TECHNICAL SERVICES AGREEMENT
Exhibit 10.2
This Technical Services Agreement (the “Agreement”) is entered into on this 1st day of August, 2009 by and among Shanghai EZTripMart Travel Agency Co., Ltd., a limited liability company incorporated in the People’s Republic of China (“China” or “PRC”) with its registered office at 00/X, 000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxxx (“SHEZT”); and Shanghai Junli Air Service Co., Ltd., a limited liability company incorporated in China with its registered office at Xxxxx 000, 000-0 Xxx’xx Xxxx Xxxx, Xxxxxxxx, Xxxxx (“Junli”). (Each of SHEZT and Junli is herein referred to as a “Party” and collective as the “Parties”).
WHEREAS:
1.
SHEZT engages, among other things, in the business of travel products and services as set forth in more detail in its business license, including the operation of the information technology systems for providing travel products and services, and holds a travel agency license and a Value-Added Telecommunication Services License.
2.
Junli engages, among other things, in the business of international and domestic airline ticket sales and domestic cargo agency as set forth in more detail in its business license (the “Business”), and holds tier-one and tier-two air transport sales agency licenses issued by China Air Transport Association.
3.
Junli wishes to engage SHEZT exclusively to provide, and SHEZT wishes to be so engaged by Junli to provide, certain technical and other related services with respect to the information technology aspects of the Business, including the operation of the relevant website, in accordance with this Agreement.
NOW THEREFORE, in consideration of the covenants and agreements contained herein, the Parties hereby agree as follows:
1.
CERTAIN DEFINITIONS
In this Agreement:
“Affiliate” means, with respect to any Person, any other Person that directly or indirectly owns a Controlling interest in, or exercises Control over, such Person, or in or over which such Person directly or indirectly owns a Controlling interest or exercises Control, or that is otherwise directly or indirectly under common ownership or Control with such Person.
“Agreement” has the meaning given to such term in the preamble.
“Business” has the meaning given to such term in Recital 2.
“Business Day” means any day when commercial banks are generally open for business in Shanghai, China.
“CIETAC” has the meaning given to such term in Section 10(b).
“Confidential Information” has the meaning given to such term in Section 9(b).
“Control” means having the power to direct or appoint the management of a company and “Controlled” or “Controlling” shall have correlative meanings.
“Dispute” has the meaning given to such term in Section 10.
“Dispute Notice” has the meaning given to such term in Section 10(a).
“Force Majeure” means any event that is beyond the Party’s reasonable control and cannot be prevented with reasonable care, including but not limited to acts of governments, acts of nature, fire, explosion, typhoon, flood, earthquake, lightning, war, epidemic, strikes or riot. However, any shortage of credit, capital or finance shall not be regarded as an event of Force Majeure.
“Group” has the meaning given to such term in Section 9(b).
“Governmental Authority” means any domestic or foreign court or other governmental or regulatory authority, agency or other body with jurisdiction over any of the assets or properties of any of the Parties.
“Intellectual Property” has the meaning given to such term in Section 9(a).
“Junli” has the meaning given to such term in the preamble.
“Monthly Date” shall mean the last Business Day of each calendar month, the first of which shall be the first such day following the date of this Agreement; provided that if any such day is not a Business Day, then such Monthly Date shall be the next succeeding Business Day.
“Party” or “Parties” has the meaning given to such term in the preamble.
“Person” means an individual, corporation, joint venture, partnership, enterprise, trust, unincorporated association, limited liability company, government or any department or agency thereof, or any other entity.
“PRC” or “China” has the meaning given to such term in the preamble.
“PRC GAAP” means the PRC Enterprise Accounting Systems.
“Representative” has the meaning given to such term in Section 9(b).
“RMB” means Renminbi, the lawful currency of China.
“Services” has the meaning given to such term in Section 2(a).
“Services Fee” has the meaning given to such term in Section 3(a).
“SHEZT” has the meaning given to such term in the preamble.
“US” means the United States of America.
“Website” means the dedicated website(s) now or in the future operated for the Business of Junli, including without limitation, xxx.xxxxx.xxx.
2.
