CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN PORTIONS OF THIS EXHIBIT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE OMITTED
PORTIONS HAVE BEEN SEPARATELY FILED WITH THE COMMISSION AND ARE INDICATED BY
ASTERISK (*).
AdForce[TM] Service Agreement 24/7 Media Agreement
This Service Agreement ("Agreement") is entered into as of January 1, 1999 (the
"Effective Date") between 24/7 Media, Inc., a Delaware corporation with its
principal executive offices at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000
("24/7 Media"), and Imgis, Inc., d/b/a "AdForce," a California corporation with
offices at 00000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxx, XX 00000 ("AdForce").
1. AdForce Service Definition. The AdForce service is an Internet advertising
administration system that will allow 24/7 Media to manage advertising
across its network of multiple Web sites. As part of the AdForce service,
AdForce Will provide 24/7 Media the AdForce client application ("Client"),
through which 24/7 Media will be able to (a) generate ad tags, (b) schedule
advertising to run in the online environments in which 24/7 Media places
those ad tags, and (c) generate reports on such advertising. In addition,
AdForce will maintain an AdForce server complex from which AdForce will
electronically deliver advertising scheduled by 24/7 Media to the online
environments containing the ad tags placed by 24/7 Media. The delivery of
"Impressions," defined as the transmission of advertisements by AdForce to
an AdForce ad tag, may be verified by monthly third-party audits of the
AdForce service, conducted by the Audit Bureau of Verification Services,
Inc. or other third party chosen by AdForce.
2. AdForce Service. (a) Generally. The AdForce service includes the targeting
features and reports listed in Exhibit A. AdForce will use best efforts to
accommodate 24/7 Media's custom report requests; any custom reports agreed
to by both parties will be developed by AdForce at the rate set forth on
Exhibit A. Features added to the AdForce service in the future (e.g.
demographic targeting, behavior tracking) may be included without charge in
the AdForce service, or in AdForce's sole discretion, be subject to
additional fees. The AdForce services include the functionality described in
Section 1 and Exhibit A, plus telephone client services support from the
hours of 6 a.m. to 6 p.m., Pacific Standard Time, Monday-Friday, excluding
major holidays. AdForce will also maintain 24 x 7 technical service support
via phone, cell phone or pager. Pricing for the AdForce service is detailed
in Exhibit A. AdForce will exercise all commercially reasonable efforts at
all times to correct errors in the Client and in software used to operate
the AdForce server complex,
(b) Certain Technical and Integration Support, (i) AdForce shall
participate when reasonably requested, in technical meetings with 24/7 Media
staff, and shall furnish 24/7 Media within ninety (90) days from the
Effective Date a production monitoring page and access to AdForce's customer
issues tracking system (excluding in either case metrics or issues unique to
non-24/7 Media customers or campaigns) (ii) AdForce will use commercially
reasonable efforts to design and implement at 24/7 Media's request and at
24/7 Media's expense on a time and materials basis, an interface to access
24/7 Media's Profilz database to enable 24/7 Media, on an exclusive basis,
to deliver targeted advertising to its customers. Promptly following
execution of this Agreement, and at 24/7 Media's request, AdForce and 24/7
Media personnel will develop a plan and budget for such development, and
determine any incremental pricing to be charged by AdForce for ad management
and delivery on such new service, AdForce shall not, however, be precluded
in any way from developing its own targeting advertising products or from
cooperating with third parties on other advertising services or products,
whether targeted or otherwise. (iii) AdForce is presently delivering
advertisements on behalf of 24/7 Media using a combination of 24/7 Media ad
tags and AdForce ad tags. AdForce agrees to cooperate with 24/7 Media in
good faith to convert any existing AdForce ad tags to 24/7 Media ad tags,
and that 24/7 Media may use the AdForce system to generate 24/7 Media ad
tags for all future 24/7 Media campaigns.
