EXHIBIT 10.12
U N I T E D M I L E A G E P L U S - N E T C E N T I V E S I N C.
A M E N D E D A N D R E S T A T E D S U P P L Y A G R E E M E N T
This Amended and Restated Supply Agreement (the "Agreement") is
---------
entered into and is effective as of September 9, 1999 (the "Effective Date") by
and between Netcentives Inc., a Delaware corporation with offices at 000 Xxxxx
Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 ("Netcentives"), and Mileage Plus, Inc.,
-----------
a Delaware corporation with offices at Department WHQDX, 0000 Xxxx Xxxxxxxxx
Xxxx, Xxx Xxxxx Xxxxxxx, Xxxxxxxx 00000 ("MPI"). This Agreement supercedes the
---
Supply Agreement between Netcentives and MPI dated as of March 20, 1998 (the
"Previous Agreement"). Notwithstanding the foregoing, unused Miles (as defined
herein) purchased pursuant to the Previous Agreement will continue to be valid
and awardable to consumers by Netcentives, and will be governed by the terms of
this Agreement.
R E C I T A L S
WHEREAS, MPI is a wholly-owned subsidiary of Mileage Plus Holdings,
Inc. ("MPHI") which is a wholly-owned subsidiary of United Air Lines, Inc.
("United"), and MPI, on behalf of United, offers the United Mileage Plus
frequent traveler recognition program to all travelers who desire to participate
in that program; and
WHEREAS, Netcentives develops and operates Internet-based programs
which provide for the grant of points which are redeemable for airline frequent
flier miles and other incentives to end-users (collectively, the "Netcentives
-----------
Programs"); and
--------
WHEREAS, MPI and Netcentives have agreed upon the revised terms and
conditions of MPI's and Netcentives's rights and obligations pursuant to
Netcentives's continued purchase of the right to award Miles from MPI; and
WHEREAS, Mileage Plus Marketing, Inc. ("MPM") is a wholly-owned
subsidiary of MPHI and, on behalf of MPI and United, is responsible for the
marketing, advertising and promotion of the United Mileage Plus Program, and is
authorized to execute this Agreement on behalf of MPI.
NOW THEREFORE, in consideration of the foregoing and the mutual
consideration provided for herein, the MPI and Netcentives hereby agree as
follows:
S E C T I O N I
D E F I N I T I O N S
For purposes of this Agreement, the following terms shall have the
following meanings:
1.1 "Account" shall mean the Mileage Plus account of a Mileage Plus
-------
member who is also a Netcentives Member in which Miles balances are maintained
by MPI.
1.2 "ClickRewards Program" means the Netcentives Program located at
--------------------
xxx.xxxxxxxxxxxx.xxx.
--------------------
Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as ******. A complete version of this has been filed
separately with the Securities and Exchange Commission.
1.3 "Confidential Information" means any information, technical data,
------------------------
or know-how, including, but not limited to, that which relates to research,
product plans, products, services, Netcentives Members, Mileage Plus Members,
customers, markets, software, developments, inventions, processes, designs,
drawings, engineering, hardware configuration information, marketing or finances
of a party, which is designated in writing to be confidential or proprietary, or
if given orally, is identified as confidential or proprietary at the time of
disclosure or is obviously confidential considering the context in which such
disclosure is made. Confidential Information does not include information,
technical data or know-how which (i) is rightfully in the possession of the
receiving party at the time of disclosure, (ii) prior to or after the time of
disclosure becomes part of the public knowledge or literature other than as a
result of any improper inaction or action of the receiving party hereunder, or
(iii) is approved by the disclosing party, in writing, for release by the
receiving party hereunder.
1.4 "Contract Year" means the twelve (12) month period following the
-------------
Effective Date, or any consecutive twelve (12) month period commencing on an
anniversary of the Effective Date thereafter for the duration of the Term.
1.5 "Direct Competitor of Netcentives" means [******].
--------------------------------
1.6 "Limited Exclusivity" means MPI's agreement not to sell the right
-------------------
to award Miles to any Direct Competitor of Netcentives. Limited Exclusivity may
be terminated under this Agreement in accordance with the provisions of Section
5.1(b).
1.7 "Mileage Plus Member" means, as of any date during the Term of
-------------------
this Agreement, an individual who is a member in good standing of the Mileage
Plus Program.
