EXHIBIT 10.17
[CONFIDENTIAL TREATEMENT REQUESTED]
Group Name: Choice Hotels International, Inc.
WORLDRES, INC.
MULTI-PROPERTY PARTICIPANT AGREEMENT
This Multi-Property Participant Agreement (this "Agreement"), entered into
as of April 14, 1998 (the "Effective Date"), is between WorldRes, Inc., a
California corporation ("WorldRes"), with offices at ▇▇ ▇▇▇▇▇ ▇▇▇▇; ▇▇▇▇▇ ▇▇▇,
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇; fax (▇▇▇) ▇▇▇-▇▇▇▇; Internet address at ▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇
and Choice Hotels International, Inc., a Delaware corporation ("Choice"), with
principal offices at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇; fax
(▇▇▇) ▇▇▇-▇▇▇▇; Internet address at ▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇.
WHEREAS, among other things, Choice is in the business of managing a
central reservation system (the "CRS") for certain groups of hotels, motels and
other lodging establishments, via franchise or other arrangements ("Hotels"),
which Hotels operate under several brands throughout the United States and other
countries, including COMFORT(R), CLARION(R), QUALITY(R), SLEEP(R), ECONO
LODGE(R), RODEWAY(R), and MAINSTAY(R);
WHEREAS, WorldRes owns and operates a real-time, online reservation network
service for hotels, motels and other accommodations and lodging establishments
(the "WorldRes System"), that allows end users to check availability and make
real-time reservations at hotels activated on the WorldRes System;
WHEREAS, WorldRes and Choice desire to work together to add the Hotels to
the WorldRes System, through means of a communications connection, which will
permit electronic transfer of information and data concerning the Hotels, real-
time availability/room status updating, and real-time reservation capabilities
(the "Connection") between the WorldRes System and the CRS;
NOW, THEREFOR, in consideration of the promises and mutual covenants
contained herein, the parties agree as follows:
1. WorldRes' Obligations.
During the Term, WorldRes will be solely responsible for the performance of
the following obligations concerning the services to be provided via the
WorldRes System:
1.1 The Connection. After development of the Connection, WorldRes will
perform the final testing of the Connection and deliver written notice to Choice
upon the date the Connection is fully operational ("Connection Date").
1.2 Available Information. WorldRes agrees to: (i) within 45 days from the
.Connection Date, activate each Hotel, for which WorldRes has received all
content data
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from Choice pursuant to Section 2.1, which data shall include, without
limitation, descriptive text and photos of the Hotel and guest rooms, and
pricing and availability of rooms ("Hotel Content"); and (ii) store the Hotel
Content on the WorldRes System and make it available to the public via the
Internet, for the duration of the Term, unless and until WorldRes receives the
appropriate notice from Choice, pursuant to Section 2.3 below, to delete certain
Hotel Content or there is a breach of this Agreement by Choice.
1.3 Accept Reservations. WorldRes will accept reservations, via the
Internet on WorldRes' web site, currently called "Places To Stay", and on other
WorldRes partner web sites and call centers under contract with WorldRes,
("WorldRes Call Centers") for all Hotels then activated on the WorldRes System.
1.4 Connection Development and Maintenance. WorldRes will with Choice
develop and maintain the Connection between the WorldRes System and the CRS,
which Connection will permit WorldRes System end users to access updated
inventory and to book rooms at the Hotels. WorldRes also will develop, as
commercially reasonable, any related interfaces with the CRS and will maintain
any interface with the WorldRes System.
1.5 Relationship with Third Parties. WorldRes acknowledges Choice's
discretion and right to determine Hotel rates and participation within the
WorldRes System. WorldRes will not change the fees, obligations, or links to
Choice set forth in this Agreement, as a result of WorldRes' contracts with or
obligations to third parties, unless both parties agree to the change in
writing.
2. Choice's Obligations.
During the Term, Choice will be solely responsible for the performance of
the following obligations concerning the delivery, entry, maintenance,
timeliness and accuracy of all data concerning the Hotels to be included in the
WdrldRes System:
2.1 Initial Data Entry. Choice will transfer from the CRS into the WorldRes
System in an appropriate electronic format, all Hotel Content relating to all
Hotels that are enrolled on its CRS as of the Connection Date, Choice shall
begin the process of inputting Hotel Content to the WorldRes System as soon as
possible after the Effective Date, and shall complete such process within 14
days from the Connection Date.
