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EXHIBIT 2.1.1
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AGREEMENT REGARDING 900 PAY-PER-CALL PSYCHIC SERVICES
AGREEMENT entered into as of the day of May, 1999 by and between
XXXXXXX COMMUNICATIONS, INC., a corporation organized under the laws of Delaware
with offices at One Xxxx Xxxx Xxxxx, Xxxxx Xxxxx, Xxxxx Xxxxx, Xxx Xxxx 00000
(hereafter referred to as "XXXXXXX"), and ACCESS RESOURCE SERVICES, INC., a
Florida corporation with offices at 0000 X. Xxxxxxx Xxxxxxxxx, Xxxx Xxxxxxxxxx,
Xxxxxxx 00000 (hereafter referred to as "ARS").
RECITALS:
A. ARS and Xxxxxxx has each engaged in the offering of 900 Pay-Per-Call
Psychic Services (as such term is defined below).
X. Xxxxxxx and ARS have agreed that Xxxxxxx shall cease the 900
Pay-Per-Call Psychic Services on the terms and conditions set forth in
this Agreement.
NOW, THEREFORE, for good and valuable consideration, receipt of which
is acknowledged by the parties, it is hereby agreed as follows:
3. RESTRICTION ON XXXXXXX'X OFFERING OF 900 PAY-PER-CALL PSYCHIC SERVICES.
a. Subject to the approval of this Agreement by Xxxxxxx'x Board
of Directors and the consummation of the transactions
described in this Agreement upon and after such Board approval
by Xxxxxxx'x execution and delivery of an instrument to ARS
certifying that such approval has been obtained and that
Xxxxxxx has been authorized to consummate the transactions
described in this Agreement on the terms set forth herein (the
"Closing Certificate"; the delivery of the Closing Certificate
and the consummation of the transactions described in this
Agreement shall be referred to as the "Closing"), Xxxxxxx
shall cease offering 900 Pay-Per- Call Psychic Services,
directly or indirectly through its Affiliates, and shall not
resume offering such services until January 17, 2001, except
as otherwise provided in this Agreement.
i. As used in this Agreement, the following terms have
the meanings set forth below:
(1) "900 Pay-Per-Call Psychic Services" means
pay-per-call Psychic-Related Services
delivered telephonically and billed as a
"900" telephone number record.
(2) "900 Traffic" means billable minutes
generated by 900 Pay-Per-Call Psychic
Services.
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(3) "Psychic-Related Services" refers to
psychic, astrology, "new age", and tarot
subjects.
(4) "Affiliate" means any person or entity
controlling, controlled by or under common
control with a party, and, with respect to
ARS, the term "Affiliate" also means Xxxxx
and Xxxxx Xxxxx, and any Affiliate of either
of them.
(5) The term "stand-alone" service when used in
reference to the offering of 900
Pay-Per-Call Psychic Services means a 900
Pay-Per-Call Psychic Service which is
charged to the customer as a 900 telephone
billing record separate and apart from any
charge for any other product or service, and
such term shall not include the offering of
a psychic-related service which is not
charged to the consumer and is offered as a
premium with or adjunct to the marketing or
advertising of other products and services.
(6) The term "Premium 900 Number Psychic
Services" means a 900 Pay-Per-Call Psychic
Service which is not charged to the consumer
and is offered as a premium with or adjunct
to the marketing or advertising of other
products or services.
(7) The term "Restricted Premium Psychic
Services" means a Psychic-Related Service
(including but not limited to a 900
Pay-Per-Call Psychic Service) which is not
charged to the consumer and is offered as a
premium with or adjunct to the marketing or
advertising of products or services other
than Psychic-Related Services.
(8) The term "Media Records" has the meaning
ascribed thereto in Section 3 of this
Agreement.
b. Notwithstanding anything to the contrary contained in this
Agreement, this Agreement is subject in all respects, and
shall not become binding upon Xxxxxxx, until it has been
approved by Xxxxxxx'x Board of Directors and Xxxxxxx has
delivered the Closing Certificate. It is expressly
acknowledged by ARS that Xxxxxxx'x Board of Directors may give
or withhold its approval, or condition its approval, upon such
conditions in addition to those expressed in this Agreement as
the Board may in its absolute and unfettered discretion
determine, and without regard to any other agreements or
understandings, written or oral, between or among the parties,
and that by causing this Agreement to be executed, neither
Xxxxxxx nor the officer executing this Agreement on its
behalf, or any other officer or director of Xxxxxxx, is
making, has made or is authorized to make any agreement or
undertake any obligation to consummate the transactions
described
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in this Agreement or in any other agreement between the
parties absent such approval by Xxxxxxx'x Board of Directors.
