1
EXHIBIT 2.2.3
- 1 -
2
AMENDMENT NO. 1 TO NON-COMPETITION AND RIGHT OF FIRST REFUSAL
AGREEMENT, dated September 10, 1996 by and between XXXXXXX COMMUNICATIONS,
INC., a Delaware corporation ("Xxxxxxx") and XXXXXX X. XXXXXXX ("Obligor").
R E C I T A L S:
X. Xxxxxxx and Obligor are parties to that certain Non-Competition and
Right of First Refusal Agreement dated September 10, 1996, as amended
by this Amendment No. 1 (collectively, the "Agreement"), pursuant to
which the Obligor agreed to certain non-competition restrictions in
favor of Xxxxxxx in connection with the acquisition by Xxxxxxx'x
subsidiary, NL Corp., a Delaware corporation ("NL"), of all of the
interest (the "NL Interest") in New Lauderdale L.C., a Florida limited
liability company ("New Lauderdale") owned by Psychic Readers Network,
Inc., a Florida corporation of which Obligor is a shareholder ("PRN").
X. Xxxxxxx has concurrently with the execution and delivery of this
Amendment No. 1 entered into an agreement (the "ARS Agreement") with
Access Resource Services, Inc., a Florida corporation ("ARS"),
providing, among other things, for Xxxxxxx'x agreement to terminate the
offering of certain pay-per-call "900" telephone number psychic and
psychic-related and astrology services (the "900 Pay-Per-Call Psychic
Services").
C. The parties desire to amend and restate the Agreement in its entirety
in connection therewith, effective upon the closing under the ARS
Agreement (the "Closing").
NOW, THEREFORE, the parties agree as follows:
1. As a partial inducement to Xxxxxxx'x entry into the ARS Agreement,
the Obligor hereby covenants and agrees that during the period (the "Restrictive
Period") from the date of the Closing (the "Closing Date") through September 9,
2001, he will not, without the prior written approval of the Board of Directors
of Xxxxxxx, directly or indirectly, engage in any business activity competitive
with the business conducted by Xxxxxxx or any of its subsidiaries or affiliates,
including New Lauderdale, during the Restrictive Period (Xxxxxxx and its
subsidiaries and affiliates are collectively referred to as the "Company"). The
term "affiliate" shall mean any entity or venture in which Xxxxxxx has an
interest.
a. For the purposes of this Agreement, any business which (i)
the Company is currently engaged in, except for the 900 Pay-Per-Psychic
Services, or (ii) includes the marketing or sale of telecommunications products
and services, including internet telephony, the marketing and sale of those
products and services on the internet with which the Company is
- 2 -
3
now actively engaged, or the marketing and operation of voice-mail programs or
membership clubs pertaining to diet services, personals or any other subject
matter with which the Company is now actively engaged (except for 900
Pay-Per-Call Psychic Services), will constitute a business activity competitive
with the business of the Company. Furthermore, the Obligor agrees that, during
the Restrictive Period, he shall not (i) directly or indirectly employ or
attempt to employ or assist anyone else to employ any person (except on behalf
of the Company) who is then, or at any time during the preceding twelve months
was, in the employ of the Company, or (ii) solicit, directly or indirectly, or
affect to the Company's detriment any relationship of the Company with any
customer, supplier, partner, joint venturer, service bureau, vendor or employee
of the Company or cause any customer, supplier, partner, joint venturer, service
bureau or vendor of the Company to refrain from entrusting additional business
to the Company. Nothing herein shall prevent or limit ARS or PRN in the conduct
of their existing business as defined in subclause (i) below.
b. Notwithstanding the provisions of this Section 1 above:
i. Obligor shall be permitted to continue to
render services to ARS and PRN with respect to the conduct of their existing
businesses as of the date hereof following the Closing, ARS' and PRN's existing
business as of the date hereof means the business of providing pay-per-call
psychic and astrology telephone services in the manner in which ARS and PRN are
providing such services as of the date hereof, including, without limitation,
the marketing and sale of such products and services on the internet; and
ii. Obligor shall not be restricted from
engaging in a business activity not described in paragraph 1(a) above, and which
is not competitive with a business activity then being engaged in by the
Company, prior to the Company's commencing the conduct of such business
activity.
c. In the event that ARS, PRN or any other entity controlled
by Obligor, or controlling ARS or PRN, or under common control with ARS or PRN
shall operate any membership clubs offering psychic, new age and psychic-related
products or services, Xxxxxxx will be paid by ARS or PRN, as the case may be, a
royalty of 20% of the gross xxxxxxxx to club members during the period
commencing on the Closing Date and ending January 17, 2001. Such royalties to
Xxxxxxx shall be paid directly by the service bureau providing the billing for
such clubs on the last day of the month following the month in which members are
billed pursuant to an agreement among the service bureau, ARS or PRN, as the
case may be, and Xxxxxxx.
d. As used herein, the term "customer" shall mean (i) anyone
who is a customer of Xxxxxxx at the time of the alleged prohibited conduct; (ii)
anyone who was a customer of Xxxxxxx at any time during the two year period
immediately preceding the alleged prohibited conduct; (iii) any prospective
customers to whom Xxxxxxx had made a presentation (or similar offering of
services) within a period of 360 days immediately preceding the alleged
- 3 -
4
prohibited conduct; and (iv) any customer for which Xxxxxxx renders or has
provided programs or services within the time periods set forth above.
