1
Confidential treatment has been requested for certain portions of this Exhibit.
Accordingly, those portions have been omitted from the filed copy and filed
separately with the Securities and Exchange Commission. The following symbol
indicates where such confidential information has been omitted: "***".
2
EXHIBIT 10.1
SERVICES AGREEMENT
THIS SERVICES AGREEMENT (the "Agreement"), entered into this 21st day
of October, 1996, by and between The Xxxxxx X. Xxxxxxxxx Corporation,
("Donnelley"), a Delaware corporation, located at 000 Xxxxxx Xxxxxx, Xxxxxxxx,
XX, 00000, and IT Network, Inc., ("ITN") a wholly-owned subsidiary of Source
Media, Inc., and a Texas corporation located at 0000 Xxxxxx Xxxx, Xxxxxx, XX,
00000. (Collectively, the "Parties" or individually a "Party".)
WHEREAS, Donnelley publishes yellow page directories and sells yellow
pages advertising in directories published by certain telephone companies and
Donnelley desires to assure the provision of audiotext services in the
directories identified on Appendix A ("Directories"); and
WHEREAS, ITN has the expertise and experience to provide a full-range
of audiotext services, including network content development and broadcasting,
advertising production, customer service, network operations and system service
and maintenance ("Services"); and
WHEREAS, Donnelley wishes to acquire Services from ITN for the
Directories and ITN wishes to provide Services for Donnelley ;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this agreement, Donnelley and ITN agree as follows:
1. DEFINITIONS. The following definitions shall be applicable in
connection with this Agreement:
a) "AMOUNT FOR SERVICES" shall mean the total due for Services in
any month.
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b) "AUDIOTEXT" shall mean recorded information prepared and
transmitted via the System and/or the Network and any
reference to the System and/or the Network shall mean the
Audiotext System and/or Audiotext Network.
c) "AUDIOTEXT INFORMATION" shall mean all common interest static
or broadcast audio information prepared by ITN or obtained by
ITN under license with third parties, including all
advertising messages produced by ITN under this Agreement,
which information is entered, stored and retrieved for
transmission over the System to telephone callers using a
touch-tone telephone who call the telephone numbers and codes
listed in the Directories and retrieve desired information by
dialing an access code.
d) "CUSTOMER SERVICE" refers to preparing copy, scripting,
producing and loading advertising slots on the system. It
does not include handling claims relating to errors or
omissions from advertisers.
e) "DIRECTORIES" shall mean the telephone directories set forth
on Appendix A, attached to this Agreement and incorporated in
it by this reference. Appendix A may be amended by Donnelley
to either add or delete the Directories covered by this
Agreement.
f) A "FIELD SITE" is a physical location where one or more
servers physically reside.
g) "NETWORK" shall mean the central computer operated by ITN and
all Field Site locations, as defined below, used to create and
transmit Audiotext Information.
h) "SERVICES" shall mean the full range of audiotext services
including, but not limited to, network content development,
broadcasting, advertising production, customer service,
network operations and System service and maintenance.
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i) The "SYSTEM" shall mean all of the assets used to prepare and
transmit Audiotext Information.
2. EFFECTIVE DATE, TERM. The initial term of this Agreement becomes
effective on November 1, 1996, and remains in effect for the issue life of all
Directories published prior to October 31, 1999, however, if ITN meets all of
the Key Performance Indicators (identified and defined in Section 4) for each
year of the initial term, the Agreement will be automatically extended for two
more years, to include the issue life of all Directories published prior to
October 31, 2001. In the event that ITN fails to meet the Key Performance
Indicators during the two years after the initial term of the Agreement (if
there has been an extension of the initial term), then such failure shall
constitute a material breach of this Agreement.
