EXHIBIT 10.10
NETCENTIVES INC.
SUPPLY AGREEMENT
This Supply Agreement (the "Agreement") is entered into between Netcentives
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Inc., a California corporation ("Netcentives") and Continental Airlines, Inc., a
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Delaware corporation ("Continental") and shall be effective for all purposes as
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of September 5, 1997 (the "Effective Date").
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RECITALS
WHEREAS, Netcentives has developed an Internet-based program which provides
for the grant of airline frequent flier miles and other incentives to end-users
(the "Netcentives Program");
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WHEREAS, Continental has established a travel awards program (the "OnePass
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Program") pursuant to which, among other things, certain persons may receive
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frequent flier miles for travel on Continental and for such other reasons as are
permitted by Continental;
WHEREAS, in connection with the execution of this Agreement, Continental
has joined a Rights Agreement among Netcentives and certain other parties and
Netcentives has issued Continental a Warrant to purchase shares of the Non-
Voting Convertible Stock of Netcentives;
WHEREAS, Netcentives wishes to purchase Miles (as hereinafter defined) from
Continental and Continental wishes to sell Miles to Netcentives pursuant to the
terms of this Agreement;
NOW THEREFORE, in consideration of the foregoing and the mutual
consideration provided for herein, the parties hereto hereby agree as follows:
SECTION I
DEFINITIONS
For purposes of this Agreement, the following terms shall have the
following meanings:
1.1 "Account" shall mean the account of Netcentives Members who are also
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OnePass Program Members in which Miles balances are maintained by Continental.
1.2 "Confidential Information" means any information, technical data, or
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know-how, including, but not limited to, that which relates to research, product
plans, products, services, Netcentives Members, customers, markets, software,
developments, inventions, processes, designs, drawings, engineering, hardware
configuration information, marketing or finances of a party, which is designated
in writing to be confidential or proprietary, or if given orally, is identified
as confidential or proprietary at the time of disclosure or is obviously
confidential considering the context in which such disclosure is made.
Confidential Information does not
include information, technical data or know-how which (i) is rightfully in the
possession of the receiving party at the time of disclosure, (ii) prior to or
after the time of disclosure becomes part of the public knowledge or literature
other than as a result of any improper inaction or action of the receiving party
hereunder, or (iii) is approved by the disclosing party in writing, for release.
1.3 "Direct Competitor of Netcentives" means any third-party that
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operates a program to reward Internet or online service activities, (a) where
end-users may earn Miles at multiple web sites or multiple online service
areas, or (b) where end-users may earn points which are redeemable for the
incentive awards of more than one company.
1.4 "Limited Exclusivity" means Continental agrees not to sell Miles to
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any Direct Competitor of Netcentives as defined above. Continental and
Netcentives shall have a relationship of "Limited Exclusivity" so long as (a)
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this Agreement has not been terminated in accordance with its terms, and (b)
Continental has not sold Miles to any Direct Competitor of Netcentives.
1.5 "Miles" means the points accrued under the OnePass Program by OnePass
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Program Members for travel on Continental or such other reasons as are permitted
by Continental.
1.6 "Netcentives Marks" means the trademarks and logos of Netcentives set
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forth on Exhibit Al hereto.
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1.7 "Netcentives Member" means, as of any date, an individual who is a
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member in good standing of the Netcentives Program.
1.8 "Supplier Marks" means the trademarks and logos of Continental set
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forth on Exhibit A2 hereto.
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1.9 "Term" has the meaning given it in Section 5.2(a) hereof.
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1.10 "OnePass Program Member" means, as of any date, an individual who is
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a member in good standing of the OnePass Program.
SECTION II
PURCHASE AND SALE
2.1 Orders.
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(a) General. Netcentives shall deliver orders to Continental for
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Miles in such format as is detailed in Attachment A3, which orders shall
designate the aggregate number of Miles to be purchased, the Account or Accounts
to which such Miles are to be credited, and the number of Miles to be credited
to each such Account. Continental shall credit Accounts designated by
Netcentives within a reasonable time after receipt of an order from Netcentives,
but in any event within fifteen (15) business days thereof. As long as this
Agreement is in effect, Continental shall not reject any order of Netcentives,
except in accordance with the terms of Section 3.2 hereof.