SERVICES
(a)
Exclusive Services Provider. During the term of this Agreement, Junli hereby appoints SHEZT, and SHEZT hereby accepts Junli’s appointment, as the exclusive provider (except as to any Affiliate of SHEZT) of certain technical and other services required by Junli in the conduct of its Business through the Website, which services are more fully described in Section 2(b) below and include, among others, services relating to the maintenance and operation of the Website (the “Services”), pursuant and subject to the terms and conditions of this Agreement. During the term hereof, Junli shall not seek or accept identical or similar services from other providers (except any Affiliate of SHEZT) without the prior written approval from SHEZT. For the avoidance of doubt, however, during the term hereof, SHEZT shall have the right to provide identical or similar services to third parties, and Junli may seek or accept identical or similar services from any Affiliate of SHEZT.
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(b)
Scope of Services.
To the extent permitted by the applicable PRC laws and regulations, the Services provided under this Agreement shall include, without limitation:
(i)
Technical services in respect of information technology aspects of the Business, including, without limitation, advice and assistance relating to the information systems for the operation of the Website;
(ii)
Provision of content for the Website;
(iii)
Planning, implementation and testing of online operations;
(iv)
Training of management, staff, technical and administrative personnel Junli in respect of the Website;
(v)
Assistance in the collection and analysis of technical and business information about the Business and the operation of the Website with a view to improving the user friendliness and functionality of the Wesbite and the quality of Services provided hereunder; and
(vi)
Such other advice and assistance as may be agreed upon by the Parties.
(c)
Internet Orders. SHEZT will promptly direct and relay to Junli for processing any and all air-ticeting orders received from and generated by the Website on a real-time basis. All such internet orders and revenue generated therefrom shall be the property of Junli.
(d)
Advances. From time to time and at the request of Junli, SHEZT may in its sole discretion, in such a manner as permitted by applicable laws and regulations advance to Junli amounts for the purpose of providing working capital to Junli, funding for Junli’s acquisition of operating assets, or for any other purposes as may be acceptable to SHEZT.
3.
FEES
(a)
Fees. In consideration of the Services provided by SHEZT hereunder, Junli shall pay to SHEZT during the term of this Agreement (i) a fee (the “Services Fee”) payable in RMB each calendar month, calculated based on the ticketing volume of such month as stated in the monthly financial statement provided under Section 5 below at such per ticket (both domestic and international) rate(s) as the Parties shall from time to time agree, within 10 Business Days after receipt by SHEZT of the financial statements referenced above, and (ii) such other fees as SHEZT and Junli shall from time to time agree on an ad hoc basis. The Parties agree to periodically review the rate(s) of the Services Fee with a view to adjust the Services Fee based on the historic, present and prospective ticketing volume as appropriate.
(b)
Payment. Any payment required to be made under this Section 3 shall be paid in RMB by wire transfer to the account as may be timely specified in writing from time to time by SHEZT. SHEZT shall timely provide Junli with proper tax invoice for the payment hereunder.
(c)
No Set-off and Deduction. Notwithstanding anything to the contrary herein, Junli shall not set off any amount it may claim is owed to it by SHEZT against any Services Fee payable by Junli to SHEZT unless Junli first obtains SHEZT’s written consent. All payments to be made by Junli hereunder shall be made free and clear of and without deduction for or on account of any tax, unless Junli is required by applicable PRC law to deduct or withhold applicable tax from such payments, in which case, Junli shall promptly provide SHEZT with official receipt of payment of such tax.
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(d)
Late Payment. Should Junli fail to pay to SHEZT all or any part of the Services Fee due in RMB under this Section 3 within the time limits stipulated herein, Junli shall pay to SHEZT interest in RMB in arrears on the amount overdue based on the 3-month RMB lending rate as of the relevant due date announced by the People’s Bank of China.
(e)
Audit and Inspections. Junli will permit SHEZT or its Representatives (including independent public accountants), at SHEZT’s own expense, to conduct periodic (but no more than monthly) audits of relevant books and records of Junli for the purpose of verifying the Services Fees payable to SHEZT under this Section 3. If such audit reveals a discrepancy, Junli shall pay to SHEZT any additional amount of Services Fees or SHEZT shall refund any excess amount of Services Fees paid, in each case as promptly as practicable.
4.
