DYNAMIC INTELLIGENCE INC. -AND - AIRLINE INTELLIGENCE SYSTEMS INC. -AND- AIRLINE INTELLIGENCE SYSTEMS INC.
Exhibit
10.7
DYNAMIC
INTELLIGENCE INC.
-AND
-
AIRLINE
INTELLIGENCE SYSTEMS INC.
-AND-
AIRLINE
INTELLIGENCE SYSTEMS INC.
Made
as of December 9, 2005
| Article 1 | INTERPRETATION | 2 | |||||
| 1.1 | Definitions | 2 | |||||
| 1.2 | Gender and Number | 4 | |||||
| Article 2 | SERVICES PRODUCTS | 4 | |||||
| 2.1 | Services | 4 | |||||
| 2.2 | Non-Exclusivity | 4 | |||||
| 2.3 | Intellectual Property Rights | 5 | |||||
| 2.4 | Requests for Assistance | 6 | |||||
| 2.5 | Notice to be Provided | 6 | |||||
| 2.6 | Performance by Responders | 6 | |||||
| 2.7 | Performance by Third Parties | 6 | |||||
| 2.8 | Remuneration for Services | 7 | |||||
| 2.9 | Other Activities | 7 | |||||
| Article 3 | LIABILITY | 7 | |||||
| 3.1 | Limitation of Liability | 7 | |||||
| Article 4 | TERM AND TERMINATION | 7 | |||||
| 4.1 | Effective Date | 7 | |||||
| 4.2 | Term | 7 | |||||
| 4.3 | Insolvency, Etc | 7 | |||||
| 4.4 | Default | 8 | |||||
| 4.5 | Effect of Termination | 8 | |||||
| Article 5 | GENERAL | 8 | |||||
| 5.1 | Governing Law and Attornment | ||||||
| 5.2 | Public Notices | 8 | |||||
| 5.3 | Relationship of Parties | 8 | |||||
| 5.4 | Further Assurances | 8 | |||||
| 5.5 | Assignment | 9 | |||||
| 5.6 | Severability | 9 | |||||
| 5.7 | Notices | 9 | |||||
| 5.8 | Time of Essence | 9 | |||||
| 5.9 | Limitation of Extent of Agreement | 10 | |||||
| 5.10 | Entire Agreement, Waiver | 10 | |||||
| 5.11 | Breach of One Party. | 10 | |||||
| 5.12 | Counterparts | 10 |
DYNAMIC INTELLIGENCE INC., a
corporation
incorporated under the laws of Barbados
("Dynamic")
- and -
AIRLINE INTELLIGENCE SYSTEMS INC.,
a
corporation
incorporated under the laws of the State of Delaware
("AI
US")
- and
-
AIRLINE INTELLIGENCE SYSTEMS INC
a
corporation
incorporated under the laws of the Province of
Ontario
("AI
Canada")
RECITALS:
| A. | Dunamic, AI US and AL Cananda each possess certain capabilities (including any of research, development, marketing, sales and client services capabilities) and each may from time to time require the assistance from one or more of the Group of Companies. |
| B. | Dynamic AI US and AI Canada wish to establish an ongoing arrangement for the provision of assistance of this sort. |
| C. | The part parties wish to have AI Canada assign its intellectual Property to AI US so that AI US can assign its Intellectual Property to Dynamic pursuant to the IPA, and for Dynamic to license AIS US pursuant to the IPA. |
NOW THEREFORE IN
CONSIDERATION of the mutual covenants contrained in this agreement and
other good and valuable consideration (the receipt and sufficiency of which are
hereby acknoledged), the parties agree as follows:
1
ARTICLE 1
INTERPRETATION
1.1
Definitions
In this
Agreement, the following terms have the following meanings:
"Affiliate" of a Party means a
corporation or other legal entity (a) controlled by the Party, (b) controlling
the Party, or (c) controlled by the corporation or legal entity which controls
the Party, For the purposes of this paragraph, to "control" a corporation or an
entity means to own or control, either directly or indirectly such as by
intermediary entities, (1) more than 50% of the shares or other securities
entitled to vote for election of directors (or other managing authority) of the
corporation or entity; (2) more than 50% of the equity interest of the
corporation or entity, (3) if the corporation or entity does not have
outstanding shares or securities as may be the case in a partnership, joint
venture, or unincorporated association, more than 50% of the ownership interest
representing the right to make decisions for the corporation or entity; or (4)
the maximum shares or other securities entitled to vote for election of
directors (or other managing authority) of a foreign corporation or entity
permitted by law if (i) the applicable country does not permit the Party to own
a greater share due to its nationality and (ii) the foreign corporation or
entity is substantially controlled by the Party. Notwithstanding the foregoing,
any corporation or other legal entity shall be deemed to be an Affiliate only so
long as such control exists,
"AI Canada Intellectual Property"
means Intellectual Property that becomes or became owned, controlled or
licensable by AI Canada, or its Affiliates to extent such Affiliates are not
Affiliates of AI US, during the term of the IPA. Notwithstanding the foregoing,
"AI Canada Intellectual Property" excludes Intellectual Property if (and solely
to the extent) (a) AIS Canada, or such Affiliates as the case may be, would be
obligated to pay royalties or other consideration to a non-affiliated third
party if the Intellectual Property is assigned or licensed to AI US hereunder
and (b) such obligation existed at the time AI Canada, or such Affiliates as the
case may be, acquired its rights in the Intellectual Property.
