Software Development and License Agreement - Automated Travel Systems Inc. and Global Discount Travel Services LLC
SOFTWARE DEVELOPMENT AND LICENSE AGREEMENT
THIS SOFTWARE DEVELOPMENT AGREEMENT (the "Agreement") is made as of the
19th day of January, 1999 by and between AUTOMATED TRAVEL SYSTEMS, INC.
("ATSI"), a Delaware corporation having an office at 119 West 40th Street, 12th
Floor, New York, New York 10018, and GLOBAL DISCOUNT TRAVEL SERVICES, LLC, a
Nevada limited liability company with its principal place of business at 980
Kelly Johnson Drive, Las Vegas, NV 89119 ("Global").
WHEREAS, ATSI is designing and developing a travel database booking
system (the "Booking Engine System") providing access to airline fare, routing,
rules, travel information and computer reservation systems necessary to create a
PNR and facilitating airline reservations;
WHEREAS, pursuant to a certain Booking Database License Agreement dated
the date hereof between ATSI and Global (the "License Agreement"), ATSI has
agreed to license to Global the Booking Engine System for use in connection with
Global's travel reservation business;
WHEREAS, Global desires to have ATSI develop for Global's use in
connection with Global's on-line ticket booking service a booking engine
software application to provide access to the Booking Engine System and to
permit users to make airline and other travel reservations over the World Wide
Web (such software system including the source code and all documentation
related thereto, as enhanced or modified from time to time, is referred to
herein as the "Web Site Front End System"); and
WHEREAS, Global will develop the integrated site navigation software to
be used to provide navigation consistency throughout the Web Site Front End
System (the "Global Modules").
NOW, THEREFORE, in consideration of the mutual promises, covenants,
undertakings and agreements set forth herein and in the License Agreement, the
receipt and sufficiency of which are hereby acknowledged, the parties mutually
agree as follows:
1. Development of the Web Site Front End System; Training; and
Support.
(a) Engagement. Global hereby engages ATSI, and ATSI hereby agrees to
be engaged by Global, (i) to develop the Web Site Front End System in accordance
with the specifications attached hereto as Exhibit A as amended from time to
time by the parties (the "Specifications"), (ii) to provide Global personnel or
its designees with reasonable support in the integration of the Web Site Front
End System into the Global Modules and
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(ii) to provide training and support with respect to the Web Site Front End
System as more specifically described in this Section 1 below (the development,
training and support services to be provided hereunder are collectively referred
to herein as the "Services"), it being acknowledged and agreed that ATSI shall
have no obligation to provide training or support services with respect to the
Global Modules. Global agrees to provide ATSI with all information reasonably
requested by ATSI as required to carry out ATSI's duties under this Agreement.
(b) Time Commitment. In connection with the development of the Web Site
Front End System and the training of Global personnel in the operation and
programming of the Web Site Front End System, unless this Agreement is sooner
terminated as hereafter provided, ATSI shall deliver the Web Site Front End
System on or before March 1, 1999 (the "Delivery Date").
(c) Subsequent Maintenance, Training and Support. For a period of 60
days after the Delivery Date, ATSI shall provide Global, without charge other
than payment of expenses as stated in Section 3(d) below, support and training
services as reasonably required by Global for the implementation of the Web Site
Front End System. An initial response to or acknowledgment of a request for
support shall be made by ATSI within four hours of receipt of the request.
(d) No Other Support. Except as expressly provided in this Agreement,
ATSI shall not be obligated under this Agreement to provide any other support or
assistance to Global or any third party.
