* Confidential treatment has been requested for portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as "*". A complete
version of this exhibit has been filed separately with the Securities and
Exchange Commission.
Exhibit 10.8
Confidential
GENERAL SERVICES AGREEMENT
THIS GENERAL SERVICES AGREEMENT (the "Agreement"), dated as of October 3,
2003 (the "Effective Date") documents the business relationship between SABRE
TRAVEL INTERNATIONAL LIMITED ("SABRE") and TAM LINHAS AEREAS S.A., A BRAZILIAN
CORPORATION ("TAM"), and describes the terms and conditions under which Sabre
will provide to TAM certain services, resources and deliverables. The
obligations of Sabre set forth in this Agreement will be performed by Sabre
itself and through its direct and indirect wholly-owned subsidiaries and/or
Affiliates. All references to Sabre and TAM in this Agreement will be deemed to
include all of their respective subsidiaries and Affiliates. As used herein with
respect to a Party, an "Affiliate" means any individual, corporation,
partnership or other entity recognized by law that controls, is controlled by or
is under the common control of that Party. TAM and Sabre may be referred to in
this Agreement individually as a "Party" and together as the "Parties".
1. TERM. The term of this Agreement will begin on the Effective Date, and,
unless earlier terminated as provided in this Agreement, will continue for
a period of ten (10) years. In addition, if one or more Work Orders (as
defined below) are outstanding when this Agreement expires (whether after
the original term or otherwise), this Agreement will remain in full force
and effect solely for purposes of allowing the activities covered by such
Work Orders to be completed. On the eighth anniversary of this Agreement,
the Parties shall enter into good faith negotiations for the extension of
the Agreement beyond the initial ten-year term.
Additionally, this Agreement shall be governed by two other dates, the
"Implementation Date" and the "Suspension Date", each as defined in the
applicable Work Order.
2. SABRE SERVICES.
(a) ENTRY OF SUBLICENSE AGREEMENT. TAM will enter into an agreement
with Sabre authorizing Sabre to enter into sublicense agreements
with third parties as set forth in the Sublicense Agreement attached
as Exhibit B.
(b) WORK ORDERS FOR SERVICES. During the term of this Agreement, TAM
may request Sabre to provide TAM with such services, resources and
deliverables as are mutually agreed upon from time to time by TAM
and Sabre and confirmed in a mutually acceptable written work order
substantially in the form attached hereto as Exhibit A (the "Work
Order"). This Agreement establishes the standard provisions that
will apply to each Work Order. Each Work Order will include, at a
minimum, (a) a description of the services, resources and
deliverables that Sabre will provide thereunder, (b) TAM's role, if
any, in connection with such services, resources and deliverables
and (c) a description of the charges to be paid by TAM to Sabre in
consideration for such services, resources and deliverables. Each
Work Order will be numbered sequentially beginning with the number
one and, when executed by the Parties, will be attached hereto and
made a part hereof for all purposes. In the event of any express
conflict or inconsistency between the provisions of a Work Order and
the provisions of this Agreement, the provisions of the Work Order
will govern and control with respect to the interpretation of the
conflicting clause of the Work Order; provided, however, that the
provisions of the Work Order will be so construed to give effect to
the applicable provisions of this Agreement to the fullest extent
possible. The work to be performed by Sabre under this Agreement, as
set forth in the Work Orders, is collectively referred to herein as
the "Sabre Services". From time to time Sabre may request certain
products, services and resources from TAM and in any such event,
those requests will be made pursuant to this Agreement and this
Section 2(b) and are collectively referred to as "TAM Services". The
services to be provided by TAM under the Sublicense Agreement and
the TAM Products as defined in said Sublicense Agreement attached on
Exhibit B will not be deemed a TAM Service for the purposes of this
Section 2(b). In any such event, a Work Order with specific terms
mutually agreed by the Parties substantially in the form as attached
in Exhibit A will be used, modified as appropriate for such requests
from Sabre to TAM. Unless otherwise provided in a Work Order, the
provisions of Paragraphs 2(b), 2(c), 2(d), 5(a), 5(b), 5(c), 5(d),
5(e), 5(f), 5(g), 0, 0 ,0 ,00(x), 00(x), 12(b), 12(f)(i), 12(f)(ii),
12 (f) (iii), 18, 19, will be included in the Work Order
1
Confidential
as if TAM were Sabre and Sabre were TAM, as well as an appropriate
indemnity by Sabre for use of the TAM Services (in lieu of Paragraph
13(c)) and an appropriate limitation of liability (in lieu of
Paragraph 15(a)) in favor of TAM for the TAM Services. The
provisions contained in Paragraphs 12(e), 13(c), 13(d) and 14(b)
will not be reciprocal clauses in a Work Order for TAM Services.
(c) DELIVERY. For Work Orders that include licensing of software,
Sabre will use reasonable efforts to provide TAM with the applicable
software in accordance with the project schedule set forth in the
Work Order. Sabre will notify TAM in writing when Sabre believes the
development of the software is complete and will deliver the
software to TAM for installation. TAM will perform all preparatory
work as specified in the applicable Work Order. For any software
systems and databases hosted for TAM from a Data Center operated by
or on behalf of Sabre and remotely accessed by TAM through
telecommunications links (the "Hosted Software"), Sabre will provide
TAM with access to the Hosted Software at TAM's site and will
implement the Hosted Software at the above referenced Sabre Data
Center for TAM's use in accordance with the applicable Work Order.
(d) ACCEPTANCE TESTING. Sabre will conduct such tests as are
practicable to confirm that the applicable software system is
available and functional upon delivery to TAM and that
implementation thereof shall take place with as little disruptionas
may be practicable under the circumstances. Immediately following
delivery to TAM, the Parties will schedule a time for TAM to test
the software to determine if it substantially conforms to the
functionality description contained in the applicable Work Order
("Acceptance Test"). A detailed Acceptance testing procedure (i.e.,
test scripts, identification of testers, test sites, etc.) will be
established jointly and agreed upon in writing by both Parties ten
(10) business days prior to the commencement of such Acceptance
Test. TAM shall notify Sabre in writing immediately of any material
non-conformities between the delivered software system and the
functionality described in the applicable Work Order. TAM's initial
remedy for any such material non-conformity shall be to require
Sabre to make corrections in the non-conformities so that the
software substantially complies with the functionality and to
resubmit such non-conforming portion for retesting within a mutually
agreed period of time (the "Follow-up Acceptance Test"). If the
product is re-submitted and corrections are not reasonably provided,
TAM may terminate the use of the non-conforming portion and Sabre
will refund TAM for the amount paid by TAM to Sabre for such product
in addition other available remedies under this Agreement.
"Acceptance" shall be deemed to take place upon the earlier of (i)
the thirtieth (30th) business day after completion of the Acceptance
Test, unless TAM notifies Sabre in writing of material
non-conformities on or before that date; (ii) the thirtieth (30th)
business day after completion of the Follow-up Acceptance Test,
unless TAM notifies Sabre in writing of material non-conformities on
or before that date; or (iii) the date TAM or its customers commence
use of the software for productive purposes.
(e) WORK ORDER CHANGE REQUESTS. Either Party may, from time to time,
submit to the other Party a Work Order Change Request. If, in the
receiving Party's reasonable judgment, the Change Request can be
implemented without requiring additional time or resources of the
receiving Party, increasing receiving Party's liability, or
affecting the receiving Party's ability to maintain a project
schedule, the receiving Party will implement the change at no
additional cost to the requesting Party. Otherwise, the receiving
Party will provide the requesting Party with a Change Order
Proposal, in the form attached hereto as Exhibit D including: (i)
price change, (ii) estimated impact on project schedule, and (iii)
revised description of Services, including additional terms,
conditions, or duties of the requesting Party, if any. The
requesting Party may, at its discretion, accept or reject the
receiving Party's Change Order Proposal. Change Order Proposals
shall be considered effective upon written consent of both Parties
and will be governed by the terms and conditions of this Agreement.
Each Party shall use all reasonable efforts to respond as
expeditiously as possible to Change Requests and Change Order
Proposals.
2
Confidential
(f) THIRD PARTY REQUESTS. Third party requests for changes impacting
any products or services to be provided pursuant to this Agreement
will be directed to the applicable Party and will be generally
addressed in the manner described in such requests. Any third party
requests that the Parties mutually agree should be accommodated, in
whole or in part will be subject to the development, agreement and
execution of a separate Work Order, which shall be attached to this
Agreement.
3. REPRESENTATIVES. During the term of this Agreement, TAM and Sabre will
each maintain a dedicated representative (hereinafter, the "TAM Account
Manager" and the "Sabre Account Manager") who will be its primary point of
contact in dealing with the other Party under this Agreement and will have
the authority and power to make decisions with respect to actions to be
taken by it under this Agreement. Either Party may change its
representative by giving notice to the other of the new representative and
the date upon which such change will become effective. At the Effective
Date, and each time a change of representative occurs from either Party,
the other Party shall have the right to reasonably object prior to the
candidate's appointment. In performing its obligations under this
Agreement, each Party will be entitled to rely upon any routine
instructions, authorizations, approvals or other information provided to
it by the designated representative of the other Party or, as to areas of
competency specifically identified by such representative, by any other
personnel identified by a Party's representative, from time to time, as
having authority to provide the same on behalf of the Party in such
person's area of competency. Unless a Party knew of any error,
incorrectness or inaccuracy in such instructions, authorizations,
approvals or other information given by the other Party's representative,
a Party will incur no liability or responsibility of any kind in relying
on or complying with any such instructions, authorizations, approvals or
other information provided the relying Party had a good faith belief that
such instructions, authorizations, approvals or information were
consistent with the terms and provisions of this Agreement. Nothing set
forth in this Section 3 shall be deemed to constitute authority of either
Party to alter, amend or modify the terms of this Agreement or any Work
Order except by mutually acceptable written agreement.
4. STEERING COMMITTEE. The Parties agree to establish a steering committee
(the "Steering Committee") to be composed of from Sabre, the Sabre Account
Manager, the Divisional Vice- President, the Technical Delivery Executive
and the Airline Solution Executive and from TAM, the Vice President of
Information Technology, a Senior Manager from the Information Technology
department, a Senior Manager from the Commercial department and the TAM
Account Manager. The Steering Committee will be responsible for: (a)
generally overseeing the performance of each Party's obligations under
this Agreement and (b) making and providing continuity for strategic
decisions with respect to the establishment, prioritization, budgeting and
implementation of the Technology Solution, as "Technology Solution" is
defined in Section 2 of Work Order 1 of this Agreement. Either Party may
change any of its members in the Steering Committee from time to time
through written notice to the other and the Parties may mutually agree to
decrease or increase the size, purpose, composition of the Steering
Committee or create sub committees. Subject to any provisions to the
contrary in this Agreement or in a Work Order, each Party will bear the
costs of participation in such meetings.
The Steering Committee will determine: (a) an appropriate set of periodic
meetings to be held by them and procedures to be followed for such
meetings, including the preparation of agenda and minutes and (b) an
appropriate set of periodic reports to be issued by TAM and Sabre in
connection with such meetings. At a minimum, there will be two annual
Steering Committee meetings to discuss, among other things, the strategic
objectives of the Parties and engage in long range planning.
3
Confidential
5. CHARGES AND TAXES.
(a) PAYMENT OF FEES AND TAXES. In consideration for the performance
of the Sabre Services, TAM will pay to Sabre fees and charges
("Fees" and "Charges") set forth in the applicable Work Order in the
manner indicated therein. In addition, TAM will pay or reimburse
Sabre for any and all present or future sales, use, excise, value
added or similar transfer taxes, fees or charges (including any
related penalties, unless the imposition of such penalties are
directly attributable to the acts or omissions of Sabre), additions
to tax, and interest however designated, levied, assessed, or
imposed, which are in the nature of a transaction tax, fee or charge
or otherwise imposed on the sale of Sabre Services, or this
Agreement if required to be collected by Sabre. Nothing herein will
be construed to require TAM to pay taxes measured on the gross or
net income of Sabre. TAM will directly remit any and all present or
future sales, use, excise, value added or similar transfer taxes,
fees or charges (including any related penalties), additions to tax,
and interest however designated, levied, assessed, or imposed, which
are in the nature of a transaction tax, fee or charge or otherwise
imposed on the sale of Sabre Services, or this Agreement if such tax
is required to be self-assessed by TAM. All payments for fees will
be due and payable within * days after receipt of an invoice from
Sabre. Each invoice will itemize the fees contained therein and will
be accompanied by reasonable detail. All payments due to Sabre under
this Agreement will be made in United States Dollars and free and
clear of any withholdings for present or future taxes.
(b) WITHHOLDING TAXES. If TAM is required by applicable laws to make
any deduction or withholding of taxes from any payment due to Sabre,
then: (a) Sabre shall submit an invoice increased by the amount of
such withholding taxes, as advised by TAM and; (b) TAM will effect
such deduction or withholding, and remit such taxes to the
appropriate taxing authorities and remit a net amount after
deduction for withholding taxes to Sabre which equals the amount
Sabre would have been paid in the absence of such deduction or
withholding for taxes. Nothing herein will be construed to require
TAM to pay taxes measured on the net income of Sabre after allowance
for deductions.
(c) ANNUAL ADJUSTMENT. Unless otherwise specified in an applicable
Work Order, the fees or components thereof designated in any Work
Order hereto shall be increased not more than once a year in an
amount equal to the then current Fee multiplied by the percentage
increase in the most recently published United States Consumer Price
Index for All Urban Consumers (CPI-U) for Dallas, Texas, United
States, Other Goods and Services (as published by the Department of
Labor), measured from the later of the Effective Date or the date
that the then current fee was last adjusted. Prior to the
implementation of the any such increase the Party increasing the
fees will supply the other Party with the adjustment factor and the
calculated increase in any rates charged under any Work Order
subject to such annual adjustments.
(d) MANNER OF PAYMENT. All payments will be made through IATA or
another airline clearing house or at Sabre's option by wire transfer
to a bank account designated by Sabre and in accordance with any
applicable laws.
(e) DISPUTED INVOICES. If any portion of an invoice is subject to a
bona fide dispute, TAM will pay to Sabre on or before the due date
(i) all undisputed amounts due and (ii)* percent ( * %) of any
disputed amount of such invoice. To dispute an invoice, TAM must
notify Sabre of its specific bona fide dispute (which notice must
fully document and describe in detail TAM's position) before the due
date of the invoice being disputed. Within * days of Sabre's receipt
of such notice, Sabre and TAM will negotiate in good faith to
resolve such dispute. Upon resolution of the dispute, any portion of
the unpaid amount due Sabre and determined to be owing to Sabre will
be paid to Sabre immediately. If the dispute regarding payment is
not resolved within ten days unless extended by mutual agreement, it
shall be resolved pursuant to the dispute resolution procedure set
forth in Section 11 of this Agreement.
(f) LATE PAYMENTS. Interest on any late payments shall accrue at the
rate of * percent ( * %) per month from the date such amount became
due until finally paid.
4
Confidential
(g) CURRENCY CONVERSION. A Party will pay the other Party in the
same currency as invoiced by the Party submitting the invoice. If as
result of any governmental rule, regulation or law, it becomes
necessary to convert into any other currency (the "Foreign
Currency") an amount due in United States Dollars under this
Agreement, then the conversion shall be made at the rate of exchange
prevailing on the business day before the day on which payment is
due and/or an award for damages is finally given. If there is a
change in the rate of exchange prevailing between the business day
before the day on which payment is due and/or an awardis given and
the date of actual payment of the amount due, the Party responsible
for payment will pay such additional amounts (if any) as may be
necessary to ensure that the amount paid in the Foreign Currency,
when converted at the rate of exchange prevailing on the date of
payment, will produce the amount then due under this Agreement in
Dollars. The term "rate of exchange" in this Section means the spot
rate at which Sabre, in accordance with prudent commercial
practices, is able, on the relevant date, to purchase Dollars with
the Foreign Currency and includes any premium and costs of exchange
payable, irrespective of any official rate of exchange published by
governmental monetary authorities.
(h) INCLUSIVENESS OF FEES AND CHARGES. The Fees and Charges
associated with this Agreement and all applicable work orders,
sub-license agreements, exhibits, and attachments, both current and
in the future, however designated, are inclusive of all Fees and
Charges defined hereunder. No additional Fees and Charges other than
those defined within the agreement and all applicable work orders,
sub-license agreements, exhibits, and attachments, both current and
in the future, however designated, shall be payable by either Party
unless a suitable agreement in writing is executed by the Parties
thereof.
(i) GDS CHARGES RESULTING FROM THE PORTAL. There shall be no GDS
charges levied for bookings that are generated by the Portal
Solution and result in a charge to TAM for a Revenue Ticket Coupon.
6. EMPLOYEES. The Sabre personnel performing the Sabre Services will be and
remain the employees of Sabre and Sabre will provide for and pay the
compensation and other benefits of such employees, including salary,
health, accident and workers' compensation benefits and all taxes and
contributions which an employer is required to pay relating to the
employment of employees. The TAM personnel involved in the performance of
the Sabre Services will be and remain the employees of TAM and TAM will
provide for and pay the compensation and other benefits of such employees,
including salary, health, accident and workers' compensation benefits and
all taxes and contributions which an employer is required to pay relating
to the employment of employees.
7. CONFIDENTIALITY. As between the Parties, the Confidential Information of
each Party will remain its sole property. Confidential Information will be
used by the recipient Party only for purposes of this Agreement. Each
Party will hold the Confidential Information of the other Party in strict
confidence and protect such Confidential Information from disclosure using
the same care it uses to protect its own confidential information of like
importance, but not less than reasonable care. No Confidential Information
will be disclosed to any third party by the recipient Party without the
prior written consent of the disclosing Party, except that each Party may
disclose this Agreement and the other Party's Confidential Information to
its directors, employees, attorneys, agents, auditors, insurers and
subcontractors who require access to such information in connection with
their employment or engagement and who are obligated to keep such
information confidential in a manner no less restrictive than set forth in
this Section 7. As used herein Confidential Information means (i) all
information identified by a Party as confidential to which the other Party
has access in connection with the performance of this Agreement, whether
before or after the Effective Date, (ii) information relating to a Party's
business, customers, financial condition, or operations, (iii) a Party's
intellectual property, including proprietary software and all intellectual
property contained in any report or other deliverable, but in all cases
excluding information and intellectual property rights independently
developed by or on behalf of the recipient Party without use of or
reference to the disclosing Party's Confidential Information
5
Confidential
(a) EXCEPTIONS. This Agreement does not prevent or restrict use or
disclosure by the recipient Party of Confidential Information of the
disclosing Party that (i) was in the public domain when communicated
to the recipient Party, (ii) enters the public domain through no
fault of the recipient Party, (iii) was in recipient Party's
possession free of any obligation of confidence when communicated to
the recipient Party, (iv) was rightfully communicated to the
recipient Party by a third Party free of any obligation of
confidence to the disclosing Party, or (v) was independently
developed by the recipient Party, without use of or reference to any
of the Confidential Information. If Confidential Information is
required to be disclosed by Law or a Governmental Authority,
including pursuant to a subpoena or court order, such Confidential
Information may be disclosed, provided that the Party required to
disclose the Confidential Information (i) promptly notifies the
disclosing Party of the disclosure requirement, (ii) cooperates with
the disclosing Party's reasonable efforts to resist or narrow the
disclosure and to obtain an order or other reliable assurance that
confidential treatment will be accorded the disclosing Party's
Confidential Information, and (iii) furnishes only Confidential
Information that the Party is legally compelled to disclose
according to advice of its legal counsel. Upon written request at
the expiration or termination of this Agreement, all documented
Confidential Information (and all copies thereof) owned by the
requesting Party will be returned to it or destroyed by the
recipient Party, with written certification thereof.
