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EXHIBIT 10.7
PRECISION RESPONSE CORPORATION
0000 XX 000XX XXXXXX
XXXXX, XXXXXXX 00000
January 12, 2000
Xx. Xxxx X. Xxxxxx
00000 Xxxxxxxxx 00xx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Dear Xxxx:
Precision Response Corporation, a Florida corporation (the "COMPANY"), is
entering into an Agreement and Plan of Merger (the "MERGER AGREEMENT") with
USA Networks, Inc., a Delaware corporation ("USAi"), and a wholly-owned
subsidiary of USAi ("MERGER SUB"), pursuant to which the Company has agreed to
merge with and into Merger Sub, subject to certain terms and conditions. It is
a material condition to such merger (the "MERGER") that you enter into this
letter agreement (the "LETTER AGREEMENT") with the Company, and you have agreed
to enter into this Letter Agreement in consideration of, among other things,
the benefits to be received by you in connection with the Merger. This Letter
Agreement and all of the terms hereof shall become effective on and after the
Effective Time (as defined in the Merger Agreement), whether or not you
continue to be employed by the Company at such time.
This Letter Agreement (i) confirms that, effective as of the Effective
Time, you will no longer serve as the Chairman of the Board of the Company,
(ii) terminates, effective as of the Effective Time, the Employment Agreement,
dated as of May 15, 1996 (the "EMPLOYMENT AGREEMENT"), between you and the
Company, and (iii) terminates, effective as of the Effective Time, the
Registration Rights Agreement, dated as of May 15, 1996 (the "REGISTRATION
RIGHTS AGREEMENT"), between you and the Company.
1. Effective as of the Effective Time, you will resign as the Chairman of
the Board of the Company and from all positions you then occupy as an officer or
director of the Company and any subsidiary or affiliate of the Company and will
terminate as an employee of the Company and any subsidiary or affiliate of the
Company.
2. (a) In view of the consideration to be received by you in connection
with the Merger and as material inducement to USAi to enter into the Merger,
effective on and after the Effective Time, you, in your individual capacity
only, hereby waive, release and forever discharge the Company and its
subsidiaries, and their respective divisions, branches, predecessors,
successors, assigns, directors, officers, employees, agents, partners, members,
stockholders, representatives and attorneys, in their individual and
representative capacities
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(collectively, the "RELEASEES"), of and from any and all claims, rights,
damages, demands, causes of action or liabilities of any nature whatsoever,
known or unknown, contingent or fixed, whether due or to become due, that you
have had, now have or may have at any future time by reason of any cause,
matter or thing whatsoever, directly or indirectly, related to the Employment
Agreement, the Registration Rights Agreement or otherwise in connection with
your employment with any Releasees (collectively, "CLAIMS"), including without
limitation under Title VII of the Civil Rights Act of 1964, as amended, 42
U.S.C. Section 2000 et seq.; the Fair Labor Standards Act, as amended, 29
U.S.C. Section 201 et seq.: the Age Discrimination in Employment Act, 29 U.S.C.
Section 621 et seq. (the "ADEA"); the Americans With Disabilities Act, 42 U.S.C.
Section 1001 et seq. and Section 12,112 et seq.; the Employee Retirement Income
Security Act of 1974, as amended, 29 U.S.C. Section 1001 et seq.; the
Reconstruction Era Civil Rights Act, as amended, 42 U.S.C. Section 1981 et seq.;
and all other federal, state and local laws, statutes, rules or regulations of
any type or description, including, without limitation, contract law, tort law,
civil rights laws, express or implied covenants of good faith or fair dealing,
and otherwise, regarding employment discrimination or the employment of labor,
which you or your heirs, executors, administrators, successors and assigns
ever had, now have or hereafter can, shall or may have against the Releasees or
any of them whatsoever from the beginning of the world to the Effective Time,
except for Claims arising under or in connection with this Letter Agreement and
your rights to accrued salary and other benefits through the Effective Time and
under COBRA to continue your medical benefits under the Company's health plan,
at you own expense, after the Effective Time.
(b) Notwithstanding anything to the contrary set forth in this
paragraph 2 or otherwise, you do not in any manner whatsoever waive or
discharge or release your rights against the Company or any of its subsidiaries,
or any rights arising in connection with or under the Merger Agreement, from or
with respect to any claims for or rights to indemnification or contribution
under agreement, at law, in equity or otherwise with respect to any liability,
obligation, loss or expense incurred by you, or claims made against you in your
capacity as a shareholder, director, officer or employee of the Company (or any
subsidiary thereof).
