EXHIBIT 10.17
SERVICES AND SUPPORT AGREEMENT
THIS AGREEMENT is made effective as of January 7, 1999, by and between
IMAGINE MEDIA, INC., a California corporation ("Imagine"), and AFFILIATION
NETWORKS, INC., a Delaware corporation ("Affiliation").
RECITALS
A. Imagine has transferred certain assets to Affiliation relating to
internet businesses previously operated by Imagine.
B. In order to assist Affiliation in its organizational and start-up
phase, Imagine desires to provide certain support services Affiliation and to
permit Affiliation to occupy certain space in Imagine's premises, on the terms
and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
AGREEMENT
1. Engagement of Services. Affiliation hereby engages Imagine as an
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independent contractor to provide certain support and services, including
permitting Affiliation and its employees to remain located at the Imagine
offices until Affiliation is able to move to offices of its own, all on the
terms and conditions contained herein.
2. Duties of Imagine.
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(a) Provision of Certain Support Services. During the term of this
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Agreement, Imagine shall make available to Affiliation the services of one of
its experienced management personnel, namely, Xxxxx Xxxxxxxxx, to provide a
variety of administrative, marketing, and other support services, as agreed
between the parties from time to time. Xx. Xxxxxxxxx'x salary and benefits shall
remain the responsibility of Imagine while he is an employee of Imagine.
(b) Occupancy of Space. During the term of this Agreement, Imagine
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shall permit Affiliation to occupy space at Imagine's premises in a location
determined by Imagine in its absolute and sole discretion.
(c) Provision of Technology and Information Services Support. During
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the term of this Agreement, Imagine shall make available to Affiliation certain
technological and information services for various periods, including help desk
support through April 1, 1999; e-mail; co-location facility bandwidth; and use
of T-1 lines and certain software.
3. Duties of Affiliation.
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(a) Information. Affiliation agrees to cooperate with Imagine in all
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respects and shall furnish Imagine all information required by it for the
performance of its services, and shall permit Imagine to examine and copy any
data in the possession and control of Affiliation affecting management and/or
operations, and shall in every way cooperate to enable Imagine to perform its
services in a satisfactory manner.
(b) Salaries; Costs. Affiliation agrees to be responsible for all of its
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own operating costs, expenses, capital expenditures, fees and losses not
otherwise provided by Imagine under the terms of this Agreement, including
without limitation the cost of employee benefits, equipment, supplies, and
service contracts.
4. Compensation. Affiliation shall pay to Imagine, for services performed
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by Imagine on behalf of Affiliation pursuant to this Agreement, as follows:
(a) Direct Expenses. With respect to payroll costs related to the
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services provided by Xx. Xxxxxxxxx, Affiliation shall pay the actual costs
thereof plus an amount equal to five percent (5%) thereof.
(b) Occupancy and Technology Costs. In compensation for the right to
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occupy space at the Imagine's offices and receive technological and information
services, Affiliation shall pay to Imagine a percentage fee based upon an
allocation of certain costs as set forth with more particularly on Exhibit A
attached hereto. This percentage fee is based upon the number of Affiliation
employees as well as traffic to the Affiliation hub websites utilizing Imagine
file servers and the serving of ads from Imagine computers. The parties agree to
review the percentage allocations set forth on Exhibit A from time to time to
determine whether they need to be adjusted in light of actual experience.
(c) Reimbursement. Affiliation will reimburse Imagine for all out-of-
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pocket costs and other advances made by Imagine for the benefit of Affiliation.
(d) Time for Payment. Affiliation shall pay to Imagine the sums due
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under this Paragraph 4 as follows: within thirty (30) days after the end of
every calendar month, Imagine shall prepare a statement detailing and
reconciling (if necessary) the costs incurred and calculating the actual
compensation due under this Paragraph 4. Affiliation shall pay the amount due
within ten (10) days following receipt of such statement from Imagine.
5. Term. The term of this Agreement shall extend until the earlier of (a)
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the date on which Affiliation relocates from the Imagine premises, or (b)
October 1, 1999. Upon the termination of this Agreement as provided in (b)
above, the parties agree to negotiate an extension or renewal of this Agreement
if necessary.
6. Arbitration. Any dispute arising out of or relating to this Agreement
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shall be finally settled by one arbiter under the then existing Commercial
Arbitration Rules of the American Arbitration Association in arbitration
proceedings conducted in the City of
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San Francisco, California. The arbiter shall have no power or authority in
making his award to modify, enlarge or add to the terms and provisions of this
Agreement. Judgment upon the award of the arbiter shall be binding upon the
parties and may be entered in any court having jurisdiction. Costs and
attorneys' fees shall be paid as the arbiter's award shall specify.