c. During the period commencing with the Closing and ending
January 17, 2001, Xxxxxxx shall refrain from marketing or
promoting "stand-alone" 900 Pay-Per-Call Psychic Services,
directly or indirectly through any Affiliate, including all
marketing and media activities promoting "stand-alone" 900
Pay-Per-Call Psychic Services, except as otherwise provided in
this Agreement.
d. This Agreement shall only restrict Xxxxxxx and its Affiliates
from offering 900 Pay-Per-Call Psychic Services as a "stand
alone" service. This Agreement shall not, however, except as
set forth in paragraph 1(e) below, restrict Xxxxxxx or its
Affiliates in the offering of Psychic-Related Services other
than 900 Pay-Per-Call Psychic Services or in the operation of
any other business, other than 900 Pay- Per-Call Psychic
Services, and the restriction on the offering of 900
Pay-Per-Call Psychic Services is subject to the following
exception with respect to Premium 900 Number Psychic Services:
x. Xxxxxxx shall not, on broadcast or cable television,
advertise or market Premium 900 Number Psychic
Services offering a greater number of free minutes of
Psychic-Related Services than is then being offered
by ARS in the advertising or marketing of its 900
Pay-Per-Call Psychic Service programs. The
restriction in the foregoing sentence shall only
apply to advertising or marketing by Xxxxxxx on
broadcast television, and not in other forms of
media. In addition, such restriction shall apply only
to those offers of Premium 900 Number Psychic
Services by Xxxxxxx on broadcast television which are
first advertised or marketed more than fifteen (15)
days following Xxxxxxx'x receipt of written notice
from ARS stating the number of free minutes of
Psychic-Related Services to be offered by ARS in a
900 Pay-Per-Call Psychic Service program, provided
that such ARS program is in fact promptly advertised
or marketed after the giving of such notice, and the
restriction shall lapse as to such ARS program when
such program is no longer advertised or marketed.
e. Notwithstanding the foregoing provisions of paragraph 1(d),
Xxxxxxx shall not, the first time it makes an offer expressly
directed to a name on the Media Records, offer any
Psychic-Related Services (including, but not limited to 900
Pay-Per-Call Psychic Services) other than Restricted Premium
Psychic Services. This restriction shall no longer apply to a
name on the Media Records which has previously responded to a
Xxxxxxx offer of any product or service. Xxxxxxx shall not
advertise or market Premium 900 Number Psychic Services
offering a greater number of free minutes of Psychic-Related
Services than is then being offered by ARS in the advertising
or marketing of its 900 Pay-Per-Call Psychic Service
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programs, subject to the notice and other provisions of the
last sentence of paragraph 1(d((i) above.
f. As an example, but not an exclusive example, of the
application of the provisions of paragraphs 1(d) and 1(e),
Xxxxxxx may offer (and engage in marketing and media
activities to promote) Psychic-Related Services in the
marketing of telecommunications services, or develop a
web-site incorporating psychic-related subjects and offering
Psychic-Related Services, without restriction in any form of
media, provided that:
i. the first time a name on the Media Records is being
offered a product or service by Xxxxxxx, then the
only type of Psychic-Related Service which Xxxxxxx
can offer to such name is a Restricted Premium
Psychic Service, and
ii. if an offer is being made to any other consumers
(including names appearing on the Media Records who
have previously responded to an offer from Xxxxxxx or
its Affiliates), then Xxxxxxx may offer any
Psychic-Related Services to such consumer, except for
900 Pay-Per-Call Psychic Services, which may be
offered only as a Premium 900 Number Psychic Service,
and
iii. in with respect to both examples in clause (i) and
(ii) above in this paragraph 1(f), if at least
fifteen (15) days prior to Xxxxxxx'x offering of
Premium 900 Number Psychic Services or Restricted
Premium Psychic Services, ARS gives notice to Xxxxxxx
that ARS will offer five (5) free minutes of
Psychic-Related Services in marketing its 900
Pay-Per-Call Psychic Service programs, then, provided
such ARS program were in fact promptly advertised or
marketed, Xxxxxxx could not thereafter, while such
ARS program is being advertised or marketed,
advertise or market on broadcast television more than
five (5) minutes of Premium 900 Number Psychic
Services or Restricted Premium Psychic Services, as
the case may be.
g. Effective upon the Closing, Xxxxxxx will cease marketing and
media activities regarding those psychic specific tag
telephone numbers in the ${Confidential Portion Omitted and
Filed Separately with the Commission} guaranteed payout
telephone programs specifically identified on Schedule A and
all non-psychic specific tag telephone numbers identified on
Schedule B (collectively, the "Guaranteed Payout 900 Telephone
Numbers") attached hereto.
