Exhibit 10.15
NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY "[****]" ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST, AND HAVE BEEN OMITTED FROM THIS EXHIBIT.
COMPLETE, UNREDACTED COPIES OF THIS EXHIBIT HAVE BEEN FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION AS PART OF THIS COMPANY'S CONFIDENTIAL TREATMENT
REQUEST.
SABRE TRAVELBASE SYSTEM LEASE AGREEMENT
---------------------------------------
(United States)
This Sabre TravelBase System Lease Agreement (the "Agreement") is entered
into by and between Sabre Inc. ("Sabre") and Cheap Tickets, Inc. ("Customer"),
as of the date executed by Sabre below ("Effective Date") regarding the
provision of products and services set forth herein.
Article 1 - Term
-----------------
1.1 The term of the Sabre TravelBase System shall commence on the completion of
data conversion (the "Effective Date") and shall continue in effect for the
number of months as stated on the Schedule ("Initial Term") unless terminated as
provided herein. Any additional Sabre TravelBase System installed subsequent to
the date of execution of this Agreement by Sabre shall be subject to the terms
and conditions of this Agreement and shall have a term as specified on the
Supplement ("Additional Term"), commencing on the date of installation. Upon
expiration of the applicable term, the Agreement for such Sabre TravelBase
System shall continue on a month-to-month basis until termination by either
party upon thirty days notice.
Article 2 - Definitions
-----------------------
2.1 Agreement means this Sabre TravelBase System Lease Agreement, and all
---------
Amendments, Schedules and Supplements made a part hereof.
2.2 Confidential Information means this Agreement, any and all applicable
------------------------
rights to patents, copyrights, trademarks and trade secrets, proprietary and
confidential information of each party hereto and each party's affiliates,
subsidiaries, successors or assigns concerning such party's past, present or
future research, development, business activities or affairs, finances,
properties, methods of operation, processes and systems, agreements related to
the business of such party.
2.3 Instructions means any and all manuals, operation procedures,
------------
manufacturer's recommendations, rules and instructions delivered or made
available to Customer (either in hard copy, verbally or on-line) all of which
must be complied with by Customer. Such Instructions may be unilaterally revised
or amended by Sabre at any time in its reasonable discretion.
2.4 Sabre Subscriber Agreement means that separate agreement entered into by
--------------------------
the parties effective December 31, 1998 as modified by Amendment No. 1 also
effective December 31, 1998 and its Appendix A.
2.5 Sabre TravelBase System means the Standard Equipment, Sabre TravelBase
-----------------------
System Components, Instructions and/or the Sabre TravelBase System Software as
identified on the Schedule and all Supplements.
2.6 Sabre TravelBase System Component means all memory, disk storage space,
---------------------------------
ports, workstations, printers and any other element of the Standard Equipment.
2.7 Sabre TravelBase System Software means that Software delivered by Sabre to
--------------------------------
Customer as identified on the Schedule and all Supplements including all
upgrades, improvements, enhancements and modifications thereto.
2.8 Schedule means the document reflecting the Charges and term for the Sabre
--------
TravelBase System.
2.9 Standard Equipment means the items of computer hardware leased to Customer
------------------
by Sabre in accordance with this Agreement.
2.10 Supplement means the document reflecting any changes to the Sabre
----------
TravelBase System, and/or charges or credits related thereto.
Article 3 - Charges and Payments
--------------------------------
3.1 Charges. All amounts payable to Sabre ("Charges") shall be due and payable
-------
within thirty (30) days of the date of Sabre's invoice, without set off or
counterclaim.
3.2 Additional Charges. Customer agrees to pay to Sabre an additional charge
------------------
at Sabre's then prevailing rate for services and materials including without
limitation the following: (a) the installation or removal of Standard
Equipment; (b) excess cable or teflon coated cable required for installation;
(c) Standard Equipment relocation within the site; (d) additional support and
expenses outside of the scope of this Agreement.
3.3 Increases. Sabre shall have the right to increase the Charges as shown on
---------
the Schedule and any Supplements for the remaining term of this Agreement upon
thirty days written notice to the Customer. The total amount of such increase
shall not exceed ten percent of the Charges in any consecutive twelve month
period. Hardware maintenance payments may be increased;
Page 1
however, such increase may not be more than a rounded-up percentage equal to the
percentage of increase charged to Sabre by its maintenance vendors.
3.4 Interest. Charges not paid when due shall accrue interest at the rate of
--------
one hundred twenty-five percent (125%) of the prime rate of interest announced
from time to time by the home office of Bank of America or the highest rate
permitted by Texas law, whichever is less.
