.
ARTICLE III
LIMITATIONS ON MANAGER'S AUTHORITY
3.1 Interested Transactions. The Manager shall have no authority to
give any notice, to consent to the taking of any action under, or otherwise to
act on behalf of the Partnership with respect to, any agreement or transaction
between the Partnership and the Manager or any affiliate of the Manager.
3.2 Supermajority Decisions. Notwithstanding any other provision of
this Management Services Agreement to the contrary, the Manager shall have no
authority to consent to or approve on behalf of the Partnership any of the
"supermajority decisions" set forth in Section 6.3(e) of the Partnership
Agreement.
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ARTICLE IV
MANAGEMENT FEES
4.1 Management Fees. In consideration of the Manager's performance of
the Services:
(a) the Partnership will pay the Manager a management fee
equal to the costs and expenses incurred by the
Manager in performing Services under this Agreement,
on a fully allocated basis, including general and
administrative expenses, plus 5%; and
(b) the Partnership will grant the Manager options to
acquire Common Stock of Xxxxxxxxxxx.xxx (in an amount
and on terms to be determined by the Board of
Directors) in order to permit the Manager
concurrently to grant to employees of the Manager
options to acquire Common Stock of Xxxxxxxxxxx.xxx on
the same terms. Upon exercise of these options:
(1) the Partnership shall transfer shares of
Xxxxxxxxxxx.xxx Common Stock to the Manager
in respect of which the option is being
exercised, and
(2) the Manager shall (i) transfer such shares
of Xxxxxxxxxxx.xxx Common Stock to employees
of the Manager, and (ii) concurrently
transfer to the Partnership the net proceeds
received by the Manager with respect to such
shares (but excluding any amounts paid in
respect of applicable withholding taxes,
which amounts shall not be transferred), and
such net proceeds shall be a reduction of
the management fee payable by the
Partnership to the Manager and shall not
constitute a capital contribution.
4.2 Method of Payment. The Partnership will pay the management fee to
the Manager monthly in arrears in U.S. dollars, without set off or deduction for
any tax or other withholdings, within seven days of its receipt of the Manager's
invoice. Each invoice will be accompanied by a reasonably detailed calculation
of the management fee, including an itemized list of costs and expenses.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1 Representation and Warranties of the Partnership. The Partnership
hereby represents and warrants to the Manager that (i) the Partnership is duly
formed, validly existing and in good standing under the laws of its jurisdiction
of formation and has full power and authority to perform its obligations under
this Agreement; (ii) all partnership and other proceeding required to be taken
by the Partnership or on its behalf to authorize it to enter into and perform
its obligations under this Agreement have been duly and validly taken, (iii)
this Agreement has been duly and validly executed and delivered by the
Partnership, and constitutes a valid and binding obligation of the Partnership,
enforceable against the Partnership in accordance with its terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency, moratorium and
similar laws affecting the rights of creditors generally and by general
principles of equity; (iv) the execution and delivery of this Agreement by the
Partnership and the consummation of the transactions contemplated hereby will
not result in a default under, or violate, (x) the Partnership Agreement or (y)
any material agreement to which the Partnership is a party or by which it is
bound; and (v) the execution and delivery of this Agreement by the Partnership
and the performance of its obligations hereunder do not require the consent or
approval of any governmental or regulatory body or judicial authority.
5.2 Representation and Warranties of the Manager. The Manager hereby
represents and warrants to the Partnership that (i) the Manager is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization and has full power and authority to perform its
obligations under this Agreement; (ii) all corporate and other proceeding
required to be taken by the Manager or on its behalf to authorize it to enter
into and perform its obligations under this Agreement have been duly and validly
taken, (iii) this Agreement has been duly and validly executed and delivered by
the Manager, and constitutes a valid and binding obligation of the Manager,
enforceable against the Manager in accordance with its terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency, moratorium and
similar laws affecting the rights of creditors generally and by general
principles of equity; (iv) the execution and delivery of this Agreement by the
Manager and the consummation of the transactions contemplated hereby will not
result in a default under, or violate, (x) the charter or bylaws of the Manager
or (y) any material agreement to which the Manager is a party or by which it is
bound; and (v) the execution and delivery of this Agreement by the Manager and
the performance of its obligations hereunder do not require the consent or
approval of any governmental or regulatory body or judicial authority.
