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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 28, 2000
NETCENTIVES INC.
(Exact name of Registrant as specified in its charter)
Delaware 000-27253 93-1213291
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification No.)
690 Fifth Street
San Francisco, CA 94107
(Address of principal executive offices) (Zip code)
(415) 538-1888
(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report)
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Item 5. Other Events
On January 28, 2000, the Company entered into an Interactive Marketing and
Software Distribution Agreement with America Online, Inc.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
Exhibit 10.22 Interactive Marketing and Software Distribution Agreement.*
Exhibit 99.1 Netcentives Inc. Press Release dated January 31, 2000.
___________
* Confidential Treatment Requested
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NETCENTIVES INC.
Date: February 14, 2000 /S/ JOHN F. LONGINOTTI
-----------------------------------
John F. Longinotti
Executive Vice President and CFO
(Duly Authorized and Principal Financial
and Accounting Officer)
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NETCENTIVES INC.
INDEX TO EXHIBITS
EXHIBIT
NUMBER
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10.22 Interactive Marketing and Software Distribution Agreement*
99.1 Netcentives Inc. Press Release dated January 31, 2000
_________
* Confidential Treatment Requested
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EXHIBIT 10.22
EXECUTION VERSION
INTERACTIVE MARKETING AND SOFTWARE
DISTRIBUTION AGREEMENT
This interactive marketing and software distribution agreement
(this "Agreement") is made and entered into as of January 28, 2000 (the
"Effective Date") between America Online, Inc. ("AOL") and Netcentives Inc.
("Netcentives"). Each of Netcentives and AOL may be individually referred to
herein as a "Party," and Netcentives and AOL may be collectively referred to
herein as the "Parties." Each of Exhibits A, B and C hereto (collectively, the
"Exhibits") is hereby made part of this Agreement, and any reference to this
Agreement shall be deemed to include the Exhibits hereto.
1. Good Faith Negotiation. Promptly following the Effective
Date, the Parties shall in good faith negotiate the terms and conditions of the
Supplemental Agreements (as defined in Exhibit A), based upon the parameters set
forth in Exhibit A hereto, and shall attempt to execute the Supplemental
Agreements within the time frame set forth in the Exhibit A. The Parties shall
use commercially reasonable efforts to negotiate and execute the Supplemental
Agreements within twenty (20) business days following the Effective Date.
2. Binding Nature. This Agreement, together with Exhibits
hereto (and the terms and conditions thereof), is intended to create a binding
agreement between the Parties and shall be binding on and enforceable against
the Parties in all respects.
3. Covenants. Netcentives shall permit AOL and its consultants
and professional advisors to conduct, and shall assist AOL and its consultants
and professional advisors in obtaining an understanding of Netcentives'
technology. Any meetings related thereto shall be conducted during normal
business hours, upon reasonable terms and conditions mutually agreed upon by AOL
and Netcentives and upon prior reasonable notice to Netcentives.
4. Grant to AOL Affiliates. Any of the rights granted to and
obligations of AOL under this Agreement may also be exercised or performed by
any AOL affiliate or subsidiary; provided that such AOL affiliate or subsidiary
agrees to be bound by all of the applicable provisions hereof governing such
exercise or performance.
5. No Joint Venture. Neither Party shall make any warranties
or representations, or assume or create any obligations, on the other Party's
behalf except as may be expressly permitted hereunder or in writing by such
other Party. Each Party shall be solely responsible for the actions of all its
respective employees, agents and representatives.
***CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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6. Confidentiality. Without the express written consent of the
other Party hereto, neither Party nor any of its employees, officers, directors,
or agents shall disclose the existence of this Agreement, any of the terms
hereof, nor any other Confidential Information to any third party except: (i) as
required by law; or (ii) to such party's attorneys, accountants, other advisors,
officers, directors and equity holders, as applicable, in order to facilitate
the fulfillment of such Party's obligations hereunder; provided, however, that
any such third party agrees to be bound by the confidentiality provisions
hereof. Any publicity relating to this Agreement (including, without limitation,
the timing of any release of any such publicity) must be approved in advance by
both Parties (any such approval not to be unreasonably withheld or delayed). For
purposes of this Agreement, "Confidential Information" means any information
which is disclosed during the Disclosure Period (as defined below) and which is
or should be reasonably understood to be confidential or proprietary to the
disclosing Party (the "Discloser") (which such information may include without
limitation information concerning Discloser's business, products, services,
content, finances, subscribers, users, tools, source code, product designs and
plans, customer lists and other marketing and technical information and other
unpublished information). The Parties agree that confidential or proprietary
information conveyed in written or other tangible form shall be deemed
"Confidential Information" under this Agreement and/or any Supplemental
Agreement if it is so designated by Discloser by prominently marking it with a
"confidential," "proprietary" or similar legend. Information disclosed in other
than a tangible form shall be treated as Confidential Information if before its
disclosure Discloser advises Recipient that it will be disclosing Confidential
Information and within thirty (30) days after disclosure, Discloser summarizes
the Confidential Information in writing and, marks it "Confidential" and
delivers it to Recipient. Recipient shall make use of the Confidential
Information only for the purpose of discussing and evaluating the proposed
business relationship between the Parties set forth herein. Recipient's duty to
hold Confidential Information in confidence shall expire two (2) years after the
later of (i) the end of the Term (as defined in Section 17 of Exhibit A) and
(ii) any Supplemental Year as defined in the "Definitions" Section of Exhibit A
hereto. "Confidential Information" shall not include information (a) already
lawfully known to or independently developed by the receiving Party (without the
use of the Confidential Information of Discloser), (b) disclosed in published
materials, (c) generally known to the public, or (d) lawfully obtained from any
third party.
7. Representations and Warranties. Each Party represents and
warrants to the other Party that: (i) such Party has the full corporate right,
power and authority to enter into this Agreement and to perform the acts
required of it hereunder; (ii) the execution of this Agreement by such Party,
and the performance by such Party of its obligations and duties hereunder, do
not and will not violate any agreement to which such Party is a party or by
which it is otherwise bound; (iii) when executed and delivered by such Party,
this Agreement will constitute the legal, valid and binding obligation of such
Party, enforceable against such Party in accordance with its terms; and (iv)
such Party acknowledges that the other Party makes no representations,
warranties or agreements related to the subject matter hereof that are not
expressly provided for in this Agreement. In addition, Netcentives hereby
represents that it has full corporate right, power and authority (including,
without limitation, the approval of its Board of Directors) to issue the Common
Stock (as defined in Section 1 of Exhibit A) to AOL.
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8. Survival. Sections 6, 8, 9, 10 and 16 hereof, Sections
11(c), 11(d), 11(e), 11(g), 11(h), 19, 21, 22, 23, 27, 31, 32 and 34, and Part
10 of Exhibit A, and Sections 2, 3, 4, 8, 12, 13 and 18 of Exhibit C shall
survive termination of this Agreement in accordance with their respective terms.
9. Governing Law and Venue. This Agreement and the Exhibits
hereto shall be governed by, and construed in accordance with, the laws of the
State of New York. The Federal or state courts of the State of New York situated
in New York City shall be the venue for actions brought under this Agreement or
the Exhibits hereto, and each party hereby irrevocably consents to the exclusive
jurisdiction of such courts in such actions.
10. Fees and Expenses. Each Party shall be responsible for the
payment of its own costs and expenses, including attorneys' fees and expenses,
in connection with the negotiation and execution of this Agreement and the
Supplemental Agreements and the consummation of the transactions contemplated
hereby and thereby.
11. Entire Agreement. This Agreement and the Exhibits hereto
represent the entire agreement of the Parties with respect to the subject matter
hereof and supersede all prior and/or contemporaneous agreements and
understandings, written or oral between the parties with respect to the subject
matter hereof. This Agreement and/or any Exhibits hereto may be modified or
amended only by written agreement of AOL and Netcentives.
12. Waiver. Any of the provisions of this Agreement and the
Exhibits hereto may be waived by the party entitled to the benefit thereof.
Neither Party shall be deemed, by any act or omission, to have waived any of its
rights or remedies hereunder unless such waiver is in writing and signed by the
waiving party, and then only to the extent specifically set forth in such
writing. A waiver with reference to one event shall not be construed as
continuing or as a bar to or waiver of any right or remedy as to a subsequent
event.
13. No Third Party Beneficiaries. Nothing express or implied
in this Agreement or the Exhibits hereto is intended to confer, nor shall
anything herein confer, upon any person other than the parties and the
respective successors or assigns of the parties, any rights, remedies,
obligations or liabilities whatsoever.
14. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original and all of which
together shall constitute one in the same instrument. The execution of this
Agreement may be evidenced by facsimile transmission of signatures, in which
case the Parties agree to exchange originally executed versions of this
Agreement promptly thereafter.
15. Termination.
(a) Termination for Bankruptcy/Insolvency. Either
Party may terminate this Agreement immediately following written notice to the
other Party if the other Party (i) ceases to do business in the normal course,
(ii) becomes or is declared insolvent or bankrupt, (iii) is the subject of any
proceeding related to its liquidation or insolvency (whether voluntary or
involuntary) which is not dismissed within ninety (90) calendar days or (iv)
makes an assignment
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for the benefit of creditors.
(b) Termination for Breach. Except as expressly
provided elsewhere in this Agreement, either Party may terminate this
Agreement at any time in the event of a material breach of the Agreement by
the other Party which remains uncured after thirty (30) days written notice
thereof to the other Party (or such shorter period as may be specified
elsewhere in this Agreement). Notwithstanding the foregoing, in the event of a
material breach of a provision that expressly requires action to be completed
within an express period shorter than thirty (30) days, either Party may
terminate this Agreement if the breach remains uncured after written notice
thereof to the other Party.
16. Conflict. In the event of any conflict between any of
the Exhibits, the terms and conditions of Exhibit A shall prevail.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
Effective Date.
NETCENTIVES INC. AMERICA ONLINE, INC.
By: /s/ West Shell III By: /s/ David Colburn
____________________________ ____________________________
Name: West Shell III Name: David Colburn
Title: Chairman and CEO Title: President, Business Affairs
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EXHIBIT A
Terms of the Strategic Relationship
Definitions: (a) AIM Client. The Win 32 version of the client software
(United States version 2.0) developed and distributed by
AOL, in executable, machine readable object code form, that
enables end-users to access and use the AIM Service.
(b) AIM Service. The standard, narrow-band AOL-branded
service, currently available through the Internet, that
enables end-users of such service to exchange, in real- time,
private, personalized messages with, and to monitor the
online status of, other end-users of such service through use
of the AIM Client, and any upgrades or enhancements thereto
during the Term, excluding: (i) such service(s) or similar
services available on the AOL Service; and (ii) any other
version of an AIM service which is materially different from
the standard narrow-band U.S. version of the AIM brand
service, by virtue of its branding, distribution,
functionality, Content or services, including, without
limitation, any co-branded version of the service or any
version distributed through or designed for any [ *** ]
platform or through any platform or device other than a
desktop personal computer (e.g., a service designed primarily
for distribution to a hand-held, wireless personal digital
assistant [ *** ].
(c) AOL Properties. The AOL Service, AOL.com, the CompuServe
Service, Netcenter, AIM Service, the ICQ Service, Digital
City, Spinner, Winamp, and MovieFone. Each of the foregoing
AOL Properties may be individually referred to herein as an
"AOL Property." AOL shall use good faith efforts to work with
Netcentives to encourage the use of Netcentives Loyalty
Network Infrastructure by AOL- affiliated interactive
properties other than the AOL Properties following the
Effective Date.
(d) AOL Rewards Program. The AOL- or AOL-
[ *** ] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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affiliate-branded user loyalty program (i) developed and
managed by or on behalf of AOL but not co-branded with the
ClickRewards Program, (ii) supported or operated (in whole or
in part) by the Netcentives Loyalty Network Infrastructure
and (iii) created following the Effective Date for any and/or
all of the AOL Properties other than the ICQ Service.
(e) AOL Network. Any AOL Property and any other product or
service owned, operated or distributed by or through AOL or
any of its affiliates worldwide (and including those
properties excluded from the definitions of the AOL
Properties, pursuant to the Supplemental Agreements) (e.g.,
e-mail, yellow pages, etc.). It is understood and agreed that
the rights of Netcentives relate only to the AOL Properties
and not generally to the AOL Network.
(f) AOL Service. The standard U.S. version of the America
Online(R) brand service (whether delivered through a narrow-
band or broadband platform), specifically excluding (a)
AOL.com, Netcenter or any other AOL Interactive Site, (b) the
international versions of an America Online service (e.g.,
AOL Japan), (c) the CompuServe(R) brand service and any other
CompuServe products or services (d) "ICQ(TM)," "AOL
NetFind(TM)," "AOL Instant Messenger(TM)," "Digital City,"
"NetMail(TM)," "Electra", "Thrive", "Real Fans", "Love@AOL",
"Entertainment Asylum," "AOL Hometown," "My News" or any
similar independent product, service or property which may be
offered by, through or with the U.S. version of the America
Online(R) brand service, (e) any programming or Content area
offered by or through the U.S. version of the America
Online(R) brand service over which AOL does not exercise
complete operational control (including, without limitation,
Content areas controlled by other parties and member-created
Content areas), (f) any yellow pages, white pages,
classifieds or other search, directory or review services or
Content offered by or through the U.S. version of the America
Online(R) brand service, (g) any property, feature, product
or service which AOL or its affiliates may acquire subsequent
to the Effective Date and (h) any other version of an
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America Online service which is materially different from the
standard U.S. version of the America Online brand service, by
virtue of its branding, distribution, functionality, Content
or services, including, without limitation, any co-branded
version of the service or any version primarily distributed
through any [ *** ] platform or through any platform or
device other than a desktop personal computer.
