CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. THE LOCATIONS OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH ASTERISKS.
EXHIBIT 10.37
Agency Name: Bronner Slosberg Humphrey Inc.
ADVERTISING/MARKETING PROMOTION AGENCY AGREEMENT
This sets forth the Agreement between the above-named advertising, marketing or promotion firm ("Agency") and American Express Travel Related Services Company, Inc. ("American Express") concerning the provision to American Express of advertising, marketing, promotion or similar services. This contract is effective as of October 1, 1997.
1. Services Provided to American Express. Agency shall provide to American
Express the services described in Exhibit 1 as attached. (In the event of any
conflict between any exhibit and this Agreement, the terms of this Agreement
shall control.) The Services shall be provided in a professional manner to
American Express' reasonable satisfaction.
2. Fees and Costs. (a) Fees - Agency shall be paid as set forth in Exhibit 2 as
attached. If any of the Services to be provided are covered by the ratecard
published by American Express, the fees to be paid will be as set forth on
such ratecard. Such fees are in lieu of any and all commissions except those
commission set forth in Exhibit 2, markups or other payments to Agency, other
than reimbursable expenses as provided herein.
(b) Third-Party Costs. American Express will reimburse Agency at Agency's
cost (without markup or commission) for reasonable expenditures paid to
third parties and incurred for necessary artwork, engraving,
electrotyping, typography, translations and all other materials involved
in the mechanical production of marketing material, advertising, radio
and television production and all their associated costs, talent, music,
photographs, testimonials and all other marketing and advertising
adjuncts, including expenditures in connection with acquiring
authorization for the use of the names or photographs of individuals.
Such costs shall be reimbursed only if American Express' approval was
obtained before such costs are incurred. Any of the third party services
specified in the this paragraph, which are covered by ratecards published
by American Express from time to time, shall be billed by Agency to
American Express at the rates no more than those specified in the
ratecards and shall not be included in Agency fee.
(c) Internal Costs. American Express will reimburse Agency at Agency's cost
(without mark-up or commission) for reasonable expenses, including:
. transportation, hotels and meals, of Agency personnel in connection
with travel made in furtherance of this Agreement, in conformance with
American Express' Travel and Entertainment Guidelines attached hereto
as Appendix 1 and Appendix la. No such travel shall be undertaken
without American Express' prior approval and any travel expenses in
excess of $500.00 must be approved in advance by Client. Agency shall
not charge for local travel expenses incurred for in-town trips;
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. messenger, packing, forwarding, tape duplication and the like, and
express delivery, if approved in advance by American Express.
. American Express shall not reimburse Agency for any other out-of-
pocket expenses, including without limitation telexes, long distance
or local telephone, telecopying, photocopying, secretarial and postage
on correspondence, except if such expenses are incurred by Agency in
the course of out-of-town travel made in furtherance of this
Agreement.
. Under no circumstances will Agency bill American Express for
entertainment of Client's employees other than normal meal expense
incurred during out-of-town travel which is paid by Agency; and such
entertainment as Agency may deem appropriate shall be kept to a
minimum and within the bounds of prudent business practice. Agency
records of reimbursement for entertainment of American Express'
personnel shall be kept and made available for, and be part of, the
examination of Agency's books and records referred to in paragraph 11
of this Agreement.
(d) Billing. Unless American Express and Agency specifically agree otherwise,
Agency will bill American Express directly on a weekly basis for third-
party and internal costs. Such bill will be due within thirty days of
receipt by American Express at the address designated by American
Express.
3. Confidentiality. Proprietary information provided by the disclosing party to
the receiving party shall remain the property of the disclosing party and
shall not be disclosed by the receiving party to any third party including
employees of affiliates during the term of this Agreement or thereafter
without the disclosing party's prior written approval. Notwithstanding the
foregoing, the receiving party may disclose such information when required to
do so by law provided; however, that the receiving party gives the disclosing
party prior written notice of any intention to make such disclosures, with
sufficient time for the disclosing party to take steps to protect its
interest if it so desires. The receiving party shall promptly inform the
disclosing party of all requests by third parties for information about the
disclosing party prior to delivery of any such information with sufficient
time to provide the disclosing party with opportunity to object in a timely
and meaningful manner.
4. Term and Termination. This Agreement shall be effective as of the date it is
signed by duly authorized representatives of Agency and American Express. It
shall remain in force until the services to be performed by Agency are
completed or canceled by American Express. Either party may terminate this
agreement by 90 days' prior written notice to the other party. In the event
of any such cancellation, at American Express' option agreements with third
parties shall be assigned to American Express or its designee or canceled.