(c) For the purpose of implementing a full and complete release and
discharge of the Releasees you expressly acknowledge that the release set out
in this Letter Agreement is intended to include in its effect, without
limitation, all claims or other matters described in this paragraph 2 that you
do not know or suspect to exist in your favor at the time of execution hereof,
and that the release set out in this Letter Agreement contemplates the
extinguishment of any and all such claims or other such matters.
3. (a) You acknowledge that you have been informed by the Company of
the Company's policy to maintain as secret and confidential all information and
materials relating to (i) the financial condition, operations, business and
interests of the Company, (ii) the systems, know-how, records, products,
services, cost information, inventions, computer and Internet software,
marketing and sales techniques and/or programs, methods, methodologies, manuals,
lists and other trade secrets from time to time acquired, sold, developed,
maintained and/or used by the Company, and (iii) the nature and terms of the
Company's relationships with its clients, suppliers, lenders, underwriters,
vendors, consultants, independent contractors, attorneys, accountants and
employees (all such information and materials being hereinafter collectively
referred to as "Confidential Information"). You further acknowledge that such
Confidential
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Information is of great value to the Company and has been developed by the
Company as a result of substantial effort and expense and that you have been
given access to Company's clients and prospective clients because of your
business position with the Company. Therefore, you understand that it is
reasonably necessary to protect the Company's goodwill, trade secrets and
business interests that you agree and, accordingly, you do hereby agree, that
you will not directly or indirectly (except where authorized by the Board of
Directors, Chairman of the Board or Chief Executive Officer of the Company for
the benefit of the Company at any time hereafter divulge or disclose for any
purpose to any persons, firms, corporations or other entities (hereinafter
referred to collectively as "THIRD PARTIES"), or use or cause or authorize any
Third Parties to use, any such Confidential Information, except as otherwise
required by law.
(b) In accordance with the foregoing, you furthermore agree that (i)
you will at no time retain or remove from the premises of the Company any
products, prototypes, drawings, notebooks, computer or Internet software or
discs, tapes or similar containers of software, manuals, data, books, records,
materials or documents of any kind or description of the Company or related to
its business for any purpose unconnected with the performance of your duties
with the Company and (ii) on or before the Effective Time, you shall forthwith
deliver or cause to be delivered up to the Company any and all drawings,
notebooks, software programs or discs, tapes or similar containers of software,
manuals, data, books, records, materials and other documents and materials in
your possession or under your control relating to any Confidential Information
or any other material or thing which is the property of the Company.
4. In view of (a) the Confidential Information that has been obtained by
or disclosed to you, and (b) the consideration received by you in connection
with the Merger and as a material inducement to USAi to enter into the Merger,
you covenant and agree that, for a period of two (2) years after the Effective
Time, you shall not directly or indirectly, (i) engage in any venture
enterprise, activity or business, passively or actively, as an owner,
consultant, adviser, participant, employee, agent or in any other capacity,
competitive with the business in which the Company is engaged or involved as of
the Effective Time, anywhere within the continental United States, including,
without limitation, the sale of any products or services sold or offered by the
Company to any person or entity who is or was a client of the Company and for or
to whom the Company is performing services or selling products or for or to whom
the Company has performed services or sold products at any time during the
one-year period ending as of the Effective Time or (ii) solicit the services of,
or hire, directly or indirectly, whether on your own behalf or on behalf of
others, any managerial or executive employee, account manager or other sales or
marketing employee, programmer, information services employee (including,
without limitation, network or other information services or Internet operation
employee) or database management or marketing employee of the Company who was or
is employed by the Company at any time during the two-year period ending as of
the Effective Time. Notwithstanding the foregoing, nothing in this paragraph 4
shall prohibit you from owning as a passive investor beneficially and/or of
record less than 5% of the outstanding equity securities of any entity whose
equity securities are registered under the Securities Exchange Act of 1934, as
amended, or are listed for trading on any United States or foreign stock
exchange. You acknowledge that the business of the Company is national in scope,
that one can effectively compete with such business from anywhere in the
continental United States, and that, therefore, such geographical area of
restriction is reasonable in the circumstances to protect the Company's trade
secrets and other legitimate business interests.
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5. You covenant and agree that if you shall violate or breach any of your
covenants or agreements provided for in paragraph 3 or 4 hereof, the Company
shall be entitled to an accounting and repayment of all profits, compensation,
commissions, remuneration and benefits which you directly or indirectly have
realized and realize as a result of, growing out of or in connection with any
such violation or breach. In addition, in the event of a breach or violation or
threatened or imminent breach or violation of any provisions of paragraph 3 or 4
hereof, the Company shall be entitled to a temporary and permanent injunction or
any other appropriate decree of specific performance or equitable relief from a
court of competent jurisdiction in order to prevent, prohibit or restrain any
such breach or violation or threatened or imminent breach or violation by you.
