EXHIBIT 10.7
PROCUREMENT AND TRAFFICKING AGREEMENT
Company: LookSmart
Address: 000 Xxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Web Site URL: xxx.xxxxxxxxx.xxx
This Agreement when executed by the above named company ("Company"), and
DoubleClick Inc. ("DoubleClick"), will constitute a valid and binding agreement
between Company and DoubleClick according to the specific terms and conditions
set forth below and those terms and conditions set forth in the Standard Terms
and Conditions (a copy of which is attached as Exhibit A). All terms not
otherwise defined below shall be as defined in the Standard Terms and
Conditions.
I. DESCRIPTION OF SERVICES
-----------------------
A. DoubleClick agrees to link Pages mutually agreed upon between Company
and DoubleClick to the Service and through such Service, DoubleClick
shall deliver Advertisers' Advertising to users accessing Pages.
DoubleClick agrees to provide the Service to certain Advertisers
specified and selected by Company ("Strategic Advertisers") as part of
a "key account" program and other Advertisers procured by DoubleClick.
Company agrees that it shall consult with DoubleClick with respect to
its selection of Strategic Advertisers, provided that Company's
decision with respect to its selection of Strategic Advertisers shall
be final. DoubleClick shall afford Company all the benefits and
privileges associated with entities having "Premium" web sites linked
to the Service, which benefits and privileges shall include, but are
not limited to, the following: the establishment by Company of a "key
account" program which will consist of a defined number of Strategic
Advertiser accounts where the Company will direct any and all sales
strategies, negotiations, activities, and all communications directly
or indirectly related to the placement of Advertising on the Web Site
by these Strategic Advertiser accounts; and having Company serve as
the lead with these Strategic Advertiser accounts and determining when
and how a DoubleClick advertising sales representatives will be
involved with these Strategic Advertiser accounts. DoubleClick will
receive the full commission rate agreed to in this Agreement for those
Strategic Advertiser accounts and related sales activities and will
provide delivery of the Advertising of said Strategic Advertisers to
the Web Site. In addition to the information provided to Company
pursuant to Section V.E. and in furtherance of helping Company
establish these Strategic Advertiser accounts, DoubleClick will make
available to Company, no less frequently than or a monthly basis, (i)
a list of those Advertisers who are currently having their Advertising
targeted exclusively to the Web Site (i.e. Advertisers whose
Advertising buy requires that their Advertising be delivered solely to
the Web Site) and (ii) a list of prospective Advertisers in whose
advertising campaigns the Web Site may play a significant role. The
list of these prospective Advertisers will include contact name,
address, phone number, "call reports" and any other information
reasonably requested by Company and which DoubleClick can reasonably
provide.
B. Subject to Section A above, during the Term (as defined below), the
Company shall not sell, place, or permit the placement or delivery of,
any Advertising on the Web Site except through DoubleClick or
DoubleClick's authorized representatives, licenses and assigns which
shall be the Company's sole and
exclusive representative for the sale, placement and delivery of all
Advertising on the Web Site; provided, however, that, Company shall
have the right to utilize for its own purposes, in its sole
discretion, those Spots which are not filled with Paid Advertising
("Unpaid Spots"). Any Advertising which Company desires be delivered
to the Unpaid Spots shall either be (i) delivered to the Unpaid Spots
by DoubleClick from DoubleClick's server, (ii) redirected by
DoubleClick to the Unpaid Spots from Company's server or (iii)
delivered by Company to the Unpaid Spots from Company's own server, as
determined by Company. Company agrees that it shall not directly sell
any Advertising which Company directs DoubleClick to deliver or
redirect to such Unpaid Spots or which Company delivers to the Unpaid
Spots directly from Company's server; it being understood and agreed
that the delivery of Advertising on account of a barter, e-commerce or
similar relationship shall not be deemed the sale of Advertising for
purposes of the preceding sentence. Any Unpaid Spots not utilized by
Company may be utilized by DoubleClick as provided for in the
definition of "Service" in the Standard Terms and Conditions. For any
Advertising which Company directs DoubleClick to deliver to the Unpaid
Spots from DoubleClick's server, DoubleClick shall receive the
compensation set forth in Section III.E. hereof. For any Advertising
which Company directs DoubleClick to redirect to the Unpaid Spots from
Company's server, DoubleClick shall receive the compensation set forth
in Section III.F. hereof. For any Advertising which Company delivers
directly to the Unpaid Spots from Company's server, DoubleClick shall
be entitled to no additional compensation. It is understood and agreed
that with respect to Advertising which DoubleClick redirects to the
Unpaid Spots or which Company delivers directly to the Unpaid Spots,
DoubleClick shall not be able to provide Company with the information
contained in the reports referred to in Section V.E. and Exhibit B.
