EXHIBIT 10.56
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
SUPPLIER AGREEMENT
BETWEEN
LOYALTY MANAGEMENT GROUP CANADA INC.
and
AIR CANADA
Dated as of April 24, 2000
TABLE OF CONTENTS
PAGE
ARTICLE 1 RIGHT TO PURCHASE..............................................................................1
1.1 Right to Purchase..............................................................................1
1.2 Capacity.......................................................................................2
1.3 Capacity Guarantee.............................................................................3
1.4 Insufficient Capacity..........................................................................4
1.5 Other Requirements.............................................................................4
1.6 Treatment of Passengers Holding Tickets........................................................4
1.7 Reports and Audits.............................................................................5
1.8 Protection of Program..........................................................................5
1.9 Determination of **** Routes...................................................................5
ARTICLE 2 FARES..........................................................................................6
2.1 Special Fares..................................................................................6
2.2 Additional Payment.............................................................................6
ARTICLE 3 TERM...........................................................................................7
3.1 Term...........................................................................................7
3.2 Breach.........................................................................................7
3.3 ****...........................................................................................7
3.4 Post-Termination Rights........................................................................7
ARTICLE 4 CONFIDENTIALITY AND TRADE-MARKS................................................................8
4.1 Confidentiality................................................................................8
4.2 Announcements..................................................................................9
4.3 Trade-Marks....................................................................................9
ARTICLE 5 WARRANTIES AND CCAA ****......................................................................10
5.1 Warranties....................................................................................10
5.2 Indemnity.....................................................................................10
5.3 CCAA Process ****.............................................................................11
ARTICLE 6 GENERAL.......................................................................................11
6.1 Entire Agreement..............................................................................11
6.2 Unconditional Obligation......................................................................11
6.3 Release.......................................................................................11
-i-
**** PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT.
6.4 Injunction....................................................................................11
6.5 Severability and Time of Essence..............................................................12
6.6 Governing Law.................................................................................12
6.7 Costs and Expenses............................................................................12
6.8 Waiver........................................................................................12
6.9 Successors and Assigns........................................................................12
6.10 Counterparts..................................................................................13
SCHEDULE A - Definitions and Interpretation
SCHEDULE B - Special Fares
SCHEDULE C - Reservations, Commissions and Travel Restrictions
SCHEDULE D - Other Commitments
SCHEDULE E - Job Description for LMGC Ombudsman
SCHEDULE F - LMGC News Release
SCHEDULE G - ****
SCHEDULE H - LMGC Projections
SCHEDULE I - ****
**** PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT.
-ii-
SUPPLIER AGREEMENT
THIS AGREEMENT is made as of April 24, 2000 between LOYALTY
MANAGEMENT GROUP CANADA INC. and AIR CANADA.
WHEREAS LMGC wishes to purchase airline tickets from
Airline, and Airline has agreed to sell airline tickets to LMGC, subject to
and in accordance with the terms of this Agreement;
AND WHEREAS terms used herein have the meanings set forth
in Schedule A hereto and the principals of interpretation set out therein
apply to this Agreement;
NOW THEREFORE, in consideration of the premises and the
mutual promises and covenants hereinafter set forth, the parties now agree as
follows:
ARTICLE 1
RIGHT TO PURCHASE
1.1 RIGHT TO PURCHASE.
(a) Starting on May 1, 2000 and thereafter throughout the Term, LMGC
shall have the right to buy Special Tickets from Airline and each Regional
Airline, and Airline will make available, and either cause each of the
Regional Airlines to make available or obtain itself from each such Regional
Airline and make available, for purchase by LMGC, Special Tickets, at the
Special Fares and otherwise on the terms and conditions hereof. Airline shall
also use its best efforts to cause CAI (so long as it is not a Regional
Airline (and as a result, subject to the previous sentence)) to comply with
the terms of this Agreement in all respects (including supplying Special
Tickets for Airline Seats at the Special Fares) as if it were a Regional
Airline. Any reference herein to the purchase by LMGC of Special Tickets or
Airline Seats includes any such purchase by any Subsidiary of LMGC (including
LMG Travel) and Airline agrees that any such Subsidiary may purchase Special
Tickets hereunder at the Special Fares.
(b) During the Initial Period (but subject to Section 1.2), LMGC may
purchase Special Tickets at the Special Fares for any Airline Seats offered
by Airline or any Regional Airline. During the Additional Period, however,
LMGC may only purchase Special Tickets at the Special Fares for itineraries
which ****
**** PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT.
-2-
1.2 CAPACITY.
(a) Except as otherwise provided herein, during the Initial Period LMGC
shall (and shall be entitled to) book Special Tickets in **** Class and shall
be entitled to the priority currently associated therewith (not to be lower
than that available to any other Person booking into **** Class). Except as
otherwise provided herein, during the Additional Period LMGC shall (and shall
be entitled to) book Special Tickets in a class to be designated by Airline
which may, but need not be, **** Class, and which will satisfy the
requirements for the Additional Period set out herein (the "Other Class").