3. ITN RESPONSIBILITIES. During the Term of this Agreement, ITN shall be
responsible for providing to Donnelley all Audiotext Services requested by
Donnelley in the following areas: network content development and
broadcasting, advertising production, customer service, network operations and
System service and maintenance, as set forth specifically below:
a) Network Content Development and Broadcasting
i) ITN shall be responsible for creating and producing
the content messages made available at any time on
the System by:
(A) preparing and scripting the content for each
message;
(B) selecting and hiring the talent to record the
messages;
(C) producing and recording the messages for
distribution on the System.
ii) ITN responsibilities in this area shall also include
distributing the content, in the form of specific
messages, in broadcast format by:
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(A) until the System is fully functional,
handling the content through a main
distribution point in Pennsylvania provided
by Donnelley;
(B) digitizing and electronically distributing
the messages through the System;
(C) completely and accurately updating and/or
revising the message control files and
individual messages as required;
(D) obtaining and maintaining all consents and/or
licenses necessary to utilize and broadcast
the content through the System; and
(E) checking and maintaining the quality control
of the production and distribution of
messages through the System.
(F) ensuring that advertising and information
messages are complete and submitted to
Donnelley at the book publishing dates
provided by Donnelley.
b) Advertising Production and Customer Service
i) Advertising Production - An "advertising message"
created pursuant to an audiotext advertising contract
sold by either ITN or Donnelley shall be considered
an "advertising slot". Each advertising message is a
single advertising slot and one contract with a
customer may provide for several advertising slots in
connection with the Directories. During the Term of
this Agreement, ITN is responsible for preparing the
copy, scripting, producing and loading on the System
all advertising slots associated with the Directories
that are provided to ITN.
ii) Customer Service - As requested, ITN shall assist
audiotext advertising customers in determining
effective means of utilizing audiotext advertising in
the Donnelley Directories and in developing
acceptable advertising slots. At least once each
calendar month, ITN shall contact not
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less than 95% of the audiotext advertising customers
by telephone or in writing regarding revisions to any
of its advertising slots and their respective usage
and direct connect summaries. On a monthly basis,
ITN shall provide to each audiotext advertising
customer a usage summary including the number of
times each advertising slot and content were accessed
and, if applicable, the number of direct-connects to
the audiotext advertiser customer's place of
business.
c) Network Operations - ITN shall operate and manage the
Network to provide consistent and high quality Audiotext
Services. This shall include:
i) programming and managing each Field Site of the
Network to provide content requested by callers and
advertising slots for which audiotext advertising
customers contracted;
ii) programming and managing each Field Site to collect
access and direct connect information subsequently
provided to audiotext advertising customers in
accordance with paragraph 3(b)(ii);
iii) programming and managing a central computer system to
collect and maintain network-wide administrative
information, System-wide usage information and Field
Site specific usage information; and
iv) formulating and disseminating to Donnelley general
System and Services information and monthly call
reports for all audiotext codes in a digital ASCII
spreadsheet, database file or such format as may be
agreed upon by the Parties, to include the following
fields: Book, Category, Sub-Category, Title, Code
and Count and, in a separate file, advertiser
information, including direct connect reports, on a
monthly basis, timely
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SERVICE AGREEMENT
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turnaround on new advertiser or custom content
service orders and custom content service repair
order. ITN will forward to Donnelley general System
and Services information and monthly call reports not
later than the 15th of the month following the month
being reported
d) System Service - Operation of the System and the Field Sites
will be consistent with industry standards including the use
of remote reset devices and uninterruptable power supplies.
ITN shall perform routine maintenance on the central computer
System and Field Sites on a regularly scheduled basis and for
emergency service as required. ITN shall assure that
maintenance or other support activities do not remove the
System from full operation greater than four (4) hours per
month on average across all Field Sites. For situations other
than Force Majeure events, emergency repairs will be performed
within 48 hours of ITN being advised that the central computer
System or a Field Site is not properly operational.
e) Content Assignment - Within ten (10) working days of the
execution of this Agreement, ITN will notify Donnelley as to
which (if any) of the Content Agreements set forth in Appendix
B it wants assigned to it. Upon assignment by Donnelley of the
agreements, ITN will accept such assignment and assume all
responsibility for such Agreements thereafter.
f) Transition Period - In order to facilitate the transition of
the audiotext services covered by this Agreement, Donnelley
will make available to ITN, space within its Chesterbrook
office facility and certain employees for a period commencing
with the effective date of this Agreement and terminating
January 31, 1997 (unless sooner terminated by the parties).