1.8 "Miles" means the points accrued under the Mileage Plus Program
-----
by Mileage Plus Members for travel on United or such other reasons as are
permitted by MPI.
1.9 "Netcentives Marks" means the trademarks and logos of Netcentives
-----------------
set forth on Exhibit A1 hereto, which exhibit may be changed by Netcentives from
----------
time to time upon notice to United.
1.10 "Netcentives Member" means, as of any date, an individual who is
------------------
a member in good standing of a Netcentives Program.
1.11 "United Marks" means the trademarks and logos of United
------------
reasonably necessary for use by Netcentives in connection with the promotion of
the Mileage Plus Program within the Netcentives Program, including without
limitation, the United logo, the Mileage Plus logo, and the terms United
Airlines and Mileage Plus.
1.12 "Term" has the meaning given it in Section 5.2(a) hereof.
----
S E C T I O N II
P U R C H A S E A N D S A L E
2.1 Orders.
------
-2-
****** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.
(a) General. Netcentives shall deliver instructions to United for
-------
Miles issuance rights in a format to be mutually agreed upon by the parties,
which orders (i) shall designate the aggregate number of Miles issuance rights
to be purchased, (ii) shall specify the Account or Accounts to which such Miles
are to be credited, and the number of Miles to be credited to each such Account,
and (iii) shall request a minimum of 500 Miles be credited to any Account for
which a credit is requested. United shall credit Accounts designated by
Netcentives within a reasonable time after receipt of an order from Netcentives,
but in any event within fourteen (14) business days thereof. As long as this
Agreement is in effect, United shall not reject any order for Miles crediting of
Netcentives for use as incentives in the ClickRewards Program, except in
accordance with the terms of Section 3.2 hereof and/or otherwise in accordance
with the published and generally applicable terms and conditions of the Mileage
Plus Program.
(b) Minimum Orders; Price. So long as MPI or United has not
---------------------
terminated or breached (without cure for 30 days) its relationship of Limited
Exclusivity under this Agreement, Netcentives agrees [******] during each year
of the Term in accordance with the schedule set forth below, provided however,
----------------
that in the event that Netcentives has not identified the Account or Accounts to
which all such Miles are to be credited, such Miles shall be reserved for future
credit to an Account or Accounts as requested by Netcentives in accordance with
this Agreement. Miles reserved for future credit shall expire upon the earlier
of (a) ninety (90) days following the third anniversary date of the purchase of
such Miles by Netcentives, and (b) such date as Netcentives is no longer
entitled to award Miles to Mileage Plus Members hereunder or under any
immediately subsequent agreement between Netcentives and MPI. Any orders
applied against Miles previously reserved for future credit will be credited on
a first-in, first-out basis.
---------------------------------------------------------------------------------
Year of Term Minimum Annual Purchase Purchase due no later than:
------------ ----------------------- ---------------------------
---------------------------------------------------------------------------------
1 [******] One year after Effective Date
---------------------------------------------------------------------------------
2 [******] Two years after Effective Date
---------------------------------------------------------------------------------
3 [******] Three years after Effective Date
---------------------------------------------------------------------------------
2.2 Payment. All amounts due to MPI shall be paid to United and
-------
become due and payable: (a) in the case of the minimum payment obligations set
forth in Section 2.1(b), as of the date set forth therein to the extent not
already purchased, and (b) in the case of any additional orders, within thirty
(30) days of the receipt by Netcentives of an invoice for Miles which have been
credited to the appropriate Account. Any payments made by Netcentives to United
hereunder shall be non-refundable.
2.3 Taxes. Prices for Miles are net of any and all federal excise
-----
taxes imposed on the sale of Miles by MPI to Netcentives under this Agreement.
Netcentives is responsible for any and all such taxes.
S E C T I O N III
A D D I T I O N A L O B L I G A T I O N S A N D R E P R E S E N T A T I O N S
-3-
****** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.
3.1 Distribution to Netcentives Members. Netcentives shall only
-----------------------------------
request that Miles be credited to the Accounts of persons in exchange for their
participation in a Netcentives Program.
3.2 Distribution to Mileage Plus Members. Netcentives shall only
------------------------------------
request that Miles be credited to the Accounts of Netcentives Members whom
Netcentives believes in good faith to be Mileage Plus Members. To the extent
that Netcentives requests that Miles be credited to a person who is not a
Mileage Plus Member, MPI shall not be obligated to credit such Account, provided
--------
however, that Netcentives shall not be invoiced for any Miles which are not
-------
credited to an Account.
