RESERVATION SERVICES AGREEMENT
THIS RESERVATION SERVICES AGREEMENT ("Agreement"), dated as of July
___, 1997 (the "Effective Date"), is between HFS INCORPORATED, a Delaware
corporation ("HFS"), and AVIS RENT A CAR SYSTEM, INC. ("ARAC"). The definitions
of all other capitalized terms are found in Appendix A.
In consideration of the following mutual promises, HFS and ARAC agree
as follows:
Section 1. Reservation System. (a) HFS's Obligations. HFS will operate
and maintain (directly or by subcontracting with affiliates or one or more third
parties) a computerized Reservation System consistent with the system and
services provided by HFS to ARAC as of the Effective Date, subject to HFS's
right to institute such technological substitute(s) as HFS determines, in its
discretion from time to time. HFS will be responsible for the acquisition,
development, support, equipping, maintenance, improvement and operation of the
Reservation System. HFS shall use reasonable efforts to operate the Reservation
System and provide the Service efficiently. ARAC will participate in the
Reservation System during the Term. HFS shall have the right to provide
reservation services to other car rental operations or to other parties. HFS
will not offer callers to the toll free reservation telephone number(s)
established for ARAC the opportunity to make reservations for other car rental
operations.
(b) ARAC's Obligations. (i) ARAC will obtain and maintain at the
Locations the computer equipment and communications equipment and service
required to participate in the Reservation System. HFS shall not be obligated to
provide support to any Location where the computer equipment or the
communications equipment and service do not comply with HFS specifications. ARAC
will comply with HFS's rules and standards for participation, and will honor
reservations and commitments to renters and travel industry participants, all as
set forth from time to time in the Procedures Manual. ARAC further undertakes
and agrees that it will use its best efforts to, and to cause any U.S. Licensee
to, assure that all information entered into the Reservation System, including
but not limited to rate and fleet availability information, is current and
complete during the Term, consistent with procedures and policies in effect as
of the Effective Date or as may be specified in the Procedures Manual from time
to time during the Term.
(ii) Notwithstanding anything to the contrary contained in
this Agreement, so long as WizCom International, Ltd. ("WizCom") provides the
End User Equipment Services (as defined in the Computer Services Agreement
between WizCom and ARAC dated as of the date hereof), ARAC shall be deemed to be
in compliance with all requirements of this Agreement relating to Hardware.
Section 2. Recurring Fees, Taxes and Interest. (a) Recurring Fees. ARAC
will pay HFS certain "Recurring Fees" in U.S. dollars as set forth in Appendix B
attached hereto and made a part hereof. ARAC will also pay directly, or
reimburse HFS to the extent not paid directly by ARAC, travel agent and general
sales agent commissions payable for certain reservations and any fees levied by
third parties for reservations, including but not limited to reservations
originated or processed through the GDS Systems or Internet booking services.
HFS may charge a reasonable service fee for processing such charges, which
charge shall reflect the actual cost of providing such service.
(b) Taxes. ARAC will pay to HFS taxes equal to any federal, state or
local sales, gross receipts, use, value added, excise or similar taxes assessed
against HFS on the Recurring Fees by jurisdictions assessing such taxes, but not
including any income tax, franchise or other tax for the privilege of doing
business by HFS in any such jurisdiction. ARAC will pay taxes to HFS when due.
(c) Interest. Interest is payable when ARAC receives its invoice on any
past due amount payable to HFS under this Agreement at the per annum rate of the
Prime Rate plus 3% or the maximum rate permitted by applicable law, whichever is
less, accruing from the due date until the amount is paid.
Section 3. Term. The Term of this Agreement shall commence on the Effective
Date and shall terminate upon the termination of the License Agreement, unless
earlier terminated in accordance with the terms hereof.
Section 4. Delivery & Installation of Software. The following
provisions shall apply to the installation and delivery of Software on new or
replacement Hardware obtained by ARAC from time to time during the Term for new
or existing Locations:
(a) Hardware. Hardware obtained from an Approved Vendor will be
presumed to meet HFS's configuration requirements as set forth in specified by
HFS from time to time. ARAC may obtain from any other source ARAC's computer
hardware and related operating system software. If ARAC obtains hardware from
any source other than an Approved Vendor, HFS must certify that ARAC's hardware
meets its configuration requirements and HFS shall have the right to charge a
reasonable certification fee for such services, which charge shall reflect the
actual cost of providing such service. HFS may modify its configuration
requirements from time to time and Appendix C shall be deemed to be revised upon
written notice by HFS to ARAC of any such change.