2. License; Delivery; Acceptance; Testing.
(a) License. Upon the terms and subject to the conditions of this
Agreement, unless this Agreement is terminated in accordance with the terms
hereof, ATSI grants to Global a perpetual, non-exclusive, non-transferable,
royalty-free right and license (the "License") solely (i) to use the Web Site
Front End System on Global's servers where such servers are principally located
(the "Global Facility") in connection with Global's on-line travel booking
business, (ii) to upgrade, update, replace, revise, enhance, add t o or convert
the Web Site Front End System (the "System Enhancements") for the purposes
stated in (i) above, and (iii) to develop and test Global Modules (the foregoing
are referred to as the "Permitted Uses"). Global shall have no right to grant
sublicenses under, nor to transfer, the Web Site Front End System. Global shall
also have the right to maintain not more than one back-up copy of the Web Site
Front End System for: (i) non-productive, archival purposes and (ii) for use at
a facility other than the Global Facility in the event of an emergency that
renders inoperable the servers located in the Global Facility. In the event ATSI
shall develop modifications or enhancements to the Web Site Front End System
(the "Modifications"), and if the Modifications are not developed exclusively
for a third party, then ATSI shall make the Modifications available to Global
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on terms and conditions (including cost) not less favorable than the terms and
conditions which the Modifications are offered to other third parties.
(b) Delivery; Acceptance. The Web Site Front End System shall function
in accordance with the Specifications on or before the 15th day after the
Delivery Date. For all work product deliverables in connection with the
development of the Web Site Front End System, Global shall, within sixty (60)
days of receipt of ATSI's statement that the deliverable is complete, place the
deliverable in productive use and review it and accept it or notify ATSI in
writing of non-acceptance if the deliverable does not conform to the
Specifications, documenting in reasonable detail any and all material defects in
the deliverable. ATSI shall, upon receipt of such notice, use its reasonable
efforts to correct any such material failures and shall notify Global of its
completion of the correction. Global shall, after receipt of said notice, review
the corrected deliverable and report to ATSI. Global shall do so promptly using
diligent efforts, but in no event shall such process exceed twenty (20) days.
This cycle shall be repeated only as is reasonably necessary. A deliverable
shall be deemed accepted by Global on the earlier to occur of : (i) Global
notifies ATSI in writing of its acceptance, in which event the acceptance date
shall then be the date of such notice; or (ii) Global fails to notify ATSI in
writing of any defect in the deliverable within the 60-day period described
above, in which event the acceptance date shall be the last day of said period.
(c) Rights Respecting Source Code. As the deliverable under this
Agreement, ATSI shall deliver to Global the Web Site Front End System in source
code form, together with all technical documentation relating thereto. Global
may not (i) permit any third party access to the source code for the Web Site
Front End System, except as provided elsewhere herein or (ii) otherwise permit
any third parties to use the Web Site Front End System to create a derivative
work, except, in any case, consultants retained on a "work-for-hire" basis (who
have agreed in writing that all rights relating to the Web Site Front End System
belong to ATSI) and who are subject to confidentiality provisions no less
stringent than those set forth herein. Global shall not, and shall not permit,
any third party to use, reproduce, sublicense, distribute or dispose of the Web
Site Front End System, in whole or in part, except as expressly permitted under
the terms of this Agreement.
(d) Intellectual Property Notices. In order to protect ATSI's trade
secrets and copyrights in the Web Site Front End System, Global agrees to
reproduce and incorporate ATSI's trade secret or copyright notices in the Web
Site Front End System.
(e) Reservation of Rights.
(i) Nothing contained in this Agreement shall prohibit ATSI
from making, using, licensing, distributing, selling or granting any rights in
and to the Web Site Front End System, or any portion thereof or making
derivative works from the Web
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Site Front End System and granting any rights with respect thereto, except with
respect to those portions of the source code of the Web Site Front End System
which are specifically identified on Exhibit BC hereto, as such Exhibit shall be
amended from time to time upon the mutual agreement of Global and ATSI (such
specific portions of the source code are referred to as the "Global Property"),
and ATSI agrees it shall not permit any third party to use the Global Property.
Global shall have no rights in or to the Web Site Front End System (including
its source code and technical documentation) or to any product or service
offered by ATSI except as contemplated hereby or in other agreements between the
parties hereto. Global shall not market, distribute, provide or license, or
permit any third party to market, distribute, provide or license, the Web Site
Front End System for any uses other than as provided herein. The Board of
Directors of ATSI shall determine to whom in the leisure travel business a
license for the Web Site Front End System may be granted.
