Exhibit 10(m)
SOFTWARE DEVELOPMENT,
MAINTENANCE, AND LICENSE AGREEMENT
This Software Development, Maintenance, and License Agreement (the
"Agreement") is entered into as of the 31st day of December 1996, (the
"Effective Date"), by and between SABRE Decision Technologies, a division of
The SABRE Group, Inc. ("SDT") and Hawaiian Airlines, Inc. ("Hawaiian").
RECITALS
A. Hawaiian desires to obtain a Yield Management system by acquiring
via license SDT's yield management Software known as AIRMAX VN-TM-.
B. Hawaiian desires to obtain from SDT consulting and maintenance
services in connection with the Software.
C. SDT desires to provide such Software and services pursuant to the
terms and conditions stated in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties hereto agree as follows:
DEFINITIONS
"ACCEPTANCE" shall have the meaning identified in Article 1.03.
"CPI" shall refer to the Consumer Price Index which is the U.S.
Department of Labor all cities average reflecting an inflation index.
"DELIVERY" shall mean the date upon which SDT delivers the Software to
Hawaiian for installation and testing.
"DEVELOPMENT(S)" shall mean any work which is based on the Software as
Delivered including, but not limited to, updates, enhancements, revisions,
modifications, reproductions, adaptations, versions or expansions performed
by SDT on behalf of Hawaiian.
"DOCUMENTATION" shall mean the documentation accompanying the Software
as described in Article 1.04.
"HAWAIIAN'S AFFILIATES" shall mean (i) an entity that owns, directly or
indirectly, more than 50% of the issued and outstanding voting equity of
Hawaiian ("Hawaiian Parent"), (ii) an entity that Hawaiian's Parent owns,
directly or indirectly, more than 50% of the issued and
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outstanding voting equity, (iii) an entity that Hawaiian owns, directly or
indirectly, more than 50% of the issued and outstanding voting equity, and/or
(iv) with the advance written approval of SDT, which shall not be
unreasonably withheld, any third party organization that Hawaiian or
Hawaiian's Affiliate may choose to operate revenue management for the
internal operations of Hawaiian and/or Hawaiian's Affiliate.
"PER DIEM" shall mean SDT's standard charge to compensate its employees
and/or contractors for meals, lodging, and incidental expenses incurred in
connection with the performance of any services hereunder outside the
Dallas/Fort Worth area. The Per Diem amounts will be adjusted from time to
time according to the rates as published by the US government for federal
employees traveling on government business in the particular city where the
work is performed ("OCONUS").
"PROJECT" shall mean the development and implementation of the Software
as described in Exhibits A, and C (if Hawaiian chooses to exercise the
option granted in Article 3.01(b)) and any amendments thereto.
"SOFTWARE" shall mean AIRMAX VN-TM- (which shall contain the
functionality as more fully described in Exhibits A and C (if Hawaiian
chooses to exercise the option granted in Article 3.01(b))) and the Group
Evaluation Module (more fully described in Exhibit A), including any trade
secrets, algorithms, ideas, concepts, methods, techniques, and solution
methodologies contained therein. The term Software shall also include
Documentation.
"STANDARD RATES" shall mean during 1997, the following SDT hourly
billing rates:
JOB TITLE RATES (USD)
--------- -----------
Technical Writer 87.50
Consultant 117.50
Senior Consultant 155.00
Principal 190.00
Senior Principal 235.00
Vice President 462.50
Such rates are subject to increase by no more than the increase in the
CPI established on January 1st of each year of this Agreement or 3% per annum
whichever is less.
"TRANSPORTATION EXPENSES" shall mean confirmed first class tickets from
LAX-HNL-LAX when space is available at the time of booking; otherwise,
tickets shall be coach class, for all SDT representatives in connection with
this Agreement which will be provided to SDT by Hawaiian without cost to SDT,
as well as reasonable local transportation expenses and air transportation
expenses for
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travel between DFW and the nearest Hawaiian U.S. gateway (LAX) incurred by
SDT in connection with this Agreement. SDT shall make all reasonable efforts
to plan trips in advance to secure the lowest fares possible.
ARTICLE I
IMPLEMENTATION
1.01 SITE SURVEY. SDT shall conduct a site survey ("Site Survey") for
the purpose of developing a formal implementation plan. The Site Survey will
be conducted by an SDT representative in Hawaii and will require meetings
with Hawaiian groups necessary for SDT's information gathering.
1.02 DELIVERY AND CUSTOMIZATION. SDT shall Deliver the Software to the
Site (as defined below) pursuant to the time frames contained in the
Implementation Plan defined in Exhibit D except as varied by mutual written
agreement between Hawaiian and SDT ("Delivery"). The detailed implementation
plan, which shall be consistent with Exhibit D, shall be developed jointly by
Hawaiian and SDT and shall fully define the scope of all SDT deliverables and
all Hawaiian dependencies. The Software shall conform in all material
respects with the functionality described in Exhibits A and C (if Hawaiian
chooses to exercise the Group Tracking option granted in Article 3.01(b)). A
detailed Functional Specification describing the Group Tracking module will
be made available to Hawaiian well before the beginning of the 18-month
option exercise deadline defined in Article 3.01(b).
1.03 INSTALLATION, TESTING AND ACCEPTANCE.
(a) After Delivery, SDT shall install system Software, third party
software and hardware at the Site ("Installation") pursuant to the time
frames contained in the Implementation Plan included in Exhibit D. The
hardware and third party software configuration provided by SDT in the Site
Survey report is based on SDT's experience in installing AIRMAX at numerous
sites and represents SDT's best estimate for the configuration suitable for
Hawaiian given the current operating conditions. SDT provides no warranty of
the hardware and third party software configuration and assumes no liability
therefore. Hawaiian shall provide all reasonable and necessary assistance as
requested by SDT during such Installation.
(b) After Installation, SDT shall perform systems testing to determine
material conformity of the Software with the functionality described in Exhibit
A. Hawaiian shall provide all reasonable and necessary assistance as requested
by SDT during such systems testing.
