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EXHIBIT 10.17.1
MARKETING SERVICES AGREEMENT
THIS MARKETING SERVICES AGREEMENT dated as of August 10, 1998 by and
between XXXXXXX ENTERTAINMENT, INC., a Delaware corporation ("Xxxxxxx"), and
DELTA THREE DIRECT, LLC, a New York limited liability company (the "Company"),
WITNESSETH:
WHEREAS, pursuant to its Operating Agreement of even date herewith (the
"Operating Agreement"), the Company is being formed to engage in the business of
providing certain telephony services (as more fully described in the Operating
Agreement, the "Business"), and Xxxxxxx is becoming a member of the Company; and
WHEREAS, Xxxxxxx is in the business of providing marketing services;
and
WHEREAS, the Company desires to engage Xxxxxxx to provide marketing
services for the Company, and Xxxxxxx desires to provide such services;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, the parties hereby agree as follows:
1. Marketing Services. During the Term (as hereinafter defined):
(a) Xxxxxxx shall provide the following marketing services for
the Business;
(i) telemarketing;
(ii) direct mail;
(iii) broadcast media advertising;
(iv) infomercials;
(v) print advertising, including inserts;
(vi) on-line marketing;
(vii) direct sales;
(viii) agented sales;
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(ix) building and maintaining customer and prospective
customer data bases; and
(x) creative services.
(b) Xxxxxxx shall collect and compile customer lists based on its
marketing services hereunder for utilization solely by the Company and also
shall make available to the Company its other customer data bases or such
portions thereof as Xxxxxxx may xxxx appropriate. Xxxxxxx shall deliver
exclusively to the Company all such prospective customers for the Company's
products and services.
(c) Xxxxxxx shall provide the services of Xx. Xxxx Xxxxxxx to
serve as President and Chief Executive Officer of the Company in accordance with
Section 6.1(d) of the Operating Agreement.
2. Term. The term of this Agreement (the "Term") shall commence on
the date hereof and shall continue until the date on which Xxxxxxx withdraws as
a member of the Company (other than in the event that Xxxxxxx transfers its
interest in the Company to an Affiliate (as defined in the Operating Agreement)
of Xxxxxxx), subject to earlier termination as provided in Section 5; provided
that, unless this Agreement is terminated pursuant to Section 5(a), the Company
may elect to extend the Term on a month-to-month basis for up to nine months
from the date of Xxxxxxx'x withdrawal from the Company.
3. Fees.
(a) Service Fees. In consideration of its services hereunder,
Xxxxxxx shall be entitled to a fee equal to its "Direct Cost." For this purpose,
"Direct Cost" means Xxxxxxx'x direct cost for providing marketing services,
including without limitation (i) the salary and other compensation costs of
Xxxxxxx'x employees (whether full or part time), other than Xx. Xxxxxxx and
other management employees, to the extent dedicated to providing marketing
services hereunder, and (ii) any fees or costs of third-party service providers
to whom Xxxxxxx subcontracts marketing services, but excluding Xxxxxxx'x
overhead costs (including without limitation depreciation and amortization or
other costs and expenses of Xxxxxxx'x physical facilities and equipment), except
to the extent incurred for the purpose of providing marketing services
specifically to the Company.
(b) Billing. As soon as practicable after the end of each
calendar month during the Term, Xxxxxxx shall provide the Company with an
invoice detailing the amounts to be paid by the Company in connection with the
services provided to the Company hereunder.
(c) Payments Due; Late Payment Charges. Amounts due hereunder
shall be paid within thirty (30) days of receipt of the invoice therefor. Any
undisputed amount due hereunder not paid within thirty (30) days of receipt of
the invoice therefor shall accrue
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interest from the date such amount was due at the rate of five percent (5%) per
annum, compounded daily.
(d) Disputed Payments. If a dispute arises in good faith with
respect to any amount due hereunder, the Company shall pay when due the
undisputed portion of such amount, if any, and, if the dispute is resolved in
Xxxxxxx'x favor, promptly pay the disputed portion (or applicable part thereof)
when the dispute is resolved without the applicable late payment charge
otherwise incurred in connection with Section 3(c).
(e) Currency. All invoices hereunder shall be rendered, and all
payments hereunder shall be made, in U.S. Dollars.
4. Certain Covenants.
(a) The Company shall:
(i) be solely responsible to its Customers for providing
telecommunications and other services, including without limitation contracting
with its customers for the provision of such services and performing customer
service functions for its customers, including responding to customer inquiries
and complaints;
(ii) act in accordance with all applicable federal, state,
municipal or foreign statutes, rules, regulations, policies, orders or
ordinances (the "Governmental Rules") governing or relating to the provision of
services to its customers, including without limitation any and all Governmental
Rules prohibiting "slamming;" and
(iii) secure and maintain such federal and state regulatory
authorizations, and maintain on file with federal and state regulatory
authorities such tariffs, as shall be necessary and appropriate for engaging in
the Business.
