Exhibit 10.35
AMENDED AND RESTATED LICENSE TO USE
THE AIR MILES TRADE MARKS IN CANADA
BETWEEN
AIR MILES INTERNATIONAL HOLDINGS N.V.
AND
LOYALTY MANAGEMENT GROUP CANADA INC.
July 24, 1998
TABLE OF CONTENTS
1 DEFINITIONS...............................................................................................................2
2 LICENSE...................................................................................................................6
3 SUB-LICENSE RIGHTS........................................................................................................8
4 STANDARDS OF QUALITY......................................................................................................9
5 USE OF THE MARKS.........................................................................................................10
6 USE OF LMGC MARKS........................................................................................................11
7 ASSIGNMENT OF CANADIAN MARKS.............................................................................................11
8 ROYALTIES................................................................................................................12
9 REGISTRATION AND RENEWALS................................................................................................13
10 REPRESENTATIONS AND WARRANTIES...........................................................................................13
10.1 AMIH Warranties.............................................................................................13
10.2 LMGC Warranties.............................................................................................14
11 TITLE AND GOODWILL.......................................................................................................15
12 INDEMNITY................................................................................................................16
13 INFRINGEMENT.............................................................................................................16
14 DURATION AND TERMINATION.................................................................................................17
15 NON-COMPETITION..........................................................................................................19
16 ASSIGNMENT/SUCCESSORS....................................................................................................19
17 NOTICES..................................................................................................................20
18 CONFIDENTIALITY..........................................................................................................22
19 DISPUTE RESOLUTION.......................................................................................................22
19.1 General.....................................................................................................22
19.2 Negotiations between Executives.............................................................................22
19.3 Binding Arbitration.........................................................................................23
19.4 Expedited Binding Arbitration...............................................................................26
20 MISCELLANEOUS............................................................................................................26
20.1 Name, Captions..............................................................................................26
20.2 Entire Agreement and Relationship Between the Parties.......................................................26
20.3 Amendments..................................................................................................27
20.4 Severability................................................................................................27
20.5 Specific Performance / Injunctive Relief....................................................................27
20.6 Remedies Cumulative.........................................................................................27
20.7 No Waiver...................................................................................................28
20.8 Further Assurances..........................................................................................28
20.9 Extended Meanings...........................................................................................28
20.10 No Third Party Beneficiaries................................................................................28
20.11 Counterparts................................................................................................28
20.12 No Liability of Shareholders................................................................................28
20.13 Statutory References........................................................................................29
20.14 Business Day Payments.......................................................................................29
20.15 References..................................................................................................29
20.16 Currency....................................................................................................29
20.17 Schedules...................................................................................................29
20.18 Limitation of Liability.....................................................................................30
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20.19 Time of the Essence.........................................................................................30
20.20 Costs and Expenses..........................................................................................30
20.21 Excusable Delays............................................................................................30
20.22 Governing Law and Attornment................................................................................31
AMENDED AND RESTATED LICENSE TO USE THE AIR MILES TRADE MARKS
IN CANADA
THIS AGREEMENT is dated the 24th day of July, 1998 between AIR
MILES INTERNATIONAL HOLDINGS N.V. of Landhuis Joonchi, Kaya ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
z/n, ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ Antilles ("AMIH") and LOYALTY MANAGEMENT
GROUP CANADA INC., whose registered office is located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ("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 License Agreement AMIH 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 certain of the Canadian Marks have been used by LMGC in the
Territory since at least as early as December 17, 1992 pursuant to the License
Agreement; and
WHEREAS the Parties are desirous of amending the terms of the
License Agreement and have, for simplicity, agreed to enter into this Agreement;
and
WHEREAS AMIH is entitled to grant the licenses herein to LMGC and
is willing to license and allow LMGC to use the AMIH Marks and adopt the
Licensed Names 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 here to agree that the License Agreement 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.
"AIR MILES DEVICE" means the design ▇▇▇▇ as depicted in Canadian
Trademark Registration No. 398,882.
"AGREEMENT" means this License Agreement including any recitals and
schedules to this agreement, as amended, supplemented or restated in writing
from time to time.
"AMIH MARKS" means the Canadian Marks and the Non-Canadian Marks
collectively.
"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 Canadian Marks are 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
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇.
"CANADIAN MARKS" means the Marks owned by AMIH or its Affiliates
whether pending or registered in accordance with the Canadian Trade-Marks Act,
from time to time, particulars of which are set out in Schedule 1 hereof and as
such Schedule may be updated by agreement of the Parties and/or those Marks
owned by AMIH or its Affiliates and used in the Territory by AMIH or its
licensees in association with the Programme from time to time (and as such Marks
may be modified or supplemented by agreement of the Parties), excluding the LMGC
Marks.
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"CATEGORY" means the business sector granted to a Sponsor within
the Territory.
"CONCURRENT USE AGREEMENT" means the Concurrent Use Agreement
between AMIH, Air Miles International Trading B.V., 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 Air Miles International
Trading B.V. and LMGC, as amended by Amendment No. 1 dated 13th day of May, 1994
and as amended and restated in the amending agreement of even date, and as
amended, supplemented or restated in writing from time to time.
"INTERNIC REGISTRATION RIGHTS" means all rights associated with the
registration of a ▇▇▇▇, being a domain name or URL with InterNIC or any other
entity now or hereafter serving a domain name registration function with respect
to any jurisdiction, including the Territory.
"LICENSE AGREEMENT" means the Licence to Use the Air Miles Trade
Marks in Canada agreement between AMIH and LMGC dated December 17, 1992, as
amended by Amendment No. 1 dated 13th day of May, 1994.