3.3 No Resale Of Miles. At no time shall Netcentives offer Miles to
------------------
any person for resale, barter or redistribution to a third party.
3.4 Marketing Bounty Program.
------------------------
(a) New Members. For each Mileage Plus Member that has
-----------
enrolled in the ClickRewards Program as a result of United's active recruitment
efforts (e.g., through a registration page or ClickRewards link on United's web
site) other than those efforts for which Netcentives has paid United to perform
or the promotion efforts set forth in Section 4.3 herein, Netcentives shall
determine if the Mileage Plus Member has [******]. In the event that such
Mileage Plus Member has [******], such Mileage Plus Member will be deemed to be
a "New ClickRewards Member".
-----------------------
(b) Bounty. Netcentives will [******] (the "New Member Bounty").
-------- -----------------
Member Bounty will be determined and paid on a quarterly basis within 30 days
after the end of each quarter.
3.5 Promotional Treatment.
---------------------
(a) Partner Representation. So long as Limited Exclusivity is
----------------------
in effect, United shall [******], provided that any special
limited-time promotions (of duration 3 months or less) with
an individual airline partner (e.g., a limited-time offer
for "double miles" on a particular airline) shall not apply
for the purposes of this Section 3.5.
(b) Representation Without Limited Exclusivity If Limited
-------------------------------------------
Exclusivity is terminated pursuant to Section 5.1(b),
Netcentives shall [******] effective at the conclusion of
the forty-five (45) day period following the Notice (as
defined in Section 5.1(b)); provided, however, that if
Netcentives, at its sole discretion, continues to [******],
regardless of exclusivity status, for as long as Netcentives
[******].
(c) Representation for Consideration. Netcentives may, from
--------------------------------
time to time and at its sole discretion, make available
promotional and/or marketing placement to the airline
partners participating in the ClickRewards Program (the
"Promotional Placements"). Promotional Placements may
require payments
-4-
****** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.
or additional consideration from airline partners to
Netcentives. For as long as Netcentives features United as
a redemption partner in the ClickRewards Program, United
shall have an opportunity to participate in Promotional
Placements on a basis at least consistent with the
opportunity afforded to other ClickRewards airline partners.
3.6 Representations of Netcentives. Netcentives represents and warrants to
------------------------------
MPI that: (a) it has the full corporate right, power, and authority to enter
into this Agreement and perform the acts required of it hereunder, (b) the
execution of this Agreement by Netcentives, and the performance by Netcentives
of its obligations and duties hereunder, do not and will not violate any
agreement to which Netcentives is a party or by which it is otherwise bound, (c)
when executed and delivered by Netcentives, this Agreement will constitute the
legal, valid and binding obligation of Netcentives, enforceable against
Netcentives in accordance with its terms, and (d) Netcentives will operate the
ClickRewards Program and perform its obligations under this Agreement in
accordance with all applicable laws, governmental regulations and court orders.
3.7 Representations of MPI. MPI represents and warrants to Netcentives
----------------------
that: (a) it has the full corporate right, power, and authority to enter into
this Agreement, perform the acts required of it hereunder, (b) the execution of
this Agreement by MPI, and the performance by MPI of its obligations and duties
hereunder, do not and will not violate any agreement to which MPI is a party or
by which it is otherwise bound, and (c) when executed and delivered by MPI, this
Agreement will constitute the legal, valid and binding obligation of MPI,
enforceable against MPI in accordance with its terms. MPI further represents
that it has the authority to allow Netcentives to use the United Marks in
accordance with the terms hereof.
S E C T I O N I V
P R O P R I E T A R Y I N F O R M A T I O N
4.1 Confidential Information. Each party agrees not to use any
------------------------
Confidential Information disclosed to it by the other party for its own use or
for any purpose other than to carry out its obligations under this Agreement.
