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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
June 4, 1999 (May 26, 1999)
QUINTEL COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-27046 22-3322277
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
One Blue Hill Plaza
Pearl River, New York 10965
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(914) 620-1212
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QUINTEL COMMUNICATIONS, INC.
INDEX TO FORM 8-K
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
JUNE 4, 1999
ITEMS IN FORM 8-K
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Facing page
Item 5 Other Events 3
Item 7 Financial Statements and Exhibits 5
Signatures
Exhibit Index
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ITEM 5. OTHER EVENTS.
On May 27, 1999, the Company's Board of Directors approved the
Company's execution of the following agreements (collectively, the "Transaction
Agreements") and authorized the consummation of the transactions contemplated
thereby:
(i) Agreement Regarding 900 Pay-Per-Call Psychic Services (the "900
Agreement"), dated as of May 26, 1999, by and between the Company and Access
Resource Services, Inc. ("ARS"), pursuant to which the Company agreed to refrain
until January 17, 2001 from conducting, marketing, advertising or promoting
certain "stand alone" 900 Pay-Per-Call Psychic Services described in the
Agreement (the "900 Psychic Services") directly or indirectly through any
affiliate. In addition, the Company agreed to cease the conduct of the media
buying operation which it conducted under the name "Quintel Media" and ARS
agreed to assume responsibility for the "Quintel Media" employees and for the
lease of the premises used by "Quintel Media" in Fort Lauderdale, Florida, and
to acquire the computer equipment and other furniture, fixtures and leasehold
improvements used by "Quintel Media" at such premises. The 900 Agreement does
not prohibit the Company from offering psychic and psychic-related services,
provided such services are (a) not billed to the consumer as a "900" telephone
billing record or (b) offered as a free premium with or adjunct to the
marketing or offering of other products and services.
In consideration for the Company's agreement to suspend the offering of
the 900 Psychic Services (and for the other covenants made and obligations
undertaken by the Company under the 900 Agreement), ARS and any of its
affiliates offering 900 Pay-Per-Call Psychic Services agreed to pay to the
Company certain royalty fees for each billable minute generated by 900
Pay-Per-Call Psychic Services on ARS' (or any of its affiliates') 900 numbers
and on ARS' (or any of its affiliates') billings to membership clubs from and
after the consummation of the transactions contemplated by the Transaction
Agreements and until January 17, 2001, all as more fully described in the 900
Agreement.
(ii) Agreements by and between the Company and each of Messrs. Steven
Feder ("Feder"), Peter Stolz ("Stolz") and Thomas Lindsey ("Lindsey") amending
certain Non-Competition and Right of First Refusal Agreements dated September
10, 1996 by and between each of them and the Company (the "Amendments") which
would otherwise have restricted such individuals in the conduct of 900 Psychic
Services and the offering of such services through membership clubs.
(iii) Redemption Agreements by and between the Company and each of
Feder, Stolz and Lindsey, whereby the Company would redeem from such individuals
(or partnerships controlled by them) an aggregate of 1,300,000 shares of the
Company's common stock at a purchase price of $1.35 per share.
(iv) Indemnification Agreement by and among the Company, ARS, Feder,
Stolz and Lindsey, whereby the Company and the other parties will indemnify one
another against
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certain claims which may arise out of the transactions referred to in any of the
Transaction Agreements.
The Transaction Agreements were subject in all respects, and were not
to become binding upon the Company, until the Company's execution thereof was
approved by the Company's Board of Directors. As discussed above, the Board
approved the Company's execution of the Transaction Agreements on May 27, 1999.
The transactions contemplated by the Transaction Agreements were consumated on
or about June 4, 1999.
ARS is presently controlled by Mr. Feder, who, until his resignation in
January 1999, was a member of the Company's Board of Directors. Mr. Stolz is
also involved in the operation of ARS.
The foregoing is a summary of the Transaction Agreements and the
transactions contemplated thereby and should be read in conjunction with the
Transaction Agreements, copies of which are included as exhibits to this Current
Report on Form 8-K.