(c) Capacity. Provided 24/7 Media provides AdForce the impression
forecasts referenced in Section 3 below, and that 24/7 Media meets its
guarantee (or compensates AdForce for impression deliveries short of the
guarantee) provided in Section 3 below, AdForce covenants and warrants it
will have the capacity to serve properly on behalf of 24/7 Media the
impression volumes requested by 24/7 Media in its impression forecasts.
3. 24/7 Media Obligations. 24/7 Media agrees to implement 24/7 Media ad tags
using the process described in the AdForce User Guide and Help
documentation. Should the average file size of 24/7 Media's advertisements
exceed 20 kilobytes, as reasonably determined by AdForce on a monthly basis,
24/7 Media agrees to pay the incremental fee listed in Exhibit A to
compensate for AdForce's higher bandwidth costs. 24/7 Media agrees to
provide AdForce quarterly volume forecasts (with expected monthly volumes)
of Impressions to be delivered using the AdForce service; these forecasts
will be provided no later than thirty (30) days prior to the beginning of
each calendar quarter. Finally, 24/7 Media agrees that during the Term (as
defined in Exhibit A below) hereof, 24/7 Media will manage and deliver
through the AdForce service not less than eighty percent (80%) of the
impressions anticipated in its quarterly forecasts; if, for any reason
other than AdForce's default, 24/7 Media fails to deliver this guaranteed
amount, 24/7 Media will pay to AdForce the difference between 80% of the
guaranteed amount and the amount actually served, multiplied by the
applicable CPM rate set forth on Exhibit A.
4. Ownership/Limitations on Use, Subject to the terms and conditions of this
Agreement, 24/7 Media will have the right to use the Client in its offices
solely for purposes of using the AdForce service. AdForce shall at all times
have sole and exclusive ownership of all right, title and interest in and to
such Client and the AdForce service as a whole, any
Page 1 of 7
Confidential--Not to be shared outside 24/7 Media or AdForce, Inc.
AdForce(TM) Service Agreement 24/7 Media Agreement
enhancements thereto and in any materials and data AdForce provides to 24/7
Media. Notwithstanding anything contained elsewhere in this Agreement, the
parties acknowledge that 24/7 Media owns the domain name xxx.000xxxxx.xxx
and that this ownership shall survive the termination of this Agreement,
24/7 Media may not copy, modify, alter, sell, distribute or sublicense the
Client or reverse assemble, reverse compile or otherwise attempt by any
other method to create or derive the source programs of the AdForce service
or the Client, nor authorize or contract with third parties to do the same.
5. Data Rights. All data AdForce collects or stores in managing and
delivering ads for 24/7 Media which specifically pertain to 24/7 Media or
its customers and is used for designing, scheduling or administering
campaigns, generating reports and generating future media plans, including
information about sites in the media plan, impression limits, ad costs,
creatives, campaign results, click-through rates or transaction rates
(collectively "Campaign Data"), shall be owned by and is proprietary and
confidential to 24/7 Media. Accordingly, AdForce may not use such Campaign
Data for any purpose where such data can be specifically associated with the
identity of 24/7 Media or its clients; provided, however, that AdForce may
use such Campaign Data for reporting where such information is aggregated
with information from other AdForce customers and/or not specifically
identifiable as 24/7 Media information. Further, 24/7 Media shall own all
data collected or stored as a side effect of serving or tracking ads that is
not Campaign Data ("Clickstream Data"). However, AdForce can use Clickstream
Data for any purposes that do not expose Campaign Data to any third party,
and will not be required to store such information for more than twelve (12)
months. 24/7 Media may request at any time during the term of the Term
Sheet, or any renewal term, to receive copies of Clickstream Data from
AdForce. AdForce will supply such data at the following rates; *.
