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EXHIBIT 10.8
FACILITIES MANAGEMENT AGREEMENT
THIS FACILITIES MANAGEMENT AGREEMENT ("Agreement") is made and entered
into as of January 1, 1996 (the "Effective Date"), by and between Pegasus
Systems Inc. ("Pegasus"), a Delaware corporation, and Anasazi Inc. ("Anasazi"),
a Delaware corporation. For purposes of this Agreement, Pegasus shall include
its subsidiaries, The Hotel Industry Switch Company, The Hotel Clearing
Corporation, and TravelWeb Inc.
WHEREAS, Pegasus owns an automated reservation inquiry switching network which
includes bulk data transfer capabilities and internet connectivity, which
enables travel agents and other users to book, modify and cancel reservations
at participating hotels through airline and other reservation systems, and also
owns a commission consolidation system (these systems are collectively known as
the "Switch");
WHEREAS, Anasazi currently houses the Switch at its principal place of business
in Phoenix, Arizona, and has heretofore managed and operated the Switch
pursuant to those certain Switch Management and Operation Agreements, dated
January 4, 1991 and April 1, 1994 between THISCO and Anasazi, and that certain
Network Operation, Customer Support and System Administration Proposal dated
October 3, 1991 between HCC and Anasazi (the "Original Agreements");
WHEREAS, the parties have determined to terminate the Original Agreements and
enter into a new facilities management agreement; and
WHEREAS, Pegasus and Anasazi have determined that it would be mutually
beneficial for Anasazi to continue to manage and operate the Switch under the
terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises, the mutual covenants herein
contained, and other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement, except as provided otherwise herein,
the capitalized terms used herein shall have the following meanings:
"Affiliate" shall mean, with respect to any specified Person, any
other Person that, directly or indirectly, through one or more intermediaries,
controls, is controlled by or is under common control with, such specified
Person.
"Anasazi Commercial Software" shall mean the Anasazi Commercial
Software described on Exhibit A.
"Automated Lodging Reservation Inquiry Switching Network" shall mean a
centralized system of hardware and software which provides data communication
linkages between certain
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reservation distribution systems and computerized reservation systems operated
by lodging, cruise, tour, bus or restaurant entities who subscribe to one or
more such distribution systems and which system allows travel agents or other
persons or entities transmitting reservation-related data who subscribe to the
distribution systems to query and/or make, modify and cancel lodging, cruise,
tour, bus or restaurant reservations and receive confirmations of such
transactions.
"Bulk Data Transfer" (also, "BDT") shall mean the set of hardware and
software components implemented by Pegasus which enables file transfers between
HRSs and the Switch as well as file transfers between GDSs and the Switch.
"Central Reservation System" shall mean a centralized or decentralized
system of hardware and software which provides data communication linkages
between databases of entities and a central database and which effects
reservations and other reservations-related transactions on a centralized
basis.
"Central Reservation System Services" shall mean reservation and
reservation-related services provided to entities using a Central Reservation
System.
"Charges" shall mean the fees, expenses and costs for which Pegasus is
billed pursuant to Article VI of this Agreement
"Emergency" shall mean a problem resulting in either a total loss of
access to or operation of the Switch or a loss of a critical function with
respect to the Switch or the Participant's interface including but not limited
to loss of Type A, Type B, Phase I Logging, or significant performance
degradation.
"Equipment" shall mean the Hardware, the Network Components and the
Support Equipment.
"Event of Default" shall mean an event specified in Section 10.1
hereof.
"Hardware" shall mean collectively the Hardware listed on Exhibits and
all other computer hardware owned, leased or licensed by Pegasus and housed by,
and with the approval of Anasazi, at the Switch Facility from time to time,
together with any and all modifications, improvements, or enhancements thereof,
additions thereto, and/or replacements therefor.
"HCC" shall mean the hardware and software components implemented by
Pegasus which enable the transfer of travel agent commission information
between HRSs and financial institutions.
"HRS" shall mean an automated reservations system operated primarily
for the benefit of one or more companies.
"Intellectual Property", or "Intellectual Property Rights", shall mean
all trade secrets, copyrights, inventions (whether or not patentable), patents,
trademarks, trade names and any other proprietary information and knowledge
relating to, associated with, or used in connection with, the development, use
and maintenance of the Switch and for the performance of the functions the
Switch was designed to perform, including, but not limited to, any and all
modifications thereto or enhancements thereof and all rights concerning source
codes, object codes, execution programs and other information relating to the
Switch whether now owned or hereafter acquired; provided, however, that with
respect to the Anasazi Commercial Software, "Intellectual Property" and
"Intellectual Property Rights" shall refer only to such of the foregoing
information and rights as are expressly conveyed to Pegasus under license.
"Losses" shall mean all losses, liabilities, damages, actions, claims,
costs and expenses
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(including, without limitation, reasonable attorneys' fees and disbursements)
and costs of investigation, litigation, settlement, judgments, interest and
penalties.
"Monthly Fee" shall mean the Monthly Facilities Management Base Fee
described in Article VI and Schedule VI.
"Network Components" shall mean, collectively, the Network Components
listed on Exhibit A and all other similar equipment and materials owned, leased
or licensed by Pegasus and housed by, and with the approval of Anasazi, at the
Switch Facility from time to time, together with any and all modifications,
improvements or enhancements thereof, additions thereto, and/or replacements
therefor.
"Operations Manual" shall mean that certain UltraSwitch Operations
Manual (Revision 3.0) dated March 3, 1996, as amended from time to time jointly
by Pegasus and Anasazi.
"Participant" shall mean an entity whose automated reservation system
is connected to the Switch for the purpose of originating, communicating, or
responding to requests for bookings or other transaction supporting those
functions.
"Participant Connection" shall mean any Participant's use of a Type A,
Type B or HCC interface to the Switch. Each communication line requiring a
unique data service unit (DSU), whether stand-alone or rack mounted, shall
constitute one (1) connection regardless of whether the communication line is
split by a multiplexor or similar device.
"Person" shall mean a corporation, association, partnership, joint
venture, organization, business, trust or any other entity or organization of
any kind or character, including a government or any subdivision or agency
thereof.
"Phase I" shall mean "UltraConnect" which is the functionality of the
Switch relating to the booking, modifying and canceling of reservations.
"Phase II" shall mean "UltraSelect" which is the functionality of the
Switch relating to property and room type availability, rate information,
property descriptions and property policies and amenities.
"Services" shall mean one or more services described in, or provided
by Anasazi pursuant to, this Agreement
"Software" shall mean collectively the software listed on Exhibit A
and all other computer software owned, leased or licensed by Pegasus and, with
the approval of Anasazi, used in connection with the operation of the Switch
from time to time, together with any and all modifications, updates,
improvements or enhancements thereof, additions thereto, and/or replacements
therefor, and including all associated Intellectual Property Rights and all
manuals, selling materials or other documentation prepared by the licenser or
developer of such software describing the software and its performance
characteristics and capabilities.
"Support Equipment" shall mean collectively the Support Equipment
listed on Exhibit A and all other similar equipment, including testing and
diagnostic equipment owned, leased or licensed by Pegasus and housed by, and
with the approval of Anasazi, at the Switch Facility from time to time,
together with any and all modifications, improvements or enhancements thereof,
additions thereto, and/or replacements therefor.
"TravelWeb" is the service xxxx and trade name of Pegasus for its
Internet site and includes the set of hardware and software components
implemented by Pegasus which enables users of the
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Internet to search for hotel properties, check property availability, book and
cancel hotel reservations, and obtain access to other travel-related services.
"UltraSwitch" shall mean the automated reservation inquiry switching
network owned by Pegasus and used by Pegasus to provide services to
Participants consisting of the Hardware, the Network Components, the Support
Equipment and the Software, together with all related documentation, procedures
and associated Intellectual Property Rights. "UltraSwitch" shall include Phase
I, Phase II and Bulk Data Transfer functionalities.
"Switch Facility" shall mean the location housing the Switch,
currently being Anasazi's principal place of business at 0000 Xxxxx Xxxxxx Xxxx
Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000, or any substitute location provided
by Anasazi pursuant to this Agreement. Anasazi may move the physical location
of the Switch Facility to a comparable facility within North America at its
sole expense; provided that the new facility provides functionality and
performance comparable to the then existing facility.
"Switch Production Environment" shall mean the Equipment and Software
which is used to provide access to the Switch by Participants for the sending
and receiving of production (non-test) transactions.
"Switch Test Environment" shall mean the Equipment and Software which
is used to facilitate Pegasus' development and testing of the Switch.
"UltraSwitch Software" shall mean the UltraSwitch Software described
on Exhibit A.
ARTICLE II
TERM
2.1 Initial Term. Subject to Article XI, the term of this Agreement
will begin on the date hereof and shall extend for five (5) twelve month
periods (each, a "Service Year") (the "Initial Term"), unless earlier
terminated or extended in accordance with this Agreement
2.2 Renewal. Subject to Article XI, after the Initial Term, this
Agreement shall automatically be renewed for consecutive periods of one (1)
Service Year (each, a "Renewal Term") unless either party gives the other party
written notice at least six (6) months prior to the termination date of the
Initial Term or then current Renewal Term that the Agreement will not be
renewed. Anasazi agrees to provide written notice of this provision to Pegasus
at least nine (9) months prior to the expiration date of the Initial Term or
then current Renewal Term; at Pegasus' option, any delay in such notice by
Anasazi will extend the aforementioned six (6) month period to the extent of
the delay.
ARTICLE III
ANASAZI SERVICES
3.1 Computer and Network Operations. Anasazi will provide Services
with respect to the computer and network operations of the Switch as follows:
(a) Operate the Switch using all due diligence and in a
commercially reasonable manner in accordance with the Operations
Manual, 24 hours per day, 7 days per week, including all holidays;
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(b) Operate the Switch Test Environment from 8am through 5pm
(local Dallas, Texas time) Monday through Friday exclusive of Anasazi
holidays, and such additional times as are required to support
development and testing to resolve Emergency problems. Anasazi will
give its "best efforts" to operate the Switch Test Environment at
other times as requested by Pegasus;
(c) Provide facilities and utilities required to house and operate
the Switch;
(d) Provide uninterruptable power supply and emergency electrical
generating equipment sufficient to provide continuous power to the
Switch such that the Switch can be operated at full capacity for an
indefinite period of time during power failures;
(e) Have the right of reasonable approval of all Equipment
provided by Pegasus, such approval to be based upon the space
requirement, electrical power and cooling requirement, aesthetics, and
operability of the Equipment proposed;
(f) Act on Pegasus' behalf to initiate, and track to resolution,
requests for repairs to Equipment and Software housed by Anasazi from
Pegasus' vendors of maintenance contracts and other repair
arrangements. (Anasazi will not be liable for "no trouble found" or
other charges incurred by Pegasus as a result of Anasazi having
initiated a service call so long as Anasazi used commercially
reasonable procedures in determining that such a service call was
appropriate.);
(g) Purchase, on behalf of Pegasus as provided herein, certain
Hardware and Software Components as requested and directed by Pegasus.