This Current Report includes statements that are "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended,
including statements regarding the Company's expectations, hopes, beliefs,
intentions or strategies regarding the future, that are based on the beliefs of
management, as well as assumptions made by and information currently available
to the Company. When used in this document, the words "anticipate," "believe,"
"estimate," and "expect" and similar expressions, as they relate to the Company,
are intended to identify such forward-looking statements. Such statements
reflect the current views of management with respect to future events and are
subject to certain risks, uncertainties and assumptions, including those
described in this Current Report. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those described herein as anticipated,
believed, estimated or expected. The Company does not intend to update these
forward-looking statements.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) EXHIBITS.
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EXHIBIT
NUMBER DESCRIPTION
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2.1.1*+ Agreement Regarding 900 Pay-Per-Call Psychic Services, dated as of May
26, 1999, by and between the Company and Access Resource Services, Inc.
2.1.2* Amendment No. 1 to Exhibit 2.1.1, dated as of May 26, 1999.
2.2.1* Amendment No. 1 to Non-Competition and Right of First Refusal
Agreement, dated as of May 26, 1999, by and between the Company and
Steven L. Feder.
2.2.2*+ Amendment No. 1 to Non-Competition and Right of First Refusal
Agreement, dated as of May 26, 1999, by and between the Company and
Peter Stolz.
2.2.3*+ Amendment No. 1 to Non-Competition and Right of First Refusal
Agreement, dated as of May 26, 1999, by and between the Company and
Thomas H. Lindsey.
2.3.1* Redemption Agreement, dated as of May 26, 1999, by and among the
Company, Steven L. Feder and Defer Limited Partnership.
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<TABLE>
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2.3.2*+ Redemption Agreement, dated as of May 26, 1999, by and among the
Company, Peter Stolz and the P. Stolz Family Limited Partnership, L.P.
2.3.3*+ Redemption Agreement, dated as of May 26, 1999, by and among the
Company, Thomas H. Lindsey and Maslin Limited Partnership.
2.4*+ Indemnification Agreement, dated as of May 26, 1999, by and among the
Company, Access Resource Services, Inc., Steven L. Feder, Peter Stolz,
Thomas H. Lindsey, Defer Limited Partnership, the P. Stolz Family
Limited Partnership, L.P. and Maslin Limited Partnership.
2.5* Security Agreement, dated as of May 26, 1999, by and between the
Company and Access Resource Services, Inc.
</TABLE>
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* Filed herewith.
+ Confidential treatment requested as to portions of this Exhibit.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: June 4, 1999 QUINTEL COMMUNICATIONS, INC.
By:/s/ Jeffrey L. Schwartz
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Jeffrey L. Schwartz
Chief Executive Officer
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EXHIBIT INDEX
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EXHIBIT
NUMBER DESCRIPTION
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2.1.1*+ Agreement Regarding 900 Pay-Per-Call Psychic Services, dated as of May
26, 1999, by and between the Company and Access Resource Services, Inc.
2.1.2* Amendment No. 1 to Exhibit 2.1.1, dated as of May 26, 1999.
2.2.1* Amendment No. 1 to Non-Competition and Right of First Refusal
Agreement, dated as of May 26, 1999, by and between the Company and
Steven L. Feder.
2.2.2*+ Amendment No. 1 to Non-Competition and Right of First Refusal
Agreement, dated as of May 26, 1999, by and between the Company and
Peter Stolz.
2.2.3*+ Amendment No. 1 to Non-Competition and Right of First Refusal
Agreement, dated as of May 26, 1999, by and between the Company and
Thomas H. Lindsey.
2.3.1* Redemption Agreement, dated as of May 26, 1999, by and among the
Company, Steven L. Feder and Defer Limited Partnership.
2.3.2*+ Redemption Agreement, dated as of May 26, 1999, by and among the
Company, Peter Stolz and the P. Stolz Family Limited Partnership, L.P.
2.3.3*+ Redemption Agreement, dated as of May 26, 1999, by and among the
Company, Thomas H. Lindsey and Maslin Limited Partnership.
