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DISTRIBUTION AND SERVICE AGREEMENT
This Distribution and Service Agreement ("Agreement") is made and entered into
between Ad-Star Services Inc., a New York Corporation ("Ad-Star") with offices
at 0000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx xxx Xxx, XX 00000 and AdOne Classified
Network, Inc., a Delaware Corporation (the "Company"), with offices at 000
Xxxxxxxx, Xxxxx 000, Xxx Xxxx, XX 00000 as of November 19, 1998 ("Effective
Date").
NOW, THEREFORE, in consideration of the premises and the mutual covenants and
conditions herein contained, AD-STAR and the Company agree as follows:
1) Purpose: Company owns and operates the AdOne Classified Network, a system
for collecting, displaying, distributing, redistributing and publishing
classified advertisements on the Internet for itself and its affiliates
("Affiliates"), with a central Web site currently located at
xxx.xxxxxxxxxxxxxxxxxxx.xxx ("Classified Warehouse"). Ad-Star provides an
Internet based marketplace for the buying and selling of classified
advertising ("Ad-StarNet") for its media and advertisers clients
(collectively "Clients"). The parties wish to incorporate Ad-StarNet into
Company's Web site for the purpose of allowing Affiliates' users to place
ads through Ad-StarNet and to make Affiliate's publications capable of
taking these advertisements through Ad-StarNet.
2) Responsibilities of the Parties:
The responsibilities of the parties are detailed in Attachment A.
3) General:
3.1 This Agreement covers business dealings for North America
only. As such it includes all business relationships referred
to in this Agreement, for Company and its Affiliates doing
business in North America.
3.2 Each party shall be solely responsible for supplying and
managing its own Web site at its own expense and neither party
shall have any obligation or liability whatsoever with respect
to the Web site of the other. Each party shall manage, review,
delete, edit, create, update and otherwise manage all content
and services available on or through its respective Web site.
Notwithstanding the above, responsibilities of each party
detailed in Attachment A cannot be deleted or substantively
edited without the mutual consent of the other party
3.3 Each party shall promptly inform the other of (a) any
information related to its Web site that could reasonably be
anticipated to lead to a claim, demand, or liability of or
against the other party by any third party, (b) any changes to
its Web site which would substantially change the content in
any area to which the other party has linked, and (c) any
changes in its Web site which would substantially change the
page(s) in which links to the other party appear.
3.4 Ad-Star grants to the Company during the term of this
Agreement a non-exclusive, royalty-free, world-wide right and
license to use its trade names, trademarks, service names and
service marks ("Ad-Star Marks") in the co-branded pages
referred to in Attachment A hereto (the " Co-branded pages"),
and in connection with the distribution, marketing and
promotion of Ad-StarNet and the Co-branded pages, subject to
the following conditions: (a) the Company shall comply with
all guidelines that Ad-Star may provide from time to time; (b)
the look and feel, the use of all logos, the design, and the
overall quality of the Co-branded pages shall be subject to
Ad-Star's approval; (c) any use of the Ad-Star Marks shall
inure to the benefit of Ad-Star; and (d) the Company shall
submit to Ad-Star for its prior approval, not to be
unreasonably withheld, all advertising, promotional and other
material bearing any Ad-Star Marks.
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3.5 The Company grants to Ad-Star during the term of this
Agreement a non-exclusive, royalty-free, world-wide right and
license to use its trade names, trademarks, service names and
service marks ("Company Marks") in Ad-StarNet and in
connection with the distribution, marketing and promotion of
the Ad-StarNet and the Co-branded pages, subject to the
following conditions: (a) Ad-Star shall comply with all
guidelines that the Company may provide from time to time; (b)
any use of the Company Marks shall inure to the benefit of the
Company; and (c) Ad-Star shall submit to Company for its prior
approval, not to be unreasonably withheld, all advertising,
promotional and other material bearing any Company Marks.
3.6 The look and feel of both parties logos and brands as used by
the other party, along with the overall quality of the
Co-branded pages must meet with the mutual approval of both
parties, not to be unreasonably withheld.
