EXHIBIT 10.15
SKYREWARDS
DELTA AIR LINES
AGREEMENT
This Agreement, effective the 24th day of July, 1997 and ending the 23rd
day of July, 1999, by and between Delta Air Lines, Inc., (hereinafter "Delta")
having its principal place of business at ▇▇▇▇▇▇▇▇▇▇ Atlanta International
Airport, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ and Netcentives Inc., (hereinafter
"Netcentives") having its principal place of business at ▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
Whereas, Delta has developed the SkyMiles(R) Program, under which Members
are awarded mileage for travel on Delta and certain other SkyMiles Participants,
and for the purchase of goods or services from other SkyMiles Participants in
association with the SkyMiles Program, and can obtain bonus travel and other
SkyMiles Awards for such SkyMiles activity; and
Whereas, Netcentives desires to purchase mileage to provide to Members as
an incentive; and
Whereas, Delta is willing to sell mileage to Netcentives on the following
terms and conditions;
Now therefore, in consideration of the mutual covenants and promises in
this Agreement, the parties hereto agree as follows:
1. Definitions. For purposes of this Agreement, the following terms shall
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have the following meanings:
"SkyMiles Awards": means the awards or benefits that Members can receive
from Delta, Delta Connection(R) and/or certain SkyMiles Participants pursuant to
the SkyMiles Program Rules in exchange for the redemption of accrued SkyMiles,
and, if applicable, other consideration.
"Delta SkyRewards" or "DSR" means the program established and governed by
Delta, as such program may be in effect from time to time, whereby Netcentives,
operating in the U.S., distributes SkyMiles Vouchers to qualified Participants
in an incentive program as defined in Section 3.
"SkyMiles Activity": means the points or miles accrued under the SkyMiles
Program Rules by members for (i) travel on Delta or Delta Connection, (ii)
travel on, and/or the purchase of goods or services from SkyMiles Participants,
or (iii) any other reason permitted by Delta.
"SkyRewards Vouchers" or "Vouchers" means the document or miles distributed
to a Member by Netcentives in a Netcentives incentive program that entitles such
Member to SkyMiles Awards based on the terms and conditions and the denomination
specified on such document or communicated to Delta on diskette or by other
agreed upon method.
Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as *****. A complete version of this exhibit has been
filed seperately with the Securities and Exchange Commission.
"SkyMiles Participant" means any Person that, pursuant to the SkyMiles
Program Rules and an agreement between Delta and such Person regarding such
Person's participation in the SkyMiles Program: (i) provides goods or services
to Members in exchange for the redemption of SkyMiles, or (ii) in connection
with the sale of goods or services by such Person to Member, offers SkyMiles to
such Member.
"SkyMiles Program" means the travel awards program established and governed
by Delta, as such program may be in effect from time to time, pursuant to which,
among other things, Members receive miles for (i) travel on Delta or Delta
Connection, (ii) travel on and/or the purchase of goods or services from
SkyMiles Participants, or (iii) any other reason permitted by Delta.
"SkyMiles Program Rules" means the rules, regulations, terms, and
conditions established or modified, from time to time, by Delta, in its sole
discretion, which shall govern the SkyMiles Program.
"Agreement" means this Delta SkyRewards Agreement, as it may, from time to
time, be amended or modified in writing.
"Delta" has the meaning assigned to such term in the preamble to this
Agreement.
"Customer" means an individual to whom Netcentives awards Netcentives
Points.
"Netcentives Employee" or "Employee" means an individual who is on
Netcentives' payroll.
"Marks" shall have the meaning set forth in Section 6.
"Member" means, as of any date, an individual who is a member in good
standing in the SkyMiles Program.
"Direct Competitor" means: [*****]
2. Netcentives is currently in the business of Internet and Online Service
Marketing. Netcentives will conduct an incentive program designed to form an
Internet and Online Service frequency program using Internet-only currency. Web
sites will award Netcentives points to Members as a form of incentive, loyalty,
or promotional currency for use by a consumer. Members may then redeem
Netcentives Points through Netcentives for Delta SkyMiles, or other awards
(including other airlines' frequent flyer miles) at the Member's option.
3. Netcentives agrees that it will sell Vouchers at no less than [*****]
per miles only to qualified Participants in Netcentives' incentive program, and
that the Vouchers must meet at least one of the following purposes: a)
Netcentives' Employee sales and/or job performance awards, recognition or
incentives; or b) Netcentives Customer awards, recognition or incentives.
Netcentives agrees that it will not distribute Vouchers to Employees for use in
Netcentives' business travel. Netcentives agrees that it will not award more
than [*****] miles to any one
****** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
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individual in any calendar year. Any awarding of more than [*****] miles to an
individual via Netcentives needs to be pre-approved via SkyRewards management.