"LICENSED NAME" means any corporate name, trading style and/or
business name of LMGC or its Affiliates which is or includes any Canadian ▇▇▇▇.
"LMGC MARKS" means the Marks owned by LMGC or its Affiliates
whether pending or registered in accordance with the Canadian Trade-Marks Act,
from time to time, particulars of which are set out in Schedule 2 hereof and as
such Schedule may be updated and/or those Marks developed, owned and used by
LMGC or its Affiliates or sub-licensees in the Territory from time to time (and
as such Marks may be modified or supplemented).
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"▇▇▇▇" means any name, ▇▇▇▇▇, ▇▇▇▇, trade ▇▇▇▇, trade dress, trade
name, business name, Uniform Resource Locator ("URL"), domain name or other
indicia of origin.
"MARKETING SPECIFICATIONS" means AMIH's reasonable standards and
guidelines as of the date of this Agreement relating to the permitted use,
depiction, graphic display, marketing, advertising and promotion of any of the
AMIH Marks and any Licensed Name in association with the Programme, as they may
be amended, modified or supplemented from time to time in accordance with this
Agreement, which shall be reflected in writing.
"MASTER SPECIFICATIONS" means the applicable Quality Specifications
and Marketing Specifications for the Programme.
"NON-CANADIAN MARKS" means the registered or common law trade marks
and service marks subsisting outside the Territory comprising or including the
words Air Miles or the Air Miles Device and which are owned or used by AMIH or
any of its Affiliates, licensees, successors or assignees.
"PARTY" means either AMIH or LMGC; and "PARTIES" means AMIH 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 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.
"QUALITY SPECIFICATIONS" means AMIH's reasonable specifications as
of the date of this Agreement relating to the standards of the wares or services
bearing the Canadian Marks for the Programme, as they may be amended, modified
or supplemented from time to time in accordance with this Agreement, which shall
be reflected in writing.
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"RELATED AGREEMENTS" means collectively, the Intellectual Property
License, 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 AMIH and its Affiliates
and LMGC and its Affiliates.
ARTICLE 2
LICENSE
2.1 AMIH hereby grants to LMGC, subject to the terms of this Agreement, an
exclusive right and license to use the Canadian Marks in the Territory in
association with the Programme 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 AMIH to similar effect to this
Agreement, including the right to sub-license the use of the Canadian Marks in
the Territory in accordance with the provisions of this Agreement. Provided that
LMGC's use of a NonCanadian ▇▇▇▇ in the Territory in association with the
Programme would not violate the rights of any Third Person (which has not
obtained such rights from or through AMIH or an Affiliate), AMIH hereby grants
to LMGC, subject to the terms of this Agreement, an exclusive right and license
effective from the date hereof to use the Non-Canadian Marks in the Territory in
association with the Programme only, including the right to sub-license the use
of such Non-Canadian Marks in the Territory in accordance with the provisions of
this Agreement. Except as provided in Article 2.3 herein, AMIH agrees not to
license to anyone else the right to use a Non-Canadian ▇▇▇▇ in the Territory.
The exclusivity of the license is subject to the rights of AMIH, its Affiliates,
successors and assignees together with their respective licensees and
sub-licensees mentioned in Articles 2.3 and 2.4 hereafter.
2.2 AMIH hereby grants a non-exclusive right to LMGC, with a right to
sub-license its applicable Sponsors and sub-licensees, for and further agrees
that it will
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not and will ensure that its Affiliates, successors, assignees or any of their
licensees or sub-licensees will not object to the use of the AMIH Marks 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 is incidental
to the operation of the Programme in the Territory. LMGC shall not itself have
any other right to use the AMIH Marks outside the Territory. LMGC's right to use
of the AMIH Marks outside the Territory shall include the right to display, for
the purposes of promotion and advertisement, such Marks including 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 of the AMIH
Marks by AMIH, its Affiliates, successors and assignees together with 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
AMIH, 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 AMIH, its Affiliates, successors and assignees may use the Canadian Marks 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, AMIH, its Affiliates, successors
and assignees must cooperate with LMGC with respect to the promotion of the
Business. LMGC, its Affiliates, successors and assignees may use the
Non-Canadian Marks 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, AMIH reserves the right to use and license the
use of the AMIH Marks outside the Territory, whether in connection with sales
promotion and incentive schemes similar to the Programme or otherwise.
2.6 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 AMIH acknowledges that LMGC has entered into sub-licensing arrangements with
a number of Sponsors that are currently participating in the Programme. AMIH
confirms that the terms and conditions of such sub-licenses are acceptable to
it.
3.2 AMIH agrees that LMGC may grant additional or amended non-exclusive sub-
licenses to the same or other Sponsors to use the Canadian Marks 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, AMIH 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 AMIH a copy of each such
license agreement and AMIH shall provide written notice of any objections
thereto within ten (10) Business Days, failing which AMIH shall be deemed to
have consented to such sub-license arrangement. In any event, AMIH's consent to
such sub-licenses shall not be unreasonably withheld.
3.3 AMIH agrees that LMGC may agree in such sub-license agreements as mentioned
under Article 3.2 with such Sponsors that neither AMIH nor their Affiliates,
successors, assignees, licensees or sub-licensees will object to the use by such
Sponsors of the AMIH Marks outside the Territory only to the extent that such
use is in accordance with the rights granted in Article 2.2 above.
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 any use of the Marks in 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
AMIH Marks 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
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(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 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.