3.7 Nothing in this Agreement shall be deemed to grant to the
Company any ownership interest in the Ad-Star Marks or to
Ad-Star any ownership interest in the Company Marks. Further,
neither Company nor Ad-Star is granted any ownership interest
in the marks of their respective Affiliates and Clients
3.8 The "Ad-Star ad taking services," as it is referred to in this
Agreement and accompanying Attachments, includes all services
enabled by Ad-Star, including but not limited to its logos,
marks, code and design elements incorporated into the
Co-branded pages, and in whole the Ad-Star's central Web site
and other sites which Ad-Star enables for the buying and
selling of advertisements into and from Affiliates, Clients
and affiliates of other Ad-Star Clients. Not withstanding the
above, certain added value applications of the Ad-Star ad
taking services, beyond those expressly provided for in this
Agreement, may be excluded by Ad-Star from this Agreement, or
negotiated separately.
4) Promotional Efforts: Each party will submit to the other party, for its
prior written approval, which shall not be unreasonably withheld or
delayed, all press releases, and marketing, advertising, and other
promotional materials that refer to the other party and/or its trade names,
trademarks, service names and service marks (the "Materials"). Copy
substantially similar to that already approved shall be deemed approved.
5) Fees, Share of Advertising Revenue and Payment: Ad-Star will pay Company
and its Affiliates advertising revenues earned and actually received, less
applicable fees, in a calendar month within thirty (30) days of the end of
that calendar month. Each party will provide the other party with a monthly
report with all information necessary to show the basis on which
advertising revenues and fee payments are calculated in accordance with
this Agreement. Each party will have the right, at its own expense, to
inspect and audit the accounting books and records of the other party that
are specifically relevant to the determination of fees and payments due
under this Agreement. In the event such inspection and audit shows a
discrepancy in payments in the recipient party's disfavor of five percent
(5%) or more, then the other party shall promptly reimburse the recipient
party for the costs and expense of such inspection and audit and pay the
amount of any underpayment. Ad-Star applicable fees which will be deducted
from advertising revenues include:
a) The Ad-Star transaction fee, which includes Company's share of
such fee, which is defined in Attachment A;
b) The merchant processing fees (note that these fees for credit
cards are estimated in the range of 2.5% to 3.5% of the total
charge plus a per transaction fee of $.80; ACH is estimated to
be $1.25 per transaction and $2 for ACH refunds and $10 for
each return item);
c) a reserve for credit card charge backs of three percent (3%)
of the total advertising revenues for a rolling twelve (12)
months. This reserve will serve to reduce fluctuations in
monthly payments and may be adjusted from time to time with
written notice to more accurately reflect the actual charge
back experience. Sole liability for chargebacks will remain
with the Affiliate and/or Client who is the primary publisher
of the advertising, where the primary publisher is defined as
the publisher receiving payment for the advertising, excluding
transaction fees.
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6) Non-Exclusivity: Both parties agree and acknowledge that nothing in this
Agreement shall be deemed or construed to provide the other with any manner
of exclusivity.
7) Timing: Both parties will use reasonable commercial efforts to work on
their respective responsibilities as identified in this Agreement and
attachment A, towards a January 15, 1999 beta release of the ad taking
functionality through the Co-branded pages and Ad-Star's own site.
Subsequently, both parties will work towards a fully functional live
production date of February 1, 1999. The live production on February 1,
1999 will included a minimum of ten (10) Company Affiliates, or up to a
maximum of twenty (20) Company Affiliates. The actual number of Company
Affiliates and any change to these minimum and maximum requirements will be
based on mutual consent of the parties. Company will be Ad-Star's first
network Client to be mutually announced if Company is first network Client
Agreement signed by the Effective Date. In addition, Company will be the
first network Client of Ad-Star to launch if Company provides all needed
information and performs its requirements as identified in this Agreement
and Attachments.
8) Assignability: This Agreement shall not be assigned, sublicensed or
transferred by either party, without the prior written consent of the other
party, which shall not be unreasonably withheld or delayed. An acquisition,
merger or other change of control of either the Company or Ad-Star shall
not be deemed an assignment.