(b) Airline agrees to load and maintain the Special Fares in **** Class
during the Initial Period and in the Other Class during the Additional Period,
and make such Special Fares accessible in SABRE throughout the Term and to
give LMGC and LMG Travel (and no one else outside of Airline or a Regional
Airline) access to such fares. No other Person or entity entitled to book into
**** Class at any time will have greater rights thereto or to the capacity
provided thereby, than LMGC. Airline represents and warrants to LMGC that the
following statements regarding **** Class are now true and covenants that such
statements will be true (subject to Section 1.2(c) below) throughout the Term:
(i) **** Class is loaded such that it is accessible in SABRE and can be viewed
by LMGC within SABRE, (ii) **** (iii) **** (iv) it regularly provides an
initial availability for a route when set of at least **** (v) there are no
partitions in such class that would affect LMGC and **** and (vi) ****. The
parties have discussed LMGC's current and projected needs and flight patterns
for Airline Seats and a description of such needs is attached as Schedule H
hereto. Airline confirms that it is its expectation that LMGC's rights to book
into **** Class as contemplated hereby will generally satisfy those needs
during the Initial Period, ****, and LMGC confirms that it is its expectation
that it will book to its forecasts, as reflected in Schedule H, during the
Initial Period, although it gives no warranty as to what actual levels of
bookings will be. ****
(c) If at any time or from time to time during the Initial Period, Airline
changes its booking classes so that **** Class no longer exists or makes any
material changes to the parameters associated with such class, Airline shall
designate another booking class into which LMGC shall be entitled to book
Special Tickets and which will provide LMGC with substantially the same
**** PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT.
-3-
parameters as described in Section 1.2(b). For purposes hereof, any such
replacement class shall thereafter be referred to as "**** Class".
(d) The parties will meet annually to review the concept of LMGC being
permitted access to the capacity provided from time to time by Airline under
"web specials" made available on Airline's web site. Such access would be
provided in order to permit LMGC to assist Airline in utilizing such capacity,
by issuing Special Tickets therefrom to its Collectors. The price payable by
LMGC for any Airline Seats booked therefrom shall not be any greater than
****. Airline will allow LMGC reasonable access on such basis to book Special
Tickets from at least one such web special during the Initial Period, but
otherwise Airline has no obligation to provide LMGC such access. LMGC's rights
under this Section 1.2(c) are in addition to, and not in limitation of, its
capacity entitlements under the balance of this Section 1.3.
1.3 CAPACITY GUARANTEE.
(a) The provisions of Sections 1.3(b) and (c) below shall apply only in
respect of itineraries booked by LMGC for the period on or after September 1,
2000 and LMGC acknowledges that Airline cannot commit to such capacity
guarantees for itineraries prior thereto. Airline shall however use its
commercially reasonable best efforts to ensure that LMGC's needs for capacity
are satisfied in respect of itineraries prior thereto.
(b) Subject to Section 1.3(a), Airline shall ensure that, at all times
during the Term, for each **** day period which commences at least **** days
after such time, ****
(c) In addition, but again subject to Section 1.3(a), Airline shall also
ensure that, at all times during the Term, for each **** day period which
commences at least **** days after such time, ****
**** PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT.
-4-
1.4 INSUFFICIENT CAPACITY. If at any time LMGC, acting reasonably,
determines (whether from reviewing the reports Airline provides under Section
1.7, from a review of SABRE or otherwise) that the capacity made available to
LMGC **** with respect to a particular **** day period that has not been
completed does not comply with Section 1.3, LMGC may notify Airline thereof.
****
1.5 OTHER REQUIREMENTS. Airline shall, and shall ensure that each
Regional Airline shall, comply with Schedule D hereto. In addition, the terms
of this Agreement will be subject to the reservations, commissions, travel,
ticket use and other procedures and requirements as set forth in Schedule C
hereto.
1.6 TREATMENT OF PASSENGERS HOLDING TICKETS. Except as described in
Schedule C, Airline shall, and shall ensure that each Regional Airline shall,
treat and serve each passenger holding a Special Ticket in the same manner as
each other economy passenger of Airline or such Regional Airline, as
applicable, including as to loading priorities, entitlement to denied
boarding
**** PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT.
-5-
compensation, flight cancellation compensation, baggage limits, or any
disruption or compensation, all in accordance with applicable industry
tariffs and conditions of carriage.
