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EXHIBIT 10.25
ROYALTY AGREEMENT
THIS ROYALTY AGREEMENT (the "Agreement") made effective as of January
1, 1999, by and between AMERIVISION COMMUNICATIONS, INC., an Oklahoma
corporation (the "Company"), and Regency Productions, Inc. ("Regency"), a
Georgia corporation.
SECTION 1
BACKGROUND
The Company and Regency have entered into various agreements and
understandings regarding agent royalties; and
The Company and Regency agree to terminate all prior agent royalty
agreements and waive all rights and duties thereunder and seek to enter into and
be bound by a new comprehensive agreement.
In consideration of the foregoing and the agreements contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
SECTION 2
TERM
The term of this Agreement (the "Term") is three years commencing
January 1, 1999 (the "Commencement Date").
SECTION 3
ROYALTY PAYMENTS
3.1 Royalty Payments. In consideration of settlement of all agent
royalties and claims under prior agreements, and in consideration of Regency's
compliance with the Noncompetition and Nonsolicitation provisions in Sections
5.3 and 5.4 below, during the Term of this Agreement, the Company shall pay
Regency royalty payments equal to $110,500 annually for 1999 and $102,000
annually for 2000 and 2001, payable in equal monthly payments. In addition,
Regency will assist the Company with relationships on existing non-profit
organizations that use the Company's services.
3.2 No Withholding. Regency shall be responsible for paying all taxes,
if any, imposed by any federal, state, city or other taxing authority on any
amount paid under this Agreement.
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SECTION 4
MUTUAL RELEASE
Subject to the satisfaction of the conditions set forth in Section 4.4
below:
4.1 The Company's Release. The Company hereby releases and forever
discharges Regency and its successors and assigns from and against any and all
claims, losses, liabilities, obligations, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever (whether known or unknown, foreseen or unforeseen, liquidated or
contingent, currently existing or arising in the future), arising from any act,
omission, event, conduct or transaction having occurred on or before the date of
this Agreement.
4.2 Regency's Release. Regency hereby releases and forever discharges
the Company and its trustees, officers, employees, agents, counsel,
subsidiaries, affiliates, successors and assigns from and against any and all
claims, losses, liabilities, obligations, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever (whether known or unknown, foreseen or unforeseen, liquidated or
contingent, currently existing or arising in the future), arising from any act,
omission, event, conduct or transaction having occurred on or before the date of
this Agreement. Notwithstanding the foregoing, this Agreement does not modify or
waive any payments due CASE, ACLJ-National, or Regency Productions, Inc. of 10
percent royalties based on subscribers to the Company's long-distance services
obtained by those organizations.
4.3. Representations of the Parties. Each party or the party identified
represents, warrants and covenants to the other as follows:
(a) Organization. As to the Company, that it is an Oklahoma
corporation, and as to Regency that it is a Georgia corporation, in each case
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization. Each such party has the requisite power and
authority to execute and deliver this Agreement, to consummate the transactions
contemplated hereby and to comply with the terms, conditions and provisions
hereof.
(b) Authority. The execution, delivery and performance of this
Agreement have been duly authorized and approved by all necessary corporate
action and do not require any further authorization or consent in the case of
the Company by such company or its board of directors and in the case of Regency
by such company or its board of directors. This Agreement is when executed and
delivered by the respective party its legal, valid and binding agreement
enforceable in accordance with its respective terms and conditions, except as
such enforceability may be limited by bankruptcy, moratorium, insolvency,
reorganization or other similar laws affecting or limiting the enforcement of
creditors' rights generally and except as such enforceability is subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at Law).
4.4 Conditions. The releases set forth in Sections 4.1 and 4.2 above
are conditioned upon Regency's compliance with Sections 5.3 and 5.4 below.
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SECTION 5
OTHER DUTIES OF REGENCY
5.1 Additional Information. Regency will, with reasonable notice during
or after the Term, furnish information as may be in its possession and cooperate
with the Company as may reasonably be requested in connection with any claims or
legal action to which the Company is or may become a party.