Whenever appropriate, Anasazi shall purchase all such items in
Pegasus' name and shall have the purchase order issued directly to
Pegasus, to the attention of its chief financial officer. Any
purchases made in Anasazi's name (e.g. to take advantage of an Anasazi
discount) will be billed back to Pegasus at total cost plus a Fifteen
(15) percent processing fee;
(h) Maintain, pursuant to Section 3.5(a), a log of the events
associated with the unavailability of the Switch to one or more of its
respective Participants and provide Pegasus with copies of the log
each month;
(i) Provide Pegasus with reasonable access to the Switch and the
Switch Facility housing the Switch Production Environment and the
Switch Test Environment. In the event of an audit, Pegasus must
provide a minimum of forty-eight hours notice to Anasazi prior to
commencing the audit;
(j) Provide the same level of security as commercially reasonable,
for the Switch Test Environment and Switch Production Environment as
Anasazi provides for its own equipment and operations;
(k) Maintain the Switch and the Switch Facility in a commercially
reasonable and professional manner and at least at the same level of
efficiency as it maintains its own system operations;
(l) Configure modems and DSUs as per Pegasus' directions and
specifications for Participant connections to the Switch;
(m) Anasazi will commit the following levels of resources to
fulfilling the obligations set forth in this Agreement:
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Job Type Allocation
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Account Manager 20%
Network Operator Manager 25%
Network Operator Supervisor 75%
Network Operator Lead 100%
Network Operator Lead 100%
Network Operator Lead 100%
Network Operator Jr. 100%
Network Operator Jr. 100%
3.2 Technical Support Services. Anasazi will provide Pegasus with
technical support services in accordance with the following:
(a) Anasazi will make available to Pegasus technical resources to
assist Pegasus in the analysis and resolution of i) system and
software-related problems, ii) database-related problems, iii)
telecommunication problems, and iv) telecommunication configurations.
(b) Technical resources will be available 24 hours per day, 7 days
per week, 365 days per year to assist Pegasus in dealing with
Emergency problems. Anasazi shall begin execution of Pegasus' request
for Emergency services no later than four hours following the request.
(c) Schedulable technical resources requested by Pegasus will be
billed on a time and materials basis at Anasazi's then prevailing
rates.
(d) Emergency technical resources requested by Pegasus will be
billed at twice the then current hourly rate.
(e) Anasazi will make its best effort to fulfill Pegasus' requests
for technical support in a timely manner.
3.3 Software and Hardware Maintenance. Anasazi shall provide certain
Software and Hardware maintenance services as follows:
(a) Anasazi will perform routine and corrective maintenance to
support and maintain the Anasazi Commercial Software as is reasonable
and necessary for the operation of the Switch. This maintenance will
be limited to correcting bugs within the Anasazi-written software.
Protocol and gateway problems traced to Participants or to Pegasus-
modified code, are covered under Section 3.2 (technical support
services). In the event new releases of the Anasazi Commercial
software are developed by Anasazi, such new releases will be made
available to Pegasus as follows: in the event the new release has been
developed through the mutual efforts of Pegasus or such development
has been paid for, in whole or in part, by Pegasus, such new release
shall be made available to Pegasus at no charge or in exchange for
Pegasus' portion of the development costs, whichever is applicable. In
the event Pegasus personnel have not been involved in the development
of such new release nor has Pegasus paid for all or part of the
development of such new release, then if the release is made generally
available to Anasazi's customers, the new release shall be made
available to Pegasus for a fee comparable to the fee generally charged
to Anasazi's other customers. Anasazi will consider changes to the
Anasazi Commercial Software as recommended or requested by Pegasus for
the purposes of enhancing performance and expanding the functionality
of the Anasazi Commercial Software.
(b) Anasazi will administer third party maintenance contracts
pursuant to Section 3.1(f).
(c) Anasazi's technical support staff will use both the Switch
Test Environment and certain
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equipment provided by Anasazi for its computing needs pursuant to this
Agreement only. Pegasus-provided telecommunications facilities will be
used as required by this Agreement. The Switch Test Environment and
communication equipment will be used solely to perform this Agreement
and primarily for any development and testing of the Switch.
3.4 Physical Space and Utilities. Anasazi shall, at no additional cost
to Pegasus, provide space and utilities at the Switch Facility for the Switch
and its operations, including any expansions thereof or additions thereto
mutually agreed upon by Pegasus and Anasazi, as follows:
(a) Switch. Anasazi shall provide adequate space for the Switch.
The space allocated to each component of the Switch shall meet or
exceed those environmental requirements of the manufacturer of such
component.
(b) Supplies. Anasazi shall provide paper, printer ribbons and
toner required for the provision of Services, and shall provide
adequate storage space for all necessary Switch-related supplies,
including, but not limited to, magnetic tapes, stock paper, custom
forms and other computer and network supplies. Pegasus shall provide
all magnetic media pursuant to Section 4.1(g).
(c) Pegasus Personnel. Anasazi shall provide a furnished office
equipped with a telephone and network connection for use by Pegasus
personnel during visits to the Switch Facility.
(d) Training and Meeting Space. Upon reasonable notice, Anasazi
shall provide appropriately equipped facilities for all required
training and meeting activities.
(e) Utilities. Anasazi shall at all times provide or cause to be
provided at the Switch Facility all of the utilities, including, but
not limited to, electricity, gas, water and voice telephone service,
necessary for the operation and performance of the Switch as
contemplated in this Agreement.
(f) Storage and Pick-Up. Anasazi shall provide, or cause to be
provided, storage, pick-up and delivery services for off-site storage
of magnetic and paper media on at least a weekly basis.
3.5 Monthly Status Report. Anasazi shall provide Pegasus with a
monthly status report containing the following information: (a) a log of each
occurrence of a System outage occurring during the month, and the number of
minutes duration of each and the number of minutes each communications line and
Participant was reported as down, and the diagnosed cause of the problem (the
event list); (b) an analysis of communication line failures occurring during
the month; (c) a log of all Hardware and Equipment maintenance and repair
services performed during the month, which log shall include a description of
all Equipment maintenance work performed, including the date, time, and
duration of the maintenance work performed and a description of the cause for
the work, either by describing the defect, real function or non-conforming
performance giving rise to the maintenance work or by describing such work as
regular, routine maintenance; (d) a list of items which in Anasazi's opinion
requires the attention of Pegasus management, if any; (e) the UltraSwitch
availability report for such month and, if the average UltraSwitch downtime for
such month exceeds 0.25%, an analysis of the cause(s) and an action plan for
addressing the cause(s) of such UltraSwitch downtime; (f) a report detailing
hours billed to Pegasus for technical support services as provided in
accordance with Section 3.2; (g) a report of dial back-up test results
including all successes and failures; (h) a report of router fallback test
results including all successes and failures; and (i) a report of BDT transfer
successes and failures.
3.6 Electronic Communications. Anasazi shall maintain the Switch,
facilities permitting Pegasus to access the Switch directly from Pegasus' home
office and to communicate
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with Anasazi via electronic mall, all at Pegasus' expense.
3.7 Marketing Materials. Anasazi shall promptly review and advise
Pegasus with respect to the accuracy of all marketing materials prepared by or
for Pegasus insofar as they describe the technical capabilities of the Switch
and the services it provides.
3.8 Switch Test Environment Utilization. Anasazi shall, upon request,
permit qualified employees, agents and representatives of Pegasus, the
Participants and Anasazi to utilize the Switch Test Environment for
maintenance, development, testing and other Switch related purposes. The use of
the Switch Test Environment as a back-up to the Switch Production Environment
has priority over all other uses of the Switch Test Environment and such usage
shall be at the sole discretion of Anasazi.
3.9 Security Features and Fire Prevention. Anasazi will provide the
same level of security, fire prevention and fire protection for all other
Pegasus equipment and supplies as it provides for its own equivalent materials,
but in any event it shall not be less than exists at the execution of this
Agreement.
3.10 Participation in Dispute Resolution. As part of its duties
hereunder, the Anasazi account manager assigned to Pegasus will, upon request,
provide assistance to Pegasus in connection with resolution of disputes between
Pegasus and the Participants as to the nature or quality of Switch services
and/or the costs thereof. Assistance sought by Pegasus from Anasazi's technical
support staff will be subject to the provisions of Section 3.2.
3.11 Operating Procedures. The Operations Manual establishes operating
procedures for various activities, including, without limitation, routine
maintenance of equipment, conversion to certain communications equipment,
periodic testing of equipment, back-up routines, disaster recovery and
escalation procedures for seeking appropriate assistance of Anasazi or Pegasus
management and/or the vendor which has been contracted to provide equipment
maintenance services in the event of system outages which cannot be quickly
resolved, response to equipment and software failures, record keeping,
preserving confidentiality for Participant information received through the
Switch, computer operations, network management and liaison with communications
vendors. In order to insure that these and the other mandated operating
procedures are observed and properly implemented, Anasazi shall, among other
things: (a) provide its employees with appropriate training, (b) provide its
employees with working copies of such portions of the Operations Manual as are
relevant to their respective responsibilities, (c) ensure that all Anasazi
employees working on the Switch or given access to Confidential Information are
subject to confidentiality agreements with Anasazi covering the Confidential
Information, (d) enforce compliance with procedures specified in the Operations
Manual and (e) create and appropriately distribute revisions of portions of the
Operations Manual describing any agreed modified operating procedures.
3.12 Costs and Expenses.
(a) Except as expressly hereinafter provided, Anasazi shall bear
all of the costs and expenses arising from the performance of
Anasazi's obligations under this Agreement, including but not limited
to: (i) all costs associated with renting (or otherwise acquiring),
finishing out, furnishing and providing security for the Switch
Facility; (ii) all utility costs, including, without limitation, the
costs of electricity, gas, water and voice telephone service; (iii)
all employee related costs and expenses for Anasazi's employees,
including salary expenses, overtime, bonuses, benefits, taxes, other
compensation and the costs of training; and (iv) the maintenance costs
specified in Section 3.3(a). Notwithstanding the foregoing, and
without limiting Pegasus' other obligations or responsibilities under
this Agreement, Pegasus shall bear: (i) the cost of installing at the
Switch Facility any additional or replacement Switch-related equipment
purchased by it or on its behalf with its approval; (ii) all costs
associated
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with the data communication lines used to operate the Switch,
including installation costs and usage charges; (iii) the cost of
magnetic media used in connection with the operation of the Switch as
specified in Section 4.1(g); and (iv) the costs arising from Pegasus
obligations described in Section 3.1(g).
(b) With respect to any other costs for which neither Anasazi nor
Pegasus is expressly obligated in the Agreement to cover or incur, the
parties will promptly use best efforts to reach mutual agreement
within thirty (30) days of such notice of such cost on the manner in
which such cost will be allocated. Until resolution is reached, the
parties will each bear 50% of such costs as they become due.
