1
EXHIBIT 10.7
AMENDMENT TO
WORLD TRAVEL PAYMENT
TRAVEL AGENCY COMMISSION SETTLEMENT PROGRAM
CLIENT SERVICE AGREEMENT
This Amendment to the World Travel Payment Travel Agency Commission
Settlement Program Client Service Agreement dated as of June 19, 1993
("Amendment") between THE HOTEL CLEARING CORPORATION ("Client") and CITIBANK,
N.A. (NEW YORK) ("Citibank").
WITNESSETH:
WHEREAS, Citibank and Client entered into a WORLD TRAVEL PAYMENT
TRAVEL AGENCY COMMISSION SETTLEMENT PROGRAM CLIENT SERVICE AGREEMENT dated
December 9, 1991 (the "Service Agreement"); and
WHEREAS, certain hotel organizations that comprise the stockholders of
Client (collectively, the "Members") provide information to Client regarding
commission payments owed by the Members to travel industry suppliers outside of
the United States ("Non-domestic Payments") under the Members' individual
agreements with Client; and
WHEREAS, Client in turn transmits Member-provided information to
Citibank for processing through its Travel Agency Commission Settlement Program
(the "Program"); and
WHEREAS, Client and Citibank desire to expand the scope of
transactions governed by the terms of the Service Agreement and make certain
other changes to the Service Agreement; and
WHEREAS, in exchange for such changes to the Service Agreement,
Citibank is willing to make certain financial accommodations to Client,
provided that the Members enter into agreements with Citibank requiring minimum
levels of processing activity with respect to commission payments to travel
suppliers located within the United States ("Domestic Payments") to be supplied
by the Members ("Member Minimum Volume") to Citibank through Client
(collectively, the "Member Volume Agreements").
NOW, THEREFORE, in exchange for good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the parties agree that
the Service Agreement is amended as follows:
1. Definitions. For purposes of this Amendment, the following
definitions shall apply:
(a) "HCC Minimum Volume" shall mean the minimum annual
volume of domestic Chargeable Transactions required to be
transmitted by Client to Citibank for processing pursuant to
the Service Agreement and this Amendment as provided in
Schedule A.
(b) "HCC Deficit" shall mean the negative difference, if
any, between the HCC Minimum Volume and the actual number of
domestic Chargeable Transactions transmitted by Client to
Citibank for processing pursuant to the Service Agreement and
this Amendment.
(c) "Member Deficit" shall mean the negative difference,
if any, between the Member Minimum Volume and the actual
number of domestic Chargeable Transactions transmitted by any
Member through Client for processing pursuant to the Service
Agreement and this Amendment.
1
2
(d) "HCC Deficit Payment" shall mean the amount to be paid or
paid by Client to Citibank, in the event of an HCC Deficit, being
equal to the HCC Deficit multiplied by US sixteen cents (US $.16).
(e) "Member Deficit Payment" shall mean the amount to be paid or
paid by Member to Citibank, in the event of a Member Deficit, being
equal to the Member Deficit multiplied by US sixteen cents (US $.16).
(f) "Other Service Programs" shall mean those agreements
existing now or in the future between a Member and Citibank to process
Domestic Payments.
2. Commitment Period. The Commitment Period under the Service Agreement
is extended to December 31, 1998. Thereafter, the Commitment Period may be
renewed as provided in Section 15(h) of the Service Agreement. During such
Commitment Period and any renewal thereof, Client shall use Citibank as its
exclusive vendor for the processing of Commission Payments to travel agents
under contract with HCC, including both Domestic Payments and Non-domestic
Payments.
3. Remittance. The Exhibit "A" attached hereto shall supersede the
heretofore existing Exhibit "A" to the Service Agreement as of the date of this
Amendment. As of the date of this Amendment, Client shall pay Citibank
according to the terms of the attached Exhibit "A" for Domestic Payments and
Non-domestic Payments for which information is transmitted on or after the date
of this Amendment. Client shall pay Citibank according to the terms of Exhibit
"A" in effect prior to the date of this Amendment for Non-domestic Payments for
which information is transmitted prior to the date of this Amendment.
4. Special Services. Client may request, in writing, that Citibank
perform special programming, system changes, enhancements, developments,
customizations or special processing, provided, however, that Client shall be
responsible for all developmental and processing costs associated with any such
work. Client and Citibank shall negotiate in good faith and agree in writing
upon the price, schedule, payment and other terms for such work, provided,
however, that Citibank shall not be obligated to perform work that Citibank
deems to be impracticable or not in the best interests of the Program.
5. Minimum Volume.
(a) The start date for purposes of determining the number of
Chargeable Transactions to be processed by Citibank on behalf of
Client and its Members shall be the earlier of the first day Citibank
processes a Domestic Payment or November 1, 1993. Client agrees to
meet the HCC Minimum Volume set forth on Exhibit "A" hereto. Citibank
and HCC hereby agree to dedicate the personnel and time necessary to
perform their respective obligations for timely implementation of the
system to begin live processing of Domestic Payments no later than
November 1, 1993. In the event of an HCC Deficit, Citibank shall give
written notice to Client of the amount and itemization (including each
Member Deficit and excess information) and shall permit Client thirty
(30) days within which to make an HCC Deficit Payment. In the event
Client shall fail to make the HCC Deficit Payment within thirty (30)
days of Client's receipt of Citibank's notice of the HCC Deficit
Payment due and accompanying information as provided herein, Citibank
may proceed to exercise its rights pursuant to the Member Volume
Agreements to obtain Member Deficit Payments. Client shall receive a
credit against any HCC Deficit for fees received by Citibank from
Members for Other Service Programs.