(b) RESIDUAL KNOWLEDGE. Each Party acknowledges that the other may,
as a result of its receipt of or exposure to the disclosing Party's
Confidential Information, increase or enhance the knowledge and
experience retained in the unaided memories of its directors,
employees, agents or contractors. A Party and its directors,
employees, agents or contractors may use and disclose such knowledge
and experience in such Party's business or other business endeavors,
so long as such use and disclosure does not involve Confidential
Information received from the disclosing Party.
(c) TAM DATA. As used herein, "TAM Data" means (i) all information
relating to the TAM's business, including information relating to
financial condition or operations provided by TAM to Sabre in
connection with the Sabre Services, (ii) all data provided by or on
behalf of TAM to Sabre in connection with the Sabre Services, and
(iii) all data that is produced in the Sabre Services using data in
clauses (i) and (ii), but in all cases excluding Sabre intellectual
property. The TAM Data will remain the sole property of TAM. The TAM
Data does not include the TAM Solution as defined in the Sublicense
Agreement, attached as Exhibit "B". Subject to TAM's proprietary
rights, Sabre may access and use the TAM Data and the TAM Solution
as needed to perform the Sabre Services under this Agreement. Upon
expiration or termination of this Agreement the following will
apply:
(i) In the event of expiration of the Agreement with the
mutual agreement of the Parties not to renew it, Sabre will,
after reaching a mutual agreement on a standard format and
media, and at a TAM's and Sabre's equally shared expense,
return to TAM all the TAM Data in Sabre's possession in 10
business days, or
(ii) In the event of a termination by TAM either for a breach
by Sabre or for Sabre's own decision not to renew this
Agreement, Sabre will, after reaching a mutual agreement on a
standard format and media, and at Sabre's expense, return to
TAM all the TAM Data in Sabre's possession in 10 business
days, or
6
Confidential
(iii) In the event of a termination by Sabre either for a
breach by TAM or for TAM's own decision not to renew this
agreement, Sabre will, after reaching a mutual agreement on a
standard format and media, and at TAM's expense, return to TAM
all the TAM Data in Sabre's possession in 10 business days.
In any event, the cost of the TAM Data transfer will be determined
according to reasonable industry practices at the time of the
transfer. In any event, Sabre will not use the TAM Data for any
purpose other than providing the Sabre Services under this
Agreement.
(d) TAM BOOKING DATA. Notwithstanding anything to the contrary
herein, Sabre may use the TAM Booking Data collected from "Sabre
Subscribers" (as such term is defined in Work Order No. 1) using the
Agency Solution (as such term is defined in Work Order No.l, and is
also currently known as the "Turbo Sabre Agency Tool"), and subject
to applicable laws, for the purpose of determining, using and
distributing aggregate statistical and marketing information from
which the identity of TAM's customers cannot be determined through
the use of reasonable effort. Sabre shall refrain from selling,
distributing, or deploying, however designated, the aggregate data
collected and described above to any company entity based in Brazil
and any such sale or distribution will be made subject to the
provision that the TAM Booking Data is confidential information.
Sabre will obtain from any third party recipient an agreement that
such recipient will not publish, duplicate, or reproduce in any
manner, electronic or otherwise, in whole or in part, nor utilize,
disclose or sell to any other third party the TAM Booking Data. "TAM
Booking Data" means data including but not limited to pseudo city
code, ARC/IATA number (where applicable), Sabre Subscriber name,
airline code, board/off cities, class of service, flight number,
passenger count, departure date, booking date, agency city, state,
country and postal code.
(e) SAFEGUARDING. Sabre will employ substantially the same
safeguards it uses for data of its other customers, but not less
than reasonable safeguards, in protecting the TAM Data against
accidental or unauthorized deletion, destruction or alteration.
Sabre personnel having access to the TAM Data will be informed of
their duties to maintain its confidentiality and to use it only for
purposes permitted hereunder. TAM may establish backup security for
the TAM Data and retain backup data files if it so chooses. Sabre
will have access to such backup data files as is reasonably required
by Sabre.
8. AUDIT RIGHTS.
(a) GENERAL. Auditors designated by Sabre will be provided with
reasonable access to the TAM site(s) to enable them to audit the
operations, books and records of TAM for the sole purpose of
verifying that TAM is in compliance with its obligations in
accordance with this Agreement and any Work Orders hereto. Sabre
shall pay the cost of such audit unless the audit discloses TAM has
underpaid Sabre for charges due under the applicable Work Order by
more than * percent ( * %) in which case the cost of the auditors
shall be paid by TAM within thirty days of presentation of the
invoice for the audit.
(b) PROCEDURES. Such audits may be conducted no more than once each
calendar year during reasonable business hours unless Sabre has
reasonable cause to request an out of term audit. Sabre will provide
TAM with reasonable prior written notice of an audit. TAM will
cooperate with the audit, will make the information reasonably
required to conduct the audit available on a timely basis and will
assist the designated employees of Sabre's auditors as reasonably
necessary. TAM will not be required to provide access to the
proprietary data of TAM except to the extent such access is
necessary to conduct the audit and only if Sabre and Sabre's
auditors agree to treat any such information as Confidential
Information and to bind any third parties gaining access to such
information during the term of the audit to similar confidentiality
restrictions. All information learned or exchanged in connection
with an audit, as well as the results of any audit, is Confidential
Information will be treated by Sabre as TAM's Confidential
Information except to the extent Sabre must rely and disclose such
audit results in
7
Confidential
order to protects its rights under this Agreement and any related
Work Order including, but not limited to, seeking an injunction or
arbitration.
(c) RESULTS. Sabre will provide TAM copies and results of each
audit. The Parties will review the results of an audit, will
identify all relevant audit issues and will determine (i) what, if
any, actions will be taken in response to such audit issues, and
(ii) which Party will be responsible for the cost of taking the
actions necessary to resolve such issues.
(d) RECORDS RETENTION. For the first * ( * ) years during the term
of this Agreement, TAM will retain books and records that are
reasonably required to verify that they are in compliance with this
Agreement and any Work Order hereto. Commencing with the fourth
anniversary and proceeding until two years after the termination or
expiration of this Agreement, TAM shall maintain the most recent
four years of books and records that are reasonably required to
verify that they are in compliance with this Agreement and any Work
Orders hereto.
9. WARRANTIES. Unless otherwise specified in a Work Order or in the
Sublicense Agreement, the Parties agree to the following warranties:
(a) LICENSED SOFTWARE. Subject to the proper installation in
accordance with Sabre's instructions, Sabre warrants that any
existing and future software applications owned or licensed by Sabre
that are licensed to TAM from time to time (the "Licensed Software")
will substantially meet the functional requirements as identified in
the applicable Work Order and in the standard user documentation
issued by Sabre to its customers. Considering the current state of
the art, it is not possible to exclude technical software problems,
to manufacture faultless software or to cure all defects. Sabre does
not warrant the absence of any defects in the Licensed Software, or
that the Licensed Software will operate without any interruption or
the possibility of combining the Licensed Software with other
software programs.
(b) SERVICES. Sabre warrants that any Sabre Services provided
hereunder will be provided by qualified professionals in their
respective disciplines in a manner that is equivalent to the
standard performed by Sabre for other similarly situated clients.
(c) WARRANTY PERIOD. The warranties contained in Sections 9 (a) and
(b) above shall, (i) as to each Licensed Software, be valid from
Acceptance and continue for the warranty period specified in the
applicable Work Order, or, if not specified in the Work Order, then
for a period of * days following Acceptance of the relevant Licensed
Software system as defined in Section 2(d), and (ii) as to any Sabre
Services, continue for a warranty period of * from the date on which
such Sabre Services were performed by Sabre.
(d) EXCLUSIONS FROM WARRANTY. The warranties contained in this
Section 9 shall not apply (i) to problems arising from any products,
equipment, data, service or software other than those provided by
Sabre hereunder, including inoperability of such items with the
Licensed Software or each other; (ii) if TAM fails to use the
Licensed Software in accordance with reasonable instructions from
Sabre; (iii) if TAM has modified any products, equipment, software
or environment or used the Licensed Software in any manner other
than as reasonably instructed by Sabre, or instructed in manuals or
written instructions; or (iv) to any error, loss or damage which is
caused in whole or in part by TAM, other third parties or other
cause beyond the control of Sabre. No warranties shall be provided
for any Hosted Software or Equipment provided by Sabre to TAM
(except for pass through warranties from third party providers). As
used in this Agreement, "Equipment" means computers,
telecommunication terminals, terminal controllers, printers and
modems, including any software protocols that modify the operation
of such software used by TAM in connection with the Sabre Services.
(e) WARRANTY NOTICE. If TAM believes that a Licensed Software
contains a reproducible failure to perform in all material respects
in accordance with its functional requirements (hereinafter an
"Error") or that the warranty provided in Section 9(a) has been
breached, the TAM Account Manager will notify the Sabre Account
Manager by written notice during the
8
Confidential
term of the warranty specified in Section 9(c). All documents
reasonably required for Error identification must be attached. At
Sabre's request, additional Error-related information, reasonably
available to TAM, will be promptly provided by TAM.
(f) REMEDY. Provided that Sabre is able to reproduce the error in
the Licensed Software, as TAM's initial remedy, Sabre will use its
reasonable efforts to correct the error in the Licensed Software,
supply a modified or improved Licensed Software system version
suited for the contractually contemplated purpose, or make available
a by-pass solution, at no additional charge to TAM. With respect to
a breach of the warranty in Section 9(b). Sabre will re-perform any
defective Services at no additional charge to TAM. If foregoing
remedies do not successfully cure the non-conformance within the
Licensed Software, then in addition to any other remedies available
to TAM under this Agreement, TAM may terminate the use of the
non-conforming portion of the Licensed Software and Sabre will
refund TAM for the amount paid by TAM to Sabre for such
non-conforming portion of the product.
(g) ACCURACY OF INFORMATION. TAM represents and warrants that any
information furnished to Sabre upon which Sabre based the
description of any services and fees to TAM is accurate and complete
in all material respects.
(h) PASS-THROUGH WARRANTIES AND INDEMNITIES. To the extent
permissible, each Party will pass through to the other any rights it
obtains under warranties and indemnities given by its third party
licensors, subcontractors or suppliers in connection with any
services, software, Equipment or other assets provided by such Party
pursuant to this Agreement. In the event of a third party software
or Equipment nonconformance, or nonperformance or inadequate
performance by any third party vendor, the Party who has the
relationship with the Third Party vendor will coordinate with, and
be the point of contact for resolution of the problem through, the
applicable vendor. Upon becoming aware of a problem, such Party will
notify such vendor and will use commercially reasonable efforts to
cause such vendor to promptly repair or replace the nonconforming
item or remedy the nonperformance or inadequate performance in
accordance with such vendor's obligations. If any warranties or
indemnities may not be passed through, each Party will, upon the
other's request, take commercially reasonable action to enforce any
applicable warranty or indemnity which is enforceable by such Party
in its own name. Neither Party, however, shall be obligated to
resort to litigation or other formal dispute resolution procedures
to enforce any such warranty or indemnity and the Party requesting
such enforcement will reimburse the other Party for all costs and
expenses incurred in connection therewith, including reasonable
attorneys' fees and expenses.
DISCLAIMER OF WARRANTIES. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS
AGREEMENT, OR ANY WORK ORDER, NEITHER PARTY MAKES ANY REPRESENTATIONS OR
WARRANTIES, EXPRESS OR IMPLIED, REGARDING ANY MATTER, INCLUDING THE
MERCHANTABILITY, SUITABILITY, ORIGINALITY, FITNESS FOR A PARTICULAR USE OR
PURPOSE, TITLE, NONINFRINGEMENT OR RESULTS TO BE DERIVED FROM THE USE OF
ANY HOSTED SOFTWARE AS DEFINED IN SECTION 2(C) OF THE AGREEMENT, LICENSED
SOFTWARE, SERVICE, EQUIPMENT, DELIVERABLES OR OTHER MATERIALS PROVIDED
UNDER THIS AGREEMENT OR ANY WORK ORDER. NO REPRESENTATION OR OTHER
AFFIRMATION OF FACT, INCLUDING, WITHOUT LIMITATION, STATEMENTS REGARDING
CAPACITY, SUITABILITY FOR USE, OR PERFORMANCE OF THE HOSTED SOFTWARE,
LICENSED SOFTWARE, SERVICE, EQUIPMENT, DELIVERABLES OR OTHER MATERIALS
PROVIDED UNDER THIS AGREEMENT OR ANY WORK ORDER SHALL BE DEEMED A WARRANTY
FOR ANY PURPOSE OR GIVE RISE TO ANY LIABILITY OF SABRE OR TAM AS THE CASE
MAY BE WHATSOEVER. THE PARTIES ACKNOWLEDGE THAT THEY HAVE NOT RELIED UPON
ANY WARRANTIES OTHER THAN THE EXPRESS WARRANTIES IN THIS AGREEMENT.
10. INTELLECTUAL PROPERTY RIGHTS. Each Party will retain all rights in any
software, ideas, concepts, know-how, development tools, techniques or any
other proprietary material or information that it owned or developed prior
to the Effective Date of this Agreement, or acquired or developed after
the date of this Agreement
9
Confidential
without reference to or use of the Confidential Information or
intellectual property of the other Party. All software that is licensed by
a Party from a third party vendor will be and remain the property of such
vendor.
(a) LICENSES. Specific licenses required in connection with this
Agreement will be as provided in the Sublicense Agreement and the
applicable Work Order. Subject to the foregoing and to any third
party rights or restrictions, Sabre will own all intellectual
property rights in or related to all deliverables that are developed
and delivered by Sabre under a Work Order (the "Deliverables").
However, upon payment therefore in accordance with such Work Order,
TAM will have the right and license to use the copy of the
Deliverables (including any Sabre Tools, as defined below, that are
used in producing the Deliverables and become, and remain, embedded
therein) in accordance with the terms of any such Work Order
provided by Sabre to TAM under such Work Order. Such copy, if the
Deliverable is software, will be in object code form, and the
related right and license to use will consist of TAM being able to
load, execute, display, store and otherwise use such object code
copy. The right and license granted to TAM in this Section 10 will
be perpetual (subject to compliance by TAM with this sentence),
royalty-free, nontransferable and nonexclusive and will be limited
to TAM's internal use and exploitation or for the use of third
parties designated by TAM exclusively for the purposes specified in
this Agreement and any of its Work Orders. The Deliverables are
confidential and will be subject to Section 7.
(b) RESERVATION OF SABRE RIGHTS. Notwithstanding anything to the
contrary in this Agreement, Sabre (i) will retain all right, title
and interest in and to all know-how, intellectual property,
methodologies, processes, technologies, algorithms, software or
development tools used in performing the Sabre Services which are
based on trade secrets or proprietary information of Sabre, are
developed or created by or on behalf of Sabre without reference to
or use of the intellectual property of TAM or are otherwise owned or
licensed by Sabre (collectively, "Sabre Tools") and (ii) will retain
ownership of any Sabre-owned software or Tools that are used in
producing the Deliverables and become embedded in the Deliverables.
(c) RESERVATION OF TAM RIGHTS. Notwithstanding anything to the
contrary in this Agreement TAM (i) will retain all right, title and
interest in and to all know-how, intellectual property,
methodologies, processes, technologies, algorithms, software or
development tools used in performing the TAM Services or any
services pursuant to the Sublicense Agreement which are based on
trade secrets or proprietary information of TAM, are developed or
created by TAM without reference to or use of the intellectual
property of Sabre or are otherwise owned or licensed by TAM
(collectively, "TAM Tools") and (ii) will retain ownership of any
TAM-owned software or Tools that are used in producing the TAM
Services or the services under the Sublicense Agreement and become
embedded in any deliverables pursuant to such services.
(d) No licenses will be deemed to have been granted by either Party
to any of its patents, trade secrets, trademarks or copyrights,
except as otherwise expressly provided in this Agreement, the
Sublicense Agreement, or any related Work Orders. Nothing in this
Agreement will require either Party to violate the proprietary
rights of any third party in any software or otherwise.
The provisions of this Section 10 will survive the expiration or
termination of this Agreement, the Sublicense Agreement and each
Work Order for any reason.
11. MEDIATION; ARBITRATION. Any dispute, controversy or claim arising under,
out of, in connection with or in relation to this Agreement, or any Work
Order, or the breach, termination, validity or enforceability of any
provision hereof or thereof (a "Dispute") will be resolved as follows:
(a) PROCEDURE. The Parties shall first discuss in good faith all
disputes at a mutually convenient location in order to try and find
an amicable solution. If the Parties are unable to resolve the
Dispute within * days after receipt of notice from a Party that a
Dispute exists, it shall be resolved by arbitration pursuant to the
terms set forth below.
Confidential
(b) ARBITRATION. The Dispute shall be resolved and decided by
binding arbitration, pursuant to the International Arbitration Rules
of the American Arbitration Association ("AAA") and the United
States Federal Rules of Civil Procedure and United States Federal
Rules of Evidence with regard to the taking of any evidence therein.
The arbitration panel shall have the exclusive right to determine
the arbitrability of any disputes. In the event of any conflict
between the rules of the AAA and any provisions of this Agreement,
this Agreement shall govern.
The arbitration shall be conducted in English in Miami, Florida.
Unless otherwise agreed to by the Parties there shall be a panel of
three arbitrators for all disputes. The claimant party shall appoint
an arbitrator in the arbitration petition and the respondent party
shall appoint an arbitrator in its response. If within thirty
(30)days after the arbitration petition, the respondent has not
appointed an arbitrator; such arbitrator shall be appointed by the
AAA. Within thirty (30) days of their appointment, the two
arbitrators so appointed shall appoint a third arbitrator who shall
preside over the arbitration panel. If the two arbitrators cannot
agree on a third arbitrator within such thirty (30) day period, the
third arbitrator shall be appointed by the AAA.
The arbitration panel shall award the prevailing Party its attorneys
fees and costs, arbitration administrative fees, panel member fees
and costs, and any other costs associated with the arbitration. The
Parties agree that notifications of any proceedings, reports,
communications or any other document shall be sent as set forth in
Section 21 of this Agreement. The arbitration panel shall interpret
the agreement in accordance with its terms and render decisions
thereon and shall only award damages as provided under the terms of
this Agreement. The arbitrators shall have the authority to award
specific performance or an injunction to the prevailing Party, or to
make an award of direct damages but shall have no right to grant
special, punitive or exemplary damages, or indirect or consequential
damages (including lost profit, or losses due to a prospective
business opportunity).
(c) SOLE REMEDY. Except as provided in Section 15(f), 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; and that any costs, fees or taxes incident
to enforcing the award shall, to the maximum extent permitted by
law, be charged against the Party resisting such enforcement.
Confidential
12. TERMINATION.
(a) TERMINATION FOR CAUSE. If either Party materially defaults in
the performance of any of its duties or obligations under this
Agreement or any Work Order (except for a default in payments to
Sabre which will be governed by Section 12(b)). which default has a
material and adverse effect on the other Party and such default is
not substantially cured within sixty (60) days after written notice
is given to the defaulting Party specifying such default, the
non-defaulting Party, in addition to all other available remedies,
may terminate this Agreement and any Work Orders.
(b) TERMINATION FOR NONPAYMENT. If TAM defaults in the payment when
due of any undisputed amount due to Sabre pursuant to this Agreement
or any Work Order, and does not cure such default within * days
after being given written notice of such default Sabre may, by
giving written notice thereof to TAM, (a) terminate, in the case of
Work Order No. 2, only such Work Order, or (b) in the case of Work
Order No. 1, terminate this Agreement, Work Order No. 1 and the
Sublicense Agreement, in either case as, of the date of receipt by
TAM of such notice or as of a future date specified in such notice
of termination. With respect to any Work Order entered into by the
Parties after the date of this Agreement, and in the case where
payment is not made when due the nondefaulting party may only
terminate said Work Order unless otherwise provided therein.
