AMENDED AND RESTATED LICENSE TO USE
AND EXPLOIT THE AIR MILES SCHEME IN CANADA
BETWEEN
AIR MILES INTERNATIONAL TRADING B.V.
AND
LOYALTY MANAGEMENT GROUP CANADA INC.
July 24, 1998
TABLE OF CONTENTS
1 DEFINITIONS ......................................................... 2
2 LICENSE ............................................................. 5
3 SUB-LICENSE RIGHTS .................................................. 7
4 ASSIGNMENT OF THE PROGRAMME ......................................... 8
5 ROYALTIES ........................................................... 9
6 REGISTRATION AND RENEWALS ........................................... 10
7 REPRESENTATIONS AND WARRANTIES ...................................... 10
7.1 AMIT Warranties .......................................... 10
7.2 LMGC Warranties .......................................... 11
8 INDEMNITY ........................................................... 11
9 DURATION AND TERMINATION ............................................ 12
10 NON-COMPETITION ..................................................... 13
11 ASSIGNMENT/SUCCESSORS ............................................... 13
12 NOTICES ............................................................. 14
13 CONFIDENTIALITY ..................................................... 16
14 DISPUTE RESOLUTION .................................................. 17
14.1 General ................................................. 17
14.2 Negotiations between Executives ......................... 17
14.3 Binding Arbitration ..................................... 18
14.4 Expedited Binding Arbitration ........................... 21
15 MISCELLANEOUS ....................................................... 21
15.1 Name, Captions .......................................... 21
15.2 Entire Agreement and Relationship Between the Parties ... 21
15.3 Amendments .............................................. 22
15.4 Severability ............................................ 22
15.5 Specific Performance/Injunctive Relief .................. 22
15.6 Remedies Cumulative ..................................... 22
15.7 No Waiver ............................................... 23
15.8 Further Assurances ...................................... 23
15.9 Extended Meanings ....................................... 23
15.10 No Third Party Beneficiaries ............................ 23
15.11 Counterparts ............................................ 23
15.12 No Liability of Shareholders ............................ 23
15.13 Statutory References .................................... 24
15.14 Business Day Payments ................................... 24
15.15 References .............................................. 24
15.16 Currency ................................................ 24
15.17 Schedules ............................................... 24
15.18 Limitation of Liability ................................. 25
15.19 Time of the Essence ..................................... 25
15.20 Costs and Expenses ...................................... 25
15.21 Excusable Delays ........................................ 25
15.22 Governing Law and Attornment ............................ 26
AMENDED AND RESTATED LICENSE TO USE AND EXPLOIT THE AIR MILES
SCHEME IN CANADA
THIS AGREEMENT is dated the 24th day of July, 1998 between AIR MILES
INTERNATIONAL TRADING B.V. of Xxxxxxxx 0, 0000 XX Xxxxxxxxx, Xxx Xxxxxxxxxxx
("AMIT") and LOYALTY MANAGEMENT GROUP CANADA INC., whose registered office is
located at 0000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxx Xxxx, Xxxxxxx, Xxxxxx ("LMGC");
WHEREAS the Parties entered into the License Agreement and the
Intellectual Property License on December 17, 1992; and
WHEREAS throughout the term of that Intellectual Property License AMIT
and LMGC were related companies; and
WHEREAS Alliance Data Systems Corporation has agreed to purchase all of
the shares of LMGC pursuant to the Share Purchase Agreement and such transaction
is intended to close on the date hereof; and
WHEREAS AMIT has the rights to use, operate, exploit and develop in
certain countries of the world, including the Territory, the unique concept and
business opportunity, being the Programme; and
WHEREAS the Parties are desirous of amending the terms of the
Intellectual Property License and have, for simplicity, agreed to enter into
this Agreement; and
WHEREAS AMIT is entitled to grant the licenses herein to LMGC and is
willing to license and allow LMGC to use and exploit the AMIT Know How in the
Territory on the terms and conditions set out in this Agreement.
NOW THEREFORE, in consideration of the business relationship between
the Parties, the mutual covenants contained herein, and other good and valuable
consideration (the receipt and sufficiency of which are acknowledged by the
Parties), the Parties hereto agree that the Intellectual Property License is
hereby amended and restated as follows:
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ARTICLE 1
DEFINITIONS
1.1 DEFINITIONS
"AFFILIATE" means a Person directly or indirectly controlling,
controlled by or under common control with a party.
"AGREEMENT" means this Intellectual Property License including any
recitals and schedules to this agreement, as amended, supplemented or restated
in writing from time to time.
"AMIT KNOW HOW" means all know how and other intellectual property
rights subsisting at the date hereof as described in Schedule 1 licensed to
and/or owned by AMIT or its Affiliates in connection with or relating to the
Programme, but not including rights in Marks.
"BANKRUPTCY" shall be considered to occur in respect of a
Party if:
(i) any voluntary proceeding is commenced (by the filing of any
originating process, notice or assignment or otherwise) by the
Party pursuant to an Insolvency Act;
(ii) any proceeding is commenced (by the filing of any originating
process or otherwise) against the Party pursuant to an
Insolvency Act, and
(a) such proceeding is not contested, diligently and
on a timely basis, by that Party,
(b) Bankruptcy occurs in respect of that Party within the
meaning of any other paragraph of this definition
during the contestation of such proceeding, or
(c) such proceeding is not dismissed, withdrawn or
permanently stayed within sixty (60) days of
commencement;
(iii) any voluntary proceeding is commenced (by the filing of any
originating process or notice or otherwise) by or respecting a
Party pursuant to the corporate or company statute under which
Party is organized from time to time or any other statute of
any relevant jurisdiction which is not an Insolvency Act
seeking any stay of creditor remedies or moratorium,
compromise, arrangement, adjustment, extension or
reorganization of debts or other liabilities;
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(iv) any voluntary or other proceeding is commenced (by the filing
of any originating process or notice or
otherwise) by or against the Party seeking appointment
(provisional, interim or permanent) of a receiver, manager,
receiver and manager, trustee, sequestrator, custodian,
liquidator or Person with like or comparable powers for that
Party or for all or substantially all of its property, assets
and undertaking, and
(a) such proceeding is not contested, diligently and
on a timely basis, by that Party;
(b) Bankruptcy occurs in respect of that Party within the
meaning of any other paragraph of this definition
during the contestation of such proceeding, or
(c) such proceeding is not dismissed, withdrawn or
permanently stayed within sixty (60) days of
commencement;
(v) any secured creditor of the Party takes possession or control
(actual or constructive) of, or appoints any agent, receiver,
manager, receiver and manager or Person with like or
comparable powers in respect of, that Party or all or
substantially all of its property, assets and undertaking; or
(vi) a majority of the directors or shareholders of the
Party voting thereon pass or ratify any resolution (A)
except as part of a bona fide corporate reorganization,
for its liquidation, winding up or dissolution, (B) to
authorize any voluntary proceeding by or in respect of
that Party described above or (C) to consent to or
refrain from contesting any proceeding or step against
or in respect of that Party or its property, assets or
undertaking described above.