ARTICLE IV
CUSTOMER AND JOINT RESPONSIBILITIES
4.1 Pegasus Responsibilities. Pegasus will be solely responsible for
performing and incurring all costs for the following obligations as a condition
of Anasazi's Services under this Agreement:
(a) Provide Equipment and Software required for the Switch,
including all manuals and documentation provided by the manufacturers
and distributors of such Equipment and software which art required for
their efficient operation;
(b) Provide Test Equipment for use in diagnosing
telecommunications facilities used in the Switch Production
Environment and Switch Test Environment;
(c) Update Operations Manual as the Switch is enhanced and
modified over time and as equipment and telecommunications facilities
are upgraded and modified over time;
(d) Provide and pay for all costs and expenses rising from
maintenance contracts or other repair arrangements for all Equipment
housed at the Switch Facility and provide notice of authorization to
third party vendors enabling Anasazi to act on Pegasus' behalf to
facilitate maintenance services;
(e) Assume full responsibility for Participant maintenance
requests and service;
(f) Provide at Pegasus' sole discretion, maintenance contracts or
direct maintenance of all Software and Equipment utilized in the
operation of the Switch, including, but not limited to Informix and
Interactive UNIX;
(g) Provide all magnetic media required for operation of both the
Switch Production Environment and Switch Test Environment;
(h) As mutually agreed, provide enhancements to Software to
implement interfaces with future system monitoring tools. These
monitoring tools will be designed and implemented by Anasazi and will
enhance the ability of system operators to monitor the functionality
of the Switch;
(i) Provide Anasazi with an "on-call" contact list to be used in
the event of a problem with the Switch whose remedy is beyond she
scope of the procedures set forth in the Operations Manual provided by
Pegasus and which cannot be remedied by the primary on-call contact
provided by Anasazi;
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(j) Provide customer support services to Participants.
4.2 Anasazi Implemented Interfaces. Upon mutual agreement on terms
between Pegasus and Anasazi, Anasazi may design, develop, document and
implement new Participant interfaces to the Switch. These interfaces, following
a brief post-implementation acceptance period, will be maintained by Pegasus
pursuant to Section 4.1(e).
ARTICLE V
WARRANTIES AND DISCLAIMERS
5.1 Warranties.
(a) Anasazi warrants that the "Average Switch Downtime", as
described in Exhibit B, will not exceed 0.25% (twenty-five percent of
one percent) of total scheduled UltraSwitch operating time each
calendar month, provided that Anasazi will be released from such
warranty if its failure resulted from a cause beyond its reasonable
control, including, but not limited to, force majeure events, any act
or omission of Pegasus or a Participant, or failure of a vendor to
timely respond to service requests. For purposes of this Agreement,
the "Average Switch Downtime" shall be calculated according to Exhibit
B.
(b) Should the "Average Switch Downtime" for any calendar month be
exceeded, then Pegasus will be due a credit against the Switch
Operating Fee for that month according to the following schedule:
A total credit of $5,000 if unavailability is greater than
0.25% and less than or equal to 0.75%
A total credit of $10,000 if unavailability is greater than
0.75% and less than or equal to 1.25%
A total credit of $15,000 if unavailability is less than 1.25%
The maximum credit in respect of calendar month is $15,000.
(c) Anasazi will employ or otherwise retain individuals with the
required skills and training sufficient to carry out its obligations
under this Agreement.
(d) The Switch Facility is reasonable and appropriate for purposes
of housing and operating the Switch, assuming that there are no
material changes to the configuration of the Switch.
(e) If Anasazi breaches this warranty in a manner to lose or
destroy billing data prior to Pegasus' xxxxxxxx to participants which
contemplated such data, then Pegasus' sole remedy in respect of such
reach will be (i) Anasazi's obligation to diligently assist Pegasus in
the data re-creation and estimation process so as to provide Pegasus
with reasonable billing data (which may include, but not be limIted
to, reasonable estimates based on methodologies and categories of data
used by the parties in prior similar circumstances) for the period
effected by such breach no later than the tenth business day after the
beginning of the month in which Participants are billed in respect of
such data, and (ii) if the parties are unable to accomplish the
foregoing by such date, then subject to the following sentence,
Anasazi shall credit to Pegasus' billing account, a credit of up to
$5,000 in liquidated damages per incident. Such credit will be
applicable to incidents or breaches affecting in excess of 500 net
bookings, shall be measured by amounts billed and uncollected due to
Anasazi's breach (not to exceed $5,000), and shall be conditioned upon
reasonable substantiation by Pegasus of its best efforts to mitigate
its losses, including, but not limited to, good faith collection
efforts on, estimated bills and obtaining contractual agreements with
affected Participants (contracted with after the Effective Date) to
pay estimated bills.
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5.2 Disclaimer and Exclusion of Warranties.
(a) While Anasazi may provide from time to time certain hardware,
software or other items to Pegasus, Anasazi is primarily providing
Services under this Agreement, and the provision of such other items
is an incidental part of the Services and not the sale of goods within
the meaning of the Uniform Commercial Code or other statute.
(b) EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS ARTICLE V (BUT
WITHOUT LIMITING ANASAZI'S EXPRESS CONTRACT OBLIGATIONS CONTAINED
ELSEWHERE IN THIS AGREEMENT), ANASAZI MAKES NO REPRESENTATIONS OR
WARRANTIES, EXPRESS OR IMPLIED, TO PEGASUS OR TO ANY OTHER PERSON,
INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES REGARDING THE
MERCHANTABILITY, SUITABILITY, ORIGINALITY, FITNESS FOR A PARTICULAR
PURPOSE OR OTHERWISE (IRRESPECTIVE OF ANY PREVIOUS COURSE OF DEALINGS
BETWEEN THE PARTIES OR CUSTOM OR USAGE OF TRADE), OR RESULTS TO BE
DERIVED FROM THE USE, OF ANY SOFTWARE, SERVICES, HARDWARE OR OTHER
MATERIALS PROVIDED UNDER THIS AGREEMENT.
(c) This Article V sets forth Anasazi's total liability for a
breach of any warranty contained in this Article V, without limiting
Pegasus' remedies with respect to Anasazi's obligations contained
elsewhere in this Agreement.
ARTICLE VI
CHARGES; PAYMENT
6.1 Charges. The Charges for the Services are set forth on Schedule VI
to this Agreement.
(a) The Monthly Facilities Management Base Fee for facilities
management ("Monthly Fee") and the floor space fees described below
will be subject to annual increases (beginning January 1, 1997) by a
factor equal to the percentage change in the Consumer Price Index for
the U.S. City Average for Other Goods and Services for All Urban
Consumers as published by the U.S. Department of Commerce based on the
1982-1984 standard reference base area ("CPI"). The Monthly Fee will
also be subject to the following annual adjustment:
(i) The Monthly Fee will be increased or decreased at the
end of each applicable month for each additional square foot
of floor space required, or freed up, by Pegasus according to
the following rates:
- Computer Room Space: $5 per square foot per
month.
- Computer Lab Space: $3 per square foot per
month.
These adjustments will be applicable provided they do not
reduce the Monthly Fee below its original value as set forth
on Schedule VI. These adjustments will not be applicable to
any non-operational Pegasus hardware which Anasazi may
currently be storing within either of its computer rooms (e.g.
USP1 and USP2).
(b) The cost of services not otherwise described in this Agreement
which Pegasus may request Anasazi to perform in the future, shall be
based on Anasazi's then current time and materials rates. The current
rates are set forth on Schedule VI and are subject to change in the
event Anasazi shall change its then current prevailing standard hourly
rates (as set forth on Schedule VI) generally applicable to its
customers, and then, no more than once per Service
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Year effective upon thirty (30) days prior written notice to Pegasus,
provided that (i) in no one Service Year can the increase exceed a
percentage equal to the percentage change in the CPI over the CPI for
the prior twelve month period, plus 2% and (ii) Pegasus shall receive
the same percentage discount (set forth on Schedule VI attached
hereto) on the new then current prevailing standard hourly rates,
provided that Pegasus is current on its payment obligations. Each
request for service outside the scope of this Agreement made by
Pegasus will be evaluated by Anasazi. After completing its evaluation,
Anasazi will either decline to provide such service (e.g. based on
unavailability of resources or scheduling conflicts) or shall submit
to Pegasus its price and time estimate to provide the requested
additional service, which will also advise Pegasus of any recurring
costs of providing the requested additional service and costs of any
additional hardware, software or other resources associated with the
requested additional service. The parties will evidence any agreement
on such additional services in a mutually executed writing.
(c) Anasazi shall make operational training available to Pegasus,
the Participants, prospective Participants and other users of the
Switch pursuant to the Charges in Schedule VI. All training
preparation and materials will be included in the hourly fees. Upon
request, training will be provided at a Participant's or other
non-Anasazi location at the same rates.
(d) If Anasazi personnel travel with Pegasus' prior written
approval to perform Agreement related services during the term of this
Agreement, whether to provide training or for other purposes, Pegasus
shall reimburse Anasazi for coach class air fare and other reasonable
out-of-pocket expenses incurred during any month set forth on a
separate billing statement.
(e) The Monthly Fee shall be invoiced and billed on the first day
of every month following the month to which the Monthly Fee applies.
All fees and expenses set forth in this Agreement, including the
Monthly Fee, are due within thirty (30) days following the date of the
invoice. Notwithstanding anything to the contrary, unless directed by
an arbitrator, the Monthly Fee is not subject to any set-off with
respect to disputes and is deemed not to be divisible or allocable
with respect to any claims or disputes of Pegasus. Any disputes on any
other invoice must be communicated in writing to Anasazi, prior to the
due date of the invoice, specifying the claimed discrepancy. Pegasus
shall pay when due all undisputed amounts, and if the parties have
failed to resolve the dispute within thirty (30) days after the
applicable due date, then within five business days after such date,
Pegasus must either pay by the due date the disputed amount and seek a
credit pending dispute resolution or place such amount in an escrowed
bank account designated for Anasazi's benefit (with interest allocated
as the disputed amount is so allocated), pending resolution of the
dispute. Any unresolved disputes will be subject to Article XII.
(f) Any amounts payable which are not received by Anasazi by the
due date shall bear interest of 1.5% per month provided that such rate
shall be reduced by the percentage it exceeds the highest rate
permitted by applicable law.
(g) Pegasus will be responsible for any sales, use, excise or
value-added taxes or duties payable by Anasazi on the Services as a
whole or on a particular good or Service received by Pegasus or a
Participant from Anasazi where the tax is imposed on Pegasus' or the
Participant's acquisition or use of such Services or goods from
Anasazi, and not by Anasazi's income or property. Pass-through items
will be billed to Pegasus inclusive of any taxes billed to Anasazi.