3.7 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
STANDARDS OF QUALITY
4.1 In using the AMIH Marks hereunder LMGC shall comply so far as it is capable
of doing so and shall ensure that all sub-licensees of the AMIH Marks appointed
by LMGC comply so far as they are capable of doing so in the manufacturing and
distribution, advertising, marketing and promotion of wares and services under
the AMIH Marks in relation to the Programme with all applicable laws in force in
the Territory and all other countries in which sub-licensees appointed by LMGC
use the AMIH Marks in the manufacture and distribution, advertising, marketing
and promotion of wares or services under such AMIH Marks in relation to the
Programme.
4.2 In using the AMIH Marks here under, LMGC shall and shall cause its sub-
licensees to meet the Master Specifications, provided that:
(i) AMIH hereby confirms that LMGC and, to AMIH's
knowledge, LMGC's sub- licensees have prior to the
signing of this Agreement met all material Master
Specifications set by it;
(ii) subject to Article 4.2(iii) below, on an ongoing basis,
the Master Specifications are the Master Specifications
as of the date of this Agreement; and
(iii) the Master Specifications may be amended, modified
or supplemented from time to time by AMIH, provided
that LMGC consents to the changes in such Master
Specifications and is provided with a reasonable
period of time to comply with such changes. LMGC will
have a period of ninety (90) days to rectify any breach
of the Master Specifications after receipt from AMIH of
notice of such breach, providing particulars of such
breach. Any extension of the cure period may be
mutually agreed upon by the Parties, acting reason
ably, taking into account primarily the materiality and
nature of the breach and the
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impact of the breach on AMIH's rights in the AMIH
Marks and otherwise what would be a reasonable time
within which to effect a cure and any reasonable
efforts LMGC is making to meet the Master
Specifications. LMGC will not be in breach of this
Agreement if it is meeting most of the Master
Specifications and is taking reasonable steps to meet
the balance of the Master Specifications, any failure
to comply with any Master Specification does not
negatively impact customer perceptions of quality or
negatively affect any of AMIH's rights in the AMIH
Marks and/or are not material to customer perceptions.
If a dispute arises between AMIH and LMGC as to the
materiality of a breach of the Master Specifications,
the matter will be resolved pursuant to .
ARTICLE 5
USE OF THE MARKS
5.1 LMGC shall be entitled to use any or all of the Canadian Marks including the
words Air Miles as or as part of the Licensed Name(s) of LMGC or any of its
Affiliates incorporated in the Territory provided that it is legally able to do
so.
5.2 LMGC may use any URL featuring any or part of the Canadian Marks including
the words Air Miles and may use a domain name featuring any or part of the
Canadian Marks including the words Air Miles including for any Internet-based
products or services that LMGC offers as part of or in furtherance of the
Programme, providing such URL or domain name includes an identifier of the
Territory. LMGC's website accessed through such domain name must also identify
the Territory. LMGC may own any InterNlC Registration Rights therein in its sole
discretion.
5.3 AMIH and LMGC agree to consider in good faith any incidents of actual
confusion or circumstances giving rise to a reasonable apprehension of confusion
between the operation of the Programme by LMGC and/or its sub-licensees of the
AMIH Marks and the activities of AMIH and their respective Affiliates and/or
licensees under the AMIH Marks which may come to the attention of either Party
and the Party responsible for such incidents of confusion or circumstances shall
take reasonable steps to ensure that similar confusion or potential confusion
does not arise in the future.
5.4 Where LMGC becomes aware of a material or persistent breach, that materially
affects the rights of AMIH, of the terms of any sub-license by a sub-licensee of
the AMIH Marks appointed by LMGC and such breach continues for at least sixty
(60) days after LMGC has given notice requiring the breach to be remedied LMGC
shall by means of an escalating course of discipline culminating in termination
assert the rights legally available to it to ensure compliance with the
provisions of such sub-license agreement.
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5.5. Where LMGC becomes aware of a challenge to the validity of, or entitlement
of LMGC to use or license any of the AMIH Marks by a sub-licensee of the AMIH
Marks appointed by LMGC, LMGC shall by means of an escalating course of
discipline culminating in termination assert the rights legally available to it
to ensure compliance with the provisions of such sub-licensee's sub-license in
relation to such AMIH Marks.
ARTICLE 6
USE OF LMGC MARKS
6.1 LMGC may use, continue to use and adopt any LMGC Marks in respect of any
wares and services including in relation to the Programme and in association
with any of the Canadian Marks. LMGC may register any LMGC Marks in the
Territory in respect of any wares and services including in relation to the
Programme. LMGC may associate intellectual property belonging to a Third Person
with the Canadian Marks or Licensed Name. LMGC may co-mingle the LMGC Marks with
the Canadian Marks and Licensed Name. Further, any Marks which are developed
after the date hereof by LMGC and which are not confusingly similar to AMIH
Marks shall be owned by LMGC and AMIH and/or any of its Affiliates shall not
have any ownership rights whatsoever therein and shall not use, adopt or
register such Marks (in any jurisdiction where they would be registrable by
LMGC) in the world. None of the foregoing shall permit LMGC to do anything which
would impair any of the rights of AMIH in the AMIH Marks in the Territory.
6.2 LMGC may provide services and distribute wares and invest in businesses or
non-commercial enterprises under the LMGC Marks.
ARTICLE 7
ASSIGNMENT OF CANADIAN MARKS
7.1 If AMIH wishes to assign or transfer the Canadian Marks, either directly or
indirectly by or through AMIH or AMIH's Bankruptcy, other than to an Affiliate,
no such assignment or transfer shall be effective unless AMIH provides LMGC
notice of its intention to do so and gives LMGC thirty (30) days written notice
within which to bid on such Canadian Marks for the purposes of owning either
directly or indirectly such Canadian Marks. The foregoing provision shall not,
in any way, obligate AMIH 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 8
ROYALTIES
8.1 (i) In accordance with the practice actually used for the payment of
Royalties under the License Agreement for the fiscal year of LMGC ended April
30, 1998, LMGC shall pay to AMIH 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
but excluding amounts received as co-operative marketing fees or for
reimbursement of expenses.
