EXHIBIT 10.8
CONFIDENTIAL
AADVANTAGE PARTICIPATION AGREEMENT
BETWEEN
AMERICAN AIRLINES, INC.
AND
NETCENTIVES INC.
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 separately with the Securities and Exchange Commission.
TABLE OF CONTENTS
Section Page
1 DEFINITIONS........................................................................................... 1
2 MILEAGE ACCRUAL....................................................................................... 6
2.1 Mileage Accrual............................................................................ 6
2.2 Good Standing.............................................................................. 6
2.3 Rounding................................................................................... 6
2.4 Bonus Miles................................................................................ 6
2.5 Ongoing Conditions Precedent - American.................................................... 6
2.6 Ongoing Conditions Precedent - Participant................................................. 7
2.7 Survival................................................................................... 8
3 CHARGES............................................................................................... 8
3.1 Pricing.................................................................................... 8
3.2 Mileage Payments........................................................................... 8
3.3 Method of Payments......................................................................... 9
3.4 Minimum Purchase; Prepayment............................................................... 9
3.5 Survival................................................................................... 9
4 PROGRAM CONTENT AND ADMINISTRATION.................................................................... 9
4.1 Program Content............................................................................ 9
4.2 AADVANTAGE Program Enrollment.............................................................. 10
4.3 AADVANTAGE Program Administration.......................................................... 10
4.4 Customer Service........................................................................... 10
4.5 Member Disputes............................................................................ 10
4.6 Transaction Processing..................................................................... 11
4.7 Training................................................................................... 11
4.8 Trademarks................................................................................. 11
4.9 Applicable Law............................................................................. 12
4.10 AADVANTAGE Program Abuse.................................................................. 12
4.11 Cancellation or Alteration of AADVANTAGE Program.......................................... 12
4.12 Air Carrier Sponsor....................................................................... 13
4.13 Reserve Requirement....................................................................... 13
4.14 Management of Program..................................................................... 13
4.15 Computer Reservation Function............................................................. 13
5 EXCLUSIVITY........................................................................................... 13
5.1 Limited Exclusivity........................................................................ 13
5.2 Termination of Limited Exclusivity......................................................... 14
6 REPORTS............................................................................................... 14
6.1 Report from Participant.................................................................... 14
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6.2 Verification............................................................................... 14
6.3 Report from American....................................................................... 14
6.4 Tax Reporting.............................................................................. 14
6.5 Survival................................................................................... 14
7 MARKETING AND ADVERTISING............................................................................. 15
7.1 Web Site and Telephone Number.............................................................. 15
7.2 Newsletter Inserts......................................................................... 15
7.3 American Approval of Promotional Materials; Graphic Standards.............................. 15
7.4 Web Site Co-Marketing...................................................................... 16
7.5 Termination................................................................................ 16
8 REPORTS; AUDITS....................................................................................... 16
8.1 Informational Reports...................................................................... 16
8.2 Audit Access............................................................................... 16
8.3 Survival................................................................................... 16
9 TERM OF AGREEMENT..................................................................................... 17
9.1 Term....................................................................................... 17
9.2 Notice of Termination...................................................................... 17
10 INDEMNIFICATION; LIMITATION OF USABILITY............................................................. 17
10.1 Participant Indemnification............................................................... 17
10.2 Limitation................................................................................ 17
10.3 Survival.................................................................................. 17
11 DEFAULT OF PARTICIPANT; REMEDIES; OTHER RIGHTS OF AMERICAN........................................... 18
11.1 Participant Default....................................................................... 18
11.2 American Remedies......................................................................... 18
11.3 Additional Rights......................................................................... 18
12 DEFAULT OF AMERICAN; Remedies........................................................................ 19
12.1 American Default.......................................................................... 19
12.2 Participant Remedies...................................................................... 19
13 REPRESENTATIONS AND WARRANTIES OF PARTICIPANT........................................................ 19
13.1 Due Organization.......................................................................... 19
13.2 Requisite Power; Enforceability........................................................... 20
13.3 No Conflict............................................................................... 20
13.4 No Consent................................................................................ 20
14 REPRESENTATIONS AND WARRANTIES OF AMERICAN........................................................... 20
14.1 Due Organization.......................................................................... 20
14.2 Requisite Power; Enforceability........................................................... 20
14.3 No Conflict............................................................................... 21
14.4 No Consent................................................................................ 21
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15 NOTICES.............................................................................................. 21
16 GOVERNING LAW; CONSENT TO JURISDICTION............................................................... 22
17 WAIVER............................................................................................... 22
18 AMERICAN'S CONFIDENTIALITY........................................................................... 23
18.1 American's Confidential Information....................................................... 23
18.2 Non-Disclosure by Participant............................................................. 23
18.3 Return of American's Confidential Information............................................. 24
18.4 Participant's Employees and Agents........................................................ 24
18.5 American's Equitable Relief............................................................... 24
18.6 Survival.................................................................................. 24
19 PARTICIPANT'S CONFIDENTIALITY........................................................................ 24
19.1 Participant's Confidential Information.................................................... 24
19.2 Non-Disclosure by American................................................................ 25
19.3 Return of Participant's Confidential Information.......................................... 25
19.4 American's Employees and Agents........................................................... 25
19.5 Participant's Equitable Relief............................................................ 25
19.6 AADVANTAGE Database....................................................................... 26
19.7 Survival.................................................................................. 26
20 FORCE MAJEURE........................................................................................ 26
21 INDEPENDENT CONTRACTOR............................................................................... 26
22 ENTIRE AGREEMENT..................................................................................... 26
23 SUCCESSORS AND ASSIGNS............................................................................... 26
24 TAXES................................................................................................ 27
24.2 Indemnity for Taxes....................................................................... 27
24.3 Withholding............................................................................... 27
25 CAPTIONS............................................................................................. 27
26 CONSTRUCTION......................................................................................... 27
27 SEVERABILITY......................................................................................... 27
28 NO THIRD PARTY BENEFICIARIES......................................................................... 27
29 EFFECTIVE DATE....................................................................................... 27
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Attachment 1
Pricing......................................................................................... 1-1
Attachment 2
Minimum Purchase Requirements and Prepayment Schedule........................................... 2-1
Attachment 3
Netcentives Approval Request Form............................................................... 3-1
Attachment 4
Data Transmission Layouts....................................................................... 4-1
Attachment 5
Guidelines for Producing AADVANTAGE(R) Related Materials
and Using the AADVANTAGE Travel Awards' Trademark............................................... 5-1
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AADVANTAGE PARTICIPATION AGREEMENT
AGREEMENT made as of the date set forth below between AMERICAN
AIRLINES, INC., a corporation organized and existing under the laws of Delaware
("American") and NETCENTIVES INC., a corporation organized and existing under
the laws of California ("Participant").
WHEREAS, American has developed the AADVANTAGE Program, under which
Members are awarded AADVANTAGE Miles for travel on American, and certain other
AADVANTAGE Participants, and for the purchase of goods or services from other
AADVANTAGE Participants in association with the AADVANTAGE Program, and can
obtain Award Travel and other AADVANTAGE Awards for such AADVANTAGE Miles; and
WHEREAS, American is willing to allow Participant to participate in the
AADVANTAGE Program 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. The words "hereof", "herein" or "hereunder" as
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used in this Agreement refer to this Agreement as a whole and not to any
specific portion or provision of this Agreement. For all purposes of this
Agreement, the following terms shall have the following meanings:
"AADVANTAGE Account" means the record, maintained by American,
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of a Member's AADVANTAGE Program activity, including, without limitation, the
accrual and redemption of AADVANTAGE Miles by such Member.
"AADVANTAGE Awards" means the awards or benefits that Members
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can receive from American, American Eagle and/or certain AADVANTAGE Participants
pursuant to the AADVANTAGE Program Rules in exchange for the redemption of
accrued AADVANTAGE Miles, and if applicable, other consideration.
"AADVANTAGE Miles" means the points or "Miles" (including
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bonus points or "Miles") accrued under the AADVANTAGE Program Rules by Members
for (i) travel on American or American Eagle, (ii) travel on, and/or the
purchase of goods or services from, AADVANTAGE Participants, or (iii) any other
reason permitted by American.
"AADVANTAGE Participant" means any Person that, pursuant to
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the AADVANTAGE Program Rules and an agreement between American or an Affiliate
of American and such Person regarding such Person's participation in the
AADVANTAGE Program: (i) provides goods or services to Members in exchange for
the redemption of AADVANTAGE Miles, or (ii) in connection with the sale of goods
or services by such Person to Member offers AADVANTAGE Miles to such Member.
"AADVANTAGE Program" means the travel awards program
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established and governed by American, as such program may be in effect from time
to time, pursuant to which, among other things, Members receive AADVANTAGE Miles
for travel on American or for travel on, or for the use or purchase of goods or
services offered by, an AADVANTAGE Participant, or for any reason permitted by
American.
"AADVANTAGE Program Rules" means the rules, regulations, terms
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and conditions established or modified, from time to time, by American, in its
sole discretion, which shall govern the AADVANTAGE Program.
"Additional Warrant Agreement" means the Letter Agreement
----------------------------
dated on or about the date hereof, executed by American and Participant, as it
may be amended from time to time, concerning certain additional warrants for
certain non-voting common stock of Participant potentially available to
American.
"Affiliate" means, with respect to any Person, any other
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Person directly or indirectly controlling or controlled by or under common
control with such Person. For purposes of this definition, "control" (including
"controlled by" and "under common control with") shall mean the power, directly
or indirectly, to direct or cause the direction of the management and policies
of such Person whether through the ownership of voting securities or by contract
or otherwise.
"Agreement" means this AADVANTAGE Participation Agreement, as
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it may, from time to time, be amended or modified in accordance herewith.
"American" has the meaning assigned to such term in the
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preamble to this Agreement.
"American Default" shall have the meaning assigned to such
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term in Section 12.1 (American Default).
