Service Agreement - 24/7 Media Inc. and IMGIS Inc.
ADFORCE-TM- SERVICE AGREEMENT 24/7 Media Agreement
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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 1250 Broadway, New York, New York 10001-3701
("24/7 Media"), and Imgis, Inc., d/b/a "AdForce," a California corporation with
offices at 10590 North Tantau Avenue, Cupertino, CA 95014 ("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, will 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 [*] 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 [*] percent ([*]%) 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 [*] of the
guaranteed amount and the amount actually served, multiplied by the
applicable CPM rate set forth on Exhibit A.
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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 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 www.247media.com 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: $[*] per month for files delivered daily, $[*] per
month for files delivered monthly for the preceding month, and $[*] for
files generated in the preceding 12 months (provided 24/7 Media makes the
request within thirty (30) days of the end of such year).
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.
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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 (collectively with records
using such data, the "DATE DATA"), 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, 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 and 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 and 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 [*]
([*]) 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 than 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
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calendar monthly basis, for four (4) consecutive calendar months; (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 four (4)
consecutive calendar months; (iii) failure to maintain average AdForce ad
selector internal response time for ad delivery at equal to or less than
[*] ([*]) milliseconds, calculated on a calendar monthly basis, for four
(4) consecutive months; (iv) persistent documented failure of AdForce's
customer support to 24/7 Media over four (4) consecutive calendar months;
and (v) AdForce's failure to provide technical support for any period in
excess of [*] ([*]) consecutive business days.
15. NON-SOLICITATION. For a period commencing on the date hereof and
terminating [*] ([*]) months 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 sixty (60) days 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 supplys 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/ Accepted: /s/
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Print Name: C. Andrew Johns Name: Rex S. Jackson
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Title: EVP & CFO Title: VP/GC
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Company: 24/7 Media, Inc. Imgis, Inc., d/b/a "AdForce"
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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:
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NETWORK REPORTS WEBSITE REPORTS ADVERTISER REPORTS
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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
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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:
- BROWSER TYPE - Different campaigns can be delivered to visitors of
different browsers.
- OPERATING SYSTEM - Different campaigns can be delivered to visitors
with different operating systems
- DOMAIN TYPE - Different campaigns can be delivered to visitors from
different domain types.
- SERVICE PROVIDER - Different campaigns can be delivered to visitors
with different ISPs.
- TELEPHONE AREA CODE - Different ads can be delivered to visitors in
different area codes.
- SIC CODE - Different ads can be delivered to visitors working for
companies with different SIC codes.
- COUNTRY - Different campaigns can be delivered to visitors from
different countries.
- FREQUENCY - An advertisement can be shown a specified number of times
to each visitor.
- SEQUENCE - A series of advertisements can be shown in sequence to a
visitor.
- KEYWORDS - Advertisements can be targeted on the basis of a search
word or phrase.
- SITE DATA - Ads can be targeted on the basis of a site's data (i.e.
with registered users).
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- DAY / DATE / TIME OF DAY - Ads can be scheduled to run during specific
times and on specific days.
- CONTENT AREA - Ads can be targeted to a specific area of a site.
TERM; LEVEL OF SERVICE. The initial term ("Term") shall commence on the
Effective Date and end on the fifth (5th) anniversary of such date;
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
written notice of its election to terminate. 24/7 Media may renew this
Agreement for subsequent one (1) year terms 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.
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ADFORCE SERVICE
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Campaign Management Scheduling
Features Delivery
Inventory Forecast
Reporting
Targeting
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Auditing Free monthly audit
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CPMs for Ad Delivery
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1/1/99-3/31/99: all ads, [*]
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On or after 4/1/99: first [*] ads, [*]
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Remainder of term: [*]
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- Beginning April 1, 1999: Buttons (ad size limit [*] kilobytes) will be
$[*] CPM. House ads and unpaid ads that are redirected will be $[*]
CPM, subject to a maximum cap of [*] percent ([*]%) 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 [*]
percent ([*]%) of volume in any given month; any excess will be billed
at $[*] CPM.
- 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.
- 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.
- 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.
- An additional $[*] per thousand Impressions will be applied for each [*]
kilobytes (or fraction thereof) that the average size of advertisements
placed by 24/7 Media through the AdForce service in a calendar month
exceeds [*] kilobytes.
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REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
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ADFORCE-TM- SERVICE AGREEMENT 24/7 Media Agreement
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