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(b) Reserve Account. Netcentives may also order Miles for
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undesignated accounts, which Miles shall be reserved in an Account for the
benefit of Netcentives (the "Reserve Account"). Upon notice by Netcentives (in
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such format as is mutually agreed by the parties) of an election to credit some
or all Miles retained in the Reserve Account to an Account, such Miles shall be
credited to the designated Account within two (2) business days of such notice.
Miles held in the Reserve Account shall be valid and shall not expire while this
Agreement between Continental and Netcentives is in place, as extended by
Section 5.2(b).
(c) Minimum Orders. Beginning on March 5, 1998, and every six (6)
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months thereafter during the Term of this Agreement, if Netcentives and
Continental have a relationship of Limited Exclusivity and if Netcentives has
purchased less than an aggregate of 5,000,000 Miles during the preceding six (6)
month period, Netcentives shall submit an order for that number of Miles that
represents the difference between 5,000,000 and the aggregate Miles purchased by
Netcentives during such six (6) month period. The Miles subject to such order
may be designated by Netcentives for credit to any Account, including the
Reserve Account. Netcentives shall not be obligated to purchase any quantity of
Miles if Netcentives and Continental do not have a relationship of Limited
Exclusivity.
2.2 Price. If Netcentives and Continental have a relationship of Limited
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Exclusivity as of the date of an order, the price per mile to be paid to
Continental by Netcentives shall be $0.015 per Mile. If Netcentives and
Continental do not have a relationship of Limited Exclusivity as of the date
of such order, the price per mile to be paid to Continental by Netcentives
shall be $0.013 per mile. The prices for Miles shall not be changed during the
term of this Agreement without the prior written consent of Netcentives.
2.3 Payment. All payments due to Continental pursuant to an order under
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this Section 2 shall become due and payable within thirty (30) days of
presentation of evidence that the Miles subject to such order have been credited
to the appropriate Account or Accounts. Any payments made by Netcentives to
Continental hereunder shall be non-refundable.
2.4 Mileage Usage. Netcentives agrees to not transfer Miles to any party
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for resale. All sales not in the form of Netcentive Points to eligible
consumers for redemption of Continental Miles may be awarded only with previous
approval by Continental.
2.5 Taxes. Prices for Miles do not include taxes. Netcentives is
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responsible for any and all taxes on the sale of Miles to Netcentives pursuant
to this Agreement.
SECTION III
OBLIGATIONS OF NETCENTIVES
3.1 Distribution to Netcentives Members. Netcentives shall only request
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that Miles be credited to the accounts of persons in exchange for their
participation in the Netcentives Program.
3.2 Distribution to OnePass Program Members. Netcentives shall only
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request that Miles be credited to the Accounts of Netcentives Members whom
Netcentives believes in good faith to be OnePass Program Members. To the extent
that Netcentives requests that Miles be credited to a person who is not a
OnePass Program Member, Continental shall not be obligated to credit such
Account, provided however, that upon receiving Notice from Continental that a
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specified account does not belong to a OnePass Program Member, Netcentives may,
at its election, have such Miles credited to the Reserve Account (in which case
Netcentives shall be obligated to pay Continental as if it had originally
requested that such Miles be placed in the Reserve Account) or treat such Miles
as if they had never been ordered (in which case Netcentives' payment obligation
shall be reduced accordingly).
3.3 No Resale Of Miles. At no time shall Netcentives offer Miles to any
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person for resale to a third party. If Netcentives discovers with reasonable
certainty that any Netcentives Member is inappropriately redistributing Miles,
Netcentives shall immediately cease requesting that Miles be credited to the
Account of such Netcentives Member, and shall notify Continental of the identity
of such Netcentives Member and the nature of the potential infraction.