6. Confidentiality. Any 24/7 Media passwords to AdForce, AdForce user
guides, the AdForce Client, and the AdForce "help" documentation, whether
on-line or in printed form, are confidential and proprietary to AdForce. As
indicated above, all Campaign Data is proprietary and confidential to 24/7
Media. Such information shall not be used, disclosed or reproduced by the
other party without the consent of the party providing said information,
except for any information, data or material which: (a) at the time of
disclosure to the receiving party was known or in the possession of the
receiving party; (b) is independently developed by the receiving party; (c)
is generally available to the public without any breach of this Agreement,
7. Indemnification. (a) 24/7 Media. Subject to subsection (b), 24/7 Media shall
indemnify and hold harmless AdForce from any liability and damages and costs
(including reasonable costs and attorneys' fees) arising out of or relating
to advertising placed by 24/7 Media using the AdForce service, including,
without limitation, failure of the AdForce service or the Client, content,
libel, invasion of privacy, and rights of publicity; provided: (i) AdForce
promptly notifies 24/7 Media of such claims; (ii) 24/7 Media has sole
control of the defense and settlement of such claims and is not responsible
for any settlement that it does not approve in writing; and (iii) AdForce
renders all assistance required.
(b) AdForce. AdForce shall indemnify and hold harmless 24/7 Media
from any third party Claims and liabilities for infringement arising out of
or relating to 24/7 Media's use of the Client pursuant to this Agreement,
provided that: (i) 24/7 Media promptly notifies AdForce of such claims; (ii)
AdForce has sole control of the defense and settlement of such claims and is
not responsible for any settlement that it does not approve in writing; and
(iii) 24/7 Media renders all assistance required. If an injunction is
entered against 24/7 Media's use of the Client, AdForce will, at its option,
(A) obtain a license permitting such use, (B) modify the Client to avoid the
infringement, or (C) if it cannot reasonably do either of the foregoing,
terminate 24/7 Media's access to the Client and this Agreement.
8. Warranty. 24/7 Media warrants that it is free to enter into this
Agreement and that this Agreement constitutes the valid and binding
obligation of 24/7 Media, enforceable in accordance with its terms, AdForce
warrants that it is free to enter into and perform this Agreement and,
except for events beyond AdForce's control, including but not limited to
Internet service disruptions or access outages and other events of force
majeure, (a) the AdForce service will conform in all material respects to
the functionality described in Sections 1 and 2; (b) AdForce either owns,
has, or will otherwise acquire the right (and will, during the term hereof
maintain such right) to use all hardware and software components of the
AdForce service, and will not infringe on any United States federal or state
intellectual property rights of any third party.
Y2K. AdForce warrants to 24/7 that without any requirement for any human
intervention whatsoever (i) the overall operation, functions and performance
of the AdForce system will employ in connection with its obligations under
this Agreement (the "AdForce System") will be unaffected in any way by any
date data, date setting, date value, date input or other date related data
and any combination thereof (collectvely with records using such data, the
"Date Plan"), whether falling on, after or before September 9, 1999,
December 31, 1999 or January 1, 2000 (collectively, the "Millennium Dates");
(ii) the AdForce System will correctly and accurately, without human
intervention, store, define, merge, archive, display, recognize, return,
manage, extract support, calculate,
Page 2 of 7
Confidential--Not to be shared outside 24/7 Media or AdForce, Inc.
AdForce(TM) Service Agreement 24/7 Media Agreement
compare, manipulate interpret, sort, accept, sequence, tag, present and
conduct any other operation or process on, any Date Data, will not
abnormally end as a result of Date Data, will not result in or cause logical
or mathematical errors or inconsistencies in any user-interface
functionalities or otherwise, and will move backwards and forwards across,
Date Data without error relating to or occasioned by Date Data; and (iii)
the AdForce System shall correctly accommodate same century end
multi-century formulas in data calculations, shall process two digit century
Date Data and the fields assigned special values in a manner that correctly
resolves any ambiguities as to intended century date and shall correctly
reflect each century in Date Data values and Date Data interface values, and
the AdForce System does and will have the ability to properly interface with
internal and external applications or systems of third parties with whom
AdForce exchanges data electronically, including vendors, suppliers,
customers, banks and governmental agencies. AdForce warrants to 24/7 that
the AdForce System shall conform to the warranties in this Section from and
at all times during the term of this Agreement, before, on or after a
Millennium Date, regardless of whether 24/7 uses the AdForce System on,
before or after a Millennium Date,
EXCEPT AS SPECIFIED IN THIS SECTION 8, ADFORCE HEREBY DISCLAIMS ALL
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY AND ALL
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND
NON-INFRINGEMENT, IN CONNECTION WITH THIS AGREEMENT.