(g) AOL.com. AOL's primary Internet-based Interactive Site
marketed under the "AOL.COM(TM)" brand, specifically
excluding (a) the AOL Service, (b) Netcenter, (c) any
international versions of such site, (d) "ICQ," "AOL
NetFind(TM)," "AOL Instant Messenger(TM)," "NetMail(TM),"
"AOL Hometown," "My News" or any similar independent product
or service offered by or through such site or any other AOL
Interactive Site, (e) any programming or Content area offered
by or through such site over which AOL does not exercise
complete operational control (including, without limitation,
Content areas controlled by other parties and member-created
Content areas), (f) any programming or Content area offered
by or through such site which was operated, maintained or
controlled by the former AOL Studios division (e.g.,
Electra), (g) any yellow pages, white pages, classifieds or
other search, directory or review services or Content offered
by or through such site or any other AOL Interactive Site,
(h) any property, feature, product or service which AOL or
its affiliates may acquire subsequent to the Effective Date
and (i) any other version of an America Online Interactive
Site which is materially different from AOL's primary
Internet-based Interactive Site marketed under the
"AOL.COM(TM)" brand, by virtue of its branding, distribution,
functionality, Content or services, including, without
limitation, any co- branded versions or any version
distributed through any [ *** ] platform or through any
platform or device other than a desktop personal computer.
(h) Bank Operations. Responsibility for and management of the
financial liability associated with the redemption of AOL
Rewards Program currency or any Customized AOL Rewards
Program currency. "Bank Operations" shall include any
software or technology
[ *** ] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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required to operate, manage, maintain, distribute or support
the Bank Operations, or to provide interconnectivity between
the Bank Operations and the AOL Rewards Program or any
Customized AOL Rewards Program. For the avoidance of doubt,
"Bank Operations" shall not include the AOL Rewards Program
(or any Customized AOL Rewards Program) database and related
AOL software.
(i) Baseline Interactive Service. An entity offering either:
***
(j) Broad Content or E-Commerce Aggregator. An interactive
site or service featuring a broad selection of aggregated
third party interactive content (or navigation thereto)
(e.g., an online service or search and directory service)
and/or marketing a broad selection of products or services
across numerous interactive commerce categories (e.g., an
online mall or other leading commerce site)
(k) Change of Control. (i) The consummation of a
reorganization, merger or consolidation or sale or other
disposition of substantially all of the assets of a party or
(ii) the acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1933, as amended) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under
such Act) of more than 50% of either (x) the then outstanding
shares of common stock of such party; or (y) the combined
voting power of the then outstanding voting securities of
such party entitled to vote generally in the election of
directors.
(l) ClickRewards Program. The consumer-based Rewards Program
operated by Netcentives and currently located at
www.clickrewards.com (or any successor Rewards Program
thereto).
(m) CompuServe Service. The standard, U.S. version of the
CompuServe brand service [ *** ], specifically excluding (a)
any international versions of such service, (b) any web-based
service including "compuserve.com", "cserve.com" and
"cs.com", or any similar product or service offered by or
through the U.S. version of the CompuServe brand service, (c)
Content areas owned, maintained or controlled by CompuServe
affiliates or any similar "sub-service," (d) any programming
or Content area offered by or through the U.S.
[ *** ] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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version of the CompuServe brand service over which CompuServe
does not exercise complete or substantially complete
operational control (e.g., third-party Content areas), (e)
any yellow pages, white pages, classifieds or other search,
directory or review services or Content and (f) any
co-branded or private label branded version of the U.S.
version of the CompuServe brand service, (g) any version of
the U.S. version of the CompuServe brand service which offers
Content, distribution, services and/or functionality
materially different from the Content, distribution, services
and/or functionality associated with the standard,
narrow-band U.S. version of the CompuServe brand service,
including, without limitation, any version of such service
distributed through any platform or device other than a
desktop personal computer and (h) any property, feature,
product or service which CompuServe or its affiliates may
acquire subsequent to the Effective Date.
(n) Customized AOL Rewards Program. Any customized Rewards
Program, created by Netcentives in accordance with this
Agreement and the Supplemental Agreements for use by AOL on
any AOL Property, and into which AOL shall have the right,
but not the obligation, to opt any AOL Property from time to
time during the Term. Each Customized AOL Rewards Program
shall utilize (at the sole option of AOL) an AOL proprietary
currency (e.g., "Spinner Rewards Points") and shall be
powered by Netcentives. The terms and conditions set forth in
Sections 21 through 23 shall apply to any Customized AOL
Rewards Program.
(o) Customized ClickRewards Program. Any customized cul-de-
sac website Rewards Program co-branded with the Click Rewards
Program, created by Netcentives in accordance with the
Supplemental Agreements for use by AOL on any AOL Property
(e.g., the ICQ Click Rewards Program), and into which AOL
shall have the right, but not the obligation, to opt any AOL
Property from time to time during the Term. Each Customized
Click Rewards Program shall be co-branded
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with the Click Rewards currency and shall be powered by
Netcentives. The terms and conditions of maintaining an
Affiliated Program Site as set forth in Sections 24 through
28 shall apply to any Customized ClickRewards Program.
(p) Digital City. The standard U.S. version of Digital City's
local content offerings marketed under the Digital City(R)
brand name [ *** ], specifically excluding (a) the AOL
Service, AOL.com, Netcenter, or any other AOL Interactive
Site, (b) any international versions of such local content
offerings, (c) the CompuServe(R) brand service and any other
CompuServe products or services (d) "Driveway," "ICQ(TM),"
"AOL NetFind(TM)," "AOL Instant Messenger(TM)," "Digital
City," "NetMail(TM)," "Electra", "Thrive", "Real Fans",
"Love@AOL", "Entertainment Asylum," "AOL Hometown," "My News"
or any similar independent product, service or property which
may be offered by, through or with the standard narrow band
version of Digital City's local content offerings, (e) any
programming or Content area offered by or through such local
content offerings over which AOL does not exercise complete
operational control (including, without limitation, Content
areas controlled by other parties and member-created Content
areas), (f) any yellow pages, white pages, classifieds or
other search, directory or review services or Content offered
by or through such local content offerings, (g) any property,
feature, product or service which AOL or its affiliates may
acquire subsequent to the Effective Date, (h) any other
version of a Digital City local content offering which is
materially different from the narrow-band U.S. version of
Digital City's local content offerings marketed under the
Digital City(R) brand name, by virtue of its branding,
distribution, functionality, Content or services, including,
without limitation, any co-branded version of the offerings
or any version distributed through any broadband distribution
platform or through any platform or device other than a
desktop personal computer, and (i) Digital City-branded
offerings in any local area where such offerings are not
owned or operationally controlled by America Online, Inc. or
DCI
[ *** ] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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(e.g., Chicago, Orlando, South Florida, and Hampton Roads).
(q) ICQ ClickRewards Program. The co-branded, customized,
cul-de-sac website version of the ClickRewards Program to be
offered by Netcentives exclusively on the ICQ Service, to be
promoted by AOL in accordance with Section 2 hereof and to be
developed in accordance with this Agreement and the
Supplemental Agreements.
(r) ICQ ClickRewards User. Any ICQ User who enrolls in the
ICQ ClickRewards Program through the ICQ Service.
(s) ICQ Service. The standard and generally available version
of the ICQ(TM) brand service, excluding any other version of
the ICQ Service, ICQ.com, or the ICQ Client that is
materially different from the standard version thereof, by
virtue of its branding, distribution, functionality, content
or services, including, without limitation, any co-branded
version of such service or product, or any version primarily
distributed through or designed for any [***] platform or
through any platform or device other than a desktop
personal computer (e.g., a service designed primarily for
distribution to a hand-held, wireless personal digital
assistant [***]). For purposes of this
definition, "ICQ Client" shall mean the client software,
device or functionality (e.g., browser technology)
developed and distributed by ICQ or an affiliate of ICQ
that enables ICQ users to access and use the ICQ Service.
(t) ICQ User. Any user of the ICQ Service.
(u) Interactive Service. An entity offering one or more of
the following: ***
(v) Internet Redemption Items and Communication Tools. (i)
Internet access (e.g., ISP service), broadband and wireless
internet connectivity services (e.g., wireless ISP service),
and any other paid-for AOL products or services to be agreed
upon from time to time by the
[***]=CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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Parties and (ii) consumer-based e-mail, instant messaging
service, chat service, message boards etc. (whether paid for
or not).
(w) License. A non-exclusive, worldwide license from
Netcentives to AOL and its affiliates during the Term and
thereafter, as expressly set forth herein: ***
Notwithstanding the foregoing, the License shall not permit
AOL or its affiliates to create a Rewards Program using
Netcentives' trademarks, trade names or service marks without
the prior written consent of Netcentives.
(x) Loyalty Network Infrastructure. (1) The Reward Broker
Software, (2) the Payment System Software, (3) the standard
promotion modules associated with the Reward Broker Software
and (4) any and all relevant APIs, tools or other
applications owned by Netcentives that are necessary for use
of the technology in clauses 1, 2, 3 and/or 4 of this Section
(including, without limitation, all modifications, upgrades
and updates that are generally available to all customers to
each of the technologies in clauses 1, 2, 3 and/or 4 of this
Section (collectively, the "Updates")), each of which shall
be customized as necessary by Netcentives for AOL and reward
program member use in accordance with the Rewards Program
Network Services, and as otherwise set forth herein and in
the Supplemental Agreements. "Loyalty Network Infrastructure"
shall not include (x) the AOL Rewards Program (or any
Customized AOL Rewards Program) database and the related AOL
software or (y) any AOL User Information or ICQ User
Information.
(y) Marketing Consulting Services. Netcentives marketing and
consulting services to be provided to AOL during the Term in
accordance with Section 9 hereof, including without
limitation: (1) online Rewards Program support area creation
and maintenance; (2) Rewards Program user interface
development and maintenance (e.g., creative design, online
production, development of look and feel); (3) technical
production and maintenance of such support area (e.g.,
formatting of data files and back-office support); and (4)
front-end merchant and partner Rewards Program account
***CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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management assistance.
(z) Netcentives Redemption Items. Airline frequent flyer
miles and other rewards sourced from Netcentives' syndicated
Rewards Program catalog.
(aa) Netscape. Netscape Communications Corporation's primary
Internet-based Interactive Site marketed under the "Netscape
Netcenter(TM)" brand [***], specifically excluding (a) the
AOL Service, (b) AOL.com, (c) any international versions of
such site, (d) "ICQ," "AOL Netfind(TM)," "AOL Instant
Messenger(TM)," "NetMail(TM)," "AOL Hometown," "My News,"
"Digital City(TM)," or any similar independent product or
service offered by or through such site or any other AOL
Interactive Site, (e) any programming or Content area
offered by or through such site over which AOL does not
exercise complete operational control (including, without
limitation, Content areas controlled by other parties and
member-created Content areas), (f) any programming or
Content area offered by or through the U.S. version of the
America Online(R) brand service which was operated,
maintained or controlled by the former AOL Studios division
(e.g., Electra), (g) any yellow pages, white pages,
classifieds or other search, directory or review services
or Content offered by or through such site or any other AOL
Interactive Site, (h) any property, feature, product or
service which AOL or its affiliates may acquire subsequent
to the Effective Date and (i) any other version of an AOL
or Netscape Communications Corporation Interactive Site
which is materially different from Netscape Communications
Corporation's primary Internet-based Interactive Site
marketed under the "Netscape Netcenter(TM)" brand, by
virtue of its branding, distribution, functionality,
Content or services, including, without limitation, any co-
branded versions and any version primarily distributed
through any [***] platform or through any platform or
device other than a desktop personal computer (e.g. Custom
NetCenters built specifically for third parties).
[***]=CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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(bb) Optional Services. (i) Front-end AOL Rewards Program
member customer service; (ii) diagnostic statistical analysis
of the AOL Rewards Program or any component thereof; (iii)
rewards program member database design and management; (iv)
direct marketing email and campaign management; and (v)
holding and managing the Bank Operations (or any other
currency handling obligations with respect to any AOL
Property other than the ICQ Service). For the avoidance of
doubt, all Optional Services are incremental to the Rewards
Program Network Services, and are not included in the
services for which AOL shall pay Netcentives the Transaction
Fees set forth herein.
(cc) Payment System Software. Netcentives' server software,
which currently resides at Netcentives data center (provided
that such residence may change from time to time pursuant to
the mutual written agreement of the Parties) and receives and
processes all promotional currency transfer requests from the
Reward Broker Software.
(dd) Qualified Interactive Service. An entity offering one or
more of the following: [ *** ]
(ee) Qualified Merchant. Any merchant (1) in the AOL Rewards
Program or any Customized AOL Rewards Program and/or (2)
actively solicited on an individual basis (e.g., not as part
of a mass mailing) by AOL or any AOL affiliate and
subsequently enrolled in the ICQ Click Rewards Program or any
Customized ClickRewards Program.
(ff) Reward Broker Sale. Following the Effective Date, the
license to (and/or installation by) any third party of the
Reward Broker Software (or the purchase by AOL or any of its
affiliates of a license to use the Rewards
[ *** ] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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Broker Software on behalf of any third party).
(gg) Reward Broker Maintenance. Ongoing support of third
parties who have installed, and who use, the Reward Broker
Software following the Effective Date.
(hh) Reward Broker Software. Netcentives' client software,
which typically resides at the merchant site and is capable
of initiating promotional currency transfers in real time to
the Payment System Software.
(ii) Rewards Program. A currency-based incentives program in
which program members can earn and redeem currency from a
network of product and service providers.