(b) Delivery. If ARAC buys the Hardware from an Approved Vendor, HFS
will authorize the Approved Vendor to install the Software. If ARAC obtains
ARAC's hardware from another source, the Software will either be delivered to
the applicable Location or such other address as ARAC specifies in writing, or
to ARAC's hardware vendor to be installed on the hardware by ARAC's vendor. HFS
will not ship ARAC the Software unless and until ARAC's hardware meets the
configuration requirements as provided in Section 4(c).
(c) Certification and Installation Service. If ARAC does not obtain
ARAC's hardware from an Approved Vendor, ARAC must either (1) ship ARAC's
hardware to HFS for testing and installation of the Software after HFS has
certified that the hardware meets the configuration requirements, or (2) contact
HFS for evaluation of ARAC's hardware purchase by telephone and certification
that ARAC's hardware meets HFS's configuration requirements.
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HFS's certification of compliance with configuration requirements shall not be
unreasonably withheld. If the hardware sent to HFS does not meet the
configuration requirements, HFS will ship the hardware back to ARAC without
installing the Software. ARAC shall pay the cost of freight for the shipping of
the hardware to HFS and to ARAC F.O.B. its Garden City, New York facility. ARAC
should also obtain insurance for the shipments as ARAC will bear the risk of
loss while the hardware is in transit.
(d) Limited Installation Warranty. If the Hardware is certified and HFS
installs the Software, HFS warrants to ARAC for a period of one year after
installation that the Software is properly installed in ARAC's Hardware. If any
Software failure is the result of improper installation of the Software, HFS
will reinstall the Software properly at its expense and pay the cost of shipping
(freight and insurance) the hardware to and from its Garden City, New York
facility. This is ARAC's exclusive remedy in the event this installation
warranty is breached. This warranty is in lieu of all other express and implied
warranties for this service. This warranty will be rendered null and void if the
Hardware is subjected to abuse, misuse, improper installation at the Location or
maintenance by unqualified service personnel, or if the Software is altered
without HFS's consent or direction, used for a purpose not authorized under this
Agreement or subjected to a violation of Section 7.
Section 5. License of Software and Training Materials. HFS grants to
ARAC a non-exclusive License to use the Software and any Training Materials,
subject to the conditions and limitations in this Agreement, so that ARAC can
participate in the Reservation System, effective during the term described in
Section 2. HFS will provide and ARAC will use, the standard versions of the
Software and the Training Materials HFS is then releasing at the time of
installation, as such may be modified, updated or replaced from the versions in
use at the time this Agreement is executed. The Software and Training Materials
may be used only in conjunction with the Hardware at ARAC's Locations and for
the sole purpose of obtaining the Service. If the Hardware malfunctions, the
Software and Training Materials may be used on other substantially identical
hardware approved by HFS on a temporary basis while the malfunction continues.
Section 6. Title to Software and Training Materials. Title to and
ownership of the Software and Training Materials shall remain with HFS or those
entities that have authorized HFS to sublicense and use them, free from any
claim or right of ARAC's or the holder of any security interest, lien or
encumbrance on any Location or any of ARAC's other property. ARAC will take such
steps as may be necessary to prevent any person from acquiring any rights in the
Software or Training Materials superior to HFS's rights. If any person attempts
to establish any legal right in the Software or Training Materials, ARAC shall
promptly notify HFS in writing.
Section 7. Software and Training Materials Proprietary; Confidential
Information. (a) Proprietary Information. The Software and Training Materials
are proprietary to HFS and/or its licensor, if any. Neither ARAC nor any other
person will transfer, sublicense, modify, decompile, copy or, except to ARAC's
employees as needed for the purposes of this
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License, disclose the Software or Training Materials to any other person or
entity, without HFS's prior written consent. The Software and Training Materials
are Confidential Information and are subject to the provisions set forth in
subparagraph (b) of this Section 7.
(b) Confidential Information. ARAC will take all appropriate actions to
preserve the confidentiality of all Confidential Information. Access to
Confidential Information should be limited to persons who need the Confidential
Information to perform their jobs and are subject to ARAC's general policy on
maintaining confidentiality as a condition of employment or who have first
signed a confidentiality agreement. ARAC will not permit copying of Confidential
Information (including, as to any computer software including the Software, any
translation, decompiling, decoding, modification or other alteration of the
source code of such software). ARAC will use Confidential Information only for
its car rental operations and to perform under this Agreement. Upon termination
(or earlier, as HFS may request), ARAC shall return to HFS all originals and
copies of the Software, Training Materials, Procedures Manuals, policy
statements and other Confidential Information "fixed in any tangible medium of
expression," within the meaning of the U.S. Copyright Act, as amended. ARAC's
obligations under this subsection commence when ARAC signs this Agreement and
continue for trade secrets as long as they remain secret and for other
Confidential Information for as long as HFS continues to use the information in
confidence, even if edited or revised, plus three (3) years. HFS will respond
promptly and in good faith to ARAC's inquiry about continued protection of any
Confidential Information.