"BUSINESS" means the business carried on by LMGC in connection with
which the AMIT Know How is used.
"BUSINESS DAY" means any day of the year, other than a Saturday, Sunday
or any day on which the banks are required or authorized to close in Xxxxxxx,
Xxxxxxx, Xxxxxx.
"CATEGORY" means the business sector granted to a Sponsor
within the Territory.
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"CONCURRENT USE AGREEMENT" means the Concurrent Use Agreement between
Air Miles International Holdings N.V., AMIT, Air Miles Travel Promotions
Limited, Loyalty Management Group Inc., LMGC and AMI Funding, Inc. entered into
as of the 13th day of May, 1994, as amended, supplemented or restated in writing
from time to time.
"INCLUDING" The terms "include", "including" and "such as" are
illustrative and not limitative and shall be interpreted to mean "including
without limitation".
"INSOLVENCY ACT" means the Bankruptcy and Insolvency Act (Canada), the
Companies' Creditors Arrangement Act (Canada), the Winding-up Act (Canada) or
any other statute of any relevant jurisdiction relating to bankruptcy,
insolvency, stay of creditor remedies, moratorium, compromise, arrangement,
extension, adjustment or reorganization of debts or other liabilities,
liquidation, winding up or dissolution.
"INTELLECTUAL PROPERTY LICENSE" means the Licence to Use and Exploit
the Air Miles Scheme in Canada Agreement between AMIT and LMGC dated December
17, 1992, as amended by Amendment No. 1 dated 13th day of May, 1994.
"LICENSE AGREEMENT" means the Licence to Use the Air Miles Trade Marks
in Canada agreement between Air Miles International Holdings N.V. and LMGC dated
December 17, 1992, as amended by Amendment No. 1 dated 13th day of May, 1994, as
amended and restated in the amending agreement of even date, and as amended,
supplemented or restated in writing from time to time.
"XXXX" means any name, xxxxx, xxxx, trade xxxx, trade dress, trade
name, business name, Uniform Resource Locator ("URL"), domain name or other
indicia of origin.
"PARTY" means either AMIT or LMGC; and "Parties" means AMIT and LMGC
collectively.
"PERSON" includes an individual, a legal personal representative,
corporation, company, body corporate, partnership, limited partnership, joint
venture, syndicate, trust, unincorporated organization, the Crown or any agency
or instrumentality thereof, regulatory authority or any other entity recognized
by law, howsoever designated or constituted.
"PROGRAMME" means any program(s) or business(es) that involve(s) three
(3) or more sponsoring companies in any product or service category or industry
and which offer(s), only entitled members with addresses in the Territory or any
other geographic region in which LMGC or any of its Affiliates has a license
from AMIT to similar effect to this Agreement, airline seats, airline miles,
airline or any other services, awards or value of any nature whether or not by
virtue of exchanging,
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converting or redeeming coupons, tickets, points or other tangible or intangible
rights) in connection with the purchase of goods or services of any party and
which operates for more than three (3) months duration and the operation of
travel agency services.
"RELATED AGREEMENTS" means collectively, the License
Agreement and the Concurrent Use Agreement.
"SHARE PURCHASE AGREEMENT" means the agreement for the
purchase of all the shares of LMGC made as of June 26, 1998, as amended in
writing from time to time, among Alliance Data Systems Corporation and each of
the shareholders of LMGC at that date.
"SPONSORS" means those businesses participating in the Programme in
conjunction with the offer of wares or services to consumers within the
Territory and includes the Suppliers.
"SUPPLIERS" means those businesses offering wares or services in
connection with exchanges, conversions or redemptions under the Programme.
"TERRITORY" means the current geographic area and territory of Canada
at the date of this Agreement.
"THIRD PERSON" means any Person other than AMIT and its Affiliates and
LMGC and its Affiliates.
ARTICLE 2
LICENSE
2.1 AMIT hereby grants to LMGC, subject to the terms of this Agreement, an
exclusive right and license to use, operate, exploit and develop the AMIT Know
How in the Programme (including all confidential information, copyright works,
techniques and know-how relating to the Programme) in the Territory only and the
marketing, advertising and promotion thereof in any media in the Territory or
any other geographic region in which LMGC or any of its Affiliates has a license
from AMIT to similar effect to this Agreement, including the right to
sub-license the use and exploitation of the AMIT Know How in the Territory in
accordance with the provisions of this Agreement. The exclusivity of the license
is subject to the rights of AMIT, its Affiliates, successors and assignees
together with their respective licensees and sub-licensees mentioned in Articles
2.3 and 2.4 hereafter.
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2.2 AMIT hereby grants a non-exclusive right to LMGC, with a right to sublicense
its applicable Sponsors and sub-licensees, for and further agrees that it will
not and will ensure that its Affiliates, successors, assignees or any of their
licensees or sub-licensees will not object to the use and exploitation of the
AMIT Know How outside the Territory by such of the Sponsors as provide travel or
entertainment related services for business and other travellers including, for
the avoidance of doubt, airline, car rental and/or hotel services and/or by LMGC
and/or by LMGC's applicable sub-licensees only in connection with the provision
of travel or entertainment related services including, for the avoidance of
doubt, airline, car rental and/or hotel services to the extent only that such
use and exploitation is incidental to the operation of and/or participation in
the Programme in the Territory. LMGC shall not itself have any other right to
use the AMIT Know How outside the Territory. LMGC's right to the use and
exploitation of the AMIT Know How outside the Territory shall include the right
to operate on or through the World Wide Web on the Internet or through other
electronic media.