(ii) The percentage referred to above shall be 0.100%.
8.2 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
AMIH a statement setting out the sums received by LMGC as set out Article 8.1
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 AMIH and shall be paid net of all applicable taxes, including
Canadian non-resident withholding tax.
8.3 During the term of this Agreement and for three calendar years after its
termination AMIH 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 AMIH
respectively.
8.4 LMGC shall keep all accounting records, relevant for the purposes of
calculating royalties payable to AMIH, during the term stated in Article 8.3.
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ARTICLE 9
REGISTRATION AND RENEWALS
9.1 AMIH shall, for so long as this Agreement remains in force, ensure that the
registrations of such of the Canadian Marks as are registered will be renewed as
and when they fall due for renewal. Subject to Article 11.4 solely, the costs of
the renewals or registrations and all expenses in relation to the Canadian Marks
incurred from the date hereof shall be paid in full by AMIH.
9.2 LMGC shall not and shall make reasonable efforts to ensure that all sub-
licensees of the AMIH Marks appointed by LMGC shall not use or register, in
respect of any relevant wares and/or services, any trade ▇▇▇▇ being the same or
confusingly similar to any of the AMIH Marks without the prior consent of AMIH.
9.3 AMIH shall if requested by LMGC make such further applications in the
Territory for the AMIH Marks as both Parties here to shall consider necessary or
desirable having in mind reasonable costs and expenses for the protection of
their trading activities and such Marks shall be licensed to LMGC in accordance
with the terms of this Agreement. AMIH shall bear the costs of such applications
and any subsequent registrations or renewals. Any trade-▇▇▇▇ covered by such
application shall be deemed to be a ▇▇▇▇ pursuant to this Agreement and shall be
added to the Canadian Marks. Nothing in the foregoing provision is intended to
prevent LMGC from itself applying to register trade-marks which LMGC uses or
otherwise adopts or intends to use or adopt provided that such trade-marks are
not confusingly similar to any of the AMIH Marks.
9.4 Should AMIH develop or own or be entitled to use any new ▇▇▇▇(s) which it
wishes to add to the Canadian Marks, it or they shall be so added after
consultation with LMGC and on terms and conditions acceptable to LMGC. In any
case, LMGC need not adopt any such additional Marks unless a reasonable
transition period is agreed to by the Parties for the adoption of such Marks.
Determinations that Marks are to be added to the Canadian Marks should be
reduced to writing and added to the list of Marks in Schedule 1 to this
Agreement.
ARTICLE 10
REPRESENTATIONS AND WARRANTIES
10.1 AMIH Warranties
AMIH hereby represents and warrants to LMGC as of the date of this
Agreement the following:
(i) AMIH 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;
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(ii) this Agreement has been duly authorized, executed and
delivered by AMIH and constitutes a valid, binding and
legally enforceable agreement of AMIH;
(iii) to the best of AMIH'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 AMIH is
either bound or subject;
(iv) to the best of AMIH's knowledge and belief, AMIH'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) AMIH has not granted any rights or licenses, which are
subsisting at the date hereof, to any of its Affiliates
or to any other Third Party to use the Canadian Marks
in the Territory save in the circumstances permitted in
Articles 2.3. and 2.4 above;
(vi) to the best of AMIH's knowledge and belief, the
registrations for the Canadian Marks are valid and
enforceable. AMIH is the sole and exclusive legal and
beneficial owner of all right, title and interest in
and to, or has valid title to use and license, all the
Canadian Marks that are material to the Programme. The
registrations for the Canadian Marks subsist on the
Canadian TradeMark Register;
(vii) except for the Concurrent Use Agreement, AMIH is not a
party to or bound by any contract or other obligation
whatsoever that limits or Impairs its ability to
license the Canadian Marks to LMGC; and
(viii) to the best of AMIH's knowledge and belief, LMGC is not
in breach of any term or condition of the License
Agreement.
10.2 LMGC Warranties
LMGC hereby represents and warrants to AMIH 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;
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(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 11
TITLE AND GOODWILL
11.1 LMGC acknowledges that its sole right to use the AMIH Marks and any trade
marks confusingly similar thereto derives from this Agreement and that it does
not have any rights to use the AMIH Marks or any marks confusingly similar there
to save as provided herein. LMGC agrees to include in all sub-licenses an
acknowledgment by sub-licensees appointed by LMGC to use the AMIH Marks that
their sole right to use the AMIH Marks and any trade marks confusingly similar
thereto derives from such sub-license and that they do not have any rights to
use the AMIH Marks or any marks confusingly similar thereto save as provided
therein.
11.2 LMGC shall, if reasonably requested by AMIH from time to time and to the
extent practicable, for the protection of the AMIH Marks include and ensure that
any sub-licensees of the AMIH Marks appointed by LMGC within a reasonable period
of time include in advertisements in the press and elsewhere and on the goods or
labels or containers used in connection with the sale of the goods and/or the
provision of services under the AMIH Marks a notice to the effect that the AMIH
Marks and each of them are trade marks of AMIH or its successors in title.
11.3 All rights arising from the use by LMGC or its sub-licensees of the AMIH
Marks shall inure to the benefit of AMIH or its successors in title and all
goodwill symbolised by the AMIH Marks shall belong to and accrue to AMIH or its
successors in title.