II. TERM
----
The term (the "Term") of this Agreement shall commence on September
22, 1997 and shall continue until such time that it is terminated by
either party on not less than forty-five (45) days prior written
notice to the other party.
III. COMPENSATION/PAYMENT
--------------------
A. In full consideration of the Company providing the use of the Spot and
performing all its other obligations under this Agreement, DoubleClick
shall pay Company, and Company agrees to accept, seventy percent (70%)
percent of the Net Revenues generated on Advertising which is
delivered through the Service to Pages.
B. DoubleClick shall pay Company within five (5) days of DoubleClick's
Day's Sales Outstanding (as defined herein) following the end of the
month in which Advertisers' Advertising is delivered to Pages.
C. Company shall be solely responsible for any costs or expenses it
incurs in connection with the Service or performance of its
obligations under this Agreement including, without limitation,
expenses associated with any HTML programming and linking Pages to the
Service.
D. Notwithstanding anything to the contrary contained herein, in the
event Company terminates this Agreement in accordance with Section II
above and DoubleClick, prior to said termination, has entered
2
into agreements with Advertisers ("Advertiser Contracts") for the
delivery of Advertising to the Pages, the duration of which Advertiser
Contracts extend beyond the date on which this Agreement has been
terminated by Company, DoubleClick shall be entitled to twenty percent
(20%) of the revenues derived from the continued delivery of the
Advertising programs by Company or any party other than DoubleClick
until those specific Advertiser Contracts expire.
E. With respect to Advertising delivered by DoubleClick from
DoubleClick's server to the Unpaid Spots at Company's direction
pursuant to Section I.B. above, Company shall pay DoubleClick a
monthly delivery fee (the "Monthly Delivery Fee") computed as follows:
TOTAL ADVERTISING DELIVERED COST PER THOUSAND ADVERTISING
PER MONTH IMPRESSIONS (CPM)
--------- -----------------
First 1,000,000 $1.90
From 1,000,001 to 5,000,000 $1.70
From 5,000,001 to 10,000,000 $1.50
From 10,000,001 to 20,000,000 $1.20
From 20,000,001 to 30,000,000 $0.70
From 30,000,001 to 40,000,000 $0.45
From 40,000,001 to 50,000,000 $0.35
From 50,000,001 and up $0.30
F. With respect to Advertising which is redirected by DoubleClick from
Company's server to the Unpaid Spots at Company's direction pursuant
to Section I.B. above, Company shall pay DoubleClick a monthly fee
(the "Monthly Redirection Fee") equal to $0.20/CPM for all Advertising
so redirected to the Unpaid Spots for the given month.
G. Company agrees to pay the Monthly Delivery Fee and the Monthly
Redirection Fee for each month to DoubleClick within thirty (30) days
of Company's receipt of an invoice from DoubleClick therefor.
IV. COMPANY OBLIGATIONS AND RIGHTS
------------------------------
A. Company agrees to effect all necessary HTML programming with respect
to the Web Site and Pages in accordance with the HTML modifications
(the "HTML Modifications") reasonably designated by DoubleClick so as
to enable DoubleClick to perform its obligations under this Agreement.