9) Confidentiality: Each party acknowledges and agrees that any and all
information relating to the other party's business and not publicly known
including, without limitation, the contents of this Agreement, technical
processes and formulas, source codes, trade secrets, names, addresses and
information about users and advertisers, product designs, sales, costs and
other unpublished financial information, product plans, and marketing data
is confidential and proprietary information. Each party agrees that it will
not use or disclose any confidential or proprietary information for any
purpose other than in connection with the performance of and obligations
under the terms and conditions of this Agreement or as required by a court
of competent jurisdiction.
10) Representations and Warranties, Disclaimers, and Advertising Acceptability:
Each party represents and warrants to the other that (a) its Web site is a
functional Internet site accessible to subscribers and users of the
Internet; (b) it has the right and authority to enter into and perform all
obligations under this Agreement; and (c) its execution and performance of
this Agreement does not and will not violate any agreement to which such
party is bound. In the event of an error, delay, defect, breakdown or
failure of either party's Web site, that party's obligation shall be
limited to using its reasonable efforts to restore its Web site to
operation as soon as feasible.
The Company does not review or exercise control over the advertisements,
and, consequently, all advertisements on the Company's Web site or coming
through the Co-branded pages are provided AS IS, and the Company expressly
disclaims any responsibility for the accuracy, quality or nature of such
advertisements.
The Company further represents and warrants to Ad-Star that the Company's
Web site does not and will not contain any content or material, (excluding
advertisements) that infringes any proprietary right of any third party,
including, without limitation, any copyright, trademark, patent or trade
secret, or that violates any law or governmental regulation.
Ad-Star does not obtain the advertisements which are bought and sold
through Ad-StarNet, nor does it review or exercise control over such
advertisements, and, consequently, all advertisements coming through
Ad-StarNet are provided AS IS, and Ad-Star expressly disclaims any
responsibility for the accuracy, quality or nature of such advertisements.
Ad-Star further represents and warrants to Company that Ad-Star's Web site
does not and will not contain any content or material, (excluding
advertisements) that infringes any proprietary right of any third party,
including, without limitation, any copyright, trademark, patent or trade
secret, or that violates any law or governmental regulation.
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The Company and Ad-Star reserve the right to refuse to publish any
advertisement, including, without limitation, any advertisement that: would
or might violate any law or governmental regulation; would or might violate
or infringe any right of any third party; it determines is inappropriate or
might subject it to liability or adverse publicity; or is otherwise
injurious to its interests; provided that, neither party shall be
responsible for, or be obligated to review, any content, advertisement, or
other material on the other's Web site. Notwithstanding the foregoing, the
stated circumstances shall not absolve Ad-Star of the obligation, as
identified in this Agreement, to process and transmit all successfully
transacted advertisements placed through the Ad-Star ad taking service for
Company and/or its Affiliates to Company and/or its Affiliates.
EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES, AND
EACH PARTY HEREBY SPECIFICALLY DISCLAIMS, ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, REGARDING ANY MATTER SUBJECT TO THIS AGREEMENT,
INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE, AND IMPLIED WARRANTIES ARISING FROM
COURSE OF DEALING OR COURSE OF PERFORMANCE.
11) Indemnity: Each party will defend, indemnify, save and hold harmless the
other party, Ad-Star's clients and Company Affiliates, and their officers,
directors, agents and employees, from any and all third-party claims,
demands, liabilities, costs or expenses, including, without limitation,
reasonable attorneys' fees ("Liabilities"), resulting from the indemnifying
party's breach of any representation or warranty contained in this
Agreement. Each party agrees to (a) promptly notify the other party in
writing of any indemnifiable claim or demand and (b) give the other party
the opportunity to defend or negotiate a settlement of any such claim or
demand at such other party's expense and cooperate fully with the other
party, at that other party's expense, in defending or settling such claim
or demand. The indemnifying party will not settle a claim or demand for the
indemnified party without the prior written consent of the indemnified
party, which consent shall not be unreasonably withheld. Each party
reserves the right, at its own expense, to participate in the defense of
any matter otherwise subject to indemnification by the other party.