(c) Hawaiian shall perform user acceptance testing of the Software at the
Site (as identified in Article 2.04) for a thirty (30) calendar day period,
pursuant
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to mutually agreed upon test scripts and in accordance with Exhibit B, to
confirm material conformity of the Software with the functionality identified
in Exhibit A. SDT shall provide twenty (20) working days of assistance to
Hawaiian during such user acceptance testing. Hawaiian shall notify SDT
immediately of any material non-conformities between the Software and the
functionality described in Exhibit A. SDT shall make corrections in any such
material non-conformities of the Software to the functionality identified in
Exhibit A and re-submit such previously non-conforming portion for
re-testing. Acceptance shall take place when the Software materially conforms
to the functionality identified in Exhibit A or when the Software is put in
productive use, whichever is earlier ("Acceptance"). Suspension of the
Acceptance Testing period due to a significant number of Level A problems
shall mean that SDT shall re-deliver the Software at which time the user
acceptance period will recommence for a period of thirty (30) calendar days
with SDT support on-site of twenty (20) working days.
1.04 DOCUMENTATION. SDT shall also provide a reasonable number of
copies of the following documentation: System Administration and Operations
Guide, Training Guide, and User Guide. At Hawaiian's request, SDT shall
provide electronic copies of the same documentation in Macintosh Framemaker
format. If Hawaiian requests further detailed documentation, SDT shall
provide same on mutually agreeable terms and conditions. The Documentation
and updates thereto will conform in all material respects with the
Specifications.
1.05 TRAINING. SDT shall provide training and education at SDT's
expense, excluding Transportation Expenses and Per Diem, in Honolulu, Hawaii
which will be paid by Hawaiian, to no more than sixteen (16) Hawaiian
employees (eight (8) per formal training class) in the use of the Software as
follows: three (3) weeks of user training consisting of two, one (1) week
formal training classes and one (1) week of informal training, two (2) days
of systems training for Hawaiian's IT staff, and a one day Yield Management
Seminar.
1.06 PROJECT MANAGEMENT. SDT shall be responsible for allocation of its
personnel and resources in the provision of services hereunder. All SDT
personnel assigned to the Project shall be subject to Hawaiian's reasonable
approval and will comply with Hawaiian's rules and regulations while on-site.
SDT shall, at SDT's expense, furnish Hawaiian with the qualifications of all
personnel and contractors SDT assigns to the Project, including security related
information that may be deemed essential by Hawaiian.
1.07 HAWAIIAN DEPENDENCIES. Hawaiian will provide, at its own expense,
telecommunications access to Hawaiian's current operational systems
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and communications environment. Hawaiian will obtain system software,
hardware items and all third party software as described in the configuration
list to be created during the Site Survey. Hawaiian will be responsible for
executing with the applicable vendor (prior to delivery of the third party
software and hardware), and abiding by the terms of, any applicable third
party license agreements associated with the third-party software items
listed in the configuration list to be created during the Site Survey. SDT
will assist Hawaiian in coordinating support from the vendors of hardware and
third party software including participating in joint telephone calls.
Hawaiian shall be responsible for (1) maintaining all third party software up
to the latest version level used by SDT and (2) maintaining all hardware.
Hawaiian shall prepare the Site according to SDT's and manufacturer's
specifications. Hawaiian shall provide SDT, upon request, all necessary
data, resources, personnel and facilities to support SDT's services provided
hereunder. Any delay in the provision of such support which increases costs
or efforts of SDT hereunder, shall result in commensurably increased charges
to Hawaiian.
ARTICLE II
SOFTWARE LICENSE
2.01 GRANT. SDT hereby grants to Hawaiian, subject to the terms and
provisions of this Agreement and Hawaiian remaining in compliance with its
obligations therein, a limited, non-exclusive, non-transferable, perpetual
right and license to use the Software executable code and Documentation (for
Hawaiian's internal operations and for no other purpose) strictly in
accordance with the terms of this Agreement. Such license shall also enable
Hawaiian's Affiliates to use the Software and Documentation for their own
internal operations (provided that any independent third party organization
(referred to in Clause (iv) of the definition of "Hawaiian Affiliates" above)
may only use the Software for the internal operations of Hawaiian and
Hawaiian Affiliates within the scope of Clauses (i), (ii) or (iii) of such
"Hawaiian Affiliates" definition and not it's own internal operations)
including the control of Hawaiian designated inventory under any code share
arrangements with other airlines. Hawaiian shall ensure that any such third
parties have signed a confidentiality obligation with equivalent terms to
those that apply to Hawaiian under this Agreement. Notwithstanding the
foregoing SDT shall have the right to concurrently terminate the right and
license granted herein in connection with SDT's termination of this Agreement
for Hawaiian's breach pursuant to Article 7.02 hereof and Hawaiian shall
immediately return all Software and other proprietary information to SDT.
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2.02 SOFTWARE COPIES. Hawaiian may make copies of the Software for its
own internal use on Hawaiian workstations connected to the main operating
system, and for back-up data security purposes, but Hawaiian must inform SDT
of how many copies have been made. Hawaiian shall reproduce and include on
each copy and on each partial copy of the Software any copyright notice and
proprietary rights legend contained on or in the Software, as such notice and
legend appear on or in the original.
2.03 MODIFICATIONS. Hawaiian shall make no modifications, alterations,
developments or derivative works of the Software. Hawaiian shall not reverse
engineer, disassemble, compile, reverse compile or decompile the Software.
Hawaiian is permitted to supply data to the Software, modify data used by the
Software and extract data from the Software.
2.04 SITE. SDT shall install the Software at a single site at the
offices of Hawaiian Airlines, Inc. in Hawaii, (the "Site"). Hawaiian may
move the Software to a new Site at any location in the United States at
Hawaiian's discretion and expense.
2.05 EXPORT OF SOFTWARE. Any re-export of the Software by Hawaiian must
be done in compliance with U.S. Department of Commerce regulations.
2.06 BLANK.
2.07 ESCROW AGREEMENT. Hawaiian may, at any time and at its option,
require establishment of a source code escrow. All costs associated with the
creation, administration, access and update of the source code escrow which
are charged by the third party escrow agent shall be borne by Hawaiian.
