24/7 MEDIA, INC. / NBC
AFFILIATION
AGREEMENT
AFFILIATION AGREEMENT, dated as of March 11, 1999 (the "Effective
Date"), among 24/7 Media, Inc., a Delaware corporation with an address at ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ("24/7"), and NBC Multimedia, Inc., a
Delaware corporation with an address at ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
("NBC").
WHEREAS, National Broadcasting Company, Inc. (hereinafter the "NBC
Network") and/or its affiliates are the operators and owners of the television
stations (the "O/O TV Stations") and the Internet Web sites (the "O/O Web
Sites") specified on Schedule A hereto;
WHEREAS, the NBC Network provides television programming and, through
NBC Interactive Neighborhood ("NBC-IN"), Internet content, to affiliated
television stations ("NBC Affiliates"), each of which operates and owns a
television station and many of which operate an associated Internet Web site
(the "Affiliate Web Sites", and collectively with the O/O Web Sites, the "Web
Sites");
WHEREAS, 24/7 operates a network of Internet Web sites (the "24/7
Network") for which it solicits advertisers, advertising agencies, buying
services or others ("Advertisers") regarding the placement of advertising
banners and similar devices and sponsorships ("Advertising") for display on
pages, screens, and other segments or spaces on web sites reasonably suitable
for the display of such Advertising;
WHEREAS, NBC wishes to engage 24/7 to sell Advertising on the Web Sites
individually and in packages that combine inventory from certain of the Web
Sites, the O/O TV Stations, NBC Affiliates and, in certain limited circumstances
set forth in Section 2.A, the 24/7 Network, and 24/7 wishes to accept such
engagement; and
WHEREAS, NBC and 24/7 wish to encourage NBC Affiliates to become
parties to an Affiliation Agreement (the "Affiliate Agreement") among the NBC
Affiliates, 24/7 and NBC-IN;
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
and agreements contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, it is agreed as
follows:
1. Affiliation.
A. NBC hereby designates 24/7 as its exclusive third-party Internet
advertising representation firm during the Term to sell (a) Co-op Advertising
(as defined below) in packages that combine inventory from one or more of the
Web Sites covered by an O/O TV Station or NBC Affiliate where 24/7 then has in
place a dedicated full-time salesperson on site pursuant to Section 2.F (the
"Manned Markets"), and on-air inventory from such O/O TV Stations and/or NBC
Affiliates, and (b) Advertising on the Web Sites in the Manned Markets. In
addition, NBC
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 filed separately with the Securities and Exchange Commission
and are indicated by asterisk (*).
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hereby grants 24/7 the non-exclusive right to sell Co-op Advertising and
Advertising in all markets covered by an O/O TV Station that are not Manned
Markets. 24/7 shall have a right of first refusal to man such markets before NBC
engages another third party. NBC also agrees to arrange for the O/O TV Stations,
and to use commercially reasonable efforts to encourage NBC Affiliates, to
become party to an Affiliate Agreement substantially in the form of Exhibit A
(each, an "Affiliate Agreement") to be attached hereto within 30 days of the
Effective Date in accordance with the timetable set forth on Schedule B hereto.
B. For purposes of this Agreement, "Co-op Advertising" is intended to
mean a coordinated television and Internet advertising campaign in which
multiple advertisers participate simultaneously on a cooperative basis, and
which (x) incorporate a promotional television advertisement in which viewers
are directed to the Web Site of the television station upon which such
advertisement appears, and more specifically to a promotion appearing on such
Web Site (the "Promotion"), (y) incorporate Advertising appearing on such Web
Site which directs end users to the Promotion, and (z) results in at least 30%
of the total ad buy being allocated to such Web Site Advertising. It is mutually
understood and agreed that 24/7 may have the opportunity to sell Co-op
Advertising that deviates from the terms set forth herein; provided, that (i)
24/7 may do so only with the consent of NBC and the applicable station manager,
which consents may be withheld in NBC's or such station manager's discretion, as
the case may be, and (ii) payments with respect to such modified Co-op
Advertising shall be governed by the applicable Affiliate Agreement.