2.2 Maintenance of Data. Choice will, on a real-time basis during the Term,
update Hotel Content pertaining to room pricing and availability for each Hotel
on the WorldRes System. Choice also will, once a week during the Term, update
accurately all other Hotel Content for each Hotel on the WorldRes System,
including without limitation, any new Hotel added after the Connection Date.
2.3 Adding and Deleting Hotels. Once each week during the Term, Choice will
input into the WorldRes System additions to Hotel Content for those Hotels added
to the
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CRS during the previous week, and deletions to Hotel Content for those Hotels
deleted. Choice will give WorldRes 24 hour fax or e-mail notice of these
additions and/or deletions.
2.4 Connection Development and Maintenance. Choice will, with WorldRes
develop and maintain the Connection between the WorldRes System and the CRS,
which Connection will permit WorldRes System end users to access updated
inventory and to book rooms at the Hotels. Choice also will develop, as
commercially reasonable, any related interfaces with the WorldRes System and
will maintain any interface with the CRS.
2.5 Inventory. Choice will maintain access, via the WorldRes system, to
Hotel room inventory available on the CRS for selected rate plates and programs.
2.6 [*]
3. Fees.
3.1 Transaction Fees. Choice will pay WorldRes, monthly during the Term, a
fee of [*] of revenue received by Hotels, including reservation deposits, from
reservations made through the WorldRes System ("Transaction Fee"). Choice will
not pay Transaction Fees on any reservations canceled by WorldRes, the guest,
the Hotel or Choice, but will pay Transaction Fees on reservations not resulting
in Hotel revenue due to overbooking by a Hotel.
3.2 [*] Choice also will pay WorldRes, monthly during the Term, a fee of
[*] of revenue received by Hotels, including reservation deposits from
reservations made through WorldRes Call Centers ("[*]"). WorldRes will not
charge Choice additional commissions or fees for the WorldRes Call Centers'
services without WorldRes seeking Choice's written consent. Unless Choice
provides written consent within 15 days of receiving WorldRes' request, WorldRes
will not add the additional fees.
3.3 [*]. [*] will also pay to any [*] [*] Choice's then-current [*] for
reservations made at a Hotel via WorldRes' consumer web site, WorldRes partner
web sites or a WorldRes Call Center ("[*]"). Neither Choice or WorldRes need
report to the other [*] paid.
[*]=Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with regard to the
omitted portions.
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[CONFIDENTIAL TREATEMENT REQUESTED]
3.4 Payment. Choice will pay WorldRes all Transaction Fees and Resale
Transaction Fees invoiced by WorldRes in U.S. Dollars within 30 days of
receiving such invoice, along with a report on the number and type of Hotels
reservations made for the previous month ("Report"). Choice must notify WorldRes
during the same period of any cancellations or changes not reflected on the
Report, or pay the full amounts invoiced.
4. Ownership and Intellectual Property.
4.1 Ownership. As between WorldRes and Choice: (i) WorldRes shall own all
right, title, and interest in and to the WorldRes System and any interface it
develops in connection therewith; and (ii) Choice shall own all right, title,
and interest in and to the CRS and any interface it develops, independently of
WorldRes, in connection therewith.
4.2 Intellectual Property. Both parties to this Agreement acknowledge the
other party's exclusive ownership of, and right to use, its own trademarks,
service marks, trade names and copyrighted materials. Neither party to this
Agreement acquires any rights in the other party's trademarks, service marks,
trade names or copyrighted materials. Neither party will use or sell services
or goods bearing, or comprised of, the other party's trademarks, service marks,
trade names or copyrighted materials without the owner's prior written consent.
5. Resell and Work Direct.
WorldRes may resell to any WorldRes partner web site or WorldRes Call
Center, travel services provided via the WorldRes System, including without
limitation, Hotel and reservation information. WorldRes may charge Choice
additional fees fur such reselling. In addition, WorldRes may also work directly
with a Hotel that contacts WorldRes directly; or with whom WorldRes executed a
contract for WorldRes' services on or before the Effective Date.