B. Spots must be within the first screen of a Page and otherwise conform
to the HTML Modifications unless otherwise agreed upon by Company and
DoubleClick.
C. Promptly after the execution of this Agreement, Company agrees to
place a link on the Web Site's media kit home page to DoubleClick's
web site for potential advertisers to learn how they can place
Advertising on the Web Site.
3
D. Company will maintain its Pages and Web Site at a quality standard
that is no less than the standard that exists as of the date of this
Agreement and in a manner in keeping with the quality of other web
sites in the Service.
E. Company agrees that DoubleClick has no responsibility to review the
contents of Pages or the Web Site.
F. Company shall have the right to ban and/or remove Advertising from the
Web Site by accusing the Manage Site Application (located at
xxx.xxxxxxxxxxx.xxx).
V. DOUBLECLICK OBLIGATIONS AND RIGHTS
----------------------------------
A. DoubleClick shall have the right to refuse to include in the Service,
and to remove from the Service without prior notice, any Pages
(including its contents) that DoubleClick determines do not meet the
standards of the Service or which do not comply with the HTML
Modifications, as DoubleClick deems reasonable and necessary in its
sole good faith discretion, or in the event of any material change in
the nature of the Web Site or the Page from that set forth in
Company's application.
B. DoubleClick shall determine in its sole discretion, which Advertisers
shall have access to the Service; it being understood that Company
shall have the right to ban and/or remove Advertising from the Web
Site pursuant to Section IV.F.
C. Company acknowledges and agrees that promotion of the Service is
critical to enhance usage by Advertisers and in connection therewith
Company agrees that (i) DoubleClick shall have the right to use
Company's name and Pages in advertising and promoting the Service in
any media now or hereafter known and (ii) Company shall, upon
DoubleClick's reasonable request, supply DoubleClick with a reasonable
amount of Company's promotional materials so as to facilitate
DoubleClick's sales efforts to prospective Advertisers. Company may,
in its reasonable discretion, prevent or require that DoubleClick
immediately cease any such promotion. Notwithstanding the foregoing
sentence, if DoubleClick seeks Company's approval for the use of
Company's name and Pages in printed materials which advertise and
promote the Service and Company approves such use, then,
notwithstanding the fact that Company subsequently revokes its
approval, DoubleClick shall be entitled to continue to distribute and
disseminate all such materials which have already been printed as of
the time Company revokes its approval until such time as DoubleClick's
supply of such materials is exhausted.
D. DoubleClick shall have the right to use for DoubleClick's own use or
for use in connection with potential Advertisers on the Service,
information concerning Pages, Impressions and users accessing Pages
obtained through the Service, provided DoubleClick does not reproduce
any Pages without Company's prior consent and DoubleClick shall not
disclose to any third party any such current information specifically
pertaining to such users.
E. DoubleClick will make daily Advertising reports containing the
information specified in Exhibit B available to Company through
DoubleClick's web site (xxx.xxxxxxxxxxx.xxx) in addition to site
reports listing the number of Impressions and click-over rates by
Page. Subject to any applicable laws, DoubleClick will provide any
individual or cookie level data on users accessing the Web Site that
is
4
reasonably technically feasible to provide to Company. DoubleClick
shall also provide any additional information reasonably requested by
Company and which can reasonably be provided by DoubleClick.
F. It is understood and agreed that DoubleClick, in conjunction with
Company, shall determine the rate card charged to Advertisers for
delivery of Advertising which is targeted exclusively for the Web Site
(the "Web Site Rate Card"). Revisions to the Web Site Rate Card can be
made on a quarterly basis upon the mutual agreement of DoubleClick and
Company. DoubleClick can offer discounts of up to 25% off of said Web
Site Rate Card. Discounts in excess of 25% must be approved by Company
in its sole discretion, which decision Company shall provide within
twenty-four (24) hours. If Company does not provide DoubleClick with
approval or disapproval within said twenty-four (24) hour period, such
discount shall be deemed approved. It is further understood and agreed
that DoubleClick shall have the right, in its reasonable discretion,
to provide Advertisers with bonus Impressions free of charge;
provided, however, that bonus Impressions on the Web Site shall not
exceed twenty-five (25%) of the Impressions on the Web Site from Paid
Advertising.