"Agreement" means this
agreement including the recitals, and all schedules attached to this agreement,
in each case as they may be amended or supplemented from time to
time;
"Group of Companies" means
collectively Dynamic, AI US and AI Canada.
"Business Day" means any day,
other than Saturday, Sunday or any statutory holiday in Canada or the United
States;
2
"Exploit" means make, use,
sell, offer for sale, import, reproduce, distribute (including but not limited
to by sale, rental, lease, or lending), perform, display, modify, adapt, prepare
derivative works of, make substantial and insubstantial alterations,
translate into any language, aggregate, have made, license, sublicense, grant
sublicensing rights, in any medium whatsoever whether now known or hereafter
devised, or otherwise exploit.
"Intellectual Property" means
any and all of the following items that are or were created, authored, invented,
conceived, reduced to practice, made, filed or derived (collectively "created"),
as the case may be, before or during the term of this Agreement (regardless of
the location where it was created):
(a) copyrightable
works, copyrights and computer software (including data and related
documentation), whether or not the subject of a copyright application, copyright
registration or renewed copyright,
(b) inventions
(whether or not the subject of a patent or patent application, and whether or
not reduced to practice), all improvements thereto, conceptions, patents, patent
applications, patent disclosures, industrial designs, utility models, industrial
design applications and industrial registrations,
(c) continuations,
continuations-in-part, divisionals, reissues, reexaminations,
revisions, extensions, substitute applications (as defined in MPEP §
201.09) of patents or patent applications filed before or during the term
of this Agreement, and other patents which claim the benefit of the
filing date of a patent or patent application otherwise filed before or
during
the term of this Agreement, but solely to the extent it claims subject
matter
that was disclosed in a patent or patent application filed before or
during
the term of this Agreement,
(d) moral
rights,
(e) proprietary
or confidential information, trade secrets and know-how, and
(f) any other
proprietary, intellectual or intangible property protected by the law of any
jurisdiction or governmental agency
Notwithstanding
the foregoing, "Intellectual Property" does not include trademarks, service
marks, or similar indicia of origin,
"IPA" means the executed
agreement entitled "Intellectual Property Agreement" between AI US and Dynamic,
a copy of which is attached as Schedule A.
"Party" means any signatory to
this Agreement and "Parties"
means all of them;
"Person" means any individual,
partnership, limited partnership, syndicate, sole proprietorship, company or
corporation with or without share capital, unincorporated association, trust,
trustee, executor, administrator or other legal personal
representative, regulatory body or agency, government or governmental agency,
authority or entity however designated or constituted;
3
"Requester" has the meaning
given to that term in Section 2.3;
"Responder" has the meaning
given to that term in Section 2.3; and
"Services" has the meaning
attributed to that term in Section 2.1.
1.2
Gender and
Number
In this
Agreement, unless the context otherwise requires, words importing the singular
include the plural and vice versa and words importing gender include all
genders.
ARTICLE
2
SERVICES
PRODUCTS
2.1 Services
2.1.1
Subject to this Agreement, the Parties agree to assist each other as required to
provide the following services (collectively, the "Services") for each
other:
• marketing
and sales support services
• consulting
services
• research
and development services
• logistical
services
• financial
management and support services
• technical
assistance services
• training
services
• administrative
services
• loan
facilities
• other
services as specifically identified from time to time.
