STRATEGIC ALLIANCE AGREEMENT
Exhibit 10.5
This
STRATEGIC ALLIANCE AGREEMENT (the “Agreement”) is made
effective this 21st day of March, 2008 (the “Effective Date”), by
and between TAG II, INC., a Delaware corporation, by and on behalf of itself and
its subsidiaries (collectively, “TAG”) and AMERICAN
LEISURE GROUP LIMITED, a British Virgin Islands corporation, by and on behalf of
itself, and, whether currently in existence now or hereafter, its affiliates,
and subsidiaries (collectively, “ALG”).
RECITALS
A. TAG
currently manages numerous leisure and franchise travel operations throughout
the United States under a variety of brands, organized into two
companies: (i) TraveLeaders, LLC operating under the TraveLeaders
brand; and (ii) The Travel Franchise Group, Inc., comprised of franchised brands
including Xxxxxxx Wagonlit Travel Associates and Results! Travel®. TAG
has approximately 1,700 franchised travel agency locations in the United States
and Canada and has combined travel bookings in excess of five billion
dollars. For purposes of this Agreement, the term “TAG Products”
means consumer travel products and services offered or sold by TAG and its
Affiliated Companies under the above-described brands (and any successors or
additions to such brands).
B. ALG is a
holding company formed to own United States-based resort companies and
operations and to become a fully integrated developer and operator of premium
destination resorts combining travel services, travel destination/resort
development, vacation club and resort management activities. Such
activities include, but are not limited to the promotion and sale of whole or
fractional vacation ownership and the provision of short term
accommodations. For purposes of this Agreement, the term “ALG
Resorts” refers to any resort properties directly or indirectly managed or
owned, whether in whole or in part, by ALG and its Affiliated
Companies.
C. TAG and
ALG desire to hereby enter into a strategic alliance under which they will work
together in various respects to accomplish mutually beneficial business
objectives, as more particularly set forth herein.
AGREEMENT
NOW, THEREFORE, in
consideration of the premises and the mutual agreements herein set forth, the
parties hereto agree as follows:
RECITALS
INCORPORATED. The Recitals
contained herein are true and accurate and incorporated herein. The
parties are entering into this Agreement relying upon the truth of the Recitals
contained herein.
MUTUAL MOST-FAVORED NATION
PRICING.
During
the term of this Agreement, TAG will offer all TAG Products to ALG and will
offer and sell the TAG Products to ALG for resale to ALG customers at prices and
pricing structures no less favorable to ALG than the prices and pricing
structures offered to any other customer of TAG, including any distributor,
agency, preferred partner, or other strategic alliance partner of
TAG. The obligation this Section 2.1 shall be subject to any
restrictions on discounting or similar pricing concessions imposed upon TAG
under its senior credit facilities at any time during the term of this
Agreement. The parties acknowledge and agree that TAG will not be
required to breach strategic alliance agreements similar hereto between it and
third-parties which exist on the Effective Date in order to comply with this
Section 2.1. Notwithstanding the foregoing, if TAG’s senior lender
has pursuant to a subordination agreement between such senior lender and
American Leisure Equities Corporation (“ALEC”) blocked payments on that certain
Promissory Note, dated the date hereof, of TL Acquisition Group, LLC (“TLAG”) in
favor of ALEC, then during the continuance of such blockage TAG will permit ALG
to purchase such products at (i) cost, if such pricing is then permitted under
the terms of TAG’s senior credit facility; or (ii) if cost-pricing is
not so permitted, then the lowest price permitted under TAG’s senior credit
facility.
During
the term of this Agreement, ALG will offer and sell rooms at ALG Resorts to TAG
customers at room rates no less favorable than the room rates offered by ALG to
customers purchasing through any other travel agency (including web-based travel
agencies), based on the pricing in place at the time the room rates are made
available.
In the
case of both of Sections 2.1 and 2.2 above, “TAG” shall refer to all of TAG and
its Affiliated Companies, and “ALG” shall refer to all of ALG and its Affiliated
Companies.