2. Obligations of 24/7.
In furtherance of the foregoing, 24/7 covenants and agrees to:
A. utilize its best efforts to sell Co-op Advertising and
Advertising to Advertisers for placement on the Web Sites, the O/O TV Stations
and the NBC Affiliate stations located in the Manned Markets, at such prices as
NBC, the O/O TV Stations, such NBC Affiliate stations and 24/7 shall mutually
agree, and in accordance with this Agreement and any Affiliation Agreements;
provided, that if the inventory of a Web Site sought by a particular Advertiser
(including any inventory controlled by NBC-IN thereon) is sold out or otherwise
not sufficient to meet the needs of a particular advertiser for the time periods
sought by such Advertiser, then 24/7 may offer such Advertiser inventory during
such time periods on the 24/7 Network solely as a supplement to such Web Site's
inventory;
B. utilize commercially reasonable efforts to sell Advertising
for placement on the Web Sites in the non-Manned Markets, all in accordance with
this Agreement and the applicable Affiliation Agreements, if any, with all such
Advertising and the rates therefor subject to the approval of the applicable
station management and NBC-IN.
C. offer inventory on the 24/7 Network to the O/O TV Stations
and the NBC Affiliates in those situations when such O/O TV Stations and/or NBC
Affiliates have identified an advertiser who seeks more inventory than is
available on such O/O TV Station's or NBC Affiliate's Web Site;
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D. not to sell packages which in any fashion combine Internet
inventory and television inventory on behalf of any competitor of the NBC
Network, the O/O TV Stations or the NBC Affiliates in any local market
containing an O/O Station or an NBC Affiliate that executes the Affiliate
Agreement within 90 days' after first being offered the opportunity to do so;
provided, that 24/7 agrees to negotiate in good faith with each such O/O Station
and NBC Affiliate and incorporate reasonable changes to the Affiliate Agreement
in order to accommodate the needs of each such O/O Station or NBC Affiliate, as
the case may be;
E. offer all services set forth in this Section 2 to O/O TV
Stations and NBC Affiliates in accordance with the timetables set forth on
Schedules A and B;
F. maintain suitable and qualified personnel in
administrative, sales and technical positions necessary for 24/7 to perform
effectively the terms of this Agreement; 24/7 shall hire and employ during the
Term one salesperson resident in each of the fifteen (15) mutually agreed upon
O/O TV Stations and NBC Affiliate stations (with the intention of ▇▇▇▇▇▇▇ at
least 20 of the top 25 markets); which salespersons shall devote substantially
all of their full-time efforts to the sale of Advertising in their assigned
market pursuant to this Agreement (each, a "Manned Market Salesperson", and
collectively the "Manned Market Salespeople"); provided, that if any such Manned
Market Salesperson's employment is terminated, whether voluntarily or
involuntarily, or if any such Manned Market Salesperson dies or becomes
permanently disabled, then 24/7 shall promptly replace such Manned Market
Salesperson; and provided, further, that the hiring of each such Manned Market
Salesperson, and any replacements therefor, shall be subject to the reasonable
approval of NBC and station management of the applicable O/O TV Station or NBC
Affiliate, as the case may be;
G. serve or cause to be served Advertising to the Web Sites;
it is understood that Advertising shall be served initially through a
re-direction of Advertising from 24/7's ad serving system to DART, the ad
serving system currently employed by NBC; provided, that NBC may elect at any
time upon 60 days notice to 24/7 to transition fully to 24/7's ad serving system
at 24/7's sole cost and expense, whereupon 24/7 shall use its best efforts to
promptly effect a smooth transition to its system; and provided, further, that
upon such election by NBC, the parties shall negotiate in good faith regarding a
service level agreement covering Internet up-time, server up-time and response
time, and other metrics relating to the performance of 24/7's ad serving system
and the Internet connectivity thereof, which in no event shall be less favorable
to NBC than that of any service level agreement provided to any other customer
of 24/7;
H. provide NBC with prompt notice, via e-mail posting, of all
new Co-op Advertising and Advertising that has been sold by 24/7 to be displayed