11.4 The Parties acknowledge that use of the Canadian Marks by LMGC in the
Territory may be required to maintain the validity of the Canadian Marks. If
AMIH, acting reasonably, considers that any one of the Canadian Marks has not
been used
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in the Territory in relation to the Programme, it shall be entitled to serve
notice on LMGC requesting brief details of any use of the relevant Canadian
Marks within the period of four years prior to the date of the notice or within
a period of three months after the date of the notice. If in the reasonable
opinion of AMIH, LMGC has not demonstrated that use of the relevant Canadian
Marks has taken place to the extent necessary to preserve and maintain the
validity of the said registration for the Canadian Marks and provided such
Canadian Marks are material to the Canadian business of LMGC, AMIH may, in its
sole discretion, require LMGC to make use of such Canadian ▇▇▇▇ solely to the
extent required to maintain the registration of such Canadian ▇▇▇▇.
Notwithstanding the foregoing, AMIH has the option not to renew any registration
of such Canadian ▇▇▇▇ if LMGC is not using such in the Territory.
ARTICLE 12
INDEMNITY
12.1 LMGC shall indemnify AMIH and hold it harmless and defend it from and
against all damage, including reasonable counsel fees, which AMIH may incur in
respect of all claims which may be made against AMIH (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 under the AMIH Marks, except insofar as any such claim may be
found to arise from any omission or failure on the part of AMIH.
12.2 AMIH 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 10 with regard to the
Canadian Marks only or as a result of any Third Person during the term hereof
effectively prohibiting LMGC the use of the Canadian Marks only within the
Territory.
ARTICLE 13
INFRINGEMENT
13.1 The Parties agree to give each other prompt written notice of any
infringement or other similar action in or affecting the Territory by a Third
Person of the AMIH Marks known to them.
13.2 In the event of such infringement or other similar action, LMGC has the
obligation to protect any of the Non-Canadian Marks which LMGC has been using in
the preceding 12 month period and the Canadian Marks in the Territory and may
decide whether or not any action is necessary for such protection and what such
action might be, taking into account the interests of both Parties. LMGC has the
right to act in its own name or if necessary in the name of AMIH. For the term
of this Agreement AMIH hereby LMGC a power of attorney in the form attached
-17-
hereto as Schedule 3 to act on its behalf if any action in or out of court in
connection with such actions is necessary. LMGC will select counsel, to which
AMIH has no reasonable objection and AMIH will provide reasonable assistance,
including by providing information, documents and things in response to
discovery requests, by providing at mutually convenient times witnesses for
discovery, depositions and trial testimony, and by permitting LMGC to cause AMIH
to be named as a party plaintiff or co-plaintiff in any litigation. All
expenses, including any expenses incurred by AMIH to provide such assistance,
shall be borne by LMGC and LMGC shall be entitled to any amounts awarded to LMGC
or AMIH. LMGC shall not enter into any settlement of such actions without the
written consent of AMIH, which consent shall not be unreasonably withheld.
13.3 If any action or proceeding is brought or asserted by LMGC, under the
authority granted to it under Article 13.2, LMGC will promptly notify AMIH in
writing. AMIH may assume and direct the action or proceeding only provided that
LMGC initiates no action or takes no action in such action or proceeding. Upon
assumption of the action or proceeding by AMIH, all expenses shall be borne by
AMIH and AMIH shall be entitled to any amounts awarded to LMGC or AMIH. AMIH
shall not enter into any settlement of such actions without the written consent
of LMGC, which consent shall not be unreasonably withheld.
ARTICLE 14
DURATION AND TERMINATION
14.1 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.
14.2 AMIH 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.
14.3 The rights of LMGC in the Territory in relation to any Canadian ▇▇▇▇
incorporating the words Air Miles or the Air Miles Device shall terminate in
accordance with Article 14.4 below if LMGC challenges the validity of or
entitlement of AMIH to use or license, such ▇▇▇▇. If a Court of competent
jurisdiction in a final non-appealable judgment in the Territory other than at
the request of LMGC holds that such Marks which are material to the Programme
are invalid or that AMIH is not entitled to use or license such Marks in the
Territory, LMGC may in its sole discretion either terminate this Agreement or
cease to pay royalties under this Agreement.
14.4 (1) Subject to compliance with the provisions of Article 19 requiring
dispute resolution, either Party shall have the right to terminate this
Agreement forthwith
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at any time on giving the other written notice of termination in any of the
following events:
(i) the other Party commits any breach of its obligations
hereunder 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 impair
AMIH's rights in the AMIH Marks and does not involve a
failure to pay amounts due here under, 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 16.3, or (b) with the written
consent of AMIH; 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
(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 Intellectual Property
License in accordance with the terms thereof, this Agreement shall terminate at
the same time as the Intellectual Property License.
14.5 Upon termination of this Agreement LMGC shall within a period of six (6)
months:
(i) cease to carry on business under the name 'Air Miles"
and cease to use the AMIH Marks;
(ii) deliver to AMIH any materials in its possession or
under its control which fail to meet the standard of
quality set out in Article 4 above or otherwise fail
to comply with the terms hereof and which reproduce
the AMIH Marks or give AMIH satisfactory evidence of
their destruction;
-19-
(iii) insofar as its Licensed Name(s) include(s) any Canadian ▇▇▇▇,
change such names to names that do not incorporate such Marks or
any Marks confusingly similar thereto;
(iv) terminate all sub-license agreements with sub-licensees of the
AMIH Marks appointed by LMGC; and
(v) terminate use of any URL and/or domain name containing any
Canadian ▇▇▇▇.