i. Following the Closing, ARS will:
(1) continue to provide the same type of live
operator psychic services provided to
Xxxxxxx and its Affiliates pursuant to the
Live Operator
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Service Agreement (as such term is defined
in Section 11 of this Agreement) to service
the Guaranteed Payout 900 Telephone Numbers
until the earlier of January 17, 2001 and
the termination of the restrictions on
Xxxxxxx set forth in Sections 1(a) and 2(b)
of this Agreement;
(2) pay Xxxxxxx ${Confidential Portion Omitted
and Filed Separately with the Commission}
per minute for all minutes billed on the
Guaranteed Payout 900 Telephone Numbers
specifically identified on Schedule B
attached hereto; and
(3) be entitled to all revenues from the psychic
specific tag numbers identified on Schedule
A.
h. Concurrently with the Closing, Xxxxxxx and Xxxxx are entering
into an into an agreement amending a Non-Competition and Right
of First Refusal Agreement dated September 10, 1996 (the
"Amendment"), which provides, among other things, that if ARS
or any of its Affiliates operate membership clubs offering
psychic, new age and psychic-related products or services,
Xxxxxxx will be paid twenty percent ( 20%) of the gross
xxxxxxxx to club members during the period commencing on the
Closing Date and ending January 17, 2001 (the "Club
Royalties"). Any default in the payment of the Club Royalties
or otherwise by ARS or its Affiliates under the Amendment
shall be deemed to be a default under this Agreement.
4. ROYALTY PAYMENTS
a. In consideration for Xxxxxxx'x agreement to suspend the
offering of its 900 Pay-Per-Call Psychic Services and the
other covenants made and obligations undertaken by Xxxxxxx
under this Agreement, commencing on the Closing Date ARS and
any of its Affiliates offering 900 Pay-Per-Call Psychic
Services shall pay to Xxxxxxx $0.40 per minute for the first
three million three hundred seventy-five thousand (3,375,000)
minutes of billable 900 Traffic on ARS' (or any of its
Affiliates') 900 numbers from and after the Closing Date
(excluding minutes billed on the Guaranteed Payout 900
Telephone Numbers specifically identified on Schedule B and as
to which the ${Confidential Portion Omitted and Filed
Separately with the Commission} per minute due Xxxxxxx has
been paid pursuant to paragraph 1(e)(i)(2) above).
b. For all minutes in excess of three million three hundred
seventy-five thousand (3,375,000), during the period
commencing on the Closing Date and ending January 17, 2001,
ARS and any of its Affiliates offering 900 Pay-Per-Call
Psychic Services will pay Xxxxxxx $0.07 per minute for
billable 900 Traffic on ARS' (or any of its Affiliates') 900
numbers.
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c. As noted in Section 4(d) of this Agreement, ARS is entering
into an agreement (the "WIS Agreement") with Xxxxxxx and West
Interactive Services, Inc. ("WIS") pursuant to which ARS shall
instruct WIS to pay directly to Xxxxxxx all royalty payments
due pursuant to this Section 2 within thirty (30) days after
the end of the month in which ARS' or any of its Affiliates'
900 Traffic has been billed to customers. ARS and its
Affiliates shall enter agreements on the same terms as the WIS
Agreement with any other service bureau providing the
telecommunications and billing services provided by WIS to ARS
in conjunction with their offering of 900 Pay-Per-Call Psychic
Services (WIS or such other entity is each referred to as a
"Service Bureau").
d. Until January 17, 2003, the names and addresses of all
customers of the 900 Traffic on which the royalties are
payable to Xxxxxxx shall be provided to Xxxxxxx by ARS within
forty-eight (48) hours (or within such longer period which is
required in order for ARS to arrange for provision of such
information using its best efforts to obtain such information
within such forty-eight (48) hour period) after the making of
the calls generating the traffic.
e. If the royalty payments paid to Xxxxxxx under this Section 2
are less than $25,000.00 per month in any three (3) calendar
months in any period of six (6) calendar months, then the
restrictions under Sections 1(a) and (b) of this Agreement
shall cease until the first day of the month following a
period of three (3) successive calendar months in which such
royalty payments paid to Xxxxxxx have equaled $25,000.00 per
month. During the period in which such restrictions lapse, the
live operator psychic services described in the Live Operator
Service Agreement shall be provided to Xxxxxxx by ARS or an
Affiliate on the same terms as are provided for in the Live
Operator Service Agreement, and the royalty payments referred
to in this Section 2 shall continue to be paid to Xxxxxxx in
accordance with this Agreement, and until resumption of the
restrictions on Xxxxxxx, the Live Operator Service Agreement
and the Guaranteed Payout Agreements (such terms are used with
meanings ascribed thereto in Section 11 of this Agreement)
shall be deemed to be again in full force and effect.
x. Xxxxx by his signature at the end of this Agreement personally
guarantees that he will arrange for any ARS Affiliate with
billable 900 Pay-Per-Call Psychic Services traffic to assume
the same obligations with respect to the payment of royalties
to Xxxxxxx as are undertaken by ARS in this Section 2, and to
enter into an agreement with the Service Bureau comparable to
the WIS Agreement.