Within sixty (60) days of the date of this Agreement Hawaiian and SDT shall
(a) select a mutually acceptable independent third party which would serve as
the source code escrow agent, and (b) agree upon the form and content of the
escrow agreement, required deliveries and all other reasonably related
matters. In the event the parties cannot agree within one hundred and twenty
(120) days, either party may submit this to binding arbitration.
2.08 NO SUBLICENSE. Except with respect to an Hawaiian Affiliate,
Hawaiian shall not transfer, assign, or sublicense this Agreement or the
license of the Software or any component thereof to any person or entity,
whether by operation of law or otherwise, without the prior written consent
of SDT.
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ARTICLE III
FEES AND CHARGES
3.01 LICENSE FEES.
(a) Hawaiian agrees to pay to SDT license fees in the amount of Four
Hundred Ninety Five Thousand United States Dollars (US$495,000), as per
payment schedule in Article 3.06(a).
(b) GROUP TRACKING OPTION. Hawaiian will have the option, upon prior
written notice to SDT, to acquire a perpetual executable code license for the
AIRMAX-TM- Group Tracking Module, as more fully described in Exhibit C, and
Hawaiian will pay SDT additional license fees in the amount of Fifty Thousand
United States Dollars (US$50,000) and additional Implementation Fees in the
amount of Five Thousand United States Dollars (US$5,000), as per the payment
schedule in Article 3.06(d). This option shall become available twelve (12)
months from the Effective Date of this Agreement and must be exercised within
thirty (30) months from the Effective Date of this Agreement. If the
Software is not delivered for any reason by the original Delivery date
identified in the Implementation Plan (Exhibit D), the thirty (30) month
option exercise deadline shall be automatically extended by the number of
days between the original Delivery date identified in the Implementation Plan
and the date of actual Delivery. Upon receipt of written notice that
Hawaiian intends to exercise this option, SDT and Hawaiian shall develop a
reasonable implementation plan specific to the Group Tracking Module.
3.02 IMPLEMENTATION FEES. Hawaiian shall pay SDT for implementation
efforts (excluding implementation of the connection of the Software to the
revenue accounting system) the firm fixed price of Three Hundred Eighty
Thousand United States Dollars (US$380,000) as per payment schedule outlined
in Article 3.06(b). SDT would be pleased to negotiate with Hawaiian a
mutually agreed implementation fee for the connection of the Software to the
Hawaiian revenue accounting system.
3.03 MAINTENANCE FEES. For Maintenance Services, Hawaiian shall pay
SDT, in advance, a monthly maintenance fee of Three Thousand Seven Hundred
Fifty United States Dollars (US$3,750) ("Maintenance Fee") commencing at the
end of the Warranty Period (defined in Article 8.04 below). The Maintenance
Fee is subject to adjustment from time to time by no more than 3% per annum
or the increase in the U.S. Department of Labor Consumer Price Index, all
cities average ("C.P.I."), from the CPI established as of January 1, 1997,
whichever is less.
3.04 TRAVEL EXPENSES. Hawaiian shall pay SDT, in addition to all other
amounts identified herein, Per Diem charges, as defined in the Definitions
section of this Agreement. The Per Diem amounts will be adjusted from time to
time
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according to the rates as published by the US government for federal
employees traveling on government business in the particular city where the
work is performed ("OCONUS").Additionally, Hawaiian shall pay Transportation
Expenses as described in the Definitions section of this Agreement.
3.05 DEVELOPMENT ENVIRONMENT. SDT shall be permitted to use the
hardware and third party software described in the configuration list to be
created during the Site Survey, which shall be shipped to the offices of SDT
in Dallas/Fort Worth initially for the purpose of performing the development
work. Thereafter, Hawaiian shall arrange shipping of such hardware and third
party software to its own Site at Hawaiian's expense.
3.06 PAYMENT SCHEDULE.
(a) License fees shall be due and payable in sixty (60) equal monthly
payments of Eight Thousand Two Hundred Fifty United States Dollars
(US$8,250), with the first such payment due upon Acceptance.
(b) Implementation/Customization fees shall be due and payable as
follows:
Thirty three percent (33%) upon execution of this Agreement,
Thirty four percent (34%) upon Delivery of the Software,
Sixteen percent (16%) upon Acceptance of the Software and
Seventeen percent (17%) upon end of the Warranty Period..
(c) All fees, expenses and charges hereunder shall be payable upon the
issue of a proper and accurate invoice to Hawaiian through American Airlines,
Inc. ("American") via American's IATA Clearing House account, and Hawaiian
will pay such invoices through such account pursuant to the procedures of the
IATA Clearing House. Any request by Hawaiian for back-up documentation
relating to a particular SDT invoice must be received by SDT within thirty
(30) days of receipt of such invoice by Hawaiian.
(d) In the event Hawaiian exercises such option within the time period
identified in Article 3.01(b), Group Tracking Option License and additional
Implementation Fees shall be due and payable as follows:
Thirty three percent (33%) upon SDT's receipt of written notice,
Thirty four percent (34%) upon Delivery of the Group Tracking Module, and
Thirty three percent (33%) upon Acceptance of the Group Tracking Module.
3.07 TAXES. Hawaiian shall reimburse SDT as additional fees for (i) all
taxes, duties and like charges, including any interest and penalties assessed
by the taxing authorities, imposed on SDT arising from this Agreement, except
U.S. income taxes, (ii) any additional taxes, including U.S. income taxes,
imposed on
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SDT as a result of any reimbursement of taxes under clause (i) or (ii) of
this Article 3.07.
3.08 INCIDENTAL EXPENSES. Hawaiian agrees to pay the actual costs
incurred by SDT for any incidental expenses (other than those identified
herein) incurred for consulting, professional and technical services
requested by and rendered to Hawaiian, provided that such expenditure has
been approved by Hawaiian in advance. All such expenses shall be incurred
only upon the prior mutual written agreement of the parties. Upon Hawaiian's
request, SDT shall furnish receipts for all items over Twenty Five Dollars
(US$25).
3.09 SITE SURVEY FEES. The Site Survey fees, excluding Per Diem amounts
and Transportation Expenses, are included in the implementation fees
identified in Article 3.02.
3.10 INTEREST. Interest on late payments shall accrue at the rate of
18% per annum or the highest rate permitted by Texas law, whichever is less,
from the date such amount is due until finally paid.
