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EXHIBIT 10.19
DISTRIBUTION AND SERVICE AGREEMENT
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This Distribution and Service Agreement ("Agreement") is made and entered into
between ▇▇▇▇▇▇.▇▇▇, Inc., a Delaware Corporation ("AdStar") with offices at ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ Media Group,
Inc., a New York Corporation (the "Company"), with office at [ADDRESS] as of
September 3, 1999 ("Effective Date").
NOW, THEREFORE, in consideration of the premises and the mutual covenants and
conditions herein contained, ADSTAR and the Company agree as follows:
1) Purpose: Company provides advertising representation for publishers, so as
to increase publishers advertising sales and to simplify the purchase
process for large advertisers. Company will provide an advertising Web site
("RecuitmentMarketPlace") on the World Wide Web part of the Internet
("▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇") for advertisers ("Users") to purchase
advertising ("Ads") in publications. AdStar provides an Internet based
marketplace for the buying and selling of classified advertising
("▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇") for its media and advertisers clients. The parties wish
to incorporate the ▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ service ("Service") into Company's Web
site for the purpose of allowing Company's Users to purchase Ads via
Company's Web site. Company will solicit publications to participate in the
Service.
2) Responsibilities of the Parties:
The responsibilities of the parties are detailed in Attachment A.
3) General:
3.1 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.
3.2 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.
3.3 AdStar 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
("AdStar Marks") for promotion in connection with this Agreement,
subject to the following conditions: (a) the Company shall comply
with all guidelines that AdStar may provide from time to time; (b)
the look and feel, the use of all logos, the design, and the
overall quality of the AdStar Marks shall be subject to AdStar's
approval; (c) any use of the AdStar Marks shall inure to the
benefit of AdStar; and (d) the Company shall submit to AdStar
for its prior approval, not to be unreasonably withheld, all
advertising, promotional and other material bearing any AdStar
Marks.
3.4 The Company grants to AdStar 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") for promotion in connection with this Agreement,
subject to the following conditions: (a) AdStar 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) AdStar shall submit to Company for its prior
approval, not to be unreasonably withheld, all advertising,
promotional and other material bearing any Company Marks.
3.5 Nothing in this Agreement shall be deemed to grant to the Company
any ownership interest in the AdStar Marks or to AdStar any
ownership interest in the Company Marks.
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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: AdStar will pay Company a
share of advertising revenues earned and actually received, via Recruitment
Marketplace, 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 advertising revenue
percentage shares, 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. AdStar's share
of advertising revenue and Company's share of that advertising revenue are
defined in Attachment B.
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) 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
AdStar shall not be deemed an assignment.
8) 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.
9) 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 FURTHER REPRESENTS AND WARRANTS TO ADSTAR THAT THE COMPANY'S
WEB SITE DOES NOT AND WILL NOT CONTAIN ANY CONTENT, MATERIAL, OR
ADVERTISEMENT 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. ADSTAR DOES
NOT CREATE THE ADVERTISEMENTS OR OTHER MATERIAL WHICH ORIGINATE THROUGH
THE SERVICE NOR DOES IT REVIEW OR EXERCISE CONTROL OVER THE CONTENT OF
SUCH MATERIAL, AND, CONSEQUENTLY, ALL CONTENT, MATERIAL, AND
ADVERTISEMENTS COMING THROUGH THE SERVICE ARE PROVIDED AS IS, AND ADSTAR
EXPRESSLY DISCLAIMS ANY RESPONSIBILITY FOR THE ACCURACY, QUALITY OR NATURE
OF SUCH CONTENT, MATERIAL, AND ADVERTISEMENTS.
THE COMPANY AND ADSTAR RESERVE THE RIGHT TO REFUSE TO DISPLAY 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
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shall be responsible for, or obligated to review, any content,
advertisement, or other material on the other's Web site.
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.
10) INDEMNITY: Each party will defend, indemnify, save and hold harmless the
other party, AdStar'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.
11) 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 the
Company to AdStar under this Agreement.