5. UTILIZATION OF ANI CALLER RECORDS, WEB-SITE AND OTHER RECORDS.
a. For the period commencing on the date of the Closing (the
"Closing Date") and ending January 17, 2003, ARS will provide
Xxxxxxx:
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i. with copies of all daily ANI caller records provided
to ARS by West Interactive Services, Inc. ("WIS"),
and any other service bureau providing such
telecommunications and billing services to ARS or any
of its Affiliates in conjunction with their offering
of 900 Pay-Per-Call Psychic Services (WIS or such
other entity is each referred to as a "service
Bureau"), which records shall include, when
available, names, addresses, and caller telephone
numbers (the "ANI RECORDS").
ii. on a daily basis with the names, addresses and, if
available, telephone numbers of all persons accessing
web-sites operated by ARS or its Affiliates (the
"WEB-SITE RECORDS");
iii. on a daily basis, with the names, addresses and, if
available, telephone numbers of all persons obtained
by ARS or its Affiliates from any other advertising
or marketing on any form of media (the "OTHER MEDIA
RECORDS"). The ANI Records, Web-Site Records and
Other Media Records are collectively referred to as
the "MEDIA RECORDS".
b. ARS and its Affiliates shall instruct each Service Bureau to
deliver such ANI Records, and will arrange for delivery of the
Media Records to Xxxxxxx within 24 hours after the making of
the calls or contact of the web-site, as the case may be,
generating such records.
c. Under no circumstances may Xxxxxxx utilize the Media Records
for any "stand-alone" 900 Pay-Per-Call Psychic Services or
sell, lease or otherwise transfer the ANI Records to any third
party. Xxxxxxx may use the Media Records for any of its
operations, provided that Xxxxxxx does not use such records
for the marketing of "stand-alone" 900 Pay-Per-Call Psychic
Services. It is agreed, however, that any "name" on the Media
Records delivered to Xxxxxxx who responds to a Xxxxxxx offer
may then be utilized without restriction by Xxxxxxx or its
Affiliates, and sold, leased or transferred in Xxxxxxx'x
discretion.
6. CONTINUED RELATIONSHIP WITH WIS
a. ARS agrees to continue to contract with WIS (or another
Service Bureau approved by Xxxxxxx) for all 900 and 800 number
telephone traffic during the period from the Closing through
January 17, 2001.
b. Following the Closing, ARS and its Affiliates will direct WIS
and any other Service Bureau to pay royalties directly to
Xxxxxxx in the manner set forth in Section 2 above and as
provided in the agreement referred to in Section 4(d) of this
Agreement.
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c. Effective with the Closing, Xxxxxxx agrees to instruct each
Service Bureau which provides telecommunications services for
the 900 Traffic to transfer all guaranteed payouts on the 900
Traffic allocated by such Service Bureau for psychic minutes
directly to ARS.
d. The Closing under this Agreement shall be conditioned upon the
negotiation and execution of an agreement among ARS, WIS and
Xxxxxxx with respect to the provisions of this Section 4,
which among other things will provide for WIS's guarantee of
payment of the Xxxxxxx royalties, and provision of ANI and
call records by WIS to Xxxxxxx within twenty four (24) hours
after the making of such calls.
e. The Club Royalties shall be paid directly by the Service
Bureau providing the billing for such clubs on the last day of
the month following the month in which members are billed
pursuant to an agreement among the service bureau, ARS or PRN,
as the case may be, and Xxxxxxx comparable to the WIS
Agreement which shall be executed and delivered at or prior to
the Closing.
7. ASSUMPTION OF LEASE AND XXXXXXX MEDIA EXPENSES
a. Effective with the Closing, all "Xxxxxxx Media" employees
listed on Schedule C attached hereto (the "Xxxxxxx Media
Employees") will be employed by ARS or an affiliate thereof.
Effective upon the Closing, ARS will assume (i) all accrued
benefit obligations with respect to such employees, and shall
be solely responsible for all compensation and benefits due to
the Xxxxxxx Media Employees and (ii) all other operational
expenses of the business known as "Xxxxxxx Media"
(collectively, the "Xxxxxxx Media Expenses"), including the
expenses referred to on Schedule D attached hereto.
i. Following the Closing neither ARS nor Xxxxx shall use
the names "Xxxxxxx Media", "Xxxxxxx", "Calling Card",
"New Lauderdale" or any derivative thereof in
connection with their operations or that of any of
their Affiliates.