5.2 Confidentiality. During the Term, Regency will not disclose or use
any Confidential Information other than as necessary in carrying out its duties
on behalf of the Company without first obtaining the Company's written consent;
and Regency agrees to take all reasonable precautions to prevent inadvertent
disclosure or use of Confidential Information. For purposes of this Agreement,
"Confidential Information" is defined as: the Company's sales, sales volume,
sales methods, sales proposals; customers and prospective customers, identity of
customers and prospective customers, identity of key purchasing personnel in the
employ of customers and prospective customers; amount or kind of customer
purchases from the Company, its sources of supply; the Company computer
programs, systems documentation, special hardware, product hardware, related
software development, the Company manuals, formulae, processes, methods,
machines, compositions, ideas, improvements, inventions; or other confidential
or proprietary information belonging to the Company or relating to the Company's
affairs. Confidential Information does not, however, include the general skills
and experience gained during Regency's engagement with the Company, or
information publicly available through no fault of Regency, or information
generally known within the industries in which the Company competes. Regency
agrees that the Confidential Information is the property of the Company; the
use, misappropriation, or disclosure of the Confidential Information would
constitute a breach of trust and could cause irreparable injury to the Company;
and it is essential to the protection of the Company's good will and to the
maintenance of the Company's competitive position that the Confidential
Information be kept secret and that Regency not disclose the Confidential
Information to others or use the Confidential Information to Regency's own
advantage or to the advantage of others. Upon termination of its engagement with
the Company, Regency will promptly deliver to the Company all software programs,
questionnaires, files, manuals, letters, notes, notebooks, reports, customer
lists, and all other material containing Confidential Information which are in
its possession or under its control.
5.3 Noncompetition.
(a) Basic Obligation. Regency will not Compete with the Company
(as hereinafter defined) for a period of time equal to the Term of
this Agreement or from the date of entry by a court of competent
jurisdiction of a final judgment enforcing this covenant
(whichever is later).
(b) Definition of "Compete with the Company." For the purposes of
this Section 5.3, the term "Compete with the Company" means action
by Regency in the
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continental United States, direct or indirect, for its own account
or for the account of others, either as an officer, director,
stockholder, owner, partner, member, promoter, employee,
consultant, advisor, agent, manager, creditor or in any other
capacity, resulting in Regency having any pecuniary interest,
legal or equitable ownership, or other financial or non-financial
interest, in any corporation, business trust, partnership, limited
liability company, proprietorship or other business or
professional enterprise that provides long-distance telephone
services or any other product or service now or hereafter offered
or sold by the Company during the Term of this Agreement or any
product or service similar to, competitive with, or intended to
compete with any such product or service; provided, however, that
the term "Compete with the Company" shall not include ownership
(without any other relationship) of less than a 5% interest in any
publicly-held corporation.
(c) Reasonableness of Scope and Duration. Regency acknowledges
that the covenants contained herein are reasonable as to
geographic and temporal scope.
5.4 Non-Solicitation. During the Term of this Agreement, Regency will
not without prior consent of the Company, directly or indirectly or on Regency's
own account, or as agent, employee, partner, stockholder or otherwise, solicit,
sell to or contract, with a view to selling any long-distance services or any
other product or service offered or sold by the Company at any time during the
Term of this Agreement or any product or service similar to, competitive with,
or intended to compete with any such product or service, to any person, firm or
corporation from whom Regency solicited any order or to whom Regency sold any
product or service or otherwise dealt with on behalf of the Company, or any
account that is on the Company's customer listing at any time during Regency's
engagement with the Company, or hire, seek to hire, induce, solicit or cause to
be solicited any employee of the Company, directly or indirectly, on its own
behalf or on behalf of another employer. These provisions shall be in addition
to and not in derogation of the provisions in Section 5.3 above.
5.5 Remedies. Regency acknowledges that its services are unique and
irreplaceable; that the Confidential Information which is the subject of this
Agreement is valuable and unique and constitutes information proprietary to the
Company; that its breach or attempted breach of any provision of Sections 5.2
through 5.4 would cause irreparable harm to the Company not compensable in
monetary damages; that the Company's remedy at law for any such breach would be
inadequate; and that, in addition to any other remedy, the Company shall be
entitled to temporary and permanent injunctive relief to enjoin an actual or
threatened breach of such provisions without being required to prove damages or
furnish any bond or other security; and legal costs incurred by the Company to
obtain injunctive or other relief from a court will be paid by Regency.