on the Web Sites, and honor any decision by NBC or the station management of the
applicable O/O TV Station or NBC Affiliate, as the case may be, to decline any
Co-op Advertising or Advertising, in accordance with the Provisions in 3(B)
below;
I. provide NBC with real-time access to records that will
allow it to monitor the volume of paid Co-op Advertising and Advertising
delivered to the Web Sites and the
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revenue produced (subject to billing corrections and adjustments) thereby; all
such records, including data, statistical information or other traffic analysis,
produced or provided by 24/7 (the "Data") shall be the joint property of 24/7
and NBC; provided, however, that 24/7 shall not, and shall ensure that any third
party ad serving company engaged by 24/7 contractually agrees not to, sell or
otherwise distribute the Data to any third parties without the prior written
consent of NBC, which may be withheld by NBC in its sole discretion;
J. to assist NBC in the acquisition of syndicated content
acquisitions for the Web Sites; provided, that NBC shall have no obligation to
accept any such acquisition sourced by 24/7;
K. conduct quarterly sales seminars and reviews during the
Term in rotating locations as mutually agreed by 24/7 and NBC-IN, with the
content and format of such seminars to be developed by 24/7 in cooperation with
the Steering Committee (as defined below) with the intent of communicating the
sales experiences and successes of the Manned Market Salespeople to the sales
staffs of the non-Manned Market stations; provided, that the quality of such
seminars shall be at a level reasonably acceptable to NBC-IN; and provided,
further, that 24/7 and NBC shall be jointly responsible for all costs and
expenses associated therewith (such costs to be subject to mutual prior
approval) other than travel, lodging and meals of the attendees of such
seminars, which shall be at the sole expense of the applicable O/O TV Station or
NBC Affiliate, as the case may be; and
L. provide sales and marketing products, including brochures,
marketing materials and case studies, to the sales staffs of the non-Manned
Markets, which are of a quality reasonably acceptable to NBC-IN; provided, that
NBC shall reimburse 24/7 for the actual and reasonable out of pocket costs and
expenses of such products and that all such costs and expenses shall be subject
to NBC's prior approval.
3. Obligations of NBC.
NBC covenants and agrees to:
A. consult with 24/7 regarding the hiring and daily management of the
Manned Market Salespeople, and provide such sales personnel suitable office
space at the applicable O/O TV Station, and to make available to such sales
personnel the reasonable use of all existing office facilities (general support
staff, telephone system fax machines, photocopiers, rest rooms, kitchen
facilities) on the same basis that such facilities are made available to
employees of NBC or the TV Stations; no indirect or communal expense shall be
allocated to 24/7 for the provisions in this paragraph, other than for expenses
incurred directly by the 24/7 employee (i.e. long distance telephone, travel and
entertainment, personal computer and personal office supplies);
B. provide 24/7 with NBC Network policies, as amended from time to
time, regarding the acceptance of advertising and notify 24/7 within two
business days from the time notice of any new Co-op Advertising or Advertising
is given in accordance with Section 2.F of NBCs rejection of any new Co-op
Advertising or Advertising. Failure to provide timely notice
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of rejection of the new Co-op Advertising or Advertising shall be deemed
acceptance thereof, until such time as NBC notifies 24/7 of NBC's rejection
thereof at which time 24/7 shall promptly remove the Co-op Advertising or
Advertising;
C. furnish 24/7 with all subscribership, viewership, inventory, and
usage reports, reviews and audience studies, deliveries, census requirements,
and any other information regarding the Web Sites as is reasonably available to
NBC and is deemed appropriate by NBC in its sole discretion for use by 24/7 for
the sale of Co-op Advertising and Advertising; and
D. not engage, contract with, license or permit any 3rd party Internet
advertising representation firm other than 24/7 and its employees to sell, or
represent NBC or any of the O/O TV Stations for the sale of Advertising and
Co-op Advertising for which 24/7 has been granted exclusive Internet advertising
representation rights pursuant to Section 1.