12) Limitation of Liability: In no event will either party be liable to the
other party for consequential, incidental, special, punitive, exemplary, or
indirect damages, including, but not limited to, loss of profits or sales
or loss of or damage to data, regardless of the form of action, whether in
contract, tort, breach of warranty or otherwise, even if a party has been
advised of the possibility thereof. Moreover, except for the
indemnification obligations and charge back allowance and liability
described above, in no event shall the maximum liability of either party
arising out of or relating to the transaction which is the subject matter
of this Agreement, regardless of cause, exceed the amounts payable by
either party to the other under this Agreement.
13) Term and Termination: The initial term of this Agreement will be for the
period of three (3) years from the Effective Date and will automatically
renew for successive one year periods unless terminated by either party.
Either party may terminate this Agreement after the initial term for any
reason on sixty (60) days' prior written notice. Notwithstanding the
foregoing, either party may terminate this Agreement with immediate effect
if the other party is in breach of a material obligation hereunder and
fails to cure such breach within thirty (30) days of notice from the
non-breaching party or fails to promptly after notice from the
non-breaching party begin to cure such breach and diligently pursue its
cure if such breach is curable but is not capable of being cured within
thirty (30) days of notice from the non-breaching party. Upon termination,
each party shall promptly return to the other all of the confidential
information (as defined above) of the other party in its possession or
control. Sections 5, 8, 9, 10, 11, 13 and 14 shall survive termination or
expiration.
14) General Provisions:
14.1 Amendment: No change, amendment or modification of any provision
of this Agreement shall be valid unless set forth in a written
instrument signed by both parties.
14.2 Entire Agreement: This Agreement sets forth the entire agreement
and supersedes any prior agreements, written or oral, of the parties
with respect to the transactions set forth herein.
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14.3 Construction: In the event that any provision of this Agreement
conflicts with the law under which this Agreement is to be construed,
or if any such provision is held invalid by a court with jurisdiction
over the parties to this Agreement, such provision shall be deemed to
be restated to reflect as nearly as possible the original intentions of
the parties in accordance with the applicable law, and the remainder of
this Agreement shall remain in full force and effect. There shall be no
presumption for or against either party as a result of such party being
the principal drafter of this Agreement.
14.4 Independent Contractors: The parties to this Agreement are
independent contractors. Neither party is an agent, representative, or
partner of the other party. Neither party shall have any right, power
or authority to enter into any agreement for, or on behalf of, or incur
any obligation or liability of, or to otherwise bind, the other party.
This Agreement shall not be interpreted or construed to create an
association, agency, joint venture or partnership between the parties
or to impose any liability attributable to such a relationship upon
either party.
14.5 Governing Law: This Agreement will be governed by and construed in
accordance with the laws of the State of New York, without giving
effect to principles of conflicts of law.
14.6 Arbitration: A. In the event of any disagreement, controversy or
dispute regarding performance under or interpretation of this
Agreement, the parties agree to attempt to reach a negotiated
resolution. If such disagreement, controversy or dispute remains
unresolved for a period of thirty (30) days after one party has
provided written notice of the disagreement, controversy or dispute to
the other, then each party shall designate an officer to meet to
endeavor to resolve the disagreement, controversy or dispute.
Arbitration in accordance with this section may not be commenced by
either party until said officers determine in good faith that a
negotiated resolution is unlikely, or the passage of thirty (30) days
from their first meeting, whichever occurs later (the "Negotiation
Termination Date").
Upon the Negotiation Termination Date, if a negotiated resolution has
not been reached, the disagreement, controversy or dispute shall be
settled by binding arbitration in accordance with the commercial
arbitration rules of the American Arbitration Association and judgement
upon the award rendered by the arbitrators may be entered in any court
having jurisdiction thereof. The arbitration shall be conducted in New
York County, NY by three arbitrators. One arbitrator shall be selected
by Ad-Star, one arbitrator shall be selected by Company and the third
arbitrator shall be selected by the American Arbitration Association
and shall be subject to approval by both Ad-Star and Company.
Ad-Star and Company intend that this provision for settling disputes be
irrevocable.