2.4*+ Indemnification Agreement, dated as of May 26, 1999, by and among the
Company, Access Resource Services, Inc., Steven L. Feder, Peter Stolz,
Thomas H. Lindsey, Defer Limited Partnership, the P. Stolz Family
Limited Partnership, L.P. and Maslin Limited Partnership.
2.5* Security Agreement, dated as of May 26, 1999, by and between the
Company and Access Resource Services, Inc.
</TABLE>
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* Filed herewith.
+ Confidential treatment requested as to portions of this Exhibit.
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EXHIBIT 2.1.1
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AGREEMENT REGARDING 900 PAY-PER-CALL PSYCHIC SERVICES
AGREEMENT entered into as of the day of May, 1999 by and between
QUINTEL COMMUNICATIONS, INC., a corporation organized under the laws of Delaware
with offices at One Blue Hill Plaza, Fifth Floor, Pearl River, New York 10965
(hereafter referred to as "QUINTEL"), and ACCESS RESOURCE SERVICES, INC., a
Florida corporation with offices at 2455 E. Sunrise Boulevard, Fort Lauderdale,
Florida 33304 (hereafter referred to as "ARS").
RECITALS:
A. ARS and Quintel has each engaged in the offering of 900 Pay-Per-Call
Psychic Services (as such term is defined below).
B. Quintel and ARS have agreed that Quintel shall cease the 900
Pay-Per-Call Psychic Services on the terms and conditions set forth in
this Agreement.
NOW, THEREFORE, for good and valuable consideration, receipt of which
is acknowledged by the parties, it is hereby agreed as follows:
3. RESTRICTION ON QUINTEL'S OFFERING OF 900 PAY-PER-CALL PSYCHIC SERVICES.
a. Subject to the approval of this Agreement by Quintel's Board
of Directors and the consummation of the transactions
described in this Agreement upon and after such Board approval
by Quintel's execution and delivery of an instrument to ARS
certifying that such approval has been obtained and that
Quintel has been authorized to consummate the transactions
described in this Agreement on the terms set forth herein (the
"Closing Certificate"; the delivery of the Closing Certificate
and the consummation of the transactions described in this
Agreement shall be referred to as the "Closing"), Quintel
shall cease offering 900 Pay-Per- Call Psychic Services,
directly or indirectly through its Affiliates, and shall not
resume offering such services until January 17, 2001, except
as otherwise provided in this Agreement.
i. As used in this Agreement, the following terms have
the meanings set forth below:
(1) "900 Pay-Per-Call Psychic Services" means
pay-per-call Psychic-Related Services
delivered telephonically and billed as a
"900" telephone number record.
(2) "900 Traffic" means billable minutes
generated by 900 Pay-Per-Call Psychic
Services.
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(3) "Psychic-Related Services" refers to
psychic, astrology, "new age", and tarot
subjects.
(4) "Affiliate" means any person or entity
controlling, controlled by or under common
control with a party, and, with respect to
ARS, the term "Affiliate" also means Feder
and Peter Stolz, and any Affiliate of either
of them.
(5) The term "stand-alone" service when used in
reference to the offering of 900
Pay-Per-Call Psychic Services means a 900
Pay-Per-Call Psychic Service which is
charged to the customer as a 900 telephone
billing record separate and apart from any
charge for any other product or service, and
such term shall not include the offering of
a psychic-related service which is not
charged to the consumer and is offered as a
premium with or adjunct to the marketing or
advertising of other products and services.
(6) The term "Premium 900 Number Psychic
Services" means a 900 Pay-Per-Call Psychic
Service which is not charged to the consumer
and is offered as a premium with or adjunct
to the marketing or advertising of other
products or services.
(7) The term "Restricted Premium Psychic
Services" means a Psychic-Related Service
(including but not limited to a 900
Pay-Per-Call Psychic Service) which is not
charged to the consumer and is offered as a
premium with or adjunct to the marketing or
advertising of products or services other
than Psychic-Related Services.