(c) TERMINATION FOR BANKRUPTCY AND RELATED EVENTS. Subject to
applicable bankruptcy laws, if either Party becomes or is declared
insolvent or bankrupt, is the subject of any proceedings relating to
its liquidation, insolvency or for the appointment of a receiver or
similar officer for it, makes an assignment for the benefit of all
or substantially all of its creditors or enters into an agreement
for the composition, extension or readjustment of all or
substantially all of its obligations, then the other Party may, by
giving written notice thereof to such Party, terminate this
Agreement and all outstanding Work Orders as of a date specified in
such notice of termination.
(d) TERMINATION FOR CONVENIENCE. Neither Parry will have the right
to terminate this Agreement or a Work Order for its convenience
prior to the * of the Effective Date of this Agreement, unless the
termination of the Work Order is expressly allowed in such Work
Order. Any such termination for convenience will only be effective
upon one year advanced written notice, which may be given prior to
the fifth anniversary of the Effective Date and after all payments
related to any service provided under this Agreement are fully paid
by the terminating Party.
(e) OTHER TERMINATION. If as a result of Brazilian government
action, regulator)'constraints or other third party action the
Portal Solution (as defined in Work Order No.l), is prohibited from
use, this Agreement shall be deemed to be terminated or if as a
result of any of the foregoing reasons the Agreement is terminated,
the following will apply. The Multihost Agreement will be reinstated
with all of its Work Orders, attachments, and exhibits, and (i) the
termination clause of the Multihost Agreement will be modified to
provide that either Party may terminate the Multihost Agreement for
convenience after the first anniversary of its reinstatement and
(ii) Section 12(f)(iv) below will be included into the Multihost
Agreement. The Parties will meet within * days after the termination
described in this Section 12(e) to commence on going, good faith
negations for a mutually agreed replacement for the Multihost
Agreement and this Agreement. In the event of a termination as
described in this Section 12(e), Sabre will pay (or credit TAM for
amounts owed by TAM to Sabre) any outstanding amounts owed TAM by
Sabre in connection with the TAM Services and TAM will pay Sabre any
outstanding amounts owed Sabre by TAM in connection with Sabre
Services.
Confidential
(f) EFFECT OF EXPIRATION OR TERMINATION.
(i) EXPIRATION OR TERMINATION OF WORK ORDER ONLY. On
expiration or termination of a Work Order, but not this
Agreement, Sabre will cease to perform the Sabre
Services covered thereby, and TAM will pay to Sabre (1)
all undisputed amounts due to Sabre under such Work
Order for all Sabre Services performed and expenses
incurred (including those expenses that, instead of
being concurrently billed, have been included in future
payments to be made by TAM) through the effective date
of such expiration or termination, and (2) all license
rights granted pursuant to the Work Order, as
applicable, will cease to exist and TAM will immediately
discontinue the use of the applicable Hosted Software or
Licensed Software, erase all copies of the applicable
Licensed Software systems from its computers, return to
Sabre all applicable Sabre Confidential Information, and
certify to Sabre in writing that it has fully complied
with these requirements. Sabre will create records of
the TAM database used for the Hosted Software and will
deliver them to TAM based on the terms described in
Section 7(c). Expiration or termination of a Work Order
will not affect any other Work Orders the performance of
which by either or both of the Parties remains
outstanding, unless the Parties otherwise agree in
writing.
(ii) EXPIRATION OF AGREEMENT WITH NO OUTSTANDING WORK ORDERS
OR TERMINATION OF AGREEMENT. Subject to the provisions
of Section 12(f)(iv) hereof, upon expiration of this
Agreement at a time when no Work Orders are outstanding
or on termination of this Agreement (and all outstanding
Work Orders) by TAM in accordance with this Section
12(f)(ii), Sabre will cease to perform the Sabre
Services covered hereby and thereby, and TAM will pay to
Sabre all amounts due to Sabre hereunder and thereunder
for all Sabre Services performed and expenses incurred
(including those expenses that, instead of being
concurrently billed, have been included in future
payments to be made to Sabre) through the effective date
of such expiration or termination.
(iii) EXPIRATION OF AGREEMENT WITH OUTSTANDING WORK ORDERS.
Upon expiration of this Agreement when one or more Work
Orders are outstanding, this Agreement will remain in
full force and effect solely for purposes of allowing
the activities covered thereby to be completed.
Thereafter, Sabre will cease to perform the Sabre
Services covered hereby, and TAM will pay to Sabre (1)
all amounts due to Sabre hereunder and thereunder for
all Sabre Services performed and expenses incurred
(including those expenses that, instead of being
concurrently billed, have been included in future
payments to be made by TAM) through the effective date
of such expiration or termination and (2) any
termination fees, as described in Section 12(e), if
appropriate.
(iv) TERMINATION ASSISTANCE. In the event of expiration or
termination of all or any part of a Work Order for any
reason, the Parties will cooperate in good faith for an
orderly wind-down or transition of the Sabre Services or
any services then being provided by TAM to Sabre. The
transaction rate as specified in the agreement being
terminated or reinstated, as applicable, will apply.
Subject to Section 7(c) above, and in any such event the
Parties will pay to the other, its then current
reasonable labor rates for any services requested for
wind-down or transition of the Sabre Services or of any
services provided Sabre by TAM.
Confidential
13. INDEMNITIES
(a) PERSONAL INJURY, EMPLOYEES AND PROPERTY DAMAGE. Sabre and TAM
will each indemnify, defend and hold harmless the other and their
Affiliates from and against all Losses arising out of, under or in
connection with (i) bodily or other personal injury to, or death of,
any agent, employee, customer, business invitee or business visitor
of the indemnitee or (ii) damage to or destruction of any tangible
property, in each case referred to in (i) and (ii) herein, resulting
from, or arising out of, under or in connection with, the gross
negligence or willful misconduct of the indemnitor; or (iii) its
respective obligations arising from local labor laws and
regulations, as well as other legal or contractual obligations
regarding its employees. Notwithstanding the foregoing, Sabre will
have no indemnification obligation with respect to Losses arising
out of, under or in connection with any incident for which it is
entitled to indemnification under Sections 13(c) and 13(d). As used
herein "Losses" means all judgments, claims, settlements, losses,
damages, fees, liens, taxes, penalties, obligations and expenses
(including reasonable attorneys fees) and including sanctions
imposed by any governmental entity such as fines, penalties and
equitable relief such as injunctions and temporary restraining
orders.
(b) INFRINGEMENT.
(i) GENERAL. Sabre will indemnify, defend and hold harmless
TAM and its Affiliates against any action or cause of
action based on a claim that any Sabre Intellectual
Property (excluding portions owned by third parties)
directly (A) infringes a copyright, (B) infringes a
patent granted under United States or Brazilian laws (C)
infringes a trademark granted under United States or
Brazilian laws, or (D) constitutes an unlawful
disclosure, use or misappropriation of a third party's
trade secrets. TAM will indemnify, defend and hold
harmless Sabre and its Affiliates against any action or
cause of action based on a claim that any TAM
Intellectual Property (excluding portions owned by third
parties) (W) infringes a copyright, (X) infringes a
patent granted under United States or Brazilian laws,
(Y) infringes a trademark granted under United States
or Brazilian laws, or (Z) constitutes an unlawful
disclosure, use or misappropriation of a third party's
trade secrets. The indemnitor will bear the expense of
such defense and pay any damages and attorneys' fees
that are attributable to such claim finally awarded by a
court of competent jurisdiction. Notwithstanding the
foregoing, neither Party will be liable to the other for
claims of indirect or contributory infringement,
including claims based on use of intellectual property
rights with Equipment or software not agreed to by the
indemnitor or in a manner for which such rights are not
designed or indemnitee's modifications to intellectual
property rights (other than those made at the
indemnitor's request).
(ii) ADDITIONAL REMEDY. If the intellectual property rights
of Sabre ("Sabre IP") or the intellectual property
rights of TAM ("TAM IP") becomes the subject of a claim
under this Section 13(b) which is meritorious in the
indemnitor's reasonable opinion or is likely to become
the subject of a meritorious claim, then, in addition to
defending the claim and paying any damages and
attorneys' fees as required above, the indemnitor will
either (A) replace or modify the Sabre IP or TAM IP, as
applicable, to make it non infringing or cure any
claimed misuse of a third party's trade secret or (B)
procure for the indemnitee the right to continue using
the Sabre IP or TAM IP, as applicable. Any costs
associated with either alternative will be borne by the
indemnitor. If neither option is available to the
indemnitor through the use of commercially reasonable
efforts, (Y) the indemnitee will return such Sabre IP or
TAM IP, as applicable, to the indemnitor and (Z) if
requested by the indemnitee in good faith, the Parties
will negotiate in good faith (but subject to Section 15)
to
Confidential
reach a written agreement on what, if any, monetary
damages (in addition to the indemnitor's obligations
under this Section 13(b) are reasonably owed by the
indemnitor to the indemnitee. As used herein, the term
"intellectual property rights" means any (i) any patent,
patent application, trademark (whether registered or
unregistered), trademark application, trade name,
service xxxx (whether registered or unregistered),
service xxxx application, copyright (whether registered
or unregistered), copyright application, trade secret,
Confidential Information, know-how, process, technology,
development tool, ideas, concepts, design right, moral
right, data base right, methodology, algorithm or
invention, (ii) any right to use or exploit any of the
foregoing, and (iii) any other proprietary right or
intangible asset (including software).
(c) PROVISION OF SERVICES. TAM will indemnify, defend and hold
harmless Sabre and its Affiliates from and against all Losses
arising out of or in connection with any claims made by third
parties arising out of or related to TAM's use of any Hosted
Software, Licensed Software, Equipment, or Sabre Services based on
(i) TAM's negligence, gross negligence, or misuse of the Sabre
Services, (ii) the failure of any Equipment, products or services
provided by TAM, (iii) any act or omission of any third party
furnishing products, Equipment, software or any other items or
services which are required by TAM to use the Hosted Software,
Licensed Software, Equipment or Sabre Services, (iv) unauthorized
modifications, alterations, tampering, adjustment or repair of the
Hosted Software, Licensed Software, Equipment or Sabre Services
caused by TAM or any third party permitted access to or use thereof
by TAM, (v) TAM's provision of incidental services to its code-share
airlines or provision of customary ground handling services for
another airline, (vi) use of the Hosted Software, Licensed Software,
Equipment or Sabre Services in combination with, or in addition to,
any Equipment or computer programs not licensed or recommended by
Sabre, or (vii) any Airline Incident. As used herein "Airline
Incident" means an occurrence of personal injury, death, or property
damage in connection with the operation of any TAM's or its
codeshare airline's operations.
(d) OTHER THIRD PARTY CLAIMS INDEMNITY. TAM agrees to indemnify and
defend Sabre from any and all Losses incurred by Sabre for claims
filed by any third parties, whether private parties or public
entities of any kind, against Sabre with respect to any claims
related to TAM's decision to cease utilizing GDS systems and
entering this Agreement as a means for distributing its airline
flight services to its customers.
(e) PROCEDURES FOR THIRD PARTY CLAIMS. The indemnification
obligations set forth in this Section will not apply unless the
party claiming indemnification: (a) notifies the other promptly in
writing of any matters in respect of which the indemnity may apply
and of which the notifying party has knowledge, in order to allow
the indemnitor the opportunity to investigate and defend the matter;
provided, however, that the failure to so notify will only relieve
the indemnitor of its obligations under this Section 13 if and to
the extent that the indemnitor is prejudiced thereby; and (b) gives
the other party full opportunity to control the response thereto and
the defense thereof, including any agreement relating to the
settlement thereof; unless such settlement would result in a finding
or admission that the indemnitee violated any applicable law, rule
or regulation, in which case the indemnitee's approval will be
required and provided, however, that the indemnitee will have the
right to participate in any legal proceeding to contest and defend a
claim for indemnification involving a third party and to be
represented by legal counsel of its choosing, all at the
indemnitee's cost and expense. However, if the indemnitor fails to
promptly assume the defense of the claim, the Party entitled to
indemnification may assume the defense at the indemnitor's cost and
expense. The indemnitor will not be responsible for any settlement
or compromise made without its consent, unless the indemnitee has
tendered notice and the indemnitor has then refused to assume and
defend the claim and it is later determined that the indemnitor was
liable to assume and defend the claim. The indemnitee agrees to
cooperate in good faith with the indemnitor at the request and
expense of the indemnitor.
(f) NEGLIGENCE. The ordinary negligence of any indemnittee will not
preclude such indemnittee from receiving the benefits under this
Section 13.
Confidential
14. INSURANCE.
(a) GENERAL. Each Party will have and maintain in force insurance
coverage, including worker's compensation insurance and general
liability insurance, adequate for it to perform its obligations
under this Agreement. Sabre shall cause its insurers to name TAM as
an additional insured party in its general liability insurance with
liability coverage of at least $ * (which amount can be constituted,
in part, with coverage from an umbrella policy).
(b) AVIATION INSURANCE. TAM shall cause its aviation insurers to
name Sabre as an additional insured party in its aviation insurance
policies. TAM's insurers will also provide written waivers of
subrogation in favor of Sabre in both its airline liability and
airline hull policies. Such aviation policies will also include
contractual liability coverage specifically insuring the
indemnification obligations of such Party pursuant to Section 13.
Upon request, TAM will provide Sabre with evidence of such insurance
within 60 days of the Effective Date and will cause the insurers
under such insurance policies not to cancel, amend or make any
material adverse change affecting the coverage under any such
policies without at least thirty (30) days prior written notice to
Sabre.
(c) RISK OF LOSS. Each Party will be responsible for risk of loss
of, and damage to, any Equipment, software or other materials in its
possession or under its control.
15. LIABILITY.
(a) GENERAL LIMITATION. The liability of Sabre to TAM, for all
damages and other Losses arising from or related to this Agreement,
regardless of the form of action, whether in contract, equity,
negligence, tort or otherwise will not exceed, under any
circumstances, the lesser of (i) * or(ii) * . TAM acknowledges
that * reflect the allocation of risk set forth in this Agreement
and that Sabre would not enter into this Agreement without these
limitations on its liability.
(b) LIMITATION ON OTHER DAMAGES. In no event will the measure of
damages payable by either Party hereunder include, nor will a Party
be liable for, any amounts for loss of income, profit or savings or
indirect, incidental, consequential, exemplary, punitive or special
damages of any Party, including third parties, even if such Party
has been advised of the possibility of such damages in advance, and
all such damages are expressly disclaimed. Nothing in this Section
15(b) will be deemed to limit a Party's payment obligation to the
other Party for services rendered pursuant to this Agreement or a
Work Order.
(c) EXCEPTIONS TO LIMITATIONS. The limitations, waivers and
disclaimers set forth in Sections 15(a) and 15(b) do not apply to
the liability of a Party resulting from that Party's breach of its
obligations concerning restrictions on the use of the other Party's
Confidential Information as defined in an applicable Work Order or
Section 7. The limitations, waivers and disclaimers set forth in
Section 15(a) and 15(b) do not apply to the liability of a Party
resulting from that Party's indemnification obligations under
Section 13 in respect of Losses arising out of, under or in
connection with third Party claims, actions or causes of action
(d) CONTRACTUAL STATUTE OF LIMITATIONS. No claim, demand for
mediation or arbitration or cause of action which arose out of an
event or events which occurred more than three years prior to the
filing of a demand for mediation or arbitration or suit alleging a
claim or cause of action may be asserted by either Party against the
other.
(e) ACKNOWLEDGEMENT. The Parties expressly acknowledge that the
limitations and exclusions set forth in this Section 15 have been
the subject of active and complete negotiation between the Parties
and represent the Parties' agreement taking into account each
Party's level of risk associated with the performance or
nonperformance of its obligations under this Agreement and the
payments and other benefits to be derived by each Party pursuant to
this Agreement. The
Confidential
provisions of this Section 15 will survive the expiration or
termination of this Agreement and each Work Order for any reason.
(f) INJUNCTIVE RELIEF. Each of the Parties acknowledge that, in the
event it breaches its obligations concerning restrictions on the use
of the other Party's Confidential Information as defined in ,
Section 7, the Sublicense Agreement or in any applicable Work Order,
the non-breaching Party will be irreparably harmed. In such a
circumstance, the non-breaching Party may proceed directly to court.
If a court of competent jurisdiction should find that the breaching
Party has breached any such obligations, the breaching Party agrees
that without any additional findings of irreparable injury or other
conditions to injunctive relief, it will not oppose the entry of an
appropriate order compelling performance by the breaching Party and
restraining it from any further breaches.
16. EXCUSED PERFORMANCE. Neither Party will be deemed to be in default
hereunder, or will be liable to the other, for failure to perform any of
its non-monetary obligations under this Agreement or any Work Order to the
extent that such failure results from any event or circumstance beyond
that Party's reasonable control, including acts or omissions of the other
Party or third parties, natural disasters, riots, war, civil disorder,
acts of terrorism, court orders, acts or regulations of governmental
bodies, and which it could not have prevented by reasonable precautions or
could not have remedied by the exercise of reasonable efforts
(collectively, "Force Majeure"). If either Party is precluded from
performing all or substantially all of the services hereunder for an event
covered by this Section 16 for * consecutive days, then the other Party
will have the right to terminate this Agreement and/or the Work Order, as
applicable, upon written notice to the other. Subject to the foregoing
right of termination, if there is an event of Force Majeure in connection
with Sabre Services which materially and substantially impacts TAM's
business operations or an event of Force Majeure which materially and
substantially impacts Sabre's rights to market and sublicense the TAM
Products pursuant to the Sublicense Agreement, then the affected Party may
seek substitute services from a third party for the period of time that
the Force Majeure exists.
17. EXPORT REGULATIONS. This Agreement and each Work Order is expressly made
subject to any United States government laws, regulations, orders or other
restrictions regarding export from the United States of computer hardware,
software, technical data or derivatives of such hardware, software or
technical data. Notwithstanding anything to the contrary in this Agreement
or any Work Order, if precluded by any United States government laws,
regulations, orders or other restrictions, Sabre will not directly or
indirectly export (or re-export) any computer hardware, software,
technical data or derivatives of such hardware, software or technical
data, or permit the shipment of same: (a) into (or to a national or
resident of) Cuba, North Korea, Iran, Iraq, Libya, Syria or any other
country to which the United States has embargoed goods; (b) to anyone on
the U.S. Treasury Department's List of Specially Designated Nationals,
List of Specially Designated Terrorists or List of Specially Designated
Narcotics Traffickers, or the U.S. Commerce Department's Denied Parties
List; or (c) to any country or destination for which the United States
government or a United States governmental agency requires an export
license or other approval for export without first having obtained such
license or other approval. Each Party will reasonably cooperate with the
other and will provide to the other promptly upon request any end-user
certificates, affidavits regarding re-export or other certificates or
documents as are reasonably requested to obtain approvals, consents,
licenses and/or permits required for any payment or any export or import
of products or services under this Agreement or any Work Order. The
provisions of this Section 17 will survive the expiration or termination
of this Agreement and each Work Order for any reason.
18. USE OF SUBCONTRACTORS. Sabre may subcontract any portion of the Sabre
Services to any Affiliate or third parties provided no such subcontracting
of duties or services shall relieve Sabre of its obligations to TAM under
this Agreement or any Work Order and TAM need not pursue any remedies
provided for in this Agreement or in any Work Order against any
subcontractor retained or selected by Sabre but may proceed directly
against Sabre. Sabre will not disclose any of TAM's Confidential
Information to any subcontractor unless it has agreed in writing to
protect the confidentiality of such Confidential Information in a manner
no less restrictive than required under Section 7. and to use such
information only as needed to perform subcontracted Sabre Services.
