LICENSE TO USE AND EXPLOIT THE AIR MILES
SCHEME IN THE UNITED STATES
BETWEEN
AIR MILES INTERNATIONAL TRADING B.V.
AND
ALLIANCE DATA SYSTEMS CORPORATION
July 24, 1998
TABLE OF CONTENTS
1 DEFINITIONS ................................................................1
2 LICENSE ......................................................... ..........5
3 SUB-LICENSE RIGHTS .............................................. ..........7
4 ASSIGNMENT OF THE PROGRAMME ..................................... ..........8
5 ROYALTY FREE LICENSES ........................................... ..........8
6 REGISTRATION AND RENEWALS ....................................... ..........8
7 REPRESENTATIONS AND WARRANTIES .................................. ..........9
7.1 AMIT Warranties ..................................................9
7.2 ADSC Warranties ..................................................10
8 INDEMNITY ..................................................................10
9 DURATION AND TERMINATION ...................................................11
10 NON-COMPETITION ............................................................12
11 ASSIGNMENT/SUCCESSORS ......................................................13
12 NOTICES ....................................................................14
13 CONFIDENTIALITY ............................................................15
14 DISPUTE RESOLUTION .........................................................16
14.1 General .........................................................16
14.2 Negotiations between Executives .................................16
14.3 Binding Arbitration .............................................17
14.4 Expedited Binding Arbitration ...................................20
15 MISCELLANEOUS ..............................................................20
15.1 Name, Captions ..................................................20
15.2 Entire Agreement and Relationship Between the Parties ...........20
15.3 Amendments ......................................................21
15.4 Severability ....................................................21
15.5 Specific Performance / Injunctive Relief ........................21
15.6 Remedies Cumulative .............................................22
15.7 No Waiver .......................................................22
15.8 Further Assurances ..............................................22
15.9 Extended Meanings ...............................................22
15.10 No Third Party Beneficiaries ....................................22
15.11 Counterparts ....................................................22
15.12 No Liability of Shareholders ....................................23
15.13 Statutory References ............................................23
15.14 Business Day Payments ...........................................23
15.15 References ......................................................23
15.16 Currency ........................................................23
15.17 Schedules .......................................................23
15.18 Limitation of Liability .........................................24
15.19 Time of the Essence .............................................24
15.20 Costs and Expenses ..............................................24
15.21 Excusable Delays ................................................24
15.22 Governing Law and Attornment ....................................25
LICENSE TO USE AND EXPLOIT THE AIR MILES
SCHEME IN THE UNITED STATES
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 ALLIANCE DATA SYSTEMS CORPORATION of 0000 Xxxxxx Xxxx, Xxxxx 000,
Xxxx Xxxxx, Xxxxxx, Xxxxx, X.X.X. 75244-3910 ("ADSC").
WHEREAS ADSC has agreed to purchase all of the shares of LMGC pursuant
to the Share Purchase Agreement which agreement contemplates this agreement and
relationship and such transaction is intended to close on the date hereof; and
WHEREAS AMIT is entitled to grant the licenses herein to ADSC and is
willing to license and allow ADSC 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, including as set out in the Related Agreements and through the
Share Purchase Agreement including the sum of one hundred dollars (U.S.), 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 as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions
"ADSC MARKS" means the Marks owned by or licensed to ADSC or its
Affiliates from time to time, other than those Marks licensed pursuant to the
United States License Agreement.
"AFFILIATE" means a Person directly or indirectly controlling,
controlled by or under common control with a party.
"AGREEMENT" means this agreement 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
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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) an involuntary case or other proceeding is commenced (by the
filing of any originating process or otherwise) against the
Party pursuant to an Insolvency Act, and
(a) such case or 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 case or proceeding,
or
(c) such case or 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;
(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
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(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 ADSC 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 Dallas,
Texas, United States of America.
"CANADIAN 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
Canada or any other geographic region in which ADSC or any of its Affiliates has
a license from AMIH 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, 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.
"CATEGORY" means the business sector granted to a Sponsor within the
Territory.
"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
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"INSOLVENCY ACT" means any bankruptcy, insolvency or other similar law
or statute of the United States or any other 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.
"LMGC" means Loyalty Management Group Canada Inc. a Canadian
company with its office located at 0000 Xxxxx Xxxxxx, Xxxxx 000,
Xxxxx Xxxx, Xxxxxxx Xxxxxx.