2
3
(b) If Citibank collects Member Deficit Payments for any annual
period that in the aggregate exceed the HCC Deficit, Citibank shall
refund to HCC the excess amount. HCC's right to such refund shall not
be transferable or assignable and shall terminate in the event of the
corporate dissolution of HCC or HCC ceases doing business for any
reason including, but not limited to, bankruptcy or insolvency, or a
receiver or trustee is appointed to manage HCC's affairs, and such
receiver or trustee is not discharged within sixty (60) days of
appointment.
6. Form of Commission Payments. The existing text in Paragraph 5 of the
Service Agreement is hereby designated as Paragraph 5(a) and the following is
added as Paragraph 5(b) and Paragraph 5(c) respectively:
(b) Notwithstanding the foregoing, all Domestic Payments and
Non-domestic Payments in U.S. dollars, not sent by Electronic
Transfer, will be sent by a corporate draft drawn on Citibank (for
purposes of such U.S. dollar payments, the terms "Bank Check" or
"Bank Checks" shall be deemed to refer to such corporate drafts, and
the term "Drawee" shall be deemed to refer to Citibank).
(c) In the event Client requests payment to be made by Electronic
Transfer, such payments shall be made according to those Procedures
(as defined in Paragraph 15(a) of this Agreement) detailing the
processes, methods and practices designed to help ensure that
transmissions, information, instructions, orders and requests for
Electronic Transfers sent in the name of Client ("Electronic Transfer
Instructions") are the authorized, unaltered and accurate Electronic
Transfer Instructions of Client. The parties acknowledge certain
inherent risks associated with transmitting Electronic Transfer
Instructions. Client has reviewed the Procedures as they apply to
Electronic Transfer Instructions and accepts them as appropriate.
Provided Citibank has satisfied its obligations under the Procedures,
Citibank may rely on such Electronic Transfer Instructions and shall
not be responsible for the authorization, verification or accuracy of
the information contained in an Electronic Transfer Instruction. In
the event such Electronic Transfer Instruction contains errors or
inaccuracies or requires changes to the extent not due to the
negligence or willful misconduct of Citibank, Citibank shall have
those remedies available to it as described in Paragraph 2 of this
Agreement for Communications. For purposes of this Paragraph 5(c), the
term "Citibank" shall include any of Citibank, N.A., its parent,
subsidiaries, affiliates or branches providing services in connection
with the Program.
7. Client Incentive. As an incentive to Client to reach the HCC Minimum
Volume, Citibank shall make incentive payments to Client based on Domestic
Payment processing volume according to the schedule attached hereto as Exhibit
"B".
8. Citibank Incentive. As additional consideration for the benefits
afforded HCC by this Amendment and the Service Agreement and Citibank's
continued performance thereof, client shall pay to Citibank during the
Commitment Period an amount equal to (i) 4.99% of the aggregate total of any
dividend paid by Client to any Member or other stockholder of Client on or
after the date of this Amendment and (ii) 4.99% of the aggregate total of any
Participant Commissions (as defined in Client's unamended Participant Agreement
with each of Client's common stockholders) paid on or after the date of this
Amendment by Client to any Member or other stockholder. Client shall make this
payment to Citibank prior to making any of the above-described payments to
Members or stockholders.
9. Board Meetings. Citibank shall be entitled, but not obligated, to
attend all meetings of Client's board of directors, and Client shall provide
Citibank with complete copies of all board meeting minutes, commencing with the
first board meeting after the execution of this Amendment. Client shall notify
Citibank of all board
3
4
meetings in the same manner as Client notifies Client's directors. Citibank's
presence shall not be required for a quorum or other similar purposes.
10. Financial Accommodation. In exchange for the obligations and
undertakings of Client under this Amendment, Citibank shall pay to Client the
sum of Two Million U.S. Dollars (U.S.$2,000,000.00) not later than seven (7)
business days after the execution of this Amendment by Client and the execution
of Member Volume Agreements by all Members existing as of the date of this
Amendment. In the event Citibank fails to make such payment, this Amendment
shall be terminated and of no force or effect.
12. Miscellaneous. The terms used herein shaH have the same meaning as in
the Service Agreement unless the context of this Amendment specifically
requires otherwise. The Service Agreement is hereby revised to be consistent
with this Amendment. Except as specifically amended hereby, the Service
Agreement shall continue in full force and effect unchanged.
THE HOTEL CLEARING CORPORATION CITIBANK, N.A. (NEW YORK)
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇, III By:
--------------------------- ---------------------------
Printed Name Printed Name
and Title: ▇▇▇▇ ▇. ▇▇▇▇▇, III and Title:
-------------------- --------------------
President
-------------------- --------------------
5
EXHIBIT "A"
This Exhibit contains certain specifications of the World Travel Payment Travel
Agency Commission Settlement Program ("Program") which Citibank, N.A. (New
York) ("Citibank") will provide to The Hotel Clearing Corporation ("Client").
1. Remitting Currency: U.S. Dollars
2. Payment Cycle:
On or before the 13th business day after the end of the prior month's
billing period, Client (or, in lieu of Client, any Member) shall remit
via wire transfer to Citibank funds in the amount equal to the total
monthly commission amount to be paid and Citibank shall at the option
of each payee (where possible), initiate automated clearinghouse
transactions, electronic funds transfers, or issuance of checks (in
the form of checks written on a Citibank account and prepared by
Citibank) on or before the 15th business day after the end of the
prior month's billing period to each travel agent for the commission
amount set forth in the statement. Also on or before such 15th
business day Citibank shall remit via wire transfer to Client all fees
due to Client as set forth on commission statements. This procedure
and schedule shall be followed or as set forth in agreed-upon
operating specifications.