19. MANAGEMENT OF TELECOMMUNICATIONS SERVICES. TAM acknowledges that Sabre is
not a licensed provider
Confidential
of Telecommunications services. Sabre will arrange for and manage the
provision of Telecommunications services for TAM where required in the
applicable Work Order. Subject to TAM's approval, Sabre will select a
third party provider that is licensed to provide such services. Sabre will
monitor such provider's performance of its obligation to provide and
maintain the Telecommunications services, will work with such provider and
with TAM to resolve problems with the Telecommunications services, and
will take all reasonable actions to cause such provider to perform such
obligation. Sabre will not be responsible for a failure of a third party
Telecommunications provider to provide Telecommunications services, or for
any degradation of the provision of such Telecommunications services by
the third party provider. As used herein, "Telecommunications" includes
any remote communication or connection between Customer and Sabre. For
example, such connections may be by way of a direct communication link,
radio, microwave or satellite link or by way of the Internet or World Wide
Web.
20. MANAGEMENT OF OTHER THIRD PARTIES. The Parties acknowledge that the Sabre
Services may include Sabre's management or procurement of various services
and products provided by third parties at the request of TAM. TAM agrees
that this arrangement would not constitute Sabre's subcontracting of some
portions of the Sabre Services for purposes of this Agreement, and that
Sabre would not be responsible or liable for the performance, inadequate
performance or non-performance of such third party Sabre Services or
products. The remedies for any such third party service or product
problems to the extent attributable to nonperformance or inadequate
performance by any such third party provider or nonconformance of any such
third party product will be the remedies set forth in the applicable
agreement with the provider of such third party service or product.
21. NOTICES. All notices under this Agreement and each Work Order will be in
writing and will be deemed to have been duly given if delivered personally
or by a nationally recognized courier service, to the Parties at the
addresses set forth herein. Either Party may change its address or
designee for notification purposes by giving notice to the other of the
new address or designee and the date upon which such change will become
effective.
If to Sabre for technical matters and matters of an urgent nature:
Sabre Inc. With cc to TAM Account Manager
3150 Sabre Drive Sabre Brazil
Xxxxxxxxx, XX 00000-0000 Avenida Paulista 1106 1 degrees Andar
Attn: Technical Delivery Executive Sao Paulo, SP
Email: xxxxx.xxxxxx@xxxxx.xxx email: xxxx.xxxxx@xxxxx.xxx
Fax: 000 000-0000 Fax: x00 00 0000-0000
Telephone: 000 000-0000 Telephone: x00 00 0000-0000
Confidential
If to TAM for technical matters or matters of an urgent nature:
TAM Linhas Aereas, S.A. with cc to IT Vice President
Avenida Jurandir 856 Avenida Jurandir 856
Lote 4, Xxxxxx 0, 0 xxxxxxx Xxxxx Xxxx 0, Xxxxxx 0, 3 degrees Andar
Xxxxxx Xxxx, Sao Paulo, SP, Brasil Xxxxxx Xxxx, Sao Paulo, SP, Brasil
CEP: 04072-000 CEP: 04072-000
Attn: Xxxxxxx X. Faco Attn: Xxxxxx Xxxxxxxxx
Email: Xxxxxxx.xxxx@xxx.xxx.xx email: gelson.pizzirani@tam. xxx.xx
Fax: x00 00 00000000 Fax: x00 00 0000-0000
Telephone: + 00 00 0000-0000 Telephone: x00 00 0000-0000
For all other matters to Sabre
including legal notices: with cc to General Counsel:
Sabre Travel International Ltd. Sabre Inc.
00 Xxxxx Xxxxxx Xxxxxx 3150 Sabre Drive
Third Floor, Ormonde House MD 9105, First Floor
Dublin, 2 Ireland Xxxxxxxxx, XX 00000-0000
Attn: Director Attn: General Counsel
And:
Sabre Inc.
0000 Xxxxx Xxxxx
Xxxxxxxxx, XX 00000-0000
Attn: President, Airline Solutions
For all other matters to TAM
Including legal notices: with cc to General Counsel
TAM Linhas Aereas, X.X. XXX Linhas Aereas, S.A.
Avenida Jurandir 856 Avenida Jurandir 856
Lote 4, Xxxxxx 0, 0 xxxxxxx Xxxxx Xxxx 0, Xxxxxx 0, 5 degrees Andar
Xxxxxx Xxxx, Sao Paulo, SP, Brasil Xxxxxx Xxxx, Sao Paulo, SP, Brasil
CEP: 04072-000 CEP: 04072-000
Attn:Presidente Attn:General Counsel
22. PUBLIC RELATIONS AND MARKETING REFERENCES. Each Party will coordinate with
the other regarding any media release, public announcement or similar
disclosure relating to this Agreement or any Work Order or its subject
matter and will give the other Party a reasonable opportunity to review
and comment on the content of such release, announcement or disclosure
prior to its release. This provision does not alter the restrictions on
the disclosure of Confidential Information set forth in Section 7 and
subject to Section 7. will not be construed so as to delay or restrict
either Party from disclosing any information required to be disclosed in
order to comply with any applicable laws, rules or regulations.
Notwithstanding the foregoing but subject to any applicable laws, rules or
regulations, each Party will have the right to list the name of the other
Party, to make general references to the basic nature of the relationship
between the Parties under this Agreement and to describe generally the
type of services being provided by Sabre to TAM and TAM to Sabre under
this Agreement and each Work Order in such Party's promotional and
marketing materials, in such Party's oral or visual presentations to third
parties, in interviews conducted by the news media or securities analysts
and in or through any other available media channels, including print,
internet, radio, cable and broadcast mediums.
Confidential
23. TRADEMARKS. Sabre grants TAM for the term of this Agreement a
non-exclusive and non-transferable license to use Sabre's tradenames and
trademarks for the Licensed Software in accordance with the terms outlined
in Exhibit C (the "Trademark Policy"); provided, however, no use of
Sabre's tradenames or trademarks shall be made without the prior written
approval of Sabre, which approval shall not be unreasonably withheld or
delayed. Sabre will provide TAM its current graphic standard guidelines
and will inform TAM in writing of any changes in the Trademark Policy.
24. HIRING OF EMPLOYEES. Unless mutually agreed, during the term of this
Agreement and for a period of 12 months thereafter, neither Party will
solicit, directly or indirectly, for employment or employ any employee of
the other who is or was involved in the performance of any of the services
pursuant to this Agreement without the prior written consent of the other.
An unsolicited inquiry for employment from an employee or a response to a
job posting in a general solicitation by one of the Parties (for example,
a job opportunity listed in a Party's web site or solicitations in job
fairs, newspaper or trade magazine listings) shall not be considered a
violation of this Section 24.
25. REQUIRED DOCUMENTATION. The Parties shall be responsible for providing
reasonable assistance to each other in obtaining all necessary work visas
and any other documentation required for individuals to provide Services
on behalf of the Parties under this Agreement or any Work Order.
26. RIGHT TO ENGAGE IN OTHER ACTIVITIES. Sabre and its Affiliates may provide
data processing and other information technology services for other
parties at any Sabre facility that Sabre uses to perform Sabre Services or
to provide access to the Hosted Software. Subject to TAM's proprietary
rights in its data and Sabre's confidentiality obligations contained in
Section 7, nothing in this Agreement will impair Sabre's right to acquire,
license, market, distribute, develop for itself or others or have others
develop for Sabre similar technology performing similar functions as the
technology and Sabre Services contemplated by this Agreement.
27. LEGAL AUTHORITY TO CONTRACT. Each Party represents and warrants that as of
the Effective Date: (i) such Party is a corporation in good standing under
the laws of its jurisdiction of formation and has the authority to carry
on its business as now conducted; (ii) it has the legal authority to
execute deliver and perform its obligations under this Agreement and any
Work Order (iii) the obligations under this Agreement have been duly
authorized by all necessary corporate action; (iv) this Agreement has been
executed by duly authorized officers of such Party; (v) that the Agreement
constitutes a valid and legally binding obligation of the Party
enforceable in accordance with its terms, and (vi) and no consent or
approval of stockholders or any other person or consent or approval of,
notice to, or filing with, any public authorities is required as a
condition to the validity of this Agreement.
28. SABRE PORTFOLIO ACCESS. From time to time during the term of the Agreement
and as the Parties may agree, Sabre will provide TAM with information,
including descriptions of basic uses and applications, concerning Sabre
products, services and/or enhancements thereto which may be applicable for
TAM's operations. This information will be provided free of charge for
TAM's consideration for use in their operations.
29. BETA TESTING. Sabre from time to time develops new software/hardware
products or services along with supporting documentation (the "Beta
Products") for use by its clients. The Parties believe it is mutually
beneficial to allow TAM to utilize the Beta Products for purposes of
testing, analysis, and evaluation under the conditions of TAM's business
and environment (the "Beta Tests"). Whenever Sabre has a Beta Product
suitable for Beta Tests by an airline, or has a product for another market
segment that Sabre thinks may benefit from testing by TAM, Sabre will
notify TAM of such product. Subject to TAM's agreement to test, the
Parties will mutually develop a plan for such testing prior to the
commencement of each Beta Test. TAM, in the exercise of its sole
discretion may not agree to participate in any Beta Test. The Beta
Products are a pre-release test version and may have defects or
deficiencies that cannot or may not be corrected by Sabre. Sabre makes no
warranties, express or implied, including, but not limited to, warranties
of merchantability, satisfactory quality and fitness for a particular
purpose, with respect to the Beta Products, their use or support. TAM will
actively use the Beta Products subject to the Parties testing plan free of
charge during the Beta Tests. TAM will make available to Sabre copies of
data connected with its use of the Beta Products including, but not
limited
Confidential
to, test results, corrections, deficiency information, and actual or
suggested improvements to the Beta Product and agrees to consult with
Sabre in the review and analysis of the same. All reports, designs,
specifications and other materials and all rights in all media made and/or
developed during the Beta Test for enhancement of the Beta Products,
whether prepared by Sabre or TAM, will be the sole and exclusive property
of Sabre and its Affiliates; and all such reports, designs, specifications
or other materials and all media shall be kept confidential by TAM. All
right, title and interest throughout the world to any invention relating
to enhancement of the Beta Products, whether or not patentable, conceived
in or made in the course of or as a result of TAM's Beta Test shall be the
sole and exclusive property of Sabre and its Affiliates, provided that in
no event will Sabre disclose to any third party any proprietary TAM data
or information. Subject to TAM's approval, TAM agrees to provide an
endorsement statement that Sabre can use in advertisement and sales
materials for the Beta Products. If TAM desires to continue using the Beta
Product after the expiration of the Beta Test, or contracts with Sabre for
the production version of the Beta Product within * months, the Parties
will negotiate an appropriate charge for such product, including any
credits for TAM for the use of TAM Equipment, software and/or services in
connection with the Beta Test.
30. RIGHT OF RESPONSE. In consideration of access to Sabre portfolio and the
right to act as a Beta Product testing site as provided in Sections 28 and
29, TAM agrees to give Sabre the right of response in connection with any
requirements TAM may have related to airline products and services of the
variety offered by Sabre. Concurrently with discussing with any other
provider of such airline products and services, TAM will notify Sabre of
its interest in obtaining such products and services. TAM will discuss in
good faith with Sabre the provision of such products or services from
Sabre to TAM, and will be allowed the same opportunity, conditions and
time to formulate a response as TAM provides to any third party. If
Sabre's response is not accepted by XXX, XXX will be free to negotiate
and enter into an agreement with any third party for any such airline
products and services at its discretion and without interference by Sabre.
Sabre will make no claim against any such third party as a result of their
selection by TAM for such airline products and services.
31. OTHER. Where agreement, approval, acceptance or consent of either Party is
required by this Agreement or any Work Order, such action will not
be unreasonably withheld or delayed. The Parties are independent
contractors, and neither this Agreement nor any Work Order will be
construed as constituting either Party as partner, joint venturer or
fiduciary of the other. If any provision (other than a provision relating
to any payment obligation) of this Agreement or any Work Order or the
application hereof or thereof to any persons or circumstances is, to any
extent, held invalid or unenforceable, the remainder of this Agreement and
each Work Order or the application of such provision to persons or
circumstances other than those as to which it is invalid or unenforceable
will not be affected thereby, and each provision of this Agreement and
each Work Order will be valid and enforceable to the extent permitted by
law. Nothing in this Agreement or any Work Order may be relied upon or
will benefit any Party other than TAM and Sabre and their respective
Affiliates. Any provision of this Agreement which contemplates performance
or observance subsequent to any termination or expiration of this
Agreement will survive any termination or expiration of this Agreement and
continue in full force and effect. This Agreement and each Work Order (a)
will be governed by the substantive laws of the State of New York, United
States of America (without giving effect to any choice-of-law rules that
may require the application of the laws of another jurisdiction), (b) will
be binding on the Parties and their successors and permitted assigns, (c)
may not be assigned by either Party without the prior written consent of
the other (except that Sabre will have the right to perform the Sabre
Services itself and through its Affiliates, to assign this Agreement and
each Work Order to such Affiliates, provided no such assignment shall
relieve Sabre of any of its obligations under this Agreement or any Work
Order and in the event of any such assignment by Sabre, Sabre and its
affiliate will be jointly and severally liable to TAM for any damages as
provided for in this Agreement and any Work Order) and (d) may not be
changed or modified orally or through a course of dealing, but only by a
written amendment or revision signed by the Parties. This Agreement and
each Work Order (including any exhibits or attachments referred to herein
or therein and attached hereto or thereto, each of which is incorporated
herein or therein, as applicable, by this reference for all purposes)
constitute, as of the effective date of this Agreement or that Work Order,
as applicable, the full and complete statement of the agreement of the
Parties with respect to the subject matter hereof and thereof and
supersede any previous or contemporaneous agreements, understandings or
communications, whether written or oral, relating to such subject matter.
Confidential
IN WITNESS WHEREOF, the Parties have duly executed and delivered this Agreement
by their duly authorized representatives as of the date first set forth above.
SABRE TRAVEL INTERNATIONAL LTD. (No. 272493) TAM LINHAS AEREAS S.A.,
By: By:
-------------------------------- --------------------------------
Name: Xxxxxxxx Xxxxx Name: Xxxxxx Xxxxxxxxx
Title: Director Title: Vice President
Date: October 3, 2003 Date: October 3, 2003
By:
--------------------------------
Name: Ruy Xxxxxxx Xxxxxx Xxxxxx
Title: Vice President
Date: Octobers 3, 2003
Confidential
D-1
Confidential
WORK ORDER 1
THIS WORK ORDER NUMBER 1 ("WO1") will confirm the mutual understanding and
agreement of each of Sabre Travel International Ltd. ("Sabre"), and TAM Linhas
Aereas S.A., a Brazilian corporation ("TAM") as to the terms and conditions
pursuant to which Sabre itself and through its direct and indirect wholly-owned
subsidiaries or Affiliates, will perform the services and produce the
deliverables described in this WO1. All references to Sabre and TAM in this WO1
will be deemed to include all respective Parties subsidiaries and Affiliates,
and TAM and Sabre may be referred to herein individually as a "Party" and
together as the "Parties". The terms and conditions of this WO1 are as follows:
1. This WO1 is entered into by the Parties under the provisions of the
General Services Agreement, and Exhibits thereto, dated as of
October 3, 2003, between Sabre and TAM (the "Agreement"), and,
except as otherwise provided in this WO1, all provisions of the
Agreement are applicable to this WO1. If there is a conflict between
the terms of this WO1 and the Agreement, the terms of this WO1 will
be controlling.
1.1 The term of this WO1 will begin on October 3, 2003, and,
unless earlier terminated as provided in the Agreement, will
continue through October 3, 2013 (the "Term of this WO1"). The
Term of this WO1 may be extended by mutual written agreement
of the Parties.
2. THE TECHNOLOGY SOLUTION. The technology solution ("Technology
Solution") envisioned as Sabre Services by the Agreement is
described in two specific parts; 1) the "Multihost Solution" which
encompasses products and services including host-based reservations
provided and supported by Sabre and 2) the "Portal Solution", a
web-based tool provided and supported by Sabre which integrates the
TAM Solution defined in Attachment 1 of this WO1 under Section 1,
with the Multihost Solution. In addition, TAM will have certain
obligations in connection with the Technology Solution described in
this WO1 as TAM Solution obligations.
2.1 DETERMINATION OF APPLICABLE DATES. The terms of this WO1 shall be
governed by three mutually agreed dates which are defined as
follows:
2.1.1 EFFECTIVE DATE. The "Effective Date" of this WO1 shall be
defined as the date upon which this WO1 is duly executed by
both Parties.
2.1.2 IMPLEMENTATION DATE. The "Implementation Date" of the
Technology Solution shall be the date by which Acceptance is
deemed to have occurred pursuant to Section 2(d) of the
Agreement.
2.1.3 SUSPENSION DATE. The "Suspension Date" shall be defined as the
earlier of (i) the date upon which TAM discontinues
participation in all Global Distribution Systems ("GDS")
within Brazil or (ii) (a) * days following the date upon which
Sabre Subscriber locations within Brazil which generated * %
of TAM ticket sales revenue generated by Sabre Subscribers for
the preceding * months prior to the Effective Date of the
Agreement have had Infrastructure preparation completed as
described in Section 7.4 and (b) Brazilian travel agents and
other related producers (e.g. tour operators, consolidators,
etc.) who produced * % of TAM's domestic point of sale
passenger revenue in the preceding * months prior to the
Effective Date of the Agreement have had access to training on
the Technology Solution or (iii) the * Brazilian travel
agencies, including * % of their branches, or related
producers, who produced the most revenue for TAM in the
preceding * months (a) have had access to training on the
Technology Solution and (b) of these * top producers, all
Sabre Subscribers have had Infrastructure preparation
completed as described in Section 7.4.
2.1.4 PRE-EXISTING MULTIHOST AGREEMENT. TAM's Multihost Agreement
with Sabre dated February 18, 1993 shall remain in full force
and effect until the Effective Date and shall be put into
abeyance on the Effective Date until the earlier of (i) the
expiration of this WO1 at which time
Confidential
the Multihost Agreement will automatically terminate or (ii)
termination in accordance with Section 12 (e) of the
Agreement, at which time the Multihost Agreement will be
reinstated in accordance with Section 12 (e) of the Agreement.
3. THE MULTIHOST SOLUTION. Throughout the Term of this WO1, Sabre will
provide TAM with certain Multihost Services including but not limited to
hosted computer services ("Hosted Services"), maintenance of Multihost
software and databases ("Maintenance Services"), and management of
telecommunication services ("Telecommunication Services") as described
more thoroughly below.
3.1 DESCRIPTION OF MULTIHOST SOFTWARE. Sabre shall provide or cause to
be provided to TAM access to the Multihost Software, in accordance
with Attachment 1 to this WO1 under the Section 2.1 "Description of
Multihost Software". As used herein, the term "Multihost Software"
means the Sabre proprietary computerized reservations system used in
relation to the provision of air transportation services as
described in Section 2 of Attachment 1 of this WO1.
3.2 DESCRIPTION OF MULTIHOST MAINTENANCE SERVICES. Sabre shall provide
or cause to be provided to TAM certain Multihost Maintenance
Services, as described in Sections 3.4(a)(ii), 3.4(b)(vii), 3.4(d)
and 3.4(e) of this WO1.