Neither party will disclose any Confidential Information of the other party to
third parties or to employees of the party receiving Confidential Information,
other than employees who are required to have the information in order to carry
out such party's obligations under this Agreement. Each party agrees that it
will take all reasonable measures to protect the secrecy of and avoid disclosure
or use of Confidential Information of the other party in order to prevent it
from falling into the public domain or the possession of persons other than
those persons authorized under this Agreement to have any such information,
including (without limitation) ensuring that recipients of the disclosing
party's Confidential Information adhere to confidentiality terms in content
substantially similar to the terms in this Agreement. Such measures shall
include the highest degree of care that the receiving party utilizes to protect
its own Confidential Information of a similar nature. Each party agrees to
notify the other in writing of any misuse or misappropriation of Confidential
Information of the disclosing party which may come to the receiving party's
attention.
-5-
4.2 Publicity. After the execution of this Agreement, Netcentives may, at
---------
its discretion, issue a press release, in consultation with MPI and United,
which may, among other things, confirm the existence of a relationship between
the parties and state that "Netcentives is the exclusive, Internet, points-based
rewards partner in the United Airlines Mileage Plus Program." MPI and United
may, at their sole discretion, also issue a press release, in a form similar to
that issued by Netcentives. Any such press releases shall be subject to the
prior approval of the non-releasing party, provided that (a) such approval shall
not be unreasonably withheld, and (b) any disapproval shall be provided to the
non-releasing party within two (2) business days of such request. Upon inquiry
from any other party, (a) MPI will and will cause United to confirm the accuracy
of information disclosed by Netcentives in any of its press releases, which
information was provided by MPI or United, and (2) Netcentives will confirm the
accuracy of information disclosed by MPI or United in any of its press releases,
which information was provided by Netcentives. Netcentives' status as "the
exclusive, Internet, points-based rewards partner in the United Airlines Mileage
Plus Program" shall be deemed to be information provided by both parties. Any
other proprietary, confidential, sensitive or competitive information regarding
the relationship between the parties including the other terms of this Agreement
and any other agreement between the parties shall be considered Confidential
Information under the definition set forth herein.
4.3 Promotion. During the term of this Agreement, and so long as (a)
---------
[******], or (b) Netcentives has purchased a total of [******] worth of Miles
during the applicable Contract Year, whether pursuant to guaranteed purchase
commitments as provided in Section 2.1(b) or otherwise, United agrees to promote
the ClickRewards Program by (a) [******]in its Mileage Plus Member magazine per
calendar year which features the ClickRewards Program, (b) including the
ClickRewards Program in all lists of Mileage Plus partners and MPI, (c)
providing Netcentives with [******] per calendar year to be placed in Mileage
Plus Member statements (provided that the cost of developing, producing and
shipping such inserts shall be borne by Netcentives), and (d) as soon as
feasible, and at all times thereafter, providing a link from the United Mileage
Plus worldwide web site to the ClickRewards worldwide web home page. During the
term of this Agreement, Netcentives agrees to promote the Mileage Plus program
by providing a link from the ClickRewards worldwide web site to the United
Mileage Plus worldwide web home page and featuring the United Airlines logo
within the ClickRewards web site.
4.4 Additional Marketing Programs. During the term of this Agreement, and
-----------------------------
so long as (a) [******] or (b) Netcentives has purchased a total of [******]
worth of Miles during the applicable Contract Year, whether pursuant to
guaranteed purchase commitments as provided in Section 2.1(b) or otherwise, MPI
agrees to offer Netcentives the opportunity to purchase inserts in Mileage Plus
Member statements and advertisements in any Mileage Plus Member magazines on
terms and conditions no less favorable than those offered to similarly situated
non-travel purchasers of Miles from MPI, subject to space availability.
Netcentives agrees to offer MPI the opportunity to purchase advertising on the
ClickRewards web site on terms and conditions no less favorable than those
offered to similarly situated purchasers of advertising from Netcentives, as
space is available.
4.5 Trademarks.
----------
-6-
****** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.
(a) Permission of United. MPI hereby confirms that, by Netcentives'
--------------------
signing of this Agreement, United thereby will permit Netcentives to duplicate,
transmit, display and use the United Marks in Netcentives Programs' promotional
materials and on its Internet Web site, during the Term of and in accordance
with this Agreement (as extended by Section 5.2(b)(iii), as appropriate),
provided however, that any use of the United Marks hereunder shall be only for
----------------
the purpose of promoting a Netcentives Program, shall only be used with regard
to the inclusion of Miles within a Netcentives Program and only after approval
by United of each different type of use proposed by Netcentives. United shall
provide notice of any disapproval of a use within two (2) business days of such
request, and shall not unreasonably disapprove of any such use.