(jj) Rewards Program Network Services. (i) Creation,
operation and/or support (other than as part of the Optional
Services) of a Rewards Program earning and redemption
infrastructure using Netcentives' Loyalty Network
Infrastructure; (ii) management of rewards currency
redemption transactions, (iii) fulfillment of
Netcentives-sourced rewards; (iv) limited risk management;
(v) customization of the Loyalty Network Infrastructure (as
used in connection with the AOL Rewards Program) for
infrastructure creation or development purposes, as
reasonably requested from time to time during the Term by
AOL, which such customization shall include, in addition to
those further services to be specified in the Supplemental
Agreements: any development required to port the Reward
Broker Software to up to five (5) operating systems not
currently supported as part of the Loyalty Network
Infrastructure (provided that such operating systems support
Sun Microsystems Java Development Kit, version 1.2 or higher)
and other customization required for integration to be
mutually agreed upon by the Parties; (vi) the provision of
general reports to AOL regarding the AOL Rewards Program, the
ICQ Click Rewards Program and (if applicable) any Customized
Click Rewards Program, the substance of which shall be
mutually agreed upon by the Parties; and (vii) the granting
to AOL of the License. For the avoidance of doubt, the
Transaction Fees to be paid by AOL to Netcentives pursuant to
Section 7 hereof shall cover all
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of the foregoing services (i.e., without additional payment
by AOL).
(kk) Service Revenue. *** Service Revenue shall be calculated
according to GAAP and as reported on Netcentives' financial
statements.
(ll) Supplemental Agreement. "Supplemental Agreement" shall
have the meaning set forth in Part 11 of this Exhibit.
(mm) Supplemental Year. The one year period following the
expiration of the Term or termination of this Agreement or
any Supplemental Agreement and (at the sole election of AOL)
any and each successive one year period thereafter.
(nn) Top Tier Partner. The first *** Qualified Merchants to
generate *** in revenue share payments to AOL under Section 5
of this Exhibit A in connection with any Subsequent Program
Election (as defined in Section 5 of this Exhibit A).
(oo) Transaction. Any transaction in which an AOL Rewards
Program member (or Customized AOL Rewards Program member)
earns or redeems the relevant program currency.
(pp) Transaction Fee Ratchet. The rate by which the
Transaction Fee Cap (as defined in Section 8 of this Exhibit
A) may be increased during each year of any Renewal Term or
Simple License Election, to be calculated as follows: *** For
the avoidance of doubt, once the Transaction Fee Cap has been
established, it will not be reset at a lower rate (unless
otherwise agreed upon by the Parties in writing).
Terms 1. Pursuant to the terms of the Restricted Stock Purchase
Part 1-- Agreement (as defined in Part 11 of this Exhibit),
Distribution of Netcentives shall issue to AOL *** unregistered shares of
Click Rewards on Netcentives' common stock (the "Common Equity Stock");
the ICQ Service; provided that the shares of Common Stock shall be adjusted
Equity for any splits, reverse splits, etc., occurring on or
after the Effective Date; provided, further, that
Netcentives shall
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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deliver the certificates representing such Common Stock as
soon as reasonably practicable following the execution of the
Restricted Stock Purchase Agreement. In consideration for the
delivery and execution of this Agreement by AOL, Netcentives
hereby agrees to execute and deliver the Restricted Stock
Purchase Agreement and the Common Stock to AOL. Netcentives
hereby acknowledges and agrees that its delivery of the stock
certificates evidencing the Common Stock to AOL is subject to
regulatory approval, and that for such reason, as of the
Effective Date, AOL has not received such stock certificates
from Netcentives. Netcentives agrees to (1) execute the
Restricted Stock Purchase Agreement within ten (10) days
following the Effective Date (provided that such agreement
shall reflect terms substantially similar to those terms set
forth in Section 1 and Section 44 of this Exhibit A) and (2)
deliver such Common Stock certificates to AOL as soon as
reasonably practicable after the Effective Date (the "Stock
Delivery Obligation"). The Parties acknowledge and agree that
in the event that Netcentives fails to comply with the Stock
Delivery Obligation, AOL shall have the right to seek
specific performance with respect to the performance of such
obligation by Netcentives. There will be no restrictions
imposed on AOL beyond those imposed or required by applicable
law. With respect to the Common Stock, AOL shall be granted
*** as further set forth in the Restricted Stock Purchase
Agreement (as defined in Section 45). In the event that the
Parties fail to execute the Restricted Stock Purchase
Agreement (which shall reflect the foregoing registration
obligation) within thirty (30) days following the Effective
Date, AOL shall have the right to terminate the Software
Exclusivity and/or the Program Exclusivity. Netcentives shall
comply with all of the reporting requirements of the
Securities and Exchange Act of 1934, as amended, and shall
comply with other public information reporting requirements
of the Securities and Exchange Commission which are
conditions to the availability of Rule 144 for the sale of
Promotion of the Common Stock. Netcentives represents that none of its
Click Rewards existing strategic investors has the right to anti-dilution
protection (e.g., full ratchet, weighted-average ratchet)..
In the event that Netcentives grants any existing or future
investor the right to any such anti-dilution protection,
Netcentives shall grant to AOL the same such rights.
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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2. ICQ shall prominently feature, offer and promote the ICQ
ClickRewards Program to ICQ members across the ICQ Service.
The initial implementation of such promotional requirement
shall include, where feasible, the following (and any future
implementation shall be consistent in terms of prominence
(e.g., in terms of size, location, appearance, frequency,
duration and the like) with the following):
(a) On the ICQ Service, the ClickRewards Program will be
"co-branded" during the Initial Term with the name
"ClickRewards" or any other Netcentives Mark agreed upon by
the Parties from time to time (the "ClickRewards Name").
"Co-branding" means that the ICQ Rewards Program will be
labeled and marketed during the Initial Term with the name
"ICQ ClickRewards" or such other name as ICQ and Netcentives
designate (the "ICQ Rewards Name"), and the ICQ ClickRewards
Program shall, where feasible and to the extent not
inconsistent with the ICQ Look and Feel, have a prominent tag
line such as "Powered by Netcentives" or "Provided by
Netcentives," and/or a Netcentives trademark, trade name or
logo (each, a "Netcentives Mark"). The ClickRewards tag line
and/or Netcentives Mark (the "Brandings") will be included
prominently in (and where feasible, will be placed within
reasonable proximity to the ICQ brandings in) the (A) areas
which provide information regarding the use of and enable ICQ
users to check account balances and other activities of the
ICQ ClickRewards Program (collectively, the "Support Area"),
and (B) other areas within the ICQ Service that relate
principally to the ICQ ClickRewards Program (the "Branded
Areas").
(b) The Brandings will also appear prominently in
advertising, promotional, public relations and marketing
material relating principally to the ICQ Click Rewards
Program. ICQ management will work with Netcentives' team to
create mutually agreed-upon new marketing initiatives for the
ICQ ClickRewards Program to be marketed to ICQ members (e.g.,
bonus ICQ ClickRewards points for referrals, creation of
offers targeted to an international user base (e.g.,
multilingual products and services, etc.).
(c) The name, design and "look and feel" of the Co-Branded
Areas will be determined by ICQ in its reasonable
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discretion, upon consultation with Netcentives.
(d) The promotions on the ICQ Service will include other
prominent promotional placements related to the ICQ Click
Rewards Program to be mutually agreed upon by the Parties
within forty (45) days following the Effective Date. In the
event that the Parties cannot agree to such promotional
placements within such time period, the Parties will resolve
such dispute in accordance with the dispute resolution
provisions set forth in Part 10 hereof.
Revenue Share Netcentives will have the ability to send communications and
promotions to ICQ ClickRewards Users solely in accordance
with (1) the user communication and solicitation restrictions
set forth in Sections 21 and 22 below and the Supplemental
Agreements and (2) AOL's and ICQ's standard privacy policies.
In the event that AOL or ICQ (as the case may be) amends its
respective privacy policy during the Term so as to prevent
third parties from communicating in any way with ICQ Click
Rewards Users (or any users of any Customized ClickRewards
Program into which AOL has opted any AOL Property), the
Parties agree to discuss in good faith a way to resolve such
issue. If the issue is not resolved in a reasonable period of
time, the Parties will submit such issue to the dispute
resolution provisions set forth in Part 10 of this Agreement.
3. (a) Netcentives shall pay AOL, on a quarterly basis, the
following share of the Service Revenues from the earning of
ICQ ClickRewards Program currency by ICQ ClickRewards Users
(collectively, "ICQ Service Revenues"): *** Each of the
percentages of the Service Revenues set forth above shall be
referred to herein as an "Service Revenue Share Percentage"
and collectively as the "Service Revenue Share Percentages").
***
(b) In the event that, during the Term, AOL elects to enable
a Rewards Program for any AOL Property, AOL shall have the
unilateral right (but not the obligation) to opt such
property into the AOL Rewards Program, a Customized
ClickRewards Program or (provided that AOL complies with the
Software Exclusivity) an entirely separate Customized AOL
Rewards Program. In the event that AOL elects to opt any
other AOL Property into a Customized ClickRewards Program
(i.e., AOL elects to utilize
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ClickRewards currency as the currency for the rewards program
on any such incremental AOL Property), (a) AOL will use
commercially reasonable efforts to promote such Customized
ClickRewards Program to users of such property on a basis
consistent with the promotional efforts of ICQ set forth in
this Agreement and (b) each registration of a member or user
of such other AOL Property for such Customized ClickRewards
Program (and the amount of Service Revenues generated by any
user or member on such incremental AOL Property in connection
with any such program) shall count towards the above
Registration Hurdles (and aggregate ICQ Service Revenues, as
the case may be). For example, in the event that AOL opts
Digital City into a Customized ClickRewards Program (the "DCI
Program"), and Five Million (5,000,000) Digital City users
register for the DCI Program and Ten Million (10,000,000) ICQ
Users have registered for the ICQ Click Rewards Program, then
AOL shall be entitled to receive at least *** of the
aggregate Service Revenues generated thereafter by ICQ
ClickRewards Users and DCI Program members.
Part 2 - 4. (a) In connection with any Reward Broker Sale, third party
Distribution of merchants or companies (i) will agree to the standard terms
Loyalty Network of the license from Netcentives to such third party to use
Infrastructure; Reward Broker Fee Software and (ii) will pay Netcentives (or
Installation Fee AOL shall have the right, but not the obligation, to pay
and Maintenance Netcentives on any such third party merchant's or company's
Fee Revenue behalf) a one-time fee for Reward Broker Software
Share installation (the "Installation Fee"). As of the Effective
Date, this fee is currently priced at ***. Third party
merchants or companies shall also pay Netcentives an annual
fee for Reward Broker Maintenance (the "Maintenance Fee"),
which (as of the Effective Date) is currently priced at ***.
In no event shall the Installation Fee and/or the Maintenance
Fee charged to third parties participating in the AOL Rewards
Program, the ICQ Click Rewards Program or any Customized
ClickRewards Program be *** after the Effective Date;
provided, however, that Netcentives may from time to time
elect to discount or waive any such fees, for a non-material
percentage of the aggregate AOL Rewards Program, ICQ Click
Rewards Program and (if applicable) Customized Click Rewards
Program merchant partners. Netcentives shall have the right,
at its sole discretion, to change the rate
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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card pricing of the Installation Fee or Maintenance Fee.
(b) ***
5. In the event that following installation or use of the
Reward Broker Software, any Qualified Merchant activates its
Reward Broker Software to participate in (or otherwise elects
to participate in) any other Rewards Program owned or
controlled by Netcentives (each, a "Subsequent Program
Election"), Netcentives shall pay AOL *** for each
Transaction where the member earns points at such merchant in
connection with any such other Rewards Program owned or
controlled by Netcentives; provided that such amount will be
paid as revenue from the Transaction, as recognized according
to GAAP and as reported on Netcentives' financial statements.
The amounts received by AOL under Paragraphs 4 and 5
(collectively, the "Software Distribution Revenue Share
Amount") shall not exceed a maximum of *** during the Term
(the "Software Distribution Revenue Share Cap"); provided,
however, that AOL shall receive no more than (a) *** under
Paragraphs 4 and 5 for each Top Tier Partner, or (b) ***
under Paragraphs 4 and 5 for any other AOL Rewards Program
partner; provided, further, that during the Initial Term, the
Software Distribution Revenue Share Amount paid under
Sections 4 and 5 hereof shall never exceed the Transaction
Fees paid by AOL to Netcentives under Section 7 hereof.
Part 3 6. Within thirty (30) days following the Effective Date, AOL
Establishment shall pay Netcentives a one-time Rewards Program design and
of AOL Rewards set-up fee in Custom the amount of *** (the "Design and
Custom Loyalty Set-Up Fee"). Such Design Set-Up Fee shall include the basic
Program and integration for any AOL Property that AOL elects to opt into
Consulting the AOL Rewards Program, but shall not include the design and
Services set-up fee for the development of an entirely new AOL Rewards
Program (i.e., other than the AOL Rewards Program). Basic
integration and customization for any AOL Property that AOL
elects to opt into any Customized ClickRewards Program shall
be covered by the Consulting Agreement and any payments by
AOL to Netcentives in connection therewith shall count
towards the Marketing Consulting Services Floor Amount. Such
Design and Set-Up Fee shall include the initial promotion
design, customizing program features (such as member sign-up
process) to work with existing programs, integration of the
Rewards Program for AOL Users existing
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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on the Effective Date into the AOL Rewards Program, and other
services to be set forth in the technical specifications to
be agreed upon by the Parties with respect to the AOL Rewards
Program launch.
7. AOL shall pay the following Transaction fees ("Transaction
Fees") on a bi-monthly basis to Netcentives during the Term
(where the number of transactions is reset to zero at the end
of each 12-month period of the Term); ***. In the event that
the payment by AOL of the Transaction Fees on a bi-monthly
basis adversely affects AOL from an operational or
administrative standpoint, AOL shall have the right to pay
the Transaction Fees to Netcentives on a quarterly basis
during the remainder of the Term (upon thirty (30) days prior
written notice to Netcentives) (the "AOL Payment Adjustment
Right").
(i) *** per Transaction for each Transaction up to ***
Transactions.
(ii) *** per Transaction for each Transaction above ***
Transactions and below *** Transactions;
(iii) *** per Transaction for each Transaction above ***
Transactions and below *** Transactions; and
(iv) *** per Transaction for each Transaction above ***
Transactions.