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"American Eagle" means the scheduled air carrier operations of
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any regional airlines that are permitted by American or an Affiliate of American
to do business under the name American Eagle, whether or not an Affiliate of
American.
"American Indemnified Parties" shall have the meaning assigned
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to such term in Section 10.1 (Participant Indemnification).a
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"American's Confidential Information" shall have the meaning
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assigned to such term in Section 18.1 (American's Confidential Information).
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"Applicable Law" means all applicable laws of any
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jurisdiction, worldwide, including securities laws, tax laws, tariff and trade
laws, ordinances, judgments, decrees, injunctions, writs and orders or like
actions of any Competent Authority and the rules, regulations, orders,
interpretations, licenses and permits of any Competent Authority.
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"Award Certificate" means a document, issued to a Member by
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American, that entitles such Member to Award Travel or other AADVANTAGE Awards
obtained by such Member in accordance with this Agreement and the AADVANTAGE
Program Rules.
"Award Ticket" means a ticket good for Award Travel, issued by
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American or American's authorized agents.
"Award Travel" means the air transportation on, or any
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upgrades or other benefits provided by, American or American Eagle or an
AADVANTAGE Participant, and provided wholly or partly in exchange for the
redemption of AADVANTAGE Miles pursuant to the AADVANTAGE Program Rules.
"Base Miles" means AADVANTAGE Miles awarded to a Member for
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each Qualifying Transaction as described in Section 2.1 (Mileage Accrual).
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"Base Rate" shall have the meaning assigned to such term in
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Section 3.1 (Pricing).
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"Bonus Miles" means AADVANTAGE Miles offered by Participant in
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addition to Base Miles offered in connection with a Qualifying Transaction with
American's prior written consent or in connection with other offers made by
Participant to Members with American's prior written consent.
"Business Day" means any day other than a Saturday, Sunday or
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other day on which banks in Fort Worth, Texas, are required or authorized to
close.
"Competent Authority" means any foreign, international,
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national, federal, state, county, local or municipal government body, bureau,
commission, board, board of arbitration, instrumentality, authority, agency,
court, department, inspector, minister, ministry, official or public or
statutory person (whether autonomous or not) having jurisdiction over this
Agreement or any of the parties to this Agreement.
"Commencement Date" shall have the meaning assigned to such
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term in Section 9.1 (Term).
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"Contract Year" means each August 1 of one (1) year through
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July 31 of the immediately following year during the Term.
"Contract Quarter" means each three (3) month period ending
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October 31, January 31, April 30 and July 31 during the Term.
"Direct Competitor of Participant" shall have the meaning
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assigned to such term in Section 5.1 (Limited Exclusivity).
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"Exclusivity Termination Notice" shall have the meaning
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assigned to such term in Section 5.2 (Termination of Limited Exclusivity).
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"FFP Supplier" shall have the meaning assigned to such term in
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Section 4.1 (Program Content).
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"Frequent Flyer Points" shall mean the points, credits, or
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miles, for example, AADVANTAGE Miles, however denominated, offered under a FFP
Supplier's travel awards program or frequent flyer program.
"Incentive Program" shall have the meaning assigned to such
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term in Section 5.1 (Limited Exclusivity).
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"Limited Exclusivity" shall have the meaning assigned to such
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term in Section 5.1 (Limited Exclusivity).
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"Losses" means any and all liabilities, obligations, losses,
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damages, claims, deficiencies, penalties, taxes, levies, actions, judgments,
settlements, suits, costs, legal fees, accountants' fees, disbursements or
expenses.
"Material Adverse Effect" means with respect to any Person, a
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material adverse effect on (a) the business, assets, operations, performance,
properties or condition (financial or otherwise) of such Person or (b) the
ability of such Person to perform its obligations under this Agreement.
"Member" means, as of any date, any individual who is a member
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in good standing of the AADVANTAGE Program.
"Netcentives Points" shall have the meaning assigned to such
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term in Section 4.1 (Program Content).
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"Netcentives Program" shall have the meaning assigned to such
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term in Section 4.1 (Program Content).
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"Participant Default" shall have the meaning assigned to such
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term in Section 11.1 (Participant Default).
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"Participant Indemnification" shall have the meaning assigned
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to such term in Section 10.1 (Participant Indemnification).
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"Participants Confidential Information" shall have the
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meaning assigned to such term in Section 19.1 (Participant's Confidential
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Information).
"Participant's Product or Service" shall have the meaning
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assigned to such term in Section 4.1 (Program Content).
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"Participant Taxes" shall have the meaning assigned to such
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term in Section 24.1 (Participant Taxes).
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"Person" means any individual, corporation, partnership, joint
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venture, association, joint stock company, trust, unincorporated organization or
Competent Authority.
"Qualifying Transaction" shall have the meaning assigned to
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such term in Section 4.1 (Program Content).
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"Report" means the report to be delivered by Participant
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pursuant to Section 6.1 (Report from Participant) hereof, which Report shall
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contain such information, and shall follow' such procedures, as American shall
reasonably specify from time to time.
"Rights Agreement" means the Netcentives Inc. Rights Agreement
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dated on or about the date hereof, executed by American and Participant, as it
may be amended from time to time, concerning certain additional warrants for
certain non-voting common stock of Participant potentially available to American
and other FFP Suppliers.
"Sponsors" shall have the meaning assigned to such term in
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Section 4.1 (Program Content).
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"Sponsor Contacts" shall have the meaning assigned to such
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term in Section 4.1 (Program Content).
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"$" and "Dollar" means United States Dollars.
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"Total Netcentives Points Redeemed for Frequent Flyer Points"
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shall mean all Netcentives Points redeemed for Frequent Flyer Points of FFP
Suppliers.
"Total Redeemed Netcentives Points" shall mean the total
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Netcentives Points redeemed for any service or product.
"Taxes" shall have the meaning assigned to such term in
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Section 24.1 (Participant Taxes).
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"Term" shall have the meaning assigned to such term in Section
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9.1 (Term).
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"Tour Packages" shall have the meaning assigned to such term
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in Section 4.1 (Program Content).
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"United States" or "U.S." means the fifty United States of
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America, the District of Columbia, Puerto Rico and territories or possessions of
the United States.
"U.S. AADVANTAGE Summary" means the summary of AADVANTAGE
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Program activity sent at intervals to all Members except those with mailing
addresses in Japan, Europe, the Middle East, Africa, and/or Latin America.
"Warrant Agreements" means the two Warrant Agreements dated on
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or about the date hereof, executed by American and Participant, as each may be
amended from time to time,
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concerning grants of [*****] share tranches, respectively, of warrants for
certain non-voting common stock of Participant.
2 Mileage Accrual.
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2.1 Mileage Accrual. In connection with each Qualifying
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Transaction, (i) Participant shall purchase from American and American shall
sell to Participant AADVANTAGE Miles upon payment terms specified herein, (ii)
Participant shall award AADVANTAGE Miles in exchange for Netcentives Points
subject to the terms stated in Section 4.1 (Program Content) and (iii) American
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shall post such AADVANTAGE Miles in accordance with Section 4.6 Transaction
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Processing).
Any pre-paid AADVANTAGE Miles must be awarded by Participant
pursuant to the terms of this Agreement not later than two (2) years following
their purchase or American's obligation to post such AADVANTAGE Miles shall
cease. American may, at American's option, return to Participant the amount
pre-paid by Participant for such unawarded AADVANTAGE Miles by written notice at
any time upon sixty (60) days prior written notice after one (1) year following
Participant's payment therefor. In such case, Participant shall not be entitled
to award such AADVANTAGE Miles.
Provisions of this Agreement that are stated to survive
termination or expiration of this Agreement shall survive for an additional
period, if longer, until all pre-paid AADVANTAGE Miles purchased hereunder are
awarded as provided in the immediately preceding paragraph.
2.2 Good Standing. American will post AADVANTAGE Miles
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hereunder only if such Member is enrolled and in good standing in the AADVANTAGE
Program. In order for a Member to be in good standing such Member must not
engage in activity that is contrary to AADVANTAGE Program Rules. There shall be
no refunds to Participant for AADVANTAGE Miles posted by American to a Member's
AADVANTAGE Account that are subsequently canceled or voided by American due to
such Member's failure to be in good standing as of the date such AADVANTAGE
Miles were posted or due to the circumstances described in Section 4.10
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(AADVANTAGE Program Abuse).
2.3 Rounding. In any Qualifying Transaction, if applicable, a
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partial AADVANTAGE Mile in such Transaction of (a) .50 or greater shall be
rounded up to one (1) AADVANTAGE Mile and (b) .49 or less shall be rounded down
to zero (0) AADVANTAGE Miles.
2.4 Bonus Miles. Participant may offer Bonus Miles for special
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promotions with American's prior written consent, such consent not to be
unreasonably withheld.
2.5 Ongoing Conditions Precedent - American. The obligation of
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American to perform hereunder and make available AADVANTAGE Miles to Participant
at any time shall be subject to the conditions precedent that, as of the date of
the purchase of such AADVANTAGE Miles or the date such performance is due by
American, as applicable:
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****** 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.
2.5.1 No Defaults. There exists no Participant
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Default or any event that with the giving of notice or lapse of time, or both,
would become a Participant Default.
2.5.2 Compliance with Agreement. Participant
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shall have performed and complied in all material respects with all agreements
and conditions contained herein which are required to be performed or complied
with by Participant before or at the date of such purchase of AADVANTAGE Miles.
2.5.3 No Material Adverse Effect. No event has
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occurred after the date hereof having a Material Adverse Effect on Participant.
2.5.4 Representations and Warranties. The
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representations and warranties of Participant contained in Section 13
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(Representations and Warranties of Participant) shall be true in all material
respects on the date of such purchase of AADVANTAGE Miles, with the same force
and effect as though made on and as of that date.
2.5.5 Bankruptcy Proceedings. No federal, state
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or foreign bankruptcy proceeding, case or similar action under similar laws
shall have been commenced by or against Participant.