(8) The term "Media Records" has the meaning
ascribed thereto in Section 3 of this
Agreement.
b. Notwithstanding anything to the contrary contained in this
Agreement, this Agreement is subject in all respects, and
shall not become binding upon Quintel, until it has been
approved by Quintel's Board of Directors and Quintel has
delivered the Closing Certificate. It is expressly
acknowledged by ARS that Quintel'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
Quintel nor the officer executing this Agreement on its
behalf, or any other officer or director of Quintel, is
making, has made or is authorized to make any agreement or
undertake any obligation to consummate the transactions
described
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in this Agreement or in any other agreement between the
parties absent such approval by Quintel's Board of Directors.
c. During the period commencing with the Closing and ending
January 17, 2001, Quintel shall refrain from marketing or
promoting "stand-alone" 900 Pay-Per-Call Psychic Services,
directly or indirectly through any Affiliate, including all
marketing and media activities promoting "stand-alone" 900
Pay-Per-Call Psychic Services, except as otherwise provided in
this Agreement.
d. This Agreement shall only restrict Quintel and its Affiliates
from offering 900 Pay-Per-Call Psychic Services as a "stand
alone" service. This Agreement shall not, however, except as
set forth in paragraph 1(e) below, restrict Quintel or its
Affiliates in the offering of Psychic-Related Services other
than 900 Pay-Per-Call Psychic Services or in the operation of
any other business, other than 900 Pay- Per-Call Psychic
Services, and the restriction on the offering of 900
Pay-Per-Call Psychic Services is subject to the following
exception with respect to Premium 900 Number Psychic Services:
i. Quintel shall not, on broadcast or cable television,
advertise or market Premium 900 Number Psychic
Services offering a greater number of free minutes of
Psychic-Related Services than is then being offered
by ARS in the advertising or marketing of its 900
Pay-Per-Call Psychic Service programs. The
restriction in the foregoing sentence shall only
apply to advertising or marketing by Quintel on
broadcast television, and not in other forms of
media. In addition, such restriction shall apply only
to those offers of Premium 900 Number Psychic
Services by Quintel on broadcast television which are
first advertised or marketed more than fifteen (15)
days following Quintel's receipt of written notice
from ARS stating the number of free minutes of
Psychic-Related Services to be offered by ARS in a
900 Pay-Per-Call Psychic Service program, provided
that such ARS program is in fact promptly advertised
or marketed after the giving of such notice, and the
restriction shall lapse as to such ARS program when
such program is no longer advertised or marketed.
e. Notwithstanding the foregoing provisions of paragraph 1(d),
Quintel shall not, the first time it makes an offer expressly
directed to a name on the Media Records, offer any
Psychic-Related Services (including, but not limited to 900
Pay-Per-Call Psychic Services) other than Restricted Premium
Psychic Services. This restriction shall no longer apply to a
name on the Media Records which has previously responded to a
Quintel offer of any product or service. Quintel shall not
advertise or market Premium 900 Number Psychic Services
offering a greater number of free minutes of Psychic-Related
Services than is then being offered by ARS in the advertising
or marketing of its 900 Pay-Per-Call Psychic Service
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programs, subject to the notice and other provisions of the
last sentence of paragraph 1(d((i) above.
f. As an example, but not an exclusive example, of the
application of the provisions of paragraphs 1(d) and 1(e),
Quintel may offer (and engage in marketing and media
activities to promote) Psychic-Related Services in the
marketing of telecommunications services, or develop a
web-site incorporating psychic-related subjects and offering
Psychic-Related Services, without restriction in any form of
media, provided that:
i. the first time a name on the Media Records is being
offered a product or service by Quintel, then the
only type of Psychic-Related Service which Quintel
can offer to such name is a Restricted Premium
Psychic Service, and
ii. if an offer is being made to any other consumers
(including names appearing on the Media Records who
have previously responded to an offer from Quintel or
its Affiliates), then Quintel may offer any
Psychic-Related Services to such consumer, except for
900 Pay-Per-Call Psychic Services, which may be
offered only as a Premium 900 Number Psychic Service,
and
iii. in with respect to both examples in clause (i) and
(ii) above in this paragraph 1(f), if at least
fifteen (15) days prior to Quintel's offering of
Premium 900 Number Psychic Services or Restricted
Premium Psychic Services, ARS gives notice to Quintel
that ARS will offer five (5) free minutes of
Psychic-Related Services in marketing its 900
Pay-Per-Call Psychic Service programs, then, provided
such ARS program were in fact promptly advertised or
marketed, Quintel could not thereafter, while such
ARS program is being advertised or marketed,
advertise or market on broadcast television more than
five (5) minutes of Premium 900 Number Psychic
Services or Restricted Premium Psychic Services, as
the case may be.