1.7 REPORTS AND AUDITS. On or before the 15th day of each month during
the Term, Airline shall provide LMGC with a report in mutually agreed upon
form showing both projected and historical data and, at a minimum, showing,
for at least each of the three months immediately thereafter, (i) those
routes for which there is no availability to LMGC in such month, (ii) those
routes for which there is low and rapidly diminishing capacity to LMGC in
such month, and (iii) those routes for which there is sufficient capacity to
LMGC in such month. Availability for this purpose shall be determined by
availability in the class or classes into which LMGC is then booking
hereunder and based on the aggregate number of Airline Seat available on such
routes during such month. LMGC shall have the right, on reasonable notice to
Airline and during normal business hours and no more than twice each calendar
year, to engage an independent third party to audit Airline's records in
order to confirm the accuracy of such reports, and in each case the cost of
such audit shall be paid by LMGC unless any such audit reveals that the
capacity shown to be available to LMGC in a report was incorrect by more than
****, in which case Airline shall pay the cost of such audit.
1.8 PROTECTION OF PROGRAM. Title to the Program, AMRM and all rights
represented thereby or related thereto, are reserved at all times to LMGC.
LMGC may determine, in its sole discretion, the duration, form, scope and
content of the Program and may effect termination, addition, deletion or
other modification or change thereof or thereto as it may, in its sole
discretion, determine. For greater certainty, this Section 1.8 is not
intended to give LMGC the right to change the Program in a manner that would
reduce its obligations hereunder.
1.9 DETERMINATION OF **** ROUTES.
****
****
(c) If at any time the parties are unable to agree by December 15th of any
year, for purposes of Section 1.9(a) or (b) above, as to the **** to be
described in Schedule G or the **** to be described in Schedule I, either
party may refer the matter to confidential and binding arbitration under the
ARBITRATIONS ACT (Ontario) before a single arbitrator who shall be instructed
to provide his or her determination as soon as possible. The cost thereof
shall be split equally between the parties. In the event of such a referral,
the applicable schedule
**** PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT.
-6-
shall only be amended under this Section 1.9 on the date of such
determination, and such determination shall be final and binding for purposes
of this Section 1.9.
ARTICLE 2
FARES
2.1 SPECIAL FARES.
(a) The Special Fares as of May 1, 2000 are as set out in Part 1 of
Schedule B. On ****, the Special Fares will be adjusted with respect to all
Special Tickets purchased on or after that date to the amounts set out in Part
2 of Schedule B. On ****, the Special Fares will be adjusted with respect to
all Special Tickets purchased on or after that date to the amounts set out in
Part 3 of Schedule B. **** as contemplated in Section 5.3, (i) on **** the
Special Fares will be adjusted with respect to all Special Tickets purchased
on or after that date to the amounts set out in Part 4 of Schedule B, and (ii)
on **** the Special Fares will be adjusted with respect to all Special Tickets
purchased on or after that date to the amounts set out in Part 5 of Schedule
B. ****
(b) For each Special Ticket purchased by LMGC hereunder, LMGC shall pay
Airline the applicable Special Fare. **** Infants (i.e. under 2 years old) who
do not occupy a separate Airline Seat shall be carried free of charge, except
for any applicable Additional Charges and except as otherwise required by
applicable law or by regulations or policies applicable to the airline
industry.
2.2 ADDITIONAL PAYMENT. As soon as possible, but in any event by July 1,
2000, Airline shall dedicate at least one employee exclusively for the purpose
of fulfilling the responsibilities and having the job position and
qualifications described in Schedule E hereto. In consideration of Airline
fulfilling such responsibility, LMGC shall, within 30 days of such person
being hired, pay to Airline an amount (which shall apply in respect of the
period from the date of hire up to and including December 31, 2000) determined
based on pro rating $**** over the period left in the 2000 calendar year from
the date of such hire. Within 30 days following commencement of each
subsequent calendar year during the Term, LMGC shall pay an additional $****
to Airline. The amount so paid by LMGC shall be applied on account of the
salary due to such individual and other related expenses of Airline in
connection therewith. If the Term ends part way through any calendar year,
Airline shall provide LMGC with a proportionate rebate of the amount so paid.
In addition, if at any time such position remains vacant during a calendar
year for more than 60 days in aggregate or such individual fails to fulfil
**** PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT.
-7-
the responsibilities set out in Schedule E, LMGC shall also be entitled to a
proportionate rebate of the amount paid based on the total period during
which such position remained vacant or during which such individual so failed
to fulfil such responsibilities.