2.5.6 Judicial or Environmental Intervention. No
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proceeding or case is pending before any court or governmental authority
investigating or seeking to enjoin or limit (i) American's rights hereunder or
(ii) the sale of AADVANTAGE Miles by American to Participant.
2.5.7 Force Majeure. No event or condition has
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occurred or is existing for which Participant is excused from performing
hereunder pursuant to Section 20 (Force Majeure).
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2.6 Ongoing Conditions Precedent - Participant. The
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obligation of Participant to perform hereunder and purchase AADVANTAGE Miles
from American at any time shall be subject to the conditions precedent that, as
of the date of the requirement to purchase such AADVANTAGE Miles or the date
such performance is due Participant, as applicable:
2.6.1 No Defaults. There exists no American
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Default or any event that with the giving of notice or lapse of time, or both,
would become an American Default.
2.6.2 Compliance with Agreement. American shall
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have performed and complied in all material respects with all agreements and
conditions contained herein which are required to be performed or complied with
by American before or at the date such performance is due.
2.6.3 No Material Adverse Effect. No event has
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occurred after the date hereof having a Material Adverse Effect on American.
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2.6.4 Representations and Warranties. The
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representations and warranties of American contained in Section 14
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(Representations and Warranties of American) shall be true in all material
respects on the date of such performance is due, with the same force and effect
as though made on and as of that date.
2.6.5 Bankruptcy Proceedings. No federal, state
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or foreign bankruptcy proceeding, case or similar action under similar laws
shall have been commenced by or against American.
2.6.6 Judicial or Governmental Intervention. No
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proceeding or case is pending before any court or governmental authority
investigating or seeking to enjoin or limit Participants rights hereunder.
2.6.7 Force Majeure. No event or condition has
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occurred or is existing for which American is excused from performing hereunder
pursuant to Section 20 (Force Majeure).
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2.7 Survival. Sections 2.2 (Good Standing) and 2.3
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(Rounding) shall survive termination or expiration of this Agreement and shall
continue in full force and effect until all AADVANTAGE Miles awarded hereunder
have been paid for.
3 Charges.
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3.1 Pricing. For Participant's participation in the
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AADVANTAGE Program, and for the AADVANTAGE Miles purchased by Participant
hereunder, Participant shall pay American, without offset, in accordance with
Section 3.2 (Mileage Payments), the amount per AADVANTAGE Mile ("Base Rate")
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purchased by Participant hereunder as specified on Attachment 1. Participant
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shall also pay either (i) a one time data processing hookup charge (less than
$1,000) for processing mileage transmissions or, at Participant's option, (ii)
the applicable per-mile administration and handling fee for the AAIM processing
mechanism chosen by Participant that shall be no greater than the administrative
fee charged to other AAIM customers.
3.2 Mileage Payments. Not later than five (5) Business
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Days after the date that Participant provides American with cartridges or
transmissions for AADVANTAGE Miles to be posted hereunder as provided in Section
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6.1 (Report from Participant), Participant shall pay American the per AADVANTAGE
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Mile Base Rate charges described in Section 3.1 (Pricing). American shall
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reconcile the payment amount received against the cartridge or transmission not
later than 30 days after American's receipt of the payment and will notify
Participant of any discrepancies. Any under-payment or over-payment by
Participant will require adjustment to subsequent payments in the amount of such
over-payment or under-payment and, with respect to underpayment, such adjustment
shall be paid by Participant before there will be any subsequent posting of
AADVANTAGE Miles. At American's option, American may choose not to post
AADVANTAGE Miles with respect to any under-paid amount.
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3.3 Method of Payments. All payments hereunder shall be
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made on their respective due dates by check or by wire transfer pursuant to
wiring instructions given by American or by other means of payment agreed in
writing by American.
3.4 Minimum Purchase; Prepayment. Participant shall
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prepay and purchase from American a minimum number of AADVANTAGE Miles each year
as specified in Attachment 2.
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3.5 Survival. This Section 3 shall survive termination or
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expiration of this Agreement and shall continue in full force and effect until
all AADVANTAGE Miles awarded hereunder have been paid for.
4 Program Content and Administration.
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4.1 Program Content. Participant will carry out a
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promotional program that includes the following key elements (such promotional
program is hereinafter referred to as the "Netcentives Program"). Participant
will enter into contracts ("Sponsor Contracts") with manufacturers, wholesalers,
retailers and service providers ("Sponsors") under which Sponsors will be
entitled to purchase from Participant and provide credits or points
("Netcentives Points") to such Sponsors' customers solely in connection with
offers appearing on the Internet and online services. [***] unless Netcentives
Points will not be exchangeable for AADVANTAGE Miles in connection with such
offer. [***] not later than two (2) Business Days after American's receipt of
such request. [***] Effective upon not less than ninety (90) days prior written
notice by American to Participant, [***] American. For informational purposes,
American hereby discloses to Participant that [***]
Except for special limited-time promotions, Netcentives Points
will be exchangeable for AADVANTAGE Miles at a ratio not less favorable to the
Member than the exchange ratio applicable to Frequent Flyer Points offered by
any other airline participating as a Frequent Flyer Point award supplier ("FFP
Supplier") in the Netcentives Program, but in any event not less than a ratio of
one (1) AADVANTAGE Mile for each one (1) Netcentives Point.
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****** 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.
Participant shall maintain a database of Netcentives Points earned and redeemed
by Sponsors' customers. Participant shall maintain a web site where Sponsors,
customers can check on the status of their Netcentives Points account and redeem
Netcentives Points for awards. Participant will not offer as an award under the
Netcentives Program any tour package in which any air travel component thereof
is supplied by an air carrier other than a FFP Supplier. Except for special
limited-time promotions, Participant will at all times remain neutral in
communicating the availability of Frequent Flyer Point awards on Participant's
web site, advertising and press releases so that in no instance is American
treated less favorably than any other FFP Supplier and will ensure that Sponsors
are similarly bound under their Sponsor Contracts.
"Qualifying Transaction" shall mean a redemption of
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Netcentives Points for AADVANTAGE Miles in accordance with the terms herein
stated. "Participant's Product or Service" shall mean the product(s) or
service(s) of Participant as described in this Section 4.1.
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4.2 AADVANTAGE Program Enrollment. Prospective Members must
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be enrolled in the AADVANTAGE Program in accordance with AADVANTAGE Program
Rules in order to earn AADVANTAGE Miles hereunder. American will not post
AADVANTAGE Miles hereunder until an AADVANTAGE Account number has been assigned.
4.3 AADVANTAGE Program Administration. Administration of the
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AADVANTAGE Program shall be performed by American and all AADVANTAGE Program
Rules shall apply to Participant's participation in the AADVANTAGE Program.
American will issue all Award Certificates, U.S. AADVANTAGE Summaries, and
AADVANTAGE Program newsletters.
4.4 Customer Service. Member questions concerning
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Participant's participation in the AADVANTAGE Program or record keeping in
connection therewith will be referred by American to Participant's customer
service department having a web site address and telephone number to be
furnished by Participant to American. Participant will maintain a customer
service department, with personnel available 8:00 A.M. PST to 5:00 P.M. PST, to
resolve any Member questions. This department will be staffed and supported by
Participant in such a manner that Participant will be able to effectively
address Member issues relating to Participant's participation in the AADVANTAGE
Program. Participant will ensure that the quality of Participant's Product or
Service and the quality of customer service provided by Participant to Members
hereunder shall be commensurate with that offered by major U.S. World Wide Web
providers and marketers of similar products or services.
4.5 Member Disputes. If a Member asserts that he or she is
---------------
entitled to AADVANTAGE Miles in connection with a Qualifying Transaction but did
not receive such AADVANTAGE Miles, and Participant has not, not later than
fifteen (15) Business Days after request of American, provided American with
documents (e.g., photocopy of correspondence) indicating that Participant has
----
responded to such Member concerning such dispute, and provided the Member
applies to American within twelve (12) months after the date of the Qualifying
Transaction, American shall have the right to post to the Member's AADVANTAGE
Account
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and invoice Participant, and Participant shall pay, in accordance with Section
-------
3.1 (Pricing), for the AADVANTAGE Miles in dispute.
---
4.6 Transaction Processing. Participant will be
----------------------
responsible for obtaining and maintaining the transaction processing function
necessary to process Qualifying Transactions. Participant will calculate the
number of AADVANTAGE Miles earned by Members for each Qualifying Transaction and
will incorporate that information into each Report to be furnished by
Participant to American pursuant to this Agreement. Participant understands and
agrees that American will rely on the accuracy of each Report submitted by
Participant to post AADVANTAGE Miles to a Member's AADVANTAGE Account subject to
any adjustment provided for in Section 3.2 (Mileage Payments) and Section 4.5
----------- -----------
(Member Disputes).
4.7 Training. Participant will provide training for all
--------
relevant Participant field and corporate staff members during the Term. Updated
training material as related to Participant's participation in the AADVANTAGE
Program will be produced and distributed by Participant on a regular basis. The
nature and extent of such training programs shall be sufficient to enable proper
administration of all items for which Participant is responsible hereunder.
4.8 Trademarks.
----------
4.8.1 American's Marks. Participant acknowledges
----------------
that the AADVANTAGE Program name and logo and the other names and marks referred
to below are the property of American and upon termination of this Agreement,
Participant will cease use of such logo, names and marks. The marks "AMERICAN
AIRLINES," and "AADVANTAGE" are the only marks owned by American that may be
used by Participant in marketing and promoting Participant's participation in
the AADVANTAGE Program and then only as provided in this Section and Section 7.3
-----------
(American Approval of Promotional Materials; Graphics Standards). Whenever the
words trademark, service xxxx or trade name are used in this Agreement, such
words shall be deemed to refer to the marks listed immediately above.
Participant will take no actions that are adverse to American's ownership rights
in such marks. Participant shall use only the term "Participant" to describe its
participation in the AADVANTAGE Program. Participant shall provide for
American's approval one or more templates for Netcentives Program description
for use in Sponsors' web sites and for Netcentives Program Internet banner ads
if any of such items use any of American's marks. Upon approval by American,
Participant may use and make available such templates for use by Sponsors.