(b) Xxxxxxx shall:
(i) act in accordance with all applicable Governmental
Rules governing or relating to the provision of marketing services hereunder,
including without limitation Governmental Rules prohibiting slamming; and
(ii) secure and maintain such federal and state regulatory
authorizations, and maintain on file with federal and state regulatory
authorities such filings, as shall be necessary and appropriate for engaging in
the marketing services hereunder.
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5. Termination.
(a) Termination for Cause. In the event that (i) either the
Company or Xxxxxxx materially breaches any of its duties or obligations
hereunder or (ii) Delta Three, Inc., a Delaware corporation, or Xxxxxxx
materially breaches any of its obligations under the Operating Agreement or any
agreement, certificate or other instrument or document delivered in accordance
therewith, which breach shall not be cured within ten (10) days after written
notice is given to the breaching party specifying the breach, then either the
Company or Xxxxxxx, as the case may be, may, by giving written notice thereof to
the other, terminate this Agreement as of a date specified in such notice of
termination, which date shall be no earlier than ten (10) days after the date of
such notice. Notwithstanding anything to the contrary contained herein, either
party may terminate this Agreement or discontinue the provision of services
hereunder, effective immediately upon written notice to the other, upon the
occurrence of any of the following events:
(i) the violation by such other party of any Governmental
Rule with respect to the provision of such services if such violation
is reasonably expected to cause a material harm to the business of the
party terminating this Agreement; or
(ii) a government entity with appropriate jurisdiction
issues a final order that (a) the provision of the services or the
relationship hereunder is contrary to Governmental Rules or (b) such
other party has engaged in fraudulent, deceptive or illegal conduct.
(b) Termination for Bankruptcy. In the event of the Bankruptcy
(as hereinafter defined) of either the Company or Xxxxxxx, then the non-bankrupt
party may, by written notice thereof to the party in Bankruptcy, terminate this
Agreement as of a date specified in such notice of termination, which date shall
be no earlier than ten (10) days after the date of such notice. For the purposes
of this Agreement, "Bankruptcy" shall mean the happening of any of the
following: (i) the filing of an application for, or a consent to, the
appointment of a trustee for all or substantially all of the relevant party's
assets, (ii) the filing of a voluntary petition in bankruptcy, or the filing of
a pleading in any court of record admitting in writing the relevant party's
inability to pay its debts generally as they come due, (iii) the making of a
general assignment for the benefit of creditors, (iv) the entry of an order,
judgment or decree by any court of competent jurisdiction adjudicating the
relevant party a bankrupt, or appointing a trustee of all or substantially all
of such party's assets unless such order, judgment or decree is vacated or
stayed on appeal within thirty (30) days or (v) the filing of an involuntary
case or other proceeding against the relevant party seeking liquidation,
reorganization or other relief under any bankruptcy, insolvency or other similar
law, which case or proceeding shall not have been dismissed within sixty (60)
days after filing.
(c) Effect of Termination. In the event of the termination of
this Agreement, all rights and obligations of the Company and Xxxxxxx shall
terminate as of the effective date of such termination, except that (i) such
termination shall not constitute a waiver of any rights that either the
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Company or Xxxxxxx may have by reason of a breach of this Agreement, including
any right to indemnification pursuant to Section 8, (ii) such termination shall
not constitute a waiver of any right to receive payments that are due and owing
pursuant to Section 3 and (iii) the provisions of Section 7 shall continue in
full force and effect. Neither party shall, by reason of termination or
expiration of this Agreement, be liable to the other for compensation,
reimbursement or damage of any kind on account of loss of profits on anticipated
sales or on account of expenditures, investments or commitments made by such
party in connection with the business or goodwill of such party.
6. Disclaimer of General Warranty by Xxxxxxx. XXXXXXX MAKES NO
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, CONCERNING THE SERVICES PROVIDED
HEREUNDER, INCLUDING ANY IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE,
MERCHANTABILITY OR OTHERWISE.
7. Confidentiality.
(a) In connection with the services provided hereunder, each party
may disclose to the other party confidential and proprietary technical,
commercial and other information concerning the business and affairs of such
party (the "Information"). The parties agrees that for the longest period
permitted by Governmental Rules it shall hold in strictest confidence and take
all reasonable care to insure that such Information shall not be disclosed to
any third party, including imposing reasonable confidentiality requirements with
respect to such Information on its Affiliates and its or its Affiliates'
respective employees, agents, counsel, accountants and other representatives,
except insofar as (i) such disclosure may be specifically authorized in writing
from time to time by the disclosing party, (ii) such Information is necessarily
disclosed by its commercial use in the operation of the business of the
receiving party, (iii) the receiving party of such Information can demonstrate
that such Information was previously made public or disclosed by the disclosing
party without restriction to a third party or is in the public domain otherwise
than as a consequence of a breach of the receiving party's obligations
hereunder, (iv) such Information is known by the receiving party without
proprietary restrictions at the time of receipt of such Information or (v) such
disclosure is required pursuant to compulsory legal process, including subpoena,
civil investigative demands, oral questions or interrogatories; provided that,
in such event, the receiving party of such Information shall promptly provide
written notice of such legal process to the disclosing party so that such
disclosing party may oppose such disclosures or seek a protective order or other
confidential treatment of such Information.