ARTICLE 3
TERM
3.1 TERM. This Agreement shall be come into effect as of May 1, 2000 and
shall continue in full force and effect thereafter until December 31, 2004,
at which time this Agreement shall terminate, provided that Airline shall
still be bound to honour any Special Tickets purchased hereunder on or prior
to the termination date which have a travel date which occurs thereafter and
shall comply with Section 1.6 in connection therewith notwithstanding such
termination.
3.2 BREACH. If either party hereto fails to (i) pay any amounts when due
and payable hereunder, and such failure continues for a period of fifteen
Business Days after written notice of such failure referring to this Section
3.2 is given to such party by the other party; (ii) comply with Section 4.3
and such failure continues for a period of fifteen days after written notice
of such failure referring to this Section 3.2 is given by the other party, or
(iii) observe or perform any of its other obligations under this Agreement
and such failure continues for a period of thirty days after written notice
of such failure referring to this Section 3.2 is given by the other party,
then without prejudice to any other rights or remedies the other party may
have, this Agreement may be terminated by the other party by notice to the
defaulting party so long as such failure is still continuing at the time of
giving such notice.
3.3 ****
3.4 POST-TERMINATION RIGHTS. Notwithstanding any termination of this
Agreement, the parties shall continue to be liable for all financial and
other monetary obligations respectively incurred by each of them pursuant to
this Agreement prior to such termination until the time each of such
obligations shall have been fully satisfied, and exercise by either party of
its right to terminate under any provision of this Agreement will not affect
or impair its right to enforce its
**** PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT.
-8-
other rights or remedies under this Agreement. All obligations of each party
that have accrued before termination or that are of a continuing nature will
survive termination.
ARTICLE 4
CONFIDENTIALITY AND TRADE-MARKS
4.1 CONFIDENTIALITY.
(a) Throughout the Term and for a period of 5 years following the
termination of this Agreement, each party will, and will cause each of its
Representatives (as defined below) to, hold in strictest confidence and not
use in any manner whatsoever and only disclose to those of its
Representatives who have a need to know same for purposes of this Agreement,
any Confidential Information (as defined below) of the other party, whether
provided before or after the date of this Agreement, including any
Confidential Information provided by LMGC to Airline in connection with
Airline's initial determination of whether to enter into this Agreement;
provided that the foregoing will not apply (i) to use by LMGC of its data
base; (ii) where disclosure of Confidential Information is required by law or
in order to enforce rights under or in connection with this Agreement or the
subject matter hereof; (iii) where the Confidential Information which has
been disclosed had already ceased to be confidential through no fault of the
disclosing party or its Representatives; (iv) to disclosure by LMGC of any
terms of this Agreement to its or its Affiliates' actual or prospective
financiers or investors or otherwise in connection with a financing,
including disclosing to any underwriter, potential purchasers of LMGC's or
any of its Affiliate's shares or business and including their respective
counsel, or (v) to disclosure by Airline to CAI, unless the CCAA Plan is not
approved in which case Airline may not thereafter disclose Confidential
Information of LMGC to CAI unless otherwise permitted hereunder. In addition,
LMGC may disclose, on a confidential basis, the term of this Agreement, the
existence of price increases hereunder and the percentage amount thereof (but
not the actual fares), the confidentiality restrictions, termination events
and provisions relating to **** to existing, future or prospective Sponsors or
suppliers, and Airline may disclose, on a confidential basis, the term of this
Agreement, the existence of price increases hereunder and the aggregate
percentage amount thereof (but not the actual fares), the confidentiality
restrictions, termination events and provisions relating to ****.
(b) "Confidential Information" of a party means all information and
documents, whether on paper, in computer readable format or otherwise,
relating to such party's business, which is or is treated by such party as
being of a confidential nature (and is known or should have been known by the
other party hereto as being of a confidential nature or being so treated) and
has been or is from time to time made known to or is otherwise learned by the
other party or any of its Representatives as a result of the relationship
hereunder, including the terms (but not the existence) of this Agreement
(including the pricing hereunder). In the case of LMGC, its Confidential
Information will also include all information disclosed to or otherwise
learned by Airline concerning the Program, the terms (including pricing) of
the Terminated Supplier Agreement and the Short Term CAI Supplier Agreement
and the existence or substance of and the background to any discussions among
CAI, Airline and/or LMGC with regards to the subject
**** PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT.
-9-
matter hereof and termination of the Terminated Supplier Agreement, whether
before or after the date hereof. "Representative" means, with respect to any
party, any of its directors, officers or employees or outside auditors,
lawyers or advertising or p.r. agencies, but for greater certainty, not any
other outside consultants or agencies.
(c) If any party is served with a subpoena or other legal process or
other governmental request requiring the production or disclosure of any
Confidential Information, or for any other reason believes that it is
required by law to disclose any Confidential Information of the other party,
then that party will, before complying, promptly notify the other party and
use all reasonable efforts to permit the other party a reasonable period of
time to intervene and contest disclosure or production, and will in any event
use all reasonable efforts to ensure confidential treatment of such
Confidential Information if so disclosed.