During this transition period (till January 31, 1997) the
activities performed by Donnelley and which are to be
undertaken by ITN will be transferred to ITN. Thereafter, ITN
will be expected to
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provide the audiotext services without support from Donnelley
audiotext personnel.
4. KEY PERFORMANCE INDICATORS. There are four (4) Key Performance
Indicators ("KPIs") upon which the automatic extension of this Agreement for an
additional two years are contingent and thereafter will constitute a material
breach of this Agreement if they each are not met. However, ITN is granted
thirty (30) days to cure a material failure to meet any of the following KPIs:
a) Para 3. a) ii)F) Ensure that advertising and information
messages are complete and accurate at the book publishing
dates provided by Donnelley.
b) Para 3. b) ii) At least once each calendar month, ITN shall
contact not less than *** of the Customers by telephone or in
writing regarding revisions to any of its advertising slots
and their respective usage and direct connect summaries.
c) Para 3. c) iv) ITN will forward to Donnelley general System
and Services information and monthly call reports not later
than the 15th of the month following the month being reported.
d) Para 3. d) ITN shall assure that maintenance or other support
activities do not remove the System from full operation for
greater than **** per month on average across all Field Sites.
5. DONNELLEY'S RESPONSIBILITIES.
a) Donnelley shall provide all phone lines required for local
consumer access.
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b) Donnelley shall rent, lease, buy, or otherwise acquire all
locations necessary to physically house the Network and each
Field Site, shall maintain the location and shall pay all
costs and expenses associated with acquiring and maintaining
each Field Site location. Donnelley may relocate the Network
and any or all Field Sites with notice sufficient to ensure
uninterrupted service.
c) During each month of the Initial Term and any extension
thereof, Donnelley shall pay ITN the Compensation, as provided
in this Agreement. During each month of any extension of the
Initial Term, Donnelley shall pay ITN the Amount for Services,
as provided in this Agreement.
d) Donnelley shall offer to assign the agreements with its
content providers identified in Appendix B. Upon notification
from ITN, Donnelley will assign the agreements selected by ITN
to ITN and shall no longer be responsible or liable for such
agreements.
e) Transition Period. Commencing with the effective date of this
Agreement and continuing until January 31, 1997, unless sooner
terminated by the Parties, Donnelley will facilitate the
transition of audiotext services covered by this Agreement, by
making available the space and facilities located in
Chesterbrook where Donnelley presently performs its audiotext
production services. Donnelley will also continue to offer
employment to employees needed to facilitate the transition,
provided that those employees remain in good standing or are
not otherwise terminated by Donnelley, until January 31, 1997
(unless sooner terminated by mutual agreement of the Parties).
The Retained Employees will assist in ITN facilitating the
transition of audiotext services form Donnelley to ITN.
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f) Leased Equipment. The equipment shown on Appendix C is used
to support audiotext services to the publishers also shown on
Appendix C. This equipment is leased by Donnelley pursuant to
leases that expire on the dates shown in Appendix C. Until
the date on which the leases expire, Donnelley shall make the
lease payments for this equipment and ITN may make use of the
equipment in servicing the publishers. ITN will be
responsible for the care of the equipment and for any damage
to the equipment arising from negligent acts or omissions of
ITN but shall not be responsible for normal wear and tear. At
the end of the equipment lease term, Donnelley's obligation
with respect to the equipment is ended and if there is an
ongoing need to provide audiotext services to any or all of
the publishers serviced by the leased equipment, it shall be
ITN's obligation to provide the equipment to meet this need.