3. Fee Schedule - Non-domestic Payments:
Client shall pay Citibank a Transaction Fee for each Chargeable
Transaction processed by Citibank pursuant to this Agreement. Such
Transaction Fee shall be the greater of (i) US $0.30 for each
Chargeable Transaction or (ii) US $3.00 for each statement sent to a
travel agency detailing the items to which the Commission Payment
applies in accordance with the Procedures ("Settlement Statement").
For purposes of this calculation, a "Chargeable Transaction" shall
refer to a hotel reservation for which a Commission Payment is due to
a travel agency and which is reported on a Settlement Statement sent
by Citibank to the travel agency pursuant to this Agreement, including
any adjustments which result in a change in the amount of the
Commission Payment. "Chargeable Transactions" shall not include No
Shows, Cancellations or Non-Commissionable Stays, as such terms are
defined in the Procedures. Client shall pay Transaction Fees with its
remittance for the corresponding Commission Payments.
4. Fee Schedule - Domestic Payments:
Client shall pay Citibank fees for Domestic Payments per the following
schedule:
o Payment Preparation Fee
(includes statement, forms, envelopes,
check stock and check preparation) $.50/Payment
o Chargeable Transaction Charge $.15/Transaction
For purposes of this calculation, a "Chargeable Transaction" shall refer to a hotel reservation for
which a Commission Payment is due to a travel agency and which is reported on a Settlement Statement
sent by Citibank to the travel agency pursuant to this Agreement, including any adjustments which
result in a change in the amount of the Commission Payment. "Chargeable Transactions" shall not include
No Shows, Cancellations or Non-Commissionable Stays, as such terms are defined in the Procedures.
Client shall pay Transaction Fees with its remittance for the corresponding Commission Payments.
o Non-Chargeable Transaction Charge
(Non-Chargeable Transaction Ratio to
6
Total Transactions less than 50%) No Charge
o Non-Chargeable Transaction Charge
(Non-Chargeable Transaction Ratio to
Total Transactions equal to or greater
than 50%) $.075/Transaction
o Mail Expenses At Cost
o EFT (ACH) Payments (with Payment Advice) $.25/Payment
o EFT (ACH) Payments (without Payment Advice) $.15/Payment
o Diskette Production $10.00/Diskette
o Mail Inserts $4.00/Thousand Inserts
o Special Reports/Special Processing Runs
o Test Market Module
- Programming & Development $25,000
- Processing Runs (each cycle) $ 1,000
o Electronic Media Module
- Programming & Development $18,000
o Fee Billing Module
- Programming & Development $30,000
o VAT Tax Module
- Programming & Development $15,000
o Customer Service System Input Module
- Programming & Development $17,000
5. Method of Payment: ACH Debit to Client's Account
6. Client Minimum Volumes: 11/1/93 to 10/31/94 3,500,000 Chargeable Transactions
11/1/94 to 10/31/95 4,500,000 Chargeable Transactions
11/1/95 to 10/31/96 5,500,000 Chargeable Transactions
11/1/96 to 10/31/97 6,000,000 Chargeable Transactions
11/1/97 to 10/31/98 6,000,000 Chargeable Transactions
Client's Initials Citibank's initials
------------------------- -------------------------
7
EXHIBIT "B"
INCENTIVE PAYMENTS:
(a) Client shall pay to Citibank such fees and remittances as
required by Exhibit "A."
(b) Until this Agreement is terminated Citibank shall pay Client
an incentive once per calendar quarter based upon Domestic
Payments issued calculated as follows:
(i) Multiply Client's average daily ending balance
during the prior calendar quarter, net of any
applicable reserve requirements, processing fees
and debits for Commission Payments presented for
payment, of the funds paid by Client as detailed
in the Agreement for such type of payment, times
(ii) 50%, times
(iii) the average (calculated by counting actual elapsed
days) of the daily quoted three month U.S.
Treasury ▇▇▇▇ (Secondary Market) Rate during such
quarter; provided, however, if such calculation
results in a negative number, Client shall pay
Citibank an amount equal to such number multiplied
by -1, which amount shall be payable by way of
set-off against subsequent incentive payments
Citibank may owe Client under this Agreement, and
if this Agreement is subsequently terminated or
Client is no longer entitled to incentive payments
under this Agreement before such amount can be
fully paid, then the portion of such amount not
then satisfied shall be payable by direct payment
from Client promptly upon Citibank's invoice
therefor. Should, on any particular day, Client's
ending balance of funds paid by Client as detailed
in the Agreement, net of any reserve requirements,
handling fees and debits for Commission Payments,
be a negative number, then Client shall pay
Citibank, in addition to any amounts owed pursuant
to the preceding sentence, an amount equal to such
number multiplied by -1, divided by 365 and then
multiplied by the base rate on corporate loans at
large U.S. money center commercial banks, adjusted
to a per-diem basis, as reported in the Wall
Street Journal (or, if no longer provided therein,
such financial publication that Citibank shall
designate) on the day such payment was due and
payable. Such amount shall be payable by direct
payment from Client promptly upon Citibank's
invoice therefor.
(c) To qualify for an incentive payment, Client must maintain a
minimum annualized volume of Domestic Payments of $40 million.