Except as provided above, with respect to pre-approved templates, Sponsors may
not use in any press release, web site, web advertisement or other public
communication any of American's names or marks listed above without American's
prior written consent. Participant will ensure that Sponsors are so bound in
their Sponsor Contracts. Upon request of American, Participant shall terminate
from the Netcentives Program any Sponsor that fails to comply with the
foregoing.
4.8.2 Netcentives' Marks. American acknowledges
------------------
that Netcentives, ClickRewards, and ClickPoints names and logos (and other marks
as disclosed by Participant to American during the course of this Agreement) are
the property of Participant and upon
-11-
termination of this Agreement, American will cease use of such logo, names and
marks. Netcentives hereby grants American a limited, non-exclusive license to
duplicate and use Participant's marks in American's promotional materials and on
its Internet web site, during the Term of this Agreement, provided, however,
that any use of Participant's marks shall be for the purpose of promoting the
AADVANTAGE Program or the Netcentives Program and shall only be used with regard
to the inclusion of AADVANTAGE Miles within the Netcentives Program or
termination as provided in Section 7.5 (Termination).
-----------
4.9 Applicable Law. Participant will comply with Applicable
--------------
Law with respect to its operations, including the marketing and sale of
Participant's Product or Service, and its role in connection with the AADVANTAGE
Program.
4.10 AADVANTAGE Program Abuse. American reserves the right to
------------------------
terminate from the AADVANTAGE Program any Member that, in American's judgment,
engages in any activity that is contrary to AADVANTAGE Program Rules contained
in the AADVANTAGE member guide in effect from time to time. Fraud or abuse in
relation to AADVANTAGE mileage credit or award usage is subject to appropriate
administrative and/or legal action by American including, without limitation:
the forfeiture of all Award Certificates, tickets issued against Award
Certificates and any accrued mileage in a Member's AADVANTAGE Account; as well
as cancellation of the account and Member's future participation in the
AADVANTAGE Program. Participant shall cooperate with all reasonable requests of
American concerning any investigation and/or prosecution of anyone engaging in
or suspected of engaging in AADVANTAGE Program abuse or fraud, including but not
limited to assisting American in verifying any purported Member's AADVANTAGE
Program membership status and cooperating with any civil or criminal
prosecution. In the event that Participant detects fraud or abuse in relation to
the issuance or redemption of Netcentives Points, American shall, insofar as
such fraud or abuse involves the AADVANTAGE Program, cooperate with all
reasonable requests of Participant concerning any investigation of anyone
engaging in or suspected of engaging in Netcentives Program abuse or fraud,
including but not limited to, assisting Participant in verifying AADVANTAGE
Program membership status.
4.11 Cancellation or Alteration of AADVANTAGE Program.
------------------------------------------------
Participant acknowledges that American may cancel or alter any part of the
AADVANTAGE Program, the AADVANTAGE mileage accrual structure, or any AADVANTAGE
Award at any time and may offer supplemental award promotions. American may add
or delete other Persons as AADVANTAGE Participants, subject to Section 5
---------
(Exclusivity).
4.12 Air Carrier Sponsor. No air carrier that is not a FFP
-------------------
Supplier may be a Sponsor or may advertise on Participant's web site.
Participant agrees that American or its Affiliates shall have the right to be a
Sponsor or advertise on Participant's web site on terms mutually acceptable to
American or such Affiliate, as applicable, and Participant, but in any event on
terms no less favorable to American or such Affiliate than those terms
applicable to any other FFP Supplier Sponsor in the Netcentives Program.
-12-
4.13 Reserve Requirement. Participant shall work with Deloitte
-------------------
& Touche, or such other "Big 6" auditor as Participant deems fit, to structure a
reserve process to provide for redemptions. American shall, upon thirty (30)
days written request, receive from Participants auditor an opinion on the
suitability of such reserve process to meet Participant's business obligations.
4.14 Management of Program. The price, terms and conditions
---------------------
for the purchase of Frequent Flyer Points from a FFP Supplier, as well as the
selection of FFP Suppliers, shall be determined exclusively by Participant
without participation by any FFP Supplier. American and its Affiliates shall
have no duties or responsibilities, administrative, financial or otherwise, with
respect to the Netcentives Program except, in the case of American, American's
duties and responsibilities expressly set forth herein as a vendor of AADVANTAGE
Miles and any other responsibilities or American expressly set forth herein.
American and its Affiliates shall have no implied duties or obligations with
respect to the Program. Participant shall operate its business and the Program
independently from the FFP Suppliers and shall not permit any FFP Supplier to
exercise influence or control over management of its business or the Netcentives
Program.
4.15 Computer Reservation Function. Participant shall allow
-----------------------------
American or its Affiliates, including The SABRE Group, Inc., to bid on providing
Participant with computerized reservation booking capability if Participant
decides it needs such capability.
5 Exclusivity.
5.1 Limited Exclusivity. Subject to the terms and limitations
-------------------
set forth herein, American will not offer AADVANTAGE Miles to be used as an
incentive in any program that is a Direct Competitor of Participant. The term
"Direct Competitor of Participant" means [......]. This limited exclusivity is
herein referred to as "Limited Exclusivity." It is acknowledged and understood
by Participant that except as pertains to a Direct Competitor of Participant,
American may [***] and that none of such actual or potential promotional
activities are precluded hereunder. [***] Participant acknowledges and agrees
that [***]
5.2 Termination of Limited Exclusivity. American or
----------------------------------
Participant may terminate American's obligations with respect to Limited
Exclusivity by giving not less than ninety (90) days prior written notice of
such termination to the other party ("Exclusivity Termination Notice");
provided, however, that in no event may American so terminate its
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****** 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.
obligations with respect to Limited Exclusivity with an effective date of
termination prior to January 31, 1998. Effective [***] after Participant's or
American's receipt of the other party's Exclusivity Termination Notice, [.....]
(ii) the AADVANTAGE Mile minimum purchase and prepayment requirements shall end
as provided on Attachment 2 and (iii) American will not be bound under the terms
------------
of Limited Exclusivity.
6 Reports.
-------
6.1 Report from Participant. Participant will provide American
-----------------------
with cartridges or transmissions listing AADVANTAGE Miles to be posted by Member
name, AADVANTAGE Account number, transaction code and other items as specified
in the Report. Participant will submit these cartridges or transmissions, which
will be merged with the AADVANTAGE data base maintained by American, to American
at least once each month (and if only once each month, on the day of the month
specified by written notice from American to Participant), but not more often
than once each week. The cartridges or transmissions will include all AADVANTAGE
Miles to be posted for Qualifying Transactions for the immediately preceding
period and any corrections of prior cartridges or transmissions.
6.2 Verification. To minimize posting errors, Participant will
------------
verify that the Member's AADVANTAGE Account number is valid prior to
transmission to American as per the algorithm outlined in the Report.
6.3 Report from American. American will promptly provide
--------------------
Participant with cartridge, tape, transmission or hard copy summary error report
concerning requested postings.
6.4 Tax Reporting. Participant shall be responsible for any
-------------
tax reporting in connection with the award of AADVANTAGE Miles hereunder.
6.5 Survival. This Section 6 shall survive termination or
-------- ---------
expiration of this Agreement and shall continue in full force and effect until
all AADVANTAGE Miles awarded hereunder have been paid for.
7 Marketing and Advertising.
-------------------------
7.1 Web Site and Telephone Number. Participant at its sole
-----------------------------
expense shall maintain throughout the Term a web site and telephone number to be
used exclusively for marketing Participant's Product or Service. All advertising
and promotion of Participant's Product or Service by Participant shall feature
Participant's web site address. Participant will have adequate personnel
available 8:00 A.M. PST to 5:00 P.M. PST to service callers on the telephone
number. Participant shall furnish American such statistical information
concerning the calls that relate to Participant's participation in the
AADVANTAGE Program as American may request from time to time.
7.2 Newsletter Inserts. Subject to the terms hereof and
------------------
American's ability to physically accommodate the insert in the U.S. AADVANTAGE
Summary envelope, Participant shall purchase two (2) inserts in the U.S.
AADVANTAGE Summary envelope sent by American
-14-
****** 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.
to Members for each Contract Year during the Term. Participant shall pay the
preferred AADVANTAGE Participant rate for inserts. American may, but shall not
be obligated to, make additional insert opportunities available to Participant
on a space available basis. All inserts are subject to a maximum weight of .10
ounces. Participant, at its sole cost and expense, shall create and produce all
inserts that it wishes American to consider inducing. Participant shall deliver
each insert to American no less than five (5) Business Days prior to the date of
the U.S. AADVANTAGE Summary mailing. Insertion costs associated with these
inserts is included in American's preferred rates referred to above, provided
the insert does not place the mailing overweight or require special handling by
the mailing vendor, in which case Participant shall pay the extra costs.
American shall have the right to approve the content of such inserts. In the
event that such insert will require extra postage, Participant shall have the
option to pay such extra postage or to reschedule the insert to a U.S.
AADVANTAGE Summary mailing when no extra postage will be required but
Participant must still meet the timing requirement described above, if
applicable. Nothing herein shall be considered as giving Participant the right
to an insert for any particular summary mailing. In the event Participant
chooses not to incorporate a requested insert that has been approved and
scheduled by American, it must provide American with written notice not less
than sixty (60) days prior to the scheduled insertion date.