6. CONTROL OF AUDIOTEXT SLOTS/PROGRAMMING. At Donnelley's direction, ITN
shall formulate policies relating to the wording, production, distribution and
sponsorship of the Audiotext Information. Such policies shall be in effect for
all contracts executed between ITN and audiotext advertising customers. All
policies formulated by ITN shall be consistent with the standards of the
publisher of the Directories and subject to approval by Donnelley. ITN will
modify these policies as requested in writing by Donnelley.
7. OWNERSHIP. Donnelley asserts no claim of ownership to the System, the
Network, all Audiotext Information and the Customer contracts and advertising
slots, and ITN, except with respect to certain Audiotext Information, which ITN
procures from others pursuant to license agreements, ITN asserts ownership of
such property. ITN represents to Donnelley that it has the right to use the
copyrighted work which comprises a part of the Audiotext Information.
8. COST OF SERVICES. Unless otherwise provided under this Agreement,
each party shall independently bear the cost and expense complying with its
obligations under the terms of this Agreement.
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9. COMPENSATION. The compensation due ITN each month during the Term of
this Agreement, shall be determined as set forth below:
a) Fixed Monthly Amount -
Each month during the initial Term of this Agreement, the
amount for that month is indicated on Appendix D, attached to
this Agreement and by this reference incorporated in it (the
"Fixed Monthly Amount" for the specific month).
b) Amounts for Services -
The charge for Services requested by Donnelley and performed
by ITN shall be:
i) The charge for all Network Content Development and
Broadcasting provided by ITN in accordance with this
Agreement is *** per each Field Site per year.
ii) The charge for all Advertising Production and
Customer Service provided by ITN in accordance with
this Agreement is *** per Customer advertising slot,
per Directory, per year, without regard to the term
of the Customer contract or whether the Customer
contract is a new contract or a renewal.
iii) The charge for all Network Operations provided by ITN
in accordance with this Agreement is *** per line,
per year. For the purpose of determining the amount
due, "per line" shall mean a consumer access
telephone line required by ITN to provide all
Services under this Agreement.
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iv) The charge for all System Service provided by ITN in
accordance with this Agreement is *** per each
system per year. For the purpose of determining the
amount due, a "system" shall mean a Field Site
location, the central computer system or the main
distribution point in Pennsylvania.
c) For each month while this Agreement is in effect, Donnelley
shall pay ITN the greater of the fixed monthly amount for that
month set forth on Appendix D or the total Amount for
Services as determined under Article 9(b). Provided, however,
that once the Total Compensation paid by Donnelley reaches
$3.24 million ("Initial Term Amount"), Donnelley shall pay
only the billed Amount for Services. Donnelley shall pay the
Compensation due in accordance with Article 9. At any time
during the initial Term, the total Compensation Paid shall be
the total of the Compensation paid each month to that date.
If the Parties extend the Agreement after the initial Term,
the Compensation due each month shall be the total Amount for
Services provided during that month. Provided that in the
event that ITN is determined to have breached this Agreement
and the Agreement is terminated because of such breach or if
ITN otherwise causes this Agreement to terminate, other than
as a result of a breach by Donnelley, then all payments from
Donnelley to ITN shall also terminate effective with the date
of termination.
d) ***
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10. INVOICING AND PAYMENT.
a) By the 15th day of each calendar month (or the next following
business day if the 15th of the month is a Saturday, Sunday or
legal holiday), ITN shall invoice Donnelley for the
Compensation due for the previous month. Each invoice shall
itemize separately the Fixed Amount and the Amount for
Services. The invoice shall include instructions to transmit
the amount to be paid to ITN.
b) Donnelley shall pay ITN the amount invoiced within forty-five
(45) days after receipt of the invoice. Any amounts not paid
by Donnelley to ITN by the due date shall accrue interest at
the rate of one and one-half percent (1-1/2%) per month,
compounded monthly from the date the amount were due until
paid. Acceptance by ITN of any payment after the due date
shall not constitute a waiver of any rights under this
Agreement and the payment of an invoice by Donnelley shall not
constitute acceptance or waiver of any rights or claim that
Donnelley may have with respect to this Agreement or ITN's
performance of its obligations.