2.3 Notwithstanding Article 2.1, LMGC shall not object to the use, operation,
exploitation and development of the AMIT Know How by AMIT, its Affiliates,
successors and assignees together with the use and exploitation thereof by their
respective licensees and sub-licensees in the Territory only in connection with
the provision of travel or entertainment related services including, for the
avoidance of doubt, airline, car rental and/or hotel services to persons
providing travel or entertainment related services for business and other
travellers, to the extent only that such use is incidental to the rights of
AMIT, its Affiliates, successors and assignees together with their respective
licensees or sub-licensees to carry out activities in connection with the
operation of sales promotion and/or incentive or loyalty schemes outside of the
Territory.
2.4 AMIT, its Affiliates, successors and assignees may use and exploit the AMIT
Know How in the Territory for the purposes of promoting their activities to
issuers or potential issuers of points, credits, vouchers or other incentives in
connection with the operation of sales promotion and/or incentive or loyalty
schemes conducted outside the Territory. In so doing, AMIT, its Affiliates,
successors and assignees must co-operate with LMGC with respect to the promotion
of the Canadian business. LMGC, its Affiliates, successors and assignees may use
and exploit the AMIT Know How outside of the Territory for the purposes of
privately promoting their activities to issuers or potential issuers of points,
credits, vouchers or other incentives in connection with the operation of sales
promotion and/or incentive or loyalty schemes conducted in the Territory, but
shall not make such advertisements or promotion to the public in general.
2.5 Subject to this Agreement, AMIT reserves the right to use and license the
use of the AMIT Know How outside the Territory, whether in connection with sales
promotion and incentive schemes similar to the Programme or otherwise.
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2.6. The Parties acknowledge that the licenses granted in this Article 2 do not
include the right for LMGC to use or license the use of trade marks consisting
of or including the Air Miles name and/or ancillary trademarks (including any of
the AMIH Marks defined in the License Agreement), which shall be the subject of
the License Agreement. If the License Agreement is validly terminated by either
party there to, LMGC may use any Marks owned by or licensed to it or its
Affiliates, in association with the AMIT Know How and/or the Programme, provided
that such Marks are not confusingly similar to the AMIH Marks (as licensed under
the License Agreement) or any other Marks in which AMIH or its Affiliates
hold(s) valid rights in the Territory.
2.7 The Parties agree that the Concurrent Use Agreement shall not be amended or
terminated during the term of this Agreement without the prior written consent
of the Parties.
ARTICLE 3
SUB-LICENSE RIGHTS
3.1 AMIT acknowledges that LMGC has entered into sub-licensing arrangements
relating to the participation in the Programme with a number of Sponsors that
are currently participating in the Programme. AMIT confirms that the terms and
conditions of such sub-licenses are acceptable to it.
3.2 AMIT agrees that LMGC may grant additional or amended non-exclusive
sub-licenses to the same or other Sponsors to use and exploit the AMIT Know How
in the Territory in connection with the Programme only, with or without
exclusivity in the relevant Category. If the terms and conditions of such
sub-licenses are consistent with the terms and conditions of the current
sub-license arrangements with the current Sponsors, AMIT hereby grants its
consent to such sub-licenses. If the terms and conditions of such sub-licenses
are not consistent with the current sub-license arrangements, LMGC shall submit
to AMIT a copy of each such license agreement and AMIT shall provide written
notice of any objections there to within ten (10) Business Days, failing which
AMIT shall be deemed to have consented such sub-license arrangement. In any
event, AMIT's consent to such sub-licenses shall not be unreasonably withheld.
3.3 AMIT agrees that LMGC may agree in such sub-license agreements as mentioned
under Article 3.2 with such Sponsors that neither AMIT nor their Affiliates,
successors, assignees, licensees or sub-licensees will object to the use by such
Sponsors of the AMIT Know How outside the Territory only to the extent that such
use is in accordance with the rights granted in Article 2.2 above.
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3.4 It shall be a term of all sub-licenses granted pursuant to Article 3.2 above
that the Sponsors undertake not to engage in any advertising or promotion
outside the Territory for the Programme or the participation of the Sponsors in
the Programme provided always that incidental references to the participation of
the Sponsors in the Programme in the Territory may be made in promotional
materials such as brochures outside the Territory incidental to the distribution
inside the Territory provided that such promotional materials shall clearly
indicate that the Sponsors participate in the Programme in the Territory and
that the Programme is only open to entitled members with addresses in the
Territory.
3.5 In this Agreement, where LMGC agrees to ensure that all sub- licensees of
the AMIT Know How appointed by LMGC comply with an obligation, this means:
(i) LMGC shall impose a contractual obligation on the sub-
licensees to observe such obligations; and
(ii) where LMGC becomes aware of any non-compliance by any
sub-licensee with any such obligation, LMGC shall use
reasonable efforts to ensure that such sub-licensee complies
with such obligation.
3.6 The Parties acknowledge that LMGC has no obligation to (but may) amend any
agreement with any existing Sponsor and that any and all such agreements with
any Sponsors remain unaffected hereby.
3.7 For greater clarity, LMGC may sub-license its rights hereunder to an
Affiliate to the extent considered by LMGC, acting reasonably, advisable for the
operation of travel agency services in the Territory.
ARTICLE 4
ASSIGNMENT OF THE PROGRAMME
4.1 If AMIT wishes to assign or transfer the AMIT Know How in the Programme,
either directly or indirectly by or through AMIT or AMIT's Bankruptcy, other
than to an Affiliate, no such assignment or transfer shall be effective unless
AMIT provides LMGC notice of its intention to do so and gives LMGC thirty (30)
days written notice within which to bid on such AMIT Know How and/or Programme
for the purposes of owning either directly or indirectly such AMIT Know How
and/or Programme. The foregoing provisions shall not, in any way, obligate AMIT
to accept any bid which LMGC submits. Any such assignee or transferee must be
bound in writing by the grant of the license set out in this Agreement.