14.7 Attorney's Fees: In any action or proceeding to enforce any of the
terms or provisions of this Agreement or on account of the breach
hereof, the party prevailing shall be entitled to recover all its
expenses, including, without limitation, reasonable attorney's fees
from the other party.
14.8 Notice: Any notices herein shall be given to the appropriate party
at the address specified above or at such address as the party shall
specify in writing. Notice shall be deemed given: upon personal
delivery; if sent by fax, upon confirmation of receipt; or if sent by
certified or registered mail, postage prepaid, upon receipt.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.
FOR COMPANY: FOR AD-STAR:
AdOne Classified Network, Inc. Ad-Star Services, Inc.
By: By:
Name: /s/ Xxxxxxx Xxxxx Name: /s/ Xxxx Xxxx
_________________________ _____________________
Title: VP & GM COO & VP
_________________________ Title:_____________________
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ATTACHMENT A - RESPONSIBILITIES OF THE PARTIES
General Provisions:
a) Ad-Star and Company agree to use reasonable commercial efforts to comply
with and fulfill the technical requirements in Attachment D to which this
Attachment A is attached, and which is incorporated into this Agreement in
full. Technical requirements in Attachment D apply to Company Affiliates
except for Pre-existing Ad-Star Clients, as defined below.
b) Ad-Star and Company agree that all Co-branded pages that incorporate
Ad-Star's ad taking services will be consistent with Company's Web site
look and feel and each Affiliate's private label Web site look and feel.
These interfaces will be based on Ad-Star's required information and will
use the Ad-StarNet Web site and Ad-Star private label templates, as guides
for the fields of information that are needed and the flow of the pages.
Collectively the Web pages that include Ad-Star ad taking services which
make up the Affiliates' versions and the Company's own version of Ad-Star's
marketplace for buying and selling classified advertising are hereto and
previously called the "Co-branded pages". Company and Ad-Star will mutually
agree on the final implemented look and feel along with the fields of data
and functionalities that are required on the Co-branded pages not already
incorporated by this reference to Attachment D. The Co-branded pages will
accommodate online ad placement into each and every participating Company
Affiliate.
Company Shall:
a) use reasonable commercial efforts to promote the Ad-Star ad taking service
to its Affiliates through e-mails, updates and other communications to its
Affiliates. Company will use its customer service workers or other
qualified representatives to enlist its Affiliates in the Ad-Star ad taking
services. Company will include the Ad-Star ad taking services into its
basic service, on a per Affiliate opt-out basis, for all new Company
Affiliates and as part of its planned Affiliate interface upgrade for
Q4'98. This means that Ad-Star's ad taking service will be the only such
service initially offered to Company Affiliates as part of their basic
service and Affiliate must choose not to use service, i.e. "opt-out", in
order to exclude such service from their contract, at which time Company
may offer the Affiliate any other ad taking services not expressly
precluded by this Agreement.
b) require participating Affiliates to approve and sign compliance statement,
to be mutually agreed upon by Ad-Star and the Company, obligating
Affiliates to publish the ads delivered to them through the Ad-Star ad
taking service in accordance with what the advertiser has paid for, e.g.
appropriate placement and frequency.
c) prominently promote the Co-branded pages to the users of its Web site with
permanent link buttons throughout its Web site, entitled "Place an ad" or
something else to the same effect. These permanent buttons will link to the
Co-branded pages. In addition, Company will use reasonable commercial
efforts to promote its Co-branded page, which will include Ad-StarNet and
any other vendors who provide similar services to the Company or its
Affiliates, with available resources. In no case will another vendor, which
provides similar service, be more prominently displayed than Ad-Star.
d) include all participating Company Affiliates for ad placement from within
the Ad-Star enabled Co-branded pages. Furthermore, at Company's sole
discretion, Company will also include the ability to place ads into all
other Ad-Star Client publications, provided by Ad-Star, from the Co-branded
pages. This will enable ad placement into other publications in addition to
the Company participating Affiliate publications.
e) NOT develop any type of online classified ad taking capability which is in
any way similar to Ad- Star's ad taking services for buying and selling
advertising. In the event that Company and/or its Affiliates require any
specific ad taking capabilities not provided by Ad-Star, Ad-Star shall have
the first right to provide such capabilities before Company can seek such
capabilities elsewhere, including, but not limited to capabilities designed
and implemented by Company.
f) Collect all information necessary for setting up Ad-Star's ad taking
service from each participating Affiliate. Ad-Star shall provide Company
with a list and/or form which identifies all necessary information.