The Transaction Fees shall cover the cost of the Rewards
Program Network Services solely for use by AOL and its
affiliates, but shall not include any Optional Services or
Marketing Consulting Services, nor any payments for ICQ Click
Rewards Program (or Customized Click Rewards Program)
currency. Each of the rates set forth above *** shall be
referred to herein as a "Transaction Fee Rate."
8. As part of the Transaction Fee arrangement set forth
above, AOL shall pay Netcentives on a prorated, bi-monthly
basis (subject to the AOL Payment Adjustment Right) and upon
the receipt of an appropriate invoice from Netcentives , no
less than *** in aggregate Transaction Fees during each year
of the Initial Term (the "Minimum Transaction Fee Amount");
provided, however, that AOL shall not be required to pay
Netcentives more than *** in aggregate
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
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Transaction Fees during any year of the Term or during any
Supplemental Year (the "Transaction Fee Cap") (as the same
may be increased pursuant to the Transaction Fee Ratchet
during any Renewal Term or any Simple License Election,
pursuant to the terms and conditions of this Exhibit A).
9. Provided that Netcentives satisfies certain performance
metrics to be agreed upon by the Parties in accordance with
Section 12 of this Exhibit A and the Supplemental Agreements,
AOL will pay to Netcentives a minimum of *** in the aggregate
during the Term for Marketing Consulting Services (the
"Marketing Consulting Services Floor Amount"), with a minimum
of *** of such amount to be paid during the first year of the
Term and a minimum of *** of such amount to be paid during
each of the second and third years of the Term (in each case,
on a prorated, bi-monthly basis (subject to the AOL Payment
Adjustment Right)); provided, however, that Netcentives shall
create a Marketing Consulting Services team, the composition
of which (i.e. junior, senior, etc.) will be subject to AOL's
approval (which will not be unreasonably withheld or delayed)
and which such team AOL will work with Netcentives to build
over time; provided, further, that in connection with such
Marketing Consulting Services, AOL shall pay Netcentives at
***. AOL shall pay all reasonable, duly-documented,
out-of-pocket expenses incurred by Netcentives in connection
with such Marketing Consulting Services. For customization
services performed by Netcentives beyond those included in
the Rewards Program Network Services but non-technical in
nature, AOL shall pay Netcentives at *** and such payments
shall count towards the Marketing Consulting Services Floor
Amount. For customization services performed by Netcentives
beyond those included in the Rewards Program Network Services
that are technical in nature, AOL shall pay Netcentives at
*** and such payments shall not count towards the Netcentives
Marketing Consulting Services Floor Amount. For the avoidance
of doubt, the Marketing Consulting Services team would not
provide any of the technological customization services
discussed herein.
Part 4 10. AOL shall have the right (but not the obligation) to
Bank Operations transition to Netcentives all or a portion of the Bank
and Database Operations associated with all then-existing rewards points
in the AOL Rewards Program on terms to be negotiated and
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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mutually agreed to by the Parties. In the event that, at any
time following the one (1) year anniversary of the Effective
Date, AOL determines (which such determination shall be in
AOL's sole discretion) to transition all or a portion of the
Bank Operations to any third party, AOL will provide
Netcentives with a right of first negotiation with respect to
maintaining all or such portion (as the case may be) of the
Bank Operations. During the twelve (12) month period
following the Effective Date, AOL will provide Netcentives
reasonable advance notice (not to be less than thirty (30)
days) of the transitioning of the Bank Operations to any
third party. In addition to the foregoing, AOL will explore
with Netcentives the possibility of transferring to
Netcentives responsibility for the AOL Rewards Program
database.
Part 5 11. (a) Term. Netcentives hereby grants AOL and its
License affiliates with the License during the Term (and thereafter
as expressly set forth herein), and shall provide AOL any and
all Updates (and/or other updates or upgrades thereto)
developed by and/or distributed by or on behalf of
Netcentives during the Term. Other than as part of the
Transaction Fees set forth above, AOL shall not be required
to pay any licensing or similar fees in connection with or
related to the License or the right to receive any Updates.
In addition, the Parties hereby acknowledge and agree that no
member of or participant in the AOL Rewards Program, ICQ
Click Rewards Program and/or (if applicable) Customized
ClickRewards Program shall be required to pay any licensing
or similar fees (other than any Installation Fees and/or
Maintenance Fees to be paid by merchant partners) to
Netcentives in order (i) to use the Loyalty Network
Infrastructure, the Rewards Broker Software or any component
thereof, Upgrade thereto or other intellectual property right
of Netcentives licensed to AOL or any affiliate as part of
the License set forth herein, or (ii) to participate in the
AOL Rewards Program, any Customized AOL Rewards Program, the
ICQ ClickRewards Program or the Customized ClickRewards
Program. Nothing in this Agreement will preclude Netcentives
from charging any AOL Rewards Program, ICQ Click Rewards
Program, Customized AOL Rewards Program or Customized
ClickRewards Program member, merchant or partner any fees in
connection with the use of any Netcentives software that is
not necessary for participation in any such Rewards
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Program, provided, however, that no such software shall be
offered, sold or distributed on or through any AOL Property
without the express written consent of AOL. To the extent
reasonably practicable, Netcentives shall deliver any and all
software to be delivered hereunder and/or under the
Supplemental Agreements electronically.
(b) Renewal. In the event that AOL elects to extend this
Agreement to a Renewal Term, as set forth in Section 17
hereof, the terms and conditions of this Agreement and any
Supplemental Agreements shall remain in full force and effect
(except as otherwise agreed upon by the Parties and as set
forth below); provided, however, that:
(i) AOL shall continue to be subject to the Software
Distribution Revenue Share Cap, and Netcentives shall
continue to be subject to the Transaction Fee Cap (as
increased pursuant to the Transaction Fee Ratchet);
(ii) ICQ shall have the right (but not the obligation) to
continue the Program Exclusivity, to continue offering the
ICQ ClickRewards Program on a non-exclusive basis (the
"Non-Exclusive Continuation") or to terminate the ICQ
ClickRewards Program ("ClickRewards Termination"). In the
event that (A) ICQ continues the Program Exclusivity, the
Service Revenue sharing arrangement and AOL's promotional
obligations under Section 2 that existed during the Initial
Term shall continue in full force and effect, (B) ICQ
exercises the Non-Exclusive Continuation, each of the Service
Revenue Share Percentages shall be reduced by ***, or (C) ICQ
exercises the ClickRewards Termination, the Parties shall
enter into a wind-down arrangement with respect to the ICQ
ClickRewards Program to be set forth in the Supplemental
Agreements and the Service Revenue sharing arrangement shall
be ***. In the case of (B) above, the Parties shall mutually
agree, at the time of the election by AOL for a Non-Exclusive
Continuation, to a level of promotion of the ICQ Click
Rewards Program to be carried out by ICQ on the ICQ Service
during any such Non-Exclusive Continuation; provided,
however, that in the event that the Parties cannot agree to
such level of promotion within forty-five (45) days following
such election by AOL for a Non-Exclusive Continuation, the
Parties will submit such dispute to the Dispute Resolution
provisions set forth in Part 10 hereof. In the case of (C)
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above, the Parties hereby acknowledge and agree that neither
AOL nor ICQ shall have any of the obligations set forth in
Section 2 hereof and that Netcentives shall not have any of
the obligations set forth in Section 24 through 28 hereof;
(iii) AOL shall not be required to pay Netcentives any
minimum Marketing Consulting Fees or (unless AOL elects to
opt in an AOL Property to a separate Rewards Program operated
by Netcentives) , any further Design and Set-up Fee.
***
***
(e) Wind-Down Period. Within ninety (90) days following early
termination by Netcentives of this Agreement or any
Supplemental Agreement for cause (i.e., pursuant to Section
15 of the main text of this Agreement) or for an AOL Change
of Control Event pursuant to Section 18 hereof, Netcentives
shall have the right (but not the obligation), in addition to
any other rights under the this Agreement or any Supplemental
Agreement, to cause the Parties to enter into a wind-down
period, the terms of which shall be agreed upon pursuant to
the terms of the Supplemental Agreements.
***
(g) Co-Development. Any works, including without limitation,
software or other copyrightable materials, as to which both
Parties (or their employees, contractors or agents) are joint
authors, and any patents as to which both Parties (or their
employees, contractors, or agents) are co-inventors
(collectively, the "Joint Work Product") shall be jointly
owned by the Parties (with each Party having the right to use
and exploit, or authorize the use or exploitation by others
of such Joint Work Product; provided that such use or
exploitation is not in breach of this Agreement), without an
obligation to obtain the consent of, or to account to, the
other Party and subject to Netcentives' and AOL's (or any AOL
affiliate's) respective proprietary rights in any underlying
software, works, or technology to the extent incorporated or
included in such Joint Work Product. Notwithstanding the
foregoing, to the extent that with respect to any
co-developed works created under this Agreement, the Parties
shall not constitute co-authors or co-
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inventors, and either Party owns such works or inventions as
a matter of law, , then the non-owning Party shall be deemed
by this reference to have a fully paid-up, royalty-free,
non-exclusive, non-transferable and worldwide license for the
Term to use, reproduce, distribute (directly and indirectly),
transmit, display, perform, sublicense and adapt such works
or inventions as set forth in this Agreement. Each Party
shall cooperate with the other Party in documenting and
perfecting all rights with respect to the Joint Work Product,
including executing any necessary assignments, applications
or other documentation with respect to the Joint Work
Product.
(h) API Support. Netcentives hereby warrants that for so long
as AOL or its affiliates have rights under the License,
Netcentives agrees that the Loyalty Network Infrastructure
(or any successor thereto) shall contain all functionality
reasonably necessary to support and use the APIs provided to
AOL or its affiliates by Netcentives, and agrees that no
modifications by Netcentives to the Loyalty Network
Infrastructure shall materially impair or degrade such
functionality. To the extent reasonably necessary for AOL to
modify, develop, add, delete or use any functionality or
features of the Loyalty Network Infrastructure, Payment
System Software or Rewards Broker Software in connection with
the development of any Additional Modifications pursuant to
Section 13(a)(iii) hereof, Netcentives shall provide to AOL
APIs to the Loyalty Network Infrastructure, Payment System
Software and/or Reward Broker Software (as applicable) so
that such Additional Modifications can interoperate with
(including use of the principal functions of) the Loyalty
Network Infrastructure, Payment System Software or Rewards
Broker Software; provided, however, that, to the extent that
such APIs are insufficient to enable such interoperability,
Netcentives shall modify, as promptly as commercially
reasonable, the APIs (to be paid by AOL in accordance with
the technical customization provisions of Section 9 hereof),
the Loyalty Network Infrastructure, Payment System Software
or Rewards Broker Software to enable such interoperability.
Netcentives shall own all additions and extensions to such
API (but not the Additional Modifications, which shall be
owned by AOL) and such additions and extensions shall form
part of the License granted by Netcentives to AOL and its
affiliates hereunder.
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(i) Other. The Parties will agree to negotiate in good faith
the other relevant terms of the License (e.g., terms relating
to AOL building and/or implementing a replacement loyalty
network infrastructure during a wind-down period using the
APIs related to the Loyalty Network Infrastructure) as part
of the Supplemental Agreements.
Part 6
*** 12. ***
Part 7 13. (a)(i) Software Exclusivity. During the Term, AOL and
Exclusivity; its affiliates will not *** (collectively, the "Software
Cross-Promotion Exclusivity") provided, however that the foregoing shall in
no way prevent AOL nor any AOL affiliate from providing any
user of the AOL Network with access on or through the AOL
Network (via any platform whatsoever, whether narrow-band,
broadband or otherwise) to the Loyalty Network
Infrastructure or Rewards Program of any third party. AOL
hereby represents that to the best of AOL's knowledge and
the knowledge of each of the AOL Properties (as the case
may be), as of the Effective Date, there are no existing
arrangements to which AOL is a party that would have a
material adverse effect on the Software Exclusivity.
(ii) Netcentives Rewards Program Exclusivity. During the Term
***. For purposes of this Agreement, "Click Rewards Network"
shall mean the ClickRewards Program and any similar or
successor Rewards Program owned or controlled by Netcentives
(other than those programs which are co-branded with or
operated on behalf of any third party on a private label
basis, or any non-consumer-based solutions (e.g.,
employee-based rewards programs for individual entities).
(iii) Development of Proprietary Loyalty Network
Infrastructure by AOL; Implementation of Complementary
Functionality. For the avoidance of doubt, nothing in this
Agreement or the Supplemental Agreements shall prevent AOL or
any of its affiliates from developing a proprietary Rewards
Program or loyalty network infrastructure ("Proprietary
Infrastructure") during the Term, provided, that neither AOL
nor any AOL affiliate shall develop such Proprietary
Infrastructure using the Source Code or
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Confidential Information of Netcentives; provided, further,
that AOL will provide Netcentives with reasonable advance
notice (not to be less than ***) of any public
implementation, use or distribution to its members or users
of any such Proprietary Infrastructure, which such
implementation, use or distribution shall not occur until
after the Initial Term. Netcentives shall have the right to
terminate this Agreement or any Supplemental Agreements in
the event that AOL's implementation, use or distribution of
the Proprietary Infrastructure occurs during any Renewal
Term. The Parties hereby acknowledge and agree that each of
the Software Exclusivity and Program Exclusivity does not
preclude, and in no way shall prevent, AOL or any of its
affiliates from implementing, using, promoting, marketing or
advertising on any AOL Property any feature or functionality
that complements the Loyalty Network Infrastructure (e.g., a
plug-in, etc.) developed by AOL or any AOL affiliate prior to
or after the Effective Date (e.g., the Bank Operations,
wallet-based rewards program member tracking, OpinionPlace,
etc.) (collectively, "Additional Modifications").
(iv) (a) To the best of its knowledge after due inquiry,
Netcentives hereby represents that AOL or its affiliates
shall have the right (at any time during the Term or in any
Supplemental Year in which the Software Exclusivity is in
full force and effect) to do any of the following, and ***.