DOUBLECLICK INC. COMPANY
By: /s/ Signature Illegible By: /s/ Signature Illegible
(Signature) (Signature)
XXXXX XXXX XXXXX X. XXXXXX
---------- ---------------
(Printed/Typed Name)
(Printed/Typed Name)
President SUP, SALES S. DISTRIBUTION
--------- --------------------------
(Official Title) (Official Title)
Dated: 9/24/97
-------
5
EXHIBIT A
---------
STANDARD TERMS AND CONDITIONS
-----------------------------
1. No Assignment. Neither party to this Agreement shall sell, transfer or
-------------
assign this Agreement or the rights or obligations hereunder, other than to a
parent or wholly-owned subsidiary, without the prior written consent of the
other party. Notwithstanding the foregoing, either party shall have the right to
transfer or assign this Agreement to a third party successor-in-interest, which
for the purposes of this Section shall mean any third party which acquires all
or substantially all of the assets of either party, or more than 75% of the
outstanding stock of such party, whether by sale, consolidation, merger or
otherwise. Any act in derogation of the foregoing shall be null and void.
2. Proprietary Rights. Company understands and agrees that Company shall
------------------
not have, nor will it claim, any right, title or interest in and to any
Advertising (other than its own Advertising), the Service or any elements
thereof (including without limitation, the grant of a license in or to the
Service or any software, source codes, modifications, updates and enhancements
thereof or any other aspect of the Service), the name "DoubleClick" or any
derivatives thereof, or any other trademarks and logos which are owned or
controlled by DoubleClick and made available to Company through the Service or
otherwise.
3. Representation and Indemnity. Company warrants and represents at all
----------------------------
times that Company (i) owns controls, manages or represents the Web Site, (ii)
has the right and full power and authority to enter into this Agreement, to
grant the rights herein granted and fully to perform its obligations hereunder,
(iii) owns and/or has the right to use all materials contained on the Web Site
or Pages, including, without limitation, all copyrights, trademarks and other
proprietary rights in and to such materials, and (iv) has secured the requisite
permission to use any person's name, voice, likeness and performance as embodied
in such materials or any other element contained in said material. In
furtherance of the foregoing, Company agrees to indemnify and hold DoubleClick
and the Advertisers harmless from and against any and all claims, actions,
losses, damages, liability, costs and expenses (including reasonable attorneys'
fees) arising out of or in connection with (i) the breach of any representation,
warranty or agreement made by Company hereunder, (ii) the Web Site or Pages,
including, without limitation, claims for infringement of copyright or other
intellectual property rights and violation of rights of privacy or publicity,
(iii) any and all claims, actions, lawsuits and proceedings brought by Third
Party Web Site Owners against DoubleClick ("Third Party Web Site Owner Claims")
arising out of, related to or in connection with the Service or this Agreement,
including without limitation, any action taken by or services performed by
DoubleClick under his Agreement, and/or (iii) any and all losses, damages,
liabilities, costs and expenses (including attorneys' fees) arising out of
related to, or in connection with any Third Party Web Site Owner Claims.
DoubleClick shall promptly notify Company of all claims and proceedings related
thereto of which DoubleClick becomes aware. DoubleClick warrants and represents
at all times that DoubleClick owns the Service and that such Service will not
infringe upon or conflict with the copyright or other intellectual property
right held by any third party. In furtherance of the foregoing, DoubleClick
shall indemnify, defend and hold Company harmless from and against any and all
claims, actions, losses, damages, liabilities, costs and expenses (including
reasonable attorneys' fees) resulting from or arising out of or in connection
with any breach of the foregoing representations and warranties, including,
without limitation, claims for infringement of copyright or other intellectual
property rights. Company shall promptly notify DoubleClick of all claims and
proceedings related thereto of which Company becomes aware.