(b) Permission of Netcentives. Netcentives hereby confirms that, by
-------------------------
MPI's signing of this Agreement, Netcentives thereby will permit MPI and United
to duplicate, transmit, display and use the Netcentives Marks in MPI's or
United's promotional materials and on its Internet Web site, during the Term of
and in accordance with this Agreement (as extended by Section 5.2(b)(iii), as
appropriate), provided however, that any use of the Netcentives Marks hereunder
----------------
shall be only for the purpose of promoting a Netcentives Program, shall only be
used with regard to the inclusion of Miles within a Netcentives Program and only
after approval by Netcentives of each different type of use proposed by MPI or
United. For all approvals pursuant to this Section 4.5(b), Netcentives shall
provide notice of any disapproval within one (1) business day of such request,
and shall not unreasonably disapprove of any such use.
(c) No Ownership. Nothing herein shall be deemed to grant either
------------
party any ownership interest in the Marks or the Internet web sites of the other
party.
S E C T I O N V
L I M I T E D E X C L U S I V I T Y; T E R M A N D T E R M I N A T I O N
5.1 Limited Exclusivity.
-------------------
(a) Relationship. The parties hereto acknowledge that they shall
------------
have a relationship of Limited Exclusivity (as defined in Section 1.5) during
the Term of this Agreement. As a result of such relationship:
(i) Following the execution of this Agreement, MPI will not,
and will cause United not to, renew any agreements with a Direct Competitor of
Netcentives for the sale of Miles to such party and will cease selling any
additional Miles to any such party; and
(ii) MPI will not, and will cause United not to, enter into an
agreement to sell any Miles to a Direct Competitor of Netcentives; and
(iii) Notwithstanding the foregoing, United shall be permitted
to [******] to a Direct Competitor of Netcentives, provided, however, that the
-------- -------
Mileage Plus brand, logo, or trademarks are not used in any way in connection
with a Direct Competitor of Netcentives.
-7-
****** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.
(b) Termination of Limited Exclusivity. Beginning on the first
----------------------------------
anniversary of the Effective Date, either party may terminate the obligations of
the parties under the relationship of Limited Exclusivity upon provision of
forty-five (45) days written notice (the "Notice") to the non-terminating party,
------
which termination shall have the effects set forth in subsection (c) below.
During the forty-five (45) day period following the Notice, each of the parties
will negotiate with the other in good faith to determine on what terms and
conditions, if any, Limited Exclusivity may be maintained by the parties during
the full term of this Agreement.
(c) Effect of Termination of Limited Exclusivity. Termination of the
--------------------------------------------
relationship of Limited Exclusivity between MPI and Netcentives shall not affect
the obligations of the parties under this Agreement except that upon the
termination of the relationship of Limited Exclusivity: (i) effective forty-five
(45) days after receipt of the Notice, MPI shall be permitted to sell Miles to
any third party, including a Direct Competitor of Netcentives, (ii) effective on
and after forty-five (45) days after receipt of the Notice by Netcentives,
Netcentives shall no longer be required to meet any guaranteed purchase
commitments as set forth in Section 2.1(b) and (iii) effective on and after
forty-five (45) days after receipt of the Notice by Netcentives, the price paid
by Netcentives for Miles purchased thereafter shall be adjusted to [******] per
Mile. Any sales by United or MPI to a Direct Competitor of Netcentives prior to
the expiration of such Limited Exclusivity period shall be considered a material
breach of this Agreement by MPI, unless excepted in Section 5.1(a) in accordance
with the provisions of this Section 5.1(c).
(d) Consideration. As consideration for Limited Exclusivity, within
-------------
twenty (20) days of the execution of this Agreement and upon receipt of all
necessary regulatory approvals, Netcentives will issue to United a Common Stock
Purchase Warrant for [******] shares of Netcentives Common Stock (the
"Warrant"). The Warrant shall be in substantially the form attached hereto as
Exhibit B.
(e) Remedies. In the event that MPI or United breaches its
--------
obligations under Limited Exclusivity herein and such breach is uncured for a
period of 30 days after receipt of notice of such breach, each party agrees and
acknowledges that, in addition to any other remedies that may be available, in
law, in equity or otherwise, Netcentives shall be entitled to obtain injunctive
relief against any such breach or the continuation of any such breach by MPI or
United, without the necessity of proving actual damages.