4.2 ANNOUNCEMENTS. Airline acknowledges that LMGC intends to issue a news
release forthwith after execution hereof substantially in the form attached as
Schedule F, and consents thereto. Subject thereto, neither party shall issue
any news releases in respect of the entering into of this Agreement or the
background thereto, without the prior written consent of the other party,
which consent shall not be unreasonably withheld. In addition, but subject to
the exceptions as to confidentiality set forth in clauses (i) through (v) of
Section 4.1(a), throughout the Term (i) Airline will refrain, and will use all
reasonable efforts to ensure that its Representatives (as defined in Section
4.1) refrain, **** and (ii) LMGC will refrain, and will use all reasonable
efforts to ensure that its Representatives (as defined in Section 4.1)
refrain, ****
4.3 TRADE-MARKS.
(a) Except as otherwise provided herein or as required by law, neither
LMGC nor Airline shall use any logo or trade-xxxx of the other without the
prior written permission of the other. In addition, during the Initial
Period, LMGC may use the name "Air Canada" in advertising or promotional
material for purposes of identifying to current, future or potential
Collectors or Sponsors the availability of Airline Seats from Airline as a
redemption option and subject to the following restrictions ****
**** PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT.
-10-
(b) Notwithstanding the permission to use the name Air Canada as set
forth in Section 4.3(a), Airline shall have the right to examine and to
approve or disapprove in advance the contents and appearance of any
advertising or promotional materials proposed to be used by LMGC which
incorporate such name, but (i) Airline shall not unreasonably withhold or
delay its approval of such materials, (ii) it shall in any event provide its
decision as soon as possible and not later than 7 days after request therefor
from LMGC, and (iii) upon providing any approval, no further approval will be
required for subsequent materials which have the same or a substantially
similar approach to the display of such name.
(c) Neither party shall have any liability for any breach of this Section
4.3 unless such breach continues for a period of fifteen days after written
notice thereof referring to this Section 4.3 is given to such party by the
other party demanding that such breach cease, and in any event, the maximum
aggregate liability of either party for any breach of, or otherwise in
connection with, this Section 4.3, whether on one or more than one occasion,
is $****.
ARTICLE 5
WARRANTIES AND CCAA ****
5.1 WARRANTIES. Each of the parties hereto represents and warrants to
the other party, that (i) the entering into, execution and delivery of this
Agreement and the performance of its obligations hereunder have been duly and
validly authorized and approved by all necessary corporate action on its
part, (ii) no consent or approval of any other Person or of any court is
required to the entry into, execution or delivery of this Agreement or to the
performance of its obligations hereunder, except such as have been obtained,
(iii) this Agreement has been validly executed and delivered by such party,
and is a valid and legally binding obligation of such party enforceable
against such party in accordance with its terms, subject to usual exceptions
regarding bankruptcy and other laws affecting creditors rights generally and
those with respect to specific performance and injunction, and (iv) there are
no outstanding claims, litigation, arbitrations, investigations or other
proceedings existing or, to the knowledge of each party, pending or
threatened which would enjoin, restrict or prohibit performance by such party
of its obligations hereunder.
5.2 INDEMNITY. Each party shall indemnify and hold the other party (and
in the case of LMGC, any of its Subsidiaries who purchase tickets hereunder)
and their respective directors, officers, employees and agents harmless from
and against any and all losses, claims, damages, liabilities, costs, fees and
other expenses whatsoever (including legal fees on a solicitor and his own
client basis) suffered or incurred by the other party which arise from or are
caused by the non-performance or improper performance of any obligations of
such first party hereunder, or
**** PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT.
-11-
any breach or untruth of any of its representations or warranties contained
herein, or, in the case of the indemnity in favour of LMGC, any liability of
Airline or any Regional Airline to any Person for any injuries or damages
which result from the provision or sale of any air transportation or related
services and/or merchandise by or through Airline or any Regional Airline, to
such Person.
5.3 CCAA PROCESS ****. The parties acknowledge that, by Assignment dated
as of the date hereof, LMGC has assigned the Claim to Airline. ****
ARTICLE 6
GENERAL
6.1 ENTIRE AGREEMENT. This Agreement together with the Assignment
between the parties of even date contains the entire agreement between the
parties relating to the subject matter hereof and supersedes all previous
agreements, understandings or arrangements, verbal or written, relating
thereto. This Agreement may only be modified, superseded or amended by an
agreement or modification in writing signed by both of the parties hereto.