7.3 American Approval of Promotional Materials; Graphic
---------------------------------------------------
Standards. Participant shall submit to American for review and approval, prior
---------
to publication or use, the portion of any and all artwork, scripts, copy,
advertising, promotional materials, direct mail, press releases, newsletters,
Internet pages or other communications or any other publicity published or
distributed by Participant (or at its direction or authorization) that
specifically references this Agreement, the AADVANTAGE Program, American (or any
of American's Affiliates) or uses any trademark, service xxxx, logo or trade
name of American or any of its Affiliates. All such promotional materials shall
follow the graphics standards and AADVANTAGE Program disclaimers set forth on
Attachment 5. American shall have the right to modify the graphics standards and
------------
AADVANTAGE Program disclaimers from time to time. All promotional or
informational material using the name "AADVANTAGE" or "American Airline" will
require the tag line "American Airlines and AADVANTAGE are registered trademarks
of American Airlines, Inc." Notwithstanding the foregoing, certain templates are
to be submitted for American's approval as provided in Section 4.8.1 (American's
-------------
Marks). American and Participant shall issue mutually acceptable press releases,
at a mutually agreed time, concerning American's participation in the
Netcentives Program, including the exclusive nature of such participation.
American will have a representative at Participant's Netcentives Program launch
press conference.
7.4 Web Site Co-Marketing. American agrees to provide a link
---------------------
to Participant's web site from American's web site. Participant agrees to
provide a link to American's web site from Participant's web site.
7.5 Termination. All promotion and publication rights of
-----------
Participant and American hereunder shall immediately cease upon notice of
termination of this Agreement by either party.
-15-
8 Reports; Audits.
---------------
8.1 Informational Reports. Participant will produce and
---------------------
deliver to American, at such intervals as American shall reasonably request,
reports of the aggregate number of Netcentives Points issued to or purchased by
Sponsors (as a whole and not identified as to any particular Sponsor), the
aggregate number of Netcentives Points distributed by Sponsors (as a whole and
not identified as to any particular Sponsor) to their customers, Total Redeemed
Netcentives Points, Total Netcentives Points Redeemed for Frequent Flyer Points
(as a whole and not identified as to any particular FFP Supplier) of FFP
Suppliers, forecasts of Netcentives Program demand and such other reports and
information regarding the sale or licensing and redemption of Netcentives Points
in relation to American's participation in the Netcentives Program as American
shall reasonably request.
8.2 Audit Access. Participant will permit American and any of
------------
American's accountants, attorneys and representatives reasonable access to audit
Participant's participation in the AADVANTAGE Program and for such purpose to
examine all books of account, records, reports and other papers, to make copies
therefrom and to discuss same with Participant's officers, employees and
accountants, all at such reasonable times and as often as may be reasonably
requested by American. Such audits will be at American's sole cost. Such audits
may include but will not be limited to, an audit of Participant's records
concerning AADVANTAGE Miles purchased or awarded by Participant, the quality of
customer service provided by Participant to Members, the compliance by
Participant with Applicable Law and compliance by Participant with the terms of
this Agreement.
8.3 Survival. This Section 8 shall survive termination or
-------- ---------
expiration of this Agreement and shall continue in full force and effect until
all AADVANTAGE Miles awarded hereunder have been paid for.
9 Term of Agreement.
-----------------
9.1 Term. This Agreement shall become effective on the date
----
hereof ("Commencement Date") and shall continue in full force and effect until
and including July 31, 2000 (the "Term").
9.2 Notice of Termination. All notices to the general public
---------------------
and Members of the termination of Participant's participation in the AADVANTAGE
Program will be the sole responsibility of American and shall be undertaken at
American's sole cost and expense. In addition, Participant may announce
termination to Netcentives Program members at Participant's cost and expense.
10 Indemnification; Limitation of Usability.
----------------------------------------
10.1 Participant Indemnification. Participant shall indemnify
---------------------------
and hold harmless American, as well as American's parent company, subsidiaries,
licensees and Affiliates and their officers, shareholders, directors, employees
and agents (herein collectively referred to as "American Indemnified Parties")
from and against any and all Losses incurred by, borne by or
-16-
asserted against any of the American Indemnified Parties arising out of or
resulting from (i) Participant's performance, failure to perform or improper
performance of this Agreement, (ii) breach of any representation or warranty of
Participant contained herein, (iii) the marketing, sale or use of Participant's
Product or Service, (iv) any claim that any permitted use hereunder by American
of any Participant trademark or name infringes on any existing copyright,
trademark or property right of any Person, (v) any claims or statements made by
Participant in its advertising or promotional activities that are in conflict,
or inconsistent, with the terms of this Agreement or fail to comply with
Applicable Law, or (vi) any Program Sponsor's purchase or use of Netcentives
Points. American will inform Participant promptly after American receives notice
of any claim with respect to which indemnity hereunder is asserted and will
grant to Participant the right to control, and will cooperate with Participant
in, the defense of such claim.
10.2 Limitation. Except for the indemnification obligations
----------
stated above, in no event will either party be liable under this Agreement or
under Applicable Law in connection with this Agreement to the other party for
consequential, punitive or exemplary damages relating to this Agreement and each
party hereby releases and waives any claims against the other party for such
damages. In no event shall American be liable under this Agreement or under
Applicable Law in connection with this Agreement for an amount in excess of the
aggregate amount of revenues received by American from Participant under this
Agreement.
10.3 Survival. This Section 10 shall survive termination or
-------- ----------
expiration of this Agreement and shall continue in full force and effect for a
period of three (3) years thereafter.
11 Default of Participant; Remedies; Other Rights of American.
----------------------------------------------------------
11.1 Participant Default. The occurrence of any one or more
-------------------
of the following events shall constitute a "Participant Default":
11.1.1 Participant defaults in the performance of any
of the terms and conditions of this Agreement, and such default continues for a
period of thirty (30) days or longer (ten (10) days or longer in the case of
default in payment of any sums due hereunder) following written notice thereof
from American to Participant, which notice shall describe in reasonable detail
the alleged default;
11.1.2 Participant defaults under, or breaches the terms
of, the Warrant Agreement;
11.1.3 Participant voluntarily files for bankruptcy or
makes an assignment for the benefit of its creditors, or if an involuntary
assignment or bankruptcy petition is made or filed against Participant and not
dismissed or satisfied within sixty (60) days, or if the interest of Participant
hereunder passes by operation of law to any Person; or
11.1.4 Any representation or warranty made at any time
by Participant to American proves to be untrue in any material respect.
-17-
11.2 American Remedies. If a Participant Default shall
-----------------
occur, then American, at its option, may immediately terminate this Agreement by
written notice to Participant at any time after the occurrence of such
Participant Default and/or pursue any remedies available under Applicable Law,
subject to the limitations stated in Section 10.2 (Limitation). Nothing
------------
contained herein shall be deemed to restrict or prevent American from pursuing
equitable remedies at any time to prevent or enjoin the breach or threatened
breach of this Agreement by Participant. All such remedies shall be cumulative
and the pursuit of one or more remedies by American shall not be deemed a waiver
of any other rights or remedies of American hereunder.
11.3 Additional Rights. American shall have the following
-----------------
additional rights and Participant the following additional duties whether or not
there exists a Participant Default:
11.3.1 If American decides to terminate the AADVANTAGE
Program, American may terminate this Agreement at any time upon not less than
one hundred eighty (180) days' prior written notice to Participant.
11.3.2 In the event that (i) Participant merges with
or into or is acquired, in whole or in part, by another Person; (ii)
Participant sells substantially all of its assets; or (iii) Participant acquires
another Person or purchases substantially all of the assets of another Person,
American shall have the right, upon not less than thirty (30) days prior written
notice, to terminate this Agreement if in American's judgment (a) such other
Person is a competitor of American or (b) such event will have a Material
Adverse Effect upon this Agreement or Participant's participation in the
AADVANTAGE Program.
In the event of termination by American under this Section
11.3, any amounts prepaid by Participant hereunder will promptly be refunded by
American to Participant net of any amounts due and owing to American hereunder.
12 Default of American; Remedies:
-----------------------------
12.1 American Default. The occurrence of any one or more
----------------
of the following events shall constitute an "American Default":
12.1.1 American defaults in the performance of any of
the terms and conditions of this Agreement, and such default continues
for a period of thirty (30) days or longer following written notice thereof from
Participant to American, which notice shall describe in reasonable detail the
alleged default;
12.1.2 American voluntarily files for bankruptcy or
makes an assignment for the benefit of its creditors, or if an involuntary
assignment or bankruptcy petition is made or filed against American and not
dismissed or satisfied within sixty (60) days, or if the interest of American
hereunder passes by operation of law to any Person; or
12.1.3 Any representation or warranty made hereunder
by American to Participant proves to be untrue in any material respect.
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12.2 Participant Remedies. If an American Default shall occur,
--------------------
then Participant, at its option, may immediately terminate this Agreement by
written notice to American at any time after the occurrence of such American
Default and/or pursue any remedies available under Applicable Law, subject to
the limitations stated in Section 10.2 (Limitation), including without
------------
limitation the right to promptly receive a refund from American of any amounts
prepaid by Participant hereunder, net of any amounts due and owing to American
hereunder. Nothing contained herein shall be deemed to restrict or prevent
Participant from pursuing equitable remedies at any time to prevent or enjoin
the breach or threatened breach of this Agreement by American. All such remedies
shall be cumulative and the pursuit of one or more remedies by Participant shall
not be deemed a waiver of any other rights or remedies of Participant hereunder.
13 Representations and Warranties of Participant. As an
---------------------------------------------
inducement to American to enter into this Agreement, Participant represents and
warrants to American as follows:
13.1 Due Organization. Participant is a corporation duly
----------------
organized and validly existing under the laws of California. Participant has
full power to own or lease its properties and to conduct its business as
presently conducted, including the marketing and sale of Participant's Product
or Service. Participant is duly authorized, qualified or licensed to do business
and validly existing as a foreign corporation in each jurisdiction in which it
is so required to be authorized, qualified or licensed where the failure to be
so qualified would have a Material Adverse Effect on Participant.
13.2 Requisite Power; Enforceability. Participant has all
-------------------------------
requisite corporate power and authority to execute, enter into and carry out the
terms and conditions of this Agreement and any other agreements and instruments
contemplated hereby, and to perform its obligations hereunder and thereunder.