14.6 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 the LMGC Marks.
ARTICLE 15
NON-COMPETITION
15.1 During the term of this Agreement and subject to Article 2.3 above, AMIH,
its Affiliates or its successors shall not utilize any AMIH Marks or any Marks
confusingly similar thereto in or as part of any Programme or any program
similar thereto, 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 16
ASSIGNMENT/SUCCESSORS
16.1 This Agreement shall enure to the benefit of and be binding upon the
Parties and their respective successors and permitted assigns.
16.2 Subject to Article 7.1, AMIH 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 LMGC.
16.3 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
AMIH. Should such assignment, sale or transfer result in increased withholding
taxes being payable on the royalties
-20-
payable under Article 8 hereof, LMGC shall gross up the royalties payable to
cover such withholding taxes.
16.4 Except as provided in Article 7.1, 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.
16.5 Except as provided in Article 7.1, 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 17
NOTICES
17.1 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 AMIH:
Air Miles International Holdings NV
Landhuis Joonchi, Kaya ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ z/n,
▇.▇. ▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ Antilles
Attention: Managing Director
Telephone: ▇▇▇ ▇▇▇▇▇ ▇▇▇
Fax: 599 97366 161
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With a copy to:
Loyalty Management International Ltd.
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ England
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: ▇▇▇▇▇ ▇▇▇▇▇▇
Fax: ▇▇▇▇▇ ▇▇▇▇▇▇
If to LMGC:
Loyalty Management Group Canada Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
C.O.O.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Alliance Data Systems Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ U.S.A. 75244-3910
Attention: General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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
-22-
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 18
CONFIDENTIALITY
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 AMIH shall have no obligation with respect to any information of LMGC
unless such information relates exclusively to LMGC.
ARTICLE 19
DISPUTE RESOLUTION
19.1 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
19, 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 19) promptly
by negotiations between the Parties.
19.2 Negotiations between Executives
(a) AMIH 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 AMIH or LMGC may give to the
other written notice of any dispute not resolved in
the normal course of business. Within fifteen (15)
days
-23-
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.
(b) All negotiations (including the existence, content and
result thereof) pursuant to this Article 19 shall be
confidential, non- discoverable in any judicial
proceedings and treated as compromise and settlement
negotiations for purposes of applicable rules of
evidence.
19.3 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;
-24-
(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
(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
-25-
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 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 19.4.
(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.
-26-
19.4 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 AMIH 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 8;
(iii) if LMGC uses or licenses the use of the AMIH Marks
outside the Territory contrary to Articles 2 or 3;
(iv) if AMIH uses or licenses the use of the AMIH Marks
inside the Territory contrary to Articles 2 or 3; or
(v) if the Related Agreements are or one of them is
terminated by any of the parties thereto.
ARTICLE 20
MISCELLANEOUS
20.1 Name, Captions
The provision of a Table of Contents, the division of this
Agreement into Articles, Sections, Subsections 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.
20.2 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.
Any and all registered user applications and/or agreements between the Parties
are of no force and effect.
(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 AMIH is an independent
contractor, not an agent or employee of the other. The containing obligations of
LMGC in this Agreement,
-27-
including those obligations set forth in Articles 8.3, 8.4, 12.1, 14.6 and 19,
and the continuing obligations of AMIH in this Agreement, including those
obligations of AMIH under Articles 12.2, 14.6 and 19, shall survive and continue
after the termination of this Agreement.
20.3 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.
20.4 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.
20.5 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 19, 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.
20.6 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.
-28-
20.7 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.
20.8 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.
20.9 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.
20.10 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.
20.11 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.
20.12 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 AMIH or the successors or transferees of a
shareholder of AMIH shall be liable for any of the obligations of AMIH
hereunder.
-29-
20.13 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.
20.14 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
20.15 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.
20.16 Currency
In this Agreement, all references to currency shall be references
to the lawful currency of the Territory.
20.17 Schedules
The following Schedules are attached to and form part of this
Agreement:
Schedule Description
SCHEDULE 1 CANADIAN MARKS
SCHEDULE 2 LMGC MARKS
SCHEDULE 3 POWER OF ATTORNEY
-30-
20.18 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.
20.19 Time of the Essence
Time shall be of the essence of this Agreement.
20.20 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.
20.21 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.
-31-
20.22 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 AMIH relates to the use of the AMIH Marks by LMGC
outside the Territory.
IN WITNESS WHEREOF, the Parties have executed the Agreement.
AIR MILES INTERNATIONAL LOYALTY MANAGEMENT GROUP
HOLDINGS N.V. CANADA INC.