REPRESENTATIONS AND WARRANTIES; MUTUAL COVENANTS
(a)
Representations and Warranties of the Parties. Each Party hereby represents, warrants and undertakes to the other Party that:
(i)
It is a limited liability company duly organized and validly existing under PRC laws and is qualified to do business and is in good standing in all jurisdictions in which the nature of the business currently conducted or proposed to be conducted by it or its ownership of property makes such qualification necessary.
(ii)
It has all requisite corporate and other power and authority to execute, deliver, and perform all of its obligations under, this Agreement and to consummate the transactions contemplated by this Agreement.
(iii)
It has all licenses, certificates, permits, authorizations, concessions, approvals, franchises and other rights from, and has made all declarations and filings with, all applicable Governmental Authorities necessary to engage in the business conducted by it.
(iv)
This Agreement has been duly and validly authorized, executed and delivered by it and constitutes its valid and binding obligations enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws of general applicability relating to or affecting creditors’ rights and by general equity principles (regardless of whether considered in a proceeding in equity or at law), including (1) the possible unavailability of specific performance, injunctive relief or any other equitable remedy; and (2) concepts of materiality, reasonableness, good faith and fair dealing.
(b)
Certain Mutual Covenants. The Parties covenant and agree with each other as follows:
(i)
To observe all relevant legal restrictions, including the preservation of the confidentiality of non-public information pursuant to Section 9 hereof.
(ii)
To execute such documents and other papers and perform such further acts as may be reasonably required to carry out the provisions hereof and the transactions contemplated by this Agreement.
(iii)
To be responsible for its own costs (including direct travel expenses and legal fees) relating to the negotiation, preparation, execution and performance by it of this Agreement.
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(iv)
To do or cause to be done, all things necessary or appropriate to preserve and keep in full force and effect its existence and its material rights, authorizations, concessions, approvals, franchises and licenses.
5.
AFFIRMATIVE COVENANTS OF JUNLI
Junli hereby covenants and agrees that, during the term of this Agreement, it will perform and observe the following covenants and provisions:
(a)
Services Fee Reports. As soon as available and in any event within 5 Business Days after each Monthly Date, furnish to SHEZT a written Services Fee report, setting forth a summary of the domestic and international air ticket sales for the relevant month based on which the Services Fee for that month is calculated.
(b)
Notice of Litigation. Provide to SHEZT promptly, and in any event within 1 Business Day after an officer of Junli obtains knowledge thereof, notice of (i) any litigation, arbitration or mediation or governmental or regulatory proceeding pending against Junli which could materially adversely affect the business, operations, property, assets, financial condition or prospects of Junli in respect of the Business and (ii) any other event which is likely to materially adversely affect the business, operations, property, assets, financial condition or prospects of Junli.
(c)
Other Information. Provide to SHEZT promptly such other financial information or documents as SHEZT may reasonably request from time to time.
(d)
Integrity of Financial Reporting and Controls. Keep proper books of record and account in which full, true and correct entries in conformity with the PRC GAAP and all requirements of law shall be made of all dealings and transactions in relation to its business and activities in respect of the Business. Junli agrees to implement over time, without causing unreasonable burden and as far as practicable, US-style internal accounting controls, audit committee functions and management reporting responsibilities. Additionally, Junli agrees to comply with the US Foreign Corrupt Practices Act.
(e)
Compliance with Statutes. Comply with all applicable statutes, laws, regulations, rules and orders of, and all applicable restrictions imposed by, all governmental bodies, in respect of the conduct of its Business, except that such noncompliance would not, in the aggregate, have a material adverse effect on the Business, operations, property, assets, financial condition or prospects of Junli.
6.
NEGATIVE COVENANTS OF JUNLI
Junli hereby covenants and agrees that, during the term of this Agreement, without the prior written consent of SHEZT, it shall not take any corporate action or perform any other act or enter into any transaction that would negatively affect the exclusive cooperation arrangement contemplated by this Agreement.
7.
TERM AND TERMINATION
(a)
Term. This Agreement shall take effect on the date of execution of this Agreement and shall remain in full force and effect until the termination hereof pursuant to Section 7(b).