Anasazi represents that, to its knowledge, as of the execution date of
this Agreement, there are no sales, use, excise or value added taxes
or duties payable on the Services as a whole or on a particular good
or Service received by Pegasus or a Participant from Anasazi where the
tax is imposed on Pegasus' or the Participant's acquisition or use of
such Services or goods from Anasazi, nor, to the knowledge of Anasazi,
is any such tax or duty contemplated. The parties will reasonably
cooperate with one another to enable each to
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more accurately determine its tax liability and to minimize such
liability to the extent legally permissible.
(h) Any fees, costs or expenses arising from this Agreement which
are not expressly set forth or allocated in this Agreement will be
resolved pursuant to the procedures in Section 3.12(b).
ARTICLE VII
CONFIDENTIALITY
7.1 Confidential Information. Each of Anasazi and Pegasus acknowledges
that the other possesses and will continue to possess information that has been
developed or received by it, has commercial value in its business and is not in
the public domain. Anasazi further acknowledges that it will receive
information from Pegasus and Participants which has been created or received by
Participants which has commercial value in its business and is not in the
public domain. For purposes of this Agreement, "Confidential Information" shall
mean (a) the terms of this Agreement; (b) all information of a party (including
information received from Participants) marked "confidential," "restricted,"
"proprietary" or with a similar designation; (c) in the case of Pegasus,
information in addition to the items specified in (b) above, including the
source and object codes for the UltraSwitch Software, all plans, designs,
drawings and specifications for the Switch, all Switch-related documentation
and manuals, including the Operations Manual and the Switch functional
specifications, and all information concerning the business, customers and
finances of Pegasus and the Participants, all data or information received from
Participants or Pegasus and processed or generated by the Switch and all trade
secrets, confidential knowledge, know-how, technical information relating to
the components of the Switch in which Pegasus has a proprietary interest
(including, without limitation, all software programs, computer processing
systems and techniques employed or used by Pegasus or a Participant and any
related items such as specifications, layouts, flow charts, manuals,
instruction books and programmer, technical and user documentation, any and all
upgrades, enhancements, improvements or modifications to the foregoing),
business information regarding business planning and operations of Pegasus and
any Participant and all information and data received, processed or generated
by the Switch pursuant to this Agreement or otherwise; and (d) in the case of
Anasazi, information and, in addition to the items specified in (b) above,
trade secrets, confidential knowledge, know-how, technical information, data or
other proprietary information relating to Anasazi Commercial Software or other
intellectual property used in the provision of Services (or to which Pegasus
otherwise has access) and in which Anasazi or its Affiliate has a proprietary
interest (including, without limitation, all source codes, object codes,
software programs, computer processing systems and techniques employed or used
by Anasazi or its Affiliates and any related items such as specifications,
layouts, flow charts, manuals, instruction books and programmer, technical and
user documentation, and any and all upgrades, enhancements, improvements or
modifications to the foregoing), business information regarding business
planning and operations of Anasazi and its Affiliates, and all information
regarding Anasazi's provision of Services hereunder. Access by Anasazi
personnel or any third party to Pegasus or Participant Confidential Information
shall be limited solely and exclusively to the performance of this Agreement
and such access shall be solely and exclusively by those persons reasonably
necessary to perform or enforce this Agreement. Each party shall take all
reasonable and necessary steps and precautions, consistent with the steps and
precautions taken to protect its own confidential and proprietary information
and materials, to assure that all Confidential Information of the other party
or a Participant is not used or disseminated, directly or indirectly, in whole
or in part, to any person or entity except as expressly permitted herein.
7.2 Obligations. Each party will use at least the same degree of care
to prevent disclosing to other Persons the Confidential Information of the
other party as it employs to avoid unauthorized disclosure, publication or
dissemination of its own information of a similar nature; provided,
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however, subject to Section 7.1, that each party may disclose such information
to its employees, agents, subcontractors and vendors who have a need to know
such information and who have been advised by the disclosing party of the
obligation to preserve such information's confidentiality. Furthermore, neither
Anasazi nor Pegasus will: (a) utilize, sell, assign, lease, otherwise dispose
of or commercially exploit the Confidential Information of the other party
except as expressly contemplated by this Agreement; (b) acquire any right in or
assert any lien against the Confidential Information of the other party; or (c)
refuse for any reason (including a default or material breach of this Agreement
by the other party) to promptly return the other party's Confidential
Information to it if requested to do so. Upon expiration or termination of this
Agreement for any reason, each party shall return promptly to the other party
all Confidential Information in such party's possession and certify in writing
to the other party its compliance with this sentence.
7.3 Exclusions. Notwithstanding the foregoing, this Article VII will
not apply to any particular information of a party that the other party can
demonstrate: (a) was, at the time of disclosure to it, in the public domain;
(b) after disclosure to it, becomes part of the public domain through no fault
of the receiving party; (c) was in the possession of the receiving party at the
time of disclosure to it without being subject to another confidentiality
agreement; (d) was received after disclosure to it from a third party who had a
lawful right to disclose such information to it; or (e) was independently
developed by the receiving party without reference to Confidential Information
of the furnishing party. In addition, a party shall not be considered to have
breached its obligations under this Article VII for disclosing Confidential
Information of the other party: (a) as required pursuant to an arbitration
proceeding conducted in accordance with Article XI, provided that such
disclosure is made in accordance with the approval or at the direction of the
Arbitration Panel; or (b) if in the opinion of such party's counsel, such
disclosure is required by legal process or pursuant to any applicable statute,
rule or regulation provided that, except with respect to securities laws
disclosure obligations, such party advises the other party prior to making such
disclosure in order that the other party may object to such disclosure, take
action to assure confidential handling of the Confidential Information, or take
such other appropriate action to protect the Confidential Information.
7.4 Loss of Confidential Information. In the event of any disclosure
or loss of, or inability to account for, any Confidential Information of the
furnishing party, the receiving party will promptly notify the furnishing
party.
7.5 No Implied Rights. Nothing contained in this Article VII shall be
construed as obligating a party to disclose any particular Confidential
Information to the other party, or as granting to or conferring on a party,
expressly or implied, any rights or license to the Confidential Information of
the other party, except as otherwise provided herein.
7.6 Publicity. Neither party will, without the other party's prior
written consent, use the name, service marks or trademarks of the other party
or any of its Affiliates.
7.7 Limited Use of Certain Information. Notwithstanding the foregoing,
the parties may disclose to other Persons the existence and general nature of
this Agreement.
7.8 Equitable Remedies. Each party acknowledges that if it breaches
(or attempts or threatens to breach) its obligations under this Article VII, the
other party will be irreparably harmed. Accordingly, if a court of competent
jurisdiction should find that a party has breached (or attempted or threatened
to breach) any such obligations, such party will not oppose the entry of an
appropriate order compelling performance by such party and restraining it from
any further breaches (or attempted or threatened breaches).
7.9 No Solicitation. During the term of this Agreement and for one
year after its termination or expiration, neither party shall solicit for
employment or retention as a contractor, retain, hire or employ any employee of
the other party, or contractor primarily engaged in the provision of services
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to or on behalf of the other party except whereas mutually agreed upon by the
Presidents of both Anasazi and Pegasus.
7.10 Survival. The rights and obligations of the parties under this
Article VII (excluding Section 7.9 hereof) shall survive the termination of
this Agreement for ten (10) years.
ARTICLE VIII
INTELLECTUAL PROPERTY
8.1 Ownership. Anasazi acknowledges that, except for its ownership of
the Anasazi Commercial Software, it has neither an ownership interest in, nor a
license to use, nor a lien against, the Switch or any of the components
thereof, and that: (a) Pegasus has all right, title and interest in and to
UltraSwitch, HCC and BDT; (b) Anasazi has granted to Pegasus a non-exclusive,
non-transferable license to use the Anasazi Commercial Software pursuant to a
license dated December 31, 1990; and (c) Pegasus has granted to Anasazi a
non-exclusive, nontransferable license to use the UltraSwitch, HCC and BDT
Software in the Switch Facility during the term of this Agreement and only
pursuant to the terms of this Agreement. Anasazi shall permit the components of
the Switch to bear such signage or other notices and shall execute such UCC
statements and other documents as Pegasus reasonably requests to record
ownership interests in the components of the Switch of Pegasus, its lender(s),
its lessor(s) or other persons with a protectable interest in the Switch.
Anasazi shall not remove any tags, labels or other notices of ownership
interests in the components of the Switch which Pegasus causes to be affixed to
the components of the Switch.
ARTICLE IX
LIABILITY LIMITATIONS: INDEMNIFICATION
9.1 Limitation of Liability.
(a) If Anasazi shall, during the Initial Term or any Renewal Term,
be liable to one or more of Customer and the Participants as a result
of any disputes, controversies or claims of any kind or nature arising
under or in connection with this Agreement or the relationship created
hereby (whether any such breaches, disputes, controversies or claims
are based upon contract, tort (including negligence) or any other
legal theory), all Losses from all such breaches, disputes,
controversies or claims are limited to actual and provable damages
which are reasonably incurred by Pegasus. The cumulative amount of all
such Losses (including, but not limited to, liquidated damages or
penalties) recoverable against Anasazi for all such breaches,
disputes, controversies and claims during the entire Term and any
Renewal Term(s), will not exceed, in the aggregate, an amount equal to
the total amount of Anasazi's Charges under this Agreement for the six
months immediately preceding the Arbitration Panel's (as defined in
Schedule 12.1) then current final determination of the amount of
damages recoverable against Anasazi.
(b) NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT TO THE
CONTRARY (EXCEPT FOR THE CATEGORY OF DAMAGES PROVIDED FOR IN SECTION
5.1 HEREOF), IN NO EVENT SHALL ANASAZI, ANY OF ITS AFFILIATES OR ANY
OF ITS OR THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR
SUBCONTRACTORS BE LIABLE FOR ANY DAMAGES OF PEGASUS, ANY PARTICIPANT
OR ANY OTHER PERSON WHICH: (i) WERE NOT REASONABLY FORESEEABLE BY A
PERSON OR ENTITY IN ANASAZI'S POSITION; (ii) ARE SPECULATIVE IN
NATURE; (iii) ARE NOT READILY OR REASONABLY
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DETERMINABLE AND PROVABLE IN DOLLAR TERMS; (iv) CONSTITUTE PUNITIVE
DAMAGES, LOSS OF GOODWILL OR OTHER SIMILAR INTANGIBLE; OR (v) COULD
HAVE BEEN AVOIDED, USING REASONABLE DILIGENCE, BY PEGASUS, SUCH
PARTICIPANT OR SUCH OTHER PERSON.
(c) Exceptions. Notwithstanding the foregoing provisions of
Section 9.1(a), the liability limitations contained in such subsection
shall not apply with respect to proven damages caused solely and
directly by Anasazi's intentional misconduct constituting a violation
of applicable civil or criminal law, or other acts for which a
limitation is unenforceable as construed by applicable law. However,
the foregoing exception shall not apply if such damages were directly
caused by Anasazi's employee or agent and (i) Anasazi had exercised
reasonable care in supervising such employee or agent or (ii) such
employee or agent was acting materially outside the scope of his or
her employment or agency without Anasazi's knowledge.