ADDITIONAL COOPERATION. In
addition to the obligations set forth in Sections 2.1 through 2.3, TAG and ALG
will, and will cause their respective Affiliated Companies, to use commercially
reasonable efforts to work together to identify and develop co-marketing and
joint marketing programs, mutual distribution opportunities, promotional and
advertising campaigns, information-sharing, and other mutually beneficial
programs and mechanisms, all with the purpose of furthering the respective
business objectives of the parties.
CONFIDENTIALITY.
Confidential Information
Defined. “Confidential
Information” includes all information relating to TAG’s or ALG’s
products, services, or business affairs that is of a confidential, proprietary,
or non-public nature, whether communicated orally or in writing, and whether in
tangible or intangible form, including, without limitation, financial data,
costs, margins, mailing or other marketing lists, customer lists, advertising,
promotion, product or program concepts, plans or proposals, or any other
information that is of a confidential, proprietary, or non-public
nature. Confidential Information includes the specific terms of this
Agreement and the fact that Confidential Information may have been disclosed by
either party (a “Disclosing
Party”). Confidential Information
does not include information that was: (a) already known by the party receiving
Confidential Information (a “Receiving Party”);
(b) in the public domain or later entered the public domain through no wrongful
act or omission by the Receiving Party; (c) disclosed to the Receiving Party by
a third party having no obligation of confidentiality; (d) developed
independently by the Receiving Party without reference to any Confidential
Information; (e) ascertainable from a visual inspection of the Disclosing
Party’s public premises, products, services, or advertising or promotional
material; (or) the existence of this Agreement and the nature of the
relationship between the parties hereto, it being the express intention of the
parties that ALG will market its products and services by identifying its
relationship and preferred status with TAG.
Obligations. The
Receiving Party must: (a) keep the Disclosing
Party’s Confidential Information in strict confidence; (b) not, without the
prior written consent of the Disclosing Party, use, discuss, or disclose or
permit the use, discussion, or disclosure of Confidential Information other than
use by, discussion with, or disclosure to the Receiving Party’s directors,
officers, employees, affiliates, or representatives as necessary in performing
its obligations under this Agreement; (c) be responsible for
the compliance with this Agreement by its directors, officers, employees and
representatives; (d) not, without the
prior written consent of the Disclosing Party, contact any person or entity to
confirm any Confidential Information; (e) not, without the prior written consent
of the Disclosing Party, copy any Confidential Information except as necessary
in performing its obligations under this Agreement; and (f) immediately notify
the Disclosing Party in writing of any impermissible disclosure or use of
Confidential Information under this Agreement. This Section 4.2 shall
not apply to disclosures made by the Receiving Party which are required by law;
provided, however, the
Receiving Party will promptly notify the Disclosing Party of any such legally
required disclosures made.
Survival. This
Section 4 shall survive the expiration or termination of this Agreement for any
reason.
MARKS.
TAG
Marks. Nothing in this Agreement shall be construed as a
license to use any of TAG’s marks, including but not limited to: “B4 Travel
Group, Inc.”, “The Travel Franchise Group, Inc.”, “Connexions Loyalty Travel
Solutions LLC,”, “Xxxxxxx Wagonlit Travel”, “Cruise
Holidays”, “Results Travel”, “SeaMaster Cruises”, or “emPower Travel”
trade names, trademarks, service marks, or logos (collectively, the “TAG Marks”) for any
purpose other than co-operative marketing efforts which must first be approved
in writing by TAG. Upon expiration or termination of this Agreement,
ALG must discontinue all use of the TAG Marks.
ALG
Marks. Nothing in this Agreement shall be construed as a
license to use any of ALG’s trade names, trademarks, service marks or logos
(collectively, the “ALG Marks”) for any
purpose other than co-operative marketing efforts which must first be approved
in writing by ALG. Upon expiration or termination of this Agreement,
TAG must discontinue all use of the ALG Marks.
INDEMNIFICATION.
By
TAG. TAG shall indemnify, hold harmless and defend ALG and
each of its officers, directors, employees and agents from and against any and
all damages, losses, claims or expenses (including reasonable attorneys’ fees)
(collectively, “Losses”) relating to
claims arising out of the material breach of any term of this Agreement by TAG
(including, without limitation, the failure to comply with applicable federal,
state, and local laws); provided, however, that such
indemnification obligation shall not apply to the extent that any acts or
omissions by ALG contributed to such Losses.
