EXHIBIT10.13
MARKETING SERVICES AGREEMENT
BETWEEN
BRITISH AIRWAYS PLC
AND
NETCENTIVES INC.
AGREEMENT NUMBER MKTG 002
Page
1. INTRODUCTION............................................... 3
2. PURPOSE.................................................... 3
3. DEFINITIONS................................................ 3
4. THE SERVICE................................................ 4
5. PRICE...................................................... 4
6. PAYMENT TERMS.............................................. 4
7. MILEAGE ADMINISTRATION AND USAGE........................... 4
8. ASSIGNMENT AND SUBCONTRACT................................. 5
9. LIMITED EXCLUSIVITY........................................ 5
10. AMENDMENTS................................................. 6
11. RIGHT OF AUDIT............................................. 6
12. DURATION AND TERMINATION................................... 6
13. INSURANCE.................................................. 7
14. INDEMNITY.................................................. 7
15. INTELLECTUAL PROPERTY RIGHTS............................... 8
16. CONFIDENTIALITY............................................ 8
17. ADVERTISING................................................ 9
18. FORCE MAJEURE.............................................. 9
19. OFFERS OF EMPLOYMENT....................................... 9
20. NO AGENCY OR PARTNERSHIP................................... 9
21. TAXATION................................................... 9
22. WAIVERS/AMENDMENTS......................................... 9
23. NOTICES.................................................... 10
24. GENERAL.................................................... 10
25. LAW........................................................ 11
Appendix A...................................................... 12
Appendix B...................................................... 13
1. INTRODUCTION
This Agreement is made this 4th day of April between Netcentives Inc. whose
corporate offices and operations are located at 0000 Xx Xxxxxx Xxxx, Xxxxx 000,
Xxx Xxxxx, Xxxxxxxxxx 00000, (hereafter referred to as "NETCENTIVES") and
BRITISH AIRWAYS PLC whose registered address is at X0 Xxx 00, Xxxxxx Xxxxxxxx
Airport, Hounslow, Middlesex TW6 2JA England (hereinafter called "BA"), with
Regional offices at 00-00 Xxxxxxx Xxxxxxxxx, Xxxxxxx Xxxxxxx, XX 00000 Xxxxxx
Xxxxxx of America.
2. PURPOSE
This Agreement sets out the terms and conditions under which NETCENTIVES
will purchase BA Executive ClubUSA miles from BA and agrees to provide the
products and services as specified in the Appendices hereto to BA's Executive
ClubUSA members.
3. DEFINITIONS
"The NETCENTIVES Representative" Shall mean the designated
representative of NETCENTIVES
namely:
President
"BA Purchasing" Shall mean the designated
representative of BA Purchasing
Department namely:
Vice President Purchase
The Americas
or
Senior Buyer
Purchasing, The Americas
"BA Representative" Shall mean the designated
representative of BA USA Marketing
department namely:
Vice President Business Travel
Marketing or Manager Executive
Club and Partners
"Service" Shall mean all and/or any of the
elements of the services supplied
by NETCENTIVES to BA and BA to
NETCENTIVES pursuant to this
Agreement.
"Xxxxxxx Marketing Group" The administrator of BA's
Executive Club program.
Hereinafter referenced as CMG.
"BA Executive Club USA" Shall mean British Airways'
frequent traveler program based in
the USA. Hereinafter referenced as
BA Executive Club.
"Netcentives Points" Any points or award system run by
NETCENTIVES as outlined in or
pursuant to this Agreement.
4. THE SERVICE
In accordance with the terms of this Agreement hereof Netcentives agrees to
purchase from BA and BA agrees to sell to NETCENTIVES BA Executive Club miles as
detailed in the Appendices of this agreement.
BA and NETCENTIVES agree to meet on an annual basis on or near the
effective date of this Agreement to review the business conducted between the
two parties and the results for the previous year. The business shall include a
price and volume review.