(ii) Subject to the underlying intellectual property rights of
ATSI in and to the Web Site Front End System, nothing contained in this
Agreement shall prohibit Global from making, using, licensing, distributing,
selling or granting any rights in and to the Global Property or the Global
Modules or any portion thereof or making derivative works from the Global
Property or the Global Modules and granting any rights with respect thereto,
which ATSI agrees it shall not permit any third party to use. ATSI shall have no
rights in or to the Global Property, the Global Modules, the System
Enhancements, or any product or service offered by Global except as contemplated
hereby or in other agreements between the parties hereto. ATSI shall not market,
distribute, provide or license, or permit any third party to market, distribute,
provide or license, the Global Property, the Global Modules or the System
Enhancements for any uses other than as provided herein.
3. Payments.
(a) License Fees. The fees set forth in the License Agreement shall
constitute full and complete payment for the services set forth herein.
(b) Expenses. Each party shall bear its expenses arising from the
performance of its obligations under and relating to this Agreement, including
(without limitation) expenses for facilities, employee salaries, work spaces,
utilities, license fees (subject to Section 5(d) below), clerical and
reproduction services and supplies. Notwithstanding the foregoing, Global shall
reimburse ATSI for its actual out-of-pocket expenses which are reasonable and
necessary under this Agreement incurred in connection with ATSI personnel's
travel to and from Global's places of business (including accommodations and
meals) within 45 days after receipt of an invoice therefor; provided, however,
that ATSI shall obtain prior approval from Global for expenditures in excess of
$100 per person per day. Travel arrangements and hotel accommodations shall be
arranged through Global.
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(c) Taxes. Global shall pay for, or reimburse ATSI for, all sales, use,
transfer or other taxes and all duties, whether international, national, state,
or local however designated, which are levied or imposed by reason of the
transactions contemplated hereby; excluding, however, taxes based upon ATSI's
revenue, income or profits.
4. Ownership of Intellectual Property and Confidentiality.
(a) Title to the Web Site Front End System. ATSI represents that it is
or will be the owner of all right, title and interest in and to the Web Site
Front End System, other than the Global Property, and has the right to grant the
License to, and will have the right to deliver the source code to, Global.
Global acknowledges and agrees that the Web Site Front End System contains and
will contain valuable trade secrets and/or proprietary and confidential
information of ATSI, and, except as provided in this Agreement, any right, title
and interest to the Web Site Front End System shall vest in ATSI, including any
patents, copyrights, trademarks, trade secrets, methods of processing, design
and structure of individual programs and their interaction and programming
techniques employed therein. The Web Site Front End System shall belong
exclusively to ATSI, with ATSI having the right to obtain and to hold in its own
name patent registrations, copyright registrations, or such other protections as
may be appointed to the subject matter and any extensions or renewals thereof.
Global agrees to give ATSI reasonable assistance, at ATSI's sole cost and
expense, required to perfect and protect the rights defined in this Section
4(a). Global agrees that it will execute and deliver all such further papers as
may be necessary, including original applications and applications for renewal,
extension or reissue of patents or copyrights in any and all countries, to vest
title to the Web Site Front End System to ATSI, its successors, assigns or
nominees. Except as provided in Section 4(b) hereof, nothing in this Agreement
shall be construed to vest in Global any proprietary interest in the Web Site
Front End System, and any enhancements to the Web Site Front End System
developed by or for ATSI.
(b) Title to the Global Property, System Enhancements and Global
Modules. Global represents and ATSI hereby acknowledges that Global is or will
be the owner of all right, title and interest in and to the Global Modules, the
System Enhancements, and the Global Property, and any material additional
functionality to the Global Modules, the System Enhancements, and the Global
Property developed by Global, including, without limitation, patents,
copyrights, trademarks and trade secrets. ATSI acknowledges and agrees that,
subject to the underlying intellectual property rights of ATSI to the Web Site
Front End System, the Global Modules, the System Enhancements and Global
Property contain and will contain valuable trade secrets and/or proprietary and
confidential information of Global, and, except as provided in this Agreement,
any right, title and interest to the Global Property, the System Enhancements,
and Global Modules shall vest in Global, including any patents, copyrights,
trademarks, trade secrets, methods of processing, design and structure of
individual programs and their interaction and
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programming techniques employed therein. The Global Modules, the System
Enhancements, and the Global Property shall belong exclusively to Global, with
Global having the right to obtain and to hold in its own name patent
registrations, copyright registrations, or such other protections as may be
appointed to the subject matter and any extensions or renewals thereof. ATSI
agrees to give Global reasonable assistance, at Global's sole cost and expense,
required to perfect and protect the rights defined in this Section 4(b). ATSI
agrees that it will execute and deliver all such further papers as may be
necessary, including original applications and applications for renewal,
extension or reissue of patents or copyrights in any and all countries, to vest
title to the Global Modules, the System Enhancements, and Global Property to
Global, its successors, assigns or nominees.