g. Effective upon the Closing, Quintel will cease marketing and
media activities regarding those psychic specific tag
telephone numbers in the ${Confidential Portion Omitted and
Filed Separately with the Commission} guaranteed payout
telephone programs specifically identified on Schedule A and
all non-psychic specific tag telephone numbers identified on
Schedule B (collectively, the "Guaranteed Payout 900 Telephone
Numbers") attached hereto.
i. Following the Closing, ARS will:
(1) continue to provide the same type of live
operator psychic services provided to
Quintel and its Affiliates pursuant to the
Live Operator
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Service Agreement (as such term is defined
in Section 11 of this Agreement) to service
the Guaranteed Payout 900 Telephone Numbers
until the earlier of January 17, 2001 and
the termination of the restrictions on
Quintel set forth in Sections 1(a) and 2(b)
of this Agreement;
(2) pay Quintel ${Confidential Portion Omitted
and Filed Separately with the Commission}
per minute for all minutes billed on the
Guaranteed Payout 900 Telephone Numbers
specifically identified on Schedule B
attached hereto; and
(3) be entitled to all revenues from the psychic
specific tag numbers identified on Schedule
A.
h. Concurrently with the Closing, Quintel and Feder are entering
into an into an agreement amending a Non-Competition and Right
of First Refusal Agreement dated September 10, 1996 (the
"Amendment"), which provides, among other things, that if ARS
or any of its Affiliates operate membership clubs offering
psychic, new age and psychic-related products or services,
Quintel will be paid twenty percent ( 20%) of the gross
billings to club members during the period commencing on the
Closing Date and ending January 17, 2001 (the "Club
Royalties"). Any default in the payment of the Club Royalties
or otherwise by ARS or its Affiliates under the Amendment
shall be deemed to be a default under this Agreement.
4. ROYALTY PAYMENTS
a. In consideration for Quintel's agreement to suspend the
offering of its 900 Pay-Per-Call Psychic Services and the
other covenants made and obligations undertaken by Quintel
under this Agreement, commencing on the Closing Date ARS and
any of its Affiliates offering 900 Pay-Per-Call Psychic
Services shall pay to Quintel $0.40 per minute for the first
three million three hundred seventy-five thousand (3,375,000)
minutes of billable 900 Traffic on ARS' (or any of its
Affiliates') 900 numbers from and after the Closing Date
(excluding minutes billed on the Guaranteed Payout 900
Telephone Numbers specifically identified on Schedule B and as
to which the ${Confidential Portion Omitted and Filed
Separately with the Commission} per minute due Quintel has
been paid pursuant to paragraph 1(e)(i)(2) above).
b. For all minutes in excess of three million three hundred
seventy-five thousand (3,375,000), during the period
commencing on the Closing Date and ending January 17, 2001,
ARS and any of its Affiliates offering 900 Pay-Per-Call
Psychic Services will pay Quintel $0.07 per minute for
billable 900 Traffic on ARS' (or any of its Affiliates') 900
numbers.
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c. As noted in Section 4(d) of this Agreement, ARS is entering
into an agreement (the "WIS Agreement") with Quintel and West
Interactive Services, Inc. ("WIS") pursuant to which ARS shall
instruct WIS to pay directly to Quintel all royalty payments
due pursuant to this Section 2 within thirty (30) days after
the end of the month in which ARS' or any of its Affiliates'
900 Traffic has been billed to customers. ARS and its
Affiliates shall enter agreements on the same terms as the WIS
Agreement with any other service bureau providing the
telecommunications and billing services provided by WIS to ARS
in conjunction with their offering of 900 Pay-Per-Call Psychic
Services (WIS or such other entity is each referred to as a
"Service Bureau").