"XXXX" means any name, xxxxx, xxxx, trademark, service xxxx, trade
dress, trade name, business name, Uniform Resource Locator ("URL"), domain name
or other indicia of origin.
"PARTY" means either AMIT or ADSC; and "Parties" means AMIT and ADSC
collectively.
"PERSON" includes an individual, a legal personal representative,
corporation, company, body corporate, partnership, limited partnership, joint
venture, syndicate,' trust, unincorporated organization, the United States
government 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 ADSC 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, 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 United States
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 ADSC 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.
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"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 the
United States of America including Puerto Rico and any other area or territory
which becomes a state of the United States of America, unless AMIT or its
licensees are operating a Programme (except that the entitled members thereof
have addresses in the area or territory rather than the Territory) in that area
or territory at the time it becomes a state.
"THIRD PERSON" means any Person other than AMIT and its Affiliates and
ADSC and its Affiliates.
"UNITED STATES LICENSE AGREEMENT" means the License to Use the Air
Miles Trademarks in the United States Agreement between Air Miles International
Holdings N.V. and ADSC dated July 24, 1998, and as amended, supplemented or
restated in writing from time to time.
ARTICLE 2
LICENSE
2.1 AMIT hereby grants to ADSC, 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 ADSC 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.
2.2 AMIT hereby grants a non-exclusive right to ADSC, with a right to
sub-license 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 ADSC'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 and/or by ADSC
to the extent only that such use and exploitation is incidental to the operation
of and/or participation in the Programme in the Territory. ADSC shall not itself
have any other right to use the AMIT Know How' outside the Territory.
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ADSC'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 ADSC 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 ADSC with respect to the promotion
of the Business. ADSC, 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.
2.6. The Parties acknowledge that the licenses granted in this Article 2 do not
include the right for ADSC to use or license the use of trademarks consisting of
or including the Air Miles name and/or ancillary trademarks (including any of
the AMIH Marks defined in the United States License Agreement), which shall be
the subject of the United States License Agreement. Notwithstanding its rights
under the United States License Agreement, ADSC may use the ADSC Marks in
association with the AMIT Know How and/or the Programme during or after the
termination of the United States License Agreement.
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.
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ARTICLE 3
SUB-LICENSE RIGHTS
3.1 AMIT agrees that ADSC may grant and exploit non-exclusive sub-licenses to
the same or other Sponsors to use 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
Sponsors currently sub-licensed by LMGC in Canada in conjunction with the
participation by those Sponsors in the Canadian Programme, 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, ADSC
shall submit to AMIT a copy of each such license agreement and AMIT shall
provide written notice of any objections thereto 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.
3.2 AMIT agrees that ADSC may agree in such sub-license agreements as' mentioned
under Article 3.1 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.
3.3 It shall be a term of all sub-licenses granted pursuant to Article 3.1 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.
3.4 In this Agreement, where ADSC agrees to ensure that all sub- licensees of
the AMIT Know How appointed by ADSC comply with an obligation, this means:
(i) ADSC shall impose a contractual obligation on the sub-
licensees to observe such obligations; and
(ii) where ADSC becomes aware of any non-compliance by any
sublicensee with any such obligation, ADSC shall use
reasonable efforts to ensure that such sublicensee complies
with such obligation.
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3.5 The Parties acknowledge that Licensee 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.
3.6 For greater clarity, ADSC may sub-license its rights hereunder to an
Affiliate to the extent considered by ADSC, 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 ADSC notice of its intention to do so and gives ADSC 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 ADSC submits. Any such assignee or transferee must be
bound in writing by the grant of the license set out in this Agreement.
ARTICLE 5
ROYALTY FREE LICENSES
5.1 The Licenses granted hereunder by AMIH to ADSC shall be royalty free.
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.
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ARTICLE 7
REPRESENTATIONS AND WARRANTIES
7.1 AMIT Warranties
AMIT hereby represents and warrants to ADSC as of the date of this
Agreement the following:
(i) to the best of AMIT's knowledge and belief, 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 state or territory of
the Territory which could give rise to the imposition of a
material fine, penalty or sanction levied on ADSC 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
by Articles 2.3 and 2.4 above; and
(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 ADSC.