3.3 DESCRIPTION OF MULTIHOST TELECOMMUNICATIONS SERVICES. Except as
otherwise agreed in a separate agreement, TAM shall be responsible
for obtaining communications facilities, at its own expense,
necessary to communicate with the Multihost Software. Sabre shall
cooperate with TAM to facilitate the connection of such
communication facilities.
3.4 MULTIHOST SOFTWARE AND DATABASE SUPPORT.
(a) TAM DATABASE SUPPORT.
i) TAM DATABASE. Sabre acknowledges that the TAM database
(consisting of all TAM information, data and records residing
in the TAM partition of the Sabre Multihost computer ("TAM
Database") contains information proprietary to TAM. The TAM
Database shall be and will remain the sole property of TAM and
only Equipment (as defined in Section 9(d) of the Agreement)
specified by TAM may be used to access the TAM Database;
provided, however, that Sabre and its subcontractors' data
processing personnel shall have access to the TAM Database to
ensure the integrity and performance of the Multihost
Software. Sabre and its subcontractor's personnel having
access to the TAM Database shall be made aware of their duty
to maintain the confidentiality of the TAM Database and of
their duty to use such access only for purposes contemplated
by the Agreement. The location of the TAM Database may or may
not be physically separate from the databases of Other
Customers of Sabre. As used herein "Other Customers" means any
other carrier which obtains Multihost Software or Multihost
Services from Sabre.
ii) SABRE TO MAINTAIN TAM DATABASE. Sabre shall maintain, or cause
to be maintained, the TAM Database, and shall make backup
archival copies of the TAM Database at least once in each
twenty-four hours (but not less frequently than for any Other
Customer) so that if the TAM Database is for any reason erased
or destroyed, Sabre shall promptly restore the archival copy.
If the TAM Database is erased or destroyed for (i) causes
within Sabre's sole control, Sabre will restore the archival
copy at no additional charge and, in the invoice following the
erasure or destruction of the TAM Database, Sabre will credit
TAM * % of the previous month's invoice for services provided
by Sabre to TAM pursuant to this WO1, prorated to reflect the
number of hours and minutes of the outage resulting from the
erasure or destruction of the TAM Database. (ii) if,
alternatively, the TAM Database is erased or destroyed for
causes within TAM's sole control, TAM will pay Sabre for all
labor incurred in restoring the archival copy at Sabre's then
current labor rates, (iii) for any TAM Database erasure or
destruction that is outside of TAM's sole control and Sabre's
sole control, TAM shall pay Sabre half of Sabre's standard
applicable
2
Confidential
labor cost incurred in restoring the archival copy. Any
incident pursuant to this Section 3.4(a)(ii) for which a
credit is issued will not be eligible for a credit under any
other section of this WO1.
iii) ACCESS TO THE MULTIHOST SOFTWARE RESTRICTED. Sabre will
restrict access to data contained within the Multihost
Software by functional identification ("Duty Codes") to
facilitate data security. TAM agrees that the Duty Codes used
by TAM, unless otherwise agreed to by Sabre, will be identical
to those used by Sabre. Sabre shall use the same security
procedures to protect the TAM Database from unauthorized
access as it uses for Other Customers. Sabre shall protect the
confidentiality of the TAM Database using the same care it
uses to protect its own confidential information of like
importance, but not less than reasonable care. Sabre reserves
the right to modify its regulations and procedures from time
to time to improve such protection.
iv) SABRE DATABASE SUPPLIERS. Use of the TAM Database is, or may
be, subject to certain restrictions and covenants set forth in
agreements with database application software suppliers
("Database Suppliers"). TAM agrees to comply with such
restrictions and covenants provided that copies of the
agreements in which they are contained are provided to TAM
within fifteen (15) days prior to the effective date of
any such restriction or covenants that are imposed on Sabre
hereafter and provided further that Sabre will exercise care
that such restriction does not impair TAM's rights under the
agreement and this WO1. In providing copies of such agreements
to TAM, Sabre may delete pricing or other commercially
sensitive information. To the extent that information from
such Database Suppliers becomes unavailable or third party
software is not supported, Sabre is relieved of its obligation
to provide such data to TAM; however, Sabre will use
reasonable efforts to supply replacement data.
(b) MULTIHOST SOFTWARE PERFORMANCE.
i) PERFORMANCE STANDARDS. Subject to the provisions of Sections
3.4(b)(ii) and (iii). Sabre will maintain, or to cause to be
maintained, the Multihost Software's availability twenty-four
hours per day, seven days per week, subject to Downtime. As
used herein, "Downtime" means the time when the Multihost
Software is not available for productive use at the Sabre Data
Center or at such other location as Sabre may designate Data
Center. As used herein, "Data Center" means the Data Center
operated by or on behalf of Sabre and currently located in
Tulsa, Oklahoma, United States or such other location as Sabre
may designate.
ii) AVAILABILITY. Except as may be otherwise provided in an
applicable Work Order, Sabre will provide Uptime for the
Multihost Software at least * of the time during the Term of
this WO1. As used herein "Uptime" means the time when the
Multihost Software is available for productive use at the Data
Center (excluding Downtime), measured during a calendar month,
and calculated as (i) the number of minutes of availability
during such measurement period, divided by (ii) the total
minutes during such measurement period minus the Downtime
minutes referred to in Sections 3.4(b)(v) and (vi). No
exception will be made in the case that Uptime as calculated
herein is not met solely because of the failure of Multihost
Software as defined in Section 2(c) the Agreement. If, Sabre
fails to provide Uptime for the Multihost Software for at
least * of the time as specified above during any calendar
month, Sabre will issue TAM a credit on its next invoice in an
amount equal to * of the previous month's invoice. Any
incident pursuant to this Section 3.4(b)(ii) for which a
credit is issued (the "first incident") will be eligible for
an additional credit under this WO1, if but only if, the cause
of such other incident is not directly related to the cause of
the first incident.
iii) LIMITATIONS ON SECTIONS 3.4 (B) (I) AND (II). Sabre shall not
be in default of the service levels or service level goals
under this Agreement to the extent such failure is wholly or
partly due to any one of the following reasons: (i) TAM's
failure to perform its
3
Confidential
obligations under the Agreement that affects the performance
of the respective Multihost Software system; (ii) Force
Majeure Events; (iii) the performance of a third party
(including but not limited to Telecommunications provider(s));
(iv) changes made in accordance with the procedures set forth
in Section 3.4(c)(ii) below, (v) unforeseen capacity increases
based on changes in TAM's business processes or methodology
for generating Messages;(vi) TAM's internal software other
than the "Licensed Software," as defined in the Agreement; and
(vii) performance of third party software or hardware. As
performance of the Multihost Software is dependent on
performance of local area and wide area networks, and software
and hardware of Third Parties and TAM, Sabre shall not be
responsible for problems or delays due to technical matters
beyond its control. As used herein, the term "Messages" means
a grouping of characters transmitted to the Sabre Multihost
TAM reservation partition at the Data Center whether such
transmission is made manually or automated. Each such
transmission constitutes one Message.
iv) SOLE AND EXCLUSIVE REMEDY FOR OUTAGES. In the event of an
outage, Sabre will restore the Multihost Software as soon as
reasonably practicable using the same degree of effort
accorded a similar problem for Other Customers. Except as may
be provided in an applicable Work Order, if Uptime is not at
least * for any * consecutive day period during the Term of
this WO1, Sabre's sole liability and TAM's sole and exclusive
remedy shall be for TAM to terminate this WO1 and the
Agreement.
v) ROUTINE DOWNTIME. Sabre may from time to time perform routine
Downtime for system maintenance of and software modifications
to the Multihost Software. Except for operational necessity,
routine Downtime shall occur between 2100 and 0000 Xxxxxx
Xxxxxx Central Time ("CT"). Sabre will endeavor to give TAM at
least hour written advance notice of Routine Downtime and its
anticipated duration.
vi) EXTENDED DOWNTIME. The Multihost Software may also be
unavailable for longer periods for hardware upgrades, facility
modification, TAM requested reorganization of the TAM
Database, and similar reasons. Sabre will use reasonable
efforts to limit such Downtime to no more than * hours,
occurring between the hours of 2000 and 0400 CT if on
weekdays, and 1900 and 0300 CT if on weekends or on a United
States holiday. To the extent practicable, Sabre shall consult
with TAM in scheduling such Downtime and shall endeavor to
accommodate TAM with respect to scheduling. Although Sabre
shall avoid unscheduled Downtime and to maintain Uptime at an
industry-competitive level, such Downtime may occur despite
such efforts. Unscheduled Downtime shall be included in the
calculation of Downtime.
vii) ERRORS AND PROBLEMS. After receiving notice from TAM of any
Errors or problems with the Multihost Software, Sabre will
commence efforts to correct promptly the Error or problem. As
used herein, the term "Error" means a reproducible failure of
a software system to perform in all material respects in
accordance with its functionality. Sabre will accord to TAM
the same priority, speed of response, and degree of effort
that it accords or would accord to any Other Customer for a
similar Error or problem. In the case of a "Level 1 Error" as
defined in Section 3.4(d) of this WO1, Sabre will guarantee
service restoration within * hours for * % of cases, and (ii)
in the case of a "Level 2 Error" as defined in Section 3.4(d)
of this WO1, Sabre will guarantee service restoration within *
hours for * % of cases. If Sabre fails to restore service
within the timeframes described in (i) and (ii) above, Sabre
will issue TAM a credit on its next invoice in an amount equal
to * % of the previous month's invoice. Any incident pursuant
to this Section 3.4(a)(vii) for which a credit is issued (the
"first incident") will be eligible for an additional credit
under this WO1, if, but only if, the cause of such other
incident is not directly related to the cause of the first
incident. Sabre shall have no obligation to fix Errors for any
version of a Software system other than the most current
version and the immediately preceding version of such
Multihost Software system. If a Level 2 Error is not corrected
within * days after receiving written notice of such Level 2
Error, TAM's Chief Executive Officer may give written notice
to Sabre's Chief
4
Confidential
Executive Officer that the Level 2 Error has not been
corrected and if such Level 2 Error has not been corrected
within * days from the date of such notice, TAM may terminate
the Agreement and this WO1, and seek damages as otherwise
provided for in the Agreement.
viii) PERFORMANCE RELATED TO TELECOMMUNICATIONS AND EQUIPMENT
FACILITIES. If any unusual or unforeseen growth in TAM's
operations occurs, Sabre will consult with TAM and subject to
the parties mutual agreement, TAM will pay for all Equipment
and Telecommunications facilities and necessary interfaces and
related installation costs that may be required by such
unusual or unforeseen growth. Additional fees may also apply
as may be set forth below. The Parties acknowledge that the
incorporation of another Brazilian carrier within the scope of
this WO1 will not be deemed unusual or unforeseen growth with
respect to Equipment and Telecommunications facilities as
provided herein by them.
(c) ENHANCEMENTS, NEW FUNCTIONS AND MODIFICATIONS.
i) SABRE CHANGES TO MULTIHOST SOFTWARE. From time to time, the
functionality of a Multihost Software system may be modified
by Sabre creating enhancements and adding new functions. If
Sabre offers these enhancements or new functions without
charge to TAM, then TAM agrees to accept them for use with the
applicable Multihost Software system provided TAM is not
required to pay for any related upgrades or later implemented
related upgrades.
ii) TAM CHANGE REQUESTS. TAM may submit a Change Request to Sabre
for enhancements and new functions, provided that the cost of
developing such enhancements or new functions may, at Sabre's
discretion, be charged to TAM for such development cost at a
rate of USD$ * per hour during the first * months after the
Implementation Date. Subsequently TAM shall pay Sabre for such
services at Sabre's then prevailing labor rates per hour or
another rate mutually agreed by the Parties. Any such change
shall be subject to the Change Request procedure referred to
in Section 2(e) of the Agreement. Should Sabre exercise its
discretion to charge TAM for the requested change, Sabre will
retain full rights to the change but will not offer this
functionality to any third party if TAM has requested the
product be exclusively TAM's for a maximum period of * months
after such change is in production. If the product is made
available to any third parties, with TAM's consent, Sabre will
pay TAM a prorated amount for the remaining exclusivity
period, but not exceeding the amount charged by Sabre to TAM
for the change.
iii) ENHANCEMENT AND NEW FUNCTION IMPLEMENTATION. Sabre will
provide TAM with reasonable prior notice of the scheduled
implementation of enhancements and new functions. Such notice
shall be provided to TAM in the same manner and at the same
time as such notice is provided to Other Customers. Sabre
shall provide training materials to TAM with respect to such
enhancements and new functions. The training materials
delivered to TAM shall be the latest versions that Sabre
provides to Other Customers except in cases where customized
documentation is prepared for an Other Customer.
iv) SABRE TEST OF ENHANCEMENTS AND NEW FUNCTIONS. Except when
precluded by operational emergencies, Sabre shall test all
Multihost Software capabilities, including without limitation,
enhancements and new functions, under an internal test
environment. TAM acknowledges that despite such internal
testing, conditions may develop that lead to error conditions,
malfunctions, or a breakdown in the operation of a Multihost
Software system. Should any of the foregoing occur, Sabre
shall correct any such condition with the same degree of
effort afforded a similar problem affecting Other Customers.
5
Confidential
(D) SABRE HELP DESK SUPPORT. TAM will have access to a Sabre
help desk twenty-four (24) hours a day, seven (7) days a week
for the Multihost Software. All calls to the Sabre help desk
will be coordinated through a central processing group at TAM,
which group will be responsible for the initial line of
support for the Multihost Software (the "TAM Processing
Group"). If TAM's Processing Group is unable to answer the
question or resolve an issue with the Multihost Software, it
will then contact the Sabre help desk. The Sabre help desk
will be responsible for facilitating resolution of the
question or issue. A Sabre help desk coordinator will be
responsible for logging and tracking Errors after they have
been reported by TAM through a problem report, contacting the
TAM Technical Coordinator, as defined in Section 3.4(e). to
confirm receipt of a problem report and jointly determining
the priority level of the Error. Priority levels will be
determined as follows:
Level "1" Errors. These are problems with the Multihost
Software's functionality that renders it inoperable. TAM will
be advised at least every twenty-four(24) hours by the help
desk as to the status of efforts to resolve the Level 1 Error.
One or more members of Sabre senior management will be
informed on a daily basis of all Level 1 Errors.
Level "2" Errors. These are problems with the Multihost
Software's functionality that are significant to the
productive use of the Multihost Software but the Multihost
Software can continue to operate in a restricted fashion.
These problems will be addressed in a reasonable time after
any Level 1 Error has been resolved.
Level "3" Errors. These are problems with the Multihost
Software for which Sabre has provided an acceptable work
around solution and do not have a material impact on TAM's
productivity and customer service.
(E) TAM'S ERROR REPORTING OBLIGATIONS. TAM shall have
following obligations with regard to the reporting and
resolution of Errors and problems:
(i) During normal business hours provide an on-site TAM
Technical Coordinator;
(ii) Log each incident of a problem or Error, completely
describing the specific event and documenting all
aspects of the incident (users involved, data inputs,
completed description of the incident, etc.);
(iii) The Technical Coordinator will coordinate with the
software user, hardware/operating system vendors, and
the qualified LAN administrator to confirm problems
originating in the software;
(iv) Promptly communicate to Sabre all problem reports;
(v) Notify Sabre in writing of any modifications made by TAM
to hardware or operating software configuration which
may impact the operation of the Multihost Software;
(vi) Promptly install, or assist in installing, solutions
sent by Sabre to remedy malfunctions;
(vii) Be responsible for maintaining a procedure for
reconstruction of lost or altered files, data, or
programs, and for actually reconstructing any lost or
altered files, data or programs;
(viii) Reasonably cooperate with Sabre in the resolution of
any problem or Error with the Multihost Software.
3.5 MULTIHOST ACCESS AND USE RIGHTS. Following Acceptance and for
so long as TAM is in compliance with all of its obligations
herein, Sabre grants to TAM and TAM accepts from Sabre, for
the Term, a limited, non-exclusive and non-transferable
(except as provided herein) right for TAM and its employees to
access the Multihost Software and use the executable code of
the Licensed Software and accompanying documentation solely
for TAM's internal airline operations. The documentation may
be provided in paper, computer disk, over the web or via
online help in the Multihost Software or Licensed Software, as
applicable.
6
Confidential
3.6 CODE SHARING ARRANGEMENTS. If authorized by an applicable Work
Order, TAM's internal airline operations shall include use of
the Licensed Software or the Multihost Software by TAM in
connection with TAM's code sharing arrangements with other air
carriers, so long as all of the following conditions are met:
(a) Any code sharing arrangements are disclosed in writing to
Sabre as and when they are entered into by TAM;
(b) TAM pays Sabre fees for all code share flights and
otherwise as set forth and described in Section 9.9(a) of this
WO1;
(c) TAM shall restrict access to the Licensed Software or
Multihost Software to its employees using the Licensed
Software or Multihost Software in connection with the code
sharing arrangement with TAM;
(d) TAM's use of the Licensed Software or Multihost Software
in connection with TAM's code sharing arrangement with other
carriers shall be limited solely to processing data in respect
of TAM's inventory of flights operated by such code sharing
carriers; and
(e) TAM shall remain responsible for all payments to Sabre
under this Agreement arising out of use of the Licensed
Software or the Multihost Software with TAM's carrier code in
connection with any code-sharing carriers.
3.7 COPIES. Any Multihost Software shall be resident on equipment
operated by Sabre at the Data Center, and TAM will not receive
a copy thereof (TAM's rights being limited to the access and
use of the Multihost Software resident at the Data Center).
Unless otherwise provided in another Work Order or the
Agreement, TAM shall receive only one copy of any Licensed
Software, and one copy of the accompanying documentation
therefore. TAM may make three (3) copies of each Licensed
Software system and unlimited copies of the TAM Data, as well
as accompanying documentation solely for the permitted use
identified herein and for back-up purposes. TAM shall
reproduce and include on each copy and on each partial copy
any copyright notice and proprietary rights legend contained
in the Licensed Software system and accompanying
documentation, as such notice and legend appear in or on the
original.
3.8 EXPRESS RESTRICTIONS ON SOFTWARE USE. The Multihost Software
and the Licensed Software and their structure, organization
and source code constitute valuable trade secrets of Sabre.
Accordingly, TAM agrees it will not (a) modify, adapt, alter,
translate, or create derivative works from any Multihost
Software or Licensed Software system; (b) merge any Multihost
Software or Licensed Software with any other software unless
agreed in advance with Sabre; (c) sublicense, lease, rent or
loan the Multihost Software or Licensed Software to any third
party, (d) reverse engineer, disassemble, compile, reverse
compile, or decompile the Multihost Software or Licensed
Software; or (e) otherwise use or copy the Multihost Software
or Licensed Software except as expressly allowed in this
Agreement. TAM will also restrict access to and use of the
Licensed Software, Multihost Software and other components of
IT systems operated by Sabre to perform the Services to its
own employees who require access and use in performing their
duties.
4. THE PORTAL SOLUTION. Throughout the Term of this WO1, Sabre will
provide TAM with certain Portal Services including but not limited to
hosted internet integration services through the Sabre Multihost
environment ("Portal Services"), maintenance of portal software ("Portal
Maintenance Services"), and portal telecommunication services ("Portal
Telecommunication Services") as described more thoroughly below
(collectively the "Portal Solution"). In connection with the Portal
Services, TAM will have the TAM Solution Obligations described in
Section 5 of this WO1.
