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EXHIBIT 10.2.3
AGREEMENT REGARDING
900 NUMBER TELECOMMUNICATIONS PROGRAMS AND MODIFICATION OF
NONCOMPETITION AGREEMENT AND MEDIA AGREEMENT
AGREEMENT entered into as of the 3rd day of December, 1998 by and among 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"; Xxxxxxx and its subsidiaries and
affiliates, and entities controlling, controlled by or under common control with
Xxxxxxx are collectively referred to as the "Xxxxxxx Companies"), ACCESS
RESOURCE SERVICES, INC., a Delaware corporation with offices at 0000 X. Xxxxxxx
Xxxxxxxxx, Xxxx Xxxxxxxxxx, Xxxxxxx 00000 (hereafter referred to as "Access").
Access and its subsidiaries and affiliates, and entities controlling, controlled
by or under common control with Access or Xxxxxx X. Xxxxx, an individual
residing at 00 Xxxx Xxxxx Xxxxx, Xxxx Xxxxxxxxxx, Xxxxxxx 00000 ("Xxxxx"),
including Real Communication Services, Inc., a Delaware corporation, Bahia
Encounters, Inc., a Florida corporation, and Psychic Readers Network, Inc., a
Florida corporation ("PRN"), are collectively referred to as the "PRN
Companies".
RECITALS:
X. Xxxxxxx, Xxxxx and other principals of the PRN Companies (the "PRN
Principals") are parties to Noncompetition and Right of First Refusal Agreements
dated September 10, 1996 (the "Noncompetition Agreements"), which, among other
things, prohibit PRN and the PRN Principals from engaging in any business
activity competitive with the businesses conducted by the Xxxxxxx Companies,
including theme related telephone service programs or membership clubs.
B. The PRN Companies have been engaged in the business of offering telephone
entertainment services on a pay-per-call basis using 800 and 900 Numbers (the
"PRN Pay-per-Call Business").
C. The Xxxxxxx Companies market membership clubs ("Clubs") offering enhanced
telecommunications products and services, including voice-mail and other
telecommunications services (the "Telco Services"),which are billed to customers
as 900 number telephone services (the "Xxxxxxx 900 Number Club Business"), and
have also been engaged in the business of offering telephone entertainment
services on a pay-per-call basis using 900 numbers (the "Xxxxxxx 900 Number
Pay-Per-Call Business").
D. Certain of the PRN Companies also market Clubs offering Telco Services
which are billed to customers as 900 number telephone services, which business
has been consented to by Xxxxxxx pursuant to agreements dated as of February 1,
1998 and September 1, 1998 among Xxxxxxx and the PRN Companies (the "PRN-Xxxxxxx
Club Agreements").
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X. Xxxxxxx and PRN are parties to a letter agreement dated January 16, 1996,
which provides, among other things, that Xxxxxxx or its affiliate would act as
the advertising agency for the PRN Pay-Per-Call Business and Xxxxxxx 900 Number
Business, and that media acquired by Xxxxxxx would be allocated between Xxxxxxx
and PRN in the proportions provided for in such agreement (the "Media
Agreement").
F. Access wishes to market new 900 Number programs offering pay-per-call
products and services, which will be billed to customers as 900 number telephone
services (the "New Access 900 Number Pay-Per-Call Programs").
X. Xxxxxxx has decided to discontinue the current Xxxxxxx 900 Number
Pay-Per-Call Business, and Xxxxxxx has agreed, on the terms set forth in this
Agreement, to allocate media to the PRN Companies for the advertising of the New
Access 900 Number Pay-Per-Call Programs which would otherwise have been
allocated under the Media Agreement to the Xxxxxxx Companies in the conduct of
the Xxxxxxx 900 Number Pay-Per-Call Business.
H. The PRN Companies are parties to an agreement with West Interactive
Corporation ("West") under which telecommunications services furnished by
telecommunications carriers ("Carriers") are provided to the PRN Companies for
use in providing telephone entertainment services to their customers (the
"PRN-West Agreement"). West and any other billing company or service bureau
providing such telecommunications services for the telephone programs described
in this Agreement are referred to as "Service Bureaus".
X. Xxxxxxx is also party to an agreement with West under which Carrier
services are provided to the Xxxxxxx Companies for use in conducting their
telephone service programs (the "Xxxxxxx-Xxxx Agreement").
J. By separate agreement, a copy of which is annexed hereto as Exhibit 1,
West has agreed that all charges for the New Access 900 Number Pay-Per-Call
Programs shall be for the account of Access, and that Xxxxxxx shall have no
responsibility for any charges, charge-backs, reserves or other fees due in
connection with such programs and has agreed to remit to Xxxxxxx certain amounts
due to Xxxxxxx from Access under this Agreement (the "West Undertaking").