By: /s/ Liam ▇.▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------- -----------------------
Name: Liam ▇.▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Director Title: President and Chief
Executive Officer
Date July 24, 1998 Date: July 24, 1998
SCHEDULE 1
Canadian Marks
TRADE-▇▇▇▇ OWNER STATUS
A SAVINGS ACCOUNT LIKE NEVER BEFORE. AMIH PENDING
(705359)
ADHERENT AIR MILES OR AMIH PENDING
(771326)
AIR BUCKS AMIH PENDING
(778239)
AIR MILES AMIH REGISTERED
(697937)
AIR MILES & DESIGN AMIH PENDING
(740714)
AIR MILES BABY CLUB AMIH PENDING
(820515)
AIR MILES BUCKS AMIH PENDING
(778237)
AIR MILES DES VOYAGES ET BIEN AMIH PENDING
DAVANTAGE & DESIGN
(829576)
AIR MILES DES VOYAGES ET BIEN AMIH PENDING
DAVANTAGE OR & DESIGN
(830383)
AIR MILES FOR BUSINESS PROGRAM AMIH PENDING
(868437)
AIR MILES GOLD AMIH PENDING
(771199)
AIR MILES GOLD COLLECTOR AMIH PENDING
(771200)
AIR MILES INCENTIVES AMIH PENDING
(839292)
AIR MILES LEISURE TRAVEL AMIH PENDING
(771062)
AIR MILES OR AMIH PENDING
(771327)
-33-
TRADE-▇▇▇▇ OWNER STATUS
AIR MILES ROAD WARRIOR AMIH PENDING
(774732)
AIR MILES ROAD WARRIORS AMIH PENDING
(774731)
AIR MILES TRAVEL AND MORE & DESIGN AMIH PENDING
(829575)
AIR MILES TRAVEL AND MORE GOLD & DESIGN AMIH PENDING
(830382)
AIR MILES TRAVEL THE WORLD & DESIGN AMIH REGISTERED
(629149)
AIR MILES TRAVEL THE WORLD GOLD & DESIGN AMIH PENDING
(771202)
AIR MILES VACATIONS AMIH PENDING
(820683)
AIR MILES VACATIONS & DESIGN AMIH PENDING
(822346)
AIR MILES VOUS DONNE DES AILES. AMIH PENDING
(705355)
AIR MILES VOYAGEZ DE PAR LE MON DE AMIH PENDING
OR & DESIGN
(771203)
AIR MILES. FOR BUSINESS. AMIH PENDING
(867524)
AIR MILES. LE MONDE A VOTRE ▇▇▇▇▇▇. AMIH PENDING
(790573)
AIR MILES. LE MON DE A VOTRE ▇▇▇▇▇▇. & DESIGN AMIH PENDING
(790574)
AIR MILES. LE MON DE A VOTRE ▇▇▇▇▇▇. AMIH PENDING
& DESIGN(2)
(790575)
AIR MILES. SHRINKING THE WORLD. AMIH PENDING
(790570)
AIR MILES SHRINKING THE WORLD & DESIGN AMIH PENDING
(790571)
-34-
TRADE-▇▇▇▇ OWNER STATUS
AIR MILES. SHRINKING THE WORLD. AMIH PENDING
& DESIGN (2)
(790576)
AIR MILES. ABONNEZ-VOUS ET PARTEZ! AMIH PENDING
(836877)
AIR MILES. BANK AND GO. AMIH PENDING
(832871)
AIR MILES. BUY AND GO. AMIH PENDING
(840860)
AIR MILES. DEMENAGEZ ET PARTEZ. AMIH PENDING
(841566)
AIR MILES DES VOYAGES ET BIEN DAV ANTAGE. AMIH PENDING
(829574)
AIR MILES. MAGASINEZ ET PARTEZ & DESIGN AMIH PENDING
(829579)
AIR MILES. MAGASINEZ ET PARTEZ, & AMIH PENDING
DESIGN (2)
(829580)
AIR MILES. MAGASINEZ ET PARTEZ. AMIH PENDING
(827423)
AIR MILES. MOVE AND GO. AMIH PENDING
(832870)
AIR MILES. POUR LES AFFAIRES. AMIH PENDING
(868438)
AIR MILES. SEJOURNEZ ICI ET PARTEZ. AMIH PENDING
(841565)
AIR MILES. SHOP AND GO. AMIH PENDING
(827424)
AIR MILES. SHOP AND GO. & DESIGN AMIH PENDING
(829577)
AIR MILES. SHOP AND GO. & DESIGN (2) AMIH PENDING
(829578)
AIR MILES. STAY AND GO. AMIH PENDING
(83357())
AIR MILES. TRANSIGEZ ET PARTEZ. AMIH PENDING
(84()955)
-35-
TRADE-▇▇▇▇ OWNER STATUS
AIR MILES. TRAVEL AND MORE. AMIH PENDING
(829573)
AIR MILES. SUBSCRIBE AND GO. AMIH PENDING
(833569)
APPELEZ COMME AVANT AMIH PENDING
(771201)
BABYCLUB AMIH PENDING
(818407)
BABYCLUB & DESIGN AMIH PENDING
(818410)
CALL LIKE ALWAYS. AMIH PENDING
FLY LIKE NEVER BEFORE.
(706176)
COLLECT FOR BUSINESS, AMIH PENDING
FLY FOR PLEASURE
(867523)
ESCAPE LIKE ALWAYS AMIH PENDING
(774082)
FLY FREE FASTER AMIH PENDING
(778238)
FLY LIKE NEVER BEFORE AMIH REGISTERED
(705361)
LE MONDE A VOTRE ▇▇▇▇▇▇. AMIH PENDING
(790572)
MAGASINEZ COMME AVANT. AMIH PENDING
VOYAGEZ COMME JAMAIS.
(705364)
MEGA MILES AMIH REGISTERED
(745188)
MILES ABOVE AMIH PENDING
(703895)
MILLES EN TETE AMIH PENDING
(703896)
MILLES EXTRA AMIH PENDING
(778240)
-36-
TRADE-▇▇▇▇ OWNER STATUS
MOVE LIKE ALWAYS. AMIH PENDING
FLY LIKE NEVER BEFORE.
(705358)
ON ACCUMULE POUR LE BUREAU, AMIH PENDING
ON VOYAGE POUR LE PLAISER
(867522)
PLANE DESIGN AMIH PENDING
(819040)
PROGRAMME AFFAIRES AIR MILES AMIH PENDING
(868440)
RENT LIKE ALWAYS. AMIH PENDING
FLY LIKE NEVER BEFORE.