5. PRICE
The prices specific to the purchase of BA's Executive Club miles by
NETCENTIVES under this agreement are fixed for the first year of this agreement
and are contained in Appendix B hereto.
6. PAYMENT TERMS
6.1 NETCENTIVES will send to CMG on a monthly basis a tape, disk or EDI to
BA and CMG's specifications which will contain the BA Executive Club miles
purchased for that month (to be sent by the 15th of the following month) to the
following address:
Xxxxxxx Marketing Group
Xxxxxxx Parkway
XX Xxx 00000
Xxxxxxxxxxx, XX 00000-0000
6.2 BA will invoice NETCENTIVES on a monthly basis with payment due by
NETCENTIVES on a net 30 day basis.
6.3 All payments must be clearly marked with "in accordance with"
Agreement Number Mktg 002 and sent to:
British Airways
Business Marketing/Executive Club
00-00 Xxxxxxx Xxxxxxxxx
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Xxxxxxx Xxxxxxx, XX 00000
6.4 Appendix B contains the payment guarantees that NETCENTIVES is
committed to submitting to BA for the duration of this Agreement. It is agreed
and understood that the payment guarantees represent the minimum amount of
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Executive Club miles to be purchased by NETCENTIVES from BA on a per annum basis
and does not preclude NETCENTIVES from purchasing beyond the guaranteed minimum
and there shall be no maximum purchase.
7. MILEAGE ADMINISTRATION AND USAGE
7.1 It is agreed and understood that NETCENTIVES can utilize purchased
Executive Club miles for a period of 2.5 (two and a half) years from the date of
purchase. Any Executive Club mileage that is not utilized in the 2.5 year
period from date of purchase is returned to BA during the term of this
Agreement.
7.2 NETCENTIVES agrees to not transfer BA Executive Club miles to any
party for resale. All sales will be in the form of Netcentive Points to
eligible consumers for redemption of BA Executive Club USA awards.
7.3 For administrative purposes, the crediting of Executive Club mileage
purchased by NETCENTIVES from BA will be held in an account and managed by CMG.
NETCENTIVES may not return any miles purchased here for cash or other
considerations under any circumstances.
7.4 At the mutual discretion of BA and NETCENTIVES, NETCENTIVES will work
with BA to agree on terms under which BA can purchase Netcentive Points from
NETCENTIVES. Those terms will be under a separate agreement.
7.5 The method by which BA, NETCENTIVES and CMG administer and communicate
on the issuing an awardance of BA Executive Club miles are referenced in
Appendix A of this Agreement. It is understood by BA and NETCENTIVES that the
administration of such is critical to the success of this Agreement. It is
agreed that upon receipt of tape, EDI, or disk to CMG's and BA's specifications
containing purchased miles BA will use best efforts to credit member's accounts
with miles in a timely manner.
8. ASSIGNMENT AND SUBCONTRACT
This agreement is personal between NETCENTIVES and BA. Obligations
hereunder shall not be assigned, transferred or sub-contracted or otherwise
disposed of by either party whether in whole or part, except with the prior
written notice to the other party. It is clearly understood that NETCENTIVES
shall remain responsible at all times for the performance of their obligations
in this Agreement.
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9. LIMITED EXCLUSIVITY
9.1 BA grants NETCENTIVES limited exclusivity by agreeing not to sell its
Executive Club miles to any direct competitor of NETCENTIVES. A direct
competitor, for the purposes of this Agreement, shall be defined as any third
party provider of currency on the Internet that is redeemable for awards or any
program that awards more than one airline's mileage at more than one web site.
9.2 For the first year of this Agreement, NETCENTIVES grants BA limited
exclusivity by agreeing that it will not provide services or purchase Miles from
any other European (includes the United Kingdom) based or European (includes the
United Kingdom) flag carrying airlines who have operations from North America.