(b)
Termination. This Agreement may be terminated:
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(i)
by the Parties jointly if they consent in writing to terminate this Agreement;
(ii)
by either SHEZT or Junli giving notice to the other Party if the other Party has committed a material breach of this Agreement (including but not limited to the failure by Junli to pay the Services Fee) and failed to cure such breach within 30 days after notice thereof; provided, however, that if such breach is not reasonably susceptible of being cured, no cure period shall be applicable; if the breach is curable but not within 30 days, such 30-day period may be extended if cure is being diligently pursued for an additional period of time not to exceed 60 days;
(iii)
automatically if either of SHEZT and Junli becomes bankrupt or insolvent or is the subject of proceedings or arrangements for liquidation or dissolution or ceases to carry on its business or becomes unable to pay its debts as they come due;
(iv)
by either of SHEZT and Junli giving notice to the other if the business license or any other license or approval material for the business operations of Junli or SHEZT is terminated, cancelled or revoked; or
(v)
by election of SHEZT with or without cause upon 30 days’ prior written notice to Junli.
(c)
Effect of Termination. Any Party electing properly to terminate this Agreement pursuant to this Section 7 shall have no liability to the other Party for indemnity, compensation or damages arising solely from the exercise of such right. The termination of this Agreement shall not affect the continuing liability of Junli (including the obligation to pay any Services Fee or indemnification payment) already accrued or due and payable to SHEZT. Upon the termination of this Agreement, all amounts then due and unpaid to SHEZT by Junli hereunder, as well as all other amounts accrued but not yet payable to SHEZT by Junli, shall forthwith become due and payable by Junli to SHEZT.
(d)
Survival. The rights and obligations under Sections 1, 3, 4, 7, 8, 9, 10 and 13 shall survive the expiration or termination of this Agreement.
8.
INDEMNIFICATION
Each Party shall indemnify, defend and hold the other Party harmless from and against any loss, claim, damage, or liability (including legal and accounting fees and expenses) suffered or incurred by the other Party arising out of or resulting from such Party’s breach of any representation or warranty under this Agreement or such Party’s breach or violation of, or failure to perform fully, any covenant, agreement, undertaking or obligation under this Agreement.
9.
INTELLECTUAL PROPERTY; CONFIDENTIALITY; NONCOMPETITION
(a)
Intellectual Property. Unless otherwise agreed to by the Parties in writing, as between Junli and SHEZT, SHEZT shall be the holder of all rights, title and interests to any and all trademarks, trade names, service marks, copyrights, trade dress, logos, designs, assumed names, Chinese character equivalents for the aforesaid and other indications of origin, patents, inventions, creations, know-how, trade secrets, domain names and other intellectual properties (or intellectual property rights) (collectively, the “Intellectual Property”) used by SHEZT for the provision of the Services or arising from the performance of this Agreement, whether developed by SHEZT or Junli. Junli recognizes SHEZT’s rights in and ownership of the Intellectual Property, and will not assert, or cause any of its Affiliates to assert, any right to or ownership interest in, nor file, or cause any of its Affiliates to file, any application for any right to or interest in the Intellectual Property.
(b)
Confidentiality. The Parties acknowledge that they and their respective employees, nominees, advisor, agents or other representative (collectively, “Representatives”) will have access to and will be entrusted with detailed confidential information and trade secrets (“Confidential Information”) relating to the present and contemplated operations of Junli, SHEZT and their respective Affiliate (for purposes of this Section 9 only, the “Group”), the disclosure of any of which Confidential Information to competitors of the Group or to the general public would be highly detrimental to the best interests of the Group. The Parties acknowledge and agree that the right to maintain the confidentiality of such Confidential Information and the right to preserve the goodwill of the Group constitute proprietary rights which the Parties are entitled to protect. For purposes of this Agreement, “Confidential Information” includes the existence and any term of this Agreement, the negotiations leading up to this Agreement or the transactions or arrangements contemplated or referred to herein (including the fact that this Agreement has been entered into between the Parties) as well as any confidential information belonging to any Party.