(d) Exculpation. Unless resulting from Anasazi's negligence or
breach of this Agreement, in the event of any alleged defect or
failure in the Required Equipment or any other Equipment or any other
Software utilized by Pegasus or any Participant, such Person shall
look solely to its rights and remedies under its agreements with the
Equipment or Software providers and will bring no claims against
Anasazi or any of its Affiliates as a result of such alleged defect or
failure including claims of non-performance or breach of Anasazi's
obligations under this Agreement.
(e) Limitations on Actions. Pegasus may not assert any cause of
action against Anasazi under this Agreement that occurred more than
two years prior to the filing of the suit or the commencement of
arbitration proceedings alleging such cause of action.
(f) Duty to Mitigate. Each party shall have a duty to mitigate
damages for which the other party is responsible.
(g) Acknowledgment. Pegasus and Anasazi expressly acknowledge that
the limitations contained in this Section 9.1 represent the express
agreement of the parties with respect to the allocation of risks
between the parties, including the level of risk to be associated with
the provision of the Services as related to the amount of the payments
to be made to Anasazi for such Services, and each party fully
understands and irrevocably accepts such limitations.
(h) Force Majeure. No party shall be liable for any default or
delay in the performance of its obligations under this Agreement if
and to the extent such default or delay is caused, directly or
indirectly, by; (i) fire, flood, elements of nature or other acts of
God; (ii) any outbreak or escalation of hostilities, war, riots or
civil disorders in any country; (iii) any act or omission of the other
party or any governmental authority; (iv) any labor disputes (whether
or not the employees' demands are reasonable or within the party's
power to satisfy), except that Pegasus shall have the right, if not in
contravention of applicable law or a labor agreement to which Anasazi
is bound, to replace any absent employees (and shall in such case,
supervise them), solely for purposes of minimizing any disruption to
Switch operations; or (v) nonperformance by a third party (despite
using all reasonable, necessary, diligent and expedient efforts by a
party to cause such performance or to prevent or cure such events)
excluding, however, in the case of Pegasus, the nonpayment of any
Participant of any charges owed to Pegasus, or any other similar cause
beyond the reasonable control of such party including, without
limitation, failures or fluctuations in telecommunications equipment
or lines or other equipment beyond the reasonable control of such
party. Force majeure events shall not, on their face, excuse, reduce
or delay Anasazi's obligations to provide back-up power pursuant to
Section 3.1(d), air conditioning or to promptly access backup
communication lines unless such event renders such alternate power
supply, air conditioning
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or backup communication lines unavailable. In any such event, the non-
performing party will be excused from any further performance or
observance of the obligations so affected only for as long as such
circumstances prevail and such party continues to use commercially
reasonable efforts to recommence performance or observance as soon as
practicable.
9.2 Indemnities.
(a) Indemnity by Anasazi. Anasazi agrees to defend and indemnify
Pegasus and hold Pegasus, its stockholders, directors, officers,
employees, consultants, representatives and agents harmless from,
against, for and in respect of any and all damages, losses,
obligations, liabilities, costs and expenses, including reasonable
attorneys' fees and other costs and expenses incident to any suit,
action, investigation, claim or proceeding suffered, sustained,
incurred or required to be paid by Pegasus by reason of: (i) the gross
negligence or willful misconduct of Anasazi, its directors, officers,
employees, consultants, representatives or agents; or (ii) any actual
or alleged infringement or violation of any third party copyright,
patent, trademark, trade name, trade secret or other proprietary right
arising from Anasazi's use of the Anasazi Commercial Software in its
provision of Services pursuant to this Agreement; provided, however,
that Anasazi's obligation to indemnify and hold Pegasus harmless shall
not apply to any modification or enhancement of the Anasazi Commercial
Software during the term of this Agreement which was performed by or
on behalf of Pegasus without Anasazi's consent. The limitations in
Section 9.1 hereof are applicable to Anasazi's indemnification
obligations herein.
(b) Indemnity by Pegasus. Pegasus agrees to defend and indemnify
Anasazi and hold Anasazi, its stockholders, directors, officers,
employees, consultants, representatives and agents harmless from,
against, for and in respect of any and all damages, losses,
obligations, liabilities, costs and expenses, including reasonable
attorneys' fees and other costs and expenses incident to any suit,
action, investigation, claim or proceeding suffered, sustained,
incurred or required to be paid by Anasazi by reason of: (i) any
claim, demand, charge, action, cause of action or other proceeding
asserted by any Participant or other third party (e.g. Pegasus' third
party vendors covered by this Agreement) against Anasazi or any of its
Affiliates which arises in connection with, or relates to (or is
claimed to relate to), any of the Services provided to Pegasus or to
any Participant under this Agreement, including, without limitation,
any such claim, demand, charge, action, cause of action or other
proceeding resulting from the breach or alleged breach by Anasazi or
Pegasus of any of its respective obligations under this Agreement or
from, in whole or part, the negligence or alleged negligence of
Anasazi in providing the Services hereunder; (ii) the gross negligence
or willful misconduct of Pegasus, its stockholders, directors,
officers, employees, consultants, representatives or agents; and (iii)
any action or alleged infringement or violation of any copyright,
patent, trademark, trade name, trade secret or other proprietary right
of any other person resulting from any development, modification or
enhancement of the Switch Software and the Anasazi Commercial Software
during the term of this Agreement which was performed by an employee,
agent, consultant or representative of Pegasus.
(c) Infringement Claims. In the event: (i) a claim or action is
brought alleging infringement or violation of any copyright, patent,
trademark, trade name, trade secret or other proprietary, right of
another person; or (ii) the UltraSwitch Software and/or the Anasazi
Commercial Software is held to constitute an infringing use, then the
indemnifying party may, at its sole expense and with the prior consent
of the indemnified party, which consent will not be unreasonably
withheld, settle such claim, action or judgment by either: (a)
obtaining an exclusive, worldwide, royalty-free license from the third
party to enable the indemnified party to continue to use the Switch
Software and/or a non-exclusive, worldwide, royalty-free license from
the third party to enable the indemnified party to continue to use the
Anasazi Commercial Software; (b) modify the Switch Software and/or the
Anasazi Commercial
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Software so that its continued use becomes non-infringing; or (c)
replace the Switch Software and/or the Anasazi Commercial Software
with equally suitable, functionally equivalent, non-infringing
software.
(d) Indemnification for Third-Party Claims. Notwithstanding
anything else contained in this Agreement, no obligation to indemnify
which is set forth in this Article IX shall apply unless the party
claiming indemnification notifies the other party as soon as
practicable (within sixty (60) days after the notice, or such shorter
period as is required to avoid any prejudice in the claim, suit or
proceeding) of any matters in respect of which the indemnity may apply
and of which the notifying party has knowledge and gives the other
party the opportunity to control the response thereto and the defense
thereof; provided, however, that the party claiming indemnification
shall have the right to participate in any legal proceedings to
contest and defend a claim for indemnification involving a third party
and to be represented by its own attorneys, all at such party's cost
and expense; provided further, however, that no settlement or
compromise of an asserted third party claim other than the payment of
money may be made without the prior written consent of the party
claiming indemnification.
(e) Claims Period. Any claim for indemnification under this
agreement must be made prior to the earlier of: (a) one year after the
party claiming indemnification becomes aware of the event for which
indemnification is claimed; or (b) one year after the earlier of the
termination of this Agreement or the expiration of the Term of this
Agreement.
ARTICLE X
EVENTS OF DEFAULT
10.1 Nature of Event. The term "Event of Default" means the occurrence
of any one or more of the following events:
(a) The failure of Anasazi or Pegasus to perform, observe or
comply with any covenant, term or agreement contained in the
Agreement; or
(b) Pegasus or Anasazi shall have:
(i) applied for or consented to the appointment of a
conservator, receiver, trustee, liquidate or custodian or the
like of itself or of its property;
(ii) admitted in writing its inability to pay its debts
generally as they become due;
(iii) made a general assignment for the benefit of
creditors;
(iv) become or been adjudicated as bankrupt or insolvent;
(v) filed a voluntary petition of bankruptcy under the
federal bankruptcy laws of the United States or filed a
voluntary petition or answer seeking reorganization, an
arrangement with creditors or an order for relief or seeking
to take advantage under any bankruptcy, insolvency or other
similar law;
(vi) filed an answer admitting the material allegations
of, or consented to, or defaulted in, a petition filed against
it in any proceeding under any bankruptcy, insolvency or other
similar law;
(vii) consented to the entry of an order for relief in an
involuntary case under any
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bankruptcy, insolvency or other similar law;
(viii) had a proceeding instituted against it in any court
of competent jurisdiction under any bankruptcy, insolvency or
other similar law seeking an order for relief or an
adjudication in bankruptcy, reorganization, dissolution,
winding up, liquidation, composition or arrangement with
creditors, a readjustment of debts, the appointment of a
conservator, receiver, trustee, liquidator or custodian or the
like of itself for of its property, or other like relief under
any bankruptcy, insolvency or other similar law, and such
court shall have entered an order of decree which remains
unstayed and in effect for a period of sixty (60) consecutive
days.
10.2 Notice and Opportunity to Cure. Upon the occurrence of an Event
of Default, the non-defaulting party shall notify the defaulting party in
writing of such default and shall allow the defaulting party fifteen (15) days
following the defaulting party's receipt of such notice within which to cure
such default, during which 15 day period the non-defaulting party shall not
exercise any of the remedies available to it under Section 10.3; provided,
however, (i) that if the default is non-payment by Pegasus of any Charge (other
than the Monthly Charge which if not paid by the due date shall have a cure
period of five (5) business days) which was not disputed pursuant to the
procedures in Section 6.1(f), then the cure period shall be ten (10) business
days after receipt of notice, and (ii) notwithstanding the foregoing, if the
occurrence of an Event of Default causes either a total loss of operation of
the Switch or a loss of one or more of the critical functions of the Switch
such that the Switch cannot be restored to full operation within 24 hours of
the occurrence of such Event of Default, then the non-defaulting party may
notify the defaulting party of such default and immediately exercise one or
more of the remedies available to it under Section 10.3.
10.3 Remedies. Upon the occurrence of an Event of Default and the
expiration of the applicable cure period as provided in Section 10.2, the non-
defaulting party shall have the right to:
(a) Terminate this Agreement in accordance with the provisions of
Articles X and XI;
(b) Exercise any and all rights or remedies against the defaulting
party afforded by the laws of the applicable jurisdiction, including
but not limited to, those afforded by this Agreement and those
available at law or in equity; provided, however, that: (i) no party
shall have a right of set-off except as directed by an arbitrator;
(ii) Pegasus shall not be entitled to seek or obtain injunctive relief
in response to a termination notice from Anasazi (to suspend Services
or terminate the Agreement) for a non-payment Event of Default unless
and until it has commenced arbitration pursuant to Article XII, has
escrowed in an account for Anasazi's benefit all Charges in default
and prepays prior to each month during which arbitration is pending or
conducted, at minimum, the Monthly Fee plus an amount equal to the
average of all monthly invoiced amounts during the prior three months;
and (iii) the amount of monetary damages Anasazi shall be required to
pay Pegasus under this Section 10.3(b), together with the amounts
Anasazi shall be required to pay Pegasus under Section 9.2(a), shall
in no event exceed the limitation(s) described in Section 9.1.