Section 8. Software Enhancements and Modifications; Hardware Changes.
HFS may modify, enhance and rewrite the Software from time to time. So long as
ARAC is not in default under this Agreement or the License Agreement, HFS will
provide the modified Software to ARAC when, as and if any such modification is
implemented. HFS may offer certain modifications, features, and enhancements for
additional license fees, installation and training charges, maintenance fees and
other terms as HFS may establish. ARAC will comply with HFS's installation, use
and maintenance instructions regarding non-optional enhancements and
modifications. HFS may change the configuration requirements from time to time,
and ARAC must obtain any additional or replacement Hardware required to run
enhanced or modified versions of the Software.
Section 9. Instructions and Manuals. HFS will furnish ARAC with
instructions and manuals, generally included in the Procedures Manual, outlining
procedures ARAC is to follow to install and use the Software. Use and
maintenance of the Software in other than the prescribed manner is a breach of
this Agreement. HFS may audit ARAC's records and may at reasonable times enter
the Locations to verify conformance with prescribed procedures. HFS reserves the
right to modify the Procedures Manual from time to time during the Term in its
discretion, for reasons including but not limited to reflecting changes in the
Reservation System or the Service, instituting improvements in efficiency of
operation of the Reservation System or the Service or establishing uniform
procedures to be followed by users of the Service. The Procedures Manual shall
contain stated policies regarding rate information updating, and shall
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specify default practices for continuing rates in effect if no new rates are
specified after expiration thereof.
Section 10. Maintenance. (a) Hardware. ARAC will obtain all
maintenance, repairs or adjustments of Hardware from the manufacturer of the
Hardware or its authorized service providers. ARAC will perform all
user-required maintenance procedures specified by the manufacturer of the
Hardware as and when recommended or required, and will obtain required
maintenance from authorized service providers at recommended or required
intervals. Except where HFS has supplied Hardware to ARAC, in which case the
obligations of HFS shall be governed solely by the terms of the agreement
between HFS and ARAC pursuant to which such Hardware was supplied, HFS has no
obligation to maintain the Software unless and until ARAC complies with this
paragraph.
(b) Software. So long as ARAC is not in default under this Agreement or
the License Agreement, HFS will cause the Software to function in accordance
with HFS's documentation to enable direct communication with the Reservation
System according to the standards, procedures and protocols HFS prescribes from
time to time.
(c) Hardware Failure. HFS will provide a toll-free telephone number for
reporting Software problems. In the event that ARAC is unable to interface with
the Reservation System because of hardware malfunction, and ARAC is not in
default of this Agreement or the License Agreement, HFS will make good faith
efforts to place reservations for ARAC through the use of other means and/or
facilities.
Section 11. Indemnification. ARAC will indemnify and hold harmless HFS,
its affiliates, successors and assigns and each of the respective directors,
officers and employees associated with them against all claims of employees,
agents, renters, and all other persons and entities, arising out of the
operation, use or non-use of the Software. HFS shall not be liable to ARAC or
any other person or entity for personal injury or property loss, including but
not limited to, damage to the Locations, as a result of the operation, use or
non-use of the Software.
Section 00.Xxxxxxxx Warranties. HFS makes the following warranties for the
Software:
(a) HFS warrants that the Software will perform the functions and
operations HFS specifies on the Hardware (but no other hardware), provided ARAC
follows HFS's written instructions, installs updates and modifications and makes
corrections as directed, and is not in default under this Agreement or the
License Agreement. HFS's sole obligation under this warranty shall be to remedy
any nonperformance of the Software within a reasonable time after ARAC reports
it to HFS. HFS DOES NOT WARRANT IN ANY WAY THE PERFORMANCE OR FUNCTIONING OF THE
SOFTWARE UNLESS IT IS UTILIZED AS PART OF HARDWARE CERTIFIED BY HFS OR AN
APPROVED VENDOR. ALL WARRANTIES UNDER THIS SUBSECTION ARE CONTINGENT UPON PROPER
USE OF THE SOFTWARE AND TRAINING MATERIALS AND SHALL NOT APPLY IF ARAC OR
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ARAC'S HARDWARE VENDOR WHO IS NOT AN APPROVED VENDOR FAILS TO COMPLY WITH THE
PROVIDED INSTALLATION AND OPERATING INSTRUCTIONS, MAKES OR PERMITS THE
UNAUTHORIZED ALTERATION OR REPAIR OF THE HARDWARE OR SOFTWARE, OR FAILS TO
IMPLEMENT ALL UPDATES OR CORRECTIONS TO THE SOFTWARE HFS MAKES AVAILABLE TO
ARAC.