4. Governance.
A. 24/7 shall appoint a senior officer to manage the relationship
contemplated hereby and shall hire the Manned Market Salespeople to sell Co-op
Advertising and Advertising pursuant to this Agreement; provided, that the
hiring or appointment of all such personnel, and any replacements therefor,
shall be subject to NBC's reasonable approval. All such personnel shall be
employees of 24/7 and shall be compensated entirely by 24/7. 24/7's relationship
manager and its sales personnel shall provide periodic reports to NBC in a
format reasonably acceptable to NBC regarding sales of Co-op Advertising and
Advertising made pursuant to this Agreement and shall confer directly with the
station managers of the O/O TV Stations and each participating NBC Affiliate
regularly as needed to discuss strategies and goals and to resolve sales
conflicts.
B. The parties shall form a steering committee (the "Steering
Committee") which shall be composed, of six representatives, one from each of
(i) the O/O TV Stations, (ii) the NBC Affiliates, (iii) NBC-IN, and three from
24/7. The Steering Committee shall assist in developing and maintaining
processes in order to achieve the best overall performance by 24/7 hereunder,
including, without limitation, resolving conflicts between station management
and their resident Manned Market Salespeople, the timing of NBC Affiliate
roll-outs, and setting priorities for the program. The parties shall use their
best efforts to incorporate the recommendations of the Steering Committee into
their performance under this Agreement and, the Affiliate Agreements.
5. Payments.
A. Advertisers shall be directed to pay all cash and other
consideration generated from the sale of Co-op Advertising and Advertising by
24/7 pursuant to and during the term of this Agreement and at all times
thereafter following the termination of this Agreement (each, a "Payment")
directly to NBC or the applicable NBC Affiliate. If 24/7 receives any such
payment from an advertiser, it shall immediately forward such payment to NBC or
the applicable NBC Affiliate without any deduction or set-off whatsoever. 24/7
will submit a monthly billing statement outlining commissions earned for
Advertising on NBC-IN sold by 24/7, which billing
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statement shall specify the amounts due 24/7 according to Schedule C. NBC shall
pay 24/7 all undisputed amounts owed to 24/7 within forty-five (45) days after
NBC's collection of the Payment that gave rise to such obligation. It is
understood that when calculating the portion of the Payment owed to 24/7
hereunder, NBC shall exclude those advertising agency commissions actually
retained by agencies or paid by NBC to agencies with respect to the sale of
Advertising.
B. In the event that NBC converts to 24/7 ad serving
technology, NBC may elect to have 24/7 serve advertisements not sold by 24/7.
For such ad serving NBC will pay a serving fee at a cost per thousand ("CPM ")
as shown below: *
6. Equity Issuance. In consideration of the foregoing, on the date hereof, 24/7
shall grant NBC a warrant which will give NBC the right to purchase 150,000
shares of common stock, par value $.01 per share (the "Common Stock"), of 24/7
in the form attached hereto as Exhibit 6(a) and pursuant to a Warrant Purchase
Agreement, in the form attached hereto as Exhibit 6(b). The exercise price per
share shall be equal to the average closing price of the Common Stock as
reported by Nasdaq on the five trading days immediately preceding the date of
this Agreement.