(c) Confidentiality. ATSI and Global acknowledge that in the course of
performing their responsibilities under this Agreement, they each may be exposed
to or acquire information that is proprietary to or confidential to the other.
ATSI and Global agree to hold such information in strict confidence and not to
copy, reproduce, sell, assign, license, market, transfer, give or otherwise
disclose such information to third parties or to use such information for any
purposes whatsoever, without the express written permission of the other party,
other than for the performance of their respective obligations hereunder, and to
advise each of their employees, agents and representatives of their obligations
to keep such information confidential. All such confidential and proprietary
information, data, code, finances, business plans and computer software are
hereinafter collectively referred to as "Confidential Information." ATSI and
Global shall use their reasonable efforts to assist each other in identifying
and preventing any unauthorized use or disclosure of any Confidential
Information. Without limitation of the foregoing, ATSI and Global shall use
reasonable efforts to advise each other immediately in the event that either
learns or has reason to believe that any person who has had access to
Confidential Information has violated or intends to violate the terms of this
Agreement, and will reasonably cooperate in seeking injunctive relief against
any such person.
(d) Non-Confidential Information. Notwithstanding the obligations set
forth in Section 4(c), the confidentiality obligations of ATSI and Global shall
not extend to information that:
(i) is, as of the time of its disclosure, or thereafter,
becomes part of the public domain through a source other than the receiving
party;
(ii) was known to the receiving party as of the time of its
disclosure;
(iii) is independently developed by the receiving party;
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(iv) is subsequently learned from a third party whose
disclosure of the information does not constitute a direct or indirect breach by
that third party of any confidentiality obligation to the providing party or to
ATSI or Global; or
(v) is required to be disclosed pursuant to court order or
government authority, including as part of any filing with the Securities and
Exchange Commission, whereupon the receiving party shall provide notice to the
other party prior to such disclosure so as to allow sufficient time to oppose
such order or authority's request.
5. WARRANTIES AND DISCLAIMERS.
(a) ATSI represents and Warrants to Global as follows:
(i) Organization. ATSI is a corporation duly organized,
validly existing and in good standing under the laws of Delaware.
(ii) Authorization. This Agreement constitutes ATSI's valid
and legally binding agreement enforceable against it in accordance with the
terms hereof.
(iii) No Violation. Execution and delivery of this Agreement
and the performance of its obligations hereunder are not in violation of, and do
not conflict with or constitute a default under, any of the terms and provisions
of any agreement to which it is expressly a party, indenture or instrument to
which it is bound.
(iv) No Infringement.
(A) There are no claims, disputes, actions, suits or
proceedings, including, without limitation, suits for patent infringement,
pending or, to the knowledge of ATSI, threatened against or affecting the Web
Site Front End System, or the use thereof by Global. Neither the Web Site Front
End System, nor the use thereof by Global as delivered to Global (and excluding
any claims based on use in combination with any other products), does or will
infringe or conflict with any United States patents, United States patent
applications, know-how, processes, trade secrets, techniques, procedures or
other United States proprietary property rights or intellectual property, of or
held by, any Person, nor has any claim (whether or not embodied in an action,
past or present) of such infringement been threatened or asserted, nor is such a
claim pending, against ATSI (or, insofar as ATSI is aware, any entity from which
ATSI has obtained such rights).
(B) The Web Site Front End System shall not violate the United
States intellectual property rights of any third party.
(v) Web Site Front End System. ATSI agrees to develop the Web
Site Front End System in accordance with the Specifications. Global agrees to
cooperate with
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ATSI and to promptly provide ATSI with all information reasonably requested by
ATSI which is required to carry out ATSI's duties under this Agreement. The Web
Site Front End System shall function in accordance with the Specifications for
the later to occur of (i) the period of 60 days after acceptance of the Web Site
Front End System, or (ii) until such time as Global, directly or through its
agents, makes modifications to the Web Site Front End System.