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ARTICLE 5
ROYALTIES
5.1 (i) In accordance with the practice actually used for the payment of
Royalties under the Intellectual Property License for the fiscal year of LMGC
ended April 30, 1998, LMGC shall pay to AMIT as license fee royalties calculated
as a percentage of all gross sums received by LMGC in respect of the sale,
redemption, distribution or issue of Air Miles travel miles ("AMTM") or Air
Miles awards, including:
(a) all sums received from Sponsors in connection with the
issuance of AMTM or in lieu of payments therefor (such as
participation and/or exclusivity fees);
(b) all sums received from Sponsors for services;
(c) all commissions or other income received by LMGC in respect of
the sale of travel services; and
(d) all sums received from the sale of promotional items and/or
any other activity involving the use of the AMIH Marks (as
defined in the License Agreement)
but excluding amounts received as co-operative marketing fees or
for reimbursement of expenses.
(ii) The percentage referred to above shall be 0.90%.
5.2 LMGC shall, within fourteen (14) days after the end of each fiscal quarter,
in accordance with past practise as of April 30, 1998, prepare and submit to
AMIT a statement setting out the sums received by LMGC as set out in Article 5.1
above and the amount of royalty due in respect of the immediately preceding
fiscal quarter. Royalties shall be due and payable at the time the statements
are submitted to AMIT and shall be paid net of all applicable taxes, including
Canadian non-resident withholding tax.
5.3 During the term of this Agreement and for three calendar years after its
termination AMIT and its duly authorized agents shall have the right upon
reasonable notice, to inspect during business hours on any Business Day all
relevant accounting records of LMGC for the purposes of verifying any royalties
paid or payable. If any inspection results in any finding of understatement or
overstatement, such balance will be settled forthwith by LMGC or AMIT
respectively.
5.4 LMGC shall keep all accounting records, relevant for the purposes of
calculating royalties payable to AMIT, during the term stated in Article 5.3
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ARTICLE 6
REGISTRATION AND RENEWALS
6.1 AMIT shall, for so long as this Agreement remains in force, ensure that any
registrations which are applicable to the AMIT Know How and/or the Programme
shall be registered as appropriate and shall be renewed as and when they fall
due for renewal. The costs of the renewals or registrations and all expenses in
relation to the Programme incurred from the date hereof shall be paid in full by
AMIT.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES
7.1 AMIT Warranties
AMIT hereby represents and warrants to LMGC as of the date of this
Agreement the following:
(i) AMIT has full power and authority to enter into and perform
this Agreement, including to grant the license in Article 2
and to perform each and every covenant and agreement herein
contained;
(ii) this Agreement has been duly authorized, executed and
delivered by AMIT and constitutes a valid, binding and legally
enforceable agreement of AMIT;
(iii) to the best of AMIT's knowledge and belief, the execution and
delivery of this Agreement, and the performance of the
covenants and agreements herein contained, are not restricted
by and do not conflict with any material commercial
arrangements, obligations, contracts, agreements or
instruments to which AMIT is either bound or subject;
(iv) to the best of AMIT's knowledge and belief, AMIT's performance
of this Agreement will not contravene or breach any laws or
regulations of the Territory or of any province or territory
of the Territory which could give rise to the imposition of a
material fine, penalty or sanction levied on LMGC by any
applicable regulatory authority in the Territory;
(v) AMIT has not granted any rights or licenses, which are
subsisting at the date hereof, to any of its Affiliates or to
any other Third Person to use the AMIT Know How and/or the
Programme in the Territory save in the circumstances permitted
in Articles 2.3 and 2.4 above;
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(vi) except for the Concurrent Use Agreement, AMIT is not a party
to or bound by any contract or other obligation whatsoever
that limits or impairs its ability to license the AMIT Know
How and/or the Programme to LMGC; and
(vii) to the best of AMIT's knowledge and belief, LMGC is not in
breach of any term or condition of the Intellectual Property
License.
7.2 LMGC Warranties
LMGC hereby represents and warrants to AMIT as of the date of this
Agreement the following:
(i) LMGC has full power and authority to enter into and perform
this Agreement and to perform each and every covenant and
agreement herein contained;
(ii) this Agreement has been duly authorized, executed and
delivered by LMGC and constitutes a valid, binding and legally
enforceable agreement of LMGC;
(iii) to the best of LMGC's knowledge and belief, the execution and
delivery of this Agreement, and the performance of the
covenants and agreements herein contained, are not restricted
by and do not conflict with any material commercial
arrangements, obligations, contracts, agreements or
instruments to which LMGC is either bound or subject; and
(iv) to the best of LMGC's knowledge and belief, LMGC's performance
of this Agreement will not contravene or breach any laws or
regulations of the Territory or of any province or territory
of the Territory which could give rise to the imposition of a
fine, penalty or sanction by any applicable regulatory
authority in the Territory.
ARTICLE 8
INDEMNITY
8.1 LMGC shall indemnify AMIT and hold it harmless and defend it from and
against all damage, including reasonable counsel fees, which AMIT may incur in
respect of all claims which may be made against AMIT (whether separately or as
joint defendants) arising out of the manufacture, packaging, or any other cause
relating to any wares sold and/or services provided by or on behalf of LMGC or
its sub-licensees in association with the AMIT Know How, except insofar as any
such claim may be found to arise from any omission or failure on the part of
AMIT.
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8.2 AMIT shall indemnify LMGC and hold it harmless and defend it from and
against all damages, including reasonable counsel fees, which LMGC may incur as
a result of any breach of warranties as stated in Article 7 with regard to the
AMIT Know How and/or the Programme only or as a result of any Third Person
during the term hereof effectively prohibiting LMGC the use of the AMIT Know How
and/or the Programme only within the Territory.
ARTICLE 9
DURATION AND TERMINATION
9.1 This Agreement shall continue in force indefinitely from the date hereof,
subject only to the rights of the Parties with respect to termination provided
in this Article 14, and shall not be terminable by either Party in any other
circumstances, whether upon reasonable notice or otherwise.
9.2 AMIT shall have the right to terminate this Agreement upon six months notice
in writing to LMGC if LMGC ceases for a continuous period of four years to be
involved in operation of the Programme.