7. Intellectual Property. All hardware, software, programs, codes, trade names,
technology, intellectual property, licenses, patents, trademarks, copyrights,
trade secrets, know-how, and processes owned by 24/7 as of the Effective Date
(collectively, the "24/7 Technology") used by 24/7 under this Agreement shall
remain the sole property of 24/7. NBC shall have no rights, title or interest in
the 24/7 Technology. All hardware, software, programs, codes, trade names,
technology, intellectual property, licenses, patents, trademarks, copyrights,
trade secrets, know-how, and processes owned by NBC as of the Effective Date
(collectively, the "NBC Technology") used by NBC under this Agreement shall
remain the sole property of NBC. 24/7 shall have no rights, title or interest in
the NBC Technology. Upon the expiration or termination of this Agreement, each
party shall promptly return all information, documents, manuals and other
materials belonging to the other party except as otherwise provided in this
Agreement.
8. Year 2000. In addition to any other warranties and representations provided
by 24/7 pursuant hereto, whether pursuant to this Agreement, by law, equity, or
otherwise, 24/7 represents and warrants that (a) any product(s) and/or
service(s) provided by 24/7 hereunder, including, without limitation, each item
of hardware, software, or firmware; any system, equipment, or products
consisting of or containing one or more thereof; and any and all enhancements,
upgrades, customizations, modifications, maintenance and the like
("Products/Services") shall be Year 2000 Compliant at the time of delivery and
at all times
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thereafter and in all subsequent updates or revisions of any kind, and (b)
24/7's supply of the Products/Services to NBC shall not be interrupted, delayed,
decreased, or otherwise affected by dates/times prior to, on, after or spanning
January 1, 2000. For purposes of this Agreement, Year 2000 Compliant means that
(1) the Products/Services accurately process, provide and/or receive date/time
data (including without limitation calculating, comparing, and sequencing),
within, from, into, and between centuries (including without limitation the
twentieth and twenty-first centuries), including leap year calculations, and (2)
neither the performance nor the functionality nor 24/7's supply to NBC of the
Products/Services will be affected by dates/times prior to, on, after, or
spanning January 1, 2000. The design of said Products/Services to ensure
compliance with the foregoing warranties and representations shall include,
without limitation, date data century recognition, calculations that accommodate
same century and multi-century formulae and date values, and date data interface
values that reflect the century. In particular, but without limitation, (i) no
value for current date/time will cause any error, interruption, or decreased
performance in the operation of such Products/Services, (ii) all manipulations
of date/time-related data (including, but not limited to, calculating,
comparing, sequencing, processing, and outputting) will produce correct results
for all valid dates/times, including when used in combination with other
products, (iii) date elements in interfaces and data storage will specify the
correct century to eliminate date ambiguity without human intervention,
including leap year calculations, (iv) where any date element is represented
without a century, the correct century will be unambiguous for all manipulations
involving that element, (v) authorization codes, passwords, and zaps (purge
functions) should function normally and in the same manner prior to, on, after
and spanning January 1, 2000, including, without limitation, the manner in which
they function with respect to expiration dates/times and CPU serial numbers. No
obligation of 24/7 under this Agreement shall be excused by reason of the
failure of any other person's (other than NBC's) Products/Services to be Year
2000 Compliant, nor shall such occurrence(s) be deemed a force majeure event.
In the event of breach of this warranty, in addition to any other remedies NBC
may have, whether pursuant to this Agreement, by law, equity or otherwise, NBC
shall be entitled to repair or replacement of any non-Compliant item, at no cost
to NBC, within sixty (60) days after notice of breach from NBC to 24/7, or such
different period as specified by NBC in its sole discretion. In addition to
24/7's obligations as set forth above, 24/7 shall indemnify and hold NBC
harmless from and against any claims, costs, losses, damages, or expenses
(including reasonable attorneys' fees) incurred by NBC arising out of or
relating to (a) any failure of the Products/Services to be Year 2000 Compliant
or (b) any failure of 24/7 or its vendors', sub-suppliers', or contractors'
Products/Services to be Year 2000 Compliant. Notwithstanding anything herein to
the contrary, the liability of 24/7 for a breach of 24/7's Year 2000 Compliant
representation and warranty shall not be subject to any limitations or
exclusions of remedies or warranties contained in this Agreement or any other
agreement between the parties.