3.5 Taxes. Customer shall pay any taxes, or assessments including any interest
-----
or penalty thereon levied as a result of this Agreement, excluding taxes
measured by the net income of Sabre. Customer shall indemnify and hold harmless
Sabre from all costs, fines and expenses (including reasonable legal costs)
incurred by Sabre resulting from Customer's failure to pay taxes as provided in
this Article.
3.6 [****]. Consistent with the provisions of the Sabre Subscriber
------
Agreement, and only for as long as such Sabre Subscriber Agreement and this
Agreement remain in effect and Customer complies with the provisions of Appendix
A to the Sabre Subscriber Agreement Amendment No. 1, [****]:
3.6.1 [****];
3.6.2 [****];
3.6.3 [****];
3.6.4 [****];
3.6.5 [****];
3.6.6 [****].
Article 4 - Installation and Delivery
-------------------------------------
4.1 Delivery. Sabre shall arrange for delivery of the Sabre TravelBase System
--------
F. O. B. to the site, as identified on the Schedule and all Supplements thereto.
4.2 Installation. Subject to Article 4.3, Sabre shall install, or cause to be
------------
installed, the Sabre TravelBase System at the site.
4.3 Customer's Obligations Prior to Installation. Customer, at its expense,
--------------------------------------------
shall be responsible for preparing the site for Sabre TravelBase System in
accordance with the Instructions. If installation of the Sabre TravelBase
System is prevented or delayed because of Customer's failure to prepare the
site, Sabre shall use reasonable efforts to install the Sabre TravelBase System
upon Customer's compliance with this Article and upon payment of all reasonable
expenses incurred by Sabre resulting from Customer's failure to prepare the
site.
4.4 Relocation and Possession. Customer shall at all times keep the Sabre
-------------------------
TravelBase System in its sole possession and control at the site. Customer
shall not move any part of the Sabre TravelBase System from or within the site
without first obtaining the written consent of Sabre which consent Sabre shall
not unreasonably withhold or delay.
4.5 Communications Access. Customer shall provide at its own expense such
---------------------
communication lines in accordance with the Instructions for access by Sabre or
its designated third-party to the Sabre TravelBase System.
4.6 Non-Standard System. Customer shall not connect or use any hardware, or
-------------------
firmware not acquired from Sabre with the Sabre TravelBase System without
Sabre's prior written consent, which consent Sabre shall not unreasonably
withhold or delay and which shall be granted provided that such hardware, or
firmware is approved by Sabre for use with Sabre TravelBase System and Customer
executes the Non-Standard System Amendment.
4.7 Acceptance of Sabre TravelBase System. Upon installation of the Sabre
-------------------------------------
TravelBase System, Customer shall be deemed to have accepted the Sabre
TravelBase System. Any use of the Sabre TravelBase System, and/or Sabre
TravelBase System Components or Sabre TravelBase System Software further
constitutes acceptance of the Agreement and applicable Amendments and
Supplements by the Customer.
Article 5 - Repairs and Maintenance
-----------------------------------
5.1 Repairs and Maintenance. Upon prompt notification from Customer, Sabre or
-----------------------
its designated agent, shall promptly repair and maintain the Standard Equipment
and shall keep it in good working order provided that the Standard Equipment has
been subject to reasonable operation. Customer shall not make any modifications
nor attempt to perform repairs or maintenance of any kind without previous
written permission from Sabre, which permission Sabre shall not unreasonably
withhold or delay. Sabre or its designated agent, shall have free access to the
Standard Equipment at reasonable times during normal business hours (9:00 a.m.
to 5:00 p.m. local time, Monday through Friday, excluding legal holidays) to
provide such service. Damage
[****] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
Page 2
resulting from negligence other than Sabre's or its agents' or contractors'
negligence, transport not authorized by Sabre, repairs not done by Sabre or its
agents, will not be covered.
5.2 Changes to Coverage. If Customer has title to hardware that operates in
--------------------
conjunction with the Standard Equipment, he may elect, at any time during the
term of the Agreement, to discontinue or change hardware maintenance upon giving
Sabre sixty (60) days written notice.
5.3 Limitations. Items consumed in the normal course of business, including
-----------
but not limited to printer ribbons and software media are excluded from
coverage.
5.4 Charges. Repair or maintenance services on Standard Equipment during
-------
normal business hours (9:00 a.m. to 5:00 p.m. local time, Monday through
Friday, excluding legal holidays) are included in the Charges, provided that the
Customer has not been negligent and the Standard Equipment has been subject to
reasonable operation; otherwise, Customer will be charged a service fee in
accordance with Sabre's or its designated third-party's then prevailing rates.
Article 6 - Title and Ownership of Sabre TravelBase System
----------------------------------------------------------
6.1 Title and Ownership of Sabre TravelBase Standard Equipment. The Sabre
----------------------------------------------------------
TravelBase System leased hardware hereunder shall remain the property of Sabre.