This exclusivity does not apply to United States, Asian, Latin/South/Central
American or Australian airlines. This limited exclusivity is valid only in
conjunction with the effective exclusivity terms in clause 9.1.
9.3 The exclusivity contained in this Agreement is strictly between BA USA
and NETCENTIVES USA.
9.4 The limited exclusivity does not prevent BA from pursuing its own
sales of Executive Club Miles on the Internet. BA is permitted to:
-Sales or awards of Executive Club miles to any web site that is not a
direct competitor of Netcentives as direct competitor is defined in this
Agreement.
-Have all current and future Executive Club partners offer Executive Club
Miles on their Web sites or as part of an Internet promotion and Award Executive
Club miles on BA's own Web site.
9.5 BA may at its option cancel the limited exclusivity restrictions
described within this Agreement. BA agrees to give NETCENTIVES ninety (90) days
notice of limited exclusivity cancellation. After ninety (90) days notice BA
will be entitled to work with any direct competitor of NETCENTIVES and the terms
relating to compensation to BA for limited exclusivity, as described in Appendix
B of this Agreement, will be void and will revert back to non-exclusive terms.
9.6 NETCENTIVES at its option can, upon ninety (90) days notice, free BA
from its limited exclusivity. After ninety (90) days notice BA will be entitled
to work with any direct competitor of NETCENTIVES and the terms relating to
compensation to BA for limited exclusivity, as described in Appendix B of this
Agreement, will be void and will revert back to non-exclusive terms.
10. AMENDMENTS
10.1 No change to this Agreement which affects price, delivery,
specification, functionality or any other term or condition herein shall be in
any way binding without the prior express agreement of both parties in the form
of a written amendment.
10.2 Amendments shall only be signed by a duly authorized representative
of BA on behalf of BA and a duly authorized representative of NETCENTIVES. Upon
execution the amendment shall constitute an amendment to this Agreement.
11. RIGHT OF AUDIT
NETCENTIVES shall permit access to and provide such assistance as BA may
require to the duly authorized representative of BA to inspect, audit, review
and take copies of all books,
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time sheets, records, computer records, correspondence, instructions, receipts
and memoranda in relation to this agreement. BA agrees to give NETCENTIVES 14
(fourteen) days prior notice when BA requires to view such information. Any
expenses incurred by BA during the audit shall be paid by BA. Audits shall be
directly related to the terms of this Agreement.
This Right of Audit Clause is to be used only for the sole purpose of
ensuring compliance with the terms of this Agreement. The particular matter of
compliance that the audit is designed to determine must be presented to
NETCENTIVES prior to the audit.
12. DURATION AND TERMINATION
12.1 This Agreement is deemed to have commenced upon signature of this
Agreement and shall remain in full force and effect for three (3) years or
unless terminated sooner in accordance with the terms contained in this Clause.
12.2 This agreement may be terminated by either parry by the serving of
one hundred eighty (180) days written notice to the other party at any time for
any or no reason.
12.3 In addition to the circumstances set out elsewhere in this Agreement,
the non-defaulting party shall be entitled to terminate this Agreement
immediately by written notice to the other party as follows:
12.3.1 If either party fails to observe or perform any of its
material obligations and duties hereunder, provided if such failure is capable
of remedy, that it has not been remedied to the satisfaction of the non-
defaulting party within thirty (30) days of written notice of failure;
12.3.2 If the other party makes or offers to make any arrangement or
composition with or for the benefit of its creditors;
12.3.3 If the other party ceases or threatens to cease to carry on
business or suspends or threatens to suspend all or substantially all of its
operations (other than temporarily by reason of strike) or suspends payment of
its debt or is, or becomes, unable to pay its debts as they become due and
payable or commits any act of insolvency or bankruptcy;
12.3.4 If a petition or resolution for the making of any
administration order or for the bankruptcy, winding-up, or dissolution of the
other party (other than a winding-up for the purposes of reconstruction or
amalgamation of a solvent company) is presented or passed;
12.3.5 If the other party files a voluntary petition in bankruptcy or
insolvency and
12.3.6 If a liquidator, trustee, supervisor, receiver, administrator,
administrative receiver or encumbrancer takes possession of or is appointed over
the whole or any part of the assets of the other party.