Client Initials Citibank initials
------------------------- -------------------------
8
WORLD TRAVEL PAYMENT(SM)
TRAVEL AGENCY COMMISSION SETTLEMENT PROGRAM
CLIENT SERVICE AGREEMENT
This is an agreement dated December 9, 1991 ("Agreement") by and
between THE HOTEL CLEARING CORPORATION ("Client"), a Corporation organized
under the laws of Delaware with its central office at Suite 1910, ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, and CITIBANK N.A. (NEW YORK) ("Citibank"),
a national banking association with its central office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇.▇.▇.
1. Introduction. Citibank has developed a Travel Agency
Commission Settlement Program (the "Program") under which Citibank has
commission payments sent on behalf of travel suppliers (such payments are
referred to collectively as the "Commission Payments") in amounts and made
payable to such travel agencies located outside of the United States and its
territories as the Program participant may elect. Client desires to participate
in the Program and Citibank is willing to make such Program available to Client
upon the terms and conditions set forth below. Therefore, for valuable
consideration received, the parties agree as set forth in this Agreement.
2. Communications. Citibank, Citicorp and its subsidiaries will
rely upon the worksheets, information, communications, instructions, orders and
requests (individually referred to as a "Communication") they receive from
Client. Consequently, Client will be presumed conclusively to have properly
authorized all such Communications and the persons supplying such
Communications. Client agrees that Citibank will not be responsible for the
verification and accuracy of the information contained in a Communication.
Citibank, Citicorp or any of its subsidiaries may charge to Client and Client
will pay upon demand, any cost incurred by any of them in good faith arising
out of its reliance upon a Communication should such Communication contain
errors or inaccuracies or require changes to the extent not due to the
negligence or willful misconduct of Citibank, Citicorp or any of its
subsidiaries. This charge will be in addition to any other rights or remedies
Citibank, Citicorp or any of its subsidiaries may have under this Agreement, at
law or in equity. Citibank, Citicorp and its subsidiaries' books and records
will be prima facie evidence (subject to any party's right to rebut such
evidence) of such Communication, unless one of them receives the Communication
in sufficient time to act on it via tested telex or in a writing with the
original signature of one of Client's officers in which case such telex or
writing will be the evidence of the Communication.
3. Remittance.
(a) Client will pay Citibank for each Commission Payment
Client instructs Citibank to send hereunder, plus the Transaction Fees
associated with such Commission Payment as listed in the Client
Profile (the "Profile") attached to this Agreement as Exhibit "A".
Client will do this by (i) remitting to Citibank the total amount of
such Commission Payment and Transaction Fees, (ii) making this payment
in the Remitting Currency listed in the Profile, and (iii) having this
payment sent to such accounts as Citibank may designate from
time-to-time. Unless otherwise agreed in writing by Citibank, Client
shall make each payment hereunder by an electronic wire transfer that
provides Citibank with final settlement of good funds on the day
Citibank receives the transfer. If, in Client's instructions to
Citibank regarding such Commission Payment, Client has described the
total amount of such Commission Payment in currencies other than the
Remitting Currency, Client shall make its payment for such Commission
Payment in the Remitting Currency equivalent at the exchange rates
Citibank shall then determine for such payment. Commencing after the
Adjustment Date set forth in the Profile, once each calendar year
Citibank may adjust the Transaction Fees described in the Profile,
which adjustment will become effective no sooner than ninety (90) days
after Client's receipt of written notice of such adjustment.
Increases in the
-1-
9
Transaction Fees shall be limited as follows: (i) In the event of
increases in bank charges, taxes, postage, telecommunication fees or
other costs or expenses incurred by Citibank or assessed to Citibank
by third parties in the course of performing services hereunder, the
Transaction Fees shall be increased correspondingly, such increases to
be in good faith and subject to verification by Client; (ii) increases
in the Transaction Fees for any reason under the reasonable control of
Citibank shall be limited to the percentage increase in the Consumer
Price Index ("CPI") in the year of the Transaction Fee increase over
the CPI for the prior year. For purposes of this Agreement, the
applicable CPI shall be the Consumer Price Index, Chicago, Illinois
/NY Indiana, all items, 1982-84=100, all urban consumers, as published
by the Bureau of Labor Statistics of the United States government, or,
if such CPI is no longer published, a substantially similar index for
all metropolitan areas in the U.S. for the period in question.
(b) Client will reimburse Citibank for any bank charges,
fees and taxes (excluding those taxes based on Citibank's net income
and those charges and fees incurred as a result of Citibank, Citicorp
or its subsidiaries' negligence or misconduct) imposed on Citibank,
Citicorp or any of its subsidiaries in the course of its proper
execution of the services to be provided hereunder for (i) any
Commission Payment sent, stopped or recalled hereunder, or (ii) any
remittance sent by Client, in the event such charges are enacted or
initially imposed after the date of this Agreement (collectively, the
"New Charges"). Citibank shall promptly notify Client of such New
Charges and Client shall have thirty (30) days after the date of such
notice to notify Citibank that it will not be responsible for the New
Charges. Client's failure to so notify Citibank of its rejection of
the New Charges shall be deemed Client's agreement to reimburse
Citibank for New Charges incurred after Citibank's notice to Client.
Citibank shall be responsible for any New Charges incurred prior to
its notice to Client, provided, however, that Citibank may suspend the
performance of any services that would result in imposition of the New
Charges until the earlier of Client's notification of acceptance or
the expiration of such thirty (30) day period. All amounts due to
Citibank hereunder shall be payable to Citibank immediately upon
Citibank's demand for payment.