Customer shall not in any other manner dispose of the Sabre TravelBase System or
any part thereof or suffer any lien or legal process to be incurred or levied on
the Sabre TravelBase System.
6.2 Risk of Loss. Risk of loss for and damage to the Sabre TravelBase System
------------
shall pass to the Customer upon delivery of the Sabre TravelBase System to the
site.
Article 7 - Insurance
---------------------
7.1 General. Upon delivery of any part of the Sabre TravelBase System to the
-------
site, Customer shall maintain Comprehensive General Liability (including bodily
injury, product liability, property damage and contractual liability) and All
Risk Property Insurance.
7.2 Comprehensive General Liability. The Comprehensive General Liability
-------------------------------
coverage shall be in the amount not less than one million dollars combined
single limit. The coverage shall include the following special provisions: (a)
Sabre shall be named as an additional insured; (b) such insurance shall be
primary without any right of contribution from any insurance maintained by the
additional insureds; and (c) insurers will provide Sabre with thirty days'
prior written notice of any cancellation or material change.
7.3 All Risk Property. The All Risk Property insurance shall be in an amount
-----------------
to cover the replacement value of the Standard Equipment as set forth in the
Schedule and all Supplements. Such policy shall: (a) name Sabre as additional
insured; (b) name Sabre as the sole loss payee for loss of the Standard
Equipment; (c) be primary without right of contribution from any insurance
carried by Sabre; and (e) provide that Sabre will be given thirty days' prior
written notice of any cancellation or material change of such policy.
7.4 Certificates. Customer will provide to Sabre, on or before delivery of any
------------
part of the Sabre TravelBase System to the site, a Certificate issued by its
insurer (s), evidencing the insurance coverage required by this Article.
Failure to provide such Certificate will be deemed an Event of Default under
Article 15.1.3.
Article 8 - Confidential Information
------------------------------------
8.1 The Confidential Information shall remain the property of the party
disclosing such information.
8.2 Each party shall maintain in perpetuity the confidentiality of the other
party's Confidential Information using the highest degree of care. Each party
shall not use, sell, sublicense, transfer, publish, disclose, display, or
otherwise make available to others, except as authorized in this Agreement, the
other party's Confidential Information or any other material relating to such
Confidential Information at any time before or after the termination of this
Agreement nor shall either party permit its officers, employees, agents,
contractors or subcontractors to divulge the Confidential Information without
prior written consent of the other party.
Article 9 - Sabre TravelBase System Software License
----------------------------------------------------
9.1 Ownership of Sabre TravelBase System Software. Customer acknowledges
---------------------------------------------
that Sabre or the original manufacturer of the Sabre TravelBase System Software,
as applicable, owns or has licensed from the owner, copyrights in the respective
Sabre TravelBase System Software and that ownership and title are retained by
the manufacturer or its licensor. All applicable rights to patents, copyrights,
trademarks, and trade secrets inherent in the Sabre TravelBase System Software
and pertinent thereto are and shall remain Sabre's or the original
manufacturer's sole and exclusive property. Any copy of such Software must
incorporate any copyright, trade secret, or trademark notices or legends
appearing in the original version delivered to Customer.
Page 3
9.2 Grant of License. Subject to the provisions of this Agreement and for
----------------
the term specified on the Schedule, either Sabre or the original manufacturer
grants to Customer a non-transferable, non-exclusive, limited license to use the
Sabre TravelBase System Software subject to the following restrictions: (a)
Customer shall use the Sabre TravelBase System Software only to process data
related to Customer's own travel agency business transactions, (b) Customer must
do business as a bona fide travel agency, (c) The Sabre TravelBase System
Software shall be used and installed solely at the site and solely used on the
Standard Equipment, or other equipment reasonably authorized by Sabre, (d) the
Sabre TravelBase System Software shall be used solely for internal purposes and
only in the ordinary course of business; (e) Customer shall not reverse
engineer, compile, reverse compile, decompile, disassemble, or reverse assemble
the Sabre TravelBase System Software or any portion thereof, (f) the Sabre
TravelBase System Software shall not be copied or reprinted in whole or in part
except (i) a reasonable number of copies of each program may be made in machine
readable form for reasonable archival or backup purposes, or (ii) when Sabre as
granted permission to do so, and (g) Customer shall not lease, sell, license,
sublicense or otherwise transfer the Sabre TravelBase System Software to any
other party. Nothing in this Agreement shall convey title to the Sabre
TravelBase System Software to Customer.
9.3 Modification Rights. Customer shall not modify the Sabre TravelBase
-------------------
System Software or merge such software into other programs or create derivative
works based on such software without Sabre's prior consent, which consent Sabre
shall not unreasonably withhold or delay.