11. DONNELLEY RIGHT TO REJECT. In the event Donnelley determines that any
Audiotext Information on the System is objectionable for any reasonable reason
as set forth below and notifies ITN, ITN shall have the obligation to cure the
objected to matter by electing to, remove or revise such Audiotext Information
within two (2) business days of notice of Donnelley's objections. Programming
may be considered objectionable if it is; (i) of inadequate transmission
quality as determined by Donnelley or (ii) containing objectionable program
material. Objectionable program material shall include (i) material prohibited
by applicable federal, state, or local law, (ii) material which contains
obscene, indecent, lewd, lascivious, or sexually explicit content, as
determined by Donnelley (iii) material containing profanity, (iv) any material
which, in the reasonable opinion of Donnelley, is likely to damage the
reputation of Donnelley, or (v) is objectionable to the publishers of the
Directories that are Donnelley's clients or partners. ITN's
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refusal to cure, remove or revise such information within five business days of
notice of Donnelley's objection will be considered a material breach of this
Agreement
12. INDEMNIFICATION AND THIRD-PARTY CLAIMS. While neither Donnelley nor
ITN insures or guarantees that there will be no errors, failures or omissions
in the production or transmission of Audiotext Information of the System, the
Parties acknowledge that suits may be instituted or claims filed against either
of the Parties with respect to the production or transmission of the Audiotext
Information or operation of the System and/or Network. In such event, ITN and
Donnelley agree that the Party primarily responsible, as mutually agreed upon
by the Parties, for the error will indemnify, defend and hold harmless the
other Party from any liability to any third Party resulting to such Party. ITN
and Donnelley shall fully cooperate in the defense of third-party claims and
lawsuits. In the event that responsibility for the third-party claims and
lawsuits cannot be allocated primarily to one Party, ITN and Donnelley each
shall bear their own costs, including attorney's fees, of defending such claims
or lawsuits and shall negotiate in good faith a reasonable allocation of said
responsibility for third-party liability. Nothing in the foregoing shall be
deemed or interpreted as limiting the rights of either Party to seek such legal
or equitable relief as it determines to be appropriate from the other Party.
13. TERMINATION. This Agreement may terminate (although certain
obligations shall continue as provided) prior to the end of its term if either
Party materially breaches this Agreement and such material breach has not been
cured (where feasible) within thirty (30) days of the breaching Party's receipt
of written notice of the material breach from the other Party. If the breach
has not been cured, the non-breaching Party has the right to (1) terminate this
Agreement upon notice to the other Party effective with the publication of the
successor Directory to any Directories in canvass or such earlier date as the
non-breaking party may select, provided that adequate arrangements have been
made to assure that audiotext advertiser obligations have been and will met,
(2) attempt to have this Agreement specifically performed, or (3) to pursue
other equitable or legal remedies with respect to such material breach instead
of terminating this Agreement. Termination of this Agreement pursuant to this
provision shall not
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preclude any legal or equitable remedies otherwise available for any material
breach of this Agreement.
a) In the event that this Agreement is terminated as the result
of breach by ITN, ITN on termination, will supply Donnelley
with such customer records, advertising and any other material
that is needed to continue providing audiotext services in
support of Directories then in publication or in canvass.
14. AUDIT.
a) Upon reasonable notice and during reasonable business hours,
Donnelley may audit ITN's records to the extent the records
pertain to sales, customer service, billing and collections of
accounts pursuant to this Agreement.
b) Upon reasonable notice and during reasonable business hours,
ITN may audit Donnelley's records which pertain to phone line
operation for audiotext services offered pursuant to this
Agreement.
c) If a dispute arises as a result of an audit, and the dispute
cannot be resolved, the Party having requested an audit shall
engage, at its expense, a mutually acceptable independent
nationally recognized accounting firm to audit the other
Party's records. The results of such independent audit shall
be binding on both Parties, and the Party not prevailing in
the dispute shall be required to reimburse the Party
prevailing, of any expense of the audit.