7. Notices. All notices and other communications provided for in this
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Agreement shall be given or made by telex, telecopy, telegraph, cable, certified
or registered mail (return receipt requested), or delivered personally or by a
nationally recognized overnight courier service. All such communications shall
be deemed to have been duly given when transmitted by telex or telecopier (if a
copy thereof is also mailed to the recipient, certified or registered mail,
postage prepaid), or personally delivered or delivered by cable, telegraph, or
nationally recognized overnight courier service, or five (5) days after mailing,
postage prepaid.
8. Miscellaneous.
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(a) Amendments. No amendments or additions to this Agreement shall be
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binding unless in writing and signed by both parties.
(b) Applicable Law. This Agreement shall be governed in all respects,
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whether as to validity, construction, capacity, performance or otherwise, by the
laws of the State of California.
(c) Binding Effect. This Agreement shall be binding upon and shall
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inure to the benefit of the parties hereto and their respective successors,
assigns, heirs and personal representatives.
(d) Paragraph Headings. The paragraph headings used in this Agreement
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are included solely for the convenience of the parties and shall not affect or
be used in connection with the interpretation of this Agreement.
(e) Severability. In the event any provision or portion of a
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provision of this Agreement is held to be invalid, void or unenforceable, the
rest of the Agreement shall, nonetheless, remain in full force and effect and
shall in no way be affected, impaired, or invalidated.
(f) Entire Agreement. This instrument constitutes the entire
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agreement between the parties and supersedes all prior understandings, previous
negotiations, and any memoranda or understanding with respect to the subject
matter hereof.
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(g) No Strict Construction. The language used in this Agreement shall
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be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction will be applied against any
person.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
effective as of the day and year first set forth above.
IMAGINE MEDIA, INC. AFFILIATION NETWORKS, INC.
a California corporation a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxxxx By: /s/ Xxxx Xxxx
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Xxxxxx X. Xxxxxxxxx, CFO Xxxx Xxxx, CEO
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Exhibit A
Services and Support Agreement
Imagine Medial/Affiliation Networks
Jan-99 Feb-99 Mar-99
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mo. rates % fee alloc fee
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Accounting per head $ 475 100% $ 22,800 50% $ 11,400 0% $ -
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Accommodation (space)
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per sqft $ 2.50 100% 18,600 100% 18,600 100% 19,375
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sqft/head 155
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Office-Admin per head $ 875 100% $ 42,000 100% $ 42,000 80% $ 35,000
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IT
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per head $675.00 100% 32,400 100% $ 32,400 50% $ 16,875
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internet per avg daily visit $ 0.18 100% $ 50,040 100% $ 50,040 50% $ 25,020
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Management per head $ 800 100% $ 0 25% $ 9,600 5% $ 2,000
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Production n/a
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Circ. n/a
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Corp Mkting n/a -------- -------- --------
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Totals $204,240 $164,040 $ 98,270
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estimated headcount 42 48 48 50
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avg daily visits
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ign hub sites 248,000 248,000 248,000
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chickclick 5,000 5,000 5,000
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den--- 20,000 20,000 20,000
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power studnts 5,000 5,000 5,000
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278,000 278,000 278,000
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Notes:
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Apr-99 May 99
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Accounting 0% $ 0% $
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Accommodation (space)
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100% 21,313 100% 21,313
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Office-Admin 80% $ 38,500 80% $ 38,500
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IT
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25% $ 9,281 25% $ 9,2815
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internet 50% $ 25,020 50% $ 25,020
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Management 5% $ 2,200 5% $ 2,200
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Production
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Circ.
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Corp Mkting -------- --------
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Totals $ 96,314 $ 96,314
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estimated headcount 55 55
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avg daily visits
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ign hub sites 248,000 248,000
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chickclick 5,000 5,000
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den--- 20,000 20,000
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power studnts 5,000 5,000
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278,000 278,000
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Notes:
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Accounting assumes affiliation has complete control by 3/1.
Accommodation: 100% chargeback for rents, utilities, insurance, janitorial, etc.
until affiliation relocates.
Office admin: includes HR effort - assumes affiliation handle its own HR
effective 3/1
IT: includes Imagine's IT personnel including help desk and unix; also Imagine's
network infrastructure - assumes eff 3/1 affiliation starts providing some help
desk and eff 4/1 only IT support relates to use of imagine's network
infrastructure.
IT-internet: includes colocation facility bandwidth, T-1 and deprec relating to
internet capital equip - will be reduced as affiliation establishes their own
co-location arrangement, however, charges relating to T-1 and accipitor
will probably remain.
Visits per existing reports- hub sites only, no affiliates.
Management: assumes that affiliation will handle - allows for some of TV's
time.
headcount calc: new starts at beg mo count as 1, if after 15/th/ counted as 1/2.
Represents people located on Imagine premises.
need to retain some flexibility if efforts are more or less than expected
all recharge assumptions are same as rates used for other Imagine-owned
properties