(b) The parties recognizes that the absence of a time limitation
in Section 7(a) is reasonable and properly required for the protection of the
parties and in the event that the absence of such limitation is deemed to be
unreasonable by a court of competent jurisdiction, each party agrees and submits
to the imposition of such a limitation as said court shall deem reasonable.
(c) Each party specifically recognizes that any breach of Section
7(a) will cause irreparable injury to the other party and that actual damages
may be difficult to ascertain and, in any event, may be inadequate. Accordingly
(and without limiting the availability of legal or equitable,
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including injunctive, remedies under any other provisions of this Agreement),
each party agrees that in the event of any such breach, the other party shall be
entitled to injunctive relief in addition to such other legal and equitable
remedies that may be available. In addition, the parties agree that the
provisions of Section 7(a) shall be considered separate and apart from the
remaining provisions of this Agreement and shall be enforced as such.
8. Indemnification.
(a) The Company agrees to indemnify and hold harmless Xxxxxxx from
and against, and to reimburse Xxxxxxx with respect to, any and all loss, damage,
liability, cost and expense, including without limitation reasonable attorneys'
fees and expenses (as and when incurred) incurred by Xxxxxxx, or any Affiliate
of Xxxxxxx, by reason of or arising out of or in connection with the breach of
any of the representations, warranties, covenants, agreements or undertakings
made by the Company hereunder.
(b) Xxxxxxx agrees to indemnify and hold harmless the Company from
and against, and to reimburse the Company with respect to, any and all loss,
damage, liability, cost and expense, including without limitation reasonable
attorneys' fees and expenses (as and when incurred) incurred by the Company, or
any Affiliate of the Company, by reason of or arising out of or in connection
with the breach of any of the representations, warranties, covenants, agreements
or undertakings made by Xxxxxxx hereunder; provided that, in no event shall
Xxxxxxx be liable for any special, indirect, incidental or consequential damages
whatsoever which in any way arise out of, relate to or are a consequence of its
failure to provide the marketing services hereunder.
9. Miscellaneous.
(a) Independent Contractor. This Agreement does not constitute the
Company as an agent, legal representative, joint venturer, partner or as an
employee of Xxxxxxx for any purpose. This Agreement does not authorize the
Company to make any contract, agreement, warranty, statement or representation
or take any other action which could establish any apparent relationship or
agency, joint venture, partnership or employment with Xxxxxxx. Xxxxxxx shall not
be bound in any manner by any such contract, agreement, warranty, statement or
representation made by the Company to any other person or with respect to any
other action by the Company; and the Company shall not be bound in any manner by
any contract, agreement, warranty, statement or representation made by Xxxxxxx
to any other person or with respect to any other action by Xxxxxxx. As a result
solely of this Agreement, Xxxxxxx shall not have control over the Company's
employees, including the terms and conditions of their employment, or over the
Company's methods of doing business except as set forth herein.
(b) Further Assurances. Each party will, at any time and from time
to time after the date hereof, upon the request of the other, do, execute,
acknowledge and deliver, or cause to be done, executed, acknowledged and
delivered, all such other instruments as may be reasonably required in
connection with the performance of this Agreement and each shall take all such
further actions as may be reasonably required to carry out or further effect the
transactions contemplated by
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this Agreement. Upon request, Xxxxxxx and the Company will cooperate, and will
use their respective best efforts to have their respective officers, directors
and other employees cooperate, at the requesting parties' expense, during and
after the Term in furnishing information, evidence, testimony and other
assistance in connection with any actions, proceedings, arrangements or disputes
involving Xxxxxxx or the Company.
(c) Survival of Representations. All statements, certifications,
indemnifications, representations and warranties made by the parties to this
Agreement in this Agreement or in any certificate or list delivered pursuant
hereto, and their respective obligations to be performed pursuant to the terms
hereof and thereof, shall survive the Term notwithstanding (a) any examination
or audit by or on behalf of any party hereto and (b) any notice of a breach or
of a failure to perform not waived in writing.