2.2 Non-Exclusivity
The Parties acknowledge that their respective agreements to provide
assistance as contemplated by this Agreement are on a non-exclusive basis and
that nothing contained in this Agreement will restrict any of them from carrying
out or providing, itself or through any third Person, directly or indirectly,
Services.
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2.3 Intellectual Property
Rights
The
following provisions in this Section 2.3 shall apply notwithstanding any other
provision to the contrary. In the event of any conflict between this section and
another provision hereunder, the rights and obligations of this section shall
prevail. In the event of any conflict between this Agreement and the IPA, the
rights and obligations of the IPA shall prevail.
| (a) | (i) |
AI
Canada hereby irrevocably assigns to AI US all right, title, and interest,
throughout the world, in the AI Canada Intellectual Property including the
right to: reproduce, distribute, perform, display, make, have made,
modify, adapt, prepare derivative works of, make substantial alterations,
use, sell, license, grant sublicensing rights, lease, rent, import,
transfer, collect past damages, obtain and own renewals or extensions
including copyright renewals, translate into any language or otherwise
exploit, in any medium whatsoever, whether now known or hereafter devised,
without any accounting or any other obligation owed to AI Canada, all to
the maximum extent permitted by law. As between AI US and AI Canada, AI US
shall retain ownership of the AI Canada Intellectual Property regardless
of any termination or the basis of termination of this Agreement. As
between AI US and AI Canada, AI US has sole discretion to register,
enforce or protect the AI Canada Intellectual Property, including filing
and controlling copyright applications and patent applications in its own
name, including continuations, continuation-in-parts, divisionals,
reissues, reexaminations or any other patent application which claims the
benefit of the filing date of a patent or application assigned to Dynamic.
To the extent permissible by law including Copyright Law and without
implying an employee-employer relationship between AI Canada and AI US, AI
Canada agrees that AI Canada Intellectual Property is "work made for hire"
owned solely by AI US.
|
| (ii) |
AI
Canada, subject to the provisions of this Agreement, hereby waives all of
its moral rights in all works.
|
|
| (b) |
In
the event AI Canada is prohibited by law or contract from assigning
particular AI Canada Intellectual Property to AI US, AI Canada shall, to
the maximum extent permitted by law or contract, grant AI US a fully paid
up, worldwide and perpetual license under the AI Canada Intellectual
Property to Exploit any product or service. Such license shall be
exclusive to the maximum extent permitted by law or
contract.
|
|
| (c) |
AI
Canada warrants that all AI Canada Intellectual Property that becomes or
became owned, controlled or licensable by AI Canada's Affiliates to extent
such Affiliates are not Affiliates of AI US, before or during the
Term
of the IPA shall be assigned to AI Canada for assignment or licensing to
AI US pursuant to this Section 2.3.
|
|
| (d) |
AI
Canada warrants that it will not take any action or permit a material
omission which interferes with or prevents Dynamics' rights under the
IPA.
|
|
| (e) |
The
rights and obligations between Dynamic and AI US with respect to
Intellectual Property are governed by the PA.
|
|
| (f) |
The
rights and obligations of this Section 2.3 shall terminate upon the
termination of the IPA regardless of the Term of this Agreement, except
that any rights acquired by AI US pursuant to this Section 2.3 and prior
to the termination of the IPA shall survive the termination of the IPA and
this Agreement.
|
|
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2.4
Requests for
Assistance
Whenever
a Party (the "Requester")
requires Services to be provided by a third Person, the Requester may,
but need not, by notice as contemplated by this Agreement or as otherwise agreed
by the Parties from time to time, offer the opportunity to perform the Services
to any one or more of the other Parties. Any Party that, within 3 Business Days
after receipt of the notice provided for in Section 2.5, expresses willingness
to assist the Requester is referred to below as a "Responder".
2.5
Notice to be
Provided
If a
Requester anticipates that it will require another member of the Group to
provide Services, the Requester will notify the relevant other Parties,
providing as much prior notice as is practicable and specifying, to the extent
possible, the nature of the Services to be provided, any timing deadlines or
constraints, and any further information that may reasonably be required by a
Responder.