3.4 Maximum Number of Miles Per Year. Netcentives agrees that it will not
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allow a Netcentives Member to redeem Netcentives Points for more than 50,000
Miles during any calendar year without Continental's written permission.
SECTION IV
PROPRIETARY INFORMATION
4.1 Confidential Information. Each party agrees not to use any
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Confidential Information disclosed to it by the other party for its own use or
for any purpose other than to carry out its obligations under this Agreement.
Neither party will disclose any Confidential Information of the other party to
third parties or to employees of the party receiving Confidential Information,
other than employees who are required to have the information in order to carry
out such party's obligations under this Agreement. Each party agrees that it
will take all reasonable measures to protect the secrecy of and avoid disclosure
or use of Confidential Information of the other party in order to prevent it
from falling into the public domain or the possession of persons other than
those persons authorized under this Agreement to have any such information,
including (without limitation) ensuring that recipients of the disclosing
party's Confidential Information adhere to confidentiality terms in content
substantially similar to the terms in this Agreement. Such measures shall
include the highest degree of care that the receiving party utilizes to protect
its own Confidential Information of a similar nature. Each party agrees to
notify the other in writing of any misuse or misappropriation of Confidential
Information of the disclosing party which may come to the receiving party's
attention.
4.2 Publicity. After the execution of this Agreement, Netcentives shall
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be permitted, at its discretion, to issue a press release which may, among other
things, confirm the existence of a relationship between the parties and of the
exclusive nature of such relationship, and may request that Continental issue a
similar press release. Such press release shall require Continental's previous
written approval, which shall not be unreasonably withheld. Any other
information regarding the relationship between the parties including the other
terms of this Agreement and any other agreement between the parties shall be
considered Confidential Information under the definition set forth herein.
4.3 Trademarks.
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(a) Continental hereby grants Netcentives a limited, non-exclusive
license to duplicate and use the Supplier Marks in Netcentives' promotional
materials and on its Internet Web site, during the Term of this Agreement (as
extended by Section 5.2(b)(iii), as appropriate), provided however, that any use
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of the Supplier Marks shall be for the purpose of promoting the Netcentives
Program, shall only be used with regard to the inclusion of Miles within the
Netcentives Program, and shall be used only upon previous written approval by
Continental. Such approval shall not be unreasonably withheld.
(b) Netcentives hereby grants Continental a limited, non-exclusive
license to duplicate and use the Netcentives Marks in Continental's promotional
materials and on its Internet Web site, during the Term of this Agreement,
provided however, that any use of the Netcentives Marks shall be for the purpose
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of promoting the OnePass Program or the Netcentives Program, shall only be used
with regard to the inclusion of Miles within the Netcentives Program, and shall
be used only upon previous written approval by Netcentives. Such approval shall
not be unreasonably withheld.
(c) Nothing herein shall be deemed to grant either party any ownership
interest in the Marks of the other party.
SECTION V
LIMITED EXCLUSIVITY; TERM AND TERMINATION
5.1 Limited Exclusivity.
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(a) Relationship. The parties hereto acknowledge that they shall have
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a relationship of Limited Exclusivity (as defined in Section 1.4) during the
Term of this Agreement and that certain rights and privileges under this
Agreement and other agreements between the parties are dependent on the
maintenance of such a relationship. Either party may terminate the obligations
of the parties under the relationship of Limited Exclusivity upon provision of
ninety (90) days written notice (the "Notice") to the non-terminating party,
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which termination shall have the effects set forth in subsection (b), below.