ARTICLE IV
MAINTENANCE AND SUPPORT OF SOFTWARE
4.01 GENERAL. SDT shall provide maintenance and support services
relating to the Software pursuant to the terms contained herein. Hawaiian
will have access to SDT's Help Desk Supported Full Software Maintenance and
Support Service (the "Maintenance and Support Services") in exchange for the
Maintenance and Support fees as defined in Article 3.01, plus Per Diems and
Transportation Expenses, commencing at the end of the Warranty Period, and
continuing for the License Term, after which, Maintenance and Support
Services shall be separately negotiated. SDT will provide Maintenance and
Support Services for each year of the License Term, as follows:
4.02 CORRECTION OR REPLACEMENT. SDT shall provide (a) 300 labor hours
per year in Year 1 of the Maintenance and Support Services, (b) 250 labor
hours per year in Year 2 of the Maintenance and Support Services, (c) 200
labor hours per year in Year 3 of the Maintenance and Support Services, (d)
200 labor hours per year in Year 4 of the Maintenance and Support Services,
and (e) 150 labor hours per year in Year 5 of the Maintenance and Support
Services, to provide the services necessary to remedy any programming error
which is attributable to SDT and which is applicable to only the Hawaiian
implementation or operation of the Software. Such correction or replacement
services shall commence promptly after
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Hawaiian has identified and notified SDT of any such error in accordance with
SDT's reporting procedures. Labor hours allocated for the year shall be
utilized only for requests received by SDT no less than 60 days before the
end of the applicable contract year except those hours applied to correcting
problems with the Software. Any remaining labor hours not so utilized shall
be available for use in the immediately following year of the Maintenance and
Support Services only. Additional labor hours will be provided at SDT's
Standard Rates plus Per Diem amounts and Transportation Expenses. Labor
hours provided to correct errors identified during the Warranty Period shall
not be deducted from the hours provided herein. Labor hours may also be
applied to, among other things:
(i) General consulting and technical services,
(ii) Additional training, and
(iii) Integration of Updates/Enhancements
4.03 SDT HELP DESK. (a) Hawaiian shall have access to a Help Desk
located at SDT offices in Dallas/Fort Worth twenty-four hours a day seven
days a week. The Help Desk will be responsible for facilitating error
correction or replacement services as identified in Article 4.02. A Help
Desk Coordinator will be responsible for logging and tracking such problems
after they have been reported by Hawaiian, contacting the Hawaiian Technical
Coordinator (as defined below) to confirm receipt of the problem report and
jointly determining the priority level of the problem. Priority levels will
be determined as follows:
(i) Level "A" problems. These are problems with Software
functionality which are significant in terms of impact to the
productive use of the Software by Hawaiian. Hawaiian will be
advised at least every twenty-four (24) hours by the Help Desk as
to the status of efforts to resolve the Level A problem. One or
more members of SDT senior management will be informed on a daily
basis of all Level A problems.
(ii) Level "B" problems. These are Software problems which
are not significant to the productive use of the Software. These
problems will be addressed within 5 normal working days after any
Level A problem has been resolved.
(iii) Level "C" problems. These are low priority problems
that are planned to be addressed in the next scheduled Software
update.
(b) SDT Help Desk will provide Hawaiian a monthly report showing a
summary of all problems reported during the previous month, and a status of
all outstanding problem logs.
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4.04 SOFTWARE UPDATES AND ENHANCEMENTS. SDT will promptly notify Hawaiian
of the availability of all Software Updates and Enhancements. Hawaiian shall
have the right to obtain access to Software Updates developed by SDT free of
charge. At Hawaiian's election, SDT shall provide and install at least one
update per year to Hawaiian during the term of the Maintenance and Support
Services. Hawaiian shall use the latest Updates of the Software in order to
continue to receive Support and Maintenance Services. Hawaiian shall also have
the right to review Software Enhancements (executable code only) developed by
SDT. Enhancements will be available to Hawaiian no later than any other actual
or prospective customer of SDT. Pricing of each Enhancement to Hawaiian shall
be at a level at least as favorable to that offered to any other current or
prospective user of the Software. For the purposes of this Article 4.04, (a)
"Updates" shall mean Software versions produced to correct errors or "bugs" or
to accommodate upgraded versions of operating environments, and (b)
"Enhancements" shall mean Software versions produced which add material new
functionality to existing Software. Updates, Enhancements and corrections
obtained by Hawaiian herein shall be governed by the terms of the Agreement and
shall be included within the term "Software" for all purposes. All Updates and
Enhancements will fully support and not diminish any customized features and
functionality that SDT is developing for Hawaiian as part of this Agreement.
4.05 RESPONSIBILITIES OF HAWAIIAN. Hawaiian agrees to:
(a) Inform SDT in writing of any modifications made by Hawaiian to the
hardware or operating software configuration which may affect the Software.
Hawaiian shall not make any modifications to the Software.
(b) During normal Hawaiian business hours provide on-site, a technical
coordinator trained in Software administration, operations and preventative
maintenance procedures (the "Technical Coordinator").
(c) Promptly communicate to SDT all Software malfunctions and errors by
telephoning or by telecopying a Problem Report from Hawaiian's Technical
Coordinator. Prior to the communication, the Technical Coordinator shall (as
needed) coordinate with the Software user, hardware and operating system
vendors and third party software vendors, and the qualified LAN administrator
to confirm the problem as originating from the Software.
(d) Be responsible for maintaining a procedure for data files and
program backups, reconstruction of lost or altered files, data, or programs,
and for actually reconstructing any lost or altered files, data or programs.
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(e) Provide SDT with sufficient support and test time on Hawaiian's
computer system to duplicate the problem, certify that the problem is with
the Software, and certify that the problem has been corrected.
(f) Maintain for the term of the Maintenance and Support Services, two
(2) modems (make and model of the modems to be determined by SDT) and
associated dial-up telephone lines for access solely to the Software by SDT
to Hawaiian's computer environment. Hawaiian shall be responsible for the
maintenance and use of such equipment and associated telephone line use
charges.
(g) Implement all Updates provided by SDT.
(h) Comply with any other reasonable request of SDT in connection with
the performance of services hereunder.