2.6
Performance by
Responders
The
Responders will perform their duties under this Agreement honestly and in good
faith with a view to the best interests of the Group of Companies.
2.7
Performance by Third
Parties
With
consent of the Requester, any Service to be performed by a Responder may be
performed by a third party with whom the Responder has entered into an
arrangement or agreement relating to the provision of that Service, provided
that agreement contains provisions in favour of the Requester which are no less
favourable than those contained in this Agreement.
6
2.8
Remuneration for
Services
The fees
for Services provided by the Responders to the Requesters will be agreed to by
the Parties on a comparable basis to arm's length pricing.
2.9
Other
Activities
The
Parties acknowledge the possibility that each of them may provide services to
third parties. Each Party will be free to pursue these opportunities, subject
only to maintaining its capacity to perform Services it has agreed to provide
and to fulfilling its obligations as described in this Agreement
ARTICLE
3
LIABILITY
3-1
Limitation of
Liability
A
Responder's entire liability and a Requester's exclusive remedy for damages
resulting from a Responder's performance or non-performance related in any way
to any Services provided under this Agreement will be recovery of actual
damages. This limitation will apply regardless of the form of action, whether
based on contract or tort, including negligence.
IN NO
EVENT WILL A RESPONDER BE LIABLE FOR SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES
(EVEN IF THE RESPONDER HAS BEEN ADVISED OF THE POSSIBILITY OF THIS LOSS)
INCLUDING BUT NOT LIMITED TO, LOST BUSINESS REVENUE, FAILURE TO REALIZE EXPECTED
PROFITS OR SAVINGS OR OTHER COMMERCIAL OR ECONOMIC LOSS OF ANY KIND, OR ANY
CLAIM AGAINST A REQUESTER BY ANY OTHER PARTY.
ARTICLE
4
TERM AND
TERMINATION
4.1
Effective
Date
This
Agreement will take effect as of December 9, 2005.
4.2
Term
Subject
to earlier termination in accordance with its terms, this Agreement will remain
in force as long as the IPA is in force and will terminate contemporaneously
with the IPA without notice.
4.3
Insolvency.
Etc.
Any Party may terminate this
Agreement immediately by
written notice upon the other Party being adjudged bankrupt or filing a
voluntary petition in bankruptcy or similar legislation for the relief of
debtors, or making an assignment for the benefit of creditors generally, or upon
any proceedings for dissolution or liquidation being commenced (except for purposes
of amalgamation or reconstruction) or upon a receiver, manager or
receiver-manager bemg appointed in respect of its undertaking or all or a
substantial part of it proceedings or whose appointment is not vacated or
discharged wimin 30 days.
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Default
Any party
may terminate this agreement upon any material breach of it by any other Partv
by giving
30 days' prior written notice to that Party specifying the alleged breach,
provided
that the breach is not cured within the 30 day period.
4.5
Effect
of Termination
Termination
or expiry of this Agreement will be without prejudice to the rights of the
Parties accrued up to the date of termination or expiry of this
Agreement.
The
provisions of Sections 2.3 and 3.1 will remain in force and effect after
termination or expiration of this Agreement, until the Parties may mutually
agree to the release of the obligations contained therein.
ARTICLE
5
GENERAL
5.1
Governing Law and
Attornment
This
Agreement will be deemed to have been entered into in the State of Delaware, and
will be governed by the laws in force in Delaware. The Parties irrevocably
attorn to the non-exclusive jurisdiction of the courts of Delaware.
5.2 Public
Notices
No press
release or other announcement concerning the transaction contemplated by this
Agreement may be made by any Party, without the prior written
consent of the other Parties, not to be unreasonably
withheld.
5.3
Relationship of
Parties
The
relationship of the Parties established by this Agreement is that of independent
contractors, and nothing contained in this Agreement is to be construed to
constitute the Parties as partners, joint venturers, co-owners or otherwise as
participants in a joint venture or common undertaking.
5.4 Further
Assurances
The
Parties will each, as reasonably required by the other, enter into agreements,
execute documents and otherwise do all things as may be necessary or desirable
to carry into full force and effect the intentions of this
Agreement.