9. Liability. EXCEPT IN CASES OF WILLFUL MISCONDUCT, NEITHER PARTY WILL BE
LIABLE FOR CONSEQUENTIAL, INCIDENTAL, SPECIAL OR EXEMPLARY DAMAGES, EVEN IF
IT HAS BEEN WARNED OF THE POSSIBILITY OF SUCH DAMAGES.
10. Termination. The term of this Agreement is as described in Exhibit A. Either
party may terminate this Agreement in the event that the other party ceases
to do business, or undergoes a bankruptcy or insolvency proceeding, or an
assignment for the benefit of creditors. Upon the expiration or termination
of this Agreement for any reason, the parties will use best efforts to
effect an orderly transition of 24/7 Media to another ad serving solution,
and each party will return all Confidential Information of the other party
in its possession. All accrued payment obligations of 24/7 Media shall
survive expiration or termination of the Agreement, as shall the parties'
rights end obligations under Sections 4 through 9, Sections 11 through 13,
and Sections 15 and 16.
11. Assignment. This Agreement is not assignable or transferable by either
party without the prior written consent of the other party, except that a
party may assign the Agreement (a) by operation of law, or (b) to any
entity acquiring substantially all of assignor's assets. 24/7 Media
specifically consents to AdForce's March/April 1999 reincorporation into
Delaware.
12. Payment Terms. 24/7 Media shall pay to AdForce the dollar amounts determined
from the pricing schedule set forth in Exhibit A within fifteen (15) days
from date of invoice. All payments to AdForce shall be remitted in U. S.
Dollars. Fees for the AdForce service are subject to change at the
expiration of the initial Term and upon renewal of this Agreement.
13. General. This Agreement is the complete and exclusive statement of the
mutual understanding of the parties and supersedes and cancels all previous
written and oral agreements and communications relating to the subject
matter of this Agreement. No failure or delay in exercising any right
hereunder will operate as a waiver thereof, nor will any partial exercise of
any right or power hereunder preclude further exercise. Any waivers or
amendments shall be effective only if made in writing. If any provision of
this Agreement shall be adjudged by any court of competent jurisdiction to
be unenforceable or invalid, that provision shall be limited or eliminated
to the minimum extent necessary so that this Agreement shall otherwise
remain in full force and effect and enforceable. This Agreement shall be
governed by the law of the State of New York without regard to the conflicts
of law provisions thereof. The prevailing party in any action to enforce
this Agreement will be entitled to recover its attorney's fees and costs in
connection with such action. Nothing contained herein shall be construed as
establishing a partnership, joint venture, employment or other business
relationship between the parties hereto other then that of independent
contractors. This Agreement may be executed in counterparts.
14. Service Guarantees: 24/7 Media may demand "make-goods," (free ad deliveries
for ads not delivered during down times exceeding the allowable amounts)
for: (i) failure of ad delivery to maintain * up time, calculated on a
calendar monthly basis, for * (ii) failure of the AdForce administration
system to maintain * up time, excluding reasonable scheduled downtime and
events beyond AdForce's reasonable control, calculated on a calendar monthly
basis, for * consecutive calendar months; (iii) failure to maintain
average AdForce ad selector internal response time for ad delivery at equal
to or less than *, calculated on a calendar monthly basis, for *; (iv)
persistent documented failure of AdForce's customer support to 24/7 Media
over *; and (v) AdForce's failure to provide technical support for any
period in excess of *.