b. ARS will use its best efforts to have Xxxxxxx released from
all obligations under the existing lease for the premises (the
"Sunrise Premises") located at 0000 Xxxx Xxxxxxx Xxxxxxxxx in
Ft. Lauderdale, Florida (the "Sunrise Lease"). In the event
that ARS is unsuccessful in obtaining a release of Xxxxxxx
from the Sunrise Lease, ARS will enter into an Assignment and
Assumption Agreement with respect to such lease and shall
indemnify Xxxxxxx with respect to such lease.
i. At the Closing ARS will pay Xxxxxxx $30,331.00 in
reimbursement for the security deposit being held by
the Landlord under the Sunrise Lease,
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which security deposit Xxxxxxx shall be deemed to
have assigned to ARS upon such payment being made.
ii. If Xxxxxxx is not released from its obligations under
the Sunrise Lease, effective upon the Closing, ARS
will assume all financial obligations under the
Sunrise Lease, and ARS's obligations with respect to
thereto shall be personably guaranteed by Xxxxx,
which guarantee will be executed and delivered at the
Closing.
c. In connection with ARS's assumption of the Sunrise Lease and
Xxxxxxx Media expenses, at the Closing Xxxxxxx will sell to
ARS Xxxxxxx'x interest in all computer equipment, furniture,
fixtures and other equipment and leasehold improvements
located at the Sunrise Premises for a purchase price (the
"Purchase Price") equal to Two Hundred and Fifty Eight
Thousand Eight Hundred and Seven and 63/100
Dollars($258,807.83).
i. Payment of the Purchase Price will be made as
follows: one-half will be paid at the Closing and the
balance will be paid thirty (30) days after the
Closing; ARS will arrange for WIS to pay such balance
to Xxxxxxx directly from WIS's next settlement
following the Closing of amounts due from WIS to ARS,
and confirmation by WIS of such arrangement shall be
delivered at Closing to Xxxxxxx.
ii. Following the Closing, if requested to do so by
Xxxxxxx, ARS will promptly provide Xxxxxxx with a
copy of all programs, source code, and other software
in its possession used in operating the AS 400
computer equipment at the Sunrise Premises.
iii. Included in the purchase price for such equipment is
the equipment leased by Xxxxxxx under a lease with
Digital Media Corp. for certain media "100" equipment
which had an initial term of 36 months expiring June,
1999. and a monthly rental of $1,400.20 plus sales
tax; at the Closing ARS will reimburse Xxxxxxx for
the last month's rent which was prepaid by Xxxxxxx,
and Xxxxxxx will exercise the purchase option under
such lease at its expense and transfer the equipment
to ARS.
d. In connection with ARS's assumption of the Sunrise Lease and
Xxxxxxx Media expenses, effective with the Closing ARS will
arrange for assumption of all obligations for the T1 line
provided by Frontier Telecommunications to the Sunrise
Premises.
e. Following the Closing ARS will indemnify Xxxxxxx against any
claim and hold Xxxxxxx harmless from any liability, cost or
expense arising in connection with the items referred to in
Sections 5(b) and (d) above.
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8. MEDIA PURCHASES
a. ARS' obligation to pay Xxxxxxx a three percent (3%) commission
on media purchases shall terminate as of the later of June 1,
1999 or the Closing, and such commissions shall be paid within
fifteen (15) days after the Closing.
x. Xxxxxxx agrees that neither ARS, nor PRN, nor any affiliate
thereof has any responsibility of any kind, nor any financial
obligation with respect to, Xxxxxxx production fees incurred
prior to the date hereof except for the following amounts
which will be paid at or prior to the Closing:
i. $30,000.00 for production costs for May 1999;
ii. the amount due to Xxxxxxx as of the Closing Date for
per-inquiry media costs not fully used with the media
outlets supplying such services (which amount is
approximately $82,000.00 as of the date hereof).
c. At or prior to the Closing, Xxxxxxx will pay the balance due,
if any, to the media outlets which supplied per-inquiry media
services to Xxxxxxx which have a balance due from Xxxxxxx.
d. Prior to the Closing, Xxxxxxx shall have completed an audit to
its satisfaction of all media credits due to Xxxxxxx arising
out of media purchased by Xxxxxxx Media for Xxxxxxx and ARS
and their respective Affiliates.
e. Effective upon the Closing, ARS will, if requested to do so by
Xxxxxxx (at its sole option) purchase media for Xxxxxxx
unrelated to "stand-alone" 900 Pay-Per-Call Psychic Services.