5.2 Term and Termination.
--------------------
(a) Term and Termination.
--------------------
(i) The term of this Agreement shall be three (3) years from the
Effective Date (the "Term"), unless terminated earlier pursuant to this Section
----
5.2. This Agreement shall terminate upon the expiration of the Term unless
renewed by the parties hereto in writing.
(ii) If either party defaults in the performance of any material
provision of this Agreement then the non-defaulting party may give written
notice to the defaulting party
-8-
****** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.
that if the default is not cured within thirty (30) days, the Agreement will be
terminated. If the non-defaulting party gives such notice and the default is
not cured during the thirty (30) day period, then the non-defaulting party may
terminate the Agreement at the end of that period unless otherwise agreed in
writing by the parties.
(b) Effect of Termination or Expiration. Upon termination of this
-----------------------------------
Agreement for any reason whatsoever: (i) MPI will credit all uncredited orders
to the Accounts originally designated by Netcentives; (ii) MPI will continue to
credit any Miles already purchased by Netcentives but not yet credited to
Accounts to such Accounts as are designated by Netcentives in accordance with
the terms of this Agreement until 240 days after termination of this Agreement;
and (iii) the term of the license granted to Netcentives under section 4.3(a)
shall be extended until the expiration of the period described in clause (ii)
above. During the period described in clause (ii) above, Netcentives will not
request that more than 100,000 Miles be credited to the Account of a Netcentives
Member other than in the ordinary course of business, consistent with past
practice (examples of such actions include, but are not limited to, the award of
Miles pursuant to sweepstakes). Any Miles not awarded by Netcentives as of the
end of the 240 day period shall become void and Netcentives shall forfeit any
such Miles without refund.
(c) Survival. MPI's obligations to credit Accounts in a timely
--------
manner and Netcentives' obligations to pay MPI all amounts due hereunder, as
well as Sections 4.1 (Confidential Information), 4.2 (Publicity), 4.5(a)
(Permission of United) to the extent provided in Section 5.2(b) above, 4.5(c)
(No Ownership), 5.2 (Termination), 6.2 (Indemnification), 6.3 (Notices) and 6.7
(Governing Law) shall survive termination of this Agreement.
S E C T I O N V I
M I S C E L L A N E O U S
6.1 Independent Contractors. The relationship of Netcentives and MPI
-----------------------
established by this Agreement is that of independent contractors, and nothing
contained in this Agreement shall be construed to constitute the parties as
agents, partners, joint venturers, co-owners or otherwise as participants in a
joint or common undertaking.
6.2 Indemnification.
---------------
(a) MPI hereby agrees to indemnify, defend and hold harmless
Netcentives and its respective directors, officers, agents and employees, from
and against any and all third-party claims, losses, damages, suits, judgments,
costs and expenses (including reasonable attorneys' fees and costs) arising out
of or relating to (i) MPI's operation of the Mileage Plus Program including
without limitation, claims by participants in the Mileage Plus Program of MPI's
breach, violation or failure to comply with the terms of the Mileage Plus
Program and (ii) any allegation that Netcentives' permitted use of the United
Marks hereunder infringes a copyright or trademark existing or issued as of the
date of such use, provided in each case that Netcentives promptly notifies MPI
and United in writing of any such claim, gives MPI or United control of the
defense and all related settlement negotiations, and cooperates with MPI and
United in defending or settling any such claim.
-9-
(b) Netcentives hereby agrees to indemnify, defend and hold harmless
MPI, United and their respective directors, officers, agents and employees, from
and against any and all third-party claims, losses, damages, suits, judgments,
costs and expenses (including reasonable attorneys' fees and costs) arising out
of or relating to (i) Netcentives' operation of the ClickRewards Program
including without limitation, claims by participants in the ClickRewards Program
of Netcentives' breach, violation or failure to comply with the terms of the
ClickRewards Program and (ii) any allegation that MPI's or United's use
(provided that such use is in accordance with the terms of the then current
style guide of Netcentives governing such use) of the Netcentives Marks licensed
hereunder infringes a copyright or trademark existing or issued as of the date
of such use, provided in each case that MPI or United promptly notifies
Netcentives in writing of any such claim, gives Netcentives sole control of the
defense and all related settlement negotiations, and cooperates with Netcentives
in defending or settling any such claim.