9. Confidentiality. During the Term, each party hereto (the "Disclosing Party")
may disclose to the other party (the "Receiving Party") information in
connection with the performance of this Agreement, including, without
limitation, information concerning the Disclosing Party's business, products,
services, content, technical data, trade secrets, customer or advertiser lists,
marketing plans, financial documents or data, which when provided hereunder in
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documentary or other tangible form shall be marked or stamped "Confidential",
and which if disclosed orally or visually shall be identified in a writing
marked "Confidential" by the Disclosing Party and submitted to the Receiving
Party within thirty (30) days after disclosure. All such information of or about
the Disclosing Party shall be "Confidential Information". The parties shall use
the Confidential Information of the other party solely to perform its
obligations under this Agreement, and all Confidential Information shall remain
the sole property of the Disclosing Party. 24/7 and NBC covenant to each other
that during the Term and for a period of three (3) years thereafter, neither
party shall disclose to any third party (other than its employees and directors,
in their capacity as such, and the employees and directors of any affiliate, on
a need to know basis so long as they are bound by the terms of this Agreement)
any information regarding the terms and provisions of this Agreement or any
Confidential Information of the other party except (i) in connection with any
federal securities laws and any applicable rules and regulations of any stock
exchange or quotation system; and (ii) in a confidential disclosure made in
connection with a contemplated financing, merger, consolidation or sale of
capital stock of 24/7 or NBC or any affiliate of NBC. Notwithstanding the
foregoing, the Receiving Party shall have no obligation under this Agreement
with respect to any Confidential Information disclosed to it which (a) the
Receiving Party can demonstrate was already known to it at the time of its
receipt hereunder, (b) is or becomes generally available to the public other
than by means of the Receiving Party's breach of its obligations under this
Agreement, (c) is independently obtained from a third party whose disclosure
violates no duty of confidentiality, (d) is independently developed by or on
behalf of the Receiving Party without access to or use of or reliance on any
Confidential Information furnished to it under this Agreement, and such
independent development can be reasonably evidenced by the Receiving Party, or
(e) is disclosed pursuant to applicable law or regulation or by operation of
law, provided that the Receiving Party may disclose only such information as is
legally required, and provided further that the Receiving Party shall provide
reasonable notice to the Disclosing Party of such requirement and a reasonable
opportunity to object to such disclosure.
10. Publicity. Each party shall consult with the other party before issuing any
press or other release or otherwise making any other public statement or any
statement to employees, customers or vendors of the parties with respect to this
Agreement; provided, however, that except as required by applicable law, neither
party shall issue any such press release or make any such public statement or
any statement to employees, customers or vendors without the prior written
consent of the other party.
11. Records and Audit. Each party shall maintain complete, clear and accurate
books and records to verify in detail the calculations used to determine
payments hereunder. Each party shall keep, store and maintain such books and
records for at least three years after Termination of the Agreement. At any time
during the Term or for three years thereafter, either party may, on thirty days'
notice to the other party, appoint an independent certified account to audit the
other party's books and records during normal business hours to verify
calculations, and the other party shall provide reasonable cooperation and
assistance necessary to the performance of said audit; provided, however, that
each party shall be limited to one (1) such audit in any twelve (12) month
period.
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12. Term and Termination.
A. The term of this Agreement (the "Term") shall commence on
the Effective Date and shall continue in effect until (3) three months after the
date, as determined under the provisions of Section 18 below, on which either
party gives written notice to the other party of its election to terminate the
Agreement; provided, however, that except as set forth below in this Section,
neither party may give notice of termination to the other party until three (3)
months prior to the third anniversary of the Effective Date.