(b) HFS has the right to license the Software to ARAC under this
Agreement and, to the best of its knowledge, the Software does not infringe any
Intellectual Property Rights of any third party.
Section 13. No Liability for Information. HFS WILL NOT BE LIABLE FOR ANY
CLAIMS OR DAMAGES RESULTING FROM ANY INCORRECT INFORMATION GIVEN TO HFS OR INPUT
INTO THE RESERVATION SYSTEM BY ANY PERSON OTHER THAN HFS. IN ADDITION, IF HFS
PERMITS ARAC TO UTILIZE THE HARDWARE AND/OR RESERVATION SYSTEM TO COMMUNICATE
WITH ANY PERSON BESIDES HFS, AN AFFILIATE OF HFS, OR OTHER LICENSEES OF THE AVIS
SYSTEM, HFS SHALL NOT BE LIABLE FOR THE INPUT, FORMAT, TRANSMISSION OR
MANIPULATION OF ANY INFORMATION SO COMMUNICATED, UNLESS IT IS AFFECTED DUE TO
HFS'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
Section 14. No Other Warranties. HFS MAKES NO OTHER WARRANTY WHATSOEVER,
EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY ABOUT THE DESIGN
OR CONDITION OF THE SOFTWARE, ITS MERCHANTABILITY, ITS FITNESS FOR ANY
PARTICULAR PURPOSE, OR ITS CONFORMANCE TO THE PROVISIONS AND SPECIFICATIONS OF
ANY ORDER OR DOCUMENTATION RELATING THERETO.
Section 15. Damage Limitation. NOTWITHSTANDING ANYTHING TO THE CONTRARY
IN THIS AGREEMENT, IN NO EVENT SHALL HFS OR ANY RELATED PARTY BE LIABLE FOR
SPECIAL, INDIRECT, CONSEQUENTIAL OR EXEMPLARY DAMAGES, INCLUDING, BUT NOT
LIMITED TO, LOST PROFITS OR REVENUES; AND FURTHERMORE, HFS'S LIABILITY FOR
DAMAGES HEREUNDER SHALL IN NO EVENT EXCEED THE AMOUNTS PREVIOUSLY PAID BY ARAC
TO HFS FOR THE LICENSE UNDER THIS AGREEMENT.
Section 16. ARAC's Default. If any one of these events occurs, then HFS
shall have the right to exercise any one or more of the remedies set forth below
and/or suspend the Service and related software maintenance service as described
in Section 17 below: (a) ARAC fails to make any payment when due under this
Agreement or the License Agreement; (b) ARAC breaches any other covenant,
warranty or agreement under this Agreement or the License Agreement and the time
to cure the breach expires; (c) the Software becomes inoperable by ARAC's act or
omission; or (d) ARAC assigns or transfers, or attempts to assign or transfer
the Software without HFS's consent, except as permitted under the License
Agreement.
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Section 17. Termination and Remedies. (a) Rights to Terminate. HFS
shall be entitled to terminate this Agreement, including the License and the
Service, immediately: (a) if ARAC violates or attempts to violate Section 7 of
this Agreement; (b) if ARAC defaults in a payment required pursuant to this
Agreement and such payment default continues uncured for a period of thirty (30)
days after the due date for such payment or ARAC fails to make any payment under
any other agreement between ARAC and HFS or an affiliate of HFS, and such
failure continues after the expiration of the applicable cure period under such
agreement; (c) if ARAC defaults under any other obligation under this Agreement,
and the default continues uncured for a period of ninety (90) days after HFS
gives ARAC written notice of default; (d) if the Software is rendered obsolete
in HFS's sole judgment based upon technological advances or improvements,
changes in the Service or any other reason and no reasonable substitute for
providing the Service is undertaken by HFS, or if HFS, in its sole discretion,
decides to exit the business of providing the Service, provided that in either
such case HFS must give ARAC not less than five (5) years prior written notice
of such termination; or (e) if the license granted under the License Agreement
terminates for any reason and is not immediately replaced by an express written
agreement between ARAC and HFS Car Rental, Inc. for a license to continue
operation of ARAC's car rental operations as part of the Avis System. ARAC shall
have the right to terminate this Agreement immediately (A) if HFS defaults under
any obligation under this Agreement, and the default continues uncured for a
period of ninety (90) days after ARAC gives HFS written notice of such default
or (B) HFS is subject to any voluntary or involuntary bankruptcy, liquidation,
dissolution, receivership, assignment, reorganization, moratorium, composition
or a similar action or proceeding that is not dismissed within 60 days after its
filing.