In addition, in consideration for AOL's reliance on the
foregoing representation, Netcentives hereby warrants that in
the event that AOL conducts any of the foregoing activities
at any time during the Term (or in any Supplemental Year in
which the Software Exclusivity is in full force and effect),
and any such activity violates or breaches any such ***, that
Netcentives hereby releases and forever discharges AOL and
all of its affiliates, employees, agents, successors,
assigns, representatives, directors and officers, from and
against any and all actions, causes of action (in law or
equity), claims, suits, demands or other obligations or
liabilities of any nature whatsoever, whether known or
unknown, which Netcentives or any of its employees, agents,
successors, assigns, legal representatives, directors and
officers now have (i.e., as of the Effective Date), or may in
the future have, by reason of, or arising out of, or in
connection with, any of the foregoing activities (at any time
during the Term (or in any
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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Supplemental Year in which the Software Exclusivity is in
full force and effect)).
(b) In the event that AOL elects (which such election shall
be in its sole discretion) to fulfill any redemption of the
AOL Rewards Program (or any Customized AOL Rewards Program)
currency through Netcentives for frequent flier miles of any
passenger airline, AOL shall pay Netcentives a reasonable
handling fee (e.g., ***) to be mutually agreed upon by the
Parties pursuant to the terms of the Supplemental Agreements.
(c) The Parties will (1) work together to source stand-alone
purchases of Partner Airline currency through Netcentives ***
to the extent permitted by applicable law, and other than in
connection with any AOL Marketing Agreement, work together to
***.
14. Other than the ICQ ClickRewards Program, ICQ shall not
*** (subject to compliance by Netcentives with its material
obligations under this Agreement or the Supplemental
Agreements) (the "Program Exclusivity"). During any Renewal
Term, the status of Program Exclusivity shall be governed by
the terms of Section 11(b)(ii). In the event that ICQ
terminates the Program Exclusivity during the Term (as
permitted by the terms of this Agreement), Netcentives shall
no longer be subject to the terms of clause (C) of Section
13(a)(ii) of this Exhibit A.
15. During the Term, Netcentives shall promote AOL online on
its principal Interactive Site ( www.clickrewards.com, or any
successor Interactive Site) (the "ClickRewards Site"), by
placing a prominent "Try ICQ" feature or promotion of other
AOL products or services selected by AOL on the front page of
the Click Rewards Site in connection with ICQ Click Rewards
Program offers. In addition, Netcentives shall promote (i)
AOL as its preferred Interactive Service for the ClickRewards
Network and (ii) AOL and the AOL Rewards Program in its
corporate (i.e. Netcentives) marketing initiatives, as
mutually agreed upon by the Parties. AOL shall prominently
promote the AOL Rewards Program in a manner to be determined
by AOL following consultation with Netcentives.
Part 8 16. Should AOL decide to use Netcentives Reward Items in the
Use of AOL Rewards
Netcentives
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Reward Items Program or any Customized AOL Rewards Program (which such
decision shall be in the sole discretion of AOL), AOL will
pay Netcentives (i) the lower of (a) *** or (b) *** to
include such miles in the AOL Rewards Program catalog, and
(ii) with respect to non-frequent-flyer Netcentives Reward
Items, the cost incurred by Netcentives in obtaining and
fulfilling such item plus the lower of (x) *** or (y) ***.
Part 9 17. The term of the Agreement shall be three (3) years (the
Other Terms "Initial Term"), provided that, upon expiration of the
Initial Term, AOL shall have the right to renew the Agreement
for unlimited, successive, additional terms of two (2) years
each (each, a "Renewal Term," and together with the Initial
Term, collectively, the "Term").
18. (a) Change of Control - Netcentives. In the event of (i)
any Change of Control of Netcentives by any Interactive
Service, or by any other Rewards Program owned or controlled
by an Interactive Service, or (ii) in the event of any Change
of Control by Netcentives of a Rewards Program owned or
controlled by a Baseline Interactive Service ((i) and (ii)
collectively referred to as a "Netcentives Change of Control
Event"), AOL shall have the unilateral right to terminate
this Agreement and/or any Supplemental Agreement (the "AOL
COC Termination Right"); provided, however, that in the case
of clause (ii) above, in the event that, within a period of
*** days following such Change of Control, Netcentives
integrates the acquired or merged Rewards Program into the
Click Rewards Program (and/or any Customized ClickRewards
Program, as the case may be) or otherwise causes such
acquired or merged Rewards Program to comply with the terms
of Section 13(a)(ii) hereof, AOL shall not have the ability
to exercise such AOL COC Termination Right.
(b) Change of Control - AOL. In the event of a Change of
Control by AOL of a competitor of Netcentives (i.e., any
company the majority of whose revenues is generated by
currency-based rewards programs or setting up merchant-based
user loyalty networks, and provided that in no event shall
Time Warner, Inc. or any of its affiliates be deemed a
competitor of Netcentives for purposes of this Agreement or
the Supplemental Agreements) (an "AOL Change of Control
Event"), Netcentives shall have the unilateral right to
terminate this Agreement and/or any Supplemental
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Agreement.
19. Each Party (the "IP Indemnifying Party") shall, at its
sole cost and expense, indemnify, hold harmless and defend
the other Party, and such other Party's officers, directors,
agents, affiliates, distributors, franchisees and employees
(the "IP Indemnified Party"), from any and all claims,
demands, liabilities, costs or expenses (including, without
limitation, reasonable attorney's fees) (collectively, the
"Liabilities") arising from or in connection with a
third-party claim that any of the software or other products,
services, Content (as defined in Exhibit B to this
Agreement), trademarks, trade names or service marks of such
IP Indemnifying Party infringes upon any patents, copyrights,
trade secrets, trademarks or other proprietary rights of such
third party. The IP Indemnifying Party shall pay any damages
(including costs and attorneys' fees) finally awarded against
the IP Indemnified Party by a court of competent jurisdiction
as a result of such claim (or pay any settlement of such
claim agreed to by the IP Indemnifying Party).
20. In the event that during the Term, (a) one (1) or more
infringement actions, claims or proceedings (each, a "Claim")
is or are brought against either Party concerning the Loyalty
Network Infrastructure (or any component thereof), or any
intellectual property rights related thereto (each, an
"Infringement Claim" and collectively, "Infringement Claims")
and (b) any such Infringement Claim or Infringement Claims
result(s) in or is reasonably likely to result in the
issuance of a preliminary or permanent injunction prohibiting
the promotion, distribution or use of any of the foregoing,
then Netcentives shall have the obligation to (as promptly as
reasonably possible):
(i) modify (at the sole cost and expense of Netcentives) the
software or other materials that are the subject of such
claim to perform their intended function without infringing
third party rights and without materially affecting the
functionality or performance of such software or other
materials, or
(ii) substitute non-infringing software or other materials
(at the sole cost and expense of Netcentives) that are the
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subject of such claim with items of materially comparable
functionality and performance, or
(iii) obtain a license (at the sole cost and expense of
Netcentives) permitting continued use of the software or
other materials by AOL that are the subject of such claim on
terms and conditions consistent with the rights granted to
AOL hereunder.
***
21. During the Term of this Agreement and for a *** period
thereafter, Netcentives will not use the AOL Network
(including, without limitation, the e-mail network contained
therein) to solicit AOL Users (defined below) on behalf of
another Interactive Service. More generally, Netcentives will
not send unsolicited, commercial e-mail (i.e., "spam") or
other online communications through or into AOL's products or
services, absent a Prior Business Relationship. For purposes
of this Exhibit A, a "Prior Business Relationship" will mean
that the AOL User to whom commercial e-mail or other online
communication is being sent has voluntarily either (i)
engaged in a transaction with programs operated or controlled
by Netcentives or (ii) provided information to Netcentives
through a contest, registration, or other communication. Any
commercial e-mail or other online communications to AOL
Rewards Program members, ICQ Click Rewards Users, and/or (as
applicable) Customized ClickRewards Program members which are
otherwise permitted hereunder, will (a) include a prominent
and easy means to "opt-out" of receiving any future
commercial communications from Netcentives, and (b) shall
also be subject to AOL's then-standard restrictions on
distribution of bulk e-mail (e.g., related to the time and
manner in which such e-mail can be distributed through or
into the AOL product or service in question).
22. To the extent that Netcentives is permitted to
communicate with any users of the AOL Network ("AOL Users")
under this Agreement and/or the Supplemental Agreements, in
any such communications to AOL Users (including, without
limitation, e-mail solicitations), Netcentives will not
encourage AOL Users to take any action inconsistent with the
scope and purpose of this Agreement and the Supplemental
Agreements, including without limitation, the following
actions: (i) using an Interactive Site (as defined in
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the Supplemental Agreements) or Qualified Interactive Service
other than the AOL Properties for the redemption or earning
of rewards currency, (ii) using a rewards program other than
the AOL Rewards Program or the ICQ ClickRewards program;
(iii) bookmarking of Interactive Sites; or (iv) changing the
default home page on the AOL browser. Additionally, with
respect to such AOL User communications, in the event that
Netcentives encourages an AOL User to purchase products or
redeem rewards points through such communications,
Netcentives shall ensure that the AOL Properties are promoted
as the primary means through which the AOL User can do so.
Any communications permitted hereunder shall not be used by
Netcentives as a platform to sell, market, advertise or
promote any products or services other than those related to
the ICQ Click Rewards Program or (if applicable) any
Customized Click Rewards Program unless otherwise agreed upon
by AOL (such agreement not to be unreasonably withheld).
Notwithstanding the provisions of Sections 21 and 22 herein,
to the extent that an AOL User is also a member of another
Rewards Program owned or controlled by Netcentives or any
Netcentives affiliate, Netcentives shall be permitted to
communicate with such user via such other program in a manner
consistent with the privacy policy of such program; provided,
however, that in connection with any such communications,
Netcentives shall not target users of any AOL Property or the
AOL Network on behalf of or in relation to any other
Interactive Service.
23. Netcentives shall ensure that its collection, use and
disclosure of information obtained from AOL Users under this
Agreement or any Supplemental Agreement ("AOL User
Information") complies with (i) all applicable laws and
regulations, (ii) AOL's standard privacy policies (available
on the AOL Service at the keyword term "Privacy") and (iii)
ICQ's standard privacy policy, available at www.icq.com.
Netcentives will not disclose AOL User Information collected
hereunder to any third party in a manner that identifies AOL
Users as end users of an AOL product or service (or
identifies AOL User habits, traffic patterns, etc., either
individually or as a group) or use AOL User Information
collected under this Agreement or any Supplemental Agreement
to market another Interactive Service.
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24. Netcentives shall create a specific customized area or
web site to be promoted and distributed by ICQ through which
Netcentives can market and complete transactions regarding
the ICQ Click Rewards Program (the "Affiliated Program
Site"). The Affiliated Program Site will contain only content
that is directly related to the ICQ Click Rewards Program,
and will not contain any products, services, programming or
other content of any Qualified Interactive Service (or any
Rewards Program thereof). The Affiliated Program Site will
incorporate an ICQ "look and feel" and ICQ-specific
functionality as mutually agreed upon in the Supplemental
Agreements. Netcentives will not promote, sell, offer or
otherwise distribute on the Affiliated Program Site any
products or services through auctions or clubs without the
prior written consent of AOL. Netcentives will review,
delete, edit, create, update and otherwise manage all content
available on or through the Affiliated Program Site (the
"Content Management Obligation") at its sole cost and expense
(provided, however, that AOL shall pay Netcentives for any
optional content management services requested by AOL (i.e.,
services beyond the services to be provided by Netcentives in
connection with the Content Management Obligation) as set
forth in the consulting agreement to be entered by the
Parties as part of the Supplemental Agreements), and in
accordance with the terms of the Supplemental Agreements.
Netcentives will ensure that the Affiliated Program Site does
not in any respect promote, advertise, market or distribute
the products, services or content of any Qualified
Interactive Service. Any AOL Property that AOL elects to opt
into any Customized ClickRewards Program shall be subject to
the same restrictions.
25. All sales of advertising inventory on Affiliated Program
Site will be subject to AOL's then-applicable advertising
policies (as disclosed by AOL to Netcentives or as otherwise
available online) and no sales of such advertising inventory
shall be made to any Qualified Interactive Service. In the
event that ICQ or AOL objects to the placement or nature of
any such advertisement, Netcentives shall promptly remove
such advertisement from the Affiliated Program Site. Any AOL
Property that AOL elects to opt into any Customized
ClickRewards Program shall be subject to the same
restrictions.
26. Netcentives will take commercially reasonable efforts to
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ensure that AOL traffic is either kept within the Affiliated
Program Site or channeled back into the AOL Network (e.g.,
through prominent availability of a "back" button, etc.), as
further set forth in the Supplemental Agreements. Any AOL
Property that AOL elects to any Customized ClickRewards
Program shall be subject to the same restrictions.
27. (a) AOL-Owned Data. During the Term and thereafter, AOL
shall own the e-mail address of any such ICQ Click Rewards
User (the "E-Mail Data"), [ *** ].
(b) ICQ Click Rewards User Profile Data. AOL shall own the
ICQ Click Rewards User profile data (e.g., demographic
information, behavioral information, etc.) collected on or
through the Affiliated Program Site (and/or any other
Affiliated Program Site that may be created by either of the
Parties from time to time in connection with this Agreement)
(collectively, the "User Profile Data"), [ *** ].
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(c) Jointly-Owned Data. During the Term and thereafter, the
Parties shall jointly own (i) the ICQ Click Rewards User
account balance data (and, if applicable, any Customized
Click Rewards Program user data) and (ii) any [ *** ] (the
"Mined Data," and together with the account balance data,
collectively referred to herein as the "Jointly-Owned Data");
provided, however, that each Party shall only use such
Jointly-Owned Data for its own internal business purposes and
shall not disclose any of such information (whether
individually or in the aggregate) to any third party;
provided, further, that Netcentives shall use such data in
accordance with the terms of Sections 21, 22 and 23 hereof.