6. Term and Termination.
6.1 Term. This Agreement begins on the Effective Date and will terminate,
except, with those obligations identified in this Agreement as surviving
termination, [*] from the Connection Date ("Initial Term"). The parties
agree to automatically renew the Agreement for successive periods of 1 year
("Renewal Term"), unless either party sends the other written notice of its
intent not to renew the Agreement, not less than 90 days nor more than 120 days
before the end of the Initial Term or the Renewal Term, as applicable. As used
herein, "Term" shall mean the Initial Term plus any applicable Renewal Term(s).
6.2 Termination for Cause. Notwithstanding the foregoing, this Agreement
may be terminated by either party upon written notice if the other party: (i)
breaches any of its obligations under this Agreement in any material respect,
which breach is not remedied within 30 days following receipt of written notice
thereof by such other party; (ii) ceases to do business in the normal course;
(iii) becomes or is declared insolvent or
[*]=Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with regard to the
omitted portions.
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[CONFIDENTIAL TREATEMENT REQUESTED]
bankrupt; (iv) is the subject of any proceeding relating to its liquidation or
insolvency that is not dismissed within 90 calendar days of commencement; or (v)
makes an assignment for the benefit of its creditors; or (vi) is convicted in a
court of competent jurisdiction of fraud that reflects adversely on the other
party's intellectual property or goodwill.
6.3 Post-Termination. Unless also breaching this Agreement, the terminating
party will not be liable or obligated to the other party through terminating the
Agreement. If Choice breaches this Agreement, WorldRes may immediately remove or
hold Hotel Content or other Hotel information from the WorldRes System without
further notice to Choice pending resolution of whether Choice breached. Upon
termination of this Agreement for any reason, both parties will cease claiming
affiliation with the other and return or destroy, at the other party's option,
any of the other party's intellectual property obtained under this Agreement.
Notwithstanding any other Term, the provisions of Sections 4, 6.3, 10, 11 and 13
along with any payment obligations accruing prior to the effective date of
termination, shall survive any termination or expiration of this Agreement.
7. Right To Use Information Regarding the WorldRes System.
Choice acknowledges that WorldRes will compile certain information related
to the usage of the WorldRes System ("Compiled Data"). Such Compiled Data may
include, without limitation, the volume of reservations booked on the WorldRes
System for a particular geographic region or class of accommodation, seasonal
fluctuations in bookings, and demographic profiles of the WorldRes System's end
users. Choice agrees, that WorldRes is authorized to use, reproduce and
generally make such Compiled Data, available to users of the WorldRes System,
provided that the source of any data in the Compiled Data is not specifically
attributed to Choice or any Hotel.
8. Right To Use Information Regarding Choice and Hotels.
Choice acknowledges and agrees that WorldRes has the right to use,
reproduce, display and transmit on the WorldRes web site and on or through any
WorldRes partner web site or WorldRes Call Center, any Hotel Content provided by
Choice or any of the Hotels for inclusion in the WorldRes System, and that
Choice shall secure for WorldRes such right from the Hotels.
9. Representations and Warranties.
Each party to this Agreement represents and warrants to the other party
that: (i) such party has the full corporate right, power and authority to enter
into this Agreement and perform the acts required of it hereunder; (ii) the
execution of this Agreement by such party, and the performance by such party of
its obligations and duties hereunder, do not and will not violate any agreement
to which such party is a party or by which it is otherwise bound; and (iii) when
executed and delivered by such party, this Agreement will constitute the legal,
valid and binding obligation of such party, enforceable against such party in
accordance with its terms.
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10. Indemnification
10.1 Indemnification by WorldRes. WorldRes will indemnify Choice, its
parent, subsidiaries, affiliates, successors and assigns, and their respective
directors, officers, employees, and agents from and against any claim, suit, or
proceeding and any damages, liability, or other expenses (including but not
limited to reasonable attorneys' fees and court costs) which arise out of or
result from: (i) gross negligence or intentional wrongful acts of employees or
contractors of WorldRes while performing the services of WorldRes hereunder; and
(ii) any material breach of any representation or warranty by WorldRes.