7
Confidential
4.1 DESCRIPTION OF PORTAL SOFTWARE. Sabre shall provide or cause to be
provided to TAM access to certain Portal Software, a description of which
is contained in Attachment 1 to this WO1 under the Section 3.1,
"Description of Portal Software". From the Effective Date until * TAM may
request and Sabre will provide at Sabre's sole cost * hours of Portal
Software development, for the purpose of developing additional
functionality, which hours must be utilized by * . Any unused hours
remaining after * will be lost and Sabre will have no further
obligation to TAM under this Section 4.1. Any additional functionality
that results from Sabre Portal Software development using these * hours
will be deemed to be included in the definition of Portal Software. These
software development hours are not included within the hours specified in
Section 11.4 hereof.
4.2 DESCRIPTION OF PORTAL MAINTENANCE SERVICES. Sabre shall provide or
cause to be provided to TAM certain Portal Maintenance Services, as
described in Sections 4.4(a) (vii), 4.4(c), 4.4(d) of this WO1.
4.3 DESCRIPTION OF PORTAL TELECOMMUNICATIONS SERVICES. Sabre shall provide
or cause to be provided to TAM connectivity consisting of two circuits
from Sao Paulo to the Data Center. These circuits will be utilized by TAM
for this project exclusively.
4.4 PORTAL SOFTWARE SUPPORT.
(a) PORTAL SOFTWARE PERFORMANCE.
i) PERFORMANCE STANDARDS. Subject to the provisions of Section
4.4(a)(ii) and (iii), Sabre shall maintain, or to cause to be
maintained, the Portal Software's availability twenty-four
hours per day, seven days per week, subject to Portal Software
Downtime. As used herein, "Portal Software Downtime" means the
time when the Portal Software is not available for productive
use at the Data Center.
ii) AVAILABILITY. Except as may be otherwise provided in an
applicable Work Order, Sabre will provide Portal Software
Uptime for the Portal Software at least * % commencing on the
Implementation Date and * % commencing * days after the
Suspension Date. As used herein "Portal Software Uptime" means
the time when the Portal Software is available for productive
use at the Data Center (excluding Portal Software Downtime),
measured during a calendar month, and calculated as (i) the
number of minutes of availability during such measurement
period, divided by (ii) the total minutes during such
measurement period minus the Portal Software Downtime minutes
referred to in Sections 4.4(a)(v) and (vi). If, * days after
the Suspension Date, Sabre fails to provide Uptime for the
Portal Software for at least * % of the time as specified
above during any calendar month, Sabre will issue TAM a credit
on its next invoice in an amount equal to * % of the previous
month's invoice. Any incident pursuant to this Section
4.4(a)(ii) for which a credit is issued (the "first incident")
will be eligible for an additional credit under this WO1, if,
but only if, the cause of such other incident is not directly
related to the cause of the first incident.
iii) LIMITATIONS ON SECTIONS 4.4 (a) (i) AND (ii). Sabre shall not
be in default of the service levels or service level goals
under this Agreement to the extent such failure is wholly or
partly due to any one of the following reasons: (i) TAM's
failure to perform its obligations under the Agreement and
this WO1 that affects the performance of the Portal Software
system; (ii) Force Majeure events; (iii) the performance of a
third party (including but not limited to Telecommunications
provider(s)) unless selected by Sabre; (iv) unforeseen
capacity increases based on changes in TAM's business
processes or methodology; (v) TAM's internal software other
than the Licensed Software and the Portal Software; and (vi)
performance of third party software or hardware. As
performance of the Portal Software is dependent on performance
of local area and wide area networks, and software and
hardware of third parties and TAM, Sabre shall not be
responsible for problems or delays due to technical matters
beyond its control.
8
Confidential
iv) SOLE AND EXCLUSIVE REMEDY FOR OUTAGE. In the event of an
outage, Sabre shall restore the Portal Software as soon as
reasonably practicable using the same degree of effort
accorded a similar problem for Other Customers. Commencing *
days after the Suspension Date, if the Portal Software Uptime
is not at least * %) for any * consecutive day period during
the Term of this WO1, Sabre's sole liability and TAM's sole
and exclusive remedy shall be for TAM to terminate this WO1
and the Agreement.
v) ROUTINE PORTAL SOFTWARE DOWNTIME. Sabre may from time to time
perform routine Portal Software Downtime for system
maintenance of and software modifications to the Portal
Software. Except for operational necessity, routine Portal
Software Downtime shall occur between 2100 and 0400 Brasilia
Time. Sabre will endeavor to give TAM at least hour advance
notice of Routine Portal Software Downtime and its anticipated
duration.
vi) EXTENDED PORTAL SOFTWARE DOWNTIME. The Portal Software may
also be unavailable for longer periods for hardware upgrades,
facility modification, TAM requested alterations to the Portal
Software, and similar reasons. Sabre will use reasonable
efforts to limit such Portal Software Downtime to no more than
* hours, occurring between the hours of 2100 and 0000 Xxxxxxxx
Time. To the extent practicable, Sabre shall consult with TAM
in scheduling such Portal Software Downtime and shall endeavor
to accommodate TAM with respect to scheduling. During the
period of extended Portal Software Downtime, the Portal
Solution provided by Sabre may be unavailable.
vii) ERRORS AND PROBLEMS. After receiving notice from TAM of any
material Errors or problems with the Portal Software or
material inconsistencies with described functionality
(collectively, "Error"), Sabre will commence efforts to
correct such Errors or problems. Sabre will accord to TAM the
same priority, speed of response, and degree of effort that it
accords or would accord to any Other Customer for a similar
Error or problem. In the case of a "Level 1 Error" as defined
in Section 4.4(c) of this WO1, Sabre will guarantee service
restoration within * hours for * % of cases, and (ii) in the
case of a "Level 2 Error" as defined in Section 4.4(c) of this
WO1, Sabre will guarantee service restoration within * hours
for * % of cases. If Sabre fails to restore service within the
timeframes described in (i) and (ii) above, Sabre will issue
TAM a credit on its next invoice in an amount equal to * % of
the previous month's invoice. Any incident pursuant to this
Section 4.4(a)(vii) for which a credit is issued (the "first
incident") will be eligible for an additional credit under
this WO1, if, but only if, the cause of such other incident is
not directly related to the cause of the first incident. Sabre
shall have no obligation to fix Errors for any version of the
Portal Software other than the most current version and the
immediately preceding version of such Portal Software. If a
Level 2 Error is not corrected within * days after receiving
written notice of such Level 2 Error, TAM's Chief Executive
Officer may give written notice to Sabre's Chief Executive
Officer that the Level 2 Error has not been corrected and if
such Level 2 Error has not been corrected within * days from
the date of such notice, TAM may terminate the Agreement and
this WO1, and seek damages as otherwise provided for in the
Agreement.
viii) PERFORMANCE RELATED TO TELECOMMUNICATIONS AND EQUIPMENT
FACILITIES. If any unusual or unforeseen growth in TAM's
operations occurs, Sabre will consult with TAM and subject to
the parties mutual agreement, TAM will pay for all Equipment
and Telecommunications facilities and necessary interfaces and
related installation costs that may be required by such
unusual or unforeseen growth. Additional fees may also apply
as may be set forth below. The Parties acknowledge that the
incorporation of another Brazilian carrier within the scope of
this WO1 will not be deemed unusual or unforeseen growth with
respect to Equipment and Telecommunications facilities as
provided herein by them. Notwithstanding anything contained in
this Section 4.3(viii) if the number of servers required to
provide Sabre Services hereunder exceeds 114, the cost of
acquiring and bringing online any such additional servers
shall be the subject to the mutual agreement of the parties
9
Confidential
(b) ENHANCEMENTS, NEW FUNCTIONS AND MODIFICATIONS.
i) NON-TAM REQUESTED FUNCTIONALITY. From time to time, the
functionality of a Portal Software system may be modified by
Sabre creating enhancements and adding new functions that were
not requested by TAM. Sabre shall notify TAM of any material
new functions or material modifications implemented during the
term of this WO1. During the period that Sabre has exclusive
marketing rights of the TAM Products as described in Exhibit B
of the Agreement, Sabre shall provide TAM access to this
non-TAM requested functionality at no charge. During any
period where Sabre does not have exclusive marketing rights to
the TAM Products as described in Exhibit B of the Agreement,
such non-TAM requested functionality may be offered to TAM for
a charge to be solely determined by Sabre. If Sabre offers
these enhancements or new functions without charge to TAM then
TAM agrees to accept them for use with the applicable Portal
Software system provided TAM is not required to pay for any
related upgrades or later implemented related upgrades.
ii) TAM CHANGES REQUESTS. TAM may submit a Change Request to Sabre
for enhancements and new functions which are not included in
Attachment 1 of WO1 under Section 3.1. provided that the cost
of developing such enhancements or new functions may, at
Sabre's discretion, be charged to TAM for such development
cost at a rate of USD$ * per hour during the first * months
after the Implementation Date. Subsequently TAM shall pay
Sabre for such services at Sabre's then prevailing labor rates
per hour or another rate mutually agreed by the Parties. Any
such change shall be subject to the Change Request procedure
referred to in Section 2(e) of the Agreement, and will include
consideration of its impact on Sabre service level
commitments. Should Sabre exercise its discretion to charge
TAM for the requested change, Sabre will retain full rights to
the change but will not offer this functionality to any third
party if TAM has requested the product be exclusively TAM's
for a maximum period of * months after such change is in
production. If the product is made available to any third
parties, with TAM's consent, Sabre will pay TAM a prorated
amount for the remaining exclusivity period, but not exceeding
the amount charged by Sabre to TAM for the change.
iii) ENHANCEMENT AND NEW FUNCTION IMPLEMENTATION. Sabre will
provide TAM with prior notice of the scheduled implementation
of enhancements and new functions. Such notice shall be
provided to TAM in the same manner and at the same time as
such notice is provided to Other Customers. Sabre shall
provide training materials to TAM with respect to such
enhancements and new functions. The training materials shall
be substantially similar to those that Sabre provides to Other
Customers.
iv) SABRE TEST OF ENHANCEMENTS AND NEW FUNCTIONS. Except when
precluded by operational emergencies, Sabre shall test all
Portal Software capabilities, including without limitation,
enhancements and new functions, under an internal test
environment. TAM acknowledges that despite such internal
testing, conditions may develop that lead to error conditions,
malfunctions, or a breakdown in the operation of a Portal
Software system. Should any of the foregoing occur, Sabre
shall use reasonable efforts to correct any such condition
with the same degree of effort afforded a similar problem
affecting any Other Customers.
10
Confidential
(c) SABRE HELP DESK SUPPORT. TAM will have access to a Sabre help desk
twenty-four (24) hours a day, seven (7) days a week for the Portal
Software. All calls to the Sabre help desk will be coordinated
through a central processing group at TAM, which group will be
responsible for the initial line of support for the Portal Software
(the "TAM Processing Group"). If TAM's Processing Group is unable to
answer the question or resolve an issue with the Portal Software, it
will then contact the Sabre help desk. The Sabre help desk will be
responsible for facilitating resolution of the question or issue. A
Sabre help desk coordinator will be responsible for logging and
tracking Errors after they have been reported by TAM through a
problem report, contacting the TAM Technical Coordinator to confirm
receipt of a problem report and jointly determining the priority
level of the Error. Priority levels will be determined as follows:
Level "1" Errors. These are problems with the Portal Software's
functionality that renders it inoperable. TAM will be advised at
least every twenty-four (24) hours by the help dusk as to the status
of efforts to resolve the Level 1 Error. One or more members of
Sabre senior management will be informed on a daily basis of all
Level 1 Errors.
Level "2" Errors. These are problems with the Portal Software's
functionality that are significant to the productive use of the
Portal Software but the Portal Software can continue to operate in a
restricted fashion. These problems will be addressed in a reasonable
time after any Level 1 Error has been resolved.
Level "3" Errors. These are problems with the Portal Software for
which Sabre has provided an acceptable work around solution and do
not have a material impact on TAM's productivity and customer
service.
(d) TAM'S ERROR REPORTING OBLIGATIONS. TAM shall have following
obligations with regard to the reporting and resolution of Errors
and problems:
(i) During normal business hours provide an on-site TAM Technical
Coordinator;
(ii) Log each incident of a problem or Error, completely describing
the specific event and documenting all aspects of the incident
(users involved, data inputs, completed description of the
incident, etc.);
(iii) The Technical Coordinator will coordinate with the software
user, hardware/operating system vendors, and the qualified LAN
administrator to confirm problems originating in the software;
(iv) Promptly communicate to Sabre all problem reports;
(v) Notify Sabre in writing of any modifications made by TAM to
hardware or operating software configuration which may impact
the operation of the Multihost Software;
(vi) Promptly install, or assist in installing, solutions sent by
Sabre to remedy malfunctions;
(vii) Be responsible for maintaining a procedure for reconstruction
of lost or altered files, data, or programs, and for actually
reconstructing any lost or altered files, data or programs;
(viii) Reasonably cooperate with Sabre in the resolution of any
problem or Error with the Multihost Software.
4.5 PORTAL ACCESS AND USE RIGHTS. Following Acceptance and for so long as
TAM is in compliance with all of its obligations herein, Sabre grants to
TAM and TAM accepts from Sabre, for the Term of this WO1, a limited,
non-exclusive and non-transferable (except as provided herein) right for
TAM and its employees, and agreed third-parties to access the Portal
Software to support TAM's airline operations. The documentation may be
provided in paper, computer disk, over the web or via online help in the
Portal Software or Licensed Software, as applicable.
4.6 COPIES. Any Portal Software shall be resident on equipment operated by
Sabre at the Data Center, and TAM will not receive a copy thereof. TAM's
rights will be limited to the access and use of the Portal Software
resident at the Data Center). Sabre shall escrow the source code for the
Portal Software, including all future maintenance releases as they become
commercially available, together with the related documentation and any
tools or data required to assemble and compile the source code, pursuant
to mutually agreed conditions. In the event of (i) a breach by Sabre of
the Agreement or this WO1 that frustrates Sabre's ability to provide the
Technology Solution (ii) an event of Force Majeure that frustrates Sabre's
ability to provide the Technology Solution, or (iii) the Termination of
the Agreement, or this WO1
11
Confidential
other than for a breach by XXX, XXX shall have the right to access and
modify the source code and use the Portal Software to meet its needs. In
any event, TAM shall ensure that such parties modifying the Portal
Software are under a nondisclosure agreement with TAM. Sabre shall own any
such modifications that do not include any TAM owned technology or any
technology provided by TAM from a third party. TAM will have a license to
use the modifications, exclusively for the earlier of (i) such period as
TAM has not obtained a substitute provider of technology similar to the
Portal Software or (ii) thirty six (36) months from the time access is
first granted to the source code as provided for herein. Nothing herein
shall be construed to permit TAM to provide access to the source code to
the Portal Software to any third party.
4.7 EXPRESS RESTRICTIONS ON PORTAL SOFTWARE USE. The Portal Software and
its structure, organization and source code constitute valuable trade
secrets of Sabre. Subject to the provisions Section 4.6, TAM agrees it
will not (a) modify, adapt, alter, translate, or create derivative works
from the Sabre Portal Software without the express written consent of
Sabre; (b) merge the Portal Software with any other software without the
express written permission of Sabre; (c) sublicense, lease, rent or loan
the Portal Software to any third party, (d) reverse engineer, disassemble,
compile, reverse compile, or decompile the Portal Software; or (e)
otherwise use or copy the Portal Software except as expressly allowed in
this Agreement.
4.8 PORTAL SOFTWARE USE BY NON-BRAZILIAN TRAVEL AGENCIES. The Parties
shall use commercially reasonable efforts to implement the Technology
Solution at non-Sabre travel agencies outside Brazil, on a case-by-case
basis, when both TAM and Sabre agree that such implementation would be
mutually beneficial Sabre shall be excused from its obligations under this
WO1 for providing training and Infrastructure preparation to any such
travel agency. Sabre Services, including modifications or enhancements
that are required for software associated with the Portal Solution to
adequately function outside Brazil are outside of the scope of this WO1.
4.9 COMPATIBILITY. Sabre will not alter or modify the Portal Solution
product interfaces in any way as part of a release or upgrade which
knowingly affects its compatibility with TAM software without advance
notice to TAM.
5. THE TAM SOLUTION OBLIGATIONS. Throughout the Term of this WO1, TAM will have
certain obligations with regard to the Portal Services of the Sabre Services
including but not limited to permitting Sabre access to certain of TAM's
proprietary software ("TAM Software"), maintenance of TAM's software ("TAM
Software Maintenance"), and maintenance and access to TAM's internal databases
("TAM Database Services") as described more thoroughly below.
5.1 DESCRIPTION OF TAM SOFTWARE. TAM shall provide or cause to be
provided to Sabre access to certain TAM Software, a description of
which is contained in Attachment 1 to this WO1 under Section 1.
5.2 DESCRIPTION OF TAM SOFTWARE MAINTENANCE. TAM shall provide or cause
to be provided to Sabre certain TAM Software Maintenance Services,
as described in Sections 5.4(b) (vii) of this WO1.
5.3 DESCRIPTION OF TAM DATABASE OBLIGATIONS. The description of the TAM
Database Obligations is described in Section 5.4 below.
5.4 TAM SOFTWARE AND DATABASE SUPPORT.
(a) TAM DATABASE OBLIGATIONS
i) TAM TO MAINTAIN TAM INTERNAL DATABASE. TAM shall
maintain, or cause to be maintained, the TAM Internal
Database, and shall make backup archival copies of the
TAM Internal Database at least once in each twenty-four
hours so that if the TAM Internal Database is for any
reason erased or destroyed, TAM shall, at its own
expense, promptly restore the archival copy. Sabre shall
be under no liability in the event that the TAM
12
Confidential
internal database is erased or destroyed, unless through
Sabre's negligence or willful misconduct.
ii) ACCESS TO THE TAM SOLUTION SOFTWARE RESTRICTED. TAM will
restrict access to data contained within the TAM
Solution by functional identification ("Duty Codes") to
facilitate data security. TAM will provide its own
security to the TAM Solution and shall allow Sabre
access through this system in accordance with the terms
of this Agreement and any applicable confidentiality
agreement. TAM reserves the right to modify its
regulations and procedures from time to time to improve
such protection.
(b) TAM SOFTWARE PERFORMANCE.
i) PERFORMANCE STANDARDS. TAM will maintain, or to cause to
be maintained, the TAM Software's availability * hours
per day, * days per week, subject to TAM Software
Downtime. As used herein, "TAM Software Downtime" means
the time when the TAM Software is not available for
productive use at the Customer data processing facility
currently located in Sao Paulo, SP, Brazil, herein
referred to as the "TAM Data Center" or at such other
location Customer may designate.
ii) AVAILABILITY. Except as may be otherwise provided in an
applicable Work Order, TAM will provide TAM Software
Uptime for the TAM Software at least * % of the time
beginning * days after the Suspension Date. As used
herein "TAM Software Uptime" means the time when the TAM
Software is available for productive use at the TAM Data
Center (excluding TAM Software Downtime), measured
during a calendar month, and calculated as (i) the
number of minutes of availability during such
measurement period, divided by (ii) the total minutes
during such measurement period minus the TAM Software
Downtime minutes referred to in Sections 5.4(b)(v) and
(vi).
iii) LIMITATIONS ON SECTIONS 5.4(b) (i) AND (ii). TAM shall
not be in default of the service levels or service level
goals under this Agreement to the extent such failure is
wholly or partly due to any one of the following
reasons: (i) Sabre's failure to perform its obligations
under the Agreement that affects the performance of the
TAM Solution; (ii) Force Majeure Events; (iii) the
performance of a third party (including but not limited
to Telecommunications provider(s); (iv) unforeseen
capacity increases based on changes in Sabre's business
processes or methodology for generating Messages; (v)
Sabre's internal software; and (vi) performance of third
party software or hardware. As performance of the TAM
Software is dependent on performance of local area and
wide area networks, and software and hardware of third
parties and Sabre, TAM shall not be responsible for
problems or delays due to technical matters beyond its
control.
iv) SOLE AND EXCLUSIVE REMEDY. In the event of an outage,
TAM will use commercially reasonable efforts to restore
the TAM Software as soon as reasonably practicable.