(b) Obligations Upon Termination. If this Agreement terminates, ARAC
will immediately return the originals and all copies of the Software and
Training Materials unencumbered to HFS. ARAC will certify to HFS in writing that
the original and all copies have been returned or destroyed. ARAC EXPRESSLY
WAIVES ANY RIGHT TO NOTICE OF OR A HEARING WITH RESPECT TO REPOSSESSION AND
CONSENT TO ENTRY INTO ANY LOCATION BY HFS'S AGENTS OR REPRESENTATIVES OR ANY
PREMISES WHERE THE SOFTWARE AND TRAINING MATERIALS MAY BE LOCATED AND REMOVING
THEM WITHOUT JUDICIAL PROCESS. If ARAC fails or refuses to permit the peaceable
entry by HFS's agents to take possession of any Software and Training Materials
HFS owns, ARAC will be liable for rental of the Software and Training Materials
at the rate of $1,000.00 per week per Location from the date that HFS first
attempts to retake it. Notwithstanding anything contained herein to the
contrary, ARAC will honor any advance reservations made for ARAC prior to
termination at the rates and on the terms established when the reservations are
made and pay when due all related travel agent commissions and other third party
charges associated with such reservations.
(c) Other Remedies. HFS may suspend ARAC from the Reservation System
for any default or failure to pay or perform under this Agreement and
discontinue Reservation System referrals to ARAC for the duration of such
suspension. Reservation service will be restored after ARAC has fully cured any
and all defaults and failures to pay and perform. ARAC recognizes that any use
of the Reservation System not in accord with this Agreement will
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cause HFS irreparable harm for which there is no adequate remedy at law,
entitling HFS to injunctive and other relief. HFS may litigate to collect
amounts due under this Agreement without first issuing a default or termination
notice.
(d) Liquidated Damages. If HFS terminates the License under Section
17(b), or ARAC terminates this Agreement (except pursuant to the last sentence
of subparagraph (a) above), ARAC will pay HFS within thirty (30) days following
the date of termination, as Liquidated Damages, an amount equal to the sum of
accrued Recurring Fees during the immediately preceding twenty-four (24) full
calendar months (or the number of months remaining in the unexpired Term at the
date of termination, whichever is less). If the elapsed portion of the Term as
of the date of termination is less than twenty-four (24) months, then the amount
shall be the average monthly Recurring Fees since the Effective Date multiplied
by 24. ARAC will also pay any applicable Taxes assessed on such payment.
Liquidated Damages are paid in place of HFS's claims for lost future Recurring
Fees under this Agreement. HFS's right to receive other amounts due under this
Agreement is not affected by this provision.
Section 18. Costs and Expenses. The non-prevailing party will pay the
costs and expenses incurred, including reasonable attorneys' fees and the
expenses of retaking the Software and Training Materials, incurred by the
prevailing party to enforce this Agreement.
Section 19. Other Relief. HFS may obtain the remedy of injunctive
relief without the posting of a bond if ARAC violates ARAC's obligations
regarding confidentiality, non-disclosure, transfer or limitations on Software
use under this Agreement.
Section 20. Force Majeure. If performance by ARAC or HFS is delayed or
prevented because of strikes, inability to procure labor or materials, defaults
of suppliers or subcontractors, delays or shortages of transportation, failure
of power or telephone transmissions, restrictive governmental laws or
regulations, weather conditions, or other reasons beyond the reasonable control
of the party, then performance of such acts will be excused and the period for
performance will be extended for a period equivalent to the period of such
delay. Delays or failures to pay resulting from lack of funds will not be deemed
delays beyond ARAC's reasonable control.
Section 21. Notices. Notices will be effective if reduced to writing
and delivered, by next day delivery service, with proof of delivery, by
facsimile transmission immediately followed by first class mailing of the
original material, or mailed by certified or registered mail, return receipt
requested, to the appropriate party at its address specified below or to such
party at such address as may be designated by notice in accordance with this
Section. Notices will be deemed given on the date delivered or date of attempted
delivery, if service is refused.
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If to HFS: If to ARAC:
HFS Incorporated Avis Rent A Car System, Inc.
0 Xxxxxx Xxx 000 Xxx Xxxxxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000 Xxxxxx Xxxx, Xxx Xxxx 00000
Attn.: Xxxxxxx Xxxxxxxxx Attn.: General Counsel
Fax: (000) 000-0000 Fax: 000-000-0000
HFS Incorporated
0 Xxxxxx Xxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attn.: Senior Vice President
and Corporate Counsel
Fax: (000) 000-0000
Section 22. Oral Modifications. This Agreement may not be amended, modified
or rescinded except in writing, signed by both parties and any attempt to do so
shall be void and of no effect.