WorldRes' obligations under this Section 10.1 are subject to the following
conditions and obligations of Choice: (i) Choice will notify WorldRes by
certified mail, return receipt requested, immediately upon knowledge of any
claim, suit, action, or proceeding for which it may be entitled to
indemnification under this Agreement; (ii) Choice shall permit WorldRes to have
the sole right to control the defense of any such claim; (iii) Choice will
provide reasonable assistance to WorldRes at WorldRes' expense, in the defense
of same; and (iv) Choice will not enter into any settlement agreement or
otherwise settle any such claim without WorldRes' express prior consent or
request.
10.2 Indemnification by Choice. Choice will indemnify WorldRes, its
subsidiaries, affiliates, successors and assigns, and their respective
directors, officers, employees, and agents from and against any claim, suit, or
proceeding and any damages, liability, or other expenses (including but not
limited to reasonable attorneys' fees and court costs) which arise out of or
result from: (i) gross negligence or intentional wrongful acts of employees,
contractors, or agents of Choice; (ii) any material breach of any representation
or warranty by Choice; or (iii) any information, data or materials, including
without limitation Hotel Content, or the use or inclusion in the WorldRes System
of any information, data or materials, including without limitation Hotel
Content, provided by Choice, or any Hotels hereunder. Choice's obligations under
this Section 10.2 are subject to the following conditions and obligations of
WorldRes: (i) WorldRes will notify Choice by certified mail, return receipt
requested, immediately upon knowledge of any claim, suit, action, or proceeding
for which it may be entitled to indemnification under this Agreement; (ii)
WorldRes shall permit Choice to have the sole right to control the defense of
any such claim; (iii) WorldRes will provide reasonable assistance to Choice at
Choice's expense, in the defense of same; and (iv) WorldRes will not enter into
any settlement agreement or otherwise settle any such claim without Choice's
express prior consent or request.
10.3 Limitation of Liability. Subject to Sections 10.1, 10.2 and 13 herein,
neither party will be liable to the other for incidental, consequential,
special, punitive or indirect damages, including loss of profit, loss of
business or business opportunity, unless such loss results from a willful breach
of obligations.
11. Disclaimer.
Choice acknowledges that it is responsible for-the delivery, entry,
maintenance, timeliness and accuracy of all data relating to the Hotels provided
to WorldRes, and for
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any updating of data during the Term. WORLDRES WILL NOT BE RESPONSIBLE OR LIABLE
IN ANY MANNER FOR SUCH DATA OR INFORMATION INCLUDED IN THE WORLDRES SYSTEM,
INCLUDING WITHOUT LIMITATION ANY INACCURACIES, UNLESS ANY SUCH INACCURACY WAS
DIRECTLY CAUSED BY THE' GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF WORLDRES.
Choice is solely and exclusively responsible for the protection of any and all
of its intellectual property and/or the intellectual property of any Hotels,
including, but not limited to, the inclusion on Choice's or any Hotel's web
pages of any and all statutory or other notices customarily used or required for
purposes of providing notice of ownership or protection of Choice's and/or any
Hotel's trademarks, trade names, service marks, logos or copyrights.
12. Complimentary Rooms.
Choice shall encourage its Hotels to participate in mutually determined
promotional events. In addition, Choice will use its best efforts to make a
predetermined number of free rooms available to WorldRes for use as promotional
awards to WorldRes users.
13. Confidential and Proprietary Information.
During the Term, the parties acknowledge that each may receive confidential
and proprietary information of the other party, including without limitation,
information concerning proprietary technology and products, technical data,
WorldRes System programming, software, processes, ideas, concepts, formulas,
designs, engineering, trade secrets, know-how, research, marketing plans,
strategies and client information identified at the time of disclosure as
confidential or proprietary information ("Confidential Information"). All such
Confidential Information will be treated as confidential and proprietary by the
receiving party, and shall not be disclosed by the receiving party to third
parties unless required by law. The receiving party will only disclose the
Confidential Information of the disclosing party to those of its employees: (i)
with a need to know in order to perform this Agreement; (ii) who are informed of
the nondisclosure obligations imposed by this Agreement; and (iii) who are
parties to appropriate confidentiality agreements sufficient to comply with the
obligations imposed by this Agreement. The receiving party shall use at least
the same degree of care it takes to protect the confidentiality of the
disclosing party's Confidential Information that the receiving party normally
exercises with respect to its own Confidential Information, but in no event
shall the receiving party use less than its reasonable efforts to protect the
confidentiality of the disclosing party's Confidential Information.