AOL shall have the right to receive reports containing any
such Mined Data (or any portion thereof), so long as AOL pays
an amount to be agreed upon by the Parties for such Mined
Data. Any other rights of the Parties with respect to ICQ
Click Rewards User information following termination or
expiration of the Term shall be set forth in the Supplemental
Agreements.
(d) Mutual Non-Targeting Obligation. During the Term of this
Agreement and for a period of *** thereafter, Netcentives
shall not target AOL Users or ICQ Users on behalf of or in
relation to any Interactive Service or Rewards Program.
During the Term of this Agreement and for a period of ***
thereafter, AOL shall not target Click Rewards Program
members on behalf of or in relation to any Rewards Program
other than any Click Rewards Network Rewards Program.
28. Additional terms and conditions regarding the operation,
maintenance and distribution of the Affiliated Program Site
shall be set forth in the Supplemental Agreements.
29. In the event that following the Effective Date, either
Party effectuates a material change in its accounting
procedures (not required pursuant to any change in GAAP
occurring after the Effective Date) that adversely affects
the revenues to be received by the other Party under this
Agreement or any Supplemental Agreements, the Parties will
work together in good faith to make the adversely affected
Party whole, and if the Parties cannot agree to the method by
which (or the amount to which) the adversely affected party
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shall be made whole, such dispute shall be submitted to the
dispute resolution procedures of this Agreement.
30. Following the Effective Date, the Parties shall issue a
joint press release, with terms to be mutually agreed by the
Parties, regarding this Agreement and the relationship
between the Parties established hereby. The Parties will
mutually agree on the appropriate timing of each such release
and other public announcements of the relationship during the
Term. Each Party agrees that it shall not issue any other
press release or make any public announcement regarding this
Agreement, except with the prior written consent of the other
Party or as required by law; provided, however, that each
Party shall be permitted, without the other Party's prior
consent, merely to list the other Party as one of its
industry partners and to repeat factual information or
statements contained in any mutually agreed-upon press
release. Also, Netcentives will be able to make any
announcements related to the Supplemental Agreement necessary
to meet all legal and regulatory disclosure requirements.
31. Neither Party shall make, publish, or otherwise
communicate, or cause to be made, published, or otherwise
communicated, any deleterious remarks whatsoever to any third
parties concerning the other Party or its affiliates,
directors, officers, employees or agents, including without
limitation, the other Party's products, services, business
projects, business capabilities, performance of duties and
services or financial position.
32. Netcentives will maintain complete, clear and accurate
records of all expenses, revenues and fees in connection with
the performance of the Supplemental Agreements. As long as
the Service Revenue sharing arrangement pursuant to Section 3
hereof is effective, Netcentives will provide AOL with
standard reports regarding the ICQ ClickRewards Program and
any Customized ClickRewards Program. *** For the sole purpose
of ensuring compliance with AOL's obligations under this
Agreement, Netcentives shall have the right to receive from
AOL reports regarding AOL's performance under the
Supplemental Agreements, which reports shall be substantially
similar to those provided to similarly situated partners.
33. AOL cannot acquire additional shares of Netcentives stock
on the open market without prior approval from Netcentives.
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34. As further clarified in the Supplemental Agreements, each
Party will collect and pay and indemnify and hold the other
Party harmless from, any sales, use, excise, import or export
value added or similar tax or duty payable by such Party, as
well as any costs associated with the collection or
withholding thereof, including attorneys' fees.
35. The Parties hereby agree to negotiate in good faith
modifications to this Agreement (as part of the Supplemental
Agreements) to further limit the instances in which AOL shall
have the right to terminate this Agreement upon a Change of
Control of Netcentives by an Interactive Service, provided,
however, that the Parties also hereby agree to negotiate in
good faith additional protections to be provided by
Netcentives to AOL in the Supplemental Agreements to ensure
that any such Change of Control of Netcentives will not
negatively impact AOL (e.g., in terms of service levels,
leverage, etc.).
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Part 10 36. Management Committee. The Parties will act in good faith
Dispute and use commercially reasonable efforts to promptly resolve
Resolution any claim, dispute, claim, controversy or disagreement (each
a "Dispute") between the Parties or any of their respective
subsidiaries, affiliates, successors and assigns under or
related to this Agreement or any document executed pursuant
to this Agreement or any of the transactions contemplated
hereby. If the Parties cannot resolve the Dispute within such
time frame, the Dispute will be submitted to the Management
Committee for resolution. For ten (10) days following
submission of the Dispute to the Management Committee, the
Management Committee will have the exclusive right to resolve
such Dispute; provided further that the Management Committee
will have the final and exclusive right to resolve Disputes
arising from any provision of the Agreement which expressly
or implicitly provides for the Parties to reach mutual
agreement as to certain terms. If the Management Committee is
unable to amicably resolve the Dispute during the ten-day
period, then the Management Committee will consider in good
faith the possibility of retaining a third party mediator to
facilitate resolution of the Dispute. In the event the
Management Committee elects not to retain a mediator, the
dispute will be subject to the resolution mechanisms
described below. "Management Committee" will mean a committee
made up of a senior executive from each of the Parties for
the purpose of resolving Disputes under this Section 36 and
generally overseeing the relationship between the Parties
contemplated by this Agreement. Neither Party will seek, nor
will be entitled to seek, binding outside resolution of the
Dispute unless and until the Parties have been unable
amicably to resolve the Dispute as set forth in this Section
36 and then, only in compliance with the procedures set forth
in this Section 36.
37. Arbitration. Except for Disputes relating to issues of
(i) (A) proprietary rights, including but not limited to
intellectual property and confidentiality and (B) any
non-compliance with the terms and conditions of Section 27 of
this Exhibit (or any part thereof), with respect to which the
Parties shall have the right to seek injunctive relief in a
court of competent jurisdiction, to resolve such issues
through amicable resolution as set forth in Part 10 of this
Exhibit A, or to seek any other remedies under this Agreement
or applicable law) and (ii) any provision of the Agreement
which expressly or implicitly provides for the Parties to
reach mutual agreement as to certain
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terms (which will be resolved by the Parties solely and
exclusively through amicable resolution as set forth in Part
10 of this Exhibit A), any Dispute not resolved by any of the
foregoing dispute resolution mechanisms (as applicable) will
be governed exclusively and finally by arbitration. Such
arbitration will be conducted by the American Arbitration
Association ("AAA") in New York City, New York and will be
initiated and conducted in accordance with the Commercial
Arbitration Rules ("Commercial Rules") of the AAA, including
the AAA Supplementary Procedures for Large Complex Commercial
Disputes ("Complex Procedures"), as such rules will be in
effect on the date of delivery of a demand for arbitration
("Demand"), except to the extent that such rules are
inconsistent with the provisions set forth herein.
Notwithstanding the foregoing, the Parties may agree in good
faith that the Complex Procedures will not apply in order to
promote the efficient arbitration of Disputes where the
nature of the Dispute, including without limitation the
amount in controversy, does not justify the application of
such procedures.
38. Selection of Arbitrators. The arbitration panel will
consist of three arbitrators. Each Party will name an
arbitrator within ten (10) days after the delivery of the
Demand. The two arbitrators named by the Parties may have
prior relationships with the naming Party, which in a
judicial setting would be considered a conflict of interest.
The third arbitrator, selected by the first two, should be a
neutral participant, with no prior working relationship with
either Party. If the two arbitrators are unable to select a
third arbitrator within ten (10) days, a third neutral
arbitrator will be appointed by the AAA from the panel of
commercial arbitrators of any of the AAA Large and Complex
Resolution Programs. If a vacancy in the arbitration panel
occurs after the hearings have commenced, the remaining
arbitrator or arbitrators may not continue with the hearing
and determination of the controversy, unless the Parties
agree otherwise.
39. Governing Law. The Federal Arbitration Act, 9 U.S.C.
Secs. 1-16, and not state law, will govern the arbitrability
of all Disputes. The arbitrators will allow such discovery as
is appropriate to the purposes of arbitration in
accomplishing a fair, speedy and cost-effective resolution of
the Disputes. The arbitrators will reference the Federal
Rules of Civil Procedure then in effect in setting the scope
and timing of discovery. The Federal Rules of Evidence will
apply in total. The arbitrators
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may enter a default decision against any Party who fails to
participate in the arbitration proceedings.
40. Arbitration Awards. The arbitrators will have the
authority to award compensatory damages only. Any award by
the arbitrators will be accompanied by a written opinion
setting forth the findings of fact and conclusions of law
relied upon in reaching the decision. The award rendered by
the arbitrators will be final, binding and non-appealable,
and judgment upon such award may be entered by any court of
competent jurisdiction. The Parties agree that the existence,
conduct and content of any arbitration will be kept
confidential and no Party will disclose to any person any
information about such arbitration, except as may be required
by law or by any governmental authority or for financial
reporting purposes in each Party's financial statements.
41. Fees. Each Party will pay the fees of its own attorneys,
expenses of witnesses and all other expenses and costs in
connection with the presentation of such Party's case
(collectively, "Attorneys' Fees"). The remaining costs of the
arbitration, including without limitation, fees of the
arbitrators, costs of records or transcripts and
administrative fees (collectively, "Arbitration Costs") will
be borneequally by the Parties. Notwithstanding the
foregoing, the arbitrators may modify the allocation of
Arbitration Costs and award Attorneys' Fees in those cases
where fairness dictates a different allocation of Arbitration
Costs between the Parties and an award of Attorneys' Fees to
the prevailing Party as determined by the arbitrators.
42. Non Arbitratable Disputes. Any Dispute that is not
subject to final resolution by the Management Committee or to
arbitration under this Part 10 or by law (collectively,
"Non-Arbitration Claims") will be brought in a court of
competent jurisdiction in the State of New York. Each Party
irrevocably consents to the exclusive jurisdiction of the
state courts of New York and the federal courts situated in
the State of New York, City of New York over any and all
Non-Arbitration Claims and any and all actions to enforce
such claims or to recover damages or other relief in
connection with such claims.
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Part 11 43. Strategic Partnership Agreement to be entered into by AOL
Supplemental and Netcentives, reflecting, inter alia, the terms of the
Agreements strategic relationship described above. The parties may elect
to proceed with several shorter agreements (e.g., CLN
agreement, consulting agreement, etc.) that in the aggregate
reflect the entire strategic partnership, rather than one
long agreement as contemplated in the previous sentence.
44. Restricted Stock Purchase Agreement to be entered into by
AOL and Netcentives, reflecting, inter alia, the issuance of
the Common Stock to AOL and the granting to AOL each of the
rights set forth in Section 1 of this Exhibit A (including,
without limitation, ***
45. The Marketing Consulting Agreement to be entered into by
the Parties pursuant to Section 6 of this Exhibit A.
***CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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EXHIBIT B
Standard Online Commerce Terms
1. AOL Network Distribution. Any promotions or advertisements purchased from
or provided by AOL or ICQ will be used by Netcentives solely for its own
benefit and will not be resold, traded, exchanged, bartered, brokered or
otherwise offered to any third party.
2. Provision of Other Content. In the event that AOL or any AOL affiliate
notifies Netcentives that (i) as reasonably determined by AOL or such
affiliate, any Content within the Affiliated Program Site violates AOL's
then-standard Terms of Service (as set forth on the America Online(R)brand
service at Keyword term "TOS"), for the AOL Service or any other AOL
property through which the Affiliated Program Site is promoted, the terms
of this Agreement or any other standard, written AOL policy or (ii) AOL
reasonably objects to the inclusion of any Content within the Affiliated
Program Site (other than any specific items of Content which may be
expressly identified in this Agreement), then Netcentives will take
commercially reasonable steps to block access by AOL Users to such Content
using Netcentives' then-available technology. In the event that Netcentives
cannot, through its commercially reasonable efforts, block access by AOL
Users or ICQ Users to the Content in question, then Netcentives will
provide AOL prompt written notice of such fact. AOL may then, at its
option, restrict access from the AOL Network to the Content in question
using technology available to AOL. Netcentives will cooperate with AOL's
reasonable requests to the extent AOL elects to implement any such access
restrictions.
3. Contests. Netcentives will take all steps necessary to ensure that any
contest, sweepstakes or similar promotion conducted or promoted by
Netcentives (on its own or in conjunction with any third party) through the
Affiliated Program Site (a "Contest") complies with all applicable federal,
state and local laws and regulations.
4. Navigation. Subject to the prior consent of Netcentives, which consent will
not be unreasonably withheld, AOL will be entitled to establish
navigational icons, links and pointers connecting the Affiliated Program
Site (or portions thereof) with other content areas on or outside of the
AOL Network. Additionally, in cases where an AOL User or ICQ User performs
a search for ClickRewards through any search or navigational tool or
mechanism that is accessible or available through the AOL Network (e.g.,
Promotions, Keyword Search Terms, or any other promotions or navigational
tools), AOL or ICQ (as the case may be) shall have the right to direct such
AOL User to the Affiliated Program Site, or any other ClickRewards Network
Interactive Site determined by AOL in its reasonable discretion.
5. Disclaimers. Upon AOL's request, Netcentives agrees to include within the
Affiliated Program Site a product disclaimer (the specific form and
substance to be mutually agreed upon by the Parties) indicating that
transactions are solely between the relevant merchant partner and AOL Users
or ICQ Users (as the case may be).
6. AOL Look and Feel. Netcentives acknowledges and agrees that AOL will own
all right, title and interest in and to the elements of graphics, design,
organization, presentation, layout, user interface, navigation and
stylistic convention (including the digital implementations thereof) which
are generally associated with online areas contained within the AOL
Network, subject to Netcentives' ownership rights in any Netcentives
trademarks or copyrighted material within the Affiliated Program Site.