(b) Effect of Termination of Limited Exclusivity. Termination of the
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relationship of Limited Exclusivity between Continental and Netcentives shall
not affect the obligations of the parties under this Agreement except that upon
the termination of the relationship of Limited Exclusivity, in addition to the
loss of certain other rights as set forth in other Agreements between the
parties, (i) immediately upon receipt of the Notice by Netcentives, [.....]; and
(ii) beginning ninety (90) days after receipt of the Notice by Netcentives,
Continental shall be permitted to sell Miles to any third party, including a
Direct Competitor of Netcentives. Any sales by Continental to a Direct
Competitor of Netcentives prior to the expiration of such period shall be
considered a material breach of this Agreement. Each party agrees that its
obligations under Limited Exclusivity as provided herein are necessary and
reasonable in order to protect Netcentives and its business, and each party
expressly agrees that monetary damages would be inadequate to compensate
Netcentives for any breach by Continental of its Limited Exclusivity related
covenants and agreements. Accordingly, each party agrees and acknowledges
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that any such violation would cause irreparable injury to Netcentives and that,
in addition to any other remedies that may be available, in law, in equity or
otherwise, Netcentives shall be entitled to obtain injunctive relief against any
such breach or the continuation of any such breach by Continental, without the
necessity of proving actual damages. Notwithstanding the above, Netcentives
recognizes that third parties may obtain Miles through Continental's "Miles of
Thanks" program, and that it is not always possible to determine the intended
use of the Miles purchased in the "Miles of Thanks" program. Continental will
use commercially reasonable efforts to prevent any Direct Competitor of
Netcentives from purchasing miles through the "Miles of Thanks" program, but if,
after having done so, a Direct competitor of Netcentives obtains miles,
Continental will not be in breach of the Limited Exclusivity Provision of this
Agreement, provided however, that if Netcentives identifies such Direct
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Competitor of Netcentives and provides for Continental opportunity to cure by
removing participation by such Direct Competitor of Netcentives, Continental
will be in breach of this Agreement if it fails to: a) immediately refuse to
sell additional "Miles of Thanks" Miles to said Direct Competitor of
Netcentives; and b) use best efforts to prevent the use of any existing
purchased "Miles of Thanks" Miles by said Direct Competitor of Netcentives.
5.2 Term and Termination.
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(a) Term and Termination.
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(i) The term of this Agreement shall be three (3) years from
the Effective Date (the "Term"), unless terminated pursuant to this Section 5.2.
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This Agreement shall terminate upon the expiration of the Term unless renewed by
the parties hereto in writing.
(ii) If either party defaults in the performance of any material
provision of this Agreement then the non-defaulting party may give written
notice to the defaulting party that if the default is not cured within thirty
(30) days, the Agreement will be terminated. If the non-defaulting party gives
such notice and the default is not cured during the thirty (30) day period, then
the Agreement shall automatically terminate at the end of that period.
(iii) This Agreement shall terminate, without notice, (A) upon
the institution by or against either party of insolvency, receivership or
bankruptcy proceedings or any other proceedings for the settlement of such
party's debts, (B) upon either party's making an assignment for the benefit of
creditors, (C) upon the dissolution of either party.
(b) Effect of Termination or Expiration. Upon termination of this
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Agreement for any reason whatsoever: (i) Continental will credit all uncredited
orders to the Accounts originally designated by Netcentives in accordance with
this Agreement, provided that it has received payment; (ii) all Miles in the
Reserve Account shall be credited to Accounts in the manner provided for herein
and shall remain valid for the shorter of (a) one year, or (b) until the balance
of Miles in the Reserve Account is zero (0); and (iii) the term of the license
granted to Netcentives under section 4.3(a) shall be extended until the balance
of Miles in the Reserve Account is zero (0) or all such miles have expired;
Netcentives agrees not to use such license for the solicitation of new
Netcentives Members.
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(c) Survival. Continental's obligations to credit Accounts in a
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timely manner and Netcentives' obligations to pay Continental all amounts due
hereunder, as well as Sections 3.1, 3.2, 3.3, 3.4, 4.1, 4.2, 4.3(a) (to the
extent provided in Section 5.2(b) above), 4.3(c), 6.2, 6.3 and 6.7 shall survive
termination and expiration of this Agreement.