9.3 (1) Subject to compliance with the provisions of Article 14 requiring
dispute resolution, either Party shall have the right to terminate this
Agreement on giving the other written notice of termination in any of the
following events:
(i) the other Party commits any breach of its obligations
here under and fails to remedy such breach within ninety (90)
days (or such longer period as the Parties may agree) after
being given written notice by the other Party to remedy such
default; provided however that if LMGC and its sub-licensees
are diligently pursuing the remedy or cure of such failure
during the cure period and the continued breach does not
involve a failure to pay amounts due hereunder, the cure
period shall be extended for a further ninety (90) days; or
(ii) Bankruptcy shall have occurred in respect of the other Party,
provided that termination shall not occur at anytime during:
(A) the exercise of any rights or remedies by a secured
creditor of LMGC who has taken a security interest in
LMGC's rights under this Agreement either (a) in
compliance with Article 11.3, or (b) with the written
consent of AMIT; provided that the payment of all
amounts from time to time due and payable by LMGC
hereunder continue to be duly paid and the performance
of all covenants from time to time to be performed by
LMGC hereunder continue to be duly performed; or
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(B) any proceeding under an Insolvency Act involving a
restructuring or reorganization of LMGC under court
supervision and/or any disposition of LMGC's business as a
whole or substantially as a whole pursuant to any such
proceeding, in either case, so long as such proceeding is
continuing.
(2) If either Party validly terminates the License Agreement in
accordance with the terms thereof, it may, at its option, terminate this
Agreement at the same time as the License Agreement.
9.4 Upon termination of this Agreement LMGC shall within a period of six (6)
months:
(i) cease to carry on business using the AMIT Know How unless such
or similar rights are validly licensed or purchased from a
Third Person with valid rights therein; and
(ii) terminate all sub-license agreements with sub-licensees of the
AMIT Know How appointed by LMGC to the extent such sub-license
agreements sub-license AMIT Know How.
9.5 For the avoidance of doubt, it is agreed that any termination of this
Agreement, whether in whole or in part, shall be without prejudice to any rights
held by any Party which may have accrued up to the date of termination. Further,
LMGC may continue to use any Xxxx owned by or licensed to it or its Affiliates
in association with the AMIT Know How and/or the Programme.
ARTICLE 10
NON-COMPETITION
10.1 During the term of this Agreement and subject to Article 2.3 above, AMIT,
its Affiliates or its successors shall not utilize any AMIT Know How in or as
part of any Programme or any program similar there to, in competition with LMGC
or its Affiliates, directly or indirectly in the Territory or grant any of their
assignees, licensees or sub-licensees a license or sub-license to do so.
ARTICLE 11
ASSIGNMENT/SUCCESSORS
11.1 This Agreement shall enure to the benefit of and be binding upon the
Parties and their respective successors and permitted assigns.
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11.2 Subject to Article 4.1, AMIT may at any time or from time to time assign,
sell or transfer all but not less than all of its rights under this Agreement,
either absolutely or by way of security (including the rights and remedies of
the secured party relating to such security) as part of a financing involving
AMIT's business to any Person, in either case without the consent of, but with
prior notice to LMGC.
11.3 LMGC may at any time or from time to time assign, sell or transfer all but
not less than all of its rights under this Agreement, either absolutely as part
of the sale of all or substantially all of the Business or the assets of the
Business or by way of security (including the rights and remedies of the secured
party relating to such security) as part of a financing involving the Business
to any Person, in either case without the consent of, but with prior notice to
AMIT. Should such assignment, sale or transfer result in increased withholding
taxes being payable on the royalties payable under Article 5 hereof, LMGC shall
gross up the royalties payable to cover such withholding taxes.
11.4 Except as provided in Article 4.1, a Party entering into any such
assignment shall remain liable hereunder notwithstanding such assignment except,
in the case of any indebtedness or claim arising after an absolute assignment,
if the assignee executes and delivers to the other Party an assumption agreement
of all indebtedness and obligations here under due and payable or arising after
such assignment.
11.5 Except as provided in Article 4.1, either Party may amalgamate, merge or
consolidate with any Person and any such amalgamation, merger or consolidation
shall be deemed to be an assignment unless by operation of applicable law the
amalgamated,
merged or consolidated successor corporation is subject to all liabilities and
all contracts, disabilities and debts of each of the predecessor corporations.
ARTICLE 12
NOTICES
12.1 All notices, requests, demands or other communications required by or
otherwise with respect to this Agreement shall be in writing and shall be deemed
to have been duly given to any Party when delivered personally or by courier
service or when transmitted by telecopy to the applicable addresses set forth
below:
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If to AMIT:
Air Miles International Trading X.X.
Xxxxxxxx 0
0000 XX Xxxxxxxxx,
Xxx Xxxxxxxxxxx
Attention: Managing Director
Telephone: 000 000 0000
Fax: 000 000 0000 (belonging to Air Miles International Group)
With a copy to:
Loyalty Management International Ltd.
Xxxxx Xxxxx
Xxxxxxxxx Xxxxxx
Xxxxxxx
Xxxx Xxxxxx
XX00 0XX England
Attention: Xxxx Xxxxxxx
Telephone: 00000 000000
Fax: 00000 000000
If to LMGC:
Loyalty Management Group Canada Inc.
0000 Xxxxx Xxxxxx,
Xxxxx 000,
Xxxxx Xxxx, Xxxxxxx
Attention: Xxxx Xxxxxxxx
C.O.O.
Telephone: (000) 000-0000
Fax: (000) 000-0000
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With a copy to:
Alliance Data Systems Corporation
0000 Xxxxxx Xxxx
Xxxxx 000, Xxxx Xxxxx
Xxxxxx, Xxxxx U.S.A. 75244-3910
Attention: General Counsel
Telephone: (000) 000-0000
Fax: (000-000-0000
or at such other address as the Party to whom such notice is to be given shall
have last notified (in the manner provided in this Article) the Party giving
such notice. Any notice delivered to the Party to whom it is addressed as
provided herein shall be deemed to have been given and received on the day it is
so delivered at such address and notice transmitted by telecopier shall be
deemed given and received on the day of its transmission, provided that if the
day of delivery or transmission is not a Business Day at the place of receipt or
the time of delivery or transmission is after 5 p.m. at the place of receipt on
a Business Day, then the notice shall be deemed to have been given and received
on the next Business Day at the place of receipt.