This Agreement has been duly executed and delivered and is a legal, valid and
binding agreement of Participant, enforceable in accordance with its terms,
except that the enforceability of this Agreement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and that the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
13.3 No Conflict. Neither the execution or delivery of this
-----------
Agreement, nor the consummation of the transactions contemplated hereby, will
conflict with or result in the breach of any term or provision of, or constitute
a default under, or give any third party the right to accelerate any material
obligation under, any charter provision, bylaw, contract or Applicable Law to
which Participant is a party or by which Participant or any its assets or
properties are in any way bound or obligated.
13.4 No Consent. No consent, approval, order or authorization
----------
of, or registration, qualification, designation, declaration or filing with, any
Competent Authority is required on the part of Participant in connection with
the transactions contemplated by this Agreement, except for those which have
been obtained and except for the filing of revised
-19-
Articles of Incorporation with the Secretary of State of California with respect
to the issuance of non-voting convertible stock. No consent, approval, waiver or
other action by any Person under any contract is required or necessary for the
execution, delivery and performance of this Agreement by Participant, or the
consummation by Participant of the transactions contemplated hereby, except for
those which have been obtained, except for approval by Participant's Board with
respect to the warrants contemplated under this Agreement.
14 Representations and Warranties of American. As an
------------------------------------------
inducement to Participant to enter into this Agreement, American represents and
warrants to Participant as follows:
14.1 Due Organization. American is a corporation duly
----------------
organized and validly existing under the laws of Delaware. American has full
power to own or lease its properties and to conduct its business as presently
conducted. American is duly authorized, qualified or licensed to do business and
validly existing as a foreign corporation in each jurisdiction in which it is so
required to be authorized, qualified or licensed.
14.2 Requisite Power; Enforceability. American has all
-------------------------------
requisite corporate power and authority to execute, enter into and carry out the
terms and conditions of this Agreement and any other agreements and instruments
contemplated hereby, and to perform its obligations hereunder and thereunder.
This Agreement has been duly executed and delivered and is a legal, valid and
binding agreement of the American, enforceable in accordance with its terms,
except that the enforceability of this Agreement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and that the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
14.3 No Conflict. Neither the execution or delivery of this
-----------
Agreement, nor the consummation of the transactions contemplated hereby, will
conflict with or result in the breach of any term or provision of, or constitute
a default under, or give any third party the right to accelerate any material
obligation under, any charter provision, bylaw, contract or Applicable Law to
which American is a party or by which American or any its assets or properties
are in any way bound or obligated.
14.4 No Consent. No consent, approval, order or authorization
----------
of, or registration, qualification, designation, declaration or filing with, any
Competent Authority is required on the part of American in connection with the
transactions contemplated by this Agreement, except for those which have been
obtained. No consent, approval, waiver or other action by any Person under any
contract is required or necessary for the execution, delivery and performance of
this Agreement by American, or the consummation by American of the, transactions
contemplated hereby, except for those which have been obtained.
15 Notices. All notices, reports, invoices and other
-------
communications required or permitted hereunder to be given to or made upon any
party hereto in writing, shall be addressed as provided below and shall be
considered as property given (i) if delivered in person; (ii) if sent by an
express courier delivery service which provides signed acknowledgments of
receipt; (iii) if
-20-
deposited in the US. certified or registered first class mail, postage prepaid,
return receipt requested or (iv) if transmitted by telecopier (upon receipt by
sender thereof of evidence that a complete transmission of such telecopy was
made to the recipient thereof) and, in the case of telecopier transmission,
confirmed by (a) telephone contemporaneously to the person entitled to receive
such notice or to such person's secretary, and (b) dispatching a copy of such
notice by the methods described in clause (i), (ii) and (iii) above. All notices
shall be effective upon receipt. For the purposes of notice, the addresses of
the parties shall be as set forth below; provided, however, that either party
shall have the right to change its address for notice hereunder to any other
location by giving not less than thirty (30) days notice to the other party in
the manner set forth above.
If to American:
--------------
By Mail: American Airlines, Inc.
X.X. Xxx 000000, XX 0000
XXX Xxxxxxx, XX 00000-0000
Attn: Xxxxx Xxxxxx
By Courier: 0000 Xxxx Xxxxxx Xxxxxxxxx
XX 2424
Xxxx Xxxxx, XX 00000
Attn: Xxxxx Xxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
If to Participant:
-----------------
Netcentives Inc.
0000 Xx Xxxxxx Xxxx
Xxxxx 000
Xxx Xxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx, Chairman
Phone: (000) 000-0000
Fax: (000) 000-0000
16 Governing Law; Consent to Jurisdiction. THIS AGREEMENT AND THE
--------------------------------------
RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF TEXAS,
EXCLUDING ITS RULES OF CONFLICTS OF LAW. Each party hereto irrevocably consents,
agrees and submits to the exclusive jurisdiction of the U.S. federal courts of
the Northern District of Texas or, if such court does not have jurisdiction, of
the courts of the State of Texas in Tarrant County, for the purposes of any
suit, action or proceeding arising out of or relating to this Agreement and
irrevocably waives, to the
-21-
fullest extent permitted by law, any objection to the Iaylng of venue of any
such suit, action or proceeding in any such court or any claim that any such
suit, action or proceeding has been brought in an inconvenient forum. Each party
agrees that neither of them will bring any suit, action or other proceeding
arising out of this Agreement, the subject matter herein, or any of the
transactions described herein, in any jurisdiction other than the jurisdiction
described above. Each party consents to process being served in any such suit,
action or proceeding by any of the methods of notice specified in Section 15
(Notices). Each such party agrees that such service shall be deemed in every
respect effective service of process in any such suit, action or proceeding and
shall, to the fullest extent permitted by law be taken and held to be valid
personal service upon and personal delivery to such party.
17 Waiver. No waiver of breach of any provision of this Agreement by
------
either party shall constitute a waiver of any subsequent breach of the same or
any other provision hereof, and no waiver shall be effective unless made in
writing and signed by an officer of the other party.
18 American's Confidentiality.
--------------------------
18.1 American's Confidential Information. "American's
-----------------------------------
Confidential Information" shall mean (i) all data, reports, interpretations,
forecasts, records or other information concerning the AADVANTAGE Program or
Members, tangible or intangible, oral or written, which American may give
Participant access to or which Participant obtains through the Netcentives
Program, (ii) all AADVANTAGE Program documents and marketing materials that
American may provide to Participant where such documents are identified orally
or in writing by American as confidential immediately prior to or immediately
after disclosure by American to Participant, and (iii) any other information
identified orally or in writing by American as confidential immediately prior to
or immediately after disclosure by American to Participant. Participant
acknowledges that American's Confidential Information is the sole and exclusive
property of American. Participant acknowledges that American's Confidential
Information includes this Agreement and its terms and the names, addresses and
other information disclosed by American to Participant regarding any Member or
obtained by Participant in connection with processing mileage accrual for
Qualifying Transactions. Nothing in this Agreement, however, shall prevent
Participant from independently compiling information regarding its customers so
long as (i) the status of being an AADVANTAGE Member, AADVANTAGE Account
numbers, any other AADVANTAGE membership data, or any reference to or other
association with American is not identified in, or used as a factor or criteria
in compiling, such information, and (ii) any promotions or communications
directed at such customers, or any partial grouping thereof, by Participant or
by Participant jointly with another Person or Persons, are not directed
exclusively to such individuals, and will not reference such individuals, as
Members or travelers on American, without American's prior written consent.
18.2 Non-Disclosure by Participant. Participant shall not
-----------------------------
sell, transfer, publish, disclose, display or otherwise make available
American's Confidential Information to any third Person except as may be
required by Applicable Law, in which case Participant shall (i) promptly notify
American, (ii) use reasonable and lawful efforts to resist making any disclosure
not approved by American, (iii) use reasonable and lawful efforts to limit the
amount of
-22-
confidential information to be disclosed pursuant to any such disclosure not
approved by American, and (iv) use reasonable and lawful efforts to obtain a
protective order or other appropriate relief to minimize the further
dissemination of any confidential information to be disclosed pursuant to any
such disclosure not approved by American. In addition, Participant shall not
disclose American's Confidential Information to any Affiliate, employee, or
agent of Participant, except on a need-to-know basis. Participant shall ensure
that all such Affiliates, employees and agents recognize that American's
Confidential Information is subject to this non-disclosure obligation.
Furthermore, Participant will not use American's Confidential Information for
any purposes other than as expressly provided in this Agreement. Participant
will maintain American's Confidential Information in secrecy at all times, using
at least the same degree of care with respect to such confidential information
as Participant uses in protecting Participant's own proprietary information and
trade secrets. Information shall not be subject to the foregoing confidentiality
restrictions to the extent such information (i) was in possession of or known to
Participant prior to Participant's execution of this Agreement, unless such
information was received by Participant subject to earlier confidentiality
agreements or arrangements with American or its Affiliates; (ii) is or becomes
public knowledge other than by means of a breach of confidentiality by
Participant; (iii) is received by Participant from a third party that
Participant reasonably believes is lawfully in possession of such information
and under no duty to keep it in confidence, or (iv) is approved by American, in
writing, for release by Participant.
18.3 Return of American's Confidential Information. Upon
---------------------------------------------
termination or expiration of this Agreement for any reason, American's
Confidential Information shall be promptly returned to American and Participant
shall destroy any copies, extracts or other reproductions, in whole or in part,
of American's Confidential Information, regardless of the media in which
recorded or stored, and any working papers or notes containing any item of
American's Confidential Information. Upon written request of American,
Participant shall deliver to American a signed certification that all such
copies, extracts, reproductions and working papers have been destroyed.
18.4 Participant's Employees and Agents. Participant covenants
----------------------------------
and agrees that it shall cause Participant's principals, members, partners,
officers, directors, stockholders, employees, agents and contractors who may
gain access to American's Confidential Information, whether or not such access
is permitted hereunder, to comply with each agreement of Participant under this
Section 18.
----------
18.5 American's Equitable Relief. Participant acknowledges and
---------------------------
agrees that American will have no adequate remedy at law if there is a breach or
threatened breach of this Section 18 and, accordingly, that American shall be
----------
entitled to an injunction against such breach. Nothing herein shall be construed
as a waiver of any other legal or equitable remedies which may be available to
American if Participant breaches this Section 18.