(c) In the event the Client fails to make any payment as
required in this Agreement, Citibank may, at its option and in
addition to any other rights or remedies it may have, (i) stop payment
on or recall any Commission Payment for which Client owes such payment
or (ii) elect not to send or have sent out any further Commission
Payments unless and until Client makes such payment. Citibank shall
promptly notify Client should Citibank exercise any of its rights
under this Paragraph 3(c).
4. Commission Payment Currency. Citibank will have Commission
Payments sent under this Agreement in the currency which Client has requested
if it is then available under the Program or, if not then available, in a
currency which is then available and which Citibank believes in good faith
would be preferable to the Commission Payment's beneficiary. For each
Commission Payment being sent in a currency other than the Remitting Currency,
Citibank will determine the non-Remitting Currency equivalent of the amount of
such Commission Payment by using exchange rates Citibank determines in good
faith for such Commission Payment that day.
5. Form of Commission Payments. The Commission Payments will be sent
by bank check (individually referred to as a "Bank Check") drawn on Citibank
branches, affiliates or correspondents (the branch or entity on which a Bank
Check is drawn being a "Drawee"). However, at Client's option, Commission
Payments will be sent by electronic transfer (individually referred to as an
"Electronic Transfer") sent to a designated account at a depository financial
institution (the "Receiving Bank"), but only to the extent Citibank has made
Electronic Transfers available to Client under the Program. Citibank will
determine, at its sole discretion using its professional skill and judgment,
the form and format of each Bank Check and Electronic Transfer and will select
the Citicorp subsidiary which will use its customary procedures to send each
Bank Check and Electronic
-2-
10
Transfer in accordance with this Agreement. As of the date of this Agreement,
the only form of Electronic Transfers available to the Client under the Program
is ACH credit transfers.
6. Sending Commission Payments. Citibank will cause the
Commission Payments referred to in Paragraph 4 above to be sent in accordance
with the Procedures and as Client has then instructed, provided: (a) such
instruction, in the form of Commission Settlement Worksheets or as otherwise
permitted by such Procedures, complies with all requirements of such
Procedures, and (b) Citibank could confirm its receipt of payment for such
Commission Payments in immediately available funds as required under this
Agreement; but provided further that Citibank may elect to have any such
Commission Payment sent even if part or all of the foregoing have not been
satisfied. For purposes of this Agreement, a Commission Payment will be deemed
sent when the applicable Citicorp subsidiary has completed, signed and mailed
or otherwise sent out the applicable Bank check, or, in the case of an
Electronic Transfer, when the applicable Citicorp subsidiary has transmitted
instructions to a third party financial institution for the transfer or credit
of funds, which, if properly executed, would electronically transfer such funds
to the third parry financial institution.
7. Cancellations and Stop Payments.
(a) Client may cancel its instructions to Citibank to
send a Commission Payment provided Citibank or its designated
affiliate receives from Client notice of such cancellation in
sufficient time for Citibank and its designated affiliate to act
thereon prior to sending such Commission Payment. Citibank will then
refund to Client any amounts (excluding those fees, charges and taxes
payable by Client under Paragraph 3(b) above) Client paid to Citibank
for such canceled Commission Payment, or apply such amounts towards
payment of other Commission Payments as Client may direct.
(b) Should Client desire to cancel its instructions to
send any Commission Payment by Electronic Transfer but Citibank or its
designated affiliate fails to receive notice of such cancellation in
sufficient time for it and its designated affiliate to act thereon
prior to such Commission Payment being sent, Citibank shall refund
Client's payment for such Commission Payment at Citibank's option only
and then only when Citibank is in possession of the funds transferred
or to be transferred by such Electronic Transfer and has received
satisfactory confirmation of effective recall or cancellation of the
Electronic Transfer.
(c) Citibank shall comply with Client's request or
instruction to stop payment on any Commission Payment sent by Bank
Check but only if (i) Citibank receives such request or instructions
in sufficient time before such Bank Check is settled or presented for
payment for Citibank, its designated affiliate and any applicable
Drawee to act upon such request or instructions, (ii) such request
including its from and format complies with the procedures and
requirements set out in the Procedures referenced in Paragraph 15(a)
below, (iii) such stop payment can be made in accordance with
applicable laws and regulations, such Procedures, and the applicable
Drawee's policies, procedures and requirements which are subject to
change without notice from time-to-time, and (iv) Client provides
Citibank, its designated affiliate and the applicable Drawee with such
security as any of them may reasonably require.
(d) Citibank, Drawees and their affiliates shall treat
each of Client's cancellation, recall or stop payment requests or
instructions as continuing in effect unless and until Citibank
receives Client's notice to rescind such request or instruction in
sufficient time for Citibank and any applicable Drawee to act thereon.
All notices to rescind, including its form and format, must comply
with Citibank and the applicable Drawee or Receiving Bank's then
current policies, procedures and requirements.
-3-
11
(e) All refunds for cancellations, recalls and stop
payments shall be made at such exchange rate as Citibank shall then
determine, less costs, charges and expenses payable by Client
pursuant to Paragraph 3(b) above, and are subject to foreign currency
regulations. Client shall repay to Citibank any credit Client may
receive from Citibank in connection with any Commission Payment for
which Client has requested a cancellation, recall or stop payment but
which Citibank was unable to cancel, recall or stop payment on due to
Client's misdescription of such Commission Payment.