Page 3 of 7
Confidential--Not to be shared outside 24/7 Media or AdForce, Inc.
AdForce(TM) Service Agreement 247 Media Agreement
15. Non-solicitation. For a period commencing on the date hereof and terminating
* after the end of the Term, neither party may solicit employees of the
other, nor hire any employees or ex-employees of the other within *
following termination of employment with the other party. Further, during
the Term hereof, AdForce agrees not to solicit Web sites in the 24/7 network
for any purpose, including the providing of ad serving services or for
purchasing registration or other data, without the written consent of 24/7
Media.
16. Dispute Resolution. Any controversy or claim arising out of or relating to
this Agreement, or the breach hereof, shall be settled exclusively by
arbitration, and neither party shall under any circumstance cease
performance of its obligations under the Agreement notwithstanding any
alleged breach by the other. Such arbitration shall be conducted before a
single arbitrator in accordance with the Commercial Arbitration Rules of the
American Arbitration Association then in effect. The arbitration shall take
place in Palo Alto, California, if commenced by 24/7 Media and in New York,
New York, if commenced by AdForce. Judgment may be entered on the
arbitrator's award in any court having jurisdiction, and the parties
irrevocably consent to the jurisdiction of the California and New York
courts for that purpose. The parties waive personal service in connection
with any such arbitration; any process or other papers under this provision
may be served outside California or New York by registered mail, return
receipt requested, or by personal service, provided a reasonable time for
appearance or response is allowed. The decision of the arbitrator shall be
final and binding on the parties. The parties shall equally divide all costs
of the American Arbitration Association and the arbitrator. Each party shall
bear its own legal fees in any dispute. The arbitrator may grant injunctive
or other relief.
17. International Support. AdForce is presently serving ads for 24/7 Media
Europe Ltd. out of its data center in California pursuant to a contract with
Euroserve Media GmbH., AdForce will make every commercially reasonable
effort to ensure adequate support of 24/7 Media in Europe. AdForce shall
supply such services under direct contract with 24/7 Media Europe Ltd. and
shall provide such services on a most favored nation basis for contracts
entered into for ad delivery in Europe.
18. Publicity. AdForce and 24/7 agree to consult with one another prior to
making any disclosures, publicly or privately, about this Agreement. AdForce
and 24/7 agree that neither party shall issue a press release announcing
this Agreement
IN WITNESS WHEREOF, the parties have executed this Agreement as of January 1,
1999 (the "Effective Date").
By: /s/ C. Xxxxxx Xxxxx Accepted: /s/ Xxx X. Xxxxxxx
------------------------- ---------------------
Print Name: C. XXXXXX XXXXX Name: XXX X. XXXXXXX
----------------- ------------------------
Title: EVP & CFO Title: VP/GC
---------------------- -----------------------
Company: 24/7 Media, Inc. Imgis, Inc., d/b/a "AdForce"
Page 4 of 7
Confidential--Not to be shared outside 24/7 Media or AdForce, Inc.
AdForce(TM) Service Agreement 24/7 Media Agreement
Exhibit A
Reporting and Targeting
Reports Available - The following reports are currently available in the
AdForce service:
AdForce Reporting
The following reports are currently available with all levels of the AdForce
service:
Network Reports Website Reports Advertiser Reports
--------------------------------------------------------------------------------
Daily Campaign Details Activity by Advertiser Campaign On-line Summary
Daily Campaign Summary Activity by Area Code Summary by Area Code
Monthly Billing Report Activity by Browser Summary by Banner
Summary by Advertiser Activity by Content Unit Summary by Browser
Summary by Area Code Activity by Country Summary by Category
Summary by Browser Activity by Date Summary by Country
Summary by Category Activity by Domain Summary by Date
Summary by Country Activity by Keyword Summary by Domain
Summary by Date Activity by Hour Summary by Hour
Summary by Domain Activity by Operating System Summary by Operating System
Summary by Hour Activity by Pay Type Summary by Service Provider
Summary by Operating System Activity by Service Provider Summary by SIC Code
Summary by Payment Type Activity by SIC Code Summary by Website
Summary by Service Provider Website Revenue Campaign Summary
Summary by SIC Code Monthly Billing Report
Summary by Website
Website Revenue
All other reports currently provided by AdForce to 24/7 Media.