B. On or after October 1, 2000, either party terminate the
Agreement with 60 days' prior written notice if gross total ▇▇▇▇▇▇▇▇ for Co-op
Advertising and Advertising sold pursuant to this Agreement is less than
$* for the three months ended September 30, 2000.
C. This Agreement may be terminated by either party on 60
days' prior written notice to the other party upon the occurrence of a material
breach by the other party of any covenant, duty or undertaking herein, which
material breach continues without cure for a period of 45 days after written
notice of such breach from the non-breaching party to the breaching party.
D. Either party may terminate this Agreement if a form of the
Affiliate Agreement is not agreed upon and attached to this Agreement within
thirty (30) days of the Effective Date.
E. This Agreement may be terminated by NBC commencing 18
months after the Effective Date if any of the following have occurred: (i) a
significant change of ownership of 50% or more of NBC-IN, (ii) a merger of
NBC-IN (or a company holding all or substantially all of the assets constituting
NBC-IN) with a major Internet company, (iii) a sale of all or substantially all
of the assets constituting NBC-IN, or (iv) a spin-off of NBC Internet properties
or other material change in NBC-IN's status; provided, that NBC must provide
24/7 with 90 days prior written notice of such termination and such notice of
termination may not be given prior to 15 months after the Effective Date. If NBC
terminates the Agreement pursuant to this Section, then on the date such
termination becomes effective it shall pay 24/7 a termination fee (the
"Termination Fee") equal to *.
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13. Indemnification.
A. NBC shall indemnify and hold harmless 24/7 and its
officers, directors, employees and agents against and in respect of any and all
claims, suits, actions, proceedings and investigations instituted by third
parties, as well as any judgments, damages, settlements, liabilities, and legal
and other expenses (including reasonable legal fees and expenses of attorneys)
as and when incurred, arising out of or based upon (a) any misrepresentation or
breach of the representations and warranties of NBC set forth in this Agreement,
and (b) any non-compliance by NBC with any covenants or agreements of NBC
contained in or made pursuant to this Agreement. 24/7 shall indemnify and hold
harmless NBC, its affiliates, and their respective officers, directors,
employees and agents, against and in respect of any and all claims, suits,
actions, proceedings and investigations instituted by third parties, as well as
any judgments, damages, settlements, liabilities, and legal and other expenses
(including reasonable legal fees and expenses of attorneys) as and when
incurred, arising out of or based upon (a) any misrepresentation or breach of
the representations and warranties of 24/7 set forth in this Agreement, and (b)
any non-compliance by 24/7 with any covenants or agreements of 24/7 contained in
or made pursuant to this Agreement.
B. Upon the assertion of any claim or the commencement of any suit or
proceeding against an indemnified party by any third party that may give rise to
liability of an indemnifying party hereunder, the indemnified party shall
promptly notify the indemnifying party of the existence of such claim and shall
give the indemnifying party reasonable opportunity to defend and/or settle the
claim at its own expense and with counsel of its own selection. The indemnified
party shall cooperate with the indemnifying party and shall at all times have
the right to fully participate in, but not control, such defense with its own
counsel and at its own expense. The indemnified party shall not make any
settlement of any claims which might give rise to liability of the indemnifying
party hereunder without the prior written consent of the indemnifying party.
14. No Poaching. NBC and 24/7 agree that during the Term, neither NBC nor 24/7
will solicit or recruit the services of each other's employees, or hire any such
employees, for the purpose of selling Internet Advertising without prior written
consent of the other party. In addition, upon termination of this Agreement, the
party that first provides notice of termination (unless such notice is pursuant
to Sections 12.C or 12.D), shall not solicit or recruit the services of the
other party's employees, or hire any such employees, for the purpose of selling
Internet Advertising for a period of one year without prior written consent of
the other party.
15. No Waiver. This Agreement shall not be waived or modified except by a
written consent to that effect signed by NBC and 24/7.