9.4 Upgrades and Modifications. All tangible objects containing or relating
---------------------------
to the Sabre TravelBase System Software are the sole and exclusive property of
Sabre or the manufacturer. In the event Sabre, in its sole discretion, modifies
the Sabre TravelBase System Software, it will deliver and install, either on-
site or through remote dial-up capabilities, such modified Sabre TravelBase
System Software to Customer at its then current charge, if any, and Customer
shall promptly return to Sabre any and all tangible objects relating to the
previous version of the Sabre TravelBase System Software which Customer is no
longer using as provided in Article 16.6. If Sabre designates such modified
Sabre TravelBase System Software to be self-installable by Customer and Customer
requests Sabre to perform the installation on-site, for reasons other than the
in-operability or malfunctioning of the modified Sabre TravelBase System
Software or its installation routine, Customer will pay Sabre's then current fee
for such installation assistance. Customer shall install or allow Sabre to
install all such modifications within ninety days of receipt of the new revision
of Sabre TravelBase System Software. Customer shall be solely responsible for
protecting all software not obtained from Sabre hereunder and the data related
thereto in the event of a software upgrade. Customer, in order to receive an
upgraded or updated program, shall comply with any and all terms and conditions
and Instructions reasonably imposed by Sabre.
9.5 Processing Units. The TravelBase System Software will solely reside on
----------------
the processing units (the "Fileserver" and "Database server") located at
Customer's site. In the event a Fileserver or Database server is upgraded,
replaced or moved, Customer shall be solely responsible for moving and
protecting all software not obtained from Sabre and the data related thereto.
9.6 Operating Program.
-----------------
9.6.1. Customer acknowledges that the Sabre TravelBase System Software
incorporates, in part, copyrighted materials pertinent to the Operating Program
as identified on the Schedule. Customer agrees that such copyrighted portions
shall be subject to the Operating Program copyright and license.
9.6.2. Customer will look only to Sabre and not to the manufacturer for any
support, maintenance, assistance and upgrades and the like with respect to the
Operating Program and the manufacturer shall have no liability to Customer in
relation to this program.
9.6.3. THE LICENSE OF THE OPERATING PROGRAM, IF MANUFACTURED BY IBM, SHALL BE
CONSTRUED AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK AND THE UNITED
STATES OF AMERICA NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS
AGREEMENT.
9.7 Sabre TravelBase System Software.
---------------------------------
9.7.1. With respect to those portions of the Sabre TravelBase System Software
that Sabre licenses from a third party, Customer acknowledges and agrees that
Customer is not entitled to any greater warranty with respect to the Sabre
TravelBase System Software than the warranty received by Sabre from its supplier
of the respective Sabre TravelBase System Software.
9.7.2. EXCEPT AS SPECIFICALLY PROVIDED ELSEWHERE IN THIS AGREEMENT, THE SABRE
TRAVELBASE SYSTEM SOFTWARE IS PROVIDED TO CUSTOMER AS IS AND WITH ALL ITS FAULTS
WITHOUT ANY WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, INCLUDING WITHOUT
LIMITATION ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OR THOSE IMPLIED WARRANTIES ARISING OUT OF COURSE OF PERFORMANCE, COURSE
OF DEALING, USAGE OF TRADE OR ANY OTHER WARRANTY. THE ENTIRE RISK AS TO THE
QUALITY AND PERFORMANCE OF THE SABRE TRAVELBASE SYSTEM SOFTWARE IS WITH THE
CUSTOMER. SOME STATES DO NOT ALLOW THE EXCLUSION OF IMPLIED WARRANTIES, SO THE
ABOVE EXCLUSION MAY NOT APPLY TO CUSTOMER. THIS WARRANTY GIVES THE CUSTOMER
SPECIFIC LEGAL RIGHTS AND CUSTOMER MAY ALSO HAVE OTHER RIGHTS WHICH VARY FROM
STATE TO STATE. ADDITIONALLY, CUSTOMER ASSUMES RESPONSIBILITY FOR THE SELECTION
OF THE SABRE TRAVELBASE SYSTEM SOFTWARE TO ACHIEVE CUSTOMER'S INTENDED RESULTS,
AND FOR THE INSTALLATION AND USE OF THE RESULTS OBTAINED FROM THE SABRE
TRAVELBASE SYSTEM SOFTWARE.
Page 4
9.7.3 Notwithstanding the above, Sabre warrants that during the Initial Term
the media on which the Sabre TravelBase System Software is encoded is warranted
to the Customer shall be free from defects in material or workmanship for a
period of three months from the receipt of original purchase by Customer. If
during such period, Customer discovers any defect in the media, Customer may
return the media to Sabre and Sabre shall, as Customer's sole and exclusive
remedy, repair, or replace the defective media.