Except as may be provided in an applicable Work Order or
the Sublicense Agreement, commencing * days after the
Suspension Date, if TAM Software Uptime is not at least
* percent ( * %) for any * consecutive day period during
the Term of this WO1, TAM's sole liability and Sabre's
sole and exclusive remedy shall be for Sabre to
terminate this WO1 or the Agreement.
v) ROUTINE TAM SOFTWARE DOWNTIME. TAM may from time to time
perform routine TAM Software Downtime for system
maintenance of and software modifications to the TAM
Software. Except for operational necessity, routine TAM
Software Downtime shall occur between 2100 and 0700
Brasilia Time. TAM will endeavor to give Sabre at least
twenty-four (24) hour advance notice of Routine TAM
Software Downtime and its anticipated duration. During
the period of Routine TAM Software Downtime, the Portal
Solution provided by Sabre may be unavailable.
vi) EXTENDED DOWNTIME. The TAM Software may also be
unavailable for longer periods for
13
Confidential
hardware upgrades, facility modification, TAM required
reorganization of the TAM Internal Database, and similar
reasons. TAM will use reasonable efforts to limit such
TAM Software Downtime to no more than * hours, occurring
between the hours of 2100 and 0000 Xxxxxxxx Time, if on
weekdays, and 1900 and 0000 Xxxxxxxx time, if on
weekends or on a Brazilian holiday. To the extent
practicable, TAM shall consult with Sabre in scheduling
such TAM Software Downtime and shall endeavor to
accommodate Sabre with respect to scheduling. During the
period of Extended TAM Software Downtime, the Portal
Solution provided by Sabre may be unavailable.
VII) ERRORS AND PROBLEMS. After receiving notice from Sabre
of any problems with the TAM Software, TAM will commence
efforts to correct the problem as soon as reasonably
possible.
(C) ENHANCEMENTS, NEW FUNCTIONS AND MODIFICATIONS.
i) TAM CHANGES TO TAM SOFTWARE. From time to time, the
Functionality of a TAM Software system may be modified
by TAM creating Enhancements and adding New Functions.
If TAM offers these enhancement or new functions without
charge to Sabre, then Sabre agrees to accept them for
use with the applicable TAM Software system. TAM will
provide these Enhancements or New Functions without
charge to Sabre.
ii) ENHANCEMENT AND NEW FUNCTION IMPLEMENTATION. TAM will
provide Sabre with prior notice of the scheduled
implementation of Enhancements and New Functions. TAM
shall provide training and technical materials to Sabre
with respect to such Enhancements and New Functions. The
training and technical materials shall be substantially
similar to those which Sabre provides to TAM.
iii) TAM TEST OF ENHANCEMENTS AND NEW FUNCTIONS. Except when
precluded by operational emergencies, TAM shall test all
TAM Software capabilities, including without limitation,
Enhancements and New Functions, under an internal test
environment. Sabre acknowledges that despite such
internal testing, conditions may develop that lead to
error conditions, malfunctions, or a breakdown in the
operation of a TAM Software system. Should any of the
foregoing occur, TAM shall use reasonable efforts to
correct any such condition.
5.5 COMPATIBILITY. TAM will not alter or modify the TAM Solution product
interfaces in any way as part of a release or upgrade which
knowingly affects its compatibility with Sabre software without
advance notice to Sabre.
6. THE AGENCY SOLUTION. Throughout the Term of this WO1, TAM acknowledges that
Sabre will provide, at Sabre's discretion, Sabre Subscribers in Brazil with
integration of the Portal Solution with the Sabre Subscriber's existing desktop
GDS functionality (known as Turbo Sabre)(hereinafter the "Agency Solution"). To
the extent Sabre provides the Agency Solution, it will do so in a manner that
will not interfere with or impair the Sabre Subscriber's productive use of
Portal Solution. Sabre will use reasonable efforts to provide TAM with prior
notice of the scheduled implementation of enhancements and new functions of the
Agency Solution. The use of the Agency Solution shall not impose any costs on
TAM that are not otherwise contemplated by this WO1, unless such use is
requested by TAM.
6.1 DESCRIPTION OF AGENCY SOFTWARE. Sabre shall provide or cause to be
provided to TAM and Sabre Subscribers in Brazil access to certain
Agency Software, a description of which is contained in Attachment 1
to this WO1 under the Section 4 "Description of Agency Software".
14
Confidential
6.2 DESCRIPTION OF AGENCY SOLUTION SUPPORT
(a) SABRE HELP DESK SUPPORT. Upon the introduction of the Agency Solution, TAM
will have access to a Sabre Help Desk twenty-four (24) hours a day, seven (7)
days a week for the Agency Solution for problems related to the integrated
functionalities of the Agency Solution with the Portal Solution. Sabre Help Desk
will be responsible for facilitating resolution of any questions or issues. A
Sabre Help Desk coordinator will be responsible for logging and tracking Errors
after they have been reported by TAM through a problem report, contacting the
TAM Technical Coordinator to confirm receipt of a problem report and jointly
determining the priority level of the Error. Priority levels will be determined
as follows:
Level "1" Errors. These are problems with the Agency Solution functionality that
renders the Portal Solution inoperable at Sabre Subscribers collectively or
individually that represent more than * % of the TAM's revenue. TAM will be
advised at least every twenty-four (24) hours by the Help Desk as to the status
of efforts to resolve the Level 1 Error. One or more members of Sabre's senior
management will be informed on a daily basis of all Level 1 Errors.
Level "2" Errors. These are problems with the Agency Solution functionality that
concurrently affect Sabre Subscribers that collectively or individually
represent more than * % of TAM's revenue and are significant to the productive
use of the Agency Solution but the Agency Solution can continue to operate in a
restricted fashion. These problems will be addressed in a reasonable time after
any Level 1 Error has been resolved.
Level "3" Errors. These are problems with the Agency Solution functionality for
which Sabre has provided an acceptable work around solution and do not have a
material impact on TAM's productivity and customer service.
(b) ERRORS AND PROBLEMS. Upon the implementation of the Agency Solution at a
Sabre Subscriber in Brazil, after receiving notice from TAM of any Errors or
problems with the Agency Solution, Sabre will commence efforts to correct such
Errors or problems. Sabre will accord to TAM the same priority, speed of
response, and degree of effort that it accords or would accord to itself for a
similar Error or problem. In the case of a "Level 1 Error" as defined in Section
6.2(a) of this WO1, Sabre will guarantee to rectify the Error or problem within
* hours for * % of cases, and (ii) in the case of a "Level 2 Error" as defined
in Section 6.2(a) of this WO1, Sabre will guarantee rectify the Error or problem
within * hours for * % of cases. If Sabre fails to restore service within the
timeframes described in (i) and (ii) above, Sabre will issue TAM a credit on its
next invoice in an amount equal to * % of the previous month's invoice. Any
incident pursuant to this Section 6.2(b) for which a credit is issued (the
"first incident") will be eligible for an additional credit under this WO1, if,
but only if, the cause of such other incident is not directly related to the
cause of the first incident. Sabre shall have no obligation to fix Errors for
any version of the Agency Solution other than the most current version and the
immediately preceding version of such Agency Solution. If a Level 1 Error is not
corrected within * hours after receiving written notice of such Level l Error,
TAM's Chief Executive Officer may give written notice to Sabre's Chief Executive
Officer that the Level 1 Error has not been corrected and if such Level 1 Error
has not been corrected within * hours from the date of such notice, TAM may
terminate the Agreement and this WO1, and seek damages as otherwise provided for
in the Agreement. If this remedy has not previously been exercised by TAM, its
right to terminate the Agreement under these conditions shall expire 30 days
following the correction of the Level 1 Error as described herein.
6.3 COMPATIBILITY. Sabre will not alter or modify the Agency Solution in any way
as part of a release or upgrade which knowingly affects its compatibility with
Portal Software.
15
Confidential
7. AGENCY INFRASTRUCTURE COST SHARING.
(a) Beginning with the Implementation Date and for the Term of this WO1,
TAM will pay to Sabre the cost of travel agency infrastructure
(hardware and communications) for Sabre Subscribers using
infrastructure provided and paid for by Sabre within Brazil based on
TAM's Passenger Share (as defined in Section 7.2. below) within
Brazil. As used herein, "Sabre Subscriber" means any entity
operating in Brazil which has executed a Sabre Subscriber Agreement.
Sabre will invoice TAM and TAM will pay Sabre for charges described
under this Section 7 in accordance with Section 5 of the Agreement.
(b) During the shorter of (i) the time period between the Implementation
Date and the Suspension Date, or (ii) the six month period following
the Implementation Date, rather than billing TAM the full amount of
infrastructure cost based upon the procedure described in Section
7.2 of this WO1 , Sabre will xxxx XXX for such Infrastructure
Preparation costs by the amount determined by multiplying the amount
otherwise due Sabre times the percentage of the bookings processed
through the Portal Solution by Sabre Subscribers in Brazil, and all
Sabre GDS and Portal Solution bookings by Sabre Subscribers in
Brazil, and TAM will pay such amount. The six month period described
in (ii) above will be extended until Sabre has completed all
Infrastructure Preparation as defined in Section 7.4 below to the
level described in Section 2.1.3(ii)(a).
7.1. COST OF INFRASTRUCTURE.
(a) The cost of agency infrastructure shall be paid to Sabre by TAM and
based on vendor invoices. The data within such vendor invoices (e.g.
volumes, pricing, etc.) will be considered Confidential Information,
and TAM will not disclose it to third parties. Sabre shall xxxx XXX
only for those charges which relate to Sabre Subscriber hardware and
communications. Sabre Subscriber hardware charges ("Hardware
Charges") include: (1) hardware and peripheral lease and purchase,
(2) hardware maintenance, (3) hardware refurbishment, and (4)
related activity and event fees including; (i) device installation
and swap, (ii) site surveys, (iii) trip fees, (iv) software loads,
and (vi) warehouse lease. Sabre Subscriber telecommunication charges
("Telecom Charges") include: (1) communication lease and access
charges, and (2) communication line installation and initiation
fees. Hardware Charges and Telecom Charges shall be collectively
termed "Infrastructure Charges". Such billing shall begin for
Infrastructure Charges invoiced to Sabre by its third party vendors
on or after the Implementation Date, subject to Section 7.4.
"Infrastructure Preparation" below. Any vendor fee directly related
to Sabre employees and/or Sabre internal offices shall be Sabre's
responsibility and will not be charged to TAM. TAM shall have the
right to review and audit vendor invoices which support Sabre's
charges to TAM in accordance with this Section 7.1 and to audit such
charges in accordance with Section 8 of the Agreement.
(b) If the Implementation Date does not occur on the 1st day of a month,
Infrastructure Charges billable to TAM related to the calendar month
of the Implementation Date shall be prorated based on the number of
days remaining in the month after the Implementation Date according
to the provisions of Section 7.
(c) TAM will not be responsible for any costs related to Section 7.1 (a)
that result from misuse of the item either by a Sabre Subscriber or
Sabre.
7.2 CALCULATION OF PASSENGER SHARE. Every quarter after the Effective
Date, Sabre will calculate TAM's passenger share during the preceding
twelve-month period (or the most recent available twelve-month period),
and TAM will pay to Sabre that percentage of the Infrastructure Charges
during the subsequent quarter on a monthly basis and in accordance with
Section 7.5 Cost Reductions below. TAM's passenger share ("Passenger
Share") will be computed using data from the Comando da Aeronautica
Departamento de Aviacao Civil ("DAC"), for revenue passengers boarded in
Brazil. In the event XXX xxxxxx with another airline and once the bookings
from the other airline merged with TAM begin to be processed in the
16
Confidential
Multihost Software and Portal Solution, the Passenger Share will be
immediately recalculated to include the passenger volumes of both carriers
for the preceding twelve months.
7.3 SABRE SUBSCRIBER LINES OF CREDIT. In the event that both parties agree
in writing that it would be more desirable for Sabre to pay a line of
credit to a Sabre Subscriber as reimbursement for charges relating to
Infrastructure, rather than having such Infrastructure provided by Sabre
or its vendors, then TAM shall pay to Sabre a percentage of such line of
credit based upon Passenger Share. These instances will be addressed on a
case-by-case basis and decisions on Sabre Subscriber lines of credit will
not be unreasonably withheld by either Party.
7.4 INFRASTRUCTURE PREPARATION. In preparation for the implementation of
the Technology Solution, the Parties acknowledge that Infrastructure
upgrade activities may occur prior to the Implementation Date. Prior to
commencing the Infrastructure preparation, the Parties will agree on the
specific requirements and conditions under which to conduct the
Infrastructure preparation. The parties further agree that upgrading
agencies to the minimum Infrastructure will require the outlay of
expenditures. TAM will be responsible for paying its Passenger Share of
the cost of such agreed upon Infrastructure upgrade. In the event this
Agreement is terminated as result of TAM's breach or TAM decides not to
implement the Technology Solution TAM shall remain responsible to Sabre
for paying its Passenger Share of the Infrastructure upgrade costs and * %
of the third party software costs and hardware costs to launch the Portal
incurred by Sabre as previously agreed. Should TAM pay the costs as
described in the sentence above, then Sabre shall deliver or cause to
deliver to TAM one-half of the related software and hardware provided TAM
shall pay for the shipping of any such hardware or reimbursing Sabre for
such shipping costs.
7.5 COST REDUCTION EFFORTS. Sabre shall reduce Hardware Costs by * % per
year starting with the first anniversary following the Suspension Date or
six months after the Implementation Date, whichever comes first,
("Hardware Date") in the following manner: (1) On or about the Hardware
Date Sabre shall provide to TAM all Hardware Charges and associated vendor
invoices in order to support these Hardware Charges, (2) The amount of
these Hardware Charges shall be mutually agreed and entered into an
Exhibit of the Agreement and shall be signed by both Parties ("Full
Hardware Charges"), (3) on the first anniversary of the Hardware Date
Sabre shall lower the Hardware Charges to a maximum of * % of the Full
Hardware Charges, (4) on the second anniversary of the Hardware Date Sabre
shall lower the Hardware Charges to a maximum of * % of the Full Hardware
Charges, (5) on the third anniversary of the Hardware Date Sabre shall
lower the Hardware Charges to a maximum of * % of the Full Hardware
Charges, (6) on the fourth anniversary of the Hardware Date Sabre shall
lower the Hardware Charges to a maximum of * % of the Full Hardware
Charges, (7) beginning on the * anniversary of the Hardware Date and
throughout the term of the Agreement, Sabre shall not charge TAM any
Hardware Charges unless mutually agreed by the Parties. Sabre will work
with TAM's support to implement a mutually agreed plan to reduce Telecom
Charges in Brazil. The Parties shall agree upon this cost reduction plan
no later than the Hardware Date. Among the strategies of the cost
reduction plan, are the following: (1) Sabre and TAM will attempt to
reduce applicable unit costs from Sabre Infrastructure vendor contracts as
they expire, (2) Sabre and TAM will create value-added commercial
packages, including, but not limited to special pricing and alternative
compensation packages, to offer to Sabre Subscribers to encourage Sabre
Subscribers to provide their own telecommunication lines, (3) approval for
reasonable cost reductions shall not be unreasonably withheld by either
party, (4) if an approval for a reasonable cost reduction is withheld for
any reason other than a technical reason, the proposing Party's Telecom
Charges shall be adjusted so that proposing Party shall receive the
benefit of cost reduction as if the proposal was accepted, (5) TAM and
Sabre shall agree on a letter to be signed by Sabre Subscribers
authorizing Sabre to remove their communication lines due to an agreement
between TAM and the Sabre Subscriber, and (6) if signed letters, as
defined in item 5 above, are obtained by TAM from the Sabre Subscriber and
copies are delivered to Sabre, and Sabre does not remove these
communication lines within * days, the number of these letters times the
average monthly cost per Sabre Subscriber shall be removed from the
Telecom Charges prior to the calculation of TAM's Passenger Share of the
Telecom Charges. TAM will be responsible for its Passenger Share portion
of any cancellation fees that may result from the removal of communication
lines provided, however, that the amount of these cancellation fees are
informed in writing to TAM by Sabre prior to the disconnection of the
communication lines. If the Infrastructure Charge cost reduction
commitments are not met in accordance with the terms of Section 7.5,
17
Confidential
TAM may terminate the Agreement and this WO1 provided such failure was not
attributable solely to TAM.
7.6 AUTOMATION LEVELS. During the Term of this WO1, Sabre will not
exceed the Sabre Subscriber Infrastructure levels existing as of the
Effective Date of the Agreement, based on GDS industry practices and
historical Sabre Subscriber automation levels in Brazil. Sabre will
maintain Infrastructure at such level ("Infrastructure Level"), or
less expensive levels, for all Sabre Subscribers in Brazil in total,
and both Parties shall deem such level of Infrastructure acceptable.
As of the Effective Date of the Agreement, the Infrastructure Level
is as described in Sections 7.6(a) through (d) inclusive, and will
be measured on a quarterly basis, beginning three months after the
Suspension Effective Date, based on a rolling twelve-month period:
(a) RATIO OF TA'S TO SABRE PROVIDED COMPUTERS. The Infrastructure
Level shall not exceed at least half of Sabre Subscriber Terminal
Addresses in Brazil use agency-owned computers rather than computers
leased from Sabre. As used herein, "Terminal Address" or "TA" means
an assigned communication session between a Sabre Subscriber and the
data processing facilities of the Sabre GDS currently located in
Tulsa, Oklahoma (the "Sabre GDS System"), allowing a Sabre
Subscriber access to the Sabre GDS System for the purpose of making
Sabre GDS bookings.
(b) COMPUTER PRODUCTIVITY. The Infrastructure Level shall not
exceed, at an aggregate level, the average number of TAM travel
agency ticketed revenue segments from Brazil agency points of sale
per computer that Sabre leases to Brazilian subscribers is at least
64 per month.
(i). If TAM's Passenger Share drops below * %, then the
requirement for * segments per computer shall be revised
downward proportionately.
(ii). If total airline industry total revenue passengers
boarded in Brazil, as reported by DAC, drops below *
during any twelve-month period, then the requirement for *
segments per computer shall be revised downward
proportionately. As a point of reference, DAC reported the
aforementioned * total revenue passengers boarded in
Brazil during 2002.
(iii). In the event both conditions associated with Section
7.6.(b)(i) and (ii) occur, the downward adjustments to the
requirement for * segments per computer shall be
cumulative.
(c) PRINTER TO TA RATIO. The Infrastructure Level shall not exceed,
at an aggregate level, for Sabre Subscribers in Brazil be no more
than * invoice and itinerary printer leased from Sabre per *
Terminal Addresses. As of the Effective Date, there are * ticket
printers used by Sabre Subscribers in Brazil and TAM shall not be
responsible for the cost of any ticket printers above this number of
printers after the Effective Date.
(d) AGENCY DATA COMMUNICATIONS. The Infrastructure Level shall not
exceed, at an aggregate level, at least * % of Sabre Subscriber
locations in Brazil shall have communication links provided by the
Sabre Subscriber rather than by Sabre.
(e) NON-COMPLIANCE WITH AUTOMATION LEVEL. If Sabre fails to manage
agency Infrastructure within the Infrastructure Level described in
this Section 7.6, the amount that Sabre would have otherwise billed
TAM for that component of the agency Infrastructure Charges during
the subsequent quarter shall be reduced proportionately by the level
by which Sabre fell below the required automation level.