Where the terms of such third party agreements do not permit such assignment
and/or cancellation, American Express shall bear any losses incurred by
Agency associated with cancellation of this Agreement. Provisions of this
Agreement that by their nature continue beyond any termination, including
Confidentiality, Indemnity and Ownership, shall not be affected by any
cancellation or termination of this Agreement. The provisions of paragraph
3,6,8,10 shall survive the termination of this agreement.
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5. Insurance. Agency, at its own cost and expense, shall continuously maintain
in full force and effect an Advertising Liability Insurance Policy (the
"Policy") that provides coverage for Agency and American Express in a minimum
amount of five million ($5,000,000.00) U.S. dollars for any claim, loss or
liability resulting from the conduct of Agency or from the creation or
publication of advertising pursuant to this Agreement, which policy shall
provide that it may not be changed or, canceled without 30 days' prior
written notice to Agency. Agency shall provide American Express with
immediate notice of any such change or cancellation of the Policy. The Policy
may have a deductible of not more than one million ($1,000,000.00) U.S.
dollars. At American Express' request, Agency shall provide American Express
with a copy of the Policy.
6. Indemnity. (a) American Express Indemnifies Agency. (i) American Express
shall be responsible for the accuracy, completeness and propriety of
information concerning its industry, organization, products and services, or
the products and services of competitors, which American Express furnishes to
Agency in connection with the performance of this Agreement. Accordingly,
American Express shall indemnify and hold Agency harmless from and against
any loss, damage, liability, claim, demand, suit and expense (including
reasonable attorneys' fees) which may be incurred by Agency as the result of
any claim, suit or proceeding made or brought against Agency based upon any
advertising or other services which Agency prepared or performed for American
Express and which was approved by American Express, to the extent such
claims, suits or proceedings relate to the accuracy, completeness or
propriety of the information concerning American Express' industry,
organization, products and services, or the products and services of
competitors, which American Express furnished to Agency.
(ii) American Express shall also similarly indemnify and hold Agency
harmless in respect of any loss which Agency may sustain resulting
from any claim, suit or proceeding made or brought against it
arising out of the nature or use by a third party of any of
American Express' products or services.
(b) Agency Indemnifies American Express. (i) Agency agrees in connection with
all advertising or promotional matter or other materials submitted by
Agency to American Express to indemnify and hold American Express
harmless from and against any loss, damage, liability, claim, demand,
suit or expense (including reasonable attorneys' fees) which may be
incurred by American Express as the result of any claim, suit or
proceeding made or brought against American Express based upon any
advertising or other services which Agency prepared or performed for
American Express (whether or not approved by American Express), to the
extent such claims, suits or proceedings relate to:
A) libel, slander or defamation; or
B) any infringement of copyright, trademark, service mark, title or
slogan; or
C) piracy, plagiarism, unfair competition or idea misappropriation;
or
D) misappropriation of personality; or
E) any invasion of privacy; or
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F) violation of the right of publicity; or
G) other property or intellectual property rights.
(ii) Agency similarly agrees to indemnify and hold American Express
harmless from and against any loss, damage, liability, claim,
demand, suit or expense (including reasonable attorney's fees)
which may be incurred by American Express as the result of any
claim, suit or proceeding made or brought against American Express
based upon claims arising from contracts, agreements or
understandings between Agency and third parties to effectuate the
purposes of the Agreement.
(iii) Agency agrees to pay American Express liquidated damages in the
amount of $2 million for breach of the obligations of section 10(a)
including solicitation and hiring American Express employees with
access to proprietary information to support Competitive Products
as defined in section 10.
(c) Obligations and Rights of Indemnified Party. Upon the assertion of a
claim or commencement of any suit against a party that may give rise to
a claim of indemnity under this Agreement, the indemnitee shall promptly
give the indemnitor notice of such a claim or suit, and shall give the
indemnitor reasonable opportunity to settle or defend the claim or suit
with counsel of its own choosing. Indemnitee shall have at all times the
right to participate in any such settlement which it reasonably believes
would have an adverse impact on its business. The parties shall render
to each other such assistance as may be reasonably requested to defend
against any such claim or suit. An indemnitee shall not settle any such
claim or suit without the prior written permission of the indemnitor.
7. Duties of Agency. (a) Agency shall not place any advertising without first
obtaining the approval of American Express nor shall it incur any expenditure
for which American Express shall be billed, without first obtaining the
approval of American Express for the estimated cost thereof. Agency shall
make no agreements, commitments or disbursements nor incur any obligations in
an amount greater than or equal to $3,000.00 on behalf of American Express or
for American Express' account without American Express' prior written
approval. American Express' verbal approval is required for amounts less than
$3,000.00.
(b) Agency has not accepted and shall not hereafter during the term of this
Agreement and for ninety (90) days thereafter accept appointment as an
advertising agency for any products or services competing with American
Express' products or services without full discussion and disclosure to
American Express and American Express' prior written approval. Products
or services which compete with American Express' products or services
include, without limitation, credit, debit, charge or stored value cards,
calling card with linkage to credit or financial services, travelers
cheques and travel agency services.