ARTICLE 13
CONFIDENTIALITY
13.1 During the term of this Agreement, each Party shall keep confidential and
not divulge to any Person any information, whether written or oral, or otherwise
recorded, which is proprietary or confidential of the other including, but not
limited to, customer lists, data compilations and data systems, pricing methods,
cost information, financial information, strategic plans, finances, methods of
operation, marketing plans and strategies, equipment and operational
requirements, processes or products and services or intended products or
services of the other and information concerning personnel and customers;
provided however that neither Party shall have any confidentiality obligation
(i) as to information which has come into the public domain through no fault of
or action by such Party, (ii) to the extent such Party is required by law to
disclose, or (iii) as to information such Party may disclose to employees,
directors or advisors of such Party or an Affiliate thereof in connection with
performance of services for such Party; and provided further that AMIT shall
have no obligation with respect to any information of LMGC unless such
information relates exclusively to LMGC and provided further that upon
termination of this Agreement and for two (2) years thereafter such
confidentiality obligation shall apply only to disclosures of information which
would be materially' detrimental to the operations of LMGC's Business or AMIH's
business.
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13.2 LMGC's obligations under this Agreement with respect to any trade secrets
forming part of the AMIT Know How shall cease with respect to such trade secrets
to the extent that such trade secrets become part of the public domain through
no fault of or action by LMGC.
ARTICLE 14
DISPUTE RESOLUTION
14.1 General Any dispute arising out of or relating to this Agreement, including
any dispute regarding the existence, validity, scope, enforceability or
termination of this Agreement and whether an issue is arbitrable (a "Dispute")
shall be resolved in accordance with the procedures specified in this Article
15, which shall be the sole and exclusive procedures for the resolution of any
such Disputes. The Parties shall attempt in good faith to resolve any Dispute
(including the validity, scope and enforceability of this Article 14) promptly
by negotiations between the Parties.
14.2 Negotiations between Executives
(a) AMIT and LMGC shall attempt in good faith to resolve
any dispute arising out of or relating to this
Agreement promptly by negotiation between executive
officers who have authority to settle the controversy
and who are at a higher level of management than the
Persons with direct responsibility for administration
of this Agreement. Either AMIT or LMGC may give to the
other written notice of any dispute not resolved in the
normal course of business. Within fifteen (15) days
after delivery of the notice, the receiving Party shall
submit to the other Party a written response. The
notice and the response shall include (i) a statement
of each Party's position and a summary of arguments
supporting that position, and (ii) the name and title
of the executive officer who will represent that Party
and of any other Person who will accompany the
executive officer. Within twenty (20) days after
delivery of the disputing Party's notice, the executive
officers of both Parties shall meet at a mutually
acceptable time and place, and thereafter as often as
they reasonably deem necessary, to attempt to resolve
the dispute. All reasonable requests for information
made by one Party to the other Party will be honoured.
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(b) All negotiations (including the existence, content and result
thereof) pursuant to this Article '14 shall be confidential,
non-discoverable in any judicial proceedings and treated as
compromise and settlement negotiations for purposes of
applicable rules of evidence.
14.3 Binding Arbitration
(a) If the Dispute is not resolved by negotiation within
forty-five (45) days (or any mutually agreed extension of
time) of the disputing Party's notice, or if the Parties fail
to meet within twenty (20) days of the notice, either Party
may, upon notice to the other Party and the CPR Institute for
Dispute Resolution ("CPR") submit such Dispute to arbitration.
(b) Such arbitrations shall be based in Toronto, Ontario and shall
be conducted by three (3) arbitrators (who shall be lawyers
admitted to practice in one or more provinces or territories
and who shall be experienced in matters relating to
intellectual property licenses) appointed as follows:
(i) the disputing Party shall appoint its nominee as
first arbitrator;
(ii) the receiving Party shall, within ten (10) days of
having received written notice from the disputing
Party of the nature of the dispute to be referred to
arbitration and of the identity of its nominee
arbitrator, appoint its nominee as second arbitrator;
(iii) if the appointment required by clause (ii) is
not made within the period therein stipulated, the
disputing Party shall be entitled to appoint as
second arbitrator a nominee of its choice who is not
related to the disputing Party and who shall be
deemed to be the nominee of the respondent to the
dispute;
(iv) the two nominees so appointed shall, within ten
(10) days of the date upon which the second of
them had been appointed as arbitrator, appoint a
third nominee as chairman of the tribunal. In the
event of their failure so to do within the
prescribed period, the third arbitrator shall be
appointed in accordance with the provisions of the
International Commercial Arbitration Act (Ontario)
("the Act"); and
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(v) should a vacancy arise because any arbitrator
dies, resigns, refuses to act, or becomes
incapable of performing his functions, the vacancy
shall be filled by the method by which that
arbitrator was originally appointed. When a
vacancy is filled the newly established tribunal
shall exercise its discretion to determine whether
any previously completed hearings shall be
repeated.
(c) The arbitration will be in accordance with the Act and
the then current CPR "Non-Administered Arbitration Rules" or
any successor CPR rules (the Act having precedence in the
event of a conflict) (the "Arbitration Rules") and the
procedures specified in this Article, to the extent they
modify or add to such Arbitration Rules. The seat of the
arbitration will be Toronto and the arbitration will be
conducted at a neutral site in Toronto selected by the
arbitrators.
(d) The arbitrators will have sole authority to resolve
issues of the arbitrability of Disputes, including the
applicability of any statute of limitation. The
arbitrators may not amend or disregard any provision of
this Article and may not limit, expand or otherwise
modify the terms of this Agreement (including any terms
respecting the limitation of liability of any Person).
The arbitrators will have the power to order the pre-
hearing discovery of documents but such production
shall be restricted to documents (which shall include
information recorded or stored by means of any device)
directly related to the Dispute. The arbitrators will
also have the power to order the taking of examinations
for discovery of no more than two (2) witnesses per
side (with the witnesses to be selected by the adverse
side) for a period of not more than three (3) hours per
witness, unless otherwise agreed. In addition, the
arbitrators may compel the attendance of witnesses and
production of documents at the hearing, to the extent
provided by the Act. The arbitrators will determine the
rights and obligations of the Parties and decide the
Dispute in accordance with the substantive and
procedural laws of the Province of Ontario.