10.4 Remedies Not Exclusive. Except to the extent monetary damages are
limited pursuant to the provisions of Sections 9.1 and 9.2, no remedy herein
conferred upon or reserved to the parties under this Article XI or under any
other provision of this Agreement is intended to be exclusive, but rather each
such remedy shall be cumulative of and in addition to all other rights and
remedies granted to the parties at law or in equity, whether given hereunder or
thereafter existing, and whether or not the parties shall have instituted any
suit or any other action in connection therewith.
10.5 Fees and Expenses. Should an Event of Default occur and the non-
defaulting party employ attorneys or incur other expenses for the enforcement or
performance of any covenant, term or agreement of the defaulting party
hereunder, if the arbitrator so determines, the defaulting party
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shall on demand pay to the non-defaulting party the reasonable fees of such
attorneys and such other reasonable expenses so incurred.
10.6 Waivers. The acceptance by either part at any time and from time
to time of performance by the other party shall not be deemed to be a waiver of
any default or Event of Default then existing. No waiver by either party of any
particular default or Event of Default shall be deemed to be a waiver of any
default or Event of Default other than the particular default or Event of
Default waived. No delay or omission by either party in exercising any right or
remedy hereunder shall impair such right or remedy or be construed as a waiver
thereof or any acquiescence therein, nor shall any single or partial exercise
of any such right or remedy preclude other or further exercise thereof, or the
exercise of any other right or remedy hereunder or otherwise.
ARTICLE XI
TERMINATION
11.1 Termination. This Agreement may be terminated and abandoned
without further notice at any time upon the occurrence of the following events:
(a) Pegasus and Anasazi may mutually terminate this Agreement in
writing at any time;
(b) Upon the occurrence of an Event of Default and the expiration
of the applicable cure period, if any, the non-defaulting party may
terminate this Agreement pursuant to Section 10.3, or Anasazi, at its
option, may terminate or suspend all or a portion of the Services
until a non-payment Event of Default has been cured;
(c) Pegasus may terminate this Agreement in the event a fire,
flood, or other disaster occurs which results in either a total loss
of operation of the Switch or a loss of one or more critical functions
of the Switch such that the Switch cannot be restored to full
operation within 96 hours of the occurrence of such event;
(d) Pegasus or Anasazi may terminate this Agreement if any court
or governmental agency restrains, enjoins, prohibits, invalidates, or
sets aside the consummation of any of the transactions contemplated
hereby;
(e) Pegasus may terminate this Agreement at any time following the
acquisition by one or more of the Participants of 50% or more of
Anasazi's assets or 50% or more of Anasazi's outstanding voting
securities;
(f) Pegasus may terminate this Agreement at any time upon its
election to withdraw from the hotel reservation switching business for
a period of at least two (2) years; provided, however, Pegasus shall
give Anasazi six (6) months prior written notice of its intent to
terminate this Agreement pursuant to this subsection (f); and
(g) Pegasus may terminate this Agreement within twelve months
following the acquisition of 50% or more of Anasazi's assets or 50% or
more of Anasazi's voting securities provided that such notice shall
not provide an effective termination date beyond the 12 month period
and shall be provided to the acquiring party or successor no later
than six (6) months after the acquisition date.
(h) Notwithstanding any other provision herein, Pegasus may
terminate this agreement upon providing at least six months notice of
termination to Xxxxxxx.
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11.2 Effect of Termination. Upon the termination of this Agreement
pursuant to the provisions of Section 11.1:
(a) Within ten (10) days after effective date of termination,
Anasazi shall submit to Pegasus a final billing statement for all
unpaid fees owed to it by Pegasus for services performed by Anasazi
prior to the date of termination. The billing statement shall be
prepared by Anasazi and paid by Pegasus in accordance with the terms
of Article VI; provided, however, if this Agreement shall be
terminated by Pegasus for any reason other than upon the occurrence of
an Event of Default by Anasazi under Section 11.1(b) hereof, such
payments shall be made upon delivery by Anasazi of those items set
forth in subsections 11.2(b) through (d) hereof;
(b) In the event this Agreement is terminated by Pegasus pursuant
to Sections 11.1(b)-(e), within ten (10) business days after the
termination of this Agreement, Anasazi shall deliver to Pegasus all
notebooks, data, information and other material acquired, compiled or
generated by Anasazi with respect to the Switch.
(c) Within ten (10) business days after the termination of this
Agreement, Anasazi and Pegasus shall deliver to each other all
Confidential Information furnished to either of them by the other,
together with all copies of the same.
(d) In the event this Agreement is terminated by Pegasus pursuant
to Sections 11.1(b)-(e), immediately upon termination of this
Agreement or at such earlier date as Pegasus reasonably requests,
Anasazi shall deliver to Pegasus or Pegasus' designee, for the cost of
the media upon which it is provided, a copy of each Switch data tape
then in Anasazi's possession, a copy of the source and object codes in
their then current forms for the Anasazi Commercial Software and
copies of such Switch records as Pegasus reasonably requests, and make
the Hardware, the Network Components, the Support Equipment and the
Software available for packing and pick-up by Pegasus and/or its
designees, at Pegasus' expense.
(e) In the event this Agreement is terminated pursuant to Section
11.1(a), or terminated by Pegasus pursuant to Section 11.1(b)-(d), to
facilitate transition to operation of the Switch by a party other than
Anasazi, and subject to Pegasus' payment to Anasazi of all outstanding
amounts due under invoices rendered, Anasazi shall make personnel
knowledgeable in Switch operations, the Hardware, the Network
Components, the Support Equipment and the Software available to train
and consult with Pegasus and/or Pegasus' designees as reasonably
requested during the two-month period following termination, provided,
however, that Anasazi shall not be required to provide such resources
in excess of the hours and periods otherwise provided for under
Article III hereof, and provided that such non-Pegasus designees shall
enter into a confidentiality agreements with Anasazi with terms at
least as stringent as those in Article VII hereof. Pegasus shall pay
for such services at Anasazi's then prevailing hourly rate(s) for the
level(s) of personnel rendering such services, and shall reimburse the
traveling expenses of such personnel, if any, in accordance with
Section 6.1(d).
11.3 Survival of Certain Covenants. In the event this Agreement is
terminated in accordance with this Article XI, this Agreement shall be of no
further force or effect, except for Articles VII, VIII, XI, XII and XIII which
shall not be affected by the termination of this Agreement but shall survive
the termination hereof pursuant to their terms.
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ARTICLE XII
DISPUTE RESOLUTION
12.1 Dispute Resolution Procedures. Schedule XII attached hereto sets
forth the procedures governing any and all disputes arising between the parties
hereunder or in connection herewith.
ARTICLE XIII
GENERAL
13.1 Relationship of Parties.
(a) In furnishing the Services to Pegasus, Anasazi is acting only
as an independent contractor. This Agreement is not intended to create
a joint employer, shared employee or leased employee relationship with
respect to any employees of either party. Except as otherwise
expressly provided in this Agreement, Anasazi has the sole right to
supervise, manage, contract, direct, procure, provide or cause to be
provided, all Services to be provided pursuant to this Agreement.
Except as otherwise expressly provided in this Agreement, Anasazi does
not undertake by this Agreement or otherwise to perform any obligation
of Pegasus, whether regulatory or contractual, or to assume any
responsibility for the business or operations of Pegasus. Under no
circumstances shall Anasazi be considered or deemed under this
Agreement to be a joint venture or partner of Pegasus or in any
relationship with Pegasus under this Agreement carrying with it
fiduciary or trust responsibilities, and no other similar relationship
is intended or created between the parties pursuant to this Agreement
(b) Except for Anasazi's current business relationship with Avis
Rent A Car System, Inc. and except as otherwise permitted by Pegasus
in writing, Anasazi covenants and agrees that it will not, at any time
during the term of this Agreement, directly or indirectly: (i) own or
control more than 50% of the equity or assets of any business which
engages in the creation, development, installation, maintenance or
operation of an Automated Lodging Reservation Inquiry Switching
Network; (ii) manage or operate any business which, directly or
indirectly, engages in the creation, development, installation,
maintenance or operation of an Automated Lodging Reservation Inquiry
Switching Network; or (iii) serve as a consultant, contractor,
advisor, programmer or supervisor in the creation, development,
installation, maintenance or operation of any Automated Lodging
Reservation Inquiry Switching Network. The remedy at law for any
breach or attempted breach by Anasazi of the provisions of this
Section 13.1(b) will be inadequate and Pegasus shall be entitled to
temporary or permanent injunctive relief against any breach or
attempted breach of such provision without the necessity of posting
bond or proving actual damages. It is the express intention of the
parties hereto to comply with all laws which may be applicable to this
Section 13.1(b). Should any restriction contained in this Section
13.1(b) be found to exceed in duration or scope the restriction
permitted by law, it is expressly agreed that the covenant not to
compete contained in this Section 13.1(b) may be reformed or modified
by the final judgement of a court of competent jurisdiction to reflect
a lawful and enforceable duration or scope. If any one or more of the
provisions contained in this Section 13. 1(b) shall for any reason be
held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement, but this Agreement shall be construed as
if such invalid, illegal or unenforceable provision had never been
contained herein.
(c) Except as otherwise permitted by Anasazi in writing, Pegasus
covenants and agrees that it will not, at any time during the term of
this Agreement, directly or indirectly (i) own or control at least 50%
of the equity or assets of any U.S.-based business which engages in
the creation, development, installation, licensing, maintenance or
operation of any Central Reservation System marketed in competition
with Anasazi or contemplated to be marketed in
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competition with Anasazi or which engages in the business of providing
Central Reservation System Services which is in competition with
Anasazi or which contemplates being in competition with Anasazi; (ii)
manage or operate any business which, directly or indirectly, engages
in the creation, development, installation, maintenance or operation
of a Central Reservation System marketed in competition with Anasazi
or contemplated to be marketed in competition with Anasazi or which
engages in the business of providing Central Reservation System
Services which is in competition with Anasazi or which contemplates
being in competition with Anasazi; or (iii) serve as a consultant,
contractor, advisor, programmer or supervisor in the creation,
development, installation, maintenance or operation of a Central
Reservation System or in the provision of Central Reservation System
Services, which business is in competition with Anasazi or
contemplates being in competition with Anasazi, provided that nothing
herein is intended to prohibit Pegasus from engaging in general
consulting activities which are in its normal and ordinary course of
business activities pertaining to the exploitation of the Switch and
further provided that nothing herein shall prohibit Pegasus from
entering into agreements with central reservation system providers to
include in the central reservation system provider's system any one or
more of the products or services offered by Pegasus. The remedy at law
for any breach or attempted breach by Pegasus of the provisions of
this Section 13.1(c) will be inadequate and Anasazi shall be entitled
to temporary or permanent injunctive relief against any breach or
attempted breach of such provision without the necessity of posting
bond or proving actual damages. It is the express intention of the
parties hereto to comply with all laws which may be applicable to this
Section 13.1(c). Should any restriction contained in this Section
13.1(c) be found to exceed in duration or scope the restriction
permitted by law, it is expressly agreed that the covenant not to
compete contained in this Section 13.1(c) may be reformed or modified
by the final judgment of a court of competent jurisdiction to reflect
a lawful and enforceable duration or scope. If any one or more of the
provisions contained in this Section 13.1(c) shall for any reason be
held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement, but this Agreement shall be construed as
if such invalid, illegal or unenforceable provision had never been
contained herein.