6.2 UNCONDITIONAL OBLIGATION. Airline's obligation to comply herewith
and provide Airline Seats to LMGC at the Special Fares and otherwise as
contemplated thereby, is an independent obligation of Airline which shall
apply notwithstanding any matter or thing affecting CAI, including any
reorganization, bankruptcy, receivership or other proceeding affecting CAI
and including the current proceedings under the CCAA affecting CAI (the "CCAA
Proceedings"), the treatment of CAI's obligations in the CCAA Proceedings,
the success or lack of success of the CCAA Proceedings, the treatment of the
Claim in the CCAA Proceedings, whether or not the Claim is disputed by any
other Person or Airline has the right to vote or receive distributions of the
Claim in the CCAA Proceedings, and regardless of the amount of any recovery
in respect of the Claim.
6.3 RELEASE. LMGC and Airline each release each other and their
respective Affiliates, other than, for greater certainty, CAI, from all
costs, damages and liability in connection with any matters which have
occurred prior to the date of this Agreement with respect to the Terminated
Supplier Agreement or any matter relating thereto.
6.4 INJUNCTION. Airline acknowledges that a breach of its obligations
under any of Sections 1.1, 1.2, 1.3, 1.4, 1.6, 1.7, 4.1, 4.2 or 4.3 and LMGC
acknowledges that a breach of any of its obligations under Sections 4.1, 4.2
or 4.3, will cause irreparable harm to the other party for
**** PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT.
-12-
which money damages alone will provide inadequate compensation. Accordingly,
the parties agree that injunctive relief to prevent any such breaches or a
mandatory order or specific performance requiring continued performance of
the provisions in question, as applicable, is appropriate and necessary to
prevent the continuation of such a breach.
6.5 SEVERABILITY AND TIME OF ESSENCE. If any provision of this Agreement
is held by a court of competent jurisdiction or by any governmental agency or
authority to be invalid, such holding shall not have the effect of
invalidating the other provisions of this Agreement which shall nevertheless
remain binding and effective between the parties. Time is of the essence
hereof.
6.6 GOVERNING LAW. This Agreement shall be construed under and governed
by the laws of the Province of Ontario and the laws of Canada applicable
therein. The Parties hereto attorn to the non-exclusive jurisdiction of the
courts of Ontario.
6.7 COSTS AND EXPENSES. ****
6.8 WAIVER. Any term or condition of this Agreement may be waived at any
time by the party which is entitled to the benefit thereof, but such waiver
shall only be effective if evidenced by a writing signed by such party. A
waiver on one occasion shall not be deemed to be a waiver of the same or of
any other breach on any other occasion. Any previous waiver, forbearance, or
course of dealing will not affect the right of either party to require strict
performance of any provision of this Agreement.
6.9 SUCCESSORS AND ASSIGNS. Neither party may assign its rights or
obligations hereunder without the prior written consent of the other, except
that either party may, without consent, assign its rights hereunder (i) to
any Affiliate either as part of a bona fide corporate reorganization, or a
sale of all or substantially all of its assets, but no such assignment shall
relieve such party from its obligations hereunder, and (ii) by way of
security to any financier; provided that ****
**** PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT.
-13-
6.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of
which taken together shall be deemed to constitute one and the same
instrument. Counterparts may be executed either in original or faxed form and
the parties hereto adopt any signatures received by a receiving fax machine
as original signatures of the parties; provided, however, that any party
providing its signature in such manner shall promptly forward to the other
party an original of the signed copy of this Agreement which was so faxed.
IN WITNESS WHEROF the parties have executed this Agreement as of
the date and year first above written.
LOYALTY MANAGEMENT GROUP CANADA INC.
By:
------------------------------------
Name:
------------------------------------
Title:
------------------------------------
AIR CANADA
By:
------------------------------------
Name:
------------------------------------
Title:
------------------------------------
SCHEDULE A
DEFINITIONS AND INTERPRETATION
In this Agreement (including the recitals hereto), the
following terms shall have the following meanings:
"ADDITIONAL PERIOD" means the period from and including January 1, 2003 to
and including December 31, 2004.
"AFFILIATE" has the meaning set out in the CANADA BUSINESS CORPORATIONS ACT.
"AGREEMENT" means this Agreement including the Schedules to this Agreement
all as amended or supplemented from time to time.
"AIR CARRIER" means an airline or air carrier, or a Person which otherwise
engages in the business of carrying passengers by air.
"AIRLINE" means Air Canada, its successors and permitted assigns.
"AIRLINE SEATS" means seats for travel on flights for any City Pair Served as
operated by Airline or any Regional Airline.
****
"AMRM" means AIR MILESTM reward miles.