Section 23. Governing Law; Venue. This Agreement is to be governed by
and construed in accordance with the laws of the State of New York. Each party
consents to the non-exclusive personal jurisdiction of the New York state courts
situated in Nassau County, New York and the United States District Court for the
Eastern District of New York. Each party waives objection to venue in any such
courts.
Section 24. Waiver. If either ARAC or HFS fail to exercise any right or
option at any time under this Agreement, such failure will not be deemed a
waiver of the exercise of such right or option at any other time or the waiver
of a different right or option. Termination of this Agreement by either HFS or
ARAC will not waive ARAC's obligation to make any payments to HFS under this
Agreement.
Section 25. Severability. If any provision of this Agreement is determined
to be void or unenforceable, the provision shall be deemed severed from the
Agreement and the remainder of this Agreement shall continue in full force and
effect.
Section 26. Entire Agreement. This Agreement supersedes all prior oral and
written agreements and understandings and constitutes the entire Agreement
between the parties with respect to the subject matter hereof.
Section 27. No Third Party Beneficiary. This Agreement is intended for
the sole benefit and protection of the named parties, and no other persons or
entities shall have any cause of action or right to payments made or received
under this Agreement except for any owners of the Software who have licensed or
authorized HFS to sublicense the same to ARAC. Notwithstanding the foregoing,
the parties acknowledge that certain rights and obligations inure
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to ARAC pursuant to the License Agreement with respect to its obligations to
provide services to the U.S. Licensees as set forth in the License Agreement.
All such rights and obligations of ARAC requiring the use of the Software and
Training Materials or any other rights granted ARAC under this Agreement are
hereby acknowledged by HFS, provided however, that such acknowledgement and
permission does not create any new rights in the U.S. Licensees other than those
existing under any agreements between HFS, HFS Car Rental, Inc. or any affiliate
of Avis, Inc. and the U.S. Licensees relating to the Reservation System.
Section 28. Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the parties, their successors and permitted
assigns. Notwithstanding the above, ARAC may not assign this Agreement without
HFS's express written consent, except as permitted under the License Agreement.
HFS may assign this Agreement at any time in connection with an assignment of
the Reservation System, provided that the assignee executes a written assumption
of the obligations of HFS hereunder.
Section 29. Waiver of Jury Trial. The parties waive the right to a jury
trial relating to this Agreement or the relationship between HFS, ARAC and their
respective successors and assigns.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date set forth in the preamble to this Agreement,
HFS INCORPORATED
ATTEST: /s/ Xxxxxx X. Xxxxxx BY: /s/ Xxxxx X. Xxxxxxx
--------------------------- ---------------------------
(Assistant) Secretary (Vice) President
AVIS RENT A CAR SYSTEM, INC.
ATTEST: /s/ Xxxxx X. Xxxxxxxx BY: /s/ Xxxxx X. Xxxxxxx
--------------------------- ---------------------------
(Assistant) Secretary (Vice) President
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APPENDIX A
Definitions
"Agreement" means this Reservation Services Agreement between HFS and ARAC.
"Approved Vendor" means a vendor of computer hardware that HFS identifies as an
Approved Vendor before ARAC's purchase of hardware.
"ARAC" means Avis Rent A Car System, Inc. and its successors and assigns,
as permitted in the License Agreement.
"Avis System" means the "System" as defined in the License Agreement.
"Confidential Information" means any trade secrets HFS owns or protects and
other proprietary information not generally known to the car rental industry
including the Software and documentation related thereto and confidential
portions of the Training Materials and the Procedures Manual or information HFS
otherwise imparts to ARAC and ARAC's representatives in confidence.
"GDS Systems" means the global distribution systems operated by the airlines and
may include other third party reservation systems and networks charging fees for
processing reservations.
"Hardware" means the computer hardware, including the operating system software,
ARAC obtains and dedicates to operation of the Software installed at ARAC's
Locations that conforms to HFS's configuration requirements.
"Intellectual Property Rights" means any patents, copyrights, trade secrets or
similar property rights owned by any person or entity in the Software.
"License" means the non-transferable, non-exclusive right to use the Software
and Training Materials granted to ARAC under this Agreement.
"License Agreement" means the Master License Agreement between ARAC and HFS
Car Rental, Inc. granting to ARAC the non-exclusive right to operate its car
rental operations under the Avis System.
"Liquidated Damages" means the amounts payable under Section 17(d), set by the
parties because actual damages will be difficult or impossible to ascertain on
the Effective Date and the amount is a reasonable estimate of the damages that
will be incurred and is not a penalty.