8. Laws and Regulations. The rights and obligations of the
Client, Citibank, Citicorp and its subsidiaries under this Agreement are
subject to and limited by all applicable local laws and regulations. Because
these laws and regulations are subject to change without notice, Citibank,
Citicorp and its subsidiaries do not make any representations with respect to
such laws and regulations and Citibank cannot be liable to Client for any
violation of such laws or regulations other than those violations which
Citibank knowingly commits not in connection with a stop payment on a Bank
Check effected pursuant to this Agreement. Notwithstanding the terms of
Paragraph 6 above, neither Citibank nor the applicable Citicorp subsidiary will
be required to send a Commission Payment or perform any actions that would be
necessary to send such Commission Payment (a) if it would be impossible or
impracticable to do so due to circumstances beyond it's control which could not
have been reasonably or practicably prevented in the exercise of due care, or
(b) if it would cause a violation of any applicable law or regulation. Citibank
will notify Client immediately if Citibank or the applicable Citicorp
subsidiary will be unable to send such Commission Payment or perform any such
action in a timely manner.
9. Indemnity. Client will indemnify Citibank, Citicorp and its
subsidiaries against and hold them harmless from any loss, liability or expense
(including reasonable attorneys' fees) arising from (i) Citibank's request to
stop payment on or recall a Commission Payment in connection with exercising
its rights under Paragraph 3(c)(i) above, (ii) any action taken by any of them
in good faith compliance with or reliance upon Client's instructions,
applications, information or requests, or (iii) any claim which directly or
indirectly arose out of any representation by Client to any third party which
is inconsistent with the services to be provided by Citibank as set forth
herein. Citibank will indemnify Client, its subsidiaries and affiliates against
and hold them harmless from any loss, liability or expense (including
reasonable attorneys' fees) arising from any claim which directly or indirectly
arose out of any representation by Citibank to any third party which is
inconsistent with the services to be provided by Citibank as set forth herein.
However, in no event will either party hereto be liable to the other party for
loss of good will or for special, indirect, incidental or consequential
damages, regardless of whether any party has been advised of the possibility of
such damages.
10. Liability. Citibank, at its expense, will quickly and
expeditiously correct any errors in the performance of its obligations
hereunder to the extent due to its negligence or misconduct. Client will
promptly notify Citibank of the error as soon as the error first comes to
Client's attention. If Client makes the notification orally, Client must send a
written confirmation to Citibank within five (5) days. If Client fails to
provide notification as and when aforesaid, Citibank will correct such error as
provided above but only to such extent as would have been necessary had Client
properly provided such notification. However, neither Citibank nor any Citicorp
subsidiary, will be responsible for any errors, delays, mutilations,
interruption, loss or non-performance due to events beyond its direct control
which could not have been reasonably or practicably prevented in the exercise
of due care, or due to any compliance with local banking practices or the laws,
rules and regulations of any industry association, convention, clearing house,
jurisdiction or governmental authority.
11. Trademarks; Advertising. Citibank will not use Client or any of
its affiliates' names, trademarks or service marks without Client's prior
written approval. Client will neither use the name, trademarks and service
marks of Citicorp or any subsidiary of Citicorp nor advertise or promote the
Program without Citibank's prior written approval. However, either party or
any of their affiliates may use either party's name and address in any
directory, listing, advertisement or promotional
-4-
12
material to indicate in an accurate and non-misleading manner that Client has
subscribed to the Program and is sending Commission Payments thereunder.
12. Termination.
(a) Upon completion of the Commitment Period described in
Paragraph 15(h) below, Client may terminate this Agreement at any time
for any reason upon ninety (90) days prior written notice to Citibank.
Citibank may terminate this Agreement at any time for any reason upon
ninety (90) days prior written notice to Client. In addition, Citibank
may by notice immediately terminate this Agreement without further
formality or judicial interference being required upon the occurrence
of any of the following events: (1) any default by Client in any of
its agreements with any of its lenders, (2) the Client becoming unable
to pay its debts as and when they become due or (3) the commencement
of any assignment for the benefit of creditors or any bankruptcy,
liquidation, winding-up, reorganization or similar proceedings
involving the Client. Either party may by notice to the other
immediately terminate this Agreement without further formality or
judicial interference being required should the other party
substantially breach any one of its material obligations under this
Agreement.
(b) Upon any termination of this Agreement, all sums due
under this Agreement will be immediately due and payable without
further notice or demand.
(c) Notwithstanding any such termination, the terms and
conditions of Paragraphs 2, 3, 7-11, 12, 13 and 15(c)-(f) of this
Agreement will survive such termination.
13. Choice of Law and Jurisdiction. This Agreement and all
documents, agreements and instruments related to this Agreement will be
governed by and interpreted according to the laws of the State of New York,
United States of America. Client, by this Agreement, submits to the
non-exclusive jurisdiction of all courts within the State of New York. United
States of America, waiving any objection which it then may have to the laying
of venue of any action relating to this Agreement or any related document or
instrument brought in such court. To the extent that the Client is located
outside the United States of America and may have or acquire any sovereign
immunity from the jurisdiction of any court or from any legal process, with
respect to itself or its property, Client by this Agreement waives such
immunity in respect of its obligations under this Agreement and all documents,
agreements and instruments related thereto.
14. Assignment. This Agreement will be binding upon and inure to
the benefit of Client and Citibank, their respective successors and assigns.