SECTION VI
MISCELLANEOUS
6.1 Independent Contractors. The relationship of Netcentives and
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Continental established by this Agreement is that of independent contractors,
and nothing contained in this Agreement shall be construed to constitute the
parties as agents, partners, joint venturers, coowners or otherwise as
participants in a joint or common undertaking.
6.2 Indemnification.
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(a) Continental hereby agrees to indemnify, defend and hold harmless
Netcentives and its respective directors, officers, agents and employees, from
and against any and all claims, losses, damages, suits, judgments, costs and
expenses (including litigation costs and reasonable attorneys' fees) arising out
of or relating to (i) Continental's operation of the OnePass Program including
without limitation, claims by participants in the OnePass Program of
Continental's breach, violation or failure to comply with the terms of the
OnePass Program and (ii) an allegation that Netcentives use of the Supplier
Marks licensed hereunder infringes a copyright or trademark existing or issued
as of the date of such use, provided in each case that Netcentives promptly
notifies Continental in writing of any such claim, gives Continental sole
control of the defense and all related settlement negotiations, and cooperates
with Continental in defending or settling any such claim.
(b) Netcentives hereby agrees to indemnify, defend and hold harmless
Continental and its respective directors, officers, agents and employees, from
and against any and all claims, losses, damages, suits, judgments, costs and
expenses (including litigation costs and reasonable attorneys' fees) arising out
of or relating to (i) Netcentives' operation of the Netcentives Program
including without limitation, claims by participants in the Netcentives Program
of Netcentives' breach, violation or failure to comply with the terms of the
Netcentives Program and (ii) an allegation that Continental's use of the
Netcentives Marks licensed hereunder infringes a copyright or trademark existing
or issued as of the date of such use, provided in each case that Continental
promptly notifies Netcentives in writing of any such claim, gives Netcentives
sole control of the defense and all related settlement negotiations, and
cooperates with Netcentives in defending or settling any such claim.
6.3 Notices. All notices and demands hereunder shall be in writing and
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shall be delivered by personal service or by telex, facsimile, cable, telegram,
certified or registered mail, or return receipt express courier to the address
of the receiving party set forth on the signature page of this Agreement, or to
any other address of the receiving party designated by written notice in
accordance with this paragraph.
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6.4 Waiver, Amendment and Modification. No waiver, amendment or
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modification of any provision hereof shall be effective unless in writing and
signed by the party against whom such waiver, amendment or modification is
sought to be enforced. No failure by either party to exercise and no delay by
either party in exercising any right, power or remedy with respect to the
obligations secured hereby shall operate as a subsequent waiver of any such
right, power or remedy.
6.5 Assignment. Each of the parties agrees that its rights and
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obligations under this Agreement may not be transferred or assigned directly or
indirectly without the prior written consent of the other party, provided
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however, that such consent shall not be required for an assignment of this
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contract pursuant to a merger, sale of substantially all of the assets, or sale
of all of the outstanding stock of either party. This Agreement shall be
binding upon and inure to the benefit of the parties hereto, their successors
and assigns.
6.6 Severability. In the event that any of the provisions of this
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Agreement shall be held by a court of competent jurisdiction to be
unenforceable, such provision will be enforced to the maximum extent permissible
and the remaining portions of this Agreement shall remain in full force and
effect. The parties agree to negotiate in good faith a substitute, valid and
enforceable provision that most nearly effects the parties' intent and to be
bound by the mutually agreed substitute provision.
6.7 Governing Law. This Agreement shall be governed by and construed in
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accordance with the laws of the State of California, without reference to
conflict of laws provisions thereof.
6.8 Force Majeure. Neither party shall be responsible for any failure to
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perform (except for payment obligations) due to unforeseen circumstances or to
causes beyond its control, including but not limited to acts of God, war, riot,
embargoes, acts of civil or military authorities, fire, floods, accidents,
strikes, or shortages of transportation facilities, fuel, energy, labor or
materials. A party whose performance is affected by a force majeure condition
shall be excused from such performance to the extent required by the force
majeure condition so long as such party takes all reasonable steps to avoid or
remove such causes of nonperformance and immediately continues performance
whenever and to the extent such causes are removed.