4.06 MODIFICATIONS. SDT may, at its discretion, with no additional
charge to Hawaiian, make modifications to the Software. Such Modifications
shall not cause the Software to deviate adversely from the Functional
Specification provided in Exhibit A, jeopardize the functionality of the
Software or coverage of the Software under this Article IV. The timing for
installation and testing of such modifications shall be within the reasonable
discretion of Hawaiian.
4.07 USER GROUP. Hawaiian shall obtain automatic membership in SDT's
AIRMAX-TM- User Group that will meet regularly with the specific objective of
exchanging ideas relating to AIRMAX-TM-. The costs associated with
participation at User Group meetings, and other related costs, will be borne
by the individual members of the User Group.
4.08 REMEDY. In the event, after Acceptance, that SDT notifies Hawaiian
that it will be unable to correct an error or defect, Hawaiian may at its
option, and as its sole and exclusive remedy, terminate the Maintenance and
Support Services. Upon such termination, neither party shall have any
obligation or liability to the other in connection with such Maintenance and
Support Services, except that SDT shall reimburse Hawaiian for all License
Fees and Maintenance and Support Services Fees actually paid up to the
effective date of termination hereunder, Implementation Fees actually paid
up to the effective date of termination hereunder depreciated in a straight
line over 5 years, and the depreciated value (in a straight line over 5
years) of any hardware and third party software purchased at the written
direction of SDT expressly to operate the Software that Hawaiian and SDT
mutually agree cannot reasonably be re-used by Hawaiian. Hawaiian agrees
that SDT takes the ownership of such hardware and software licenses, all of
which will be promptly shipped to SDT, and all third party
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license agreements and warranties from the corresponding manufacturers will
be transferred or assigned to SDT.
4.09 PERFORMANCE. In the event that SDT fails for any reason other
than Force Majeure or other than through the fault of Hawaiian, its agents,
assigns, Affiliates or third parties under the control of Hawaiian or in
contractual or fiduciary relationship with Hawaiian, to maintain a system
uptime of 90% measured over a full calendar year, commencing at the end of
Acceptance, Hawaiian shall have the right to receive credit SDT Labor Hours
as its sole and exclusive remedy. Ten (10) Labor Hour credits shall be
awarded to Hawaiian by SDT for every one (1) percentage point below the 90%
threshold. Such hours will be added to the Total hours awarded annually
under Article IV, Maintenance and Support of Software, and will be utilized
as provided in Article 4.02.
ARTICLE V
MARKETING RIGHTS
5.01 OWNERSHIP. SDT shall retain all ownership rights in the Software
including any Development, including, without limitation, all copyrights and
other intellectual property rights.
5.02 MARKETING RIGHTS. SDT shall have the exclusive right to market,
sell, distribute and license all or any portion of the Software, including
any Development to third parties.
5.03 DEMONSTRATION. Upon prior notice to and consent of Hawaiian, such
consent may be withheld at Hawaiian's sole discretion, SDT may demonstrate
the Software at the Site, at a mutually agreeable time to any SDT client or
prospective client. The parties shall take all reasonable measures to
protect the confidentiality of Hawaiian data during such demonstration.
5.04 PROMOTIONS. SDT may disclose to prospective or existing clients
that Hawaiian has licensed the Software from SDT and that SDT is providing
consulting services to Hawaiian. Promptly after execution of this Agreement,
the parties shall issue a mutually acceptable press release relating to this
Agreement.
5.05 OTHER PRODUCTS. Except for Enhancements within the scope of
Section 5.06 and subject to SDT's confidentiality obligations in Article VI,
nothing herein shall prohibit, or in any way limit, SDT's rights to use,
develop or market existing or subsequently developed or modified software,
technology, ideas, inventions or concepts, or to use its expertise, skills or
knowledge acquired in the performance of services rendered under this
Agreement in any current or subsequent endeavors. Hawaiian shall have no
right or interest in such endeavors.
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5.06 HAWAIIAN SPONSORED ENHANCEMENTS. In the event of future
Enhancements requested by Hawaiian and developed by SDT explicitly for
Hawaiian, Hawaiian will pay SDT Standard Rates and will obtain ownership of
that Enhancement, but will only use it for the internal use of Hawaiian or
Hawaiian Affiliates only.
ARTICLE VI
CONFIDENTIALITY
6.01 SDT CONFIDENTIAL INFORMATION. Hawaiian, its agents, assigns,
Affiliates or third parties under the control of Hawaiian or in contractual
or fiduciary relationship with Hawaiian (Hawaiian shall ensure that such
independent third parties have signed a confidentialty obligation with
equivalent terms to those applied to Hawaiian under this Agreement) shall
maintain the confidentiality of the Software and the Documentation, using the
highest degree of care that Hawaiian uses to protect its own most sensitive
information. Except as specifically permitted in this Agreement, Hawaiian
shall not use, sell, transfer, publish, disclose, display, or otherwise make
available to others the Software, Documentation, or any derivative,
enhancement or modification thereto, or any information or material relating
to the Software, Documentation or any derivative, enhancement or modification
thereto ("SDT Confidential Information") at any time before or after the
termination of this Agreement. Hawaiian shall limit access to the Software
and Documentation to employees with a need to know.
6.02 HAWAIIAN CONFIDENTIAL INFORMATION. Except in connection with a
mutually agreeable demonstration as identified in Article 5.03, SDT shall
maintain the confidentiality of all confidential and proprietary data
relating to Hawaiian's revenue management operations ("Hawaiian Confidential
Information"), obtained through the provision of services under this
Agreement, using the highest degree of care that SDT uses to protect its own
most sensitive information. Except as specifically permitted in this
Agreement, SDT shall not use, sell, transfer, publish, disclose, display, or
otherwise make available to others the Hawaiian Confidential Information at
any time before or after the termination of this Agreement. SDT shall limit
access to the Hawaiian Confidential Information to employees with a need to
know.
6.03 EXCEPTIONS. Notwithstanding the foregoing, either party may
release the Confidential Information of the other, upon prior notification to
the other, that is subject to subpoena, court order, or other governmental
order or regulation.
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6.04 ASSISTANCE. Each party shall use its best efforts in assisting the
other in identifying and preventing any unauthorized use or disclosure of SDT
Confidential Information or Hawaiian Confidential Information, as applicable.