NOW, THEREFORE, for good and valuable consideration, receipt of which is
acknowledged by the parties, it is hereby agreed as follows:
1 OPERATION OF THE PRN 800 NUMBER TELCO CLUBS.
1.1 Xxxxxxx hereby consents to the operation of the New Access 900
Number Pay-Per-Call Programs by the PRN Companies.
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1.2 Xxxxxxx shall be responsible for the marketing of the New Access 900
Number Pay-Per-Call Programs, and the expenses associated therewith. Xxxxxxx
shall determine in its discretion the terms on which to market the New Access
900 Number Pay-Per-Call Programs, including the pricing of such Programs, except
that Xxxxxxx shall not reduce the price per minute offered in such programs
below $4.99 per minute.
(a) Xxxxxxx shall allocate media under the Media Agreement for the
advertising of the New Access 900 Number Pay-Per-Call Programs which
would otherwise have been allocated to the Xxxxxxx Companies in the
conduct of the Xxxxxxx 900 Number Pay-Per-Call Business under the
Media Agreement. The cost of the media used for the advertising of
the New Access 900 Number Pay-Per-Call Programs shall be paid by
Xxxxxxx. [INSERT 1]
(b) As part of the marketing expenses for the New Access 900
Number Pay-Per-Call Programs for which Xxxxxxx is responsible,
Xxxxxxx shall also be responsible for payment of all costs incurred
in connection with any 800 number telephone lines used in marketing
the New Access 900 Number Pay-per-Call Programs.
1.3 In consideration for Xxxxxxx'x consent to the operation of the New
Access 900 Number Pay-Per-Call Programs and Xxxxxxx'x agreement to allocate
media to Access as provided in Paragraph 1.2 above, and as a condition to the
continuation of such consent and agreement, Access agrees to all of the
provisions of this Paragraph 1.3.
(a) The use of any Service Bureau other than West in connection
with the operation of the New Access 900 Number Pay-Per-Call
Programs shall require Xxxxxxx'x prior approval.
(b) Access agrees that Access will pay Xxxxxxx on a monthly basis
in the manner provided for in this Agreement, within thirty (30)
days after the end of each calendar month during which the New
Access 900 Number Pay-Per-Call Programs operate, an amount equal to
the product of {Confidential portion omitted and filed separately
with the Commission} multiplied by the number of Billable 900
Minutes billed during such month (hereafter such amount payable to
Xxxxxxx is referred to as the "Xxxxxxx 900 Number Fee").
i) The term "Billable 900 Number Minutes" shall mean the
minutes (or portions thereof) of service provided by Carriers
and billed by the Service Bureau to customers of the New
Access 900 Number Pay-Per-Call Programs, excluding "free"
minutes or portions thereof which are offered without charge
to customers by Access in promoting the New Access 900 Number
Pay-Per-Call Programs.
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ii) The Xxxxxxx 900 Number Fee shall be paid when due
without set-off or deduction of any kind.
iii) In the event that the aggregate payments collected by
Access or any of the other PRN Companies from the Service
Bureau for the New Access 900 Number Pay-Per-Call Program
xxxxxxxx is less than the aggregate Xxxxxxx 900 Number Fee
(the amount by which such collections are less than the
aggregate Xxxxxxx 900 Number Fee is referred to as the
"Shortfall"), and the Shortfall occurs because of the
insolvency or bankruptcy of the Service Bureau, then, provided
that the PRN Companies use diligent efforts to collect the
Shortfall (including, without limitation commencement of
actions to collect the Shortfall and filing and prosecution of
proofs of claim), that portion of the Xxxxxxx 900 Number Fees
equal to the Shortfall shall not be payable to Xxxxxxx until
such time as and only to the extent that any of the PRN
Companies collect the Shortfall.
iv) Pursuant to the West Undertaking, West has agreed to pay
the Xxxxxxx 900 Number Fee to Xxxxxxx by deducting such amount
from the amounts due to Access for the New Access 900 Number
Pay-Per-Call Programs, and to pay the amount of the Xxxxxxx
900 Number Fee so deducted directly to Xxxxxxx or for its
account prior to making any payment to Access for such
Programs other than the Access Base Payment. Such a direction
shall be delivered by Access or any of the PRN Companies to
any other Service Bureau with which any of them arrange for
the provision of telecommunications Carrier services for the
New Access 900 Number Pay-Per-Call Programs.
1.4 Access and the other PRN Companies represent and warrant to the
Xxxxxxx Companies that the operations of the New Access 900 Number Pay-Per-Call
Programs will be conducted in accordance with all applicable laws and
regulations.