15. TRADE SECRETS. Each Party acknowledges that in the course of its
performance of responsibilities under this Agreement, the Party is likely to
have had access to and acquire knowledge of information, including formulas,
patterns, combinations, programs, devices, methods, techniques or processes
that derive independent economic value, actual or potential,
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from not being generally known to the public or to other persons who can obtain
economic value from its disclosure or use; and, are the subject of efforts by
the Party that are reasonable under the circumstances to maintain their secrecy
such that this information constitutes trade secrets that are proprietary to
the Party owning such Secrets. Each Party further acknowledges that any
conveyance, transfer or communication in any manner of such trade secrets to
third parties whether directly or indirectly would be improper and that such
transferal would constitute a misappropriation of the trade secret that would
occasion all available legal sanctions for such misappropriation of a trade
secret. All records, files, drawings, documents, models, equipment and the
like relating to the businesses of a Party which the other Party may use,
prepare or come in contact with during the performance of this Agreement, shall
be and remain the sole property of the Party owning such secret. All
proprietary and intellectual rights associated with the work product prepared
by a Party under this Agreement shall be the property of the preparing Party.
16. INDEPENDENT CONTRACTOR. Each Party undertakes its responsibilities
under this Agreement as an independent contractor. A Party's personnel
participating in the performance of this Agreement shall remain that Party's
employees. There shall be no employer-employee relationship between the
employees of one Party and the other Party.
17. EQUAL OPPORTUNITY. ITN shall comply as required by law with all
applicable portions of the non-discrimination compliance provisions appended to
this Agreement and labeled "non-discrimination provision" and if requested by
Donnelley shall sign and return to Donnelley a non-discrimination compliance
certificate.
18. NOTICES. Any notice or agreement shall be in writing and shall be
conclusively deemed to have been received and to be effective on the date on
which received at the office of the recipient, or if sent by registered or
certified mail, on the third business day after the day on which it was mailed.
Any notices, consents or other communications hereunder shall be sent as
follows (unless such addresses are modified by either of the parties):
If to Donnelley:
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Xxxx X. XxXxxxxx and to Xxxxxx X. XxXxxxxx
General Counsel Vice President
& Senior Vice President The Xxxxxx X. Xxxxxxxxx
The Xxxxxx X. Xxxxxxxxx Corporation
Corporation 000 Xxxxxx Xxxxxx
000 Xxxxxx Xxx Xxxxxxxx, XX 00000
Xxxxxxxx, XX 00000
If to ITN:
Xxxxx Xxxxxxx
Chief Operating Officer
IT Network, Inc.
One Xxxx Lakes
0000 Xxxxxx Xxxx Xxxx #0000
Xxxxxx, Xxxxx 00000
19. ITN EQUIPMENT LOCATED AT DONNELLEY SITES. As provided in section 5b,
ITN equipment used to service Donnelley operations is currently located at
Donnelley locations and Donnelley agrees to allow ITN personnel access to the
equipment for maintenance and upgrading of the equipment during normal business
hours, with advance notice. ITN personnel will notify the Donnelley
representative appointed as liaison with ITN in advance as well as upon arrival
an departure from the site. ITN personnel will follow all Donnelley security
procedures and will conduct themselves in a businesslike manner that will
minimize disruption to Donnelley operations. In the event that equipment
located at Donnelley locations is used by ITN to serve other ITN clients, ITN
will compensate Donnelley for the rent of the space housing the equipment.
Under no circumstances will other ITN clients or anyone not employed by ITN and
assigned to work on the equipment be allowed at Donnelley locations without
Donnelley's prior written consent.
20. PUBLIC STATEMENTS. ITN shall not originate any written or oral
statement, news release, or other public announcement or publication, relating
to its retention by Donnelley or relating to Donnelley, its subsidiaries, its
customers, its personnel, or agents without the prior written
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approval of Donnelley through its authorized representative. ITN also agrees
that he will not use in any public written or oral statement, news release, or
other public announcement or publication, the indicia or name of Donnelley, or
of any of its subsidiaries, its customers, its personnel, or agents without the
prior written consent of Donnelley through its authorized representative.