In consideration for such services, Xxxxxxx shall pay to ARS a
three percent (3%) commission on all national cable, half-hour
and local media purchases. Xxxxxxx shall not be obligated to
pay any commission on syndicated media purchased by ARS. The
provisions of this paragraph shall terminate, however, if
after January 17, 2001 (i) all or substantially all of
Xxxxxxx'x assets or shares of stock are acquired by a third
party unrelated to either Xxxxxxx, ARS or their respective
Affiliates, or (ii) ARS ceases to conduct business and its
business is not continued by one of its Affiliates.
f. Notwithstanding anything to the contrary contained in this
Agreement, Xxxxxxx shall be entitled at its option to retain
up to fifty percent (50%) of the volume of national cable and
syndicated media advertising currently arranged by for Xxxxxxx
and ARS by Xxxxxxx Media. Upon the expiration of the current
contracts for such advertising, Xxxxxxx may at its option
renew up to fifty percent (50%) portion of such advertising in
its own name. All syndicated advertising not currently
contracted for in Xxxxxxx'x name will be assumed by ARS, and
following the Closing, until January 17, 2001 Xxxxxxx will
have the right but not the obligation
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to be provided, on thirty (30) days prior notice, with up to
fifty percent (50%) of all such syndicated advertising so
assumed by ARS or arranged by ARS after the Closing; all such
syndicated advertising which as of January 17, 2001 Xxxxxxx
has elected to take may continue to be used by Xxxxxxx
thereafter.
i. Concurrently with the execution of this Agreement,
ARS will provide Xxxxxxx with the following
information, which it represents is true and correct
to the best of its knowledge, information and belief:
(1) a list of all local stations, national cable
networks, syndicators and other companies
for which Xxxxxxx Media has made media
arrangements for ARS, or with which ARS has
made such arrangements itself within the
last three (3) months;
(2) a list of all personal contacts (names and
telephone numbers) at each of the entities
referred to in subclause (1) above;
(3) a list of all media with which Xxxxxxx Media
has made "per inquiry" media arrangements;
(4) if possible, after using its best efforts to
do so, provide Xxxxxxx with the total net
amount spent with each of the entities
referred to in subclause (1) above, and the
total billable minutes generated in the
order of most to least profitable.
g. Following the Closing, ARS and its Affiliates will provide
Xxxxxxx upon request with access to all historical data in
Xxxxxxx Media's files (including data which is in written form
or embodied in computer databases or software), which ARS
shall not dispose of without ten (10) days prior written
notice to Xxxxxxx.
9. PRODUCTION OF COMMERCIALS
a. Effective upon the Closing, ARS will, if requested to do so by
Xxxxxxx (at its sole option) produce commercials for Xxxxxxx
or its Affiliates which are unrelated to "stand-alone" 900
Pay-Per-Call Psychic Services, at ARS' net cost for such
production. "Net cost" shall mean direct, out-of-pocket
expenses incurred by ARS for such production, not including
overhead or general administrative expenses. The provisions of
this paragraph shall terminate, however, if after January 17,
2001 (i) all or substantially all of Xxxxxxx'x assets or
shares of stock are acquired by a third party unrelated to
either Xxxxxxx, ARS or their respective Affiliates, or (II)
ARS ceases to conduct business and its business is not
continued by one of its Affiliates.
x. Xxxxxxx shall give ARS not less than four (4) weeks notice of
Xxxxxxx'x request for ARS's production of any commercials for
Xxxxxxx, and ARS will provide Xxxxxxx with a script and budget
for approval by Xxxxxxx within one (1) week after
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receipt of notice of request for production. ARS agrees to use
its best efforts to complete production of such commercials
within three (3) weeks of budget and script approval by
Xxxxxxx.
10. UTILIZATION OF XXXXXXX PERSONNEL
x. Xxxxxxx agrees to make Xxxxx Xxxxx reasonably available to ARS
to train a new MIS Director for ARS for a reasonable period
following the Closing. The selection, performance and
qualifications of such new MIS director shall be the sole
responsibility of ARS.
x. Xxxxxxx agrees to train Xxxx Xxxxxxxxx in all of Xxxxxxx'x
direct mail and marketing techniques related to 900
Pay-Per-Call Psychic Services for a reasonable period
following the Closing.
11. DIRECT MAIL AND TELEMARKETING BUSINESS
a. Following the Closing, Xxxxxxx shall deliver to ARS samples of
all Xxxxxxx direct mail marketing materials, including
scripts, and all mailing and transaction records for the
period from March 1, 1999 through May 31, 1999 related to
Xxxxxxx'x "stand-alone" 900 Pay-Per-Call Psychic Services.
b. Following the Closing, Xxxxxxx shall provide ARS personnel
with access to all outside marketing lists and all cost
schedules relating to Xxxxxxx'x "stand-alone" 900 Pay-Per-Call
Psychic Services.
c. Following the Closing, Xxxxxxx will introduce designated ARS
personnel to all Xxxxxxx direct mail and telemarketing
vendors.