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ARTICLE VI
INDEMNIFICATION
6.1 Indemnification by the Partnership. The Partnership hereby agrees,
to the fullest extent permitted by law, to indemnify the Manager, its officers,
directors, employees and agents from and against any and all claims, actions,
liabilities, losses, damages, costs and expenses, including fees and expenses of
counsel (collectively, "Losses") that may be incurred by such persons, directly
or indirectly, arising out of, based upon or resulting from (i) the
Partnership's breach of any of its obligations under this Agreement or (ii) the
Manager's performance of Services under this Agreement; provided, however, that
the indemnification provided in this Section 6.1 shall not apply to any Losses
to the extent arising out of, based upon or resulting from the gross negligence
or willful misconduct of the Manager or its officers, directors, employees or
agents.
6.2 Indemnification by the Manager. The Manager hereby agrees to
indemnify the Partnership, its officers, directors, employees and agents from
and against any and all Losses that may be incurred by such persons, directly or
indirectly, arising out of, based upon or resulting from (i) the Manager's
breach of any of its obligations under this Agreement or (ii) the gross
negligence or willful misconduct of the Manager or its officers, directors,
employees or agents.
ARTICLE VII
TERM; TERMINATION
7.1 Term. This Agreement shall commence on the date hereof and shall
remain in effect until the dissolution of the Partnership in accordance with the
Partnership Agreement; provided, however, that this Agreement may be terminated
as provided in Section 7.2 hereof.
7.2 Termination. This Agreement may be terminated at any time (i) by
the mutual written consent of the Partnership and the Manager; (ii) by the
Partnership in the event that the Manager shall default in any material respect
in the performance of any of its material obligations hereunder, which default
shall not have been cured within 90 days after written notice thereof from the
Partnership, (iii) by the Manager in the event that the Partnership shall
default in any material respect in the performance of any of its material
obligations hereunder, which default shall not have been cured within 90 days
after written notice thereof from the Manager, and (iv) by the Manager or the
Partnership when the Percentage Interest of the Travelocity Holdings Partners is
less than thirty-five percent (35%).
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ARTICLE VIII
MISCELLANEOUS
8.1 Notices. Each notice relating to this Agreement shall be in writing
and shall be delivered in person, by registered or certified mail or by
confirmed facsimile to the following address or such other address or addresses
as either party may advise in writing from time to time.
If to the Partnership, to:
Xxxxxxxxxxx.xxx LP
[address]
Attn: _________________
Tel.: _________________
Fax: _________________
If to the Manager, to:
Travelocity Holdings, Inc.
[address]
Attn: _________________
Tel.: _________________
Fax: _________________
8.2 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be considered an original.
8.3 Headings. The headings of sections of this Agreement are inserted
for convenience only and shall not be deemed to constitute a part of this
Agreement.
8.4 Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided that no party may assign, delegate or otherwise
transfer any of its rights or obligations under this Agreement without the
consent of the other party hereto except that the Manager may transfer or
assign, in whole or from time to time in part, to one or more of its affiliates,
its rights under this Agreement, but any such transfer or assignment will not
relieve the Manager of its obligations hereunder.
8.5 Severability. Every provision of this Agreement is intended to be
severable. If any term or provision of this Agreement is illegal or invalid for
any reason whatsoever such term or provision will be enforced to the maximum
extent permitted by law and, in
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any event, such illegality or invalidity shall not affect the validity of the
remainder of this Agreement.
8.6 Non-waiver. No provision of this Agreement shall be deemed to have
been waived except if the giving of such waiver is contained in a written notice
given to the party claiming such waiver and no such waiver shall be deemed to be
a waiver of any other or further obligation or liability of the party or parties
in whose favor the waiver was given.
8.7 Amendment. This Agreement may only be amended, modified or
supplemented by an instrument in writing signed on behalf of each of the
parties.
8.8 Applicable Law. This Agreement and the rights and obligations of
the parties under it shall be interpreted and enforced in accordance with and
governed by the laws of the State of Delaware.
8.9 Entire Agreement. This Agreement and the Partnership Agreement
constitute the entire agreement of the parties with respect to the subject
matter to which the Agreement relates and supersedes any and all prior
agreements, whether written or oral, among the parties with respect to the same
subject matter.
8.10 Exclusivity. The Manager shall not, directly or indirectly, enter
into or conduct any business other than (i) in connection with the ownership,
acquisition and disposition of Partnership Interests as a General Partner or
Limited Partner, (ii) in connection with the ownership, acquisition and
disposition of the capital stock of Xxxxxxxxxxx.xxx Inc., and (iii) the
management of the business of the Partnership as provided for in this Agreement
and such activities as are incidental thereto.
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IN WITNESS WHEREOF this Agreement has been executed by the undersigned
as of the date first written above.
TRAVELOCITY HOLDINGS, INC.
By:
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Name:
Title:
XXXXXXXXXXX.XXX LP
By:
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Name:
Title:
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