[*****]
4. If Vouchers purchased by Netcentives hereunder are distributed or used
for purposes that are inconsistent with this Agreement, Delta may, at its
option, cancel, void, refuse to honor and/or confiscate such Vouchers an any
remaining Vouchers in the possession of Netcentives and pursue all other rights
and remedies that may be available. Netcentives acknowledges that distribution
or use of Vouchers for such inconsistent purposes will give rise to irreparable
injury to Delta inadequately compensable in damages. Accordingly, Netcentives
agrees that Delta shall be entitled to obtain injunctive relief to prevent such
unauthorized or improper distribution or use, to prevent any breach of this
Agreement, or to compel specific performance.
5. All advertising and promotional materials using "Delta Air Lines,"
"SkyRewards" or any other of Delta's marks or logos ("Marks") shall be subject
to Delta's prior written approval and the established guidelines for use of its
Marks which are detailed in Attachment D of this document. Delta will provide
approval of, or comments on, submitted materials by the next business day
following receipt of materials. Any materials that are substantially similar to
materials already approved do not need to be sent to Delta for approval; such
materials may be used by Netcentives based upon Delta's previous approval of
such substantially similar materials. Netcentives and its clients agree to
comply with these guidelines and Netcentives agrees to provide each client
copies of these guidelines. Netcentives will only use the Marks for the purpose
of identifying Delta and its programs as participants in the Netcentives
program. Any unauthorized use of such Marks shall constitute a material breach
of this Agreement and an infringement of Delta's rights in and to such Marks.
Netcentives will forward to Delta copies of communications using its Marks for
Delta's records. Nothing herein shall be construed as transferring to
Netcentives any ownership or interest in Delta's Marks.
6. Netcentives will indemnify, defend and hold harmless Delta, its parent
company, subsidiaries and affiliates, their officers, directors, agents and
employees from an against any and all claims, losses, damages, suits, judgments,
costs and expenses (including litigation costs and reasonable attorneys fees)
arising out of or relating to Netcentives' performance, nonperformance, or
improper performance of the provisions of this Agreement in connection with
Netcentives' incentive program, including without limitation any claim by a
program Participant of Netcentives' breach, violation or failure to comply with
Netcentives' incentive program.
Delta will indemnify, defend and hold harmless Netcentives, its parent
company, subsidiaries and affiliates, their officers, directors, agents and
employees from an against any and all claims, losses, damages, suits, judgments,
costs and expenses (including litigation costs and reasonable attorneys fees)
arising out of or relating to Delta's performance, nonperformance, or improper
performance of the provisions of this Agreement in connection with Netcentives'
****** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
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incentive program, including without limitation any claim by a program
Participant of Delta's breach, violation or failure to comply with Netcentives'
incentive program.
7. Netcentives will pay Delta in full in USD by company check, cashier's
check, certified check or money order prior to Delta's delivery of Vouchers to
Netcentives. No refunds will be given by Delta for Vouchers purchased by
Netcentives.
8. All taxes arising out of this Agreement and the purchase and
distribution of Vouchers by Netcentives hereunder, except for taxes on the net
income of Delta, shall be the responsibility of Netcentives.
9. Netcentives will retain records concerning distribution of Vouchers for
a minimum of one year from the last date of distribution, and will deliver such
records to Delta upon request. Netcentives will direct all inquiries about the
SkyMiles Program and the posting of miles to Delta at ▇ ▇▇▇ ▇▇▇-▇▇▇▇.
10. Netcentives shall cooperate with all reasonable requests of Delta
concerning any investigation and/or prosecution of anyone engaging in or
suspected of engaging in SkyMiles Program abuse or fraud including, but not
limited to, assisting Delta in verifying an incentive program participant's
SkyMiles Program membership status and cooperating with any civil or criminal
prosecution of such program participant.
11. Neither party shall be liable for delays or failure in its performance
hereunder caused by any act of God, war, strike, labor dispute, work stoppage,
fire, act of government, or any other cause, whether similar or dissimilar
beyond the control of that party
12. Delta grants Netcentives limited exclusivity on the Internet by
agreeing not to sell SkyMiles to any Direct Competitor of Netcentives. The
parties agree that this exclusivity would not be violated by Delta entering into
an agreement with a company that creates brand loyalty programs for its clients
on the Internet, provided however, that the company and the programs created by
that party are restricted such that they do not become a Direct Competitor of
Netcentives. This exclusivity is limited in that except for sales to a Direct
Competitor of Netcentives, this exclusivity shall in no way prevent Delta from:
a) pursuing its own sale of mileage on the Internet; b) distributing SkyMiles to
any individual Web site or Web merchant for that site or merchant's promotional
or loyalty program; c) having SkyMiles partners offer SkyMiles on their Web
sites or as part of an Internet promotion; d) awarding SkyMiles on Delta's own
Web site; or e) selling mileage to an Internet company that in turn awards Delta
mileage as part of an incentive to another company provided that the company
receiving such mileage is not a Direct Competitor of Netcentives. Netcentives
grants Delta the right to cancel the limited exclusivity restrictions of this
Agreement at Delta's discretion at any time, upon 90 days notice.