9.7.4 In the event that (i) the Sabre TravelBase System fails to be Year 2000
Compliant (as defined below in this Article 9.7.4) and (ii) such failure is
reported to Sabre and can be reproduced by Sabre, Sabre will use all reasonable
diligence to correct such Year 2000 failure. If such nonconformity materially
impairs Customer's use of the Sabre TravelBase System Software and cannot be
cured as provided in this Section, then Customer's alternate sole and exclusive
remedy will be to terminate this Agreement without further liability to Sabre
for damages hereunder. "Year 2000 Compliant" means (i) the Sabre TravelBase
System and each component thereof will accurately process date/time data
(including, without limitation, calculating, comparing and sequencing) from,
into and between the twentieth and twenty-first centuries, and the years 1999
and 2000 and leap year calculations; and (ii) the Sabre TravelBase System and
each component thereof will accurately process date/time data (including,
without limitation, calculating, comparing and sequencing) on or after January
1, 2000 in the same manner, and with the same functionality as the Sabre
TravelBase System and each component thereof processes date/time data
(including, without limitation, calculating, comparing and sequencing) on or
before December 31, 1999.
Article 10 - Documentation and Training
---------------------------------------
10.1 Documentation. For each Sabre TravelBase System leased hereunder, Sabre
-------------
will provide at the time of delivery of the Sabre TravelBase System, one copy
of all such manuals as may be relative to the installation and operation of the
Sabre TravelBase System and all such on-line documentation as may be available
to enable Customer's personnel to use and understand the operation thereof.
Additional copies may be purchased at Sabre's then prevailing rate.
10.2 Training. For each Sabre TravelBase System leased, Sabre shall provide
--------
to Customer prior to installation of the Standard Equipment, training for a
specific number of Customer employees on the basic use and operation of the
Sabre TravelBase System Software as described on the schedule. This training
must be completed prior to the installation of the Sabre TravelBase System.
Additional classes may be offered on more advanced modules of the software as
then may be available to the Customer. Some modules have a mandatory training
requirement prior to the implementation of those modules.
10.2.1 Training for additional employees will be offered subject to
availability and at Sabre's then prevailing rate per person, per class. The
additional training charge will be assessed on Customer's monthly invoice. A
prepayment may be necessary to secure a place in the class.
10.2.2 The training described in Article 10.2 shall be performed at a location
designated by Sabre.
10.2.3 In addition to the charge for training, Sabre reserves the right to
charge all reasonable costs directly related to such training, including
transportation, meals, and lodging.
10.2.4 Except as otherwise provided herein, Customer is responsible for all
training of all its employees in the proper use of Sabre TravelBase. Sabre has
the right to reasonably require further training at the Customer's expense
before adding or changing levels of software support or adding additional
software options.
10.2.5 In addition to the training described in Article 10.2, Sabre may offer
to Customer supplemental training programs at a local level. Such training may
consist of, but not limited to, workshops, seminars, and individual
consultations. These will be made available at Sabre's then prevailing rate.
10.2.6 Customer and its trainees agree to comply with all training procedures
and rules established by Sabre, and Sabre reserves the right to remove any
Customer trainee from the training program if such trainee fails to comply with
such procedures and rules.
10.2.7 Sabre may, at its discretion, monitor or test Customer's employee's
training levels. If Sabre determines the training level to be insufficient,
the Customer will institute such additional training, at its own expense
(including, if necessary, additional training by Sabre at Sabre's then
prevailing rate) as may be reasonably necessary to bring Customer's employees
to the level of training required by Sabre.
Article 11 - Software Support
-----------------------------
Page 5
11.1 Software Support. Sabre agrees to provide software support to assist
----------------
the Customer's personnel of an understanding of the use of Sabre TravelBase.
Such support will be in the form of a Help Desk available at specified times and
hours via telephone. Support will be limited to the Sabre TravelBase System
Software provided by Sabre and the formation of files by Sabre TravelBase System
Software prior to transfer or export. The hours of support offered will be 6:00
a.m. to 7:30 p.m. Central time, Monday through Friday and 8:00 a.m. to 3:00 p.m.
Central time on Saturdays excluding legal holidays which are subject to change.
Unless otherwise specified, support will be limited to the Customer officer who
signs this Agreement, or with whom Customer officer designates by providing the
Help Desk telephone number.
11.2 Support Levels. Sabre will provide ninety days of unlimited support
--------------
from the Effective Date. Thereafter, the support level elected by the Customer
shall be provided at Sabre's then prevailing rate. Customer may elect any level
as described in the Article 11.2.2 for the Initial Term. With thirty days
written notice, Customer may upgrade the service level at any time during the
contract term. With thirty days written notice, Customer may reduce the service
level at the end of each twelve month period.