The Company shall be entitled to such injunctive or other equitable relief in
addition to any ascertainable damages which are suffered, together with
reasonable attorneys' and paralegals' fees and costs and other costs incurred in
connection with any such litigation, both before and at trial and at all
tribunal levels. It is understood that resort by the Company to such injunctive
or other equitable relief shall not be deemed to waive or to limit in any
respect any other rights or remedies which the Company may have with respect to
such breach or violation.
6. (a) You acknowledge that any breach or violation of paragraph 3 or 4
hereof will cause irreparable injury and damage and incalculable harm to the
Company. You further acknowledge that you have carefully read and considered
the provisions of paragraphs 3, 4 and 5 hereof and, having done so, agree that
the restrictions and remedies set forth in such paragraphs (including, but not
limited to, the time period, geographical and types of restrictions imposed)
are fair and reasonable and are reasonably required for the protection of the
business, trade secrets, interest and goodwill of the Company.
(b) You understand and intend that each provision and restriction
agreed to by you in paragraphs 3, 4, and 5 hereof shall be construed as
separate and divisible from every other provision and restriction. In the event
that any one of the provisions of, or restrictions in, paragraphs 3, 4, and/or 5
hereof shall be held to be invalid or unenforceable, and is not reformed by a
court of competent jurisdiction (which a court, in lieu of striking a provision
entirely, is urged by the parties to do), the remaining provisions thereof and
restrictions therein shall nevertheless continue to be valid and enforceable as
though the invalid or unenforceable provisions or restrictions had not been
included. In the event that any such provision relating to time period,
geographical and/or type of restriction shall be declared by a court of
competent jurisdiction to exceed the maximum or permissible time period,
geographical or type of restriction such court deems reasonable and
enforceable, said time period, geographical and/or type of restriction shall
be deemed to become and shall thereafter be the maximum time period or
geographical area and/or type of restriction which such court deems reasonable
and enforceable.
(c) The restrictions, acknowledgements, covenants and agreements of
you set forth in paragraphs 3, 4, 5 and 6 of this Letter Agreement shall survive
any termination of this Letter Agreement.
(d) For purposes of paragraphs 3, 4, 5, and 6 of this Letter
Agreement, the term "COMPANY" includes the Company and all wholly-owned
subsidiaries of the Company as of the Effective Time.
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7. This Letter Agreement shall be governed by and construed pursuant to
the laws of the State of Florida. Any and all disputes between the parties
which may arise pursuant to this Letter Agreement will be heard and determined
before an appropriate federal court in Florida, or, if not maintainable
therein, then in an appropriate Florida state court.
8. (a) This Letter Agreement is personal in its nature and the parties
shall not, without the prior written consent of the other, assign or transfer
this Letter Agreement or any rights or obligations hereunder; PROVIDED,
HOWEVER, the provisions hereof shall inure to the benefit of, and be binding
upon, (i) each successor of the Company or any of its affiliates, whether by
merger, consolidation, transfer of all or substantially all of its assets or
similar transaction, and (ii) your heirs, legatees, executors, administrators
and legal representatives.
(b) This Letter Agreement contains the entire understanding of the
parties hereto relating to the subject matter herein contained and supersedes,
on and after the Effective Time, all prior agreements or understandings between
the parties hereto with respect thereto, including, without limitation, the
Employment Agreement and the Registration Rights Agreement, and can be changed
only by a writing signed by both parties hereto. No waiver shall be effective
against a party unless in writing and signed by the party against whom such
waiver shall be enforced.
9. For purposes of this Letter Agreement, notices and other
communications provided for in this Letter Agreement shall be deemed to be
properly given if delivered personally or sent by United States certified mail,
return receipt requested, postage prepaid, addressed as follows:
If to you: Xxxx X. Xxxxxx
00000 Xxxxxxxxx 00xx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
If to the Company: USA Networks, Inc.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: General Counsel
or to such other address as either party may have furnished to the other party
in writing in accordance with this paragraph. Such notices or other
communications shall be effective only upon receipt. Notices also may be given
by facsimile and in such case shall be deemed to be properly given when sent so
long as the sender uses reasonable efforts to confirm and does confirm the
receiver's receipt of the facsimile transmission.