It is understood that Delta is presently a participant in Partner Programs
and that Partner Programs are participants in Delta's SkyMiles program. The
parties agree that Delta's present partnerships do not violate the exclusivity
provisions of this Agreement. Delta will not endorse any change to Partner
Programs initiated by the partner that would infringe upon the limited
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exclusivity granted above. The parties agree that changes to the Partner
Programs are at the partner's discretion and that such changes if made, will not
be deemed to violate the limited exclusivity outlined above.
13. Netcentives agrees to purchase SkyMiles at the pricing structure on
Attachment B. Netcentives will pay Delta via a company check. Within 90 days of
the date of this Agreement, Netcentives agrees to grant Delta a warrant to
purchase [*****] shares of the Non-Voting Convertible Stock of Netcentives with
an exercise price per share equal to the fair market value of such shares as of
the date of grant, and on the terms and conditions as further set forth in the
form of Warrant Agreement attached hereto as Attachment C.
If Delta chooses to end limited exclusivity to Netcentives, [*****]
14. Netcentives may not assign or transfer this Agreement, or any right or
obligation under it, without the prior written consent of Delta.
15. Nothing contained herein shall be deemed to create an association,
partnership, joint venture, or relationship of principal and agent or master and
servant between the parties hereto or any affiliates or subsidiaries thereof, or
to provide wither party with the right, power, or authority whether expressed or
implied, to create any such duty or obligation on behalf of the other party.
16. "Delta's Confidential Information" shall mean any information
regarding Members that Delta chooses to give access to Netcentives and any
information identified orally or in writing by Delta as confidential immediately
prior to or immediately after disclosure by Delta to Netcentives. Netcentives
acknowledges that Delta's Confidential Information is the sole and exclusive
property of Delta. Netcentives shall reveal Confidential Information only to
such Netcentives Employees who have need to know such information in order to
carry out the terms, conditions and purposes of this Agreement. Netcentives
shall, and shall cause its Employees to, for a period of five years after the
date hereof, hold and maintain as confidential all of Delta's Confidential
Information and will not release or disclose same to any third party, including
affiliates. Information shall not be subject to the foregoing confidentiality
restrictions to the extent such information (i) was in possession of or known to
company prior to Netcentives' execution of this Agreement; (ii) is or becomes
public knowledge other than by means of a breach of confidentiality by
Netcentives; (iii) is received by Netcentives from a third party that is
lawfully in possession of such information and under no duty to keep it in
confidence; or (iv) is required by law or court order to be disclosed to
governmental or regulatory authorities. Netcentives will not use Delta's
Confidential Information for any purpose other than the purposes stated herein.
Notwithstanding the foregoing, Delta acknowledges and agrees that certain
Members are Netcentives Customers or Netcentives Employees and that Netcentives
will not be restricted hereunder from using or disclosing names, addresses or
other information regarding such Customers or Employees in connection with
Netcentives' business so long as (i) in the case of disclosure to third parties,
travel on Delta and/or the status of being a Member is not identified as a
factor or criteria in compiling such information, and (ii) in the case of use by
Netcentives, any promotions directed at such Customers or Employees by
Netcentives or by
****** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
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Netcentives jointly with others will not reference such Customers or Employees
as Members or travelers on Delta.
"Netcentives' Confidential Information" shall mean any information
regarding Members that Netcentives chooses to give access to Delta and any
information identified orally or in writing by Netcentives as confidential
immediately prior to or immediately after disclosure by Netcentives to Delta.
Delta acknowledges that Netcentives' Confidential Information is the sole and
exclusive property of Netcentives. Delta shall reveal Confidential Information
only to such Delta Employees who have need to know such information in order to
carry out the terms, conditions and purposes of this Agreement. Delta shall,
and shall cause its Employees to, for a period of five years after the date
hereof, hold and maintain as confidential all of Netcentives' Confidential
Information and will not release or disclose same to any third party, including
affiliates. Information shall not be subject to the foregoing confidentiality
restrictions to the extent such information (i) was in possession of or known to
company prior to Delta's execution of this Agreement; (ii) is or becomes public
knowledge other than by means of a breach of confidentiality by Delta; (iii) is
received by Delta from a third party that is lawfully in possession of such
information and under no duty to keep it in confidence; or (iv) is required by
law or court order to be disclosed to governmental or regulatory authorities.