(c) Agency will take all reasonable precautions to safeguard any and all of
American Express' property entrusted to Agency's custody or control.
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(d) Agency will take all reasonable precautions to safeguard any and all
wardrobe and prop items owned by or rented by or on behalf of American
Express and entrusted to Agency's custody or control.
(e) Agency will take all reasonable precautions to guard against any loss to
American Express which arises out of Agency's engagement of third parties
for the execution of American Express assignments and the failure of such
third parties to properly execute such assignment.
(f) Agency will obtain all necessary releases, licenses, permits and other
authorization to use names, likeness, photographs, music, artwork, film,
copyrighted materials or any other property or rights belonging to third
parties or employees and independent contractors of Agency for use in
advertising for American Express, and shall indemnify and hold American
Express harmless from and against any loss, damage, liability, claim,
demand, suit or expense (including reasonable attorneys' fees) which may
be incurred by American Express as the result of any claim, suit or
proceeding made or brought against American Express based upon claims
arising out of or in connection with any such use.
(g) All acting, musical or other performing talent (the "Talent") employed by
Agency pursuant to this Agreement shall be engaged through a third party
service and shall not be considered employees of American Express. Agency
shall instruct such third party service to withhold all legally required
income and other taxes for the Talent, and to prepare and file all
required tax reports and returns in connection with compensation paid to
the Talent.
(h) Agency will proofread all advertising materials prepared by Agency,
including those approved by American Express.
(i) From time to time American Express may provide Agency with new or
additional information concerning American Express' organization,
products or services. Agency will assure that its personnel performing
services for American Express become familiar with such information, and
shall be responsible for any additional production costs incurred as a
result of errors arising from Agency's failure to do so.
(j) Agency shall use its best efforts to undertake, obtain or perform all of
the above services at the most advantageous rates, terms and conditions
available and, from time to time, cooperate with American Express in
evaluating the effectiveness of such efforts. Agency agrees to obtain
bids from at least three vendors for all services in connection with
television and print production which are in excess of $3,000 and which
Agency obtains from third parties. Agency further agrees to keep all
documentation reflecting such bids for at least two years after their
receipt.
8. Ownership. All slogans, names, plans, advertising, publicity, promotional
materials or ideas (as those ideas are embodied in Agency materials) or any
other materials submitted, created or developed by Agency for American
Express during the term of this Agreement ("American Express Work") shall be,
as between Agency and American Express, American Express' sole and exclusive
property and shall be dealt with by Agency as such. All American Express work
shall be deemed to be "work made for hire". To the extent that any American
Express work hereunder may not be
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considered "work made for hire", Agency hereby irrevocably assigns to
American Express all its right, title and interest in and to such American
Express Work to American Express and will execute any and all documents
necessary to transfer and/or evidence American Express' ownership rights.
Agency shall not copyright or sell American Express Work for Agency's own
benefit or take any other action inconsistent with American Express'
exclusive ownership of Client Work.
American Express acknowledges that Agency possesses general knowledge,
experience, skill, talent, ideas, concepts, know-how, algorithms, libraries
of codes and other information in the field in which it will provide the
services and deliverables and that such information was or will be developed
or acquired by Agency other than directly in connection with the services and
deliverables, including, without limitation, Agency's proprietary models and
processes ("Agency Information"). American Express does not assert any right
to the Agency Information, except to the extent when such model and process
is customized to include in whole or in part American Express data, processes
and methodology and proprietary information. In such event, the customized
Agency Information shall constitute American Express work, but Agency retains
all rights to the underlying Agency Information.
Agency warrants that all American Express Work shall be originally and
exclusively created for American Express, except for those materials which
Agency obtains or licenses from third parties with American Express' consent.
Agency shall inform American Express in writing if American Express'
ownership of any material is limited in any way by rights of a third party.
Agency further warrants that no American Express Work shall infringe on the
copyrights, trademarks or other property rights of third parties. Agency
shall not grant to third parties or use for the benefit of third parties
copyrights or property rights in original American Express Work created by
Agency without the express consent of American Express.
9. Non-Exclusivity. This Agreement does not establish Agency as the exclusive
advertising agency of American Express during the term of this Agreement or
otherwise. American Express shall not be obliged to use the services of
Agency except as specifically set forth in this Agreement.
10. Non-Competition. (a) Agency Non-Competition. Agency shall render undivided
loyalty and allegiance to American Express in relation to the services to be
rendered under this Agreement. Agency shall not, during the term of this
Agreement and for a period of one (1) year thereafter, act as advertising
agency or render any of the services to be supplied hereunder in connection
with any of the products or services listed on Exhibit 3 ("Competitive
Products").(1) Agency agrees not to solicit or hire American Express
employees with access to or knowledge of American Express proprietary
information during the term of this Agreement and for a period of one (1)
year after termination of this Agreement and cause its affiliates to do the
same.