6.9 Entire Agreement; Amendment. This Agreement together with the Rights
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Agreement among Continental, Netcentives and certain other parties and the
Warrant to Purchase Non-Voting Convertible Stock of even date herewith,
constitute the final and entire Agreement between the parties and may not be
modified or amended except in writing signed by both of the parties.
6.10 Headings. The headings and captions used in this Agreement are for
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convenience of reference only, and shall not in any way affect the
interpretation of the provisions of this Agreement.
6.11 Counterparts. This Agreement may be executed in counterparts, each
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of which shall be deemed an original and all of which together shall constitute
one instrument.
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[SIGNATURE PAGE TO FOLLOW]
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The parties have executed this Supply Agreement as of the date set forth
below.
NETCENTIVES INC.
ADDRESS:
0000 X. Xx Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
/s/ Xxxx X. Xxxxxxxx Facsimile: (000) 000-0000
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Xxxx X. Xxxxxxxx
Chairman
CONTINENTAL AIRLINES, INC.
ADDRESS:
0000 Xxxxx Xxxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
/s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
Vice President, Marketing Programs
[SIGNATURE PAGE TO SUPPLY AGREEMENT]
DESIGN GUIDELINES AND LOGO SHEET
[THIS PAGE CONTAINS ARTWORK FOR CONTINENTAL ONEPASS LOGO]
PROCEDURES FOR TRANSFERRING FILES
BETWEEN THE MAIN FRAME AND A PERSONAL COMPUTER USING RLINK
. Install the RLINK software onto the PC where the file transfer will take
place. RLINK can found on the Internet at xxxx://xxx.xxxxx.xxx. From
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the home page border buttons, select software. Once on the software
page, select the pre-production version of RLINK for Windows from the
drop-down box and commence the download.
. Using the RLINK product, dial into EDSNET (000-000-0000).
. At the number-of-sessions prompt, enter 1.
. At the terminal emulation prompt, enter "RLINK4".
. At the WELCOME screen, enter "EDSNET".
. At the Security screen, enter your assigned logon-id (HZRNYZ) and
password (trltNG1).
Note: The initial password is set up to expire the first time you log on
in order to force a password change. The password must then be changed
at least every 30 days. It has a length of 8, and must contain 6
characters and 2 numbers, in any order.
. There should be one application id on the next panel. Select it by
number to logon to TSO.
. In TSO, you will be prompted for your logon ID and password. This will
be the same as your network logon-id and password, so enter these same
parameters when prompted.
. You should now be at the READY prompt.
. You are now ready to transfer files between the mainframe and the PC.
You will select TRANSFER from the RLINK menu, choose IND$FILE and TSO
line format as the environment. Select the mainframe and PC file names.
To upload files from the PC to the mainframe, make sure that you are
using the append, ASCII and CRLF options, and then execute send. The
file name you will be uploading to is "PT1CO.TBKDR.NETCENT.DEPOSIT".
. Once the file is transferred, toggle to the mainframe session and back
out of TSO to the READY prompt (press PF3 a few times to get there), and
type LOGOFF. Please make sure to disconnect by exiting RLINK or
selecting the HANGUP icon.
If you encounter problems with the transfer, please contact Xxxxx Xxxxxx,
713/834-2725. She will route you to the appropriate person to handle the call.
[EDS LOGO]
[OnePass Activity Deposits]
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Netcentives deposits will need to be provided as a file in the following format
on either a weekly, semi-monthly, or monthly basis as determined by volume.
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Field Position Format Length Description
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1 1 char 1 Deposit record type, always "2"
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2 2-9 char 8 OnePass member account number
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3 10-15 char 6 Batch ID, a constant "NET" plus DDD,
where DDD is the julian date
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4 16-29 char 14 Ticket field descriptor, fill with
membership number if applicable - if
multiple deposits are sent for the same
account and same date, this field must
be made unique for each deposit for
that account.