4. No Warranties/Liabilities. EXCEPT AS EXPRESSLY PROVIDED ABOVE, NEITHER
-------------------------
PARTY MAKES ANY WARRANTIES OF ANY KIND, WHETHER EXPRESS OR IMPLIED, INCLUDING
ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS OF THE SERVICE OR THE WEB
SITE FOR A PARTICULAR PURPOSE INCLUDING, WITHOUT LIMITATION, THE TYPE OF
ADVERTISING OR AMOUNT OF ADVERTISING WHICH WILL BE DELIVERED TO PAGES THROUGH
THE SERVICE. DOUBLECLICK SHALL NOT BE LIABLE FOR ANY ADVERTISERS WHOSE
ADVERTISING APPEARS ON THE SERVICE, NOR THE CONTENTS OF ANY ADVERTISING, NOR
SHALL DOUBLECLICK BE LIABLE FOR ANY LOSS, COST, DAMAGE OR EXPENSE (INCLUDING
COUNSEL FEES) INCURRED BY COMPANY IN CONNECTION WITH COMPANY'S PARTICIPATION IN
THE SERVICE. NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY TECHNICAL
MALFUNCTION, COMPUTER ERROR OR LOSS OF DATA OR OTHER INJURY, DAMAGE OR
DISTRIBUTION TO COMPANY'S PAGES OR WEB SITE OR THE SERVICE. IN NO EVENT SHALL
EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL OR
CONSEQUENTIAL, SPECIAL OR EXEMPLARY DAMAGES ARISING OUT OF OR IN RELATION TO
THIS AGREEMENT.
1
5. Confidentiality. Any information relating to or disclosed in the
---------------
course of this Agreement by either party (the "Disclosing Party") to the other
party (the "Receiving Party"), which is or should be reasonably understood to be
confidential or proprietary to the Disclosing Party, including but not limited
to, the material terms of this Agreement, information about the Service and
technical processes and formulas, source code, product designs, sales, cost and
other unpublished financial information, product and business plans,
projections, and marketing data shall be deemed "Confidential Information" and
shall not be used, disclosed or reproduced by the Receiving Party without the
Disclosing Party's prior written consent. "Confidential Information" shall not
include information (a) already lawfully known to or independently developed by
the Receiving Party, (b) disclosed in published materials, (c) generally known
to the public, (d) lawfully obtained from any third party, or (e) required to be
disclosed by law.
6. Breach. Either party shall have the right to immediately terminate
------
this Agreement in the event the other party commits a material breach of this
Agreement and such breach is not cured by the breaching party within thirty (30)
days of its receipt of notice of such breach from the non breaching party.
7. Miscellaneous. Notwithstanding any provision hereof, for the purpose
-------------
of this Agreement each party shall be and act as an independent contractor and
not as an employee, partner, joint venturer, or agent of the other and shall not
bind not attempt to bind the other to any contract.
This Agreement, including the Standard Terms and Conditions, represents the
entire understanding between DoubleClick and Company regarding DoubleClick's
services and supersedes all prior agreements. No waiver, modification or
addition to this Agreement shall be valid unless in writing and signed by the
parties to this Agreement. Notwithstanding the foregoing, DoubleClick shall have
the right to modify or make additions to the placement algorithm governing.
Advertising delivery and the HTML Modifications, from time to time upon
reasonable prior notice to Company.
If any provision of this Agreement shall be adjudicated 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 the other provisions shall
be unaffected.
8. Applicable Law. This Agreement shall be governed by and construed in
--------------
accordance with the substantive laws of the State of New York and Company agrees
that jurisdiction and venue of all matters relating to this Agreement shall be
vested exclusively in the federal, state or local courts within the State of New
York.