12.4 Any such termination by a party shall be without prejudice to the
rights of the other xxxxx in respect of the matter giving rise to such
termination or in respect of any accrued rights arising prior to such
termination.
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12.5 Upon notice of termination of this Agreement due to the reasons
stated in Clause 12.2 the following will apply:
I. There will be a one (1) year period to complete redemption of
NETCENTIVES points to BA Executive Club miles.
II. NETCENTIVES will have a six (6) month period to continue to
purchase Executive Club miles from BA.
III. BA shall have the option to purchase any unused mileage at the
end of the one (1) year period back from NETCENTIVES at 40% of the original
purchase price.
IV. Any volume purchases agreed will terminate immediately.
13. INSURANCE
13.1 NETCENTIVES agrees to effect and to demonstrate such to BA if so
requested, public liability insurance for an amount of not less than one million
dollars ($l,000,000) per event in respect of loss, damage or injury to property
or persons.
14. INDEMNITY
14.1 NETCENTIVES agrees to fully defend, indemnify and hold BA, its
directors. officers and employees harmless from any and all liability, claims,
demands, damages, losses, legal costs and expenses arising out of, or in
connection with or as a consequence of:
- Any act or omission of NETCENTIVES, its servants, employees,
agents pursuant to or in breach of the Agreement;
- Any loss or damage to property belonging to NETCENTIVES or its
servants agents irrespective of the cause of such loss or damage save where due
to the gross negligence of BA or its employees;
- Any injury of whatsoever kind and however caused including but not
limited to property loss, personal injury or death to the third parties,
servants/agents of NETCENTIVES or BA in connection with this agreement save
where due to the gross negligence of BA or its employees;
- Any claim arising out of an allegation that BA's use of the
Netcentive's logo infringes a copyright or trademark existing or issued as of
the date of such use. The indemnification for BA of the Netcentive's logo is
limited to the United States, Canada and Europe.
14.2 BA agrees to fully defend, indemnify and hold NETCENTIVES, its
directors, officers and employees harmless from any and all liability, claims,
demands, damages, losses, legal costs and expenses arising out of, or in
connection with or as a consequence of:
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- Any act or omission of BA, its servants, employees, agents pursuant
to or in breach of the Agreement;
- Any loss or damage to property belonging to BA and/or its servants
agents irrespective of the cause of such loss or damage save where due to the
gross negligence of NETCENTIVES or its employees;
- Any injury of whatsoever kind and however caused including but not
limited to property loss, personal injury or death to the third parties,
servants/agents of NETCENTIVES or BA in connection with this agreement save
where due to the gross negligence of NETCENTIVES or its employees;
- Any claim arising out of an allegation that Netcentive's use of the
BA logo infringes a copyright or trademark existing or issued as of the date of
such use.
15. INTELLECTUAL PROPERTY RIGHTS
NETCENTIVES and BA warrants that the Service supplied in the course of this
Agreement does not and will not infringe any copyright, design right, registered
design, patent or any other intellectual property right of any third party.
16. CONFIDENTIALITY
This Agreement and all information regarding the business or activities of
either party made available to the other party under or as a result of this
Agreement shall at all times be treated by both parties as confidential on a
need to know basis and shall not be published, disclosed or circulated except
with the prior written consent of the other parry. BA shall, however, be
permitted to disclose information, on a need to know basis, regarding this
agreement and the business or activities of NETCENTIVES made available to BA
under or as a result of this agreement to its subsidiary or associated companies
including, but not limited to QANTAS Airways Limited, and any entities which BA
has or may form an affiliation with in connection with present or future
alliances.