7. Management of the Affiliated Program Site. Netcentives will ensure that the
Affiliated Program Site is current, accurate and well-organized at all
times. Netcentives warrants that any (i) ClickRewards- or
Netcentives-branded products and (ii) other Content provided by Netcentives
or its affiliates in connection with the Affiliated Program Site
(including, without limitation, any modifications, updates, enhancements or
upgrades thereto) (collectively, "Licensed Content") : (i) will not
infringe on or violate any copyright, trademark, patent or any other third
party right, including without limitation, any music performance or other
music-related rights; (ii) will not violate AOL's then-applicable Terms of
Service for the AOL Service and any other AOL Property through which the
Affiliated Program Site will be promoted or any other standard, written AOL
policy; and (iii) will not violate any applicable law or regulation,
including those relating to contests, sweepstakes or similar promotions.
Netcentives shall not in any manner, including, without limitation in any
Promotion, the Licensed Content or any promotional materials state or imply
that AOL or any AOL affiliate
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recommends or endorses Netcentives or Netcentives' Products (e.g., no
statements that Netcentives is an "official" or "preferred" provider of
products or services for AOL or its affiliates). AOL will have no
obligations with respect to the products available on or through the
Affiliated Program Site (other than AOL's or any AOL affiliate's own
proprietary products and services offered by AOL or any of AOL's affiliates
on the Affiliated Program Site), including, but not limited to, any duty to
review or monitor any such products. AOL warrants that any Content provided
by AOL or its affiliates on the AOL Rewards Program and/or any Customized
AOL Rewards Program (including, without limitation, any modifications,
updates, enhancements or upgrades thereto: (i) will not infringe on or
violate any copyright, trademark, patent or any other third party right,
including without limitation, any music performance or other music-related
rights; (ii) will not violate AOL's then-applicable Terms of Service for
the AOL Service and any other AOL Property through which the Affiliated
Program Site will be promoted or any other standard, written AOL policy;
and (iii) will not violate any applicable law or regulation, including
those relating to contests, sweepstakes or similar promotions.
8. Duty to Inform. Netcentives will promptly inform AOL of any information
related to the Affiliated Program Site which could reasonably lead to a
claim, demand, or liability of or against AOL and/or its affiliates by any
third party.
9. Customer Service. As between the Parties, it is the sole responsibility of
Netcentives to provide customer service to persons or entities purchasing
Products through the Affiliated Program Site ("Customers"). As between the
Parties, Netcentives will bear full responsibility for all customer
service, including without limitation, order processing, billing,
fulfillment, shipment, collection and other customer service associated
with any Products offered, sold or licensed through the Affiliated Program
Site, and AOL will have no obligations whatsoever with respect thereto.
Netcentives will generally respond to emails received from Customers , will
handle all currency awards and redemption electronically and will generally
process all such awards or redemption in accordance with the terms of the
Supplemental Agreements. Netcentives will work with its merchant partners
to ensure that all orders of Products are received, processed, fulfilled
and delivered on a timely and professional basis. As between the Parties,
Netcentives will bear all responsibility for compliance with federal, state
and local laws in the event that products are out of stock or are no longer
available at the time an order is received. Netcentives will also comply
with the requirements of any federal, state or local consumer protection or
disclosure law.
10. Production Work. In the event that Netcentives requests AOL's production
assistance in connection with (i) ongoing programming and maintenance
related to the Affiliated Program Site, (ii) a redesign of or addition to
the Affiliated Program Site (e.g., a change to an existing screen format or
construction of a new custom form), (iii) production to modify work
performed by a third party provider or (iv) any other type of production
work, Netcentives will work with AOL to develop a detailed production plan
for the requested production assistance (the "Production Plan"). Following
receipt of the final Production Plan, AOL will notify of (i) AOL's
availability to perform the requested production work, (ii) the proposed
fee or fee structure for the requested production and maintenance work and
(iii) the estimated development schedule for such work. To the extent the
Parties reach agreement regarding implementation of the agreed-upon
Production Plan, such agreement will be reflected in a separate work order
signed by the Parties. To the extent Netcentives elects to retain a third
party provider to perform any such production work, work produced by such
third party provider must generally conform to AOL's standards & practices
(as provided on the America Online brand service at Keyword term
"styleguide"). The specific production resources which AOL allocates to any
production work to be performed on behalf of Netcentives will be as
determined by AOL in its sole discretion. With respect to any routine
production, maintenance or related services which AOL reasonably determines
are necessary (upon consultation with Netcentives) for AOL to perform in
order to support the proper functioning and integration of the Affiliated
Program Site ("Routine Services"), Netcentives will pay the then-standard
fees charged by AOL for such Routine Services.
11. Overhead Accounts. To the extent AOL has granted Netcentives any overhead
accounts on the AOL Service, Netcentives will be responsible for the
actions taken under or through its overhead accounts, which actions are
subject to AOL's applicable Terms of Service and for any surcharges,
including, without limitation, all premium charges, transaction charges,
and any applicable communication surcharges incurred by any overhead
Account issued to Netcentives, but Netcentives will not be liable for
charges incurred by any overhead account relating to AOL's standard monthly
usage fees and standard hourly charges, which charges AOL will bear. Upon
the termination of this Agreement, all overhead accounts, related screen
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names and any associated usage credits or similar rights, will
automatically terminate. AOL will have no liability for loss of any data or
content related to the proper termination of any overhead account.
12. Merchant Certification Program. Netcentives will use commercially
reasonable efforts to encourage its merchant partners to participate in any
generally applicable "Certified Merchant" program operated by AOL or its
authorized agents or contractors. Such program may require merchant
participants on an ongoing basis to meet certain reasonable, generally
applicable standards relating to provision of electronic commerce through
the AOL Network (including, as a minimum, use of 40-bit SSL encryption and
if requested by AOL, 128-bit encryption) and may also require the payment
of certain reasonable certification fees to the applicable entity operating
the program. Each Certified Merchant in good standing will be entitled to
place on its affiliated Interactive Site an AOL designed and approved
button promoting the merchant's status as an AOL Certified Merchant.
13. Search Terms. To the extent this Agreement sets forth any mechanism by
which the Affiliated Program Site will be promoted in connection with
specified search terms requested by Netcentives to be used within any AOL
product or service, Netcentives hereby represents and warrants that
Netcentives has all consents, authorizations, approvals, licenses, permits
or other rights necessary for Netcentives to use such specified search
terms. Notwithstanding the foregoing, AOL shall have the right to suspend
the use of any search term if AOL has reason to believe continued use may
subject AOL to liability or other adverse consequences.
14. Content. For purposes of this Exhibit B and this Agreement, "Content" shall
mean text, images, video, audio (including, without limitation, music used
in synchronism or timed relation with visual displays) and other data,
products, advertisements, promotions, URLs, links, pointers and software,
including any modifications, upgrades, updates, enhancements and related
documentation.
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EXHIBIT C
Other Standard Legal Terms and Conditions
1. Promotional Materials/Press Releases. Each Party will submit to the
other Party, for its prior written approval, which will not be
unreasonably withheld or delayed, any marketing, advertising, or other
promotional materials, excluding Press Releases, related to the
Affiliated Program Site and/or referencing the other Party and/or its
trade names, trademarks, and service marks (the "Promotional
Materials"); provided, however, that either Party's use of screen
shots of the Affiliated Program Site for promotional purposes shall be
subject to the mutual agreement of the Parties; and provided, further,
however, that, following the initial public announcement of the
business relationship between the Parties in accordance with the
approval and other requirements contained herein, either Party's
subsequent factual reference to the existence of a business
relationship between the Parties in Promotional Materials, will not
require the approval of the other Party. Each Party will solicit and
reasonably consider the views of the other Party in designing and
implementing such Promotional Materials. Once approved, the
Promotional Materials may be used by a Party and its affiliates for
the purpose of promoting the Affiliated Program Site and the content
contained therein and reused for such purpose until such approval is
withdrawn with reasonable prior notice. In the event such approval is
withdrawn, existing inventories of Promotional Materials may be
depleted.
2. License. Netcentives hereby grants AOL a non-exclusive worldwide
license to (a) market, distribute and promote the Click Rewards
currency and (b) to market, license, distribute, reproduce, display,
perform, transmit and promote any other Licensed Content, as defined
in Exhibit B through such areas or features of the AOL Network as AOL
deems appropriate. Netcentives acknowledges and agrees that the
foregoing license permits AOL to distribute portions of the Licensed
Content in synchronism or timed relation with visual displays prepared
by Netcentives or AOL (e.g., as part of an AOL "slideshow"). In
addition, AOL Users will have the right to access and use the
Affiliated Program Site.
3. Trademark License. In designing and implementing any promotional
materials and subject to the other provisions contained herein,
Netcentives will be entitled to use the following trade names,
trademarks, and service marks of AOL: the "America Online(R)" brand
service, "AOL(TM)" service/software and AOL's triangle logo; and
"ICQ(TM)", and AOL and its affiliates will be entitled to use the
trade names, trademarks, and service marks of Netcentives for which
Netcentives holds all rights necessary for use in connection with this
Agreement (collectively, together with the AOL marks listed above, the
"Marks"); provided that each Party: (i) does not create a unitary
composite mark involving a Mark of the other Party without the prior
written approval of such other Party; and (ii) displays symbols and
notices clearly and sufficiently indicating the trademark status and
ownership of the other Party's Marks in accordance with applicable
trademark law and practice.
4. Ownership of Trademarks. Each Party acknowledges the ownership right
of the other Party in the Marks of the other Party and agrees that all
use of the other Party's Marks will inure to the benefit, and be on
behalf, of the other Party. Each Party acknowledges that its
utilization of the other Party's Marks will not create in it, nor will
it represent it has, any right, title, or interest in or to such Marks
other than the licenses expressly granted herein. Each Party agrees
not to do anything contesting or impairing the trademark rights of the
other Party.
5. Quality Standards. Each Party agrees that the nature and quality of
its products and services supplied in connection with the other
Party's Marks will conform to quality standards set by the other
Party. Each Party agrees to supply the other Party, upon request, with
a reasonable number of samples of any Materials publicly disseminated
by such Party which utilize the other Party's Marks. Each Party will
comply with all applicable laws, regulations, and customs and obtain
any required government approvals pertaining to use of the other
Party's marks.
6. Infringement Proceedings. Each Party agrees to promptly notify the
other Party of any unauthorized use of the other Party's Marks of
which it has actual knowledge. Each Party will have the sole right and
discretion to bring proceedings alleging infringement of its Marks or
unfair competition related thereto; provided, however, that each Party
agrees to provide the other Party with its reasonable cooperation and
assistance with respect to any such infringement proceedings.
7. Additional Restrictions Regarding Confidential Information. Each Party
acknowledges that Confidential Information may be disclosed to the
other Party during the course of this Agreement. Each Party agrees
that it will take reasonable steps, at least substantially equivalent
to the steps it takes to protect its own proprietary information,
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during the term of this Agreement, and for a period of two years
following expiration or termination of this Agreement, to prevent the
duplication or disclosure of Confidential Information of the other Party,
other than by or to its employees or agents who must have access to such
Confidential Information to perform such Party's obligations hereunder,
who will each agree to comply with this section. Notwithstanding the
foregoing, either Party may issue a press release or other disclosure
containing Confidential Information without the consent of the other
Party, to the extent such disclosure is required by law, rule, regulation
or government or court order. In such event, the disclosing Party will
provide at least five (5) business days prior written notice of such
proposed disclosure to the other Party. Further, in the event such
disclosure is required of either Party under the laws, rules or
regulations of the Securities and Exchange Commission or any other
applicable governing body, such Party will (i) redact mutually agreed-
upon portions of this Agreement to the fullest extent permitted under
applicable laws, rules and regulations and (ii) submit a request to such
governing body that such portions and other provisions of this Agreement
receive confidential treatment under the laws, rules and regulations of
the Securities and Exchange Commission or otherwise be held in the
strictest confidence to the fullest extent permitted under the laws,
rules or regulations of any other applicable governing body.
8. Limitation of Liability; Disclaimer; Indemnification.
8.1 Liability. UNDER NO CIRCUMSTANCES WILL EITHER PARTY BE LIABLE TO THE
OTHER PARTY FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR
EXEMPLARY DAMAGES (EVEN IF THAT PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES), ARISING FROM BREACH OF THE AGREEMENT,
THE SALE OF PRODUCTS AND SERVICES (INCLUDING, BUT NOT LIMITED TO, THE
MARKETING CONSULTING SERVICES), THE LOYALTY NETWORK INFRASTRUCTURE,
THE USE OR INABILITY TO USE THE AOL NETWORK, THE AOL SERVICE, AOL.COM
OR THE AFFILIATED PROGRAM SITE, THE ICQ CLICKREWARDS PROGRAM, ANY
CUSTOMIZED CLICK REWARDS PROGRAM, ANY CUSTOMIZED AOL REWARDS PROGRAM,
THE AOL REWARDS PROGRAM,OR ARISING FROM ANY OTHER PROVISION OF THIS
AGREEMENT, SUCH AS, BUT NOT LIMITED TO, LOSS OF REVENUE OR ANTICIPATED
PROFITS OR LOST BUSINESS (COLLECTIVELY, "DISCLAIMED DAMAGES");
PROVIDED THAT EACH PARTY WILL REMAIN LIABLE TO THE OTHER PARTY TO THE
EXTENT ANY DISCLAIMED DAMAGES ARE CLAIMED BY A THIRD PARTY AND ARE
SUBJECT TO INDEMNIFICATION PURSUANT TO SECTION 8.3. EXCEPT AS PROVIDED
IN SECTION 8.3, (I) LIABILITY ARISING UNDER THIS AGREEMENT WILL BE
LIMITED TO DIRECT, OBJECTIVELY MEASURABLE DAMAGES, AND (II) THE
MAXIMUM LIABILITY OF ONE PARTY TO THE OTHER PARTY FOR ANY CLAIMS
ARISING IN CONNECTION WITH THIS AGREEMENT WILL NOT EXCEED *** (EXCEPT
WITH RESPECT TO THE NON-DELIVERY OF THE COMMON STOCK AND/OR THE
FAILURE TO SIGN THE STOCK PURCHASE AGREEMENT, IN WHICH CASE ANY
LIABILITY IN CONNECTION WITH ANY SUCH FAILURE SHALL BE LIMITED TO THE
FAIR MARKET VALUE OF THE COMMON STOCK TO BE DELIVERED TO AOL BY
NETCENTIVES HEREUNDER); PROVIDED THAT EACH PARTY WILL REMAIN LIABLE
FOR THE AGGREGATE AMOUNT OF ANY PAYMENT OBLIGATIONS OWED TO THE OTHER
PARTY PURSUANT TO THE AGREEMENT.