8
5.5
Assignment
Limited Assignment
Rights. No Party shall have the right to assign or transfer any of its
rights and obligations under this Agreement (in insolvency proceedings, by
mergers, acquisitions or otherwise) without the other Partys' written consent
except that all rights and obligations may be assigned to an Affiliate or third
party where the assignment is in connection with the sale, reorganization or
other transfer of substantially all of the relevant business of the assigning
party.
Termination Option.
Upon receiving notice of the assigning Party's assignment of or intent to assign
this Agreement, the other Party may terminate this Agreement by providing notice
to the assigning Party within thirty (30) days of such notice of assignment or
intent to assign. If the assignment occurs and this Agreement is terminated in
accordance with this paragraph, then termination shall be effective the moment
before the assignment. AI US shall not have the option to terminate the
Agreement in accordance with this paragraph if the assigning party is AI Canada,
and AI Canada shall not have the option to terminate the Agreement in accordance
with this paragraph if the assigning party is AI US.
Change in Ownership.
Any change in ownership of a Party that results in a change in control of a
Party shall be deemed an assignment to a third party for the purposes of this
paragraph.
Void Assignments. Any
assignment or other transfer of rights and obligations hereunder which is
inconsistent with the foregoing shall be null and void ab initio.
5.6
Severability
If any
provision of this Agreement is held invalid by a tribunal of competent
jurisdiction, the remaining provisions will nevertheless remain in full force
and effect.
5.7
Notices
Any
notice or other communication to be given or made under this Agreement including
a notice to effect a change in a Party's address for notice, must be in writing
addressed to the current head office of that Party and will be deemed to
have been duly given or made on the earliest of the following:
• actual
delivery
• 48 hours
after being sent by commercial courier service; and
• the day
following which any e-mail, facsimile or telegram message is sent.
5.8
Time of
Essence
Time is
of the essence of this Agreement.
9
5.9
Limitation of Extent of
Agreement
This
Agreement is subject and subordinate to any other agreement between any all of
the Parties that deals specifically with any matter addressed in this
Agreement.
5.10
Entire Agreement.
Waiver
Subject
to Section 5.9, this Agreement constitutes the entire agreement between the
Parties pertaining to the subject matter hereof. There are no warranties,
conditions, or representations (including any that may be implied by statute)
and there are no agreements in connection with this subject matter except as
specifically set forth or referred to in this Agreement. Except as expressly
provided in this Agreement, no amendment or waiver of this Agreement will be
binding unless executed in writing by the Party to be bound thereby. No waiver
of any provision of this Agreement will constitute a waiver of any other
provision nor will any waiver of any provision of this Agreement constitute a
continuing waiver unless otherwise expressly provided.
5.11
Breach of One
Party
In the
event a Party breaches this Agreement ("Breaching Party") and another Party
("Acting Party") chooses to take action against the Breaching Party, then such
action shall only affect the rights and obligations between the Breaching Party
and the Acting Party. The rights and obligations between the Breaching Party and
the remaining Parties (if any), and the Acting Party and the remaining Parties
(if any), shall remain unaffected.
5.12
Counterparts
This
Agreement may be signed in counterparts and each counterpart will constitute an
original document and all counterparts, taken together, will constitute one and
the same instrument.
5.13
Counsel
Each
Party acknowledges that, in connection with the negotiation and execution of
this Agreement, it had the opportunity for independent legal advice by counsel
of its own selection and experienced in the relevant subject matter areas and
domiciles of the Parties, that each Party fully understands the facts, that each
Party has been fully informed as to its legal rights and obligations, and that
each Party is signing the Agreement freely and voluntarily.
10
IN
WITNESS WHEREOF THE PARTIES HAVE EXECUTED THIS AGREEMENT WITH EFFECT AS OF THE
9TH DAY OF DECEMBER, 2005.
| DYNAMIC INTELLIGENCE INC. | |||
|
|
By:
|
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ | |
| ▇▇▇▇▇ ▇▇▇▇▇▇▇ | |||
| President | |||
| AIRLINE INTELLIGENCE SYSTEMS INC. | |||
|
|
By:
|
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | |
| ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | |||
| President | |||
| AIRLINE INTELLIGENCE SYSTEMS INC. | |||
|
|
By:
|
/s/ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ | |
| ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ | |||
| President | |||
11
SCHEDULE
A
Intellectual
Property Agreement between AI US and Dynamic (the "IPA")
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