d. Until January 17, 2003, the names and addresses of all
customers of the 900 Traffic on which the royalties are
payable to Quintel shall be provided to Quintel by ARS within
forty-eight (48) hours (or within such longer period which is
required in order for ARS to arrange for provision of such
information using its best efforts to obtain such information
within such forty-eight (48) hour period) after the making of
the calls generating the traffic.
e. If the royalty payments paid to Quintel under this Section 2
are less than $25,000.00 per month in any three (3) calendar
months in any period of six (6) calendar months, then the
restrictions under Sections 1(a) and (b) of this Agreement
shall cease until the first day of the month following a
period of three (3) successive calendar months in which such
royalty payments paid to Quintel have equaled $25,000.00 per
month. During the period in which such restrictions lapse, the
live operator psychic services described in the Live Operator
Service Agreement shall be provided to Quintel by ARS or an
Affiliate on the same terms as are provided for in the Live
Operator Service Agreement, and the royalty payments referred
to in this Section 2 shall continue to be paid to Quintel in
accordance with this Agreement, and until resumption of the
restrictions on Quintel, the Live Operator Service Agreement
and the Guaranteed Payout Agreements (such terms are used with
meanings ascribed thereto in Section 11 of this Agreement)
shall be deemed to be again in full force and effect.
f. Feder by his signature at the end of this Agreement personally
guarantees that he will arrange for any ARS Affiliate with
billable 900 Pay-Per-Call Psychic Services traffic to assume
the same obligations with respect to the payment of royalties
to Quintel as are undertaken by ARS in this Section 2, and to
enter into an agreement with the Service Bureau comparable to
the WIS Agreement.
5. UTILIZATION OF ANI CALLER RECORDS, WEB-SITE AND OTHER RECORDS.
a. For the period commencing on the date of the Closing (the
"Closing Date") and ending January 17, 2003, ARS will provide
Quintel:
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i. with copies of all daily ANI caller records provided
to ARS by West Interactive Services, Inc. ("WIS"),
and any other service bureau providing such
telecommunications and billing services to ARS or any
of its Affiliates in conjunction with their offering
of 900 Pay-Per-Call Psychic Services (WIS or such
other entity is each referred to as a "service
Bureau"), which records shall include, when
available, names, addresses, and caller telephone
numbers (the "ANI RECORDS").
ii. on a daily basis with the names, addresses and, if
available, telephone numbers of all persons accessing
web-sites operated by ARS or its Affiliates (the
"WEB-SITE RECORDS");
iii. on a daily basis, with the names, addresses and, if
available, telephone numbers of all persons obtained
by ARS or its Affiliates from any other advertising
or marketing on any form of media (the "OTHER MEDIA
RECORDS"). The ANI Records, Web-Site Records and
Other Media Records are collectively referred to as
the "MEDIA RECORDS".
b. ARS and its Affiliates shall instruct each Service Bureau to
deliver such ANI Records, and will arrange for delivery of the
Media Records to Quintel within 24 hours after the making of
the calls or contact of the web-site, as the case may be,
generating such records.
c. Under no circumstances may Quintel utilize the Media Records
for any "stand-alone" 900 Pay-Per-Call Psychic Services or
sell, lease or otherwise transfer the ANI Records to any third
party. Quintel may use the Media Records for any of its
operations, provided that Quintel does not use such records
for the marketing of "stand-alone" 900 Pay-Per-Call Psychic
Services. It is agreed, however, that any "name" on the Media
Records delivered to Quintel who responds to a Quintel offer
may then be utilized without restriction by Quintel or its
Affiliates, and sold, leased or transferred in Quintel's
discretion.
6. CONTINUED RELATIONSHIP WITH WIS
a. ARS agrees to continue to contract with WIS (or another
Service Bureau approved by Quintel) for all 900 and 800 number
telephone traffic during the period from the Closing through
January 17, 2001.
b. Following the Closing, ARS and its Affiliates will direct WIS
and any other Service Bureau to pay royalties directly to
Quintel in the manner set forth in Section 2 above and as
provided in the agreement referred to in Section 4(d) of this
Agreement.