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5 30-35 char 6 Origin and Destination (bonus code),
the constant "NETCNT" Bonus code can
verify for specific promotional offers.
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6 36-37 char 2 Partner code, the constant "OP"
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7 38-39 char 2 Filler, always blank
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8 40-43 num 4 Filler, always 0000
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9 44-49 num 6 Billing date (Process Date) YYMMDD
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10 50-69 char 20 Member's last name
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11 70-135 char 66 Filler, always blank
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12 136 char 1 Source indicator, always "P"
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13 137-167 char 31 Filler, always blank
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14 168-173 num 6 Base mileage amount, ALWAYS ZERO FILL
(right justify)
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15 174-179 num 6 Bonus mileage amount, fill with mileage
amount (right justify)
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16 180-250 char 71 Filler, always blank
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The technical information for files sent to OnePass is as follows:
. Logical record length - 250
. Block size - 23,250
. Format - EBCDIC
. Label format - Standard (for cartridges, tapes)
OnePass can accept 3490 cartridges, or can provide dial-in download access to
the OnePass system through the use of RLINK. If dial-in access is used, EDS will
provide the partner with a copy of the RLINK software.
EXHIBIT A1
TRADEMARKS OF CONTINENTAL
NETCENTIVES INC.
0000 X. Xx Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
September 29, 1997
Continental Airlines, Inc.
0000 Xxxxx Xxxxxxx, Xxxxx 0000
Xxxxxxx,XX 00000
Attention: Xxxxxxx XxXxxxxx
Dear Xx. XxXxxxxx:
This letter agreement (the "Amendment") is entered into between the parties
as of September 25, 1997 (the "Effective Date") for the purpose of amending the
Supply Agreement dated September 5, 1997 between Netcentives Inc.
("Netcentives") and Continental Airlines, Inc. ("Continental"). When used
herein, capitalized terms will have the same meaning as in the Supply Agreement.
1. Netcentives agrees to purchase, and Continental agrees to sell
5,000,000 Miles at $0.015 per mile, for a total payment of $75,000. Following
receipt of payment from Netcentives, such Miles shall be held, pursuant to
Section 2.1(b) of the Supply Agreement, in the Reserve Account for the benefit
of Netcentives.
2. Continental agrees that the Miles purchased under this Amendment shall
be credited towards Netcentives' minimum order obligation set forth in Section
2.1(c) of the Supply Agreement.
3. Continental shall promptly provide an invoice to Netcentives for the
Miles purchased under this Amendment. Payment shall be due upon receipt of such
invoice.
4. Absent a breach of the Supply Agreement by Continental, Netcentives
shall not be entitled to a refund for Miles that are purchased under this
Amendment, but not used by Netcentives.
5. The parties shall execute the Tax Indemnification Agreement in the form
set forth in the Attachment hereto.
6. Continental agrees to promptly notify Netcentives of any taxes claimed
due pursuant to Section 2.5 of the Supply Agreement, and Continental shall
remit, subject to Netcentives' payment of same, any such taxes to the
appropriate government authority.
Continential Airlines, Inc.
September 29, 1997
Page 2
7. Except as set forth in this Amendment, the Supply Agreement constitutes
the entire agreement between the parties pertaining to the subject matter
contained herein, and each provision of the Supply Agreement shall continue in
full force and effect.
If the foregoing accurately reflects your understanding, please have this
Amendment executed on behalf of Continental by a duly authorized officer and
return it to me as soon as possible.
Best regards,
NETCENTIVES INC.
By: /s/ Xxxx X. Xxxxxxxx
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Xxxx Xxxxxxxx
Chairman and Executive Vice President
AGREED AND ACCEPTED AS OF
THE DATE FIRST SET FORTH ABOVE:
CONTINENTAL AIRLINES, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Title: Vice President Marketing Programs
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