AdForce Targeting Capabilities - The AdForce service includes targeting on the following
parameters, when AdForce databases allow the parameter to be resolved:
o Browser Type - Different campaigns can be delivered to visitors of different browsers.
o Operating System - Different campaigns can be delivered to visitors with different operating systems.
o Domain Type - Different campaigns can be delivered to visitors from different domain types.
o Service Provider - Different campaigns can be delivered to visitors with different ISPs.
o Telephone Area Code - Different ads can be delivered to visitors in different area codes.
o SIC Code - Different ads can be delivered to visitors working for companies with different SIC codes.
o Country - Different campaigns can be delivered to visitors from different countries.
o Frequency - An advertisement can be shown a "specified number of times to each visitor.
o Sequence - A series of advertisements can be shown In sequence to a visitor.
o Keywords - Advertisements can be targeted on the basis of a search word or phrase.
o Site Data - Ads can be targeted on the basis of a site's data (i.e., with registered users).
o Day/Date/Time of Day - Ads can be scheduled to run during specific times and on specific days.
o Content Area - Ads can be targeted to a specific area of a site.
Page 5 of 7
Confidential--Not to be shared outside 24/7 Media or AdForce, Inc.
AdForce(TM) Service Agreement 24/7 Media Agreement
Term; Level of Service. The initial term ("Term") shall commence on the
Effective Date and end on the fifth (5th) anniversary of such data;
provided, however, that at any time 24/7 Media may terminate this Agreement
for any reason, or for no reason, by giving AdForce three (3) months prior
notice prior written notice of its election to terminate, 24/7 Media may
renew this Agreement for subsequent one (1) year by giving written notice to
AdForce within ninety (90) days from expiration of the Term, or any
renewal term.
24/7 Media agrees to pay AdForce for all Impressions delivered through the
AdForce service after the Effective Date at the applicable rate set forth
below, which shall be subject to change upon renewal of this Agreement.
AdForce Service
---------------------------------------
Campaign Management Scheduling
Features Delivery
Inventory Forecast
Reporting
Targeting
---------------------------------------
Auditing Free monthly audit
---------------------------------------
CPMs for Ad Delivery
*
*
*
o Beginning April 1, 1999: Buttons (ad size limit 10 kilobytes) will be *
CPM. House ads and unpaid ads that are redirected will be * CPM, subject to
a maximum cap of * of volume in any given month; any excess will be billed
at * CPM. Unpaid ads that are served directly will be * CPM, subject to
a maximum cap of * of volume in any given month; any excess will be billed
at * CPM.
o AdForce pricing and fees for processing and delivering demographically
targeted advertising via TargetForce or for AdForce's TrackForce product are
not included in the above pricing and will be covered in a separate
agreement.
o AdForce will use commercially reasonable efforts to accommodate 24/7 Media's
requests for custom reports. If the parties agree to one or more custom
reports, AdForce shall develop such report(s) at the rate of * per hour,
plus direct out-of-pocket expenses. Should 24/7 Media make a request for any
such custom work, AdForce shall first prepare a written quote for such work
for 24/7 Media's review and approval. There may also be additional charges
for other reports that AdForce adds to its service in the future.
o At 24/7 Media's request, AdForce will supply on-site training to 24/7 Media
personnel at the rate of * per day, plus reasonable travel and
out-of-pocket expenses.
o An additional * per thousand Impressions will be applied for each 10
kilobytes (or fraction thereof) that the average size of advertisements
placed by 24/7 Media through the AdForce service in a calendar month exceeds
20 kilobytes.
Page 6 of 7
Confidential--Not to be shared outside 24/7 Media or AdForce, Inc.