21. FORCE MAJEURE.
a) If any Party hereto shall be prevented from performing any of
its obligation under this Agreement because of any act of God,
lockout, strike or other labor dispute, riot or civil
commotion, act of public enemy, law, order or act of
government, whether federal, state or local, or other similar
event beyond the Party's control, hereafter referred to as a
"force majeure event," then that Party shall be excused from
performing any of its obligations which are so prevented.
However, the Party so excused is responsible for performing
those obligations, of which it had been relieved due to the
force majeure event, as soon as the force majeure event has
ceased to prevent the Party's performance.
b) Donnelley's obligation under this Agreement to remit payment
for invoices issued by ITN shall not be excused by any force
majeure event, provided however that ITN shall proportionately
reduce the invoice to Donnelley to account for the day(s)
and/or the Directory(ies) for which the Audiotext Information
was not available. And, similarly the Initial Term Amount
will be reduced proportionately to account for the day(s)
and/or Directory(ies) for which the Audiotext Information was
not available.
22. AMENDMENT AND MODIFICATION. No amendment or modification of any
terms, conditions or provisions of this Agreement, shall be valid or of any
effect except when an amendment or modification is in writing and signed by the
parties.
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23. ASSIGNMENT. Neither Party may assign this Agreement, without the
express prior written consent of the other which consent will not be
unreasonably withheld. Notwithstanding the above, either Party may assign this
Agreement to a parent, to wholly-owned affiliates or to an affiliate
wholly-owned by a parent so long as the original Party remains obligated for
all obligations set forth in this Agreement.
24. WAIVER. The failure of ITN or Donnelley at any time to require
performance by the other Party of any provision of this Agreement shall not
affect the Party's right to require such performance at any time thereafter,
nor shall the waiver by either Party of a breach of any provision of this
Agreement constitute a waiver of any succeeding breach of the same or any other
provision.
25. BINDING EFFECT. This Agreement shall be binding upon and shall inure
to the benefit of the Parties and their respective successors and assigns.
26. SEVERABILITY. If any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision will be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement, provided that the provision held to be invalid is not material
to the operation of this Agreement or the intentions of the Parties.
27. GOVERNING LAW. The validity, performance, construction and effect of
this Agreement shall be governed by the laws of the State of New York and the
site of any controversy, claim, arbitration or litigation shall be in
Westchester County, New York.
28. ENTIRE AGREEMENT. This Agreement constitutes the entire Agreement
between the Parties and supersedes all prior agreements, representations,
warranties, statements, promises, information, arrangements, and
understandings, whether oral, written, express or implied with
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respect to the subject matter hereof, with the sole exception of a
non-disclosure Agreement signed between the Parties on May 20, 1996.
IN WITNESS WHEREOF, the Parties have cause their respective
representatives duly authorized to sign this Agreement on their behalf.
THE XXXXXX X. XXXXXXXXX CORPORATION
By: /s/ XXXXXXXXX X. XXXXXX
------------------------------------
Xxxxxxxxx X. Xxxxxx
Title: Executive Vice President
---------------------------------
IT NETWORK, INC.
By: /s/ XXXXXXX XXXXX BEDFORD
------------------------------------
Xxxxxxx Xxxxx Bedford
Title: Chief Operating Officer
CONFIDENTIAL
21
APPENDIX A
XXXXXX X. XXXXXXXXX
AUDIOTEX OPERATION OUTSOURCING
CLIENT & DIRECTORY LIST
October 9, 1996
CLIENT DIRECTORY
--------------------------- ---------------------------
PROPRIETARY - EAST Philadelphia
East Xxxxxxxxxx County
Lower Bucks County
Norristown/King of Prussia
Main Line/Delaware County
Xxxxxxx County
Wilmington
Southern New Jersey
Allentown
Reading
Harrisburg
Xxxxxx Barre
Scranton
Pittsburgh
Washington Suburban Maryland
Washington Northern Virginia
Washington, D.C.