12) 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 ninety (90) 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 ninety (90) 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
ninety (90) 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, 12, 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.
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
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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: The 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 dispute remains
unresolved for a period of thirty (30) days after one party has provided written
notice of the dispute to the other, then each party shall designate an officer
to meet to endeavor to resolve the 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.
Upon the expiration of said thirty (30) day period, 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, NY by three arbitrators. One
arbitrator shall be selected by AdStar, 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 AdStar and Company.
AdStar 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 an 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, five (5) days after the date of mailing.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above:
FOR COMPANY: FOR ADSTAR:
▇▇▇▇▇▇ Media Group, Inc. ▇▇▇▇▇▇.▇▇▇, Inc.
By: By:
Name: Name: ▇▇▇▇ ▇▇▇▇
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Title: Executive Vice President Title: SVP, Business Development
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9/3/99 9/3/99
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ATTACHMENT A -- RESPONSIBILITIES OF THE PARTIES
Company Shall:
a) promote the Service to its Users via its field based sales force, through
e-mails, updates and other market materials and communications.
b) promote the Service via a link(s), from the RecruitmentMarketPlace
homepage(s) to the Service. This link shall receive premium positioning and
in no case will another link be featured more prominently. The Service will
also be linked to from other appropriate areas of RecruitmentMarketPlace. In
addition, Company will use best efforts to promote the Service with banners
and promotional listings within appropriate areas of its site.
c) Use best efforts to solicit publishers to join the AdStar Service.
ADSTAR Shall:
a) provide Company with the ability to sell Ads via the Service from links from
Company's RecruitmentMarketPlace. AdStar shall also provide Company with
reports to track Ads sold via its RecruitmentMarketPlace.
b) Support Company's efforts to solicit publishers to join the AdStar Service,
with marketing materials, pricing information and other reasonable support.
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ATTACHMENT B -- SHARE OF ADVERTISING REVENUE
AD-STAR ADVERTISING REVENUE SHARE for providing Service are as follows:
1. AdStar receives a percentage or per ad fee for of all advertising revenue
generated through the Service.
2. When Users originate from Company's Web site, RecruitmentMarketPlace, and
purchase Ads via Service, Company will receive half of the net AdStar
advertising revenue share. Net AdStar Advertising revenue share excludes all
merchant, ACH, online processing and distribution fees described below. So
for example, if AdStar receives 10% of a $100 classified Ad originating from
RecruitmentMarketPlace, AdStar's advertising revenue share for the Service
would be $10.00. Since in this example the User originated from Company's
RecruitmentMarketPlace, Company would receive half of that amount or $5.00.
If the User originated from another source, Company would not receive any
compensation. If the publisher of the $100 classified Ad is subject to a
distribution fee, that amount would be netted from the $10.00 before
Company's share would be calculated.
MERCHANT, ACH ONLINE PROCESSING AND DISTRIBUTION FEES for Service, which are
deducted from the Advertising revenue before calculating Company's share are as
follows:
1. Credit card process fees are $.80 per transaction for online clearing plus
the credit card discount --
- MasterCard/Visa 3.05%
- American Express 3.75%
- Diners Club 2.80%
- JCB 2.75%
2. ACH process fees --
- 1.25% of transaction with a $1.25 minimum per transaction
Other fees --
- ACH refund $2.00
- ACH return item $10.00
- ACH Notice of change $2.50
3. Reserves for credit card charge backs and adjustments -- three percent (3%)
of the total advertising revenues for a rolling twelve (12) months will be
held in reserve to handle charge backs and adjustments. 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 and adjustment experience. Sole liability for charge backs and
adjustments remain with the publisher of the Ads. Note that Company's share
of advertising revenue paid out may be adjusted to account for their share
charge backs and adjustments which have occurred.
4. Distribution fees -- certain publications are subject to distribution fees,
which may range from 25% to 33% of the AdStar Advertising revenue share. This
fee must be netted out prior to calculation of Company's share of AdStar's
Advertising revenue share.
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