ARTICLE VII
DEFAULT, TERMINATION AND REMEDIES
7.01 PRE-ACCEPTANCE DEFAULT. To the extent that SDT fails through its
own fault to meet the Delivery date identified in the Implementation Plan
defined in Exhibit D or other Delivery date which has been mutually agreed by
Hawaiian and SDT in writing ("Failure"), and if such Failure continues for a
period of thirty (30) days after such date Hawaiian shall optionally (at
Hawaiian's discretion) have the right, as its sole and exclusive remedy
(other than the remedy set forth below), to receive credit as follows (with
Hawaiian entitled to choose at any time between credits for Labor Hours,
License Fees or some combination thereof): (a) SDT Labor Hours, 7.5 Labor
Hour credits shall be awarded to Hawaiian by SDT for every one (1) day of
Failure between thirty one (31) days and sixty (60) days, and 12.5 Labor Hour
credits shall be awarded for every one (1) day of Failure between sixty one
(61) days and ninety (90) days, and 17.5 Labor Hour credits shall be awarded
for every one (1) day of Failure between ninety one (91) days and one hundred
and nineteen (119) days (such hours will be added to the Total hours awarded
annually under Article IV, Maintenance and Support of Software, and will be
utilized as provided in Article 4.02 or (b) SDT license fees, Xxx Xxxxxxxx
Xxx Xxxxxxx xxx Xxxxxx Xxxx Xxxxxx Xxxxxx Dollars (US$1,125) license fee
credits shall be awarded to Hawaiian by SDT for every one (1) day of Failure
between thirty one (31) days and sixty (60) days, and One Thousand Eight
Hundred and Seventy Five United States Dollars (US$1,875) license fee credits
shall be awarded for every one (1) day of Failure between sixty one (61) days
and ninety (90) days, and Two Thousand Six Hundred and Twenty Five United
States Dollars (US$2,625) license fee credits shall be awarded for every one
(1) day of Failure between ninety one (91) days and one hundred and nineteen
(119) days and if such Delivery Failure continues for a total period of one
hundred and twenty (120) days after such date Hawaiian shall have the right,
as its sole and exclusive remedy, to terminate this Agreement. In the event
of such termination, neither party shall have any liability to one another
for any loss or expense, except that SDT shall reimburse Hawaiian for all
Implementation Fees actually paid up to the
15
effective date of termination hereunder and the amounts actually paid for any
hardware and third party software purchased at the written direction of SDT
expressly to operate the Software that Hawaiian and SDT mutually agree cannot
reasonably be re-used by Hawaiian. Hawaiian agrees that SDT takes the
ownership of such hardware and third party software which will be promptly
shipped to SDT.
7.02 OTHER BREACHES. Subject to the terms of Article 7.01, in the event
that either party breaches any other material term or condition of this
Agreement, and such breach continues for a period of sixty (60) days after
notice from the other party, (except for (a) a breach regarding failure to
pay amounts due, in which case the period to cure shall be thirty (30) days,
(b) a breach regarding a Level A problem under Maintenance and Support, in
which case the period to cure shall be fifteen (15) days, and (c)) a breach
regarding a Level B problem under Maintenance and Support, in which case the
period to cure shall be thirty (30) days) the other party may terminate this
Agreement immediately upon notice.
7.03 RETURN OF MATERIALS. In the event of termination of this
Agreement, Hawaiian shall promptly return to SDT the Confidential
Information, including the Software and all copies thereof, and all
Documentation, notes and materials related thereto. Similarly, SDT shall
return to Hawaiian all Confidential Information provided by Hawaiian. For
the avoidance of doubt the Option as identified in Article 3.01(b) shall
become null and void in the event of termination.
ARTICLE VIII
LIMITATION OF WARRANTIES
8.01 The parties understand that, considering the current state of the
art, it is not possible to exclude technical software problems, to
manufacture faultless software and to cure all defects. SDT does not warrant
the absence of any defects, operation without any interruption, the
possibility of combining the Software with other programs, or special
requirements which are not expressly contained in Exhibit A. No specific
characteristics or functions are to be provided except as set forth in
Exhibit A. The sole obligation of SDT, with respect to the services and
products supplied to Hawaiian hereunder, shall be to furnish them in
accordance with the terms herein. Nothing in this Article 8.01 shall be
construed to limit Hawaiian's express remedies under Article 7.02.
8.02 If, during the Warranty Period (defined below), the Software is not
in substantial conformity with the functionality identified in Exhibit A
("error"),
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written notice thereof shall be given to SDT promptly, but not later than ten
(10) days after discovery of the error. All documents required for error
identification must be attached. At SDT's request, additional error-related
information shall be supplied.
8.03 Provided that the above procedures relating to error reporting and
documentation have been complied with, and SDT is able to reproduce the
error, SDT will remove the error, supply a modified or improved software
version suited for the contractually contemplated purpose or make available a
by-pass solution. The priority levels for errors identified during the
Warranty Period shall be determined as follows:
(i) Level "A" problems. These are problems with Software
functionality which are significant in terms of impact to the
productive use of the Software by Hawaiian. Hawaiian will be
advised at least every twenty-four (24) hours by the Help Desk as
to the status of efforts to resolve the Level A problem. One or
more members of SDT senior management will be informed on a daily
basis of all Level A problems.
(ii) Level "B" problems. These are Software problems, which
are not significant to the productive use of the Software. These
problems will be addressed in a reasonable time after any Level A
problem has been resolved.
(iii) Level "C" problems. These are low priority problems
that are planned to be addressed in the next scheduled Software
update.
8.04 The above warranty obligations shall continue for a period of three
(3) months commencing from the date of Acceptance ("Warranty Period") or
whilst a Level A problem remains to be corrected up to a maximum of six (6)
months, whichever is the later date..
8.05 Any warranty by SDT shall not apply to any loss or damage which is
caused by Hawaiian, its customers or third parties and for any breakdown and
error due to improper use, improper installation, natural wear and tear,
improper handling and maintenance (unless done by SDT), improper operating
means, modifications of the Software by Hawaiian, any tampering with the
Software or chemical, electro-chemical or electric influences, accident,
fire, water and the like. Investigation and error correction under these
circumstances shall be performed at SDT's Standard Rates plus Per Diem
amounts and Transportation Expenses.