"Location" means any one of the sites at which ARAC operates a car rental
operation.
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"Prime Rate" means the rate of interest per annum publicly announced from time
to time by The Chase Manhattan Bank as its prime rate in effect at its principal
office in New York City; each change in the Prime Rate shall be effective from
and including the date such change is publicly announced as being effective.
"Procedures Manual" means the Procedures Manual and any other manual HFS
publishes or distributes specifying the procedures and standards for operation
of and participation in the Reservation System from time to time during the
Term, including, but not limited to the Technology Standards.
"Recurring Fees" means fees paid to HFS as stated in Section 2 and Appendix B.
"Reservation System" means the computerized central reservation system that HFS
maintains (directly or by subcontracting with an affiliate or one or more third
parties), pursuant to which the Service is provided to ARAC; and shall include
the Wizard System (as such term is defined in the License Agreement) and any
substitute therefor or replacement thereof.
"Service" means the basic service provided by the Reservation System for placing
and receiving car rental reservations, as well as such other services as HFS may
develop and provide in the future, upon conditions including fees which HFS, in
its sole discretion, may place in effect under this Agreement.
"Software" means the computer programs in object code form for HFS's proprietary
applications delivered to the hardware vendor or to ARAC from time to time, and
any substituted, modified, updated and enhanced versions, releases and additions
to previously delivered software pursuant to this Agreement that function to
connect the Locations with the Reservation System and that may perform
additional functions.
"Technology Standards" means standards specified in the Procedures Manual for
local and long distance telephone communications services, telephone, telecopy
and other communications systems, point of sale terminals and computer hardware
and software for various applications constituting part of or interfacing with
the Reservation System.
"Term" means the period of time during which this Agreement shall be in effect,
as stated in Section 3.
"Training Materials" means the various training modules, written materials and
audio and video tapes, as enhanced from time to time, which are provided to
instruct ARAC and ARAC's personnel in the utilization of the Software.
"U.S. Licensees" means the other licensees of the Avis System operating in
the United States, to which ARAC is obligated to provide services on behalf of
Avis, Inc. under the License Agreement.
-A-2-
APPENDIX B
Recurring Fees
Section 1. Recurring Fees. Recurring Fees shall consist of "Voice Fees",
"GDS Fees", "Internet Fees" and "Other Fees" as described below:
(a) Base Year Fees.
(i) Voice Fees. A per call charge of $0.66 ("Base Year Voice Fee" and,
generally as hereinafter provided, "Voice Fees") shall be charged for each call
received in the call centers operated by HFS for the Avis System, for manually
entered transactions and for any other transactions which are not included in
"GDS Transactions", "Internet Transactions" or "Other Transactions" as defined
below ("Voice Transactions").
(ii) GDS Fees. A per booking charge of $0.25 ("Base Year GDS Fee") for
every booking made through direct electronic interface with the GDS Systems for
the Avis System ("GDS Transactions").
(iii) Internet Fees. A per booking charge of $1.76 ("Base Year Internet
Fee" and, generally as hereinafter provided, "Internet Fees") for every booking
made through an Internet connection for the Avis System ("Internet
Transactions").
(iv) Other Fees. Other Fees shall consist of fees charged for any
transactions not contemplated by the definitions above, and shall be determined
by agreement of the parties at the time any such type of transaction is
instituted during the Term.
Base Year Voice Fees, Base Year GDS Fees, Base Year Internet Fees and
Base Year Other Fees are herein collectively referred to as "Base Year Fees";
Internet Fees, GDS Fees, Voice Fees and Other Fees are herein collectively
referred to as "Recurring Fees"; and GDS Transactions, Voice Transactions,
Internet Transactions and Other Transactions are herein collectively referred to
as "Transactions".
(b) Annual Adjustments to Fees. For each calendar year of the Term the
Recurring Fees will be adjusted in accordance with the following procedure:
(i) Setting Base Year Costs. Within forty-five days after the end of
each calendar year in the Term, for each of the Voice Transactions, the GDS
Transactions, the Internet Transactions and the Other Transactions, a Prior Year
Cost per Transaction will be determined for each type of transaction based on
the cost for such transactions for such calendar year (the "Prior Year"). In
order to determine such Prior Year costs, the Voice Prior Year Cost shall
include the telecommunications, computer processing and space costs incurred and
any other costs incurred by HFS to provide the Voice Transactions for the Avis
System during the Prior Year. The GDS Prior Year Cost shall consist of the
computer processing and space costs
-B-1-
incurred and any other costs incurred by HFS to provide the GDS Transactions for
the Avis System during the Prior Year. The Internet Prior Year Cost shall
consist of the computer processing and space costs incurred and any other costs
incurred by HFS to provide the Internet Transactions for the Avis System during
the Prior Year. The Other Transactions Prior Year cost shall be established by
agreement of the parties.