"BUSINESS DAY" means any day on which banks are open for business in
Xxxxxxxx, Xxxxxx xxx Xxxxxxx, Xxxxxxx, excluding Saturdays, Sundays and
statutory holidays in those cities.
"CCAA" means the COMPANIES CREDITORS ARRANGEMENT ACT.
"CCAA PLAN" means the proposed plan of compromise and arrangement of Canadian
Airlines Corporation and CAI, intended to be filed with the Court of Queens
Bench of Alberta on April 25, 2000, or any subsequent plan of compromise and
arrangement issued by either or both of such Persons in connection with the
CCAA Proceedings.
"CCAA PROCEEDINGS" has the meaning set out in Section 6.2.
"CAI" means Canadian Airlines International Ltd., its successors and
permitted assigns.
"CITY PAIR" means two cities or other locations between which any Air Carrier
offers scheduled service, whether domestic or international and whether or
not non-stop or direct.
**** PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT.
-2-
"CITY PAIRS SERVED" means all City Pairs for which Airline or any Regional
Airline (or any combination thereof) has, at the time in question, scheduled
service, whether domestic or international.
"CLAIM" means the claim of LMGC and its subsidiaries against CAI assigned by
LMGC to Airline.
"COLLECTOR" means any Person who is registered with LMGC as a collector of
AMRM.
****
"INITIAL PERIOD" means the period from the date hereof to and including
December 31, 2002.
"LMGC" means Loyalty Management Group Canada Inc., its successors and
permitted assigns.
"LMG TRAVEL" means LMG Travel Services Limited and its successors.
****
"OTHER CLASS" has the meaning set out in Section 1.2(a).
"PERSON" includes an individual and his or her legal representatives, a
corporation, a partnership, a trust, an unincorporated organization, the
government of a country or any political subdivision thereof, or any agency
or department of any such government.
"PROGRAM" means the AIR MILESTM program established by LMGC in Canada.
"REGIONAL AIRLINES" means, at any time, each Affiliate of Airline which, at
such time, is an Air Carrier, including for greater certainty, any Air
Carrier which hereafter becomes an Affiliate of Airline (effective as of the
date it becomes an Affiliate of Airline). Without limiting the foregoing, if
the CCAA Plan is approved, CAI shall be deemed to be a Regional Airline,
whether or not it is then an Affiliate of Airline.
****
**** PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT.
-3-
"SHORT TERM CAI SUPPLIER AGREEMENT" means the letter agreement made as of the
date hereof between LMGC and CAI providing for the termination of the
Terminated Supplier Agreement and a new short term supplier arrangement
between LMGC and CAI.
"SPECIAL FARES" means the fares set out in Schedule B.
"SPECIAL TICKETS" means tickets (including electronic tickets) for Airline
Seats issued to passengers in connection with the Program.
"SPONSOR" means any Person granted a licence by LMGC or otherwise permitted
by LMGC to issue or arrange for the issuance of AMRM.
"SUBSIDIARY" has the meaning set out in the CANADA BUSINESS CORPORATIONS ACT.
"TERM" means the period from the date hereof to the date this Agreement
terminates.
"TERMINATED SUPPLIER AGREEMENT" means the Supplier Agreement made as of March
15, 1995 between LMGC and CAI, as amended.
****
****
"**** CLASS" means the booking class maintained by Airline currently **** and
designated as "**** class", or in the case of any Regional Airline which
utilizes different booking classes, a booking class that is comparable in all
material respects with **** Class, and in either event, any replacement class
therefor established hereunder from time to time.
The division of this Agreement into Articles and Sections,
the insertion of headings, and the provision of any table of contents are for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement. Unless the context requires otherwise, (i)
words importing the singular include the plural and vice versa and words
importing gender include all genders, and (ii) references in this Agreement
to Sections or Schedules are to Sections or Schedules of this Agreement.
Except as otherwise expressly provided in the Agreement, all dollar amounts
referred to in this Agreement are stated in Canadian dollars. In this
Agreement, "including" means "including, without limitation" and "includes"
means "includes without limitation".
**** PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT.
SCHEDULE B
****
**** PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT.
SCHEDULE C
RESERVATIONS, COMMISSIONS AND TRAVEL RESTRICTIONS
1. Reservations, which must include round trip travel, must be made at least
14 days, but not more than 330 days, prior to planned departure date.
2. The return trip must be booked at the time a reservation is made for the
outbound segment.
3. All round trip travel must be completed not later than 315 days after the
date of reservation.
4. No blackout dates will be applicable for booking.
5. All travel must be on a round trip or an open jaw trip basis.
6. Each Special Ticket, which will not include en route stopovers, must
include a Saturday night stayover at destination.