1.5 The Xxxxxxx Companies shall have the right in their discretion to
modify the terms of their consent to the operation of the New Access 900 Number
Pay-Per-Call Programs and/or the allocation of media to Access under this
Agreement, for any reason or no reason, and if Xxxxxxx and Access are unable for
any reason to reach agreement upon such modifications, Access may within thirty
(30) days after receipt of notice to such effect from Xxxxxxx xxxxx the
solicitation of customers for the New Access 900 Number Pay-Per-Call Programs
using the media which would otherwise have been available to Access under the
Media Agreement. The Xxxxxxx Companies shall also have the right in their
discretion to terminate their consent to the operation of the New Access 900
Number Pay-Per-Call Programs, and/or to cease the allocation of media to Access
provided for under this Agreement, for any reason or no reason, and the PRN
Companies may within thirty (30) days after receipt of notice to such effect
from Xxxxxxx xxxxx the solicitation of customers for the New Access 900 Number
Pay-Per-Call Programs
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using the media which would otherwise have been available to Access under the
Media Agreement. [INSERT 2]
1.6 In the event of termination of (i) New Access 900 Number
Pay-Per-Call Programs, (ii) Access' use of the media which Xxxxxxx has agreed to
provide under this Agreement, or (iii) this Agreement for any reason whatsoever,
Xxxxxxx will continue to be entitled to receive the Xxxxxxx 900 Number Fee with
respect to all collections made on account of the New Access 900 Number
Pay-Per-Call Programs during the sixty (60) day period following such
termination.
1.7 Nothing herein shall prohibit or restrict the Xxxxxxx Companies from
conducting any pay-per-call, Club or other business offering telecommunications
services or products, or from conducting any business competitive with the
business conducted by Access or any of the other PRN Companies.
2 INDEMNIFICATION.
2.1 Access and the other PRN Companies shall indemnify the Xxxxxxx
Companies against any claims made by any customers of the New Access 900 Number
Pay-Per-Call Programs, West, or any other Service Bureau providing services to
the New Access 900 Number Pay-Per-Call Programs, any governmental or regulatory
body, or any other party, arising out of the operation of the New Access 900
Number Pay-Per-Call Programs and shall hold the Xxxxxxx Companies harmless from
any liability, cost or expense arising in connection therewith, including, but
without limitation thereto, all fees, reserves, charge-backs or other charges of
West or any Carrier arising out of the New Access 900 Number Pay-Per-Call
Programs. In the event that Xxxxxxx is billed for any such charges by West under
the Xxxx-Xxxxxxx Agreement, Access shall immediately make payment of such
charges to West on demand by Xxxxxxx, and such obligation of Access is
guaranteed by each of the PRN Companies. Such indemnification by the PRN
Companies shall not include the cost of media acquired by Xxxxxxx for the New
Access 900 Number Pay-Per-Call Programs pursuant to this Agreement, which shall
remain the responsibility of Xxxxxxx, and Xxxxxxx shall hold Access harmless
from any liability, cost or expense for such media.
2.2 Promptly after receipt by any party hereto (the "Indemnitee") of
notice of any demand, claim or circumstances which, with the lapse of time,
would or might give rise to a claim or the commencement (or threatened
commencement) of any action, proceeding or investigation (an "Asserted
Liability") that may result in any claim for which a party is entitled to
indemnification under this Agreement (a "Claim"), the party entitled to
indemnification (the "Indemnitee") shall promptly give notice thereof (the
"Claims Notice") to the party obligated to provide indemnification pursuant to
this Agreement (the "Indemnifying Party"); provided, however, that the failure
of any Indemnitee to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 2, except to the extent
that the Indemnifying Party is actually prejudiced by such failure to give
notice. The Claims Notice shall describe the Asserted Liability in reasonable
detail, and shall indicate the amount
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(estimated, if necessary and to the extent feasible) of the Claim that has been
or may be suffered by the Indemnitee.
2.3 The Indemnifying Party may elect to compromise or defend, at its own
expense and by its own counsel, any Asserted Liability. If the Indemnifying
Party elects to compromise or defend such Asserted Liability, it shall within
thirty (30) days (or sooner, if the nature of the Asserted Liability so
requires) notify the Indemnitee of its intent to do so, and the Indemnitee shall
cooperate, at the expense of the Indemnifying Party, in the compromise of, or
defense against, such Asserted Liability.
(a) If the Indemnifying Party elects not to compromise or defend
the Asserted Liability, fails to notify the Indemnitee of its
election as herein provided or contests its obligation to indemnify
under this Agreement, the Indemnitee may pay, compromise or defend
such Asserted Liability at the expense of the Indemnifying Party (if
the Indemnifying Party is found obligated to indemnify the
Indemnitee with respect to the Claim).