(e) The Parties may seek injunctive relief either within
the arbitration process or from the Ontario Court
(General Division) or the Federal Court of Canada (or
in the case of disputes relating to the use of Marks
outside the Territory a Court competent in the
jurisdiction in which use occurred) and the Parties
accept the concurrent jurisdiction of the Courts for
the purpose of granting injunctive relief, as set out
herein. Within the arbitration process, Parties may
seek either interim or permanent relief. From the
Court, Parties may seek temporary injunctive relief. A
Party seeking temporary injunctive relief from the
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Court will simultaneously file a claim in the arbitration for
interim and permanent relief in the manner specified under
this Article. If the Court issues a temporary injunction
against one of the Parties, the Court will have jurisdiction
to deal with all matters, including appeals, concerning the
temporary injunction. Any requested arbitration concerning the
subject-matter of the injunction shall proceed before the
arbitrator in an expedited manner pursuant to Article 14.4.
(f) Time will be of the essence and the arbitrators' award will be
rendered as soon as practicable after conclusion of the final
hearing, but in any event not later than one hundred and
eighty (180) days after the date of appointment of the third
arbitrator unless otherwise agreed or the time period is
extended for a fixed reasonable period by the arbitrators on
written notice to each Party because of illness or other cause
of an arbitrator beyond the arbitrator's control.
(g) The decision of any two of the three arbitrators shall be
final and binding on the Parties to the Dispute with no right
of appeal therefrom. The arbitrators' decision, reasons and
award will be in writing, setting forth the legal and factual
basis therefor (except with respect to the validity,
infringement or misappropriation of any patents or other
proprietary rights of any Party, with respect to which such
award will be a bare award without findings or any statement
of legal or factual basis). The Parties will abide by and
perform any award, including interim awards, rendered by the
arbitrators and judgment on such awards may be entered and
enforced in any court of competent jurisdiction.
(h) The fees and expenses of the arbitration, which may include
the costs of CPR, the arbitrators, the arbitration site and
counsel will be in the sole discretion of the arbitrators.
(i) All information and documents disclosed in arbitration by any
Party will remain Confidential Information of the disclosing
Party, and the arbitrators and the Parties will (and will
cause their representatives, advisors and counsel to) hold the
existence, content and result of the arbitration in
confidence, except to the limited extent necessary to enforce
a final settlement agreement or to obtain and secure
enforcement of or a judgment on an arbitration award. No
privilege or right of a Party with respect to information or
documents disclosed by it in arbitration will be waived or
lost by such disclosure.
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14.4 Expedited Binding Arbitration
The Parties agree that there shall be expedited arbitration pursuant to
this Article 19 to be completed in not more than ninety (90) days where there is
a genuine issue with respect to the following events:
(i) if AMIT or LMGC is enjoined pursuant to a temporary injunction
of the Ontario Court (General Division) or the Federal Court
of Canada or any other Court in the World;
(ii) if LMGC fails to pay the amounts due under Article 6;
(iii) if LMGC uses or licenses the use of the AMIT Know How outside
the Territory contrary to Articles 2 or 3;
(iv) if AMIT uses or licenses the use of the AMIT Know How and/or
the Programme inside the Territory contrary to Article 2; or
(v) if the Related Agreements are or one of them is terminated by
any of the parties thereto.
ARTICLE 15
MISCELLANEOUS
15.1 Name, Captions
The provision of a Table of Contents, the division of this Agreement
into Articles, Sections, Sub sections and other subdivisions and the insertion
of headings are for convenience of reference only and shall not affect or be
utilized in the construction or interpretation of this Agreement.
15.2 Entire Agreement and Relationship Between the Parties
(a) This Agreement and the Related Agreements constitute the
entire agreement between the Parties pertaining to the matters contemplated
hereby and supersede all prior agreements, understandings, negotiations and
discussions, whether oral or written, of the Parties, relating to the subject
matter hereof.
(b) This Agreement is not a franchise and does not create a
partnership or joint venture. Neither Party shall have any right to obligate or
bind any other Party in any manner. Each of LMGC and AMIT is an independent
contractor, not an agent or employee of the other. The continuing obligations of
LMGC in this Agreement, including those obligations set forth in Articles 5.3,
5.4, 8.1, 9.5 and 14, and the continuing obligations of AMIT in this Agreement,
including those obligations of
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AMIT under Articles 8.2, 9.5 and 14, shall survive and continue after the
termination of this Agreement. The continuing obligations of each of LMGC and
AMIH set forth in Article 13 of this Agreement shall survive and continue for a
period of two (2) years after the termination of this Agreement.
15.3 Amendments
No amendment of this Agreement shall be effective unless such amendment
is made in writing and signed by authorized representatives of the Parties
hereto.
15.4 Severability
If any provision of this Agreement is determined to be invalid or
unenforceable by an arbitrator or a court of competent jurisdiction from which
no further appeal lies or is taken, that provision shall be deemed to be severed
therefrom, and the remaining provisions of this Agreement shall not be affected
thereby and shall remain valid and enforceable; provided that in the event that
any portion of this Agreement shall have been so determined to be or become
invalid or unenforceable (the "offending portion"), the Parties shall negotiate
in good faith such changes to this Agreement as will best preserve for the
Parties the benefits and obligations of such offending portion. The invalidity
or unenforceability of any term or any right arising pursuant to this Agreement
shall in no way affect the validity or enforceability of any of the remaining
terms or rights.
15.5 Specific Performance/Injunctive Relief
The Parties acknowledge and agree that money damages are not an
adequate remedy for violations of this Agreement and that any Party may, in its
sole discretion, notwithstanding Article 14, apply to the Ontario Court (General
Division) or the Federal Court of Canada for specific performance or for
temporary injunctive relief or such other temporary relief (equitable or
otherwise) as such court may deem appropriate in order to enforce this Agreement
or to prevent any violation hereof, and each Party waives any objection to the
imposition of such relief and any requirement for the posting of any security,
including a bond, with respect to such relief.