Delta will not use Netcentives' Confidential Information for any purpose other
than the purposes stated herein. Notwithstanding the foregoing, Netcentives
acknowledges and agrees that certain Members are Delta Customers or Delta
Employees and that Delta will not be restricted hereunder from using or
disclosing names, addresses or other information regarding such Customers or
Employees in connection with Deltas' business so long as (i) in the case of
disclosure to third parties, travel on Delta and/or the status of being a Member
is not identified as a factor or criteria in compiling such information, and
(ii) in the case of use by Delta, any promotions directed at such Customers or
Employees by Delta or by Delta jointly with others will not reference such
Customers or Employees as Members or travelers on Delta.
17. This Agreement constitutes the entire agreement between Netcentives
and Delta with respect to the subject matter hereof and supersedes all prior or
contemporaneous agreements or understandings, if any, whether written or oral,
relating to such subject matter. No modifications, amendment or waiver of this
Agreement or any of its terms shall be effective or binding unless made in
writing and signed by authorized representatives of both parties.
18. Each Voucher is subject to all the terms and conditions stated
thereon, and cannot be modified or waived by Netcentives.
19. Delta may suspend or cancel the DSR program or Netcentives'
participation in the DSR program at any time upon advance written notification
to Netcentives. Upon such notice, A Winding Down period of six months will
begin, during which both Delta and Netcentives will let SkyMiles Members and
Netcentives Customers know the relationship will be ending. However,
Netcentives Points may continue to be redeemed for Vouchers during the Winding
Down period and use of the Marks and any other applicable terms during the
Winding Down period. At the end of such Winding Down period, Netcentives shall
promptly return to Delta all undistributed Vouchers, and if there shall be no
default by Netcentives hereunder, Delta shall, upon receipt of
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such Vouchers, reimburse Netcentives the amount paid by Netcentives to Delta for
such Vouchers.
21. Netcentives will abide by as well as state on Netcentives' web site
the following note and warning notice:
Warning Notice: The sale, purchase, or barter of mileage credit, vouchers,
award certificates and award tickets violates Delta's program rules, is illegal,
and subjects the violator to liability for damages and litigation and
transaction costs. Violators are subject to having their accounts terminated or
deductions of mileage from their accounts. Improperly obtained
certificates/tickets are VOID and will be confiscated. Persons trying to use
such tickets must pay applicable fare to Delta in order to travel.
Delta and its program partners reserve the right to change the program
rules, regulations, travel awards, mileage award levels and special offers at
any time without notice. This means that Delta may initiate changes, for
instance, impacting partner affiliations, rules for earning mileage credit,
continued availability of awards, blackout dates or limit the seats available
for award travel to any or all destinations. Such changes to Delta's frequent
flyer program may include modifications which (i) govern mileage credits earned
on or after the date of change, (ii) change the value of already accumulated
mileage credits or (iii) govern mileage credits earned on or after the date of
change and change the value of already accumulated mileage credits. Delta
reserves the right to terminate the Delta frequent flyer program with six months
notice. Unless otherwise stated, the terms and conditions of the program's
Awards, Rules & Conditions brochure and Membership Guide and Program Rules.
22. This Agreement shall be governed by and construed in accordance with
the laws of the State of Georgia.
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IN WITNESS WHEREOF, the parties have executed this Agreement by their
undersigned duly authorized representatives.
NETCENTIVES INC.
By:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------
(NAME)
Chairman
---------------------------
(TITLE)
DELTA AIR LINES, INC.
By:
/s/ ▇▇▇▇▇ ▇▇▇▇
---------------------------
(NAME)
___________________________
(TITLE)
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Attachment A
[*****]
****** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
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Attachment B
PAYMENT SCHEDULE
. One time up-front purchase of [*****] worth of miles at the time of signing
of the Agreement, to be credited towards the Netcentives First Stage purchase of
Delta SkyMiles.
. Each contract year, the following Payment Stages shall apply [*****]
[*****]
3. if Netcentives has bought greater than or equal to [*****] SkyMiles to
date, the[*****] cost/mile will be effective immediately for all future
SkyMiles purchased.
4. if Netcentives has bought fewer than [*****] SkyMiles to date, the number
of SkyMiles purchased to-date shall be applied toward [*****]
****** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
Contract Addendum:
Attachment B:
In the event that Delta [*****]
.......
2. prior to Netcentives purchasing a total [*****] SkyMiles under Third
Stage, Netcentives will receive an additional credit per mile of [*****] for
each SkyMile purchased to date, representing the difference between the Third
Stage effective cost/mile [*****]and the effective cost/mile [*****]. This
credit will be net of any credits already paid to date, such as any of
the[*****] credits per mile rebated on the first 25,000 SkyMiles purchased.
****** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