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None of the Parties shall at any time disclose any Confidential Information to any Person or use the same for any purpose other than the purposes of Group, provided, however, that a Party may disclose any information which (i) such Party can demonstrate was already lawfully in its possession prior to the disclosure thereof, (ii) is generally known to the public and did not become so known through any violation of law, (iii) became known to the public through no fault of such Party, (iv) is later lawfully acquired by such Party without confidentiality restrictions from other sources, (v) is required to be disclosed by order of court or government authority with subpoena powers (provided, that such Party shall have provided the other Party with prior notice of such order and an opportunity to object or take other available action), (vi) is disclosed to an Affiliate which agrees to be bound by the terms of this Section 9(b) or (vii) is disclosed to such Party’s Representative on a need-to-know basis and that such Party has informed the recipient of the restrictions on disclosure contained in this Section 9(b) and that such Party will be responsible for any breach of the provisions of this Section 9(b) by or caused by, the recipient.
(c)
Announcements. The Parties agree that no public announcement, circular or communication of any kind will be made or issued, in respect of the subject matter of this Agreement by the Parties except:
(i)
with the prior written consent of the other Party which may not be unreasonably withheld or delayed; or
(ii)
if so required by law or regulation (including disclosure required under the applicable listing rules of any securities exchange on which any securities of an Affiliate of SHEZT may be listed), provided that the Party required to make or issue it has, to the extent practicable, first consulted and taken into account the reasonable requirements of the other Party.
(d)
Noncompetition. During the term of this Agreement and for a period of 12 months thereafter, without the prior written approval of SHEZT, Junli or any of its Affiliate,
(i)
will not directly or indirectly, including, either individually or in association with any other Person, or as principal, licensor, agent, representative, equity older, distributor, supplier, co-venturer or partner, engage in any business that is competitive with SHEZT anywhere in the world, including e-commerce travel related products and services. Junli agrees that the restriction herein contained are reasonable with respect to its duration, geographical area and scope;
(ii)
subject to subsection (i) above, will not solicit in any manner any Person who is or has been a customer or client of SHEZT for the purpose of offering to such Person any goods or services similar to or competing with any of the businesses conducted by SHEZT; and
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(iii)
will not solicit or entice away, or endeavor to solicit or entice away, any employee or officer or other Representative of SHEZT.
10.
SETTLEMENT OF DISPUTES
This Agreement shall be governed by procedures other than litigation for settling all claims and disputes (a “Dispute”), under the method set forth in this Section 10.
(a)
If any Dispute arises out of or in connection with this Agreement or the performance, breach, termination or invalidity thereof, any Party shall be entitled to serve a notice of Dispute (a “Dispute Notice”) upon the other Party. The Parties agree, following service of a Dispute Notice, to use their reasonable endeavors to negotiate in food faith to settle such Dispute.
(b)
If the Parties have not settled any such Dispute within 21 days of service of a Dispute Notice then the Dispute shall be settled by arbitration before China International Economic and Trade Arbitration Centre (“CIETAC”) in accordance with the Rules of CIETAC in force at the date of commencement of the arbitration.
(c)
In any arbitration pursuant to Section 10(b):
(i)
the place of arbitration shall be Shanghai, China;
(ii)
the language to be used in the arbitral proceedings shall be both English and Chinese languages;
(iii)
the appointing authority shall be CIETAC; and
(iv)
3 arbitrators shall be appointed to form an arbitration tribunal to resolve a dispute, one each by the claimant and the respondent, and one (the chairman of the arbitration tribunal) by the chairman of the appointing authority.
(d)
When 3 arbitrators have been appointed in any arbitration pursuant to Section 10(c), the award shall be given by a majority decision. If there is no majority, the award shall be made by the chairman of the arbitral tribunal alone.
(e)
Any award given by an arbitral tribunal appointed pursuant to Section 10(c) shall be final and binding. By agreeing to arbitration, the Parties waive irrevocably their right to any form of appeal, review or recourse to any court or other judicial authority. The losing Party shall be responsible for the fees of CIETAC, the fees of the arbitrators, fees and expenses of the arbitration proceedings and all costs and expenses in relation to the enforcement of any arbitral award, including reasonable attorneys’ fees and expenses.
11.