15.6 Remedies Cumulative
All rights, powers and remedies provided under this Agreement or
otherwise available in respect hereof at law or in equity shall be cumulative
and not alternative, and the exercise or beginning of the exercise of any
thereof by either Party shall not preclude the simultaneous or later exercise of
any other such right, power or remedy by such Party.
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15.7 No Waiver
No waiver of any of the provisions of this Agreement is binding unless
it is in writing and signed by the Party entitled to grant the waiver. No
failure to exercise, and no delay in exercising, any right or remedy under this
Agreement will be deemed to be a waiver of that right or remedy. No waiver of
any breach of any provision of this Agreement will be deemed to be a waiver of
any subsequent breach of that provision.
15.8 Further Assurances
The Parties will, from time to time during the course of this Agreement
or upon its expiry and without further consideration, execute and deliver such
other documents and instruments of transfer, conveyance and assignment and take
such further action as the other may reasonably require to effect the
transactions contemplated thereby.
15.9 Extended Meanings
Any reference in this Agreement to gender shall include all genders,
and words importing the singular number only shall include the plural and vice
versa.
15.10 No Third Party Beneficiaries
Each Party intends that this Agreement shall not benefit or create any
right or cause of action in or on behalf of any Person, other than the Parties
and their Affiliates, and no Person, other than the Parties, shall be entitled
to rely on the provisions hereof in any action, suit, proceeding, hearing or
other forum.
15.11 Counterparts
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original and all of which, taken together, shall
constitute one and the same instrument. Each counterpart may consist of a number
of copies each signed by less than all, but together signed by all, the Parties.
15.12 No Liability of Shareholders
No shareholder of LMGC or the successors or transferees of a
shareholder of LMGC shall be liable for any of the obligations of LMGC
hereunder. No shareholder of AMIT or the successors or transferees of a
shareholder of AMIT shall be liable for any of the obligations of AMIT
hereunder.
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15.13 Statutory References
Unless expressly stated to the contrary, any references in this
Agreement to any law, by-law, rule, regulation, order or act of any government,
governmental body or other regulatory authority shall be construed as a
reference there to as enacted at the date of this Agreement as such law, by-law,
rule, regulation, order or act may be amended, re-enacted or superseded from
time to time.
15.14 Business Day Payments
If under this Agreement any payment or calculation is to be made or any
other action is to be taken on a day which is not a Business Day, that payment
or calculation is to be made, and that other action is to be taken, as
applicable, on or as of the next day that is a Business Day
15.15 References
In this Agreement, references to "hereof", "hereto", and "hereunder"
and similar expressions mean and refer to this Agreement taken as a whole, and
not to any particular Article, Section, Subsection or other subdivision;
"Article", "Section", "Subsection" or other subdivision of this Agreement
followed by a number means and refers to the specified Article, Section,
Subsection or other subdivision of this Agreement.
15.16 Currency
In this Agreement, all references to currency shall be references to
the lawful currency of the Territory.
15.17 Schedules
The following Schedules are attached to and form part of
this Agreement:
Schedule Description
SCHEDULE 1 AMIT KNOW HOW
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15.18 Limitation of Liability
THE PARTIES (INCLUDING FOR THIS PURPOSE THEIR AFFILIATES) EXPRESSLY
ACKNOWLEDGE AND AGREE THAT THEY WILL NOT BE LIABLE FOR EACH OTHER'S INCIDENTAL,
INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES OR FOR PUNITIVE, EXEMPLARY OR
AGGRAVATED DAMAGES OR FOR DAMAGES FOR LOST PROFITS, LOST REVENUES OR FAILURE TO
REALIZE EXPECTED SAVINGS, REGARDLESS OF WHETHER SUCH LIABILITY ARISES IN OR IS
BASED UPON TORT (INCLUDING NEGLIGENCE), CONTRACT (INCLUDING FUNDAMENTAL BREACH
OR BREACH OF A FUNDAMENTAL TERM), BREACH OF TRUST OR FIDUCIARY DUTY, RESCISSION
OF CONTRACT, RESTITUTION, INDEMNIFICATION OR OTHERWISE.
15.19 Time of the Essence
Time shall be of the essence of this Agreement.
15.20 Costs and Expenses
Except as otherwise or expressly provided in this Agreement, each Party
shall pay all costs and expenses it incurs in authorizing, preparing, executing
and performing this Agreement and the transactions contemplated there under,
including all fees and expenses of its respective legal counsel, investment
bankers, brokers, accountants or other representatives or consultants.
15.21 Excusable Delays
The dates and times by which any Party is required to perform any
obligation under this Agreement shall be postponed automatically to the extent,
for the period of time, that the Party is prevented from so performing by
circumstances beyond its
reasonable control. Such period shall not extend beyond one year. Said
circumstances shall include acts of nature, strikes, lockouts, riots, acts of
war, epidemics, government regulations imposed after the fact, fire, power
failures, earthquakes or other disasters or other causes beyond the performing
Party's reasonable control whether or not similar to the foregoing.
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15.22 Governing Law and Attornment
This Agreement shall be governed by and interpreted and enforced in
accordance with the laws of the Province of Ontario and the laws of Canada
applicable therein (excluding any conflict of laws rule or principle which might
refer such construction to the laws of another jurisdiction). To the extent
applicable, the Parties expressly exclude the application of the United Nations
Convention on Contracts for the International Sale of Goods. Each of the Parties
hereby irrevocably attorns and submits to the exclusive jurisdiction of the
Courts of the Province of Ontario or the Federal Court of Canada, except to the
extent any Court action of AMIT relates to the use of the AMIT Know How by LMGC
outside the Territory.
IN WITNESS WHEREOF, the Parties have executed the Agreement.
AIR MILES INTERNATIONAL LOYALTY MANAGEMENT GROUP
TRADING B.V. CANADA INC.
By:_____________________ By:__________________________
Name: Liam X.X. Xxxxxxx Name: Xxxxx Xxxxxxxxx
Title: Director Title: President and Chief
Executive Officer
Date July 24, 1998 Date: July 24, 1998
SCHEDULE 1
All know-how, processes, trade secrets, confidential information, unpatented
inventions, studies and data, marketing strategies, product information, sponsor
and/or supplier information, manuals, technology, research and development
reports, technical information, technical assistance and similar materials
recording or evidencing expertise or information related to the Programme.