12. URL TAGS
a. During the period from the Closing and ending January 17,
2001, ARS will insert into all 28.5 minute infomercials two
(2) minutes of commercials (or if the standard format of
infomercials changes to be less or greater than 28.5 minutes,
then at the rate of one (1) minute for every 14.25 minute
segment of infomercial), for designated Xxxxxxx or its
Affiliates' websites or any other non-direct response offers
designated by Xxxxxxx, at no cost to Xxxxxxx.
b. Following the Closing, Xxxxxxx shall have the right, at any
time, to purchase from ARS website tags on all 30 and 60
second video commercials produced by ARS
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or its Affiliates for a purchase price of $30,000 per month.
Xxxxxxx may purchase such tags on a month-to-month basis.
13. TERMINATION OF PRIOR AGREEMENTS
a. In consideration of the mutual covenants and agreements
contained herein, the parties hereby agree that each of the
following previously executed agreements shall terminate in
their entirety, and be of no further force and effect, as of
the Closing, except as otherwise provided in Section 2 of this
Agreement:
i. Letter of Intent among Xxxxxxx, PRN and Calling Card
Co., Inc. ("CCC"), dated January 17, 1996;
ii. Amended and Restated Psychic Readers Network Live
Operator Service Agreement, dated September 10, 1996
("Live Operator Service Agreement") and the Rider to
the Live Operator Service Agreement; and
iii. Employment Agreement by and between CCC and Xxxxxx
Xxxxx, dated September 10, 1996;
iv. Agreements regarding the "${Confidential Portion
Omitted and Filed Separately with the Commission}
guaranteed payout telephone numbers dated December 7,
1998, March 11, 1999 and March 24, 1999 (the
"Guaranteed Payout Agreements").
b. Following the Closing, neither ARS nor Xxxxx shall represent
in any way, directly or indirectly, that he or it is an agent,
employee, consultant to or otherwise a representative of
Xxxxxxx or its Affiliates, except in connection with acting as
an agent for media purchases or the production of commercials
in accordance with Sections 6 and 7 of this Agreement.
14. CONDITIONS TO CLOSING.
a. It shall be a condition to Xxxxxxx'x obligations under this
Agreement that each of the following conditions shall have
first been satisfied, any one or more of which may be waived
by Xxxxxxx in its discretion:
(1) Xxxxxxx'x Board of Directors shall have
approved the consummation of this Agreement;
(2) no action or proceedings shall have been
instituted or, to the knowledge, information
and belief of Xxxxxxx, shall have been
threatened before a court or other
government body or by any
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public authority to restrain or prohibit any
of the transactions contemplated by this
Agreement or the Other Agreements, and an
authorized officer of Xxxxxxx shall have
delivered to ARS a certificate, dated the
Closing Date, to such effect;
(3) the representations made by ARS in this
Agreement shall be true and correct in all
material respects as of the date hereof and
the Closing Date, and ARS shall deliver to
Xxxxxxx at the Closing a certificate, dated
the Closing Date, to such effect.
15. MISCELLANEOUS.
a. ARS may not assign its rights and obligations under this
Agreement without the consent of Xxxxxxx.
b. ARS represents and warrants to Xxxxxxx that ARS is a
corporation, duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation,
and has the corporate power and authority to execute and
deliver this Agreement, to consummate the transactions hereby
contemplated, and to take all other actions required to be
taken by it pursuant to the provisions hereof, and is not
subject to, or a party to, any contract, agreement,
instrument, order, judgment or decree, or any other
restriction of any kind or character, which would prevent its
entry into the performance under this Agreement, and no
consent of or other action by or notice to any third party is
required in connection with ARS' entering into and performing
under this Agreement.
c. Any notice or other communications required or permitted
hereunder shall be in writing and shall be deemed effective
(a) upon personal delivery, if delivered by hand and followed
by notice by mail or facsimile transmission; (b) one day after
the date of delivery by Federal Express or other nationally
recognized courier service, if delivered by priority overnight
delivery between any two points within the United States; or
(c) five days after deposit in the mails, if mailed by
certified or registered mail (return receipt requested)
between any two points within the United States, and in each
case of mailing, postage prepaid, addressed to a party at its
address first set forth above, or such other address as shall
be furnished in writing by like notice by any such party.
d. No waiver by a party of any breach of this Agreement by the
other shall be deemed to be a waiver of any preceding or
subsequent breach.
e. This Agreement contains the entire understanding of the
parties hereto with respect to the subject matter contained
herein.