(vi) Year 2000 Compliance. The Web Site Front End System will
be (A) free of any software virus, worm, virus macro, Trojan Horse, or other
such component designed to permit unauthorized access, to disable, erase, or
otherwise harm or maliciously alter software, hardware or data (provided that
this is not a warranty that the system will be virus free after it is used or
combined with other software) and (B) shall not experience any abnormality,
malfunction, or degradation in its operation as a result of changing date values
in connection with moving from the calendar year 1999 to the calendar year 2000
and beyond that arise from an internal systems failure ("Year 2000 Compliant").
Global acknowledges that the Web Site Front End System will interact with third
party software, hardware, systems, databases and computer networks that may
experience abnormality, malfunction or degradation in their operation as a
result of changing date values in connection with moving from calendar year 1999
to calendar year 2000 and beyond, which may in turn cause the Web Site Front End
System to experience abnormality, malfunction or degradation in its operation.
Global agrees that ATSI is in no way responsible for such abnormality,
malfunction or degradation in the operation of the Web Site Front End System
caused by third party software, hardware, systems, databases and computer
networks. ATSI shall take reasonable steps to insure that any third party
software that is integrated into the Web Site Front End System is Year 2000
Compliant.
(b) Each party agrees to indemnify and hold the other party harmless
against any suit, claim, damage, and expense (including reasonable attorneys'
fees) by reason of (i) its negligence or willful misconduct in the course of the
performance of this Agreement or (ii) a breach of its warranties and obligations
under this Agreement (except with respect to section 5(a)(vi), Year 2000
Compliance, with respect to which correction by ATSI of any defect in the Web
Site Front End System in violation of that section shall be the exclusive remedy
of Global).
(c) No Warranties. EXCEPT AS PROVIDED IN THIS AGREEMENT, THE WEB SITE
FRONT END SYSTEM AND THE SYSTEM ENHANCEMENTS ARE LICENSED "AS IS" AND ATSI MAKES
NO REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE WEB SITE FRONT END SYSTEM,
EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE OR THAT THE WEB SITE FRONT
END SYSTEM OR THE SYSTEM ENHANCEMENTS AS DEVELOPED AND DESIGNED WILL MEET ANY
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REQUIREMENTS OR WILL PERFORM ERROR FREE OR IN CONFORMANCE WITH THE NEEDS OR
REQUIREMENTS OF GLOBAL.
(d) Third Party Software. ATSI and Global understand that the Web Site
Front End System, the System Enhancements, the Global Modules and the Global
Property may include certain third party software. It is acknowledged by the
party utilizing such third party software that such party shall be solely
responsible for obtaining licenses to such third party software if such software
is not already in such parties' possession, including the right to incorporate
such software into the Web Site Front End System or the Global Modules. NEITHER
ATSI NOR GLOBAL MAKES ANY WARRANTIES OR REPRESENTATIONS, EXPRESS OR IMPLIED, AS
TO THE QUALITY, CAPABILITIES, OPERATIONS, PERFORMANCE OR SUITABILITY OF THIRD
PARTY SOFTWARE, INCLUDING THE ABILITY TO INTEGRATE WITH MODIFICATIONS TO THE WEB
SITE FRONT END SYSTEM, THE SYSTEM ENHANCEMENTS, THE GLOBAL PROPERTY OR THE
GLOBAL MODULES, AS THE CASE MAY BE, OR OF NEW RELEASES TO INTEGRATE WITH THE WEB
SITE FRONT END SYSTEM, THE SYSTEM ENHANCEMENTS, THE GLOBAL PROPERTY OR THE
GLOBAL MODULES, AS THE CASE MAY BE. The quality, capabilities, operations,
performance and suitability of such third party software lies solely with Global
or ATSI, as the case may be, and the vendor or supplier of such third party
software.
(e) Disclaimer of Warranty. THE WARRANTIES SET FORTH HEREIN ARE LIMITED
WARRANTIES AND ARE IN LIEU OF ALL OTHER WARRANTIES EXPRESS OR IMPLIED. ATSI DOES
NOT WARRANT THAT THE SOFTWARE LICENSED HEREBY WILL MEET SUCH PARTY'S FUTURE OR
UNDISCLOSED REQUIREMENTS.