7. ****
8. All Special Tickets and Special Fares are subject to the tariff
restrictions and Warsaw Convention Limitations, as applicable, with
respect to (but only with respect to) limits of compensation for, damage
to Persons or property.
The restrictions in clauses 1, 3, 5 and 6 shall not apply to tickets purchased
under web specials as contemplated in Section 1.2(c).
**** PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT.
SCHEDULE D
OTHER COMMITMENTS
1. Gold Collectors shall receive a discount of 10% off the cost of any
companion tickets purchased through LMGC or any of its Subsidiaries, up
to a maximum of **** return trips each calendar year. For purposes
hereof, a companion ticket means a ticket purchased in conjunction with
the purchase of, and having the same itinerary as, a Special Ticket.
2. During each 12 month period in the Initial Period, Airline shall make
available to LMGC, up to **** return trip Airline Seats, either on
Airline's or a Regional Airline's flights, as selected by LMGC, to be
used in connection with the Canadian Special Olympics. Such Airline Seats
shall be made available to LMGC at the Special Fares. These seats are
subject to regular availability of inventory as per this Agreement and
use thereof by LMGC shall be included in determining bookings made by
LMGC for purposes of Section 1.3 (b) and (c).
3. During each 12 month period in the Initial Period, Airline shall provide
LMGC with **** return trips on City Pairs Served, either on Airline's or
a Regional Airline's flights, to be used in connection with LMGC's
Sponsor activities. Ten such return trips shall be provided to LMGC at no
cost to LMGC and **** such return trips shall be provided to LMGC at a
cost equivalent to AD ****. LMGC and Airline shall mutually agree to the
destinations chosen for such return trips.
4. Airline shall make available to LMGC not less than ****
(return trip) for each 12 month period of the Term, of which no less than
**** shall be **** and the balance shall be ****.
**** PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT.
SCHEDULE E
JOB DESCRIPTION FOR LMGC OMBUDSMAN
OBJECTIVE
To maximize the inventory made available to LMGC under this Agreement.
TASKS
- Liasing between LMGC and Air Canada Revenue Management.
- ****
- ****
- ****
- Advising and reporting to LMGC of Air Canada's schedule ****.
- Identifying **** for LMGC.
- Implementing web specials and other potential marketing
opportunities for LMGC at Air Canada.
AIR MILES CONTACT
- Speak with Reward Services at LMGC at least once a week.
- Meet with Reward Services at LMGC at least quarterly, at LMGC
offices in Toronto.
QUALIFICATIONS
Minimum 3 years experience at Air Canada or Canadian Airlines in
revenue management, planning or financial analysis (if possible).
**** PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT.
SCHEDULE F
LMGC NEWS RELEASE
FOR IMMEDIATE RELEASE
AIR MILES PROGRAM REACHES AGREEMENT WITH AIR CANADA
COLLECTORS CAN NOW FLY ON CANADIAN AIRLINES AND AIR CANADA
----------------------------------------------------------
TORONTO, Ontario - April 26, 2000 - The Loyalty Group, operator of the AIR
MILES Reward Program, today announced it has reached an agreement with
Canadian Airlines and Air Canada that will allow it to offer reward flights
on both airlines to AIR MILES Collectors across Canada.
"We are thrilled to be able to continue to offer travel on Canadian Airlines
to our 11 million AIR MILES Collectors, and we welcome Air Canada as a new
airline supplier to the AIR MILES Reward Program," said Xxxx Xxxxxxxx,
President and Chief Executive Officer, The Loyalty Group. "Canadian Airlines
has always been a valued supplier to the Program, and we now look forward to
extending that partnership with Air Canada," he added.
AIR MILES Collectors can continue to redeem their reward miles and book
domestic flights on Canadian Airlines and international flights on our four
other airline partners: American Airlines, KLM, Northwest Airlines and United
Airlines. Collectors can redeem their reward miles for Air Canada flights
beginning in May 2000.
Terms of the agreement are confidential and will not be disclosed. The
Loyalty Group's claim in connection with Canadian Airlines' restructuring
plan has been assigned to Air Canada as part of the new agreement with Air
Canada.
The Loyalty Group launched the AIR MILES Reward Program in March 1992,
offering Canadians the opportunity to collect AIR MILES reward miles while
shopping for everyday goods and services. There are over 100 participating
Sponsors across Canada representing over 12,000 retail locations. In addition
to free flights, AIR MILES reward miles can be exchanged for over 100
different rewards from movie passes to attractions to merchandise like
electronics, watches and toys.
For further information, contact:
Xxxx Xxxxxx
Senior Vice President
The Loyalty Group
(000) 000-0000
SCHEDULE G
****
**** PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT.
SCHEDULE H
****
**** PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT.
SCHEDULE I
****
**** PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT.
