Sample Business Contracts

Distribution and Service Agreement - Inc. and CareerEngine

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This Distribution and Service Agreement ("Agreement") is made and entered into
between, Inc., a Delaware Corporation ("AdStar") with offices at
4553 Glencoe Avenue, Suite 325, Marina del Rey, CA 90292 and CareerEngine, a New
York Corporation (the "Company"), with offices at 2 World Trade Center, Suite
2112, New York, NY 10048 as of August 30, 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 a network of category specific career advertising
     Web sites ("CareerEngine Network") on the World Wide Web part of the
     Internet ("") for employers ("Users") to connect with
     job seekers ("Consumers"). 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 employers to purchase ads on Company's Web site and
     other related sites and to make Company's advertising accessible from

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

          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

          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.
<PAGE>   2

  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
     advertising revenues earned and actually received, less advertising
     percentage shares and 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 advertising
     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
     applicable fees and share of revenue which will be deducted from
     advertising revenues include:

          a)   The AdStar advertising percentage shares, which are defined
               in Attachment B;
          b)   The merchant and ACH online processing fees, which are defined
               in Attachment B;
          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

 6)  Data Ownership and Usage: Company will own the data relating to its User
     advertising and grant AdStar a royalty free world wide right to use its
     data, which originates through the Service, for purposes other than for
     publishing for Consumers to search and locate employers or for Users to
     connect with Consumers. In addition, AdStar will not individually identify
     Company data, other than anonymously as in peer group analysis.

 7)  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.

 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 AdStar 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.


<PAGE>   3
    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 shall be
    responsible for, or obligated to review, any content, advertisement, or
    other material on the other's Web site.


11) 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.

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 the Company to AdStar under this

13) Term and Termination: The initial term of this Agreement will be for the
    period of one (1) year 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.

<PAGE>   4
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 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
     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

     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

     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.

<PAGE>   5
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.

For Company:                          For AdStar:
CareerEngine                , Inc.

By:                                   By:
   -------------------------------       --------------------------------
Name:                                 Name: Adam Leff
     -----------------------------         ------------------------------
Title: President                      Title: SVP Business Development
      ----------------------------          -----------------------------
           9/15/99                                 8/30/99

<PAGE>   6

Company Shall:

a) promote the AdStar enabled Web ad taking capability to its Users 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 program. Company will include the ad taking capability into
   its basic service for all new Company Affiliates.

b) publish the ads delivered to them via the Service, in accordance with what
   the Users have paid for, such as appropriate placement and frequency.

c) will promote the Service to the Users of its Web site with prominently
   displayed buttons or links from the home pages of the CareerEngine Network.
   These permanent buttons will link to the ad taking Web pages. In addition,
   Company will use best efforts to promote the service with banners and
   promotional listings within the search results and other appropriate areas of
   its site.


a) provide Company with the ability to take ads via the Web through the Service
   into the CareerEngine Network. These ads will be pre-paid and conform to the
   reasonable pricing instructions from the Company. AdStar will deliver the
   advertising coming through the Service to Company publication via e-mail or

b) support and maintain the Company ad taking functionality including hosting of
   the Company ad taking Web pages. AdStar will provide reasonable telephone and
   e-mail support for Users with regard to the Service at 310-577-8255 during
   normal business hours, Pacific Standard Time.

<PAGE>   7

AD-STAR ADVERTISING PERCENTAGE SHARES for providing Service are as follows:

1.   AdStar receives 10% of all advertising revenue generated through the
     Service when User comes from CareerEngine Network

2.   AdStar receives 35% of all advertising revenue generated through the
     Service when User comes from

MERCHANT AND ACH ONLINE PROCESSING FEES for Service, which are in addition to
the AdStar advertising percentage shares and reserve for credit card charge
backs, 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