(b) Employee Non-Competition. Agency account management and creative
personnel working on the subject matter herein who have access to
American Express' confidential and/or proprietary information,
including but not limited to information concerning current and
---------------------- (1) Exhibit 3 and 4 should list (i) the product lines covered by the Agreement, and (ii) any other related product lines, as well as (iii) entities that compete generally with American Express Travel Related Services' business.
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future marketing plans and strategies, (each an "Employee") shall not
perform any work for any other client (including those of affiliates)
that sells or markets any Competitive Product (each a "Client") or for
any of the American Express' competitors listed on Exhibit 4 (each a
"Competitor") (1) during the term of this Agreement and for a period of
one (1) year after the earlier of the termination of this Agreement or
the termination of the Employee's employment with Agency. Furthermore,
employee shall not work for or support affiliates that provide services
to competitors during the term of this Agreement and for a period of one
(1) year after termination of this Agreement. Furthermore, each Employee
agrees not to solicit or hire existing or former agency or American
Express employees, agents or third parties with knowledge of American
Express confidential or proprietary information to perform or assist on
any work involving a Competitive Product for any Client or Competitor for
a period of one (1) year after the earlier of the termination of this
Agreement or the termination of the Employee's employment with Agency.
(c) Employee Undertaking. Agency shall cause each Employee, as consideration
for being permitted to work on the American Express account and for being
granted access to American Express' confidential and/or proprietary
information, to agree in writing to the terms of sub-paragraph 10(b) by
executing a Non-Competition Agreement substantially in the form set forth
as Exhibit 5 hereof. Agency shall provide an original counterpart of all
such Non-Competition Agreements to American Express.
(d) It is expressly understood and agreed that Michael Bronner and David
Kenny shall have no involvement with the development or implementation of
strategies and marketing plans for Charles Schwabs, Prudential and any
other competitors of American Express supported by an affiliate.
11. Reports: Books and Records. 1) From time to time American Express may
request Agency to participate in, and Agency will use its best efforts to
participate in, a periodic agency performance evaluation with respect to (a)
Agency's contribution to the American Express business results, (b) Agency's
servicing of American Express's account, (c) Agency's economics in servicing
American Express's accounts, (d) the working relationship between Agency and
American Express, and (e) the implementation of this Agreement.
2) Upon reasonable notice, all contracts, paper, correspondence, copybooks,
time sheets, account records, records reflecting discounts, and other
documents which relate to American Express's account, will be open to
inspection, examination and audit by American Express or American
Express's representative during Agency's normal business hours at
Agency's place of business.
3) At any reasonable time during the life of this Agreement and for one year
thereafter, and upon reasonable prior notice to Agency, American Express
may examine and make reasonable copies of American Express's files and
records (excluding, however, payroll and personnel records) pertaining to
American express advertising and marketing.
4) Unless prohibited by applicable law, Agency shall promptly advise
American Express of any actual or contemplated material changes in
Agency's ownership or control.
5) Agency shall provide American Express with annual financial ratios no
later than March 31 of the following year. In the event that there is
sufficient risk that agency may become insolvent
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or unable to complete projects for American Express, American Express may
suspend the agency relationship and withdraw any or all projects
previously assigned.
All of the foregoing and other requested information supplied by Agency to
American Express will be provided in such form and substance as American
Express shall reasonably designate.
American express shall have the right to set-off against the compensation to
be paid to Agency for any current year under paragraph 2. Hereof the amount
of any overpayment revealed in any audit performed by American Express of
amounts paid by American Express to Agency or billed by Agency to American
Express of amounts paid prior year. If an underpayment is revealed in the
audit, Agency will be entitled to any additional payment.
12. Corporate Purchasing Card. Agency agrees, upon request from American
Express, to accept the American Express Corporate Purchasing Card as a
method of payment, subject to the parties agreeing on mutually acceptable
terms and conditions, as well as the method of implementing the Corporate
Purchasing card program.
13. Services by Affiliate. In the event that Agency desires any of its parents,
subsidiaries or other affiliates ("Affiliate") to render services to
American Express, Agency first shall cause said Affiliate to execute either
a separate Agency Agreement with American Express or the Affiliate Agreement
attached hereto as Exhibit 6.
14. Compliance With Law. Agency will take all reasonable precautions to ensure
that all services, materials and copy supplied to American Express shall not
violate any laws or orders or regulations. In addition, Agency will comply
with all applicable provisions of the Workers' Compensation law and all
other federal, state and local laws, rules and regulations which may be
applicable to Agency as an employer.
15. Notice. All notices which either party is required or may ...
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