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7.2 ADSC Warranties
ADSC hereby represents and warrants to AMIT as of the date of this
Agreement the following:
(i) ADSC 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 ADSC and constitutes a valid, binding and legally
enforceable agreement of ADSC;
(iii) to the best of ADSC'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 ADSC is either bound or subject;' and
(iv) to the best of ADSC's knowledge and belief, ADSC'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 ADSC 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 ADSC 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 ADSC and hold it harmless and defend it from and
against all damages, including reasonable counsel fees, which ADSC 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.
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 ADSC if ADSC fails to commence within seven (7) years of the date
hereof the operation of the Programme or ceases for a continuous period of seven
(7) 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 ADSC and its sub-licensees
are diligently pursuing the remedy or cure of such failure
during the cure period, 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 ADSC who has taken a security interest in ADSC'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 ADSC hereunder continue to be
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duly paid and the performance of all covenants from time to
time to be performed by ADSC hereunder continue to be duly
performed; or
(B) any proceeding under an Insolvency Act involving a
restructuring or reorganization of ADSC under court
supervision and/or any disposition of ADSC'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 United States United States
License Agreement in accordance with the terms thereof, it may, at its option,
terminate this Agreement at the same time as the United States License
Agreement.
9.4 Upon termination of this Agreement ADSC 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 ADSC 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,
ADSC may continue to use the ADSC Marks.
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 thereto, in competition with ADSC
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.
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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.
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
AMIH's business to any Person, in either case without the consent of, but with
prior notice to ADSC.
11.3 ADSC 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.
11.4 Except as provided in Article 4.1, a Party entering into any such
assignment shall remain liable here under 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.
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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:
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
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If to ADSC:
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
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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
ADSC unless such information relates exclusively to ADSC 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.
13.2 ADSC'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 ADSC.
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
14, 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 ADSC 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 ADSC 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
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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.
(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 American
Arbitration Association ("AAA~) submit such Dispute to
arbitration administered by the AAA in accordance with the
International Commercial Arbitration Rules of the AAA
("Commercial Arbitration Rules").
(b) Such arbitration shall be based in New York, New York and
shall be conducted by three (3) arbitrators (who shall be
attorneys admitted to practice in one or more states 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;
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(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 Commercial Arbitration
Rules; and
(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 then current
Commercial Arbitration Rules or any successor AAA rules (the
"Arbitration Rules") and the procedures specified in this
Article, to the extent they modify or add to such Arbitration
Rules. The arbitration, shall be heard in New York, New York
and the arbitration will be conducted at a neutral site in New
York City 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 Arbitration Rules. 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
State of New York and the federal laws of the United States.
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(e) The Parties may seek injunctive relief either within the
arbitration process or from the courts of the State of New
York or in the United States District Court for the Southern
District of New York (collectively, the "Courts") 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 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 there for (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.
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(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.
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 ADSC 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 ADSC uses or licenses the use of the AMIT Know How outside
the Territory contrary to Articles 2 or 3;
(iii) 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
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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 ADSC and AMIT is an independent contractor,
not an agent or employee of the other. The continuing obligations of ADSC in
this Agreement, including those obligations set forth in Articles 8.1, 9.5 and
14, and the continuing obligations of AMIT in this Agreement, including those
obligations of 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
ADSC and AMIT 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 Courts of the State of
New York, including the Federal Court of the United States having jurisdiction
in that state, 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.
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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.
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.
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15.12 No Liability of Shareholders
No shareholder of ADSC or the successors or transferees of a
shareholder of ADSC shall be liable for any of the obligations of ADSC here
under. 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.
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 thereto 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 thereunder,
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 State of New York (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 State of New York or
the Federal Court of the United States having jurisdiction in that state, except
to the extent any Court action of AMIT relates to the use of the AMIT Know How
by ADSC outside the Territory.
IN WITNESS WHEREOF, the Parties have executed the Agreement.
AIR MILES INTERNATIONAL ALLIANCE DATA SYSTEMS
TRADING B.V. CORPORATION
By /s/ Liam X.X. Xxxxxxx By: /s/ Xxxxxxx Xxxxx
-------------------------------- ----------------------------
Name: Liam X.X. Xxxxxxx Name: Xxxxxxx Xxxxx
Title: Director Title: Executive Vice President
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.