6. LIMITATION OF LIABILITY.
(a) EXCEPT FOR CLAIMS FOR MISAPPROPRIATION BY ONE PARTY OF THE
INTELLECTUAL PROPERTY OR CONFIDENTIAL INFORMATION OF THE OTHER PARTY, IN NO
EVENT SHALL EITHER GLOBAL'S OR ATSI'S AGGREGATE LIABILITY ARISING OUT OF OR
RELATING TO THIS AGREEMENT FOR ANY REASON AND UPON ANY CAUSE OF ACTION
WHATSOEVER EXCEED THE PAYMENTS MADE UNDER THE LICENSE AGREEMENT. OTHER THAN THE
INDEMNIFICATION OBLIGATIONS SET FORTH IN THIS AGREEMENT, NEITHER ATSI NOR GLOBAL
SHALL HAVE ANY LIABILITY FOR DAMAGES ARISING OUT OF OR IN CONNECTION WITH THE
DELIVERY, USE, OR PERFORMANCE OF THE WEB SITE FRONT END SYSTEM, THE SYSTEM
ENHANCEMENTS, THE GLOBAL PROPERTY OR THE GLOBAL MODULES, WHETHER IN WARRANTY,
CONTRACT, NEGLIGENCE OR STRICT LIABILITY IN TORT.
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(b) NEITHER ATSI NOR GLOBAL SHALL HAVE ANY LIABILITY WITH RESPECT TO
ITS OBLIGATIONS UNDER THIS AGREEMENT OR OTHERWISE FOR SPECIAL, CONSEQUENTIAL,
EXEMPLARY, OR INCIDENTAL DAMAGES, INCLUDING DAMAGES AS A RESULT OF LOST PROFITS
OR BUSINESS INTERRUPTION, EVEN IF IT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.
(c) BOTH ATSI AND GLOBAL AGREE THAT THE OTHER'S AFFILIATES,
REPRESENTATIVES, OFFICERS, DIRECTORS AND ADVISORS SHALL NOT BE LIABLE TO THE
OTHER PARTY UNDER ANY THEORY OF LIABILITY OR ANY FORM OF ACTION.
7. THIRD PARTY INTELLECTUAL PROPERTY RIGHTS.
(a) ATSI Indemnification. Subject to the limitations contained in
Section 6 hereof, ATSI shall indemnify, defend and hold Global harmless from any
liabilities, damages, losses, costs and expenses (including reasonable
attorneys' fees) in the event that Global is subject to a claim that the Web
Site Front End System, as delivered by ATSI, infringes the United States
intellectual property rights of any third party or is enjoined, for any reason,
from using the Web Site Front End System as a result of such claim.
Notwithstanding the foregoing, if Global cannot use the Web Site Front End
System as set out in this Agreement without infringing the patents or
proprietary rights of a third party, ATSI shall have the right to determine the
most effective way of proceeding to obtain such rights, which may include ATSI
negotiating with the third party for a license under the third party's patents,
copyrights, and proprietary rights, subject to reasonable license terms.
Global acknowledges and agrees that the foregoing is the sole
obligation of ATSI in the event of any infringement of any intellectual property
rights of any third party by the Web Site Front End System or any part thereof;
provided, that Global shall give prompt notice, cooperation and assistance to
ATSI relative to any such claim and provided that ATSI shall have the option to
undertake and conduct the defense of any such claim or suit.
If requested by ATSI, Global shall make any reasonable modification of
its use of the Web Site Front End System and shall take such other reasonable
action as ATSI reasonably may request at ATSI's expense in order to avoid suit
for an alleged infringement, to reduce the potential adverse effect of any such
claim, or to settle any alleged infringement claim by making such practice
non-infringing, provided that the functionality of the Web Site Front End System
shall remain substantially the same as before the modifications.
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Except as provided in Section 7(b) below, ATSI shall indemnify, defend
and hold Global harmless from any liabilities, damages, losses, claims, liens,
costs and expenses (including reasonable attorneys' fees) incurred by Global as
a result of any claims or proceedings against Global arising out of or based
upon ATSI's violation of any applicable export provision.