FORCE MAJEURE
The Party claiming Force Majeure shall notify the other Party without delay. If a Party is delayed in or prevented from performing its obligations under this Agreement by an event of Force Majeure, only within the scope of such delay or prevention, such Party shall not be responsible for any damage, increased costs or loss which the other Party may sustain by reason of such a failure or delay of performance, and such failure or delay shall not be deemed a breach of this Agreement. The Party claiming Force Majeure shall take appropriate means to minimize or remove the effects of Force Majeure, and attempt to resume performance of the obligations delayed or prevented by the event of Force Majeure. After the event of Force Majeure is removed, the Parties agree to resume performance of this Agreement with their best efforts.
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12.
NO AGENCY
Nothing in this Agreement shall be construed to create a partnership or establish a relationship of principal and agent or any other fiduciary relationship between the Parties.
13.
APPLICABLE LAW
The validity, interpretation and implementation of this Agreement shall be governed by the laws of the PRC.
14.
NOTICES
Notices or other communications required to be given by any Party to another pursuant to this Agreement shall be in writing and delivered or sent by personal delivery, by facsimile, by registered mail or by internationally recognized courier, fees prepaid, to the fax number or address of the relevant Party set forth below or to such other address or fax number as may from time to time be designated by such Party to the other Party.
If to SHEZT:
Address:
20/F, 000 Xxxxxxx Xxxx
Xxxxx Xxxxxxxx
Xxxxxxxx 000000, Xxxxx
Attn:
Ms. Coco Hu
Fax:
00-00 0000-0000
If to Junli:
Address:
394-8 Yan’an Road West
Jing Xx Xxxxxxxx
Xxxxxxxx 000000, Xxxxx
Attn:
Xx. Xxxx Xxxx
Fax:
00-00 0000-0000
Any such notice or communication shall be deemed to have been given if by personal delivery, upon receipt by the addressee; if by facsimile transmission, upon confirmation that the communication was successfully sent to the applicable number; if by registered mail, 7 Business Days after post; if by courier, 3 Business Days after delivery to such courier.
15.
SUCCESSORS; ASSIGNMENT
This Agreement binds and will benefit the Parties and their respective successors and permitted assigns. Junli may not assign this Agreement to any third party without the prior written consent of SHEZT. SHEZT may transfer all or any of its rights and obligations under this Agreement at any time to any Person at its sole discretion without the consent of Junli.
16.
SEVERABILITY
Any provision of this Agreement which is invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability, without affecting in any way the remaining provisions hereof in such jurisdiction or rendering that or any other provision of this Agreement invalid, illegal or unenforceable in any other jurisdiction. To the extent that any provision of this Agreement is deemed unenforceable in the PRC, the Parties shall use all commercially reasonable efforts to implement an alternative arrangement to effect the transactions as contemplated in this Agreement to the fullest extent possible.
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17.
ENTIRE AGREEMENT; AMENDMENT AND SUPPLEMENT
This Agreement, together with any schedules and exhibits (if any) attached hereto, constitutes the entire agreement and understanding of the Parties with respect to the subject hereof, and supersedes all prior oral or written agreements, contracts, understandings and communications of the Parties in respect of the subject matter of this Agreement. No amendment, modification or waiver of any of the terms of this Agreement shall be valid unless set forth in writing and duly signed by the Party against whom enforcement of such amendment, modification or waiver is sought. No delay or failure on the part of any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any Party of any such right, power or privilege, be construed as a waiver of any other right, power or privilege. The rights and remedies herein provided are cumulative and are not exclusive of any rights or remedies that any Party may otherwise have at law or in equity.
18.
HEADINGS
The headings in this Agreement are inserted for the convenience of reference only and shall not be taken into consideration in the interpretation or construction of this Agreement.
19.
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one instrument.
[Signatures appearing on the following page]
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IN WITNESS HEREOF, the Parties have caused their authorized representatives to execute this Agreement on the date first above written.
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SHEZT:
SHANGHAI EZTRIPMART TRAVEL AGENCY CO., LTD.
By: /s/ Xxxx Xxxx
Name: Xxxx Xxxx
Legal Representative |
Junli:
SHANGHAI JUNLI AIR SERVICE CO., LTD.
By: /s/ Xxxx Xxxx
Name: Xxxx Xxxx
Legal Representative
|
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(Company Seal) |
(Company Seal) |
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