7.7. LOCAL VENDORS. If a vendor bills Sabre or its affiliates for
Infrastructure Charges in Brazil in Brazilian Reais, then TAM will
pay its portion of such vendor invoice in Reais directly to the
Sabre affiliate which received such vendor invoice. All other fees
and charges otherwise due to Sabre under the Agreement and this WO1
not specifically described in this Section 7.7 shall be payable in
USD, in accordance with Section 5 of the Agreement.
7.8. SABRE SUBSCRIBER AGREEMENT. Throughout the Term of this WO1, and
consistent with applicable law, TAM shall refrain from providing
Infrastructure to Sabre Subscribers, unless TAM has received a
18
Confidential
written release from Sabre to provide such Infrastructure. Such
notification of release from Sabre will be provided within * days of
TAM's request, should Sabre choose, with its sole discretion, to
provide such release. Travel agencies must sign a GDS Subscriber
Agreement with Sabre prior to receiving Infrastructure from Sabre,
and prior to receiving access to the Sabre System.
7.9 CONTINUED INFRASTRUCTURE USE FOLLOWING TERMINATION. In the event of
the early termination of the Agreement (except for default on the
part of TAM), Sabre will allow Sabre Subscribers to use
Sabre-provided Infrastructure to access TAM Solution for purposes of
booking TAM flights and other TAM services, provided that (i) TAM is
current on all its obligations to Sabre and its affiliates, and (ii)
TAM continues to reimburse Sabre under the cost-sharing terms
described in this Section 7. In the event of any such termination as
described in this Section 7.9, the adjustments described in Section
7.6(e) "Non-Compliance With Automation Levels" shall not apply and
Sabre will be free to manage Sabre Subscriber Infrastructure levels
at its own discretion.
8. IMPLEMENTATION TIMELINE. The expected Implementation Date is scheduled to
be * . The ability of Sabre to complete the defined Technology Solution
will be contingent upon the cooperation of TAM throughout the performance
of this WO1. The Parties will acknowledge in writing the actual
Implementation Date.
8.1 AGREEMENT ON IMPLEMENTATION DATES. TAM and Sabre shall jointly
develop a project implementation plan that will include milestones
for product delivery, user acceptance testing, infrastructure
upgrades and market introduction. Sabre and TAM will provide the
necessary resources and expend commercially reasonable efforts to
meet the project implementation timeline. Material variances to the
plan, if any, shall be reported to the project steering committee as
defined in the Agreement.
9. FEES AND CHARGES. Sabre shall invoice TAM and TAM shall pay Sabre for fees
and charges associated with the delivery of the Sabre Services according
to the terms set forth below.
9.1 DEFINITION OF REVENUE TICKET COUPON. Sabre shall charge TAM monthly
for each Revenue Ticket Coupon flown during the previous calendar
month. For purposes of this WO1, a "Revenue Ticket Coupon" shall be
defined as those passengers who pay at least * % of the applicable
normal fare flown according to the definition of IATA in "FORMULARIO
ESTADISTICO DE IATA FORM 1 ESTADISTICAS DE OPERACIONES (AOS) -
Definiciones e Instrucciones", who is boarded on any TAM flight or
on any flight operated under TAM's airline designator code. For the
purposes of calculating the number of Revenue Ticket Coupons,
charter flights are not included unless the charter flights generate
Revenue Ticket Coupons issued by TAM or in connection with the
conduct of any such charter flights Multihost Services are utilized.
A Revenue Ticket Coupon on a direct flight that makes one or more
intermediate stops without a change of flight number, whether or
not including a change of equipment, shall be counted as one
Revenue Ticket Coupon. A passenger traveling on a "Funnel Flight"
shall be regarded as at least two Revenue Ticket Coupons if the
boarded passenger must have at least two boarding passes. A
passenger making a connection at an intermediate point by deplaning
from one flight and boarding another flight shall be considered as
more than one Revenue Ticket Coupon. If the DAC revenue passenger
boarded counts are more than * % greater than the Revenue Ticket
Coupon counts provided by TAM in a given month, then the Parties
will meet to investigate the source of the discrepancy. TAM will
inform Sabre every month, after the 20th day of the month, the
number of Revenue Ticket Coupons flown calculated in accordance with
the Section 9.1 during the prior month so that Sabre can properly
invoice TAM. Revenue Ticket Coupon counts are subject to the Audit
rights described in Section 8 of the Agreement.
9.2 FEE PER REVENUE TICKET COUPON. Beginning on the Implementation Date
and throughout the Term of this WO1, TAM shall pay an amount equal
to USD$ * for each Revenue Ticket Coupon other than those described
in Section 9.3. However, during the time period between the
Effective Date and the Suspension Date in lieu of said fee, TAM
shall pay solely USD$ * for each Revenue Ticket Coupon generated at
its internal offices, (e.g. ATOs, CTOs, call center, website,etc.).
In the event such time period lasts longer than six months through
no breach of the obligations of Sabre hereunder,
19
Confidential
then at the six month anniversary of the Implementation Date,
Revenue Ticket Coupons generated at TAM's internal offices will be
billable at the rate of USD$ *.
9.3 FEES FOR GDS-DRIVEN REVENUE TICKET COUPONS. Beginning on the
Effective Date and throughout the Term of this WO1, for each Revenue
Ticket Coupon that is booked by a travel agency via a GDS, Sabre
will xxxx and XXX will pay USD$ * . Such charges shall be in
addition to any other fees that may be payable to Sabre, including,
but not limited to, GDS booking and cancellation fees. If the data
needed to determine the number of GDS-generated Revenue Ticket
Coupons is not available for a given month, the Parties will
estimate the number of such GDS-generated Revenue Ticket Coupons in
a mutually acceptable manner.
9.4. POST SUSPENSION DATE BILLING ILLUSTRATION. For sake of clarity, and
for illustrative purposes only, billing per Revenue Ticket Coupon
after the Suspension Date and prior to the first inflation
adjustment and prior to Message adjustment, if any, will be: (1)
Brazilian travel agency transaction via portal: $ *, (2) travel
agency GDS booking, from any geographic point (assumed to be outside
of Brazil) of sale: $ * (plus booking fees and cancel fees based
upon the applicable GDS contract in place at that time), (3)
internal TAM booking (CTO, ATO, call center, website, etc.) from any
geographic point of sale: $*.
9.5 MONTHLY FEES FOR EXCESSIVE MESSAGE COUNT. The Parties will measure
Message volumes in the TAM Multihost partition beginning the first
day of the calendar month, nine months after the Implementation Date
to the last day of said calendar month in order to establish a
stable average number of Messages per Revenue Ticket Coupon
("Baseline"). In any subsequent calendar month for the remainder of
the term of the Agreement TAM will pay Sabre for the average number
of Messages per Revenue Ticket Coupon for that month in excess of
the Baseline based upon the rate of USD$ * for each set of five
Messages (in addition to the fee per Revenue Passenger Coupon), or
in the case of a partial set of Messages, a proportional amount
thereof. This fee for additional Messages would only be activated if
the number of messages exceeds * % above the Baseline. If the number
of monthly Messages does not exceed the Baseline by more than * %,
then no additional charges for Messages will be paid by TAM. If,
during a calendar month, the total number of messages exceeds * %
above the Baseline, TAM would only pay for the extra messages up to
the * % in excess of the Baseline. If, however, the total number of
messages exceeds * % for three consecutive calendar months, or the
monthly average in any six month period exceeds the Baseline by more
than * %, then a new Baseline and fees per Revenue Ticket Coupon
would be calculated and mutually agreed to by the Parties. In any
subsequent calendar month following the calculation of the Baseline,
if the average number of Messages per Revenue Ticket Coupon is less
than the Baseline by more than * %, then TAM would receive a credit
equal to USD$ * for each set of * Messages, or in the case of a
partial set of Messages, a proportional amount thereof, provided,
however, that the fee paid to Sabre per Revenue Ticket Coupon would
never fall below USD$ * for bookings made through the Portal and
USD$ * for bookings made outside of the Portal, or the then
applicable rates per Revenue Ticket Coupon after any annual
adjustment as permitted by Section 5(c) of the Agreement. The credit
to TAM for reduced Message volume will not accrue beyond a * %
reduction in Message volume below the Baseline. If however, the
total number of Messages is more than * % lower than the Baseline
for three consecutive calendar months or the monthly average in any
six month period is lower than the Baseline by more than * %, then a
new Baseline and fees per Revenue Ticket Coupon would be calculated
and mutually agreed to by the Parties.
At the time of the Acceptance of the Technology Solution, the
average number of Messages generated by the application shall be
measured in a manner that is mutually agreed to by the Parties. The
average number of Messages generated by TAM in the previous calendar
month to the Acceptance of the Technology Solution shall be
subtracted from the number of Messages generated by the Technology
Solution and this number shall be designated as the number of
messages generated by the Portal ("Portal Messages"). If the Portal
Messages is a number calculated to be less than *, then the Portal
Messages shall be deemed to be *. If the Baseline, as calculated in
accordance with the prior paragraph is more than * plus the Portal
Messages, the Parties will negotiate in good faith to reach an
agreement as to an appropriate
20
Confidential
sharing of Sabre's costs for such extra messages taking into account
any additional functionality beyond that defined as the Portal
Software in Section 4.1. TAM acknowledges that Sabre will use the
standard matrix formula of USD$ * for each set of * Messages or in
the case of a partial set of Messages, a proportional amount
thereof, as Sabre's internal cost in connection with such
negotiations.
The Parties will work together in good faith and make commercially
reasonable efforts to reduce the number of Messages per Revenue
Ticket Coupon during the * measurement period and thereafter.
9.6 FARE-LED SHOPPING. Sabre shall ensure that the FlightFinder
transaction ("JA Entry") is deactivated in the Portal Solution upon
delivery to TAM. Should TAM, at some future date, request Sabre to
reactivate the FlightFinder functionality, TAM shall pay a fee of
USD$ * for each FlightFinder transaction, or any other fee subject
to mutual agreement of the Parties.
9.7 PRICING CONDITION. *
9.8 INFLATION ADJUSTMENT. All fees described in this Section 9 will
increase annually, at the anniversary of the Implementation Date of
the Agreement, by a maximum amount equal to the inflation rate
(CPI-U) for Dallas, Texas, and such adjustment shall be cumulative
over the Term of this WO 1. Prior to the implementation of the any
such increase Sabre will provide TAM with the adjustment factor and
the calculated increase in any rates charged hereunder subject to
such annual adjustments.
9.9 PCA AND OTHER CHARGES. The charges in this Section 9 are in addition
to other fees and charges described elsewhere in this Agreement, and
within other agreements between the Parties, such as the PCA.
Additional Sabre products or functionality (e.g., AirMax, AirFlite,
Databahn, QIK, bargain finder plus and migration of merged or
acquired airlines into the TAM Multihost partition) would entail
additional charges to be negotiated by the Parties. Sabre will offer
a minimum * % discount, after any inflation adjustment on the
license fee of the PC Airflite product, if TAM chooses to purchase
such product.
(a). CODESHARE. TAM shall pay a maintenance fee of USD$ * per month
plus monthly fees of USD$ * for every published Codeshare flight
during the month. Codeshare flight count is collected from the
carrier's KSIF (Codeshare Foreground Table) table. As additional
Codeshare flights are added to the KSIF table, the USD$ * fee will
be assessed. The monthly fees of USD$ * per flight will not apply
for Codeshare flights with *. No implementation charge shall apply
for the Varig Codeshare flights, but the monthly fees of USD$ * for
every Codeshare flight shall apply for Varig Codeshare flights.
(b). SITA FARES DATABASE. Sabre will prorate the SITA Fares
Database charges directly to TAM and TAM will be responsible for
paying Sabre. As of the Effective Date, such charge is approximately
USD$ * per month.
(c). TRAVEL INFORMATION MANUAL ("TIMATIC"). TAM will pay Sabre an
annual access fee of USD$ * for TIMATIC.
9.10 HOURLY PROGRAMMING FEES PAID TO TAM. In the event that Sabre
requests alterations to the TAM Solution following the
Implementation Date, other than alterations designed to repair
errors found in the code of the TAM Solution, Sabre shall pay TAM an
amount of USD$ * per hour for the alterations to be performed during
the first * months after the Implementation Date. Subsequently Sabre
shall pay TAM for such services at TAM's then prevailing labor rates
per hour or another rate mutually agreed by the Parties.
9.11 HOURLY PROGRAMMING FEES PAID TO SABRE. In the event that TAM
requests alterations from Sabre, following the Implementation Date,
associated with any portions of the Technology Solution, other
21
Confidential
than alterations designed to repair errors found in the
Sabre-provided code, TAM shall pay Sabre an amount per hour equal to
USD$ * during the first * months after the Implementation Date.
Subsequently TAM shall pay Sabre for such services at Sabre's then
prevailing labor rates per hour or another rate mutually agreed by
the Parties.
10. OTHER MUTUAL OBLIGATIONS. The following obligations shall be the mutual
responsibilities of the Parties.
10.1 DEVELOPMENT COSTS, PRODUCT ACCEPTANCE, AND ONGOING IMPROVEMENTS. The
developing Party shall, at no cost to the other Party, fund the
initial development required to implement the Technology Solution,
subject to Section 7.4. Each party commits to maintenance of its
technology on a going- forward basis, but enhancements,
customization, and/or functionality changes will be handled via Work
Orders to be negotiated separately at the hourly rates defined in
Sections 9.10 and 9.11 above. However, each Party, at its own
expense, shall allocate an annual pool of development hours, in *
-hour increments, not to exceed * hours annually, in order to
quickly respond to minor requests for enhancements or alterations.
10.2 COMMUNICATION COST SHARING AND DATABASE REPLICATION. TAM will pay *
of the cost of a Frame Relay connection, as described in Attachment
1 to this WO1 under the Section 3.3 "Description of Portal
Telecommunication Services," between Sao Paulo, Brazil and the
Portal Solution server site, wherever it may reside, as required by
mutually agreed-upon solution architecture and solution providers.
Sabre shall be responsible for the remaining half of the charges
above. TAM will pay * of any Oracle server replication costs, if
this is mutually deemed necessary after usability testing. TAM will
continue to pay * % of the telecommunications charges related to
Multihost, as referenced in Section 3.3, including the OFEP data
connection (a Frame Relay connection between Sao Paulo, Brazil and
the Sabre host in Tulsa) used for Multihost (Reservations). Sabre
and TAM will continue their current business practice of
aggressively seeking cost reductions with regards to communication
and server infrastructure.
10.3 CONTENT PROVISION. TAM will provide travel content to the Technology
Solution that will only be available within the Technology Solution
envisioned within this WO1. Sabre agrees to make available to TAM
through the Technology Solution, all travel content provided by
Sabre that it provides to any portal or distribution media owned by
another airline customer in the Brazilian market.
10.4 OTHER GDS AGENCY INTEGRATION SOLUTION. Nothing herein shall be
construed to prohibit any third party, including but not limited to
other GDS's, from independently creating and implementing an
integration tool to the Technology Solution that is similar to the
Agency Solution.
11. OTHER RESPONSIBILITIES OF SABRE. The following responsibilities shall be
the obligation of Sabre to perform at not additional cost to TAM with
regards to this Agreement.
11.1 GLOBAL ACCOUNTS PLAN. Sabre will work with TAM to develop a mutually
acceptable plan for the marketing and implementation of the
Technology Solution to Sabre Subscribers in Brazil having a
worldwide Sabre Subscriber Agreement, subject to Section 12.1
"Transition Program".
11.2 RESELLING OF THE TECHNOLOGY SOLUTION. Sabre shall market the
Technology Solution to third parties in accordance with the rights
and obligations contained in the Sublicense Agreement, attached as
Exhibit B of the Agreement.
11.4 RESPONSIBILITY FOR ONGOING SUPPORT. From the period starting with
the Implementation Date until the termination of this WO1, Sabre
shall allocate a minimum of * hours annually for the purposes of
maintaining the portal portion of the Technology Solution, inclusive
of any development hours to be provided by Sabre under Section 10.1
of this WO1. Such allocation of hours shall be delivered by Sabre
at no additional cost to TAM.
22
Confidential
11.5 SABRE'S ADHERENCE TO TAM'S SECURITY STANDARDS. If Sabre adheres to
TAM's security procedures, there shall be a presumption that Sabre
has satisfied its obligation to protect the confidentiality of the
TAM Internal Database.
12. OTHER RESPONSIBILITIES OF TAM. The following responsibilities shall be the
obligation of TAM.
12.1 TRANSITION PROGRAM. Transactions processed through the Technology
Solution will not be considered GDS bookings. Subject to applicable
laws, TAM will create a transition program, for a reasonable period
of time, to support Sabre Subscribers' move from the GDS environment
to the Technology Solution. TAM will also include in its
relationship with all Sabre Subscribers a confirmation that Sabre
Subscribers understand that transactions originating through the
Technology Solution are not GDS bookings.
12.2 FLIGHT BENEFITS. TAM will provide flight benefits for Sabre
employees under the categories, procedures and restrictions outlined
below. All travel under this provision will follow TAM's non-revenue
displacement policies.
(a) BUSINESS DIRECTLY RELATED TO THE AGREEMENT. For Sabre
employees traveling specifically for business purposes related
to the Agreement, including Brazil-based Account Executives
soliciting the sale of the Portal Solution. TAM will provide,
subject to its authorization, and at no charge from TAM,
confirmed space international tickets and space-available
domestic tickets. Sabre employees at the level of Director,
Senior Principal, or higher, shall be accommodated in Business
cabin and Sabre employees below the above mentioned levels
shall be accommodated in Economy cabin.
(b) SABRE BUSINESS TRAVEL. Sabre employees traveling on business
not covered under Section 12.2(a) can obtain space available
tickets from TAM at a rate equal to * % of the first published
fare below full economy or * % of the full Business Class
fare, as applicable.
(c) TRAVEL AGENTS. For travel agents traveling for training
specifically related to the Technology Solution under this
Agreement, TAM will provide, at no charge from TAM, space
available tickets.
(d) TAXES AND OTHER SURCHARGES. For all travel under this Section
12.3. Sabre and its employees will be responsible for paying
all taxes, airport fees, and other surcharges outside of the
base fare of the ticket.
(e) COMPETITOR EXCLUSION. Sabre and its affiliates will never use
the TAM flight benefits and TAM is not obligated to provide to
Sabre or any of its affiliates TAM flight benefits for travel
directly or indirectly related to TAM's Brazilian airline
competitors.
(f) VIOLATION OF RESTRICTIONS. Any violation of the Flight
Benefits restrictions can lead to cancellation of all flight
benefits described herein at TAM's discretion, or full-fare
reimbursement.
23
Confidential
13. PERFORMANCE OF PARTIES OBLIGATIONS. Neither Party will not be
responsible to the other Party for the failure to perform its obligations
to the extent such failure is the result of the other Parties failure to
perform its obligations under this WO1.
IN WITNESS WHEREOF, the Parties have duly executed and delivered this WO1 by
their duly authorized representatives as of October 3, 2003.
SABRE TRAVEL INTERNATIONAL LTD. (NO. 272493) TAM LINHAS AEREAS S.A.
By: ____________________________________ By: ___________________________
Name: Xxxxxxxx Xxxxx Name: Xxxxxx Xxxxxxxxx
Title: Director Title: Vice President
Date: October 3, 2003 Date: October 3, 2003
By: ___________________________
Name: Ruy Xxxxxxx Xxxxxx Xxxxxx
Title: Vice President
Date: October 3, 2003
24
Confidential
ATTACHMENT 1 OF WORK ORDER #1
[26 Pages Redacted]