(d) Notwithstanding the foregoing, either party shall have the
right to terminate this Agreement without liability upon six months
prior written notice if: (i) 50% of more of the assets or equity of
Anasazi are proposed to be sold to an entity or person owning,
operating, controlling or participating, directly or indirectly, in at
least 50% or more of a business engaged in the operation or commercial
exploitation of an Automated Lodging Reservation Switching Network; or
(ii) 50% of more of the assets or equity of Pegasus are proposed to be
sold to an entity or person owning, operating, controlling or
participating, directly or indirectly, in at least 50% or more of a
business engaged in the operation or commercial exploitation of a
Central Reservation System or Central Reservation System Services.
13.2 Consents and Approvals. If either party requires the consent or
approval of the other party for the taking of, or omitting to take, any action
under this Agreement, such consent or approval shall not be unreasonably
withheld or delayed.
13.3 Notices. Except as otherwise expressly provided in this Agreement
and except for routine operational communications, any notice or other
communication under this Agreement to either party shall be effective upon
receipt (or refusal of receipt) and shall be in writing and delivered
personally (or by courier) or sent by telex, telecopy, other facsimile
transmission (with confirmation), or certified or registered mail, postage
prepaid as follows:
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If to Anasazi, to:
Anasazi Inc.
0000 X. Xxxxxx Xxxx Xxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Facsimile transmission: (000) 000-0000
Attention: Xxx Xxxxxxxxx
If to Pegasus, to:
Pegasus Systems Inc.
0000 Xxxxxx Xxxxx Xxxx.
Xxxxx 0000
Xxxxxx, XX 00000
Facsimile transmission: (000) 000-0000
Attention: Xxxx X. Xxxxx
With a copy (which shall not constitute
effective notice) to:
Xxx Xxxxx, Counsel
A party may from time to time change its address or designee for
notification purposes by giving the other party prior notice in the
manner specified above of the new address or the new designee and the
subsequent date upon which the change will be effective.
13.4 Account Manager. Anasazi and Pegasus shall each designate one
person, and shall notify each other immediately in writing of the person so
designated, who shall serve as the Account Manager for all communication
regarding the performance of their respective duties and obligations under this
Agreement. The person designated as the Account Manager by Anasazi and Pegasus
shall be fully authorized and empowered by Anasazi and Pegasus, respectfully to
act, in his or her sole discretion, for and on behalf of Anasazi and Pegasus,
respectfully in response to any communication regarding performance under this
Agreement.
13.5 Assignment. Anasazi's rights and duties under this Agreement are
personal and not assignable without the prior written consent of Pegasus,
except Anasazi may, without the consent of Pegasus, assign its rights and
duties under this Agreement to an Affiliate, provided that such assignee agrees
in writing to be bound by this Agreement. Anasazi may subcontract with third
parties to provide required services, but will retain ultimate responsibility
for ensuring that such services are properly rendered. Pegasus' rights and
duties may be assigned without Anasazi's consent to any entity which Pegasus
controls or which purchases either (a) more than 50% of the assets of the
business in which the Switch is used or (b) a controlling interest in Pegasus,
provided the assignee agrees in writing to be bound by this Agreement. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective permitted assigns and successors.
13.6 Legal Compliance. Pegasus shall ensure that; (a) the services
offered by Pegasus ("Pegasus Services") to Participants and others through the
provision of Services by Anasazi; (b) the materials provided to Anasazi for use
in connection with the Services; (c) the methods used by Pegasus to offer, sell
and deliver Pegasus' Services to Pegasus; and (d) the contents of all
advertising, marketing and promotional communications, comply with all
applicable laws and regulations. Pegasus will possess all authorizations,
consents, registrations, exemptions and licenses necessary to offer, sell and
deliver, and to engage Anasazi to offer, sell and deliver, Pegasus' Services to
Pegasus' customers in all jurisdictions where such offers, sales and deliveries
are to be made. Anasazi shall ensure that it complies with all applicable laws
and regulations with respect to the provision of Services under this Agreement.
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13.7 No Third-Party Beneficiaries. Nothing contained in this Agreement
is intended to confer upon any Person (other than the parties hereto) any
rights, benefits or remedies of any kind or character whatsoever, and no Person
(including, without limitation, the Participants) shall be deemed a third-party
beneficiary under or by reason of this Agreement.
13.8 Amendment and Modification: No Waiver. This Agreement may be
amended or modified only by a written instrument duly executed by the parties
hereto. The failure of either party at any time or times to require performance
of any provision of this Agreement shall not affect the right of a party at a
later time (not to exceed 12 months after the non-performance) to enforce such
provision.
13.9 Severability. If any provision or portion of a provision of this
Agreement or the application of any such provision or portion of a provision to
any Person or circumstance, shall be declared judicially or by the Arbitration
Panel (as defined in Schedule XII) to be invalid, unenforceable or void, such
decision shall not have the effect of invalidating or voiding the remainder of
this Agreement (or the remainder of the provision), it being the intent and
agreement of the parties that this Agreement shall be deemed amended by
modifying such provision or portion thereof to the extent necessary to render
it valid, legal and enforceable while preserving its intent or, if such
modification is not possible, by substituting therefor another provision or
portion thereof that is valid, legal and enforceable and that achieves the same
objective.
13.10 Entire Agreement. This Agreement (including the Schedules
hereto) and the documents and instruments executed and delivered in connection
herewith constitute the entire agreement between the parties with respect to
the subject matter hereof and supersede all prior and contemporaneous
agreements and understandings, whether written or oral, between the parties
with respect to the subject matter hereof, and there are no representations,
understandings or agreements relating to the subject matter hereof that are not
fully expressed in this Agreement and the documents and instruments executed
and delivered in connection herewith. All Schedules attached to this Agreement
are expressly made a part of, and incorporated by reference into, this
Agreement. This Agreement, as of the Effective Date, shall have the effect of
terminating and nullifying the Original Agreements (including all addenda and
amendments thereto) and the parties' rights and obligations thereunder, except
for liabilities incurred prior the Effective Date. Notwithstanding anything to
the contrary in this Agreement or the Original Agreements, Pegasus hereby
terminates its rights and Anasazi's obligations of the Original Agreements, and
Anasazi, as of the Effective Date, shall not be bound thereby, but shall be
bound by the provisions of Section 13.1 thereof.
13.11 Governing Law. This Agreement shall be construed in accordance
with, and the rights of the parties shall be governed by, the substantive laws
of the State of Arizona without giving effect to any choice-of-law rules that
may require the application of the laws of another jurisdiction.
13.12 Certain Construction Rules. The description of any Services
contained in the Schedules is qualified in its entirety by reference to the
information set forth in the provisions of this Agreement. To the extent that
the provisions of this Agreement and of the Schedules are in any respect
inconsistent, the provisions of this Agreement shall govern and control. To the
extent that one or more provisions in the Operations Manual is inconsistent
with or in contravention of this Agreement (including the Schedules), this
Agreement shall govern, and unless the Agreement is mutually amended by the
parties to address the inconsistency, the Operations Manual will be amended or
implemented by the parties to conform to the Agreement. The Article and Section
headings and the table of contents contained in this Agreement are for
convenience of reference only and shall in no way define, limit, extend or
describe the scope or intent of any provisions of this Agreement. In addition,
as used in this Agreement, unless otherwise provided to the contrary, (a) all
references to days, months, quarters or years shall be deemed references to
calendar days, months, quarters or years, and b) any reference to a "Section,"
"Article," or "Schedule" shall be deemed to refer to a Section or Article of
this Agreement or a Schedule attached to this Agreement.
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13.13 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall constitute one instrument binding on all the parties,
notwithstanding that all the parties are not signatories to the original or the
same counterpart.
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IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties as of the date first above written.
ANASAZI INC.
By:/s/ X. XXXXXXXXX
----------------------------
Name: X. XXXXXXXXX
--------------------------
Title: PRESIDENT & COO
-------------------------
PEGASUS SYSTEMS, INC.
By: /s/ X. XXXXXXXXX
----------------------------
Name: X. XXXXXXXXX
--------------------------
Title: PRESIDENT
-------------------------
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SCHEDULE VI
ANASAZI CHARGES
Subject to the provisions of Article VI, the Monthly Facilities
Management Fee will initially be $39,530 per calendar month.
HOURLY RATES
(as of January 1, 1996)
--------------------------------------------------------------------------------
Standard Hourly Rate Pegasus Rate
--------------------------------------------------------------------------------
VP Dir, Sr. Management $225 $175
Sr. Consultant $175 $150
Project Manager $150 $135
Sr. System Administrator $150 $135
System Administrator $100 $ 90
Sr. System Engineer $135 $115
System Engineer $100 $ 90
Jr. System Engineer $ 75 $ 65
System Analyst $100 $ 90
Sr. Database Analyst $125 $100
Database Analyst $ 75 $ 65
Sr. QA Analyst $ 95 $ 85
Tester $ 50 $ 45
Tech Writer $ 55 $ 45
Support Analyst $ 55 $ 45
Application Trainer $ 55 $ 45
Anasazi reserves the right to apply the Standard Hourly Rate during
any period in which Pegasus is overdue on the payment of any charge
o Travel time to/from Customer is charged portal to
portal.
o Reasonable travel, lodging and incidental expenses
are additional.