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Ad-Star Shall:
a) provide Company and its Affiliates with the ability to take ads through
Ad-Star's ad taking services into the Affiliates print and online
environments from Affiliates own site, from Company's site and from
Ad-Star's central site and other Ad-Star enabled sites. These ads will be
pre-paid and conform to the reasonable pricing instructions from the
publication, such as different rates per line, category, word or character.
Ad-Star will deliver via e-mail in a mutually agreed format the advertising
coming through the Ad-Star ad taking services to the appropriate Company
Affiliate for publication. Advertising may alternatively be delivered to
Company Affiliate via fax for an additional cost to cover
telecommunications charges. If this option is elected, all
telecommunications charges will be deducted from advertising revenues paid
to Affiliate in the same fashion as other applicable fees as detailed in
Section 5) of the Agreement to which this Attachment A is attached.
b) assist in the marketing the Ad-Star ad taking service to Company
Affiliates, at it own discretion, including making presentations to the
Company sales force.
c) support and maintain the Company ad taking functionality including hosting
of the Co-branded pages. Ad-Star will upgrade the Ad-Star ad taking service
on the Co-branded pages at no charge when the upgrade enhances already
existing capabilities of the Ad-Star ad taking service. Other reasonable
updating, such as once a year, of pricing tables for Company Affiliates'
publications will be done free of charge on an annual basis for each
Company Affiliate that generates over 1,200 paid ads for the previous 12
months to the update. Otherwise there will be a fee for updating pricing
tables of $200 per update. Ad-Star will provide reasonable telephone
support for Company and its Affiliates with regard to the ad taking
functionality at 000-000-0000 during normal business hours, Pacific
Standard Time. In addition, Ad-Star will provide e-mail support exclusively
for advertisers using the Company version of the Ad-Star ad taking
services.
d) in the event that it ceases to do business in the ordinary course, grant
Company a contingent license to use the Source Code in a manner limited to
maintaining the Co-branded pages such that Company can support only
Company's Existing Affiliates. "Existing Affiliates" is defined as those
Affiliates whom Ad-Star has included in the Ad-Star ad taking service at
the time of the granting of the contingent license.
e) provide Company with a percentage of every "Ad-Star transaction fee"
("Ad-Star transaction fee" is a per ad fee charged, excluding merchant
processing fees, reserves for payment chargebacks and fax telecommunication
charges) charged to Company Affiliates and Ad-Star Clients for ad
placement, based on the channel through which the ad was originated and the
Publication Status (i.e. Publication Status is determined by whether or not
the Company Affiliate is a Pre-existing Ad-Star Client or if the
Publications is not a Company Affiliate (Ad-Star Client solely). A list of
Company Affiliates as of the Effective Date is included as Attachment B. A
list of Ad-Star Clients as of the Effective Date is included as Attachment
C.). If Company adds a new Affiliate the Publication Status will be Company
Affiliate First unless the Publications already has an Agreement with
Ad-Star at the time of becoming a Company Affiliate. Note that if a Company
Affiliate does not host their classified Web site with Company, Company
must get Affiliate to place prominent links to the Co-branded pages or
their private label version of the Ad-Star ad taking services from their
classified Web site and to agree to the terms of this Agreement, in order
for that Affiliate to be included as a Company Affiliate for the purposes
of determining Publication Status and transaction fees due Company. The
percentage of the transaction fee due to Company is indicated in the
following table:
CHANNEL BY WHICH AD IS ORIGINATED
PUBLICATION STATUS COMPANY WEB SITES PUBLICATION'S WEB SITE AD-STARNET
------------------ ----------------- ---------------------- ----------
Company Affiliate First 50% 50% 33%
(i.e. not a pre-existing
Ad-Star Client)
Pre-existing Ad-Star Client 33% 0% 0%
Ad-Star Client solely 33% 0% 0%
(i.e. not a Company
Affiliate)
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Note that whenever a user comes through Company's Web site and places an ad
in a non-Company Affiliate publication, Company will receive 33% of the
transaction fee paid as a distribution fee. Ad-Star will pay Company and
its Affiliates their appropriate advertising revenues or fees in accordance
with the terms of Section 5 above of the Agreement to which this Attachment
A is attached.