(d) Notices. All notices or other communications required or
permitted hereunder shall be in writing and shall be deemed given or delivered
(i) when delivered personally or by private courier, (ii) when actually
delivered by registered or certified United States mail, return receipt
requested and postage prepaid or (iii) when sent by facsimile (provided that it
is confirmed in writing sent by either of the methods set forth in clauses (i)
or (ii) on the day that such facsimile is sent), addressed as follows:
If to the Company:
Delta Three Direct, LLC
Xxx Xxxx Xxxx Xxxxx
Xxxxx Xxxxx, Xxx Xxxx 00000
Fax No.: 000-000-0000
Attention: Xxxx Xxxxxxx
with a copy to:
Delta Three Israel Ltd.
Jerusalem Technology Park
Xxxxx Xxxxxxxx 0, 0xx Xxxxx
Xxxxxxxxx 00000
Xxxxxx
Fax No.: 000-0-000-0000
Attention: Xxxx Xxxxxxx
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and a copy to:
RSL Communications, N. America, Inc.
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
Fax No.: 000-000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
If to Xxxxxxx:
Xxxxxxx Entertainment, Inc.
Xxx Xxxx Xxxx Xxxxx
Xxxxx Xxxxx, Xxx Xxxx 00000
Fax No.: 000-000-0000
Attention: President
with a copy to:
Feder, Kaszovitz, Isaacson, Weber, Xxxxx & Bass LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Fax No.: 000-000-0000
Attention: Xxxxxx Xxxxx, Esq.
or to such other address as such party may indicate by a notice delivered to the
other party hereto pursuant to the terms hereof.
(e) No Modification Except in Writing. This Agreement shall not be
changed, modified, or amended except by a writing signed by the party to be
charged and no obligation of any party under this Agreement may be discharged
except by performance in accordance with the terms hereof or by a writing signed
by the other party.
(f) Entire Agreement. This Agreement and all other documents to be
delivered in connection herewith set forth the entire agreement and
understanding between the parties as to the subject matter hereof and merges and
supersedes all prior discussions, agreements and under standings of every kind
and nature between them.
(g) Severability. If any provision of this Agreement or the
application of any provision hereof to any person or circumstances is held
invalid, the remainder of this Agreement and the application of such provision
to other persons or circumstances shall not be affected unless the provision
held invalid shall substantially impair the benefits of the remaining portions
of this Agreement.
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(h) Assignment. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns. This Agreement may not be assigned by either party hereto without the
prior written consent of the other party.
(i) Public Announcements. Neither party hereto shall issue or make
any advertisement, press release or public announcement with respect to this
Agreement and the transactions contemplated herein, without the prior written
consent of the other party hereto, except to the extent required by Governmental
Rules (including U.S. securities rules and regulations and the rules and
regulations of any stock exchange on which the capital stock of any party hereto
or its Affiliate is traded). The parties hereto agree, to the extent practical,
to consult with each other regarding any public announcement required by
Governmental Rules in advance of such public announcement.
(j) Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, without giving
effect to the conflict of laws principles thereof. For purposes of this
Agreement, each party hereby irrevocably submits to the nonexclusive
jurisdiction of the courts of the State of New York, sitting in New York County,
and the courts of the United States for the Southern District of New York. Each
party irrevocably waives, to the fullest extent permitted by Governmental Rules,
any objection which it may now or hereafter have to the laying of the venue of
any such suit, action or proceeding brought in any such court, any claim that
any such suit, action or proceeding brought in such a court has been brought in
an inconvenient forum and the right to object, with respect to any such suit,
action or proceeding brought in any such court, that such court does not have
jurisdiction over such party. In any such suit, action or proceeding, each party
waives, to the fullest extent it may effectively do so, personal service of any
summons, complaint or other process and agrees that the service thereof may be
made by certified or registered mail, addressed to such party at its address set
forth in Section 9(d). Each party agrees that a final non-appealable judgment in
any such suit, action or proceeding brought in such a court shall be conclusive
and binding.
(k) Third Party Beneficiaries. Nothing in this Agreement, express
or implied, shall create or confer upon any person or entity, other than the
parties to this Agreement or their respective successors and permitted assigns,
any rights, remedies, obligations or liabilities.
(l) Captions. The captions appearing in this Agreement are
inserted only as a matter of convenience and for reference and in no way define,
limit or describe the scope and intent of this Agreement or any of the
provisions hereof.
(m) Interpretation. All pronouns and any variations thereof shall
be deemed to refer to the masculine, feminine, neuter, singular, or plural as
the identity of the person or persons referred to may require.
(n) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original.
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IN WITNESS WHEREOF, the parties by their respective duly authorized
officers, have duly executed and delivered this Agreement, as of the date set
forth in the Preamble hereto.
XXXXXXX ENTERTAINMENT, INC. DELTA THREE DIRECT, LLC
By: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxx Xxxxxxx
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Xxxxxxx X. Xxxxxxxx, President Xxxx Xxxxxxx, President
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