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SCHEDULE XII
ARBITRATION PROCEDURES
DISPUTE RESOLUTION
1. Arbitration. If the parties are unable to resolve any dispute,
controversy or claim between the parties of any kind or nature arising under or
in connection with the Agreement or the relationship of the parties under the
Agreement (a "Dispute") informally or in accordance with the procedures, if
any, set forth in the Agreement relating to such Dispute, then such Dispute
shall be submitted to mandatory and binding arbitration at the election of
either party (the "Disputing Party"). The procedures set forth in this Schedule
12.1 shall be governed by The Federal Arbitration Act, 9 U.S.C. Section 1, et
seq. Except as otherwise provided in this Section 1, the arbitration shall be
pursuant to the Commercial Arbitration Rules of the American Arbitration
Association (the "AAA").
a. Initiation of Arbitration; Selection of Arbitration
Panel. To initiate the arbitration, the Disputing Party shall notify the other
party in writing (the "Dispute Notice"), which shall (i) describe in reasonable
detail the nature of the Dispute, (b) state the amount of the claim, (iii)
specify the requested relief, and (iv) name an arbitrator who (A) has been
licensed to practice law in the United States for at least ten years, (B) is
not then an employee of either party or of an Affiliate of either party, and
(C) has not been retained or employed by or rendered professional services to
either party or an Affiliate of either party for a five-year period prior
thereto (the "Basic Qualifications"). Within 15 days after the other party's
receipt of the Dispute Notice, such other party shall file, and serve on the
Disputing Party, a written statement (i) answering the claims set forth in the
Dispute Notice and including any affirmative defenses of such party; (ii)
asserting any counterclaim, which shall (A) describe in detail the nature of
the Dispute relating to the counterclaim, (B) state the amount of the
counterclaim, and (C) specify the requested relief; and (iii) naming a second
arbitrator satisfying the Basic Qualifications. Promptly, but in any event
within 15 days thereafter, the two arbitrators so named shall select a third
neutral arbitrator from a list provided by the AAA of potential arbitrators who
satisfy the Basic Qualifications and who have no past or present relationships
with the parties or their counsel, except as otherwise disclosed in writing to
and approved by the parties. The arbitration shall be heard by a panel of the
three arbitrators so chosen (the "Arbitration Panel"), with the third
arbitrator so chosen serving as the chairperson of the Arbitration Panel.
b. Conduct of Arbitration. The arbitration hearing shall
be held in such neutral location as the parties may mutually agree. The
Arbitration Panel is specifically authorized to render partial or full summary
judgment as provided for in the Federal Rules of Civil Procedure. The Federal
Rules of Evidence shall apply to the arbitration hearing. The party bringing a
particular claim or asserting an affirmative defense shall have the burden of
proof with respect thereto. The arbitration proceedings and all testimony,
filings, documents and information relating to or presented during the
arbitration proceedings shall be deemed to be Confidential Information subject
to Article VII of the Agreement. The Arbitration Panel shall have no power or
authority, under the Commercial Arbitration Rules of the AAA or otherwise, to
relieve the parties from their agreement hereunder to arbitrate or otherwise to
amend or disregard any provision of the Agreement or the Schedules thereto,
including this Schedule 12.1, including without limitation the provisions of
this Section 1.
c. Findings and Conclusions. Within 15 days after the
closing of the arbitration hearing, the Arbitration Panel shall prepare and
distribute to the parties a writing setting forth the Arbitration Panel's
findings of fact and conclusions of law relating to the Dispute, including the
reasons for the giving or denial of any award. The findings and conclusions and
the award, if any, shall be deemed to be Confidential Information subject to
Article VII of the Agreement.
d. Expeditious Proceedings. The Arbitration Panel is
instructed to schedule promptly all discovery and other procedural steps and
otherwise to assume case management initiative and control to effect an
efficient and expeditious resolution of the Dispute. The Arbitration Panel is
authorized to issue monetary sanctions against either party if, upon a showing
of good cause, such party is unreasonably delaying the proceeding.
e. Award. Any award rendered by the Arbitration Panel
shall be final, conclusive and binding upon the parties and any judgment
thereon may be entered and enforced in any court of competent jurisdiction.
f. Expenses of Proceeding. Each party shall bear 50% of
all fees, costs and expenses of the arbitrators, and notwithstanding any law to
the contrary, each party shall bear all the fees, costs and expenses of its
own attorneys, experts and witnesses; provided, however, that in connection
with any judicial proceeding to compel arbitration pursuant to this Agreement
or to enforce any award rendered by the Arbitration Panel, the prevailing party
in such a proceeding shall be entitled to recover reasonable attorneys' fees
and expenses incurred in connection with such proceeding, in addition to
any other relief to which it may be entitled.
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2. Effect of Contract Rights During Arbitration. Nothing in this
Schedule 12.1 shall be construed to prevent a party from exercising or enforcing
its rights and remedies or to excuse a party from performing an obligation
(including, but not limited to, making payments when due) set forth in, and
pursuant to, the terms of the Agreement, notwithstanding the initiation and
pendency of an arbitration proceeding. The provisions of Section 10.3(b) of the
Agreement are incorporated herein as part of the arbitration procedures.
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EXHIBIT A
COMPONENTS OF THE SWITCH
Hardware
1. Those certain transaction processing engines (TPEs) provided
by Pegasus.
2. Those certain communication engines (CEs) provided by Pegasus.
3. That certain communication equipment provided by Pegasus for
the purpose of establishing and maintaining electronic data
communication links amongst UltraSwitch, HCC, BDT and
Participants.
4. Those certain communication interface boards used in the CEs.
5. Those certain items of hardware comprising part of the Switch
Test Environment for the Switch.
6. Those certain items of hardware comprising the Lanyon Terminal
interface System.
7. Those certain items of hardware comprising the Bulk Data
Transfer System.
8. Those certain items of hardware comprising the TravelWeb
System.
Network Components
1. An Ethernet network, which includes sub-networks.
2. A network management system.
Software
1. DC/OSx operating system software (including the C programming
language) obtained under license from Pyramid Technology
Corporation pursuant to a Software Binaries Sublicense
Agreement for use in connection with the operation of the
TPEs.
2. Interactive UNIX operating system software obtained under
license from the vendor pursuant to self-executing
"shrink-wrap" or "box-top" license for use in connection with
the operation of the CEs.
3. Informix data base software obtained under license from the
vendor thereof pursuant to a self-executing "shrink-wrap" or
"box-top" license for use in conjunction with the UNIX
operating system in connection with the operation of the TPEs.
4. Anasazi Commercial Software (KivaNet) which includes a subset
of "primitives" (macro language) for lodging systems and other
common-use modules (algorithms and techniques with general
applicability to many types of data processing applications)
and protocol gateways, either currently in existence or
created in conjunction with the performance of this Agreement,
all as obtained under license from Anasazi dated December 31,
1990 for use in connection with the Switch.
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5. UltraSwitch software developed by Anasazi and Pegasus
exclusively for use in connection with the Switch and acquired
by Pegasus pursuant to the Development, License and Funding
Agreement dated November 14, 1988, as amended, including all
Participant interface processes and all software developed by
Anasazi and Pegasus pursuant to the Software Development
Agreement dated January 6, 1992, as amended, and additional
functionality as developed from time to time.
6. Those certain items of software comprising the Lanyon Terminal
interface System.
7. SCO UNIX operating system software obtained under license from
the vendor pursuant to self-executing "shrink-wrap" or
"box-top" license for use in connection with the operation of
BDT.
8. BSDI UNIX operating system software obtained under license
from the vendor pursuant to self-executing "shrink-wrap" or
"box-top" license for use in connection with the operation of
TravelWeb.
9. Just Logic data base software obtained under license from the
vendor thereof pursuant to a self-executing "shrink-wrap" or
"box-top" license for use in conjunction with the UNIX
operating system in connection with the operation of
TravelWeb.
10. Netscape Netsite Commerce Server web server software obtained
under license from the vendor pursuant to self-executing
"shrink-wrap" or "box-top" license for use in connection with
the operation of TravelWeb.
11. All manuals, selling materials or other documentation prepared
by the licenser or developer of any of the foregoing software
describing the software and its performance characteristics
and capabilities.
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Average Switch Downtime
The following System/Component Recovery Table shall be used to
determine the Average Switch Downtime each month referred to in
Section 5.1 of the Agreement. This Table may be amended from time to
time by mutual agreement of THISCO and Anasazi.
Only the amount of time in excess of the Maximum Time Allocated for
the Events included in this table shall be used to calculate the
Average Switch Downtime.
SYSTEM/COMPONENT RECOVERY TABLE
Maximum Time
Failure Events Requiring Recovery by Anasazi Allocated
====================================================================================================================================
General UltraSwitch
o TPE Hardware Fallback, Spring Forward or Reboot 45 Min.
o Comm Engine Fallback, Spring Forward or Reboot 20 Min.
o Comm Engine or TPE Software Install or Problem
Requiring Cycle of All Software 15 Min.
o Comm Engine or TPE Software Install or Problem
Requiring Cycle of Subset of All Software 5 Min.
Communications
o DSU or Modem Fallback 15 Min.
Maximum Time
Commercial Software and Operator Error Allocated
====================================================================================================================================
o Anasazi Commercial Software Recovery 0 Min.
o Anasazi Computer Operator Error Recovery 0 Min.
Maximum Time
Failure Events Requiring Notification by Anasazi Allocated
====================================================================================================================================
General UltraSwitch
o TPE or Comm Engine Hardware Recovery Successful.
Vendor to be Notified 60 Min.
o TPE or Comm Engine Hardware Recovery Failed.
Vendor to be Notified 15 Min.
o TPE or Comm Engine Recover Software Recoverable on
Running System or During Unsuccessful Software Install.
THISCO to be Notified 60 Min.
o TPE or Comm Engine Unrecoverable Software Problem on
Running System or during an Unsuccessful Software Install.
THISCO to be Notified 15 Min.
Communications
o DSU, Modem, or T-1 Rack (and its global components) Recovery Successful
Vendor to be Notified 60 Min.
o DSU, Modem, or T-1 (and its global components) Recovery Failed
Vendor to be Notified 15 Min.
o Comm Lane Dial Back Up Successful
Vendor to be Notified 15 Min.
o Comm Lane Dial Back Up Unsuccessful
Vendor to be Notified 15 Min.
34
AMENDMENT TO
SOFTWARE LICENSE AGREEMENT
This Amendment dated as of April 1, 1994 (the "Amendment") to the
Software License Agreement dated December 31, 1994 by and between Anasazi Inc.,
a Delaware corporation ("Anasazi") and The Hotel Industry Switch Company, a
Delaware corporation ("THISCO") ("License Agreement").
The parties hereby amend the License Agreement only to the extent as
follows:
1. The parties have mutually terminated the Operations Agreement dated
January 4, 1991 in order to enter into a successor Facilities
Management Agreement dated the date hereof ("Facilities Management
Agreement").
2. The parties hereby update and amend the License Agreement to redefine
"Operations Agreement" (the defined term in the License Agreement) to
be "that certain Facilities Management Agreement dated as of April 1,
1994 between the parties or any successor agreement which generally
provides for operational and other support services provided
exclusively by Anasazi to THISCO in respect of the Switch."
3. Except for the foregoing, the meanings of the defined terms in this
Amendment are the same as those meanings in the License Agreement, and
the License Agreement remains the same.
ANASAZI INC.
By: /s/ [ILLEGIBLE]
-----------------------------
Title: PRESIDENT
--------------------------
THE HOTEL INDUSTRY SWITCH COMPANY
By: /s/ [ILLEGIBLE]
-----------------------------
Title: PRESIDENT
--------------------------