However, neither party may assign or transfer any of its rights or obligations
under this Agreement without the other party's prior written consent, which
consent will not be unreasonably withheld, except that Citibank may, at its
sole discretion, at any time assign or transfer any or all of its rights,
duties or obligations under this Agreement to its parent, an affiliate or
subsidiary. In the event Citibank assigns and transfers any of its rights and
obligations under this Agreement to its parent, an affiliate or subsidiary,
then Client shall retain recourse to Citibank, and Citibank shall remain
responsible to Client, for the exercise and performance of such rights and
obligations so assigned and transferred as though such assignment and transfer
had not occurred, unless and until Client gives its written consent to such
assignment and transfer, which consent shall not be unreasonably withheld.
-5-
13
15. Miscellaneous Terms.
(a) Upon entering into this Agreement the parties hereto shall
work together expeditiously and in good faith to prepare three
mutually agreeable documents containing specifications, requirements,
forms and other details which the parties deem necessary to facilitate
the efficient day-to-day operation of the Program and communications
between the parties respecting the Program. These documents are the
HCC Cash Functional Specifications, the HCC Cash-Citicorp Interface
Specifications and the World Travel Payment/HCC Procedures, and the
final agreed-upon versions of these documents, as revised from time to
time pursuant to the provisions of this Paragraph 15(a), are referred
to in this Agreement collectively as the "Procedures". The parties
will be bound by the provisions set forth in the Procedures. However,
upon ninety (90) days prior written notice thereof to Client, Citibank
may amend or modify the Procedures as it may deem in good faith to be
reasonably necessary (i) in order to improve or enhance the services
provided under the Program or (ii) to comply with all applicable local
banking practices or the laws, rules and regulations of any banking
industry association, convention, clearing house or of any
jurisdiction of governmental authority. Any amendment or modification
under (i) above shall be subject to Client's consent, which consent
shall not unreasonably be withheld, provided, however, that Client
shall have first made a determination, reasonably and in good faith,
that such change will result in an increase in Client's costs for, or
reduction in Client's benefits derived from, availing itself of the
Program. Notwithstanding the foregoing, if the terms and conditions of
this Agreement are inconsistent with those of the Procedures, those of
this Agreement will control and the Procedures will be deemed modified
to be consistent with this Agreement.
(b) Each party represents and warrants that (i) its exercise
or performance of its rights or obligations under or by virtue of this
Agreement will not violate any applicable law or regulation or any
agreement to which it may now or hereafter be bound, and (ii) this
Agreement represents valid obligations of such party and is fully
enforceable against it according to its terms. Client acknowledges
that it will use the Program only in connection with the payment of
bona fide travel agency commissions.
(c) This Agreement and the Procedures embody the entire and
only understanding of the parties with respect to the subject matter
hereof, and any and all other proposals, agreements or other writings
are superseded by this Agreement. If any provision of this Agreement
or the Procedures are declared to be invalid or unenforceable by a
court of competent jurisdiction, the remaining provisions of this
Agreement and the Procedures will remain in full force and effect
despite such declaration. This Agreement may not be amended except by
a written amendment signed by the parties hereto. The section headings
are for convenience and are not part of this Agreement.
(d) The failure or delay of either party to insist upon the
performance of any term, covenant or condition of this Agreement or to
exercise any right, remedy or privilege therein conferred, will not
impair or be construed as waiving any of such terms, covenants,
conditions, rights, remedies or privileges.
(e) Each party shall hold all non-public information it
obtains in connection with the Program from the other party to this
Agreement regarding such other party, whether obtained now or later,
strictly confidential and shall not disclose such information to any
third party without the other party's prior written consent, except as
follows:
(i) Disclosures required by court order, court
procedure, law or regulation, or any governmental
department or agency.
-6-
14
(ii) Disclosures to Citibank's parent, or any of its
affiliates, subsidiaries, correspondents,
auditors, consultants, accountants or attorneys,
provided such party agrees to hold such disclosed
information on a strictly confidential basis and
provided such disclosure is necessary in order for
Citibank to comply with its obligations under this
Agreement; or
(iii) Disclosures to a third party with respect to any
individual Bank Check or Electronic Transfer,
provided such third party already knows the serial
number or other identifying number of such Bank
Check or Electronic Transfer and such disclosure
is necessary for Citibank to comply with its
obligations under this Agreement.
The sending of a Commission Statement in accordance with this
Agreement shall not be deemed a violation of the provisions of this
Paragraph 15(e).
(f) Any and all information provided by Client to
Citibank relating to a Reservation Transaction (as hereinafter
defined), derived therefrom, or any information in any manner used,
created or arising out of a Reservation Transaction, including but not
limited to, the name, address (all or part thereof), telephone number
or other identifying code, of any travel agent, hotel or hotel
reservation service, the name, address (all or part thereof),
telephone number or other identifying code identifying or relating to
any customer, person or entity for whom or by whom a reservation is
made, room rates, commissions, destinations, length of stay, dates of
stay, departure or arrival points and intermediate stops, volumes of
reservations by hotel, travel agent, in the aggregate or otherwise, is
and shall be the sole and exclusive property of Client and shall not
be disclosed to any third party or used by Citibank, its employees,
agents or representatives, or any of its affiliates, subsidiaries or
parent without the express written consent of Client, except as
required in connection with the performance of this Agreement, or as
required by court order, court procedure, law or regulation or any
governmental department or agency. A "Reservation Transaction" is an
individual reservation at a hotel property. However, in no event shall
any of the following be deemed to be information relating to a
Reservation Transaction, derived therefrom, or any information in any
manner used, created or arising out of a Reservation Transaction:
(i) Information which becomes publicly available
through no fault of Citibank, or information
derived or developed therefrom, or
(ii) Information Citibank lawfully obtains from any
third party, or information derived or developed
therefrom, or
(iii) Information already in the possession of Citibank,
its parent or any of its subsidiaries or
affiliates, or any information derived or
developed therefrom, or
(iv) Any and all client lists, potential client lists
and accounts not derived in whole or in part from
or specifically included in any Reservation
Transactions or not covered by sub-paragraphs
(i), (ii) or (iii) above, computer programs,
software modules, programming capabilities,
algorithms, processes, trade secrets, promotional
techniques, books and records, financial and
operating information, patents, trade marks,
service marks, copyrights, inventions,
improvements, ideas, discoveries, works of
authorship, business practices and techniques and
any other information, instruments and documents
of any kind or nature whatsoever which is not
derived in whole or in part from or specifically
included in any Reservation Transaction or not
covered by sub-paragraphs (i), (ii) or (iii)
above, and which Citibank or its affiliates have
developed or may
-7-
15
develop in good faith for the purpose of providing
the Program or any other World Travel Payment
product or service whether provided to Client or
to any other Citibank Client.