10. This Letter Agreement may be executed in two or more counterparts,
all of which shall be considered one and the same agreement.
11. You acknowledge and agree that, in deciding to execute this Letter
Agreement, you have relied entirely upon your own judgment, that you have read
this Letter Agreement and have had adequate time to consider its terms and
effects and to ask any question that you may have of anyone, including your
legal counsel and that you have executed this Letter Agreement
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voluntarily and with full understanding of its terms and effects on you, and
that no fact, evidence, event or transaction currently unknown to you but which
may later become known to you will affect in any way or manner the final and
unconditional nature of this Letter Agreement. You further acknowledge that (a)
you were advised to consult with an attorney before you executed this Letter
Agreement; (b) you were afforded sufficient opportunity to and did consult with
an attorney; and (c) you may revoke your release of any Claims under the ADEA
set forth in paragraph 2 by delivering written notice to the Company within a
period of seven days following the day on which you execute this Letter
Agreement (the "REVOCATION PERIOD"), and your release of any Claims under the
ADEA set forth in paragraph 2 shall not become effective or enforceable until
after the Revocation Period has expired. For this revocation to be effective,
written notice from you must be received by the Company at the address set forth
and as provided in paragraph 9 no later than the close of business on the
seventh day after you sign this Letter Agreement. If you revoke your release of
any claims under the ADEA set forth in paragraph 2, such release will be of no
force or effect.
12. If the Merger Agreement is terminated before the Effective Time, this
Letter Agreement shall be null and void and of no force or effect.
BY SIGNING THIS LETTER AGREEMENT, YOU STATE THAT:
(a) YOU HAVE READ THIS LETTER AGREEMENT AND HAVE HAD SUFFICIENT TIME
TO CONSIDER ITS TERMS;
(b) YOU UNDERSTAND ALL OF THE TERMS AND CONDITIONS OF THIS LETTER
AGREEMENT AND KNOW THAT YOU ARE GIVING UP IMPORTANT RIGHTS;
(c) YOU AGREE WITH EVERYTHING IN THIS LETTER AGREEMENT;
(d) YOU ARE AWARE OF YOUR RIGHT TO CONSULT WITH AN ATTORNEY BEFORE
SIGNING THIS LETTER AGREEMENT AND HAVE BEEN ADVISED OF SUCH RIGHT; AND
(e) YOU HAVE SIGNED THIS LETTER AGREEMENT KNOWINGLY AND VOLUNTARILY.
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If the foregoing correctly sets forth our understanding, please sign one
copy of this Letter Agreement and return it to the undersigned, whereupon this
letter shall constitute a binding agreement between us.
Sincerely,
PRECISION RESPONSE CORPORATION
By: /s/ Xxxxx Xxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxx
Title: Chief Executive Officer
ACCEPTED AND
AGREED TO:
/s/ Xxxx X. Xxxxxx
---------------------------------
Xxxx X. Xxxxxx
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STATE OF FLORIDA )
) ss:
COUNTY OF MIAMI-DADE )
The foregoing instrument was acknowledged before me this 12th day of
January, 2000, by Xxxxx Xxxxxxx, as Chief Executive Officer of Precision
Response Corporation, a Florida corporation, on behalf of said corporation. He
is personally known to me or has produced a State of Florida driver's license as
identification.
Sign Name: /s/ Xxxxxxx X. Xxxxxx
------------------------
Print Name: Xxxxxxx X. Xxxxxx
------------------------
NOTARY PUBLIC
Serial No. (none, if blank:)
-------
OFFICIAL NOTARY SEAL
XXXXXXX X. XXXXXX
NOTARY PUBLIC STATE OF FLORIDA
My Commission Expires: COMMISSION NO. CC888151
MY COMMISSION EXP. DEC. 9, 2003
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STATE OF FLORIDA )
) ss:
COUNTY OF MIAMI-DADE )
The foregoing instrument was acknowledged before me this 12th day of
January, 2000, by Xxxx X. Xxxxxx. He is personally known to me or has produced a
State of Florida driver's license as identification.
Sign Name: /s/ Xxxxxxx X. Xxxxxx
------------------------
Print Name: Xxxxxxx X. Xxxxxx
------------------------
NOTARY PUBLIC
Serial No. (none, if blank:)
-------
OFFICIAL NOTARY SEAL
XXXXXXX X. XXXXXX
NOTARY PUBLIC STATE OF FLORIDA
My Commission Expires: COMMISSION NO. CC888151
MY COMMISSION EXP. DEC. 9, 2003