8.2 No Additional Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, NEITHER PARTY MAKES ANY, AND EACH PARTY HEREBY SPECIFICALLY
DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED,
REGARDING THE AOL NETWORK, THE AOL SERVICE, AOL.COM, THE ICQ
CLICKREWARDS PROGRAM, ANY CUSTOMIZED CLICK REWARDS PROGRAM, ANY
CUSTOMIZED AOL REWARDS PROGRAM, THE AOL REWARDS PROGRAM, THE SALE OF
PRODUCTS AND SERVICES (INCLUDING, WITHOUT LIMITATION, THE MARKETING
CONSULTING SERVICES), THE LOYALTY NETWORK INFRASTRUCTURE, OR ANY
AFFILIATED PROGRAM SITE, INCLUDING ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND IMPLIED
WARRANTIES ARISING FROM COURSE OF DEALING OR COURSE OF PERFORMANCE.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, AOL SPECIFICALLY
DISCLAIMS ANY WARRANTY REGARDING THE PROFITABILITY OF THE AFFILIATED
PROGRAM SITE.
8.3 Indemnity. Either Party will defend, indemnify, save and hold harmless
the other Party and the officers, directors, agents, affiliates,
distributors, franchisees and employees of the other Party from any
and all third party claims, demands, liabilities, costs or expenses,
including reasonable attorneys' fees ("Liabilities"), resulting from
the indemnifying Party's material breach of any duty, representation,
or warranty of this Agreement.
8.4 Claims. If a Party entitled to indemnification hereunder (the
"Indemnified Party") becomes aware of any
[***]= CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
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matter it believes is indemnifiable hereunder involving any
claim, action, suit, investigation, arbitration or other proceeding
against the Indemnified Party by any third party (each an "Action"),
the Indemnified Party will give the other Party (the "Indemnifying
Party") prompt written notice of such Action. Such notice will (i)
provide the basis on which indemnification is being asserted and (ii)
be accompanied by copies of all relevant pleadings, demands, and other
papers related to the Action and in the possession of the Indemnified
Party. The Indemnifying Party will have a period of ten (10) days
after delivery of such notice to respond. If the Indemnifying Party
elects to defend the Action or does not respond within the requisite
ten (10) day period, the Indemnifying Party will be obligated to
defend the Action, at its own expense, and by counsel reasonably
satisfactory to the Indemnified Party. The Indemnified Party will
cooperate, at the expense of the Indemnifying Party, with the
Indemnifying Party and its counsel in the defense and the Indemnified
Party will have the right to participate fully, at its own expense, in
the defense of such Action. If the Indemnifying Party responds within
the required ten (10) day period and elects not to defend such Action,
the Indemnified Party will be free, without prejudice to any of the
Indemnified Party's rights hereunder, to compromise or defend (and
control the defense of) such Action. In such case, the Indemnifying
Party will cooperate, at its own expense, with the Indemnified Party
and its counsel in the defense against such Action and the
Indemnifying Party will have the right to participate fully, at its
own expense, in the defense of such Action. Any compromise or
settlement of an Action will require the prior written consent of both
Parties hereunder, such consent not to be unreasonably withheld or
delayed.
9. Acknowledgment. AOL and Netcentives each acknowledges that the provisions
of this Agreement were negotiated to reflect an informed, voluntary
allocation between them of all risks (both known and unknown) associated
with the transactions contemplated hereunder. The limitations and
disclaimers related to warranties and liability contained in this Agreement
are intended to limit the circumstances and extent of liability. The
provisions of this Section 9 will be enforceable independent of and
severable from any other enforceable or unenforceable provision of this
Agreement.
10. Excuse. Neither Party will be liable for, or be considered in breach of or
default under this Agreement on account of, any delay or failure to perform
as required by this Agreement as a result of any causes or conditions which
are beyond such Party's reasonable control and which such Party is unable
to overcome by the exercise of reasonable diligence.
11. Independent Contractors. The Parties to this Agreement are independent
contractors. Neither Party is an agent, representative or employee of the
other Party. Neither Party will have any right, power or authority to enter
into any agreement for or on behalf of, or incur any obligation or
liability of, or to otherwise bind, the other Party. This Agreement will
not be interpreted or construed to create an association, agency, joint
venture or partnership between the Parties or to impose any liability
attributable to such a relationship upon either Party.
12. Notice. Any notice, approval, request, authorization, direction or other
communication under this Agreement will be given in writing and will be
deemed to have been delivered and given for all purposes (i) on the
delivery date if delivered by electronic mail on the AOL Network (to
screenname "[email protected]" in the case of AOL) or by confirmed
facsimile; (ii) on the delivery date if delivered personally to the Party
to whom the same is directed; (iii) one business day after deposit with a
commercial overnight carrier, with written verification of receipt; or (iv)
five business days after the mailing date, whether or not actually
received, if sent by U.S. mail, return receipt requested, postage and
charges prepaid, or any other means of rapid mail delivery for which a
receipt is available. In the case of AOL, such notice will be provided to
both the Senior Vice President for Business Affairs (fax no. 703-265-1206)
and the Deputy General Counsel (fax no. 703-265-1105), each at the address
of AOL set forth in the first paragraph of this Agreement. In the case of
Netcentives, such notice will be provided to the Executive Vice President,
Management and Development (fax no. 415-538-1889).
13. Return of Information. Upon the expiration or termination of this
Agreement, each Party will, upon the written request of the other Party,
return or destroy (at the option of the Party receiving the request) all
confidential information, documents, manuals and other materials specified
the other Party.
1. Amendment. No change, amendment or modification of any provision of this
Agreement will be valid unless set forth in a written instrument signed by
the Party subject to enforcement of such amendment, and in the case of AOL,
by an executive of at least the same standing to the executive who signed
the Agreement.
2. Further Assurances. Each Party will take such action (including, but not
limited to, the execution, acknowledgment and delivery of documents) as may
reasonably be requested by any other Party for the implementation or
continuing performance of this Agreement.
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3. 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, and any
such assignment made without such consent shall be void. Notwithstanding
the foregoing, no consent shall be required for an assignment of this
Agreement pursuant to a merger or sale of substantially all of the assets,
or sale of all of the outstanding stock of either Party. This Agreement
shall be binding upon and inure to the benefit of the Parties and their
respective successors and assigns.
4. Construction; Severability. In the event that any provision of this
Agreement conflicts with the law under which this Agreement is to be
construed or if any such provision is held invalid by a court with
jurisdiction over the Parties to this Agreement, (i) such provision will be
deemed to be restated to reflect as nearly as possible the original
intentions of the Parties in accordance with applicable law, and (ii) the
remaining terms, provisions, covenants and restrictions of this Agreement
will remain in full force and effect.
5. Remedies. Except where otherwise specified, the rights and remedies granted
to a Party under this Agreement are cumulative and in addition to, and not
in lieu of, any other rights or remedies which the Party may possess at law
or in equity; provided that, in connection with any dispute hereunder,
neither Party will be entitled to offset any amounts that it claims to be
due and payable from the other Party against amounts otherwise payable by
such Party to the other Party.
6. Export Controls. Both Parties will adhere to all applicable laws,
regulations and rules relating to the export of technical data and will not
export or re-export any technical data, any products received from the
other Party or the direct product of such technical data to any proscribed
country listed in such applicable laws, regulations and rules unless
properly authorized.
7. Headings. The captions and headings used in this Agreement are inserted for
convenience only and will not affect the meaning or interpretation of this
Agreement.
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EXHIBIT 99.1
Netcentives and America Online Announce Exclusive Rewards Program Infrastructure
Alliance
AOL AAdvantage, World's Largest Combined Online and Offline Consumer Rewards
Network, Powered By Netcentives and Operated by AOL's Digital Marketing
Services Division Netcentives and ICQ to Create "ICQ ClickRewards" Program for
the World's Largest Online Communications Community
America Online to Become Significant Shareholder in Netcentives
San Francisco, CA, and Dulles, VA, January 31, 2000 -- Netcentives Inc.
(Nasdaq: NCNT), a leading developer of e-marketing infrastructure software and
services, and America Online, Inc. (NYSE: AOL), the world's leading
interactive services company, today announced a multifaceted alliance under
which Netcentives rewards technology will become the exclusive support
infrastructure for AOL AAdvantage, the world's largest combined online and
offline consumer rewards network, enabling the network to more easily
accommodate increasing numbers of members and commerce partners. The companies
also announced that they will create "ICQ ClickRewards" -- a rewards program
for ICQ, the world's largest online communications community, and that America
Online, Inc. will become a significant shareholder of Netcentives.
Under the multi-year agreement, Netcentives will become the exclusive third-
party infrastructure software provider for AOL rewards programs, including AOL
AAdvantage, which is expected to launch across several America Online
interactive properties in Spring 2000. Powered by Netcentives patented
scalable technology solutions, AOL AAdvantage will be operated by a joint
management team from AOL's Digital Marketing Services (DMS) division and
American Airlines. AOL AAdvantage will bring together America Online's AOL
Rewards(SM) program and the American AAdvantage program, providing a host of
new benefits for current AOL members, AAdvantage members and new participants.
DMS is the pioneer of online incentive programs and has operated the AOL
Rewards Program on America Online since 1996.
By launching "ICQ ClickRewards," a customized co-branded rewards program with
ICQ ("I Seek You"), America Online's leading communications portal, the
companies will also foster Netcentives' global expansion. As the exclusive
rewards program for ICQ, ICQ ClickRewards will offer ICQ registrants worldwide
the ability to earn ClickMiles and redeem them for valuable brand-name
products from ClickRewards merchants such as barnesandnoble.com, CDNOW and
Fossil.
More than two-thirds of ICQ's 50 million registered users are based outside of
the United States, and ICQ ClickRewards will create the opportunity for
international members to earn and redeem ClickMiles, and will allow the
program's merchant partners to capitalize on the interactive medium's global
momentum. The ICQ ClickRewards program is expected to launch later this year.
Ted Leonsis, President of AOL Interactive Properties, said: "We are delighted
to team up with Netcentives and use their best-of-breed technology to scale
AOL AAdvantage quickly as new consumers and merchants sign up. Being powered
by Netcentives will enable us to create an easy way for consumers to earn
value though our program's network of merchants. And we are confident that ICQ
registrants will enjoy taking full advantage of the benefits of ClickRewards,
one of the leading online rewards programs. With critical support from
Netcentives, America Online once again is making the interactive experience
even more valuable for members and users of our Web-based brands."
West Shell, chairman and chief executive officer, Netcentives, said:
"Netcentives is very pleased to provide its industry-leading backbone for AOL
AAdvantage and join ICQ and America Online in creating the new ICQ
ClickRewards Program. We believe that our e-marketing infrastructure will
bring value to any individual or merchant who signs up with the new AOL
AAdvantage rewards program or ICQ ClickRewards, and that this agreement will
benefit our commerce partners by expanding our rewards network."
About America Online
Founded in 1985, America Online, Inc., based in Dulles, Virginia, is the
world's leader in interactive services, web brands, Internet technologies and
e-commerce services. America Online, Inc. operates: two worldwide Internet
services, America Online, with more than 20 million members, and CompuServe,
with more than 2.5 million members; several leading Internet brands including
ICQ, AOL Instant Messenger, Digital City Inc.; the Netscape Netcenter and
AOL.COM portals; Netscape Navigator and Communicator browsers; AOL MovieFone;
Spinner.com, and Nullsoft Winamp. Through its strategic alliance with Sun
Microsystems, the company develops and offers easy-to-deploy, end-to-end e-
commerce and enterprise solutions for companies operating in the Net Economy.
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About Netcentives Inc.
San Francisco-based Netcentives Inc. (Nasdaq: NCNT) is a leading developer of
e-marketing infrastructure software and services proven to drive e-commerce.
Netcentives customers include barnesandnoble.com, British Telecom, CDNOW,
Cisco Systems, Citicorp, Compaq, E*TRADE, FTD.COM, GO Network, KBkids.com,
LookSmart, Lycos, Novell and PlanetRx.com. Netcentives powers multiple
corporate and commerce loyalty networks, including the ClickRewards Shopping
Network, GO Awards and Lycos Rewards. ClickRewards -- the only loyalty network
to offer frequent flyer miles from 10 leading airlines -- now reaches millions
of Internet shoppers through its network of premier online merchants.
Netcentives has received numerous industry awards for its technology from such
organizations as ComputerWorld, InformationWeek, Upside, Technologic Partners
and Ziff Davis Labs.
This press release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995, regarding Netcentives
business strategy and future plans of operations. Forward-looking statements
involve known and unknown risks and uncertainties, both general and specific
to the matters discussed in this press release. These and other important
factors, including those mentioned in various Securities and Exchange
Commission filings made periodically by Netcentives, may cause Netcentives'
actual results and performance to differ materially from the future results
and performance expressed in or implied by such forward-looking statements.
The forward-looking statements contained in this press release speak only as
of the date hereof and Netcentives expressly disclaims any obligation to
provide public updates, revisions or amendments to any forward-looking
statements made herein to reflect changes in Netcentives' expectations or
future events.
(c)2000 Netcentives Inc. All rights reserved. Netcentives and ClickRewards are
trademarks of Netcentives Inc. Other product and company names herein may be
trademarks of their respective owners.
For More Information Contact:
Jeff Chang
Netcentives Inc.
415.836.7913
[email protected]
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Erica L. Scheidt
Netcentives Inc.
415.836.6564
[email protected]
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