----------
18.6 Survival. This Section 18 shall survive termination or
-------- ----------
expiration of this Agreement and shall continue in full force and effect for a
period of five (5) years thereafter.
-23-
19 Participant's Confidentiality.
-----------------------------
19.1 Participant's Confidential Information. "Participant's
--------------------------------------
Confidential Information" shall mean any information, technical data, or
know-how, including, but not limited to, that which relates to research, product
plans, products, services, information on individuals who are members of the
Netcentives Program, customers, markets, software, developments, inventions,
processes, designs, drawings, engineering, hardware, configuration information,
marketing or finances of Participant, which is designated in writing to be
confidential or proprietary, or if given orally, is identified as confidential
or proprietary at the time of disclosure. American acknowledges that
Participant's Confidential Information is the sole and exclusive property of
Participant.
19.2 Non-Disclosure by American. American shall not sell,
--------------------------
transfer, publish, disclose, display or otherwise make available Participant's
Confidential Information to any third Person except as may be required by
Applicable Law, in which case American shall (i) promptly notify Participant,
(ii) use reasonable and lawful efforts to resist making any disclosure not
approved by Participant, (iii) use reasonable and lawful efforts to limit the
amount of confidential information to be disclosed pursuant to any such
disclosure not approved by Participant, and (iv) use reasonable and lawful
efforts to obtain a protective order or other appropriate relief to minimize the
further dissemination of any confidential information to be disclosed pursuant
to any such disclosure not approved by Participant. In addition, American shall
not disclose Participant's Confidential Information to any Affiliate, employee,
or agent of American, except on a need-to-know basis. American shall ensure that
all such Affiliates, employees and agents recognize that Participant's
Confidential Information is subject to this non-disclosure obligation.
Furthermore, American will not use Participant's Confidential Information for
any purposes other than as expressly provided in this Agreement. American will
maintain Participant's Confidential Information in secrecy at all times, using
at least the same degree of care with respect to such confidential information
as American uses in protecting American's own proprietary information and trade
secrets. Information shall not be subject to the foregoing confidentiality
restrictions to the extent such information (i) was in possession of or known to
American prior to American's execution of this Agreement, unless such
information was received by American subject to earlier confidentiality
agreements or arrangements with Participant or its Affiliates; (ii) is or
becomes public knowledge other than by means of a breach of confidentiality by
American; (iii) is received by American from a third party that American
reasonably believes is lawfully in possession of such information and under no
duty to keep it in confidence, or (iv) is approved by Participant, in writing,
for release by American.
19.3 Return of Participant's Confidential Information. Upon
------------------------------------------------
termination or expiration of this Agreement for any reason, Participant's
Confidential Information shall be promptly returned to Participant and American
shall destroy any copies, extracts or other reproductions, in whole or in part,
of Participant's Confidential Information and any working papers or notes
containing any item of Participant's Confidential Information. Upon written
request of Participant, American shall deliver to Participant a signed
certification that all such copies, extracts, reproductions and working papers
have been destroyed.
-24-
19.4 American's Employees and Agents. American covenants and
-------------------------------
agrees that it shall cause American's principals, members, partners, officers,
directors, stockholders, employees, agents and contractors who may gain access
to Participant's Confidential Information, whether or not such access is
permitted hereunder, to comply with each agreement of American under this
Section 19.
----------
19.5 Participant's Equitable Relief. American acknowledges and
------------------------------
agrees that Participant will have no adequate remedy at law if there is a breach
or threatened breach of this Section 19 and, accordingly, that Participant shall
----------
be entitled to an injunction against such breach. Nothing herein shall be
construed as a waiver of any other legal or equitable remedies which may be
available to Participant if American breaches this Section 19.
----------
19.6 AADVANTAGE Database. Notwithstanding the foregoing,
-------------------
Participant acknowledges and agrees that names, addresses, phone numbers and
other information concerning Participant's customers may become part of the
AADVANTAGE Program database and American shall not be restricted in any way in
its utilization of such database. However, American will not furnish AADVANTAGE
membership data that identifies a Member as a customer of Participant to any
Person without Participant's prior written consent.
19.7 Survival. This Section 19 shall survive termination or
-------- ----------
expiration of this Agreement and shall continue in full force and effect for a
period of five (5) years thereafter.
20 Force Majeure. 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; provided
however that this clause shall not apply to Participant's obligation to pay for
AADVANTAGE Miles or pay other sums when due hereunder.
21 Independent Contractor. Nothing in this Agreement is intended or
----------------------
shall be construed to create or establish any agency, partnership or joint
venture relationship between the parties. The parties expressly disclaim such
relationship, agree that they are acting solely as independent contractors
hereunder and agree that the parties have no fiduciary duty to one another or
any other special or implied duties that are not expressly stated herein.
22 Entire Agreement. This Agreement and all Attachments hereto
----------------
constitute the entire agreement between the parties with respect to the subject
matter hereof and supersede any prior or contemporaneous agreement or
understanding, whether written or oral, if any, between the parties with respect
to such subject matter. This Agreement may be modified only by a further written
agreement signed by all of the parties hereto. THERE ARE NO ORAL AGREEMENTS
CONCERNING THE SUBJECT MATTER OF THIS AGREEMENT.
23 Successors and Assigns. This Agreement shall be binding upon and
----------------------
shall inure to the benefit of the permitted successors and assigns of each party
hereto. Participant may not assign, delegate or otherwise convey this Agreement,
or any of its rights and obligations hereunder, to any Person without the prior
written consent of American, and any such attempted assignment without consent
shall be void. American may assign the administration of this
-25-
Agreement to any Person that is an Affiliate of American. American may, from
time to time, delegate one or more of American's administrative duties hereunder
to an Affiliate or non-Affiliate of American.
24 Taxes.
-----
24.1 Participant Taxes. Participant will pay when due all
-----------------
present and future taxes and levies, imposts, deductions, charges, stamp taxes
or withholdings whatsoever, including without limitation sales, use, excise or
goods and services taxes (collectively "Taxes") imposed, assessed, levied or
collected by any taxing jurisdictions together with interest thereon and
penalties, fines and surcharges with respect thereto, if any, on or in respect
of any payments made or to be made by Participant under this Agreement but
excluding any such Taxes arising from or measured by American's net income (such
non-excluded taxes are collectively referred to as "Participant Taxes").
24.2 Indemnity for Taxes. Without limiting the foregoing,
-------------------
Participant will indemnify American against, and reimburse American upon demand
for, any Participant Taxes that American is obligated to pay or has paid.
24.3 Withholding. In the event that Participant is required by
-----------
Applicable Law to deduct or withhold Participant Taxes from any amounts payable
under or in respect of this Agreement, Participant shall (i) pay to American
such additional amounts as may be required, so that after the deduction or
withholding of such Participant Taxes, American will receive from Participant on
the due date thereof an amount equal to the amount stated to be payable to
American under this Agreement had such Participant Taxes not been imposed, (ii)
make the required deduction or withholding and (iii) promptly pay the
authorities before penalties attach thereto or interest accrues thereon.
25 Captions. The captions appearing in this Agreement have been
--------
inserted as a matter of convenience and in no way define, limit or enlarge the
scope of this Agreement or any of the provisions hereof.
26 Construction. The parties acknowledge and agree that this
------------
Agreement has been drafted and prepared through the efforts of both parties and
the rule of construction that any vague or ambiguous terms are to be construed
against the party drafting same shall not be applied to either party to this
Agreement.
27 Severability. If any provision of this Agreement is deemed to be
------------
illegal, invalid or unenforceable for any reason, the remaining provisions of
this Agreement shall be unaffected, and this Agreement shall continue in full
force and effect.
28 No Third Party Beneficiaries. All rights, remedies and
----------------------------
obligations of the parties under this Agreement shall accrue or apply solely to
the parties hereto or their permitted successors or assigns and there is no
intent to benefit any other Person, including without limitation Members.
-26-
29 Effective Date. Although signed as of the date specified below,
--------------
this Agreement shall not become effective unless and until (i) the Rights
Agreement, Additional Warrant Agreement and Warrant Agreements have been signed
by all parties thereto and become effective and the first [.......] of warrants
has been granted by the board of directors of Participant; and (ii) Participant
has delivered to American an opinion of Participant's legal counsel, in
substantially the form attached hereto.
-27-
***** 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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of __________________, 199_.
NETCENTIVES INC. AMERICAN AIRLINES, INC.
By: /s/ Xxxx X. Xxxxxxxx By: /s/ Xxxxxxx X. Xxxx
-------------------- ---------------------
Name: Xxxx Xxxxxxxx Name: Xxxxxxx X. Xxxx
Title: Chairman Title: Senior Vice President,
Marketing
-28-
ATTACHMENT 1
Pricing
The following volume pricing and rebate shall apply to all AADVANTAGE
Miles purchased by Participant during each Contract Year hereunder. With respect
to any Contract Year, the volume discount and rebate amount apply only to the
incremental volume set forth opposite the price discount and rebate amount in
the chart below that is actually purchased and paid for by Participant during
such Contract Year. With respect to any Contract Year, so long as no Participant
Default has occurred and is continuing, or event that with the giving of notice
or lapse of time or both would constitute a Participant Default, American, upon
written request from Participant, shall promptly pay over to Participant the
rebate amount, net of any amounts due and owing from Participant to American
hereunder, but only if and when the total volume of AADVANTAGE Miles purchased
by Participant hereunder during such Contract Year equals or exceeds
[56,349,207]. If the [56,349,207] AADVANTAGE Mile threshold is not met during a
Contract Year, there will be no rebate for AADVANTAGE Miles purchased by
Participant during such Contract Year. Participant may prepay in order to
receive a volume discount and qualify for a rebate.
-----------------------------------------------------------------------------------------------------------
VOLUME OF PRICE PER REBATE PER
AADVANTAGE MILES AADVANTAGE MILE AADVANTAGE MILE
-----------------------------------------------------------------------------------------------------------
[..........................