(b) Global Indemnification.
(i) Except as provided in Section 7(a) above, Global shall
indemnify, defend and hold ATSI harmless from any liabilities, damages, losses,
claims, liens, costs and expenses (including reasonable attorneys' fees)
incurred by ATSI as a result of any claims or proceedings against ATSI arising
out of or based upon (i) a claim that the Global Modules, the System
Enhancements or the Global Property infringe the intellectual property rights of
any third party, (ii) the use of the Global Modules, the Global Property or f
the System Enhancements by Global, (iii) the combination, operation or use of
the Global Modules, the System Enhancements or the Global Property with any
hardware, programs or data not supplied and/or recommended for use by ATSI if
such claims or proceedings would have been avoided but for such combination,
operation or use, or (iv) Global's violation of any applicable export provision
or other failure to comply with the provisions hereof.
(ii) Global shall use its reasonable efforts to assist ATSI in
identifying and preventing any unauthorized use, disclosure, or infringement of
the Web Site Front End System or the System Enhancements. Without limitation of
the foregoing, Global shall advise ATSI immediately in the event that it learns
or has reason to believe that any person who has had access to the Web Site
Front End System or the System Enhancements has violated or intends to violate
the terms of this Agreement, and will cooperate in seeking injunctive relief
against any such person.
8. Termination.
(a) Termination. ATSI or Global may terminate this Agreement upon
thirty (30) days (the "Notice Period") written notice of a material breach of
the terms of this Agreement by the other party and failure to cure such breach
within the Notice Period or in the event either party (i) terminates or suspends
its business; (ii) becomes subject to any bankruptcy or insolvency proceeding
under Federal or state statute; or (iii) becomes insolvent or becomes subject to
direct control by a trustee, receiver or similar authority. This Agreement shall
also automatically terminate upon the termination of the License Agreement, such
termination to be effective on the date of termination of the License Agreement.
(b) Termination Obligations. Upon termination of this Agreement for any
reason by either party other than as a result of a material breach of this
Agreement by
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ATSI, Global shall immediately cease use of the Web Site Front End System and
the System Enhancements and shall, within fifteen (15) days of such termination,
return to ATSI all materials furnished to Global by ATSI, including all
documentation pertaining to the Web Site Front End System. Global shall certify
in writing to ATSI, promptly at its request, that all use of the Web Site Front
End System or any portion thereof has been permanently discontinued. Upon
termination of this Agreement hereunder, ATSI's obligation to provide
maintenance or other services hereunder shall cease. In the event of termination
by Global due to an uncured material breach by ATSI, the provisions of section
2(a) shall survive to permit continued use of the Web Site Front End System by
Global.
(c) Termination By Global or Breach By ATSI. In the event (i) Global
terminates this Agreement pursuant to section 8(a) above prior to the Delivery
Date under this Agreement, (ii) ATSI fails to deliver the Web Site Front End
System by the Delivery Date, or (iii) the Web Site Front End System fails to
achieve acceptance in accordance with this Agreement within 120 days after the
Delivery Date then Global shall have the right to require ATSI to deliver to
Global one copy of all notebooks, data, information and other material acquired
or compiled by ATSI in connection with the Web Site Front End System, including
source code, object code and technical documentation, in order for Global to
complete the Web Site Front End System in accordance with the Specifications or
otherwise continue to maintain, modify and enhance the Web Site Front End System
in accordance with the terms hereof. In the case of (i), (ii) or (iii) above
(whether or not Global has exercised its right under the previous sentence),
ATSI shall be obligated to deliver to Global the Web Site Front End System once
it is completed by ATSI. ATSI shall not market, offer to sell, sell or license
the Web Site Front End System to any third party until ATSI has delivered the
Web Site Front End System to Global and Global has accepted it. Any portion of
the Web Site Front End developed by Global pursuant to the provisions of this
section 8(c) shall belong to Global and be part of the Global Modules. Any part
of the Web Site Front End System which was developed and delivered to Global by
ATSI shall remain the property of ATSI and shall be subject to the license
contained in section 2(a) above.