f) shall determine the initial Ad-Star transaction fee that is best borne by
the marketplace, which at the time of this Agreement is expected to be
three dollars ($3.00). Ad-Star shall also determine changes in transaction
fees and communicate to the Company such changes, with sixty (60) days
advance notice. Absent mutual consent of Ad-Star and Company, subsequent
changes to transaction fee will only be on a calendar year basis. The
transaction fee for each ad will be netted against the pre-payment of the
ad collected by Ad-Star as detailed in Section 5 of the Agreement to which
this Attachment A is attached.
g) reserve the right to refuse to include any new Affiliate, at its sole
discretion, on Ad-Star's central site. Ad-Star will include all of Company
Affiliates on Company's version of Ad-Star, when such Affiliate complies
with the terms of this Agreement.
h) NOT publish for any consumer purposes under its own brand any ads, which
were originated through Ad-Star's ad taking Web pages. Furthermore, Ad-Star
shall not redistribute ads for any consumer purposes, other than as
directed by ad originator or Ad-Star Client.
i) Ad-Star will not engage in the publication, distribution or redistribution
of any ad content generated from Company Affiliates through Ad-Star Net or
its successors which is not for advertiser use. Ad-Star Net will process
and transmit Company Affiliates' sold classified ads solely to the party
the Company Affiliate selects.
j) provide the Company access to monthly insertion statistics regarding all of
its participating Company Affiliate First Publications and all Affiliates
who are also Pre-existing Ad-Star Clients, when those Pre-existing Ad-Star
Clients provide their consent to release this data to Company.
k) on a monthly basis provide the Company, in a mutually agreed upon format
and transmission method, billing information (excluding credit card
information) of advertisers placing advertisements with Company Affiliates
through the Ad-Star ad taking service, subject to the prior consent by
respective Affiliate. If this involves substantial programming for Ad-Star
there may be a reasonable set up charge.
l) Agree that Company and its Affiliates reserve full ownership respectively
of all Co-branded pages, except those logos, marks and code and design
elements provided by Ad-Star. Inclusion of banner advertising on Co-branded
pages requires the approval of all parties involved, namely Ad-Star,
Company and Affiliate. Revenue from all banner advertising opportunities
will be split evenly between Ad-Star and Company after a mutually agreed
share for the Affiliate and a twenty percent (20%) commission for the
selling party of the banner ads. Furthermore, unless mutually agreed by
both parties earlier, there will be no banner advertising on Co-branded
pages for a period of six (6) months from the Effective Date. Company and
its Affiliates, when they are Company Affiliate First Publications, reserve
the right at their sole discretion to provide all other e-commerce
opportunities from the Co-branded pages during phase 2 when such pages are
hosted by Company, as defined in Attachment D. Prior to phase 2, all
e-commerce opportunities included on the Co-branded pages will be
determined by Ad-Star. Revenue from these e-commerce opportunities, prior
to phase 2, will be split evenly between Ad-Star and Company after a
mutually agreed share for the Affiliate. Only when Company hosts Co-branded
pages will the inclusion of all such e-commerce opportunities from the
Co-branded pages be determined by Company. At which time when Ad-Star
provides such e-commerce opportunities, they shall be by mutual consent as
between Ad-Star and Company and apportioned subject to mutual agreement.
m) Will provide Company Affiliate with either the customer service support for
crediting back classified advertisement purchases made through Co-branded
pages as required by Affiliate or provide Affiliate with the online
capability to apply such credits themselves. In both cases Affiliate will
be liable for all
8 Confidential
9
credit card processing charges for such credits. These fees will be
deducted from advertising fees due to Affiliate in a similar fashion to
other applicable fees as described in Section 5 of the Agreement to which
this Attachment A is attached.
9 Confidential