11.2.1 Definition of Call Types
------------------------
(i) Billable Calls. Customer will be charged for these calls. Calls
--------------
include, but are not limited to operator knowledge for which information is
available in a manual or accessible on-line, accounting knowledge relating to
the procedures and processing of tickets, and ARC/BSP documents, other
vendor/suppliers relating to questions that should be directed to CRS vendors,
forms or supplies, hardware and software not sold or supported by Sabre.
(ii) Non-Billable Calls. Customer will not be charged for these calls.
-------------------
Calls include, but are not limited to Hardware Maintenance where a vendor is
dispatched.
11.2.2 Definition of Support Levels.
----------------------------
(i) Level I Customer may call for support as desired and required.
-------
Customer must pay for each Billable Call at the rate specified on the Schedule
and Supplements. Such Charges will appear on the monthly invoice.
(ii) Level II Customer may call for support as desired and required.
--------
Customer will be allocated, at no charge, a limited number of Billable Calls per
month as specified on the Schedule and any Supplements. All Billable Calls over
that number will be charged at the rate specified on the Schedule and any
Supplements.
(iii) Level III Customer may call for support as desired and required.
---------
There will be no charge for the Billable Calls at this level. Customer shall be
billed a monthly flat rate for this support option.
Article 12 - Warranty, and Limitation of Warranty, Liability and Remedy
-----------------------------------------------------------------------
12.1 Standard Equipment. The Standard Equipment shall be delivered and
------------------
installed in good working order.
12.2 Sabre TravelBase System Software. The Sabre TravelBase System Software
--------------------------------
provided will be in good working order when installed. Sabre TravelBase System
Software and any additions, changes, improvements, and enhancements provided to
Customer hereunder shall conform to any applicable requirements or rules of the
Airline Reporting Corporation ("ARC"), Bank Settlement Plan ("BSP") or the
International Air Transport Association ("IATA") as approved by the Department
of Transportation ("DOT").
12.3 Limitation of Warranty. THE WARRANTIES EXPLICITLY SPECIFIED HEREIN ARE
-----------------------
THE ONLY WARRANTIES MADE BY SABRE AND THE MANUFACTURER AND THERE ARE NO OTHER
WARRANTIES, EXPRESS OR IMPLIED, BY OPERATION OF LAW OR OTHERWISE OF SABRE
TRAVELBASE OR THE SABRE TRAVELBASE SYSTEM OR ANY LIMITATION STATEMENTS REGARDING
CAPACITY, SUITABILITY FOR USE, OR PERFORMANCE OF THE SABRE TRAVELBASE SYSTEM OR
ANY COMPONENTS THEREOF, WHETHER MADE BY SABRE OR OTHERWISE, WHICH IS NOT
CONTAINED IN THIS AGREEMENT, SHALL BE DEEMED TO BE A WARRANTY FOR ANY PURPOSE OR
GIVE RISE TO ANY LIABILITY OF SABRE OR THE MANUFACTURER.
12.4 Limitation of Remedies. In the event of a material malfunction or
----------------------
defect in an unaltered component of the Sabre TravelBase System that can be
reproduced by Sabre, Sabre will provide reasonable services to promptly correct
such malfunction or defect. Customer will supply Sabre with such input files and
other materials as may be necessary to enable Sabre to diagnose and correct the
malfunction or defect. THE FORGOING SHALL BE CUSTOMER'S SOLE AND EXCLUSIVE
PRIMARY REMEDY FOR ANY MALFUNCTION OR DEFECT IN THE SABRE TRAVELBASE SYSTEM. IF
SUCH MALFUNCTION OR DEFECT MATERIALLY IMPAIRS CUSTOMER'S USE OF THE SABRE
TRAVELBASE SYSTEM AND CANNOT BE CURED AS PROVIDED IN THIS PARAGRAPH, THEN
CUSTOMER'S ALTERNATE SOLE AND EXCLUSIVE REMEDY SHALL BE TO TERMINATE THIS
AGREEMENT WITHOUT FURTHER LIABILITY TO SABRE FOR DAMAGES HEREUNDER.
12.5 Limitation of Liability. CUSTOMER WAIVES ALL LIABILITY OF SABRE AND THE
-----------------------
RESPECTIVE MANUFACTURER ARISING FROM NEGLIGENCE EXCEPT FOR SABRE'S GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT. NOTWITHSTANDING THE FOREGOING AND EXCEPT FOR
SABRE'S INDEMNIFICATION OBLIGATIONS UNDER ARTICLE 13, SABRE'S LIABILITY TO
CUSTOMER HEREUNDER SHALL BE LIMITED TO THE LESSER OF (1) CUSTOMER'S DIRECT
DAMAGES, OR (2) ONE MILLION DOLLARS ($1,000,000.00). NEITHER SABRE NOR ANY
MANUFACTURER NOR CUSTOMER SHALL BE LIABLE TO EACH OTHER FOR ANY INCIDENTAL,
PUNITIVE OR CONSEQUENTIAL DAMAGES, UNDER ANY CIRCUMSTANCES, INCLUDING BUT NOT
LIMITED TO LOST PROFITS, REVENUE OR SAVINGS, OR THE LOSS OF USE OF ANY DATA,
EVEN IF SABRE
Page 6
OR THE MANUFACTURER OR CUSTOMER HAS BEEN ADVISED OF, KNOWN, OR SHOULD HAVE
KNOWN, OF THE POSSIBILITY THEREOF.