Confidential Information shall not include any information which: (i) is now or
hereafter becomes available to the public through no wrongful actions of the
receiving party; (ii) is known to, or in the-possession of, the receiving party
before its disclosure hereunder, as demonstrated by documented evidence; (iii)
is disclosed to the receiving party by a third party not under any obligation of
secrecy or confidentiality to the disclosing party; (iv) can be shown by written
evidence was independently developed by the receiving party; or (v) the
receiving party is required by law to disclose; provided, however, in that
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instance, that the receiving party provides the disclosing party with sufficient
prior notice for the disclosing party to take any legal or other steps it deems
necessary to protect its
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Confidential Information. The provisions of this Section 13 will remain binding
and in full force and effect, notwithstanding the expiration or termination of
this Agreement at any time.
14. Miscellaneous.
14.1 This Agreement shall be interpreted in accordance with the laws of the
State of California, without regard to California conflicts of laws principles.
14.2 This Agreement will be binding on and will inure to the benefit of the
legal representatives, successors and assigns of the parties hereto. Neither
party to this Agreement may assign, hypothecate, pledge or sublicense any of its
rights or obligations hereunder without the prior written consent of the other
party, which consent shall not be unreasonably withheld; provided, however, that
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either party may assign this Agreement without such consent in connection with
any merger, consolidation, any sale of all or substantially all of such party's
assets or any other transaction in which more than 50% of such party's voting
securities are transferred.
14.3 This Agreement constitutes the entire agreement between WorldRes and
Choice with respect to the subject matter hereof, and Choice has not relied upon
any promises or representations by WorldRes with respect to the subject matter
except as set forth herein.
14.4 If any provision of this Agreement is found invalid or unenforceable,
that provision shall be enforced to the maximum extent permissible, and the
other provisions of this Agreement will remain in full force and effect.
14.5 The waiver by either party of a breach of or a default under any
provision of this Agreement, shall not be-construed as a waiver of any
subsequent breach of the same or any other provision of this Agreement, nor
shall any delay or omission on the part of either party to exercise or avail
itself of any right or remedy that it has or may have hereunder operate as a
waiver of any right or remedy.
14.6 Neither party will disclose the terms of this Agreement to any third
party, unless required by law, and will treat such terms as proprietary and
confidential information pursuant to the provisions of Section 13.
14.7 With respect to translations of this Agreement into a language other
than English, the English version shall govern any conflicts that may arise
concerning the interpretation of any terms or conditions of this Agreement.
14.8 The parties may modify this Agreement, but only in writing signed by
both parties.
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14.9 This Agreement does not make the parties partners, joint venturers, or
agents of one another. Both parties are acting as independent contractors.
Neither party may hold itself out in any manner as an agent of the other, make
any express or implied agreements, warranties, guarantees or representations for
the other, incur any debt or become obligated or liable under any agreements in
the name of or on behalf of the other party, unless expressly authorized by the
other party in writing.
14.10 If any provision of this Agreement is held by a court of competent
jurisdiction to be unenforceable, then a court may rewrite that provision with
the least modification necessary to render the provision valid, and the
remaining Agreement provisions will remain in full force and effect.
14.11 Both parties will send any notices required under this Agreement via
registered or certified mail, return receipt requested, to the other party at
the address above, or to such other address as a party may indicate by like
notice. Notice is effective on receipt or five days after deposit of the notice
with the U.S. Postal Service.
14.12 Neither party to this Agreement will be liable to the other should
its performance under this Agreement be prevented, restricted or interfered
with, during any period in which such performance is delayed by fire, flood,
war, riot, embargo, organized labor stoppage, earthquake, acts of civil and
military authorities, or any other acts beyond its reasonable control, provided
that the party suffering such delay immediately notifies the other party of the
delay and uses its best efforts to continue, resume or substantially resume
performance promptly upon the end of the circumstance or event preventing
performance. Either party may terminate this Agreement upon 60 days prior
written notice if the delay of the other party due to any of the above-mentioned
causes continues for a period of 90 days.
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Executed by a duly authorized representative of the parties hereto:
WORLDRES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Title: Vice President Sales
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Date: 4/14/98
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CHOICE HOTELS INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Executive V.P. & C.F.O
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Date: 4/9/98
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