Notwithstanding anything in this Agreement to the contrary, Citibank
shall not be prevented from using the number of transactions or the amount of
Transaction Fees for the purposes of analyzing or reporting the total volume of
transactions, payments or their monetary value processed by Citibank under its
commission settlement programs and services.
(g) All notices which this Agreement specifically
requires to be given in writing, but excluding those notices
specifically required under the Procedures, shall be sent to the
parties at the following addresses:
If to Client: The Hotel Clearing Corporation
----------------------------------
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
----------------------------------
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
----------------------------------
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
If to Citibank: Citibank, N.A. (New York)
c/o Citicorp Global Cash Management Services
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: World Travel Payment Product
Director
Either party may elect to change their address listed above by sending
written notice of the new address to the other party. All notices sent
pursuant to this paragraph shall be effective upon receipt by their
addressee except that notices sent via courier shall be deemed
received and effective the first business day following dispatch and
notices sent via registered mail shall be deemed received and
effective on the third business day following dispatch.
(h) Commencing upon live usage of the Program by
Client. Client shall instruct Citibank to have Commission Payments
sent (excluding those Commission Payments which are subsequently
canceled or stopped pursuant to this Agreement) for which Citibank
shall have been properly paid, and which relate to the payment of
travel agency commissions for a period of three (3) years. The period
of time from the commencement of live usage of the Program until
Client's satisfaction of the foregoing obligation shall be referred to
in this Agreement as the "Commitment Period". During the Commitment
Period, Client shall not use any third party to send Commission
Payments to any travel agency located outside of the United States or
its territories. The Commitment Period shall automatically renew for
additional one (1) year periods. unless either parry advises the other
of its intent not to renew at least ninety (90) days prior to the
expiration of the initial Commitment Period or any subsequent
Commitment Period.
-8-
16
16. Effective Date. This Agreement will become effective and
binding upon the parties on the date Citibank accepts this Agreement. Citibank
shall use its best efforts to commence providing the Program to Client as soon
as possible provided however Citibank shall have no obligation to commence
providing the Program sooner than six (6) months after the Procedures are
finally agreed upon pursuant to Paragraph 15(a) above.
THE HOTEL CLEARING Accepted this 12 day of
CORPORATION December, 1991.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇, III CITIBANK, N.A. (NEW YORK)
------------------------------
[Authorized Signature]
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------
Print Name [Authorized Signature]
and Title: ▇▇▇▇ ▇. ▇▇▇▇▇, III
-------------------------
President Printed Name:
and Title: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------
Vice President
Citibank, N. A.
CITIBANKS SALES AND MARKETING REPRESENTATIVES DO NOT HAVE AUTHORITY
TO BIND CITIBANK.
-9-
17
EXHIBIT "A"
Client Profile
This document sets forth certain specifications of the World Travel
Payment Travel Agency Commission Settlement Program ("Program") which Citibank,
N.A. (New York) ("Citibank") will provide for THE HOTEL CLEARING CORPORATION
("Client").
1. Remitting Currency: U.S. Dollars
2. Payment Cycle: Monthly
3. Cut-off Day:
--------------------------------------------------
4. Client shall pay Citibank a Transaction Fee for each Chargeable
Transaction processed by Citibank pursuant to this Agreement. Such
Transaction Fee shall be the greater of (i) US $0.30 for each
Chargeable Transaction or (ii) US $3.00 for each statement sent to a
travel agency detailing the items to which the Commission Payment
applies in accordance with the Procedures ("Settlement Statement").
For purposes of this calculation, a "Chargeable Transaction" shall
refer to a hotel reservation for which a Commission Payment is due to
a travel agency and which is reported on a Settlement Statement sent
by Citibank to the travel agency pursuant to this Agreement, including
any adjustments which result in a change in the amount of the
Commission Payment. "Chargeable Transactions" shall not include No
Shows, Cancellations or Non-Commissionable Stays, as such terms are
defined in the Procedures. Client shall pay Transaction Fees with its
remittance for the corresponding Commission Payments.
5. Payment Fee: N/A
Check (X) one of these boxes to show how Citibank will collect this
Fee:
[X] Client will pay separately each month upon
invoice.
[ ] Citibank will charge the beneficiary.
[ ] Citibank will charge Client's Owner/Operator/
Franchisor/Licensor.
6. Method of Payment: Wire (If ACH Debit, Client must provide proper ACH
Debit Authorizations)
7. Adjustment Date: December 31, 1992
Client's Initials Citibank's initials
[ILLEGIBLE] [ILLEGIBLE]
------------------------- -------------------------