Article 13 - Indemnification
----------------------------
13.1 Customer and Sabre hereby agree to indemnify and hold each other, their
affiliates, subsidiaries, successors and assigns and their officers, directors,
agents, and employees ("Indemnitees") harmless from and against third-party
liabilities, including, but not limited to, reasonable attorney's fees, and
other expenses incident thereto, which may be threatened against, or recoverable
from the Indemnitees by reason of any injuries to or death of persons or loss
of, damage to, or destruction of property arising out of or in connection with
(a) any act, or omission of Customer or Sabre, including without limitation any
act, or omission constituting negligence; and/or (b) any breach of the
representations or warranties made by the other party.
13.2 Sabre, at is own expense, will indemnity, defend and hold harmless
Customer and its employees, representatives, agents and affiliates, against any
third-party claim, suit, action or other proceeding brought against Customer
based on or arising from a claim that the Sabre TravelBase System provided
hereunder (other than material provided by Customer) infringes and/or violates
in any manner any copyright, patent, trademark, trade secret or any other
intellectual property right of any third party. Sabre will pay any and all
costs, damages, and expenses, including, but not limited to, reasonable
attorneys' fees and costs awarded against or otherwise incurred by Customer in
connection with or arising from any such claim suit action or proceeding.
13.3 All indemnification obligations under this Article 13 shall be subject
to the following requirements: (a) the indemnified party shall provide the
indemnifying party with prompt written notice of any claim; (b) the indemnified
party shall permit the indemnifying party to assume and control the defense of
any action upon the indemnifying party's written acknowledgment of the
obligation to indemnify (unless, in the opinion of counsel of the indemnified
party, such assumption would result in a material conflict of interest); and (c)
the indemnifying party shall not enter into any settlement or compromise of any
claim without the indemnified party's prior written consent, which shall not be
unreasonably withheld. In addition, the indemnified party may, at is own
expense, participate in its defense of any claim. In the event that the
indemnifying party assumes the defense of any such claim, the indemnifying party
shall have no liability for attorney's fees and costs incurred by the
indemnified party.
Article 14 - Assignment
-----------------------
Neither party will assign, transfer, license, franchise nor otherwise convey
this Agreement or any rights or services hereunder or delegate obligations
hereunder to any third party without the other party's prior written consent
except that each party may from time to time and without consent assign this
Agreement and all of its rights and obligations hereunder to: (i) any
affiliated company; or (ii) to any third person with which the assigning party
is amalgamated, merged or consolidated; or (iii) to any third person that
directly or indirectly acquires all or substantially all of the business or
assets of the assigning party to which this Agreement relates; upon any such
assignment, the transferee will be substituted for the assigning party for all
purposes under this Agreement and the assigning party will be released from all
liability under this Agreement so long as the transferee accepts all liability
and obligations of the assigning party under this Agreement in writing and the
transferee has the financial and technical capacity to perform the obligations
being assumed. The non-assigning party will be notified within fifteen (15) days
of any such assignment.
Article 15 - Termination and Default
------------------------------------
15.1 Default. The occurrence of any one of the following events shall
-------
constitute a non-exclusive event of default (the "Event of Default") pursuant
to the terms of this Agreement.
15.1.1 Customer fails to pay any amount when due;
15.1.2 Customer ceases to be a bona fide travel agency;
15.1.3 Any representation by either party is discovered to be materially
misleading or inaccurate, or either party fails to perform any material
covenant, agreement, obligation, term or condition contained herein;
15.1.4 Either party ceases to do business as a going concern, makes an
assignment for the benefit of creditors, admits in writing its inability to pay
debts as they become due, acquiesces in the appointment of a trustee, receiver
or liquidator for it or any substantial part of its assets or properties, sells,
or executes an agreement to sell all or substantially all of its assets without
complying with the provisions of Article 14.
15.1.5 Events of Default described in 15.1.1, 15.1.3 and 15.1.4 shall not be
cause for termination if the party in default cures such default within fifteen
days after date of written notice from the other party. If the party in default
cures its default as provided in this provision, said failure shall not be
considered to be an Event of Default for the purposes of Article 15.2 or Article
15.3, as applicable.