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SECTION 6
CONSOLIDATION, MERGER OR SALE OF ASSETS
Nothing in this Agreement shall preclude the Company from consolidating
or merging into or with, or transferring all or substantially all of its assets
to, another corporation which assumes this Agreement and all obligations and
undertakings of the Company hereunder. Upon such a consolidation, merger or sale
of assets, the term "the Company" as used will mean the other corporation, and
this Agreement shall continue in full force and effect. This Section 6 is not
intended to modify or limit the rights of Regency hereunder.
SECTION 7
MISCELLANEOUS
7.1 Assignment. This Agreement shall inure to the benefit of, and be
binding upon, the parties hereto and their respective representatives,
successors and assigns. Regency may not assign its rights or delegate its
obligations under this Agreement without the Company's prior written consent.
7.2 Notices. All notices hereunder must be in writing and (a) delivered
personally, (b) sent by facsimile, (c) delivered by recognized overnight courier
services (expenses prepaid), or (d) sent by registered or certified mail,
postage prepaid, and addressed as follows:
If to Company to:
AmeriVision Communications, Inc.
0000 Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxx
If to Regency to:
Regency Productions, Inc.
1000 Hurricane Shoals Road
Suite 1100, Building D
Xxxxxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxx Xxxxxxxx
Any party may alter the address to which notices are to be sent by giving notice
of such change of address in conformity with this Section 7.2. Any notice which
is delivered personally, by facsimile or by recognized overnight courier in the
manner provided in this Section 7.2 shall be deemed to have been duly given to
the party to whom it is addressed upon actual receipt by such party. Any notice
which is delivered by registered or certified mail in the manner provided in
this Section 7.2 shall be conclusively presumed to have been given to the party
to whom it is addressed at the
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close of business, local time of the recipient, on the third business day after
it is so placed in the mail.
7.3. Governing Law. This Agreement shall be deemed to have been made in
and shall be construed and interpreted in accordance with the laws of the State
of Oklahoma without giving effect to principles of conflicts of laws. Each party
hereto agrees that all actions and proceedings relating directly or indirectly
to this Agreement shall be litigated in courts located in Oklahoma, and the
exclusive venue therefor shall be Oklahoma County and consents to the
jurisdiction and venue of any such court and consents to service of process in
any such action or proceeding by personal delivery or any other method permitted
by law.
7.4 Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subject
matter above, and supersedes all prior agreements, understandings, inducements
or conditions, express or implied, oral or written, relating to the subject
matter above.
7.5 Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws by any court of
competent jurisdiction, such illegality, invalidity or unenforceability shall
not affect the legality, enforceability or validity of any other provisions or
of the same provision as applied to any other fact or circumstance and such
illegal, unenforceable or invalid provision shall be modified to the minimum
extent necessary to make such provision legal, valid or enforceable, as the case
may be.
7.6. Headings. All headings in this Agreement are for convenience of
reference only, and do not constitute a part of this Agreement and shall not be
deemed to limit or affect any of its provisions.
7.7 Modification and Waiver. No supplement, modification or amendment
of this Agreement shall be binding unless executed in writing by Regency and
Company. None of the terms or conditions of this Agreement may be waived except
in writing by the party which is entitled to the benefits above. No waiver of
any of the provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provision (whether or not similar) nor shall such waiver
constitute a continuing waiver.
7.8 Counterparts. This Agreement may be executed in duplicate
counterparts. Each counterpart will be an original and both together will
constitute but one and the same document.
7.9 Grammar. As used in this Agreement, any personal pronoun shall
include the masculine, feminine, and/or the neuter thereof, and the singular of
any noun or pronoun shall include the plural and the plural the singular,
wherever the context may require.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Company and Regency have executed this
Agreement as of the date first above written.
REGENCY PRODUCTIONS, INC. AMERIVISION COMMUNICATIONS, INC.
By: /s/ Xxx Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------- -------------------------------------
Name: Name: Xxxxxxx X. Xxxxxxxx
Title: Title: President and Chief Executive Officer
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