By
ALG. ALG shall indemnify, hold harmless and defend TAG and
each of its officers, directors, employees and agents from and against any and
all Losses relating to claims arising out of the material breach of any term of
this Agreement by ALG (including, without limitation, the failure to comply with
applicable federal, state, and local laws); provided, however, that such
indemnification obligation shall not apply to the extent that any acts or
omissions by TAG contributed to such Losses.
In no
event shall either party be liable to the other party for special punitive,
consequential or incidental damages, including lost profits, even if advised of
the possibility of such damages.
TERMINATION AND
RENEWAL.
Term. The
initial term of this Agreement shall commence on the Effective Date and shall
continue until the fifth (5th)
anniversary of the Effective Date, which term will be automatically extended for
three (3) additional extension terms of five (5) years each unless the parties
by mutual written agreement determine not to extend the
term. Notwithstanding the foregoing, either party may effect an
earlier termination of this Agreement (a) pursuant to Section 7.2
below.
Termination. In
the event of any material breach of this Agreement by a party, the other party
may (reserving cumulatively all other remedies and rights under this agreement
and in law and in equity), terminate this Agreement by giving thirty (30) days
prior written notice thereof to the other, any such cancellation to be without
prejudice to the rights of any party; provided, however, that the
Agreement will not terminate at the end of said thirty (30) day notice-period if
the party in breach has remedied the breach or taken substantial steps to remedy
the breach within the aforementioned thirty (30) day notice
period. Notwithstanding the termination, for a period of ninety (90)
days following termination, the parties must honor specific identifiable
obligations which were incurred pursuant to Section 2 above that were incurred
prior to notice of termination. In addition to the foregoing, (i)
upon no less than 180 days’ prior written notice, either party (a “Terminating
Party”) may terminate this Agreement upon a Sale Transaction (as defined below)
by the Terminating Party so long as the Terminating Party makes the buyer in the
Sale Transaction aware of this Agreement and exercises good faith efforts to
give the buyer an opportunity to continue or assume this Agreement (provided
that during the period following the closing of the Sale Transaction and through
the termination of this Agreement, the obligations hereunder shall only apply to
the business conducted by the Terminating Party and not to any other business
conducted by the buyer in the Sale Transaction), and (ii) TAG may terminate this
Agreement in the event of any breach by ALEC or American Leisure Holdings, Inc.
(“ALH”) of any material covenant in that certain Asset Purchase Agreement of
even date herewith among ALEC, TLAG, and ALH (the “Purchase Agreement”), or any
other agreement entered into by ALEC or ALH pursuant to the Purchase Agreement,
by giving thirty (30) days prior written notice of such breach to ALG; provided, however, that the
Agreement will not terminate at the end of said thirty (30) day notice-period if
ALEC and/or ALH (as the case may be) has remedied the breach within the
aforementioned thirty (30) day notice period. The term “Sale
Transaction” means (a) a reorganization, merger or consolidation of a
Terminating Party with any other person or entity, other than one in which the
beneficial holders of the Terminating Party’s voting securities (or their
Affiliates) immediately prior the reorganization, merger, or consolidation hold
more than 50% of the combined voting power of the voting securities of the
Terminating Party (or the surviving or resulting entity in the transaction)
outstanding immediately after such merger or consolidation, or (b) the sale of
all or substantially all of Terminating Party’s assets and business to a person
or entity other than an Affiliate of the Terminating Party
GENERAL.
Right to
Audit. TAG agrees that, upon reasonable request by ALG, not
more often than annually, TAG will provide ALG with its standard pricing
schedule.
Merger. This
Agreement contains the entire agreement between the parties with respect to the
subject matter of this Agreement and supersedes all earlier and contemporaneous
agreements, writings, statements, and understandings between the parties with
respect to the subject matter.
Assignment; Modification;
Successors. This Agreement may not be assigned by any party
without the prior written consent of all parties. Subject to the
preceding sentence, this Agreement shall be binding upon and inure to the
benefit of any successors and assigns. This Agreement may not
be modified by any party except by a written agreement signed by all
parties.
Severability. If
any provision of this Agreement is deemed void or unenforceable by any court of
competent jurisdiction, that provision shall be stricken from this Agreement
without affecting the remaining provisions.
Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument. Delivery of a counterpart hereof via facsimile or
electronic mail transmission shall be as effective as delivery of a manually
executed counterpart hereof.
Headings. The
headings in this Agreement are for convenience of reference only and do not
alter or affect any provision of this Agreement.
No
Waiver. The rights and remedies of the parties to this
Agreement are cumulative. No failure or delay by any party in exercising any
right, power, or privilege under this Agreement shall operate as a waiver of or
shall preclude that party’s right to exercise that right, power, or
privilege.
Expenses; Attorneys’
Fees. If any legal action or other proceeding is brought for
the enforcement of this Agreement, or because of an alleged dispute, breach,
default, or a misrepresentation in connection with this Agreement, the
successful or prevailing party shall be entitled to recovery of reasonable
attorneys’ fees and other costs incurred in such action or proceeding, in
addition to any other relief to which that party may be entitled.
Notices. All
notices, requests, consents, or other communications provided for in or to be
given under this Agreement shall be in writing, may be delivered in person, by
facsimile transmission (fax), by overnight air courier or by mail, and shall be
deemed to have been duly given and to have become effective (i) upon
receipt if delivered in person or by fax, (ii) one day after having been
delivered to an overnight air courier, or (iii) three days after having
been deposited in the mails as certified or registered matter, all fees prepaid,
directed to the parties or their assignees at the addresses noted
below:
|
If to
TAG:
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TL
Acquisition Group LLC
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| 0000 Xxxx Xxxx Xxxxxxx | |
| Xxxxxxxxxxx, XX 00000 | |
| ATTN: Chief Financial Officer and | |
| ATTN: General Counsel | |
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Facsimile
Number: (000) 000-0000
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|
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With a
copy to:
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Xxxxxxxxx
X. Xxxxxx, Esq.
|
|
Xxxxxxx
X. Xxxxxx, Esq.
|
|
|
Xxxxxxx
Xxxx & Xxxxxxxxx LLP
|
|
|
000
Xxxx Xxxxxxxxx Xxxxxx
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|
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Xxxxxxxxx,
XX 00000-0000
|
|
|
Facsimile
Number: (000) 000-0000
|
|
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If to
ALG:
|
|
|
0000
Xxxx Xxxx Xxxx
|
|
|
Xxxxxxx,
XX 00000
|
|
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Attention:
Xxxx Xxxxxx
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|
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Facsimile
Number: (000) 000-0000
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|
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With a
copy to:
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Xxxx
Xxxxxx, Esquire
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| Xxxxx & Lardner LLP | |
| 000 Xxxxx Xxxxx Xxxxxx | |
| Xxxxx 0000 | |
| Xxxxx, XX 00000-0000 | |
| Phone: 000-000-0000 | |
| Fax: 000-000-0000 |
Governing
Law. This Agreement, and all claims under this Agreement shall
be governed by and construed under the laws of the State of Florida without
regard to principles of conflicts of laws calling for the application of laws of
another state.
Relationship. Each
party is an independent contractor, and the employees, representatives or agents
of each party shall not be deemed employees, representatives or agents of the
other party for any purpose. Neither party shall have authority to
make commitments, enter into contracts on behalf of, or otherwise obligate the
other party in any manner. The parties acknowledge that this
Agreement does not constitute a joint venture or partnership between the
parties.
Expenses. Except
as otherwise provided herein, each party shall be responsible for its own costs
incurred in relation to this Agreement.
Definition of “Affiliated
Company”. For purposes of this Agreement, “Affiliated Company”
means, with respect to any specified person or entity, any corporation or other
business entity that controls, is controlled by, or is under common control with
the person or entity so specified.
[signatures
on following page]
IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed and delivered by
their duly authorized officers as of the Effective Date.
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TAG
II, INC.
By: /s/ Xxxxxxxx X. Xxxxx,
Xx.
Type:
Xxxxxxxx X. Xxxxx, Xx.
Its: Secretary
and
Tresurer
|
AMERICAN
LEISURE GROUP LIMITED
By: /s/ Xxxxxxx X.
Xxxxxx
Type:
Xxxxxxx X. Xxxxxx
Its:
Chief
Executive
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