2. The Obligor acknowledges that the restrictive covenants above are
necessary in order to protect and maintain the business of Xxxxxxx and to
prevent the usurpation by the Obligor (an employee of and a stockholder of ARS)
of all or any portion of the assets of Xxxxxxx. The Obligor acknowledges that
the business of the Company extends beyond the geographic area of the States of
New York and Florida and accordingly, it is reasonable that the restrictive
covenants set forth above are not limited by specific geographic area but by the
location of the customers of Xxxxxxx.
3. The Obligor acknowledges that the remedy at law for any breach of
this Agreement by the Obligor will be inadequate and that, accordingly, Company
shall, in addition to all other available remedies (including without limitation
seeking such damages as it can show it has sustained by reason of such breach),
be entitled to injunctive relief without being required to post bond or other
security and without having to prove the inadequacy of the available remedies at
law.
4. The Obligor acknowledges that the type and periods of restriction
imposed herein are fair and reasonable and are reasonably required for the
protection of Xxxxxxx, and are given as an integral part of certain transactions
of even date herewith between Xxxxxxx and the Obligor. If any of the covenants
contained in this Agreement, or any part thereof, is hereinafter construed to be
invalid or unenforceable, the same shall not affect the remainder of the
covenant or covenants, which shall be given full effect, without regard to the
invalid portions. If any of the covenants contained in this Agreement, or any
part thereof, is held to be unenforceable because of the duration of such
provision or the area covered thereby, the parties agree that the court making
such determination shall have the power to reduce the duration and/or geographic
area of such provision and, in its reduced form, said provision shall then be
enforceable.
5. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, executors, administrators, successors
and assigns.
6. Any Notice or demand required or permitted to be given or made
hereunder to or upon any party hereto shall be deemed to have been duly given or
made for all purposes if (a) in writing and sent by (i) messenger or an
overnight courier service against receipt, or (ii) certified or registered mail,
postage paid, return receipt requested, or (b) sent by telegram, telecopy, telex
or similar electronic means, provided that a written copy thereof is sent on the
same day by postage-paid first-class mail, if to the Company, at Xxxxxxx
Communications, Inc., Xxx Xxxx Xxxx Xxxxx, Xxxxx Xxxxx, XX 00000, attn: Xxxxxxx
Xxxxxxxx (fax: 000-000-0000), and
- 4 -
5
if to the Obligor, at {Confidential Portion Omitted and Filed Separately with
the Commission}, or at such other address as each such party furnishes by notice
given in accordance with this Section 6.
7. This Agreement shall be governed by and construed in accordance with
the law of New York, including its choice of law rules. Any judicial proceeding
brought against any of the parties to this Agreement on any dispute arising out
of this Agreement or any matter related hereto shall be brought in the courts of
the State of New York in New York County or in the United States District Court
for the Southern District of New York, and, by execution and delivery of this
Agreement, each of the parties to this Agreement accepts for itself the
jurisdiction of the aforesaid courts, irrevocably consents to the service of any
and all process in any action or proceeding by the mailing of copies of such
process to such party at its address provided for the giving of notices under
Section 6 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.
8. Notwithstanding anything to the contrary contained in this
Agreement, this Agreement is subject in all respects, and shall not become
binding upon Xxxxxxx until it has been approved by Xxxxxxx'x Board of Directors,
and upon and after such Board approval by Xxxxxxx'x execution and delivery of an
instrument to Obligor certifying that such approval has been obtained and that
Xxxxxxx has been authorized to consummate this Agreement on the terms set forth
herein. It is expressly acknowledged by the Obligor that the Company's Board of
Directors may give or withhold its approval, or condition its approval, upon
such conditions in addition to those expressed in this Agreement as the Board
may in its absolute and unfettered discretion determine, and without regard to
any other agreements or understandings, written or oral, between or among the
parties and that by causing this Agreement to be executed, neither the Company
nor the officer executing this Agreement on its behalf, or any other officer or
director of the Company, is making, has made or is authorized to make any
agreement or undertake any obligation to consummate the transactions described
in this Agreement or in any other agreement between the parties absent such
approval by the Company's Board of Directors.
9. In the event any provision of this Agreement is found to be void and
unenforceable by a court of competent jurisdiction or arbitration panel, the
remaining provisions of this Agreement shall nevertheless be binding upon the
parties hereto with the same effect as though the void or unenforceable part had
been severed and deleted.
10. This Agreement may not be changed orally, but only by an agreement
in writing signed by Xxxxxxx and the Obligor.
- 5 -
6
11. This Agreement, as amended by this Amendment No. 1, constitutes the
complete and exclusive statement of the agreement between Xxxxxxx and the
Obligor with respect to the subject matter of this Agreement, and replaces and
supersedes any and all prior agreements, understandings and negotiations between
Xxxxxxx and the Obligor with respect to the subject matter hereof.
Dated: May , 1999
XXXXXXX COMMUNICATIONS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Chairman and CEO
OBLIGOR:
/s/ Xxxxxx X. Xxxxxxx
------------------------------------------
Xxxxxx X. Xxxxxxx
The undersigned agree to the provisions of Section 1 of the within Agreement:
PSYCHIC READERS NETWORK, INC.
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxx
Title: CEO
ACCESS RESOURCE SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxx
Title: CEO
- 6 -