Baltimore
PROPRIETARY - WEST Orange County
SPRINT - UNITED Orlando/Central Florida
Kissimmee
CINCINNATI XXXX DIRECTORY Cincinnati Consumer
Clermont County
Northern Kentucky
Xxxxxxxx County
Cincinnati BTB
NYNEX Bronx
Washington Heights
Harlem
22
CLIENT & DIRECTORY LIST
PAGE 2
CLIENT DIRECTORY
--------------------------- ---------------------------
DONTECH Chicago Consumer
Chicago BTB
Far North Suburban
Far West Suburban
Northwest Suburban
Moline/Quad Cities
Springfield
CENTENNIAL MEDIA CORPORATION Denver
23
APPENDIX B
AUDIOTEXT CONTENT PROVIDERS
AGREEMENTS TO BE ASSIGNED OR CANCELLED
NAME DESCRIPTION
---- -----------
Xxxxx Xxxxxxxx Movie Reviews
UPI Wire Service
Reuters Wire Service
Sportsticker Wire Service
All My Features Soaps/Horoscopes
Data Broadcasting Wire Service
NYSE Wire Service
Amex Wire Service
OPTC Wire Service
OmniMusic Music Service
Sound Ideas Music Music Service
Xxxxxxx Xxxxxx Xxxxx Spanish Novellas Script Summaries
Xxxxx Xxxxxxxx Spanish Novellas Script Summaries
Xxxxx Largo Spanish Horoscopes
Critic's Choice Book Reviews
Commodities Exchange Center CEC Data
24
APPENDIX C
XXXXXX X. XXXXXXXXX
AUDIOTEX OPERATIONS
LEASED SERVERS
SITE PUBLISHER SERIAL # # OF ITEM
---- --------- -------- ---------
Orange County Xxxxxx X. Xxxxxxxxx NI52300HMJ 1
Allentown Xxxxxx X. Xxxxxxxxx KA509TMWSI 1
Pittsburgh Xxxxxx X. Xxxxxxxxx NI52300HPP 1
Reading Xxxxxx X. Xxxxxxxxx XX000XXXX0 0
Xxxxxxxx X-Xxx Xxxxxxxxxxx X000000XXX 1
Expiration date for above leases: June 28, 1997
25
APPENDIX D
GUARANTEED PAYMENT SCHEDULE
Fixed Monthly Amounts
FROM DONNELLEY TO SOURCE MEDIA
PAYMENT # DATE AMOUNT
--------- ---- ------
YEAR ONE: 1 01-Nov-96 $ ***
2 01-Dec-96 ***
3 01-Jan-97 ***
4 01-Feb-97 ***
5 01-Mar-97 ***
6 01-Apr-97 ***
7 01-May-97 ***
8 01-Jun-97 ***
9 01-Jul-97 ***
10 01-Aug-97 ***
11 01-Sep-97 ***
12 01-Oct-97 ***
YEAR TWO: 00 00-Xxx-00 $ ***
14 01-Dec-97 ***
15 01-Jan-98 ***
16 01-Feb-98 ***
17 01-Mar-98 ***
18 01-Apr-98 ***
19 01-May-98 ***
20 01-Jun-98 ***
21 01-Jul-98 ***
22 01-Aug-98 ***
23 01-Sep-98 ***
24 01-Oct-98 ***
YEAR THREE: 00 00-Xxx-00 $ ***
26 01-Dec-98 ***
27 01-Jan-99 ***
28 01-Feb-99 ***
29 01-Mar-99 ***
30 01-Apr-99 ***
31 01-May-99 ***
32 01-Jun-99 ***
33 01-Jul-99 ***
34 01-Aug-99 ***
35 01-Sep-99 ***
36 01-Oct-99 ***