8.06 If, at any time, Hawaiian elects to install the hardware and third
party software described in Exhibit E ("Recommended List"), SDT warrants that
17
the Recommended List together with the Software will adequately handle
Hawaiian's passenger and flight departure volumes as of the date hereof.
8.07 EXCEPT AS PROVIDED IN THIS ARTICLE VIII, THE SOFTWARE AND ALL
SERVICES HEREUNDER ARE PROVIDED "AS IS" WITH ALL THEIR FAULTS AND WITHOUT ANY
WARRANTY, CONDITION OR REPRESENTATION WHATSOEVER. EXCEPT AS PROVIDED IN THIS
ARTICLE VIII, SDT DISCLAIMS ALL WARRANTIES, CONDITIONS OR REPRESENTATIONS OF
THE SOFTWARE AND SERVICES PROVIDED BY SDT HEREUNDER, WHETHER EXPRESS OR
IMPLIED, INCLUDING ANY WARRANTIES, CONDITIONS OR REPRESENTATIONS OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE SOFTWARE AND
SERVICES OR THOSE IMPLIED WARRANTIES, CONDITIONS OR REPRESENTATIONS ARISING
OUT OF COURSE OF PERFORMANCE, COURSE OF DEALING, USAGE OR TRADE OR ANY OTHER
WARRANTY, CONDITION OR REPRESENTATION. NO REPRESENTATION OR OTHER
AFFIRMATION OF FACT, INCLUDING, WITHOUT LIMITATION, STATEMENTS REGARDING
CAPACITY, SUITABILITY FOR USE, OR PERFORMANCE OF THE SOFTWARE OR SERVICES
SHALL BE DEEMED A WARRANTY, CONDITION OR REPRESENTATION FOR ANY PURPOSE OR
GIVE RISE TO ANY LIABILITY OF SDT WHATSOEVER.
ARTICLE IX
LIMITATION OF LIABILITY
(A) EXCEPT FOR LIABILITY FOR GROSS NEGLIGENCE OR WILLFUL MISCONDUCT,
AND LIABILITY FOR PERSONAL INJURY AND/OR TANGIBLE PERSONAL PROPERTY DAMAGE,
HAWAIIAN WAIVES ALL LIABILITY OF SDT FROM NEGLIGENCE, WHETHER CONTRIBUTORY,
SOLE OR JOINT.
(B) UNDER NO CIRCUMSTANCES SHALL SDT BE LIABLE TO HAWAIIAN FOR
INDIRECT, SPECIAL, OR CONSEQUENTIAL DAMAGES, INCLUDING, WITHOUT LIMITATION,
LOST DATA, PROFITS OR REVENUES.
(C) EXCEPT IN CASES OF GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, OR
INTELLECTUAL PROPERTY INFRINGEMENT PURSUANT TO ARTICLE XIV HEREOF, AND EXCEPT
FOR PERSONAL INJURY AND TANGIBLE PERSONAL PROPERTY DAMAGE, THE MAXIMUM
LIABILITY OF SDT SHALL NOT IN ANY CASE EXCEED THE AMOUNT ACTUALLY PAID TO SDT
HEREUNDER FOR THE PRODUCT OR SERVICE WHICH FORMS THE
18
BASIS OF THE CLAIM, PROVIDED THAT FOR A CLAIM UNDER ARTICLE 7.01 THE MAXIMUM
LIABILITY OF SDT SHALL ADDITIONALLY INCLUDE THE AMOUNTS ACTUALLY PAID FOR ANY
HARDWARE AND THIRD PARTY SOFTWARE AS APPLICABLE.
ARTICLE X
DISPUTE RESOLUTION AND GOVERNING LAW
10.01 All disputes between the parties in connection with this Agreement
shall first be discussed in good faith between the parties to try to find an
amicable solution.
10.02 If no further agreement has been reached after such negotiations,
then either party, upon thirty (30) days notice to the other party
identifying with particularity those areas in dispute, may submit such
dispute to binding arbitration. Any such arbitration shall be held at Los
Angeles, California, under the Rules of Commercial Arbitration of the
American Arbitration Association and shall be conducted in English. The
arbitration panel shall consist of three arbitrators. The parties shall each
nominate an arbitrator within thirty (30) days of the notice submitting the
dispute and the nominated arbitrators shall agree on the third arbitrator
within thirty (30) days after the both of them have been nominated. Each
party shall be entitled to notice and conduct no more than four (4)
depositions (with a deposition pursuant to a Corporate Designee Notice
counting as one (1) deposition) and to propound and serve no more than one
(1) set (each) of Interrogatories, Requests for Admission and Document
Production Requests.
10.03 The parties agree that the award of the arbitration shall be the
sole and exclusive remedy between the parties regarding any claims,
counterclaims, issues or accounting presented or pled to the arbitrators;
that the award must be consistent with the terms and conditions of this
Agreement; that it shall be made and shall be payable in accordance with the
award in U.S. Dollars free of any tax, deduction or offset.
10.04 This Agreement shall be deemed to have been entered into and shall
be construed and interpreted in accordance with the laws of the State of
Texas without regard to its conflict of laws rules.
10.05 Nothing contained herein shall limit either party from obtaining
injunctions or seeking other equitable relief from an appropriate court.
10.06 ATTORNEYS' FEES. Should any party institute any action or
proceeding to enforce this Agreement or any provision hereof, or for damages
by reason of any alleged breach of this Agreement or any provision hereof, or
for a
19
declaration or rights hereunder, the prevailing party in any such action or
proceeding shall be entitled to receive from the other party all costs and
expenses, including without limitation its reasonable attorneys' fees and
disbursements incurred by the prevailing party in connection with such action
or proceeding.
ARTICLE XI
NOTICES
All notices required to be made under this Agreement shall be written in
English, effective upon receipt or transmission, and delivered via U.S. Mail
or in person or sent by telecopy transmission to the following persons:
If to SDT:
President of SABRE
Decision Technologies
MD 4462
X.X. Xxx 000000
Xxxxxx/Xxxx Xxxxx Xxxxxxx, XX 00000-0000
Fax: (000) 000-0000
With a copy to:
Managing Director
Airline Management Services, Inc.