17. ADVERTISING
17.1 Neither party nor any of its servants, agents or subsidiaries shall
mention the other party in any advertisement relating to or arising out of this
Agreement without the permission of the other party except as agreed in Clause
17.2 below. Such permission shall not be unreasonably withheld.
17.2 NETCENTIVES may utilize the BA and BA USA Executive Club logos for
the purpose of this Agreement. NETCENTIVES agrees to utilize BA's logos in
accordance with the terms and conditions of this Agreement. It is understood
that BA should never be advertised as a standalone award provider in any
advertising by NETCENTIVES without prior written permission from BA.
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17.3 NETCENTIVES agrees, when utilizing the BA logo, to adhere to BA's
graphical standards. BA agrees to advise NETCENTIVES in a timely manner of any
changes to its logo.
18. FORCE MAJEURE
Neither party shall be entitled to terminate this Agreement for any breach
of any provision hereof or failure to perform any obligation hereunder where
such breach or failure results from some cause beyond the other party's control
(unless such breach extends for a period of 1 (one) month or more) and provided
that the party seeking to rely on the above shall have promptly notified the
other party of the cause and probable duration of the failure and shall have
used all reasonable commercial endeavors to remedy the matter giving rise to the
breach.
19. OFFERS OF EMPLOYMENT
Neither party shall be permitted to offer employment of any kind in any
capacity to such person(s) at any time during the period of this Agreement or
within 6 (six) months after its termination, howsoever rising, without the
express permission of the other party.
20. NO AGENCY OR PARTNERSHIP
Nothing in this Agreement shall constitute or be deemed to constitute a
partnership between the parties hereto or constitute NETCENTIVES as agents of BA
for any purpose whatsoever and NETCENTIVES shall have no authority or power to
bind BA or to contract in the name of or create a liability against BA in any
way or for any purpose.
21. TAXATION
NETCENTIVES shall be totally responsible for any taxation liability of any
kind which may arise on it pursuant to this Agreement, including any such
liabilities in respect of NETCENTIVES employees, servants or agents. BA however
agrees to pay sales tax on all invoices submitted by NETCENTIVES pursuant to
this Agreement if applicable.
22. WAIVERS/AMENDMENTS
22.1 No failure or neglect on the part of either party or its
representatives to enforce any of the terms and conditions of this Agreement or
terms and conditions relating to a design or promotion therefore shall insist
upon the strict performance or observance thereof shall be considered as a
waiver, unless specifically stated to be a waiver in writing and signed by the
that party. A waiver by either party on one occasion shall not automatically be
construed as permitting a waiver in the future.
22.2 The rights and remedies provided in this Agreement or in respect of a
design or promotion for the benefit or in favor of BA or NETCENTIVES are
cumulative and shall not exclude any other right or remedy provided for by law.
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23. NOTICES
All demands, notices or other documents required to be given hereunder by
either party to the other shall be sent by facsimile transmission, registered
letter, first class mail or by hand to NETCENTIVES at the following address:
NETCENTIVES
Xxxx Tilenus
0000 Xx Xxxxxx Xxxx
Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Telephone: 000.000.0000
Fax: 000.000.0000
and any notices to be given to BA will be sent by facsimile transmission,
registered letter, first class mail, by hand or by telex to:
BRITISH AIRWAYS PLC
Vice President, Purchasing
00-00 Xxxxxxx Xxxxxxxxx
Xxxxxxx Xxxxxxx, XX, 00000
Telephone: 000.000.0000
Fax: 000.000.0000
A copy of such notices must also be sent to the BA Marketing Department at:
BRITISH AIRWAYS PLC
Vice President Business Marketing, USA
00-00 Xxxxxxx Xxxxxxxxx
Xxxxxxx Xxxxxxx, XX, 00000
Telephone: 000.000.0000
Fax: 000.000.0000
24. GENERAL
24.1 Where the terms and conditions of this Agreement conflict with the
terms and conditions of any previous correspondence of whatever nature then this
Agreement shall prevail.