6.3 Notices. All notices and demands hereunder shall be in writing and
-------
shall be delivered by personal service or by facsimile, certified or registered
mail, or return receipt express courier to the address of the receiving party
set forth on the signature page of this Agreement, or to any other address of
the receiving party designated by written notice in accordance with this
paragraph.
6.4 Waiver, Amendment and Modification. No waiver, amendment or
----------------------------------
modification of any provision hereof shall be effective unless in writing and
signed by the party against whom such waiver, amendment or modification is
sought to be enforced. No failure by either party to exercise and no delay by
either party in exercising any right, power or remedy with respect to the
obligations secured hereby shall operate as a subsequent waiver of any such
right, power or remedy.
6.5 Assignment. Each of the parties agrees that its rights and
----------
obligations under this Agreement may not be transferred or assigned directly or
indirectly without the prior written consent of the other party, provided
--------
however, that such consent shall not be required for an assignment of this
-------
contract by MPI to its parent corporation or any subsidiary or affiliate of MPI,
or by either party pursuant to a merger, sale of substantially all of its
assets, or sale of all of its outstanding stock. Any violation of this
provision will be cause for immediate termination of this Agreement or, at the
option of the non-assigning party, the non-assigning party may declare the
assignment of any of the rights or obligations under this Agreement null and
void as of the date of the purported assignment. In the event of a valid
assignment of this Agreement, it shall be binding upon and inure to the benefit
of the parties hereto, their successors and assigns.
6.6 Severability. In the event that any of the provisions of this
------------
Agreement shall be held by a court of competent jurisdiction to be
unenforceable, such provision will be enforced to the maximum extent permissible
and the remaining portions of this Agreement shall remain in full force and
effect. The parties agree to negotiate in good faith a substitute, valid and
enforceable provision that most nearly effects the parties' intent and to be
bound by the mutually agreed substitute provision.
-10-
6.7 Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of California, without reference to
conflict of laws provisions thereof.
6.8 Force Majeure. Neither party shall be responsible for any failure to
-------------
perform (except for payment obligations) due to causes beyond its control,
including but not limited to acts of God, war, riot, embargoes, acts of civil or
military authorities, fire, floods, accidents, strikes, telecommunications
failures, power outages or shortages of transportation facilities, fuel, energy,
labor or materials. A party whose performance is affected by a force majeure
condition shall be excused from such performance to the extent required by the
force majeure condition so long as such party takes all reasonable steps to
avoid or remove such causes of nonperformance and immediately continues
performance whenever and to the extent such causes are removed.
6.9 Entire Agreement; Amendment. This Agreement and the Warrant
---------------------------
constitute the final and entire agreement between the parties and may not be
modified or amended except in writing signed by both of the parties.
6.10 Headings. The headings and captions used in this Agreement are for
--------
convenience of reference only, and shall not in any way affect the
interpretation of the provisions of this Agreement.
6.11 Counterparts. This Agreement may be executed in counterparts, each of
------------
which shall be deemed an original and all of which together shall constitute one
instrument.
6.12 Exclusion of Consequential Damages. Neither party will be liable to
----------------------------------
the other for any incidental or consequential damages, including lost revenues,
lost profits, or lost prospective economic advantage, arising from any
performance or failure to perform under this Agreement, and each party hereby
releases and waives any claims against the other party regarding such damages.
-11-
The parties have executed this Supplementary Marketing Agreement as of the
Effective Date.
NETCENTIVES INC.
Address:
000 Xxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
/s/ Xxxxxxxx X. Xxxxxxx Facsimile: (000) 000-0000
-------------------------------------
Xxxxxxxx X. Xxxxxxx, VP - Relationship Marketing
Date: 9/9/99
--------------------------------
MILEAGE PLUS MARKETING, INC. on behalf of
MILEAGE PLUS, INC.
Address:
World Headquarters - WHQAD
/s/ Xxxxxxxx X. Xxxxx 0000 X. Xxxxxxxxx Xxxx
------------------------------------- Elk Xxxxx Xxxxxxxx, XX 00000
(Signature of Authorized Person) Facsimile: (000) 000-0000
Xxxxxxxx X. Xxxxx
-------------------------------------
(Print Name of Signatory)
President
-------------------------------------
(Print Title of Signatory)
Date: 9/9/99
--------------------------------
-12-