(b) Subject to the limitations contained in Paragraph 2.4 on the
obligations of the Indemnifying Party in respect of proposed
settlements, the Indemnitee shall have the right to employ its own
counsel with respect to any Asserted Liability, but the fees and
expenses of such counsel shall be at the expense of such Indemnitee
unless (1) the employment of such counsel shall have been authorized
in writing by the Indemnifying Party in connection with the defense
of such action, or (2) such Indemnifying Party shall not have, as
provided above, promptly employed counsel reasonably satisfactory to
the Indemnitee to take charge of the defense of such action, or (3)
the Indemnitee shall have reasonably concluded based on an opinion
of counsel that there may be one or more legal defenses available to
it which are different from or additional to those available to such
Indemnifying Party, in any of which events such reasonable fees and
expenses shall be borne by the Indemnifying Party and the
Indemnifying Party shall not have the right to direct the defense of
such action on behalf of the Indemnitee in respect of such different
or additional defenses.
(c) If the Indemnifying Party chooses to defend any claim, the
Indemnitee shall make available to the Indemnifying Party any books,
records or other documents within its control that are necessary or
appropriate for such defense. If the Indemnifying Party elects not
to assume the defense of a Claim, it will not be obligated to pay
the fees and expenses of more than one counsel for all Indemnitees
with respect to such claim, unless in the reasonable judgment of an
Indemnitee, and in the opinion of such Indemnitee's counsel, a
conflict of interest may exist between such Indemnitee and any other
of such Indemnitees with respect to such claim, in which event the
Indemnifying Party shall be obligated to pay the fees and expenses
of such additional counsel or counsels.
2.4 Notwithstanding the provisions of Paragraph 2.3, neither the
Indemnifying Party nor the Indemnitee may settle or compromise any claim for
which indemnification has been sought and is available hereunder, over the
objection of the other; provided, however, that consent to settlement or
compromise shall not be unreasonably withheld or delayed. If, however, the
Indemnitee refuses to consent to a bona fide offer of settlement which the
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Indemnifying Party wishes to accept, the Indemnitee may continue to pursue such
matter, free of any participation by the Indemnifying Party, at the sole expense
of the Indemnitee. In such event, the obligation of the Indemnifying Party to
the Indemnitee shall be equal to the lesser of (i) the amount of the offer of
settlement which the Indemnitee refused to accept plus the costs and expenses of
the Indemnitee prior to the date the Indemnifying Party notified the Indemnitee
of the offer of settlement, or (ii) the actual out-of-pocket amount the
Indemnitee is obligated to pay as a result of the Indemnitee's continuing to
pursue such matter. No party will be required to consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such party of a release
from all liability in respect to the Claim.
3 MISCELLANEOUS.
3.1 Neither PRN nor any of the PRN Companies may assign its rights and
obligations under this Agreement without the consent of Xxxxxxx, except that
assignment to any subsidiary or affiliate controlling, controlled by or under
common control with the PRN Companies shall not require such consent, but only
prior written notice to Xxxxxxx. Any of the Xxxxxxx Companies may assign its
rights and obligations under this Agreement to any subsidiary or affiliate
controlling, controlled by or under common control with the Xxxxxxx Companies,
or in connection with the sale of all or substantially all of the assets of any
of the Xxxxxxx Companies or a merger or consolidation of any of the Xxxxxxx
Companies with another entity, provided prior written notice of such assignment
is given to Access.
3.2 The Noncompetition Agreements and the PRN-Xxxxxxx Club Agreements
remain in full force and effect. This Agreement shall not be deemed to be a
waiver of any of the rights and obligations of the parties to the Noncompetition
Agreements or the PRN-Xxxxxxx Club Agreements. Any other exceptions to the
provisions of the Noncompetition Agreements shall require the written consent of
Xxxxxxx.
3.3 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.
3.4 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.
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3.5 This Agreement contains the entire understanding of the parties
hereto with respect to the subject matter contained herein.
3.6 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.
3.7 This Agreement may not be changed orally, but only by an agreement
in writing signed by the party or parties to be charged thereby.
3.8 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
Paragraph 3.3 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.
3.9 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.
3.10 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.
3.11 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, paragraph or clause.
3.12 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.
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Insert 1:
Xxxxxxx shall give Access notice of the media available to Access under the
Media Agreement on a reasonably timely basis, and Access shall give notice to
Xxxxxxx on a reasonably timely basis and with reasonable specificity as to the
amount and nature of the media which Access wishes to use for the New Access 900
Number Pay-Per-Call Programs.
Insert 2:
Access may, for any reason, including receipt of either of the aforementioned
notices from Xxxxxxx, or for no reason, upon thirty (30) days prior written
notice to Xxxxxxx, cease the solicitation of customers for the New Access 900
Number Pay-Per-Call Programs using the media which would otherwise have been
available to Access under the Media Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
XXXXXXX COMMUNICATIONS, INC. ACCESS RESOURCE SERVICES, INC
By: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxxxx X. Xxxxx
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The provisions of the foregoing agreement are consented and agreed to:
PSYCHIC READER'S NETWORK, INC.
/s/ Xxxxxx X. Xxxxx
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By: Xxxxxx X. Xxxxx
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