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f. Each party hereto intends that this Agreement shall not
benefit or create any right or cause of action in or on behalf
of any person other than the parties hereto and the other
persons executing this Agreement.
g. This Agreement may not be changed orally, but only by an
agreement in writing signed by the party or parties to be
charged thereby.
h. This Agreement shall be governed by and construed in
accordance with the law of New York, including its choice of
law rules. Any judicial proceeding brought against any of the
parties to this Agreement on any dispute arising out of this
Agreement or any matter related hereto shall be brought in the
courts of the State of New York in New York County or in the
United States District Court for the Southern District of New
York, and, by execution and delivery of this Agreement, each
of the parties to this Agreement accepts for itself the
jurisdiction of the aforesaid courts, irrevocably consents to
the service of any and all process in any action or proceeding
by the mailing of copies of such process to such party at its
address provided for the giving of notices under Section 13(c)
above, and irrevocably agrees to be bound by any judgment
rendered thereby in connection with this Agreement. Each party
hereto irrevocably waives to the fullest extent permitted by
law any objection that it may now or hereafter have to the
laying of the venue of any judicial proceeding brought in such
courts and any claim that any such judicial proceeding has
been brought in an inconvenient forum.
i. This agreement does not constitute a joint venture or
partnership by the parties, and each party is entering into
this Agreement as a principal and not as an agent of the
other.
j. This Agreement is intended to be performed in accordance with,
and only to the extent permitted by, all applicable laws,
ordinances, rules and regulations. In case any one or more of
the provisions contained in this Agreement or any application
thereof shall be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the
remaining provisions contained herein and any other
application thereof shall not in any way be affected or
impaired thereby, and the extent of such invalidity or
unenforceability shall not be deemed to destroy the basis of
the bargain among the parties as expressed herein, and the
remainder of this Agreement and the application of such
provision to other Persons or circumstances shall not be
affected thereby, but rather shall be enforced to the greatest
extent permitted by law.
k. The section headings appearing in this Agreement are for
convenience of reference only and are not intended, to any
extent or for any purpose, to limit or define the text of any
section.
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l. This Agreement may be executed in several counterparts and all
counterparts so executed shall constitute one agreement
binding on all the parties hereto, notwithstanding that all
the parties are not signatory to the original or the same
counterpart.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
XXXXXXX COMMUNICATIONS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------
Xxxxxxx X. Xxxxxxxx
ACCESS RESOURCE SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxx
----------------------------
Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx executes this Agreement in his
individual capacity with respect to the
following sections of the foregoing agreement:
Sections 2(f), 5(a)(i), 5(b)(ii), 11(a)(iii), 11(b):
/s/ Xxxxxx X. Xxxxx
-------------------------------
Xxxxxx X. Xxxxx, individually
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SCHEDULE A
TAG TELEPHONE NUMBERS
{Confidential Portion Omitted and Filed Separately with the Commission}
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SCHEDULE B
GUARANTEED PAYOUT 900 TELEPHONE NUMBERS
AS TO WHICH ${Confidential Portion Omitted and
Filed Separately with the Commission}
PER MINUTE WILL BE PAID TO XXXXXXX
PURSUANT TO SECTION 1(e)(i)(2)
{Confidential Portion Omitted and Filed Separately with the Commission}
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SCHEDULE C
XXXXXXX MEDIA EMPLOYEES
Media Buying Department
Xxxxx Xxxxxxx
Xxxxxx Xxxx
Xxxxxx Xxxxxx
Xxxxx Xxxxxxxx
Xxxxxxx Xxxxxx
Xxxx Xxxxxxx
Xxxxx Xxxx
Xxxxx True
Xxxxxxxx Xxxxxxx
Xxxxxx Xxxxx
Xxxxxxx Xxxx
Xxxxx Xxxxxxx
Xxxx Xxxxx
Xxxxx Xxxxx
Xxxxxxxx Xxxxxx
Xxxxx Xxxxxx
Xxxxxx Xxxxxxxx
Accounting/Bookkeeping Department
Xxxxxx Xxxxxxxx
Shellete Xxxxxx Reception
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SCHEDULE X
XXXXXXX MEDIA EXPENSES
===============================================================================================
Contract in
Name of NL, Estimated
LC Prior to Monthly
Vendor Close Description Outlay
===============================================================================================
Authentic Business Systems yes Operating lease on office copier $ 250.00
-----------------------------------------------------------------------------------------------
AT&T Wireless yes Production Department cellular telephone $ 160.00
-----------------------------------------------------------------------------------------------
MobileComm yes Production Department beeper $ 125.00
-----------------------------------------------------------------------------------------------
Glenns Greenery yes Office plant maintenance $ 446.00
-----------------------------------------------------------------------------------------------
Zephyrhills yes Water cooler $ 125.00
-----------------------------------------------------------------------------------------------
IBM yes Service and support contract $ 75.00
-----------------------------------------------------------------------------------------------
Sunrise Storage yes Office record archives $ 182.00
-----------------------------------------------------------------------------------------------
Xxxxx yes Office cleaning $ 340.00
-----------------------------------------------------------------------------------------------
Newcourt Leasing yes Office copier $ 696.00
===============================================================================================
All information on the above list of expenses was supplied by ARS and there is
no representation by Xxxxxxx that it is accurate or complete.
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