X.X. Xxx 000000
Xxxxxx/Xxxx Xxxxx Xxxxxxx, Xxxxx 00000-0000
Fax: (000) 000-0000
If to Hawaiian:
Xxx X. Xxxxx, Esq.
Corporate Secretary
Hawaiian Airlines, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxx X-000
Xxxxxxxx, Xxxxxx 00000
Fax: (000) 000-0000
With a copy to:
Xxxxx Xxxxxxxxx
Vice President
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Hawaiian Airlines, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxx X-000
Xxxxxxxx, Xxxxxx 00000
Fax: (000) 000 0000
ARTICLE XII
NO SOLICITATION
Neither party shall solicit for employment or retain the services of the
employees, former employees, or contractors of the other party who provided
services in connection with this Agreement from the date of this Agreement
for a period of two (2) years from the date of Acceptance.
ARTICLE XIII
FORCE MAJEURE
Each party shall be relieved of the obligations hereunder to the extent
that its performance is delayed or prevented by any cause beyond its
reasonable control, including without limitation, acts of God, public
enemies, war, civil disorder, fire, flood, explosion, failure of
communication facilities, labor disputes or strikes, or any acts or orders of
any governmental authority.
ARTICLE XIV
INFRINGEMENT INDEMNITY
14.01 SDT will defend, at its expense, any action brought against
Hawaiian and/or Hawaiian's employees, officers, directors, Affiliates, agents
and contractors, to the extent that such action is based on a claim of direct
infringement of any duly issued United States patent, or infringement of any
copyright established in the United States resulting from the supply to
Hawaiian by SDT, or the use by Hawaiian, of the Software as Delivered
("Infringement"). SDT shall pay all damages and costs finally awarded
against Hawaiian and/or Hawaiian's employees, officers, directors,
Affiliates, agents and contractors which are attributable to such
Infringement, provided that SDT is promptly informed in writing and furnished
a copy of each communication, notice or other action relating to the alleged
Infringement and is given authority, information and assistance necessary to
defend or settle such claim. SDT's indemnity obligation shall be
21
limited to the extent that Hawaiian's and/or Hawaiian's employees, officers,
directors, Affiliates, agents and contractors failure to perform the above
has prejudiced SDT's position regarding such Infringement.
14.02 Should the Software as Delivered by SDT hereunder become, or in
SDT's opinion be likely to become the subject of a claim of Infringement,
then SDT may, at its option and expense; (a) procure for Hawaiian the right
to use the Software free of any liability for Infringement; (b) replace or
modify the Software with a non-Infringing substitute otherwise conforming in
all material respects with the functionality identified in Exhibit A, or (c)
repurchase the Software for its depreciated value, and thereby be released
from all liabilities with respect thereto. SDT shall not be obligated to
defend, or be liable for costs and damages, if the Infringement arises out of
(x) use of the Software in combination with or in addition to the equipment
or computer programs not in the Implementation Plan, (y) a breach of this
Agreement by Hawaiian or modification of the Software by Hawaiian or a third
party which was not approved by SDT. The indemnity obligation stated in this
Article XV with respect to SDT shall reciprocally apply to Hawaiian in the
event of a claim arising under circumstances covered under (x)-(y).
14.03 Except as expressly provided for in this Article XIV, Hawaiian
shall defend, indemnify and hold harmless SDT from any and all claims or
causes of action arising out of Hawaiian's or Hawaiian's employees, officers,
directors, Affiliates, agents or contractors use of the Software, and pay any
and all damages and expenses (including reasonable attorneys fees incurred by
SDT) in connection therewith, regardless of the circumstances of the claim or
damage, excluding those circumstances arising out of SDT's negligence, gross
negligence or wilful misconduct.
ARTICLE XV
MISCELLANEOUS
This Agreement constitutes the full and complete agreement of the
parties and supersedes any prior written or oral agreement between the
parties with respect to the subject matter hereof and may be modified only by
a written agreement signed by both authorized officers of both parties. All
obligations
22
hereunder are subject to receipt of all necessary governmental approvals. In
the event any one or more of the provisions of this Agreement shall be
determined to be invalid, unenforceable or illegal, such determination shall
not affect any other provisions of this Agreement, and the invalid,
unenforceable or illegal provision shall be automatically amended to the
extent necessary to make it valid, enforceable and legal. Any rights and
obligations which expressly or by their nature are intended to survive and
continue after termination of this Agreement, including, without limitation
Article V, VI, IX, X and XIV shall so survive and bind the parties, their
successors and assigns. The parties warrant and represent that they are
authorized to enter into this Agreement and that this Agreement is binding
and enforceable against them. The Exhibits to this Agreement are incorporated
herein and are a part of this Agreement as if they were set forth in full
herein. This Agreement may be executed in several counterparts, each of
which shall be an original and all of which shall constitute one and the same
document. Facsimiled signatures shall be treated as originals. Each party
agrees to
23
promptly execute and deliver such documents and promptly to do such other
acts as are reasonably requested by the other party in order to effectuate
the purposes and intent of this Agreement.
HAWAIIAN AIRLINES, INC. THE SABRE GROUP, INC.
/s/ Xxxx X. Xxxxxxxxx /s/ Xxxxxx X. Xxxx
---------------------------------- -----------------------------------
By: Xxxx X. Xxxxxxxxx By: Xxxxxx X. Xxxx
---------------------------
Title: Executive Vice President Title: President, SABRE
--------------------------- Decision Technologies
and Chief Financial Officer
Date: 31 DEC 96
--------------------------- Date:
----------------------------
/s/ Xxxxx X. Xxxxxxxxx
----------------------------------
By: Xxxxx X. Xxxxxxxxx
---------------------------
Title: Vice President
---------------------------
Date: 31 DEC 96
---------------------------
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Exhibit A - Functional Specification
25
Exhibit B - User Acceptance Test Plan
26
Exhibit C - AIRMAX-TM-. Group Tracking Module
27
Exhibit D - Implementation Plan
28
Exhibit E - Recommended List - Hardware and Third Party Software
29