9. Force Majeure. Neither party shall be liable or deemed to be in
default for any delay or failure in performance under this Agreement for
interruption of service resulting directly or indirectly from acts of God, or
any causes beyond the reasonable control of such party.
10. Non-Solicitation. Global and ATSI agree that neither they nor their
subsidiaries or other affiliated companies shall directly or indirectly solicit
for employment, employ or otherwise retain staff of the other party who they
have met as a result of the performance of work under this Agreement during the
term of this Agreement, nor for a period of two (2) years after termination of
this Agreement unless written consent is given by appropriate parties to this
Agreement.
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11. Approvals and Consents. Where agreement, approval, acceptance, or
consent by either party is required by any provision of this Agreement, such
action shall not be unreasonably delayed or withheld.
12. Right to Supervise. ATSI has the sole right and obligation to
supervise, manage, contract, direct, procure, perform, or cause to be performed
all work to be performed by ATSI hereunder unless otherwise provided herein.
13. Independent Contractors. It is expressly agreed that ATSI and
Global are acting hereunder as an independent contractors and under no
circumstances shall any of the employees of one party be deemed the employees of
the other for any purpose. This Agreement shall not be construed as authority
for either party to act for the other party in any agency or other capacity, or
to make commitments of any kind for the account of or on the behalf of the other
except to the extent and for the purposes provided for herein.
14. Notice. Any notice required to be given by either party to the
other shall be deemed given upon receipt if in writing and actually delivered by
overnight courier, or facsimile transmission or deposited in the United States
mail in registered or certified form with return receipt requested, postage
paid, addressed to the notified party at the address set forth above with a copy
to ATSI's counsel, Piper & Marbury L.L.P., 1251 Avenue of the Americas, New
York, New York 10020, attn: Paul J. Pollock, Esq., telecopy: 212-835-6001; and
with a copy to Global's counsel, Gordon Altman Butowsky Weitzen Shalov & Wein,
114 West 47th Street, New York, New York 10036, attn.: Marc Weitzen, Esq.,
telecopy: 212-626-0799. Either party and their counsel may change the address to
which notice is sent by written notice to the other party.
15. Assignment. ATSI may not, without the prior written consent of
Global, assign or transfer (whether by merger, reorganization, consolidation,
sale of all or substantially all of ATSI's assets or otherwise) this Agreement
or any obligation incurred hereunder. Global may assign this Agreement without
consent to a subsidiary or affiliated company now existing or hereafter
organized. This Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors.
16. Severability. If any provision of this Agreement is determined by a
court of competent jurisdiction to be invalid or unenforceable, such
determination shall not affect the validity or enforceability of any other part
or provision of this Agreement.
17. Waiver. No waiver by any party of any breach of any provision
hereof shall constitute a waiver of any other breach of that or any other
provision hereof.
18. Entire Agreement. This Agreement, including the Exhibit attached
hereto, contains the entire Agreement of the parties, and there are no
understandings or
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agreements relative thereto that are not expressed herein. No waiver,
modification or addition to this Agreement shall be valid unless in writing and
signed by ATSI and Global. In addition, the parties agree that this Agreement
shall supersede any and all prior contracts, agreements, or understandings
entered into by the parties.
19. Survival. The obligations, covenants and agreements set forth in
this Section 19 and in Sections 3, 4, 5, 6, 7, 10, 13 and 14 of this Agreement
shall continue beyond the term of the Agreement.
20. Governing Law. This Agreement shall be construed according to the
laws of New York without giving effect to the principles of conflicts of law
thereof. The parties agree that the federal or state courts sitting within the
State of New York shall be the exclusive jurisdiction for governing all matters
arising out of or relating to this Agreement.
21. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
22. Construction. The parties acknowledge that each party and its
counsel have reviewed this Agreement and have participated jointly in
negotiations and drafting of this Agreement. The parties hereby agree that the
normal rule of construction to the effect that ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation of this
Agreement or any amendments or exhibits hereto.
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The parties hereto, by their duly authorized agents, have set their
hands hereto on the date first set forth above.
AUTOMATED TRAVEL SYSTEMS, INC.
By:________________________________
Seth Perelman
President
GLOBAL DISCOUNT TRAVEL SERVICES, LLC
By:________________________________
Terry O'Neal
Manager
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