-----------------------------------------------------------------------------------------------------------
..........................
-----------------------------------------------------------------------------------------------------------
.......................]
-----------------------------------------------------------------------------------------------------------
[.....]. With respect to any Contract Year, the volume price discount
applies only to the incremental volume set forth opposite the price discount in
the chart below that is actually purchased and paid for by Participant during
such Contract Year after the effective date of termination of Limited
Exclusivity. Participant may prepay in order to receive a volume discount.
------------------------------------------------------------------------
VOLUME OF PRICE PER
AADVANTAGE MILES AADVANTAGE MILE
------------------------------------------------------------------------
[****] [**]
-------------------- ------
------------------------------------------------------------------------
[******] [**]
----------------------- -----
------------------------------------------------------------------------
[.............................
------------------------------------------------------------------------
..............................]
------------------------------------------------------------------------
[......]
1-1
***** 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.
ATTACHMENT 2
Minimum Purchase Requirements and Prepayment Schedule
1. Minimum Purchase Requirement. [***], Participant shall
----------------------------
purchase and pay for [***] worth of AADVANTAGE Miles during each
Contract Year during the Term. [***].
2. Prepayment Schedule. Participant shall pay American [***] on
-------------------
the date this Agreement is executed and on the first day of each Contract Year
thereafter as a prepayment of Participant's AADVANTAGE Mile purchase obligations
hereunder. This amount will be credited against payments due under Section 3.2
----------
(Mileage Payments) until such amount will be exhausted. If American terminates
Limited Exclusivity with an effective date of termination within ninety (90)
days after the beginning of any Contract Year, American shall, promptly upon
Participant's written request, refund the unused portion of the prepayment made
by Participant for such Contract Year, net of any amount due and owing by
Participant to American hereunder.
2-1
****** 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.
ATTACHMENT 3
------------
[***]
______________________________ ______________________________
Signature Signature
______________________________ ______________________________
Title Title
______________________________ ______________________________
Date Date
3-1
****** 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.
ATTACHMENT 4
------------
Data Transmission Layouts
[***]
****** 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.
ATTACHMENT 5
------------
Guidelines for Producing AADVANTAGE(R) Related Materials
and Using the AADVANTAGE Travel Awards' Trademark
To protect the legal registration of the AADVANTAGE trademark and to
achieve instant and consistent recognition of the AADVANTAGE travel awards
program, the following guidelines must be followed when producing AADVANTAGE
related material.
Register Xxxx: The first time the word "AADVANTAGE" or "American Airlines"
-------------
appears in a headline, subhead or text, it must include the register xxxx
of (R)or (R).
Eagle: The first time the word "AADVANTAGE" appears in a headline, subhead or
-----
text, it must include an eagle between the two capital A's and carry the
register xxxx (R). The eagle must always be facing to the right. If the Eagle
----------------------------------
cannot be produced, as in a letter, it is not required but, the register xxxx
(R) must still be used.
Note: Both the registrar xxxx (R) and Eagle are required only one time
-------------
per piece
Tag Line: When using the word "AADVANTAGE" in a headline, subhead or text, if
--------
the slug "A registered trademark of American Airlines, Inc." is not used
immediately below the AADVANTAGE logo, the following tag line must appear at the
bottom of the page/piece (along with the disclaimer):
American Airlines and AADVANTAGE are registered trademarks of American
Airlines, Inc.
(The eagle and registered xxxx (R) do not have to appear in the tag
line.)
NOTE: You should also include other AA trademark names in the tag line when
appropriate. For example: AADVANTAGE Platinum, AADVANTAGE Gold, American
Eagle, Something Special in the Air, Admirals Club, etc.
Disclaimer: All pieces discussing the AADVANTAGE travel awards program must have
----------
a legal disclaimer added to the bottom of the page/piece. The disclaimer is in
accordance with guidelines of the National Association of Attorneys General. If
the material referencing AADVANTAGE has perforations or can be separated, each
separate piece that can potentially be viewed as a "stand-alone" piece must have
both the disclaimer and tag line. See the attached list of disclaimers that are
to be used.
Multiple Pieces: If several pieces are being produced for distribution, each
---------------
separate piece that can potentially be viewed as a "stand-alone" piece must have
both the tag line and disclaimer.
Colors: PMS 485 Red and PMS 281 Blue are the colors for the AADVANTAGE logo. The
------
preferred treatment for the AADVANTAGE logo is the first capital A in red with
the rest of the word, register xxxx (R) and the eagle in blue.
A AADVANTAGE(R) American Airlines(R)
(red) (blue) (red) (blue)
5-1
If it is not possible to use both red and blue, the AADVANTAGE logo is also
acceptable as follows:
- all blue
- all black
- reversed out in all white
Other colors or color combinations are not acceptable.
Type: AADVANTAGE and American Airlines are to be printed in Helvetica type if
---- --
printed as a logo. For text or headings, the type may match that used for the
-----------------
rest of the piece noting the following provisions: AADVANTAGE should not be
printed in SCRIPT illustrated or art typefaces.
Spacing: The word "AADVANTAGE" should never be hyphenated and the name
-------
American Airlines should not be split over any lines.
Use as an Adjective: The word "AADVANTAGE" may never be used as a noun or verb.
-------------------
It should only be used as an adjective and in connection with the common name of
the service, such as the "AADVANTAGE travel awards program."
Any play on the word ADVANTAGE should be avoided. For example, copy
such as "The AADVANTAGE of American Airlines" or "THE ADVANTAGES AND BENEFITS OF
MEMBERSHIP" are not acceptable.
---
Awards: If awards are mentioned, the wording of the awards should be the same
------
as the wording used in our AADVANTAGE Rules Brochure or on our Mileage Summary.
Description of Miles: AADVANTAGE miles or mileage cannot be described as FREE.
--------------------
Miles are not free, they are EARNED as a result of a specified transaction.
Description of Program: Any time the AADVANTAGE program is explained, the
----------------------
descriptive phrase "travel awards program" should be used versus "frequent flyer
program." The AADVANTAGE program benefits not only frequent travelers, but also
infrequent travelers who use our AADVANTAGE Participants or travel on American
consistently. Additionally, there are several non-travel related opportunities
to earn mileage credit.
The piece should not mention any other companies or organizations
unless approved by the American Airlines Partner Marketing Department, AA/HDQ-MD
5321. Other airlines participating in the AADVANTAGE travel awards program
should be referred to as "participating carriers," NOT affiliated carriers.
Additionally, no AADVANTAGE Participant should be referred to as a partner. The
words partner or partnership should never be used in any promotional materials.
Announcements: If Bonus Miles or any enhancements to the AADVANTAGE travel
-------------
awards program are being introduced, the announcement should first be made by
-----------------------
AA/HDQ and, if Possible, through the AADVANTAGE Newsletter.
----------------------------------------------------------
5-2
AADVANTAGE PROGRAM DISCLAIMERS
The following disclaimers are required on all/any advertisement or promotional
piece that references the AADVANTAGE program. The length of the disclaimer
varies with the type of promotion.
LONG VERSION
------------
(Rules Brochure, Newsletter, Certificates, detailed AADVANTAGE information)
American Airlines may find it necessary to change AADVANTAGE program rules,
regulations, travel awards and special offers at any time. This means that
American may initiate changes impacting, for example, participant affiliations,
rules for earning mileage credit, mileage levels and rules for the use of travel
awards, continued availability of travel awards, blackout dates and limited
seating for travel awards, and the features of special offers. American Airlines
reserves the right to end the AADVANTAGE program with six months notice.
AADVANTAGE travel awards, mileage accrual and special offers subject to
government regulations. American Airlines is not responsible for products or
services offered by other participating companies.
MEDIUM VERSION
--------------
(Promotional brochures, mailings, when AADVANTAGE is not
the main subject of piece but the program is mentioned).
American Airlines may find it necessary to change AADVANTAGE program rules,
regulations, travel awards and special offers at any time, impacting, for
example, Participant affiliations, rules for earning mileage and blackout dates
and limited seating for travel awards. American reserves the right to end the
AADVANTAGE program with six months notice. AADVANTAGE travel awards, mileage
accrual and special offers subject to government regulations. American Airlines
is not responsible for products or services offered by other participating
companies.
SHORT VERSION
-------------
(Posters, advertising)
American Airlines reserves the right to change AADVANTAGE program rules,
regulations, travel awards and special offers at any time without notice, and to
end the AADVANTAGE program with six months notice. American Airlines is not
responsible for products or services offered by other participating companies.
(OR)
American Airlines reserves the right to change the AADVANTAGE program at any
time without notice. American Airlines is not responsible for products or
services offered by other participating companies.
5-3
AADVANTAGE ADVERTISING COPY
RETAIL COPY STANDARDS
SHORT VERSION
-------------
Members of our AADVANTAGE travel awards program can earn valuable mileage credit
good for special upgrades and free trips to exciting destinations around the
world.
MEDIUM VERSION
--------------
Our AADVANTAGE travel awards program makes it easy for you to earn valuable
mileage credit every time you fly on American Airlines or American Eagle, or use
one of our AADVANTAGE Participants. You can redeem your AADVANTAGE miles for
special upgrades to Business and First Class, as well as free tickets to a host
of exciting destinations around the world.
LONG VERSION
------------
Our AADVANTAGE travel awards program makes it easy for you to earn valuable
mileage credit every time you fly on American Airlines or American Eagle, or use
one of our AADVANTAGE Participants. You can redeem your AADVANTAGE miles for
special upgrades to Business and First Class, as well as free tickets to a host
of exciting destinations around the world.
If you're not a member of the AADVANTAGE program, now's the time to enroll. You
can join instantly at any American Airlines ticket counter, or by calling
0-000-000-0000 or your local American Airlines Reservations number.
NOTE: APPROPRIATE AADVANTAGE DISCLAIMER
MUST BE INCLUDED WITH ALL VERSIONS.
5-4