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15.2 Sabre's Rights Upon Termination. Upon the occurrence of an Event of
-------------------------------
Default and subject to Article 15.1.5, Sabre shall have the right to any one or
more of the following remedies; (i) terminate this Agreement; and (ii) seek
all legal and equitable remedies to which it is entitled. If Customer's Event
of Default results in termination, Customer agrees to pay to Sabre damages
suffered by Sabre as a result of such Event of Default. In the event of
termination, Sabre will allow Customer to continue to utilize the Sabre
TravelBase System, pursuant to the terms and conditions of this Agreement, for a
period of [****] after the termination date ("Transition Period") on
the following conditions:
15.2.1 The discounts in Article 3.6 will be forfeited during the
Transition Period and Customer agrees to pay Sabre all
applicable Charges for the Sabre TravelBase System during the
Transition Period;
15.2.2 Customer will advise Sabre at least fifteen (15) days in advance
of the date it wishes to discontinue its continued use of the
Sabre TravelBase System;
15.2.3 Upon such discontinuance Sabre may retake immediate possession
of the Sabre TravelBase System;
15.2.4 The Transition Period may only be extended by written agreement
of both parties.
15.3 Customers Rights Upon Termination. Upon the occurrence of an Event of
---------------------------------
Default and subject to Article 15.1.5, Customer may terminate this Agreement
immediately upon written notice to Sabre and/or seek all legal and equitable
remedies to which it is entitled.
Article 16 - Miscellaneous
--------------------------
16.1 Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE
--------------
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ OF AMERICA.
16.2 Binding Effect. Except as otherwise provided, the Agreement shall inure
--------------
to the benefit of and bind the successors and assigns of the parties hereto.
16.3 Entire Agreement. This Agreement and the Instructions constitute the
----------------
entire agreement of the parties as to the matters set forth herein and shall
supersede any previous understandings, agreements, representations, statements,
negotiations and undertakings, whether written or oral, between the parties
relating to the matters set forth herein. Any amendment to this Agreement must
be in writing and signed by the authorized representatives of both parties.
16.4 Force Majeure. Each party shall be relieved of its obligations
--------------
hereunder in the event and to the extent that performance is delayed or
prevented by any cause reasonably beyond its control, including, but not limited
to acts of God, public enemies, war, civil disorder, fire, flood, explosion,
labor dispute or strikes, or any acts or orders of any governmental authority,
inability to obtain supplies and materials (including and without limitation
computer hardware) or any delay of deficiency caused by the electrical or
telephone line suppliers or other third parties.
16.5 Notices. Unless otherwise stated, notices given or required under this
-------
Agreement must be in writing and shall be deemed delivered upon receipt to Sabre
Inc. at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇. ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ (to be sent to the attention
of General Counsel) or to the Customer at the address set forth in the Schedule
or such other address as either party indicates in writing to the other.
16.6 Return of Sabre TravelBase System. Upon the termination of this
---------------------------------
Agreement for any reason, (a) Customer, at its sole cost and expense, shall
return to Sabre all Confidential Information of Sabre and the Sabre TravelBase
System as requested by Sabre, in good condition, less normal wear and tear, and
(b) Sabre, at its sole costs and expense, shall return to Customer all
Confidential Information of Customer.
16.7 Modifications. Sabre retains the right to modify the Sabre TravelBase
-------------
System, at its discretion at any time during the term of this Agreement.
However, such modifications will not materially impair Customer's ability to
access and use Sabre TravelBase in the manner expressly permitted in this
Agreement. During the term hereof, Sabre shall make additions, changes,
improvements or enhancements in the Sabre TravelBase System Software necessary
to enable Customer to comply with applicable requirements or rules of ARC, BSP
or IATA, as approved by DOT.
16.8 Severability. Any provision of this Agreement which may be determined
------------
by a court or other competent governmental authority to be prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
only to the extent of such prohibition or unenforceability, without invalidating
the remaining provisions thereof, unless said prohibition or unenforceability
materially alters the rights or obligations of either party.
16.9 Surviving Sections. Upon the expiration or earlier termination of this
------------------
Agreement, Customer shall promptly pay Sabre any and all outstanding sums that
are due and payable. Notwithstanding anything to the contrary referenced herein
Articles 6, 8, 9, 12, and 13 shall survive the termination of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set
forth below.
Cheap Tickets, Inc. Sabre Inc.
[****] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /s/ [SIGNATURE ILLEGIBLE]
---------------------------- -------------------------------
(Signature) (Signature)
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ [SIGNATURE ILLEGIBLE]
-------------------------- Name:-----------------------------
(Print Name) (Print Name)
Title: EXEC. V.P. Title: Manager - Financial Services
Date: 10/15/99 Date: 10/21/99
PCC______
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