(ii) Year-End Adjustment. Within forty-five (45) days after the end of
each calendar year of the Term, HFS shall provide ARAC with notice of the
amount, if any, by which the actual cost to HFS of providing each type of
Transaction to ARAC during such calendar year exceeded the aggregate amount paid
by ARAC for such type of Transaction for the preceding calendar year, supported
by documentation satisfactory to both parties of such cost. ARAC shall pay HFS,
within fifteen (15) days after the date of such notice the amount of such
deficiency.
(iii) Adjustment of Prior Year Fees. For each calendar year after 1997
(each a "Year of Determination"), the cost (the "Determination Year Cost") for
each type of Transaction shall be estimated for such year, using the estimated
cost in such year for the same cost items included in the applicable Prior Year
Cost. The applicable Transaction Fee to be charged in the calendar year next
succeeding the Year of Determination for each type of Transaction shall be equal
to the Recurring Fee charged for such type of Transaction in such prior year
increased by the positive percentage increase, if any, of the applicable
Determination Year Cost for such type of Transaction for the Year of
Determination over the applicable Prior Year Cost.
(c) Interim Adjustments. In the event that during any calendar year (i)
ARAC requests changes to the Service which will, in HFS's reasonable judgment
increase the cost of providing any type of Transaction by more than five percent
(5%) or (ii) HFS reasonably believes that the Transaction Fee established for
any type of Transaction for such calendar year will result in payments which are
more than five percent (5%) less than HFS's actual cost for providing such type
of Transactions to ARAC in such calendar year, HFS shall provide notice to ARAC
of such determination and the reasons therefor, and effective with the monthly
billing which succeeds such notice by at least fifteen (15) days, HFS shall xxxx
ARAC at a rate for such type of Transaction which is calculated to eliminate
such deficit.
Section 2. Billing. Within forty five (45) days after the end of each
calendar month of the Term (each a "Billing Period"), HFS shall provide ARAC
with an invoice detailing the quantity of each type of Transaction occurring
during such Billing Period and the Fees associated therewith. ARAC shall pay
such Fees within fifteen (15) days after the date of such invoice.
-B-2-
FIRST AMENDMENT TO
RESERVATION SERVICES AGREEMENT
THIS FIRST AMENDMENT TO RESERVATION SERVICES AGREEMENT (the "First
Amendment") dated as of August 22, 1997 amends that certain Reservation
Services Agreement dated as of July 30, 1997 (the "Original Agreement"),
between HFS INCORPORATED, a Delaware corporation ("HFS"), and AVIS RENT A CAR
SYSTEM, INC. ("ARAC"). The definitions of all capitalized terms used and not
defined herein shall have the same meaning as ascribed to such terms in the
Original Agreement.
WHEREAS, the parties desire to amend the Original Agreement as herein
provided.
NOW, THEREFORE, in consideration of the following mutual promises, HFS
and ARAC agree as follows:
Section 1. Schedule B to the Original Agreement is hereby amended by
adding a new Section 3, to read as follows:
"Section 3. Other Reservation Locations. If and to the
extent HFS provides ARAC reservation services in locations other than
the existing reservation centers located in Drumright and Tulsa,
Oklahoma and Virginia Beach, Virginia, the cost per transaction shall
be determined for each such location and type of transaction using the
following methodology: (i) if the location at which such reservation
services are being provided is dedicated solely to ARAC reservations
business, all costs associated with such location shall be reimbursed
to HFS by ARAC; (ii) if the location at which such reservation
services are being provided is used to service other customers or
affiliates of HFS as well as ARAC, costs incurred directly to provide
reservation services to ARAC (such as labor, computer processing and
telecommunications costs) shall be charged directly to ARAC and costs
which are incurred for operation of such facility as a whole (such as
space-related and administration costs) shall be allocated to the
customers and affiliates using such facility, including ARAC, on an
equitable basis, based on usage and transaction volume, as agreed by
ARAC and HFS."
Section 2. Except as expressly provided herein, the Original Agreement
is hereby ratified and affirmed in all respects.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date set forth in the preamble to this Agreement.
HFS INCORPORATED
ATTEST: /s/ Xxxxxx X. Xxxxxx BY: /s/ Xxxx Xxxxxxxxx
---------------------------- ----------------------------
Secretary (Vice) President
AVIS RENT A CAR SYSTEM, INC.
ATTEST: BY: /s/ Xxxxx X. Xxxxxxx
---------------------------- ----------------------------
(Assistant) Secretary (Vice) President
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