9. Definitions. "Advertiser" is defined as a company, entity or
-----------
individual which provides Advertising to DoubleClick for distribution through
the Service. "Advertising" (or its correlative term "Advertisement") is defined
as third party materials including "banners", "pop-up windows", "buttons",
"roadblocks", "tickers", "intermercials", "incentives" and any other forms of
advertisements and their contents. "Day's Sales Outstanding" shall be the
average number of days it takes DoubleClick to collect its Net Accounts
Receivable (as defined herein) from Advertisers and which shall be calculated as
follows: DoubleClick's account's receivable balance from the immediately
preceding semi-annual accounting period (calculated on a calendar year basis)
after adjustment for any reserve for doubtful accounts and deferred or unbilled
revenue ("Net Accounts Receivable") shall be divided by the average daily
revenue recognized by DoubleClick for the last two months of such semi-annual
accounting period. DoubleClick's Day's Sales Outstanding shall be calculated
following the end of each semi-annual accounting period and shall be used in
determining the date of payment for amounts due to Company for Advertising which
is delivered to Pages in each of the months comprising the ensuring semi-annual
accounting period. "Net Revenues" is defined as the gross xxxxxxxx earned from
Advertisers by DoubleClick less (i) rate card and volume discounts and agency
commissions, and (ii) a bad debt allowance of 1% of said gross xxxxxxxx.
"Impression" is defined as occurring each time Advertising appears on a Page
resulting from a user accessing or visiting such Page. "Page" is defined as a
page of the Web Site designated by Company to be linked to the Service and is
accepted and approved by DoubleClick. "Paid Advertising" is defined as any
Advertising which is paid for by an Advertiser. "Service" is defined as the
DoubleClick service that delivers Advertising to any Page(s) of the Web Site in
the following order and manner: For users which match the criteria selected by
an Advertiser from information currently available to DoubleClick concerning
users. Paid Advertising from such Advertiser will appear. If no match occurs or
Paid Advertising is unavailable. Advertising for another web site linked to the
Service will appear (and Company shall receive "barter" Advertising entitling it
to one free delivery of its Advertising to a web site linked to the Service.) In
addition, Advertising promoting the Service and Advertising promoting charitable
causes and non-profit organizations (i.e. public service announcements) may
appear on Pages. "Spot" is defined as the specific place on a Page where
Advertising may appear through the Service. "Web Site" is defined as (i)
2
the Company's web site referred to above and (ii) pages of those web sites which
are owned by third parties ("Third Party Web Site Owners"), but for which
Company has the right to deliver Advertising.
3
EXHIBIT B
---------
Advertising Report Information
------------------------------
Daily Advertiser report information shall include:
(1) Advertiser name
(2) Number of Impressions contracted
(3) Area/Category of the Web Site targeted
(4) CPM rates
(5) Term of Advertising contract and dates contracted
(6) Impressions delivered against number of Impressions contracted
(7) Click rates for each Advertisement of (i) Strategic Advertisers and
(ii) Advertisers whose Advertising is targeted exclusively for the Web
Site. With respect to the foregoing Advertisers who specifically
target "Affinity Areas" within the Web Site, DoubleClick will provide
click rates for each applicable Advertisement by Affinity Area. (It is
understood and agreed that DoubleClick shall not be required to make
any click rates referred to in this item (7) available until such time
as the applicable Advertiser has granted DoubleClick permission to
make the click rate information available to Company; Company shall be
the party responsible for obtaining any permissions of the Strategic
Advertisers and DoubleClick shall be the party responsible for
obtaining any permissions of Advertisers whose Advertising is targeted
exclusively for the Web Site and who are not Strategic Advertiser).
(8) Forecast of Impressions available for sale to Advertisers and
available Impression (based on forecast) for sale to Advertisers.
4