16. Assignment. Neither party may assign this Agreement without the prior
written consent of the other, except (a) in connection with the sale of all or
substantially all of its assets, (b) to the surviving entity in any merger or
consolidation, or (c) in the case of NBC, to an affiliated company. Each party
agrees that if it assigns or transfers this Agreement, it shall cause such
successor, assignee, or transferee to assume all of such party's obligations
hereunder.
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17. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and performed therein, without regard to principles of conflicts of laws.
18. Notices. All notices required or permitted to be given hereunder shall be in
writing and either hand-delivered, telecopied, mailed by certified first class
mail, postage prepaid, or sent via electronic mail to the other party or parties
hereto at the address(es) set forth below. A notice shall be deemed given when
delivered personally, when the telecopied notice is transmitted by the sender,
three business days after mailing by certified first class mail, or on the
delivery date if delivered by electronic mail.
19. Entire Agreement. This Agreement, including the Schedules and Exhibits
attached hereto, constitutes the entire agreement and supersedes all prior
agreements of the Parties with respect to the transactions set forth herein and,
except as otherwise expressly provided herein, is not intended to confer upon
any other person any rights or remedies hereunder.
20. Survival. The provisions of Sections 2.1, 5, 7-11, 13, 14 & 17 shall survive
any expiration or termination of this Agreement.
21. Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original and all of which together shall constitute one and
the same document.
11
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement this 11th day of March, 1999.
24/7 MEDIA, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: CEO
NBC MULTIMEDIA, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: VP NBC Interactive
3/11/99
12
SCHEDULE A
O/O TV Stations and Web Sites
*
13
SCHEDULE B
Roll-out to O/O TV Stations and NBC Affiliates
*
14
SCHEDULE C
Payments
I. Owned & Operated Stations
The percentage of the Payment that shall be retained by 24/7 and NBC-IN
respectively with respect to on-air advertising ("On-Air") and Internet
advertising ("Online") shall be determined in accordance with the following
table:
*
With respect to Co-op Advertising, the Payment amount shall be allocated between
On-Air and Online in a fashion that reasonably reflects the actual value of the
On-Air and Online components of such Co-op Advertising.
TV Station commission rates are applicable to all revenue in the corresponding
Aggregate Annual Payments bracket, and are not retroactive to the first dollar.
For example, if the Aggregate Annual Payment is $20 million, split 60/40 between
television and Internet, 24/7 shall retain $*.
The first Aggregate Annual Payment Period shall be deemed to run from the date
of this Agreement through December 31, 1999.
15
II. NBC Affiliates
The percentage of the Payment that shall be retained by 24/7 and NBC-IN
respectively with respect to On-Air and Online shall be determined in accordance
with the following table:
*
With respect to Co-op Advertising, the Payment amount shall be allocated between
On-Air and Online in a fashion that reasonably reflects the actual value of the
On-Air and Online components of such Co-op Advertising.
16
TABLE OF CONTENTS
Page No.
1. Affiliation.....................................................................................1
2. Obligations of 24/7.............................................................................2
3. Obligations of NBC..............................................................................4
4. Governance......................................................................................5
5. Payments........................................................................................5
6. Equity Issuance.................................................................................6
7. Intellectual Property...........................................................................6
8. Year 2000.......................................................................................6
9. Confidentiality.................................................................................7
10. Publicity.......................................................................................8
11. Records and Audit...............................................................................8
12. Term and Termination............................................................................9
13. Indemnification................................................................................10
14. No Poaching....................................................................................10
15. No Waiver......................................................................................10
16. Assignment.....................................................................................10
17. Governing Law..................................................................................11
18. Notices........................................................................................11
19. Entire Agreement...............................................................................11
20. Survival.......................................................................................11
21. Counterparts...................................................................................11
SCHEDULE A O/O TV Stations and Web Sites............................................13
SCHEDULE B Roll-out to O/O TV Stations and NBC Affiliates...........................14
17