(705357)
SAVE LIKE ALWAYS AMIH PENDING
(705356)
SAVE LIKE ALWAYS. AMIH PENDING
FLY LIKE NEVER BEFORE.
(705363)
SHOP AND GO AMIH PENDING
(815494)
SHOP LIKE ALWAYS. AMIH REGISTERED
FLY LIKE NEVER BEFORE.
(697938)
SHRINKING THE WORLD. AMIH PENDING
(790569)
SUPER MILES AMIH PENDING
(822483)
SUR ▇▇▇ ▇▇▇▇▇ DE BANQUE-AIR AMIH PENDING
(827285)
TRAVEL AND MORE AMIH PENDING
(835066)
TRAVEL LIKE NEVER BEFORE AMIH REGISTERED
(705362)
TRAVEL THE WORLD AMIH PENDING
(705360)
UN MONDE REMPLI D'OR AMIH PENDING
(833177)
-37-
TRADE-▇▇▇▇ OWNER STATUS
VOYAGEZ DE PAR LE MONDE AMIH PENDING
(697940)
VOYAGEZ DE PAR LE MON DE & DESIGN AMIH IN OPPOSITION
(705546)
WORLD OF GOLD AMIH PENDING
(833176)
YOU BANK. YOU FLY. AMIH PENDING
(826108)
SCHEDULE 2
TRADE-▇▇▇▇ OWNER STATUS
COALITION DATABASE MARKETING LMGC REGISTERED
(751706)
LE GROUPE LOYALTY LMGC PENDING
(862344)
LOYALTY LMGC PENDING
(831970)
LOYALTY LMGC PENDING
(849707)
LOYALTY LMGC PENDING
(849709)
LOYALTY & DESIGN LMGC PENDING
(860274)
LOYALTY CONSULTING LMGC PENDING
(860281)
LOYALTY LE GROUPE LOYALTY & DESIGN LMGC PENDING
(862346)
LOYALTY MANAGEMENT CONSULTING LMGC PENDING
(830856)
LOYALTY MANAGEMENT CONSULTING & DESIGN LMGC PENDING
(830858)
LOYALTY MANAGEMENT GROUP LMGC PENDING
(831971)
LOYALTY MANAGEMENT GROUP CANADA LMGC PENDING
INC. & DESIGN
(831972)
LOYALTY MANAGEMENT SERVICES LMGC PENDING
(830857)
LOYALTY MANAGEMENT SERVICES & DESIGN LMGC PENDING
(830859)
LOYALTY RECOMPENSES RESULTATS LMGC PENDING
SAVOIR & DESIGN
(862345)
-2-
LOYALTY REWARDS RESULTS KNOWLEDGE LMGC PENDING
& DESIGN
(860276)
LOYALTY SERVICES LMGC PENDING
(860280)
LOYALTY THE LOYALTY GROUP & DESIGN LMGC PENDING
(860275)
RECOMPENSES RESULTATS SAVOIR LMGC PENDING
(862343)
REWARDS RESULTS KNOWLEDGE LMGC PENDING
(860278)
SPONSOR PROFITABILITY MODEL LMGC REGISTERED
(771044)
SPONSORFINDER DATABASE LMGC REGISTERED
(745187)
STAR DESIGN LMGC PENDING
(860279)
STAR SYSTEM LMGC PENDING
(870232)
THE FUTURE OF COALITION DATABASE LMGC REGISTERED
MARKETING ... TODAY
(751707)
THE LOYALTY GROUP LMGC PENDING
(860277)
SCHEDULE 3
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned AIR MILES
INTERNATIONAL HOLDINGS N.V. ("AMIH"), of Landhuis Joonchi, Kaya ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ z/n, ▇.▇. ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ Antilles, hereby nominates,
constitutes and appoints LOYALTY MANAGEMENT GROUP CANADA INC. ("Loyalty"), an
Ontario corporation, to be the true and lawful attorney of AMIH, with full power
of substitution, to act for and on behalf of AMIH and in AMIH's name or
Loyalty's own name in any suit, action, application, mediation, arbitration,
opposition or other legal, mediatory, arbitral or administrative proceeding
(each, a "Proceeding") or the exercise of any other remedy, of any nature or
kind whatsoever, whether in Canada or elsewhere in the world, at any time during
the term of the agreement (the "Agreement") dated July 24, 1998 between AMIH and
Loyalty entitled "Amended and Restated License to Use the Air Miles Trade Marks
in Canada", in connection with infringement or alleged infringement or other
similar action in Canada by any Person other than AMIH and its Affiliates of the
Canadian Marks or any of the Non-Canadian Marks which Loyalty has been using in
the preceding 12-month period in Canada.
In this power of attorney, the terms "Person", "Affiliates",
"Canadian Marks" and "Non-Canadian Marks" have the same respective meanings as
in the Agreement.
The following terms and conditions apply to this power of attorney:
1. This power of attorney shall be irrevocable by AMIH during the term
of the Agreement.
2. A certificate signed by an officer or director of Loyalty to the
effect that this power of attorney is valid and subsisting shall be conclusive
against all persons other than AMIH and its Affiliates.
3. Any person may rely on this power of attorney without inquiring of
AMIH or Loyalty as to its validity and subsistence.
-2-
4. Loyalty may not enter into a settlement of a Proceeding without the
written consent of AMIH, which consent shall not be unreasonably withheld.
IN WITNESS WHEREOF AMIH has duly executed this power of attorney
this 24th day of July, 1998.
AIR MILES INTERNATIONAL HOLDINGS N.V.
by:
------------------------
Name: Liam ▇.▇. ▇▇▇▇▇▇▇
Title: Director