24.2 All Appendices referred to in this Agreement and attached to this
Agreement form part of this Agreement provided that if there is any conflict
between the terms and conditions of this Agreement and the Appendices, the terms
and conditions of the Agreement shall prevail.
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24. No failure on the part of either party at any time or from time to
time to enforce or to require the strict adherence and performance of any of the
terms or conditions shall affect or impair its right to enforce such terms or
conditions in any way.
24.4 The headings of this Agreement are for the convenience only and shall
not affect the construction of the provisions of this Agreement. The invalidity
or enforceability of any part of this Agreement shall not prejudice or affect
the validity or enforceability of the remainder. The masculine gender shall
include the feminine and vice versa.
24.5 The following clauses shall survive termination of this Agreement,
for whatever reason, and shall remain in full force and effect:
Clauses: 14, 15, 16, 17, 19, 24, 25.
25. LAW
This Agreement shall be governed and construed in all respects in
accordance with the laws of the State of New York courts.
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In Witness whereof the parties have caused this Agreement to be duly
executed by their authorized representative the day and year first above
written.
FOR AND ON BEHALF OF
BRITISH AIRWAYS PLC.
SIGNED ./s/ Xxxxx X. Xxxxx
-------------------
NAME: Xxxxx X. Xxxxx
TITLE: Senior Buyer, Purchasing, The Americas
DATE: April 04, 1997
FOR AND ON BEHALF OF
BRITISH AIRWAYS PLC.
SIGNED /s/ Xxxxx Xxxxxxx
-----------------
NAME: Xxxxx Xxxxxxx
TITLE: Vice President Business Marketing
DATE: April 4, 1997
FOR AND ON BEHALF OF
NETCENTIVES
SIGNED /s/ Xxxx X. Xxxxxxxx
--------------------
NAME: Xxxx Xxxxxxxx
TITLE: President
DATE: April 30, 1997
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APPENDIX A
SPECIFICATIONS
A. Netcentives Services and Executive Club Communication
-----------------------------------------------------
Netcentives will be awarding Netcentive Points to eligible consumers at
various websites on the Internet. These Netcentive Points, in turn, may be
redeemed with several award programs, including BA's Executive Club.
It is NETCENTIVE'S responsibility to ensure that any consumer
redeeming/converting Netcentive points for BA Executive Club miles is a member
of BA's Executive Club. A confirmation procedure will be set up between
NETCENTIVES, CMG and BA.
If a consumer eligible for Netcentives point redemption is not a BA
Executive Club member then Netcentives is responsible for advising the consumer
the method by which he/she can join BA's Executive Club. The method of
advisement is To Be Advised and to be discussed between BA, CMG and NETCENTIVES.
B. Marketing Support
-----------------
BA and NETCENTIVES both mutually agree to use best efforts to market the
Netcentives Points program and the BA Executive Club during the term of this
Agreement. It is agreed between BA and NETCENTIVES that within two months of
signature of this Agreement both parties will meet to discuss an annual
marketing plan.
APPENDIX B
PRICING AND PAYMENTS
Pricing
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Item Limited Exclusivity Non-Exclusive
---- ------------------- -------------
1 mile to 7,000,000 miles $0.0160 $0.0150
7,000,001 miles and up $0.0155 $0.0150
Guaranteed minimum miles
purchased per year 7 million no minimum
*It is understood that the payment and mileage guarantee is in effect while
limited exclusivity as per Clause 19.1 is effective.
Payment
-------
Date Payment Guarantee Miles Credited
---- ----------------- --------------
April 30, 1997 $ 20,000 1,250,000
July 31, 1997 $ 25,000 1,562,500
October 31, 1997 $ 30,000 1,875,000
January 31, 1998 $ 37,000 2,312,500
Total $112,000 7,000,000
*All subsequent years of this Agreement will follow the same payment guarantee
and time schedule.