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c. Effective with the Closing, Quintel agrees to instruct each
Service Bureau which provides telecommunications services for
the 900 Traffic to transfer all guaranteed payouts on the 900
Traffic allocated by such Service Bureau for psychic minutes
directly to ARS.
d. The Closing under this Agreement shall be conditioned upon the
negotiation and execution of an agreement among ARS, WIS and
Quintel with respect to the provisions of this Section 4,
which among other things will provide for WIS's guarantee of
payment of the Quintel royalties, and provision of ANI and
call records by WIS to Quintel within twenty four (24) hours
after the making of such calls.
e. The Club Royalties 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 Quintel comparable to the WIS
Agreement which shall be executed and delivered at or prior to
the Closing.
7. ASSUMPTION OF LEASE AND QUINTEL MEDIA EXPENSES
a. Effective with the Closing, all "Quintel Media" employees
listed on Schedule C attached hereto (the "Quintel Media
Employees") will be employed by ARS or an affiliate thereof.
Effective upon the Closing, ARS will assume (i) all accrued
benefit obligations with respect to such employees, and shall
be solely responsible for all compensation and benefits due to
the Quintel Media Employees and (ii) all other operational
expenses of the business known as "Quintel Media"
(collectively, the "Quintel Media Expenses"), including the
expenses referred to on Schedule D attached hereto.
i. Following the Closing neither ARS nor Feder shall use
the names "Quintel Media", "Quintel", "Calling Card",
"New Lauderdale" or any derivative thereof in
connection with their operations or that of any of
their Affiliates.
b. ARS will use its best efforts to have Quintel released from
all obligations under the existing lease for the premises (the
"Sunrise Premises") located at 2455 East Sunrise Boulevard in
Ft. Lauderdale, Florida (the "Sunrise Lease"). In the event
that ARS is unsuccessful in obtaining a release of Quintel
from the Sunrise Lease, ARS will enter into an Assignment and
Assumption Agreement with respect to such lease and shall
indemnify Quintel with respect to such lease.
i. At the Closing ARS will pay Quintel $30,331.00 in
reimbursement for the security deposit being held by
the Landlord under the Sunrise Lease,
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which security deposit Quintel shall be deemed to
have assigned to ARS upon such payment being made.
ii. If Quintel is not released from its obligations under
the Sunrise Lease, effective upon the Closing, ARS
will assume all financial obligations under the
Sunrise Lease, and ARS's obligations with respect to
thereto shall be personably guaranteed by Feder,
which guarantee will be executed and delivered at the
Closing.
c. In connection with ARS's assumption of the Sunrise Lease and
Quintel Media expenses, at the Closing Quintel will sell to
ARS Quintel's interest in all computer equipment, furniture,
fixtures and other equipment and leasehold improvements
located at the Sunrise Premises for a purchase price (the
"Purchase Price") equal to Two Hundred and Fifty Eight
Thousand Eight Hundred and Seven and 63/100
Dollars($258,807.83).
i. Payment of the Purchase Price will be made as
follows: one-half will be paid at the Closing and the
balance will be paid thirty (30) days after the
Closing; ARS will arrange for WIS to pay such balance
to Quintel directly from WIS's next settlement
following the Closing of amounts due from WIS to ARS,
and confirmation by WIS of such arrangement shall be
delivered at Closing to Quintel.
ii. Following the Closing, if requested to do so by
Quintel, ARS will promptly provide Quintel with a
copy of all programs, source code, and other software
in its possession used in operating the AS 400
computer equipment at the Sunrise Premises.
iii. Included in the purchase price for such equipment is
the equipment leased by Quintel under a lease with
Digital Media Corp. for certain media "100" equipment
which had an initial term of 36 months expiring June,
1999. and a monthly rental of $1,400.20 plus sales
tax; at the Closing ARS will reimburse Quintel for
the last month's rent which was prepaid by Quintel,
and Quintel will exercise the purchase option under
such lease at its expense and transfer the equipment
to ARS.
d. In connection with ARS's assumption of the Sunrise Lease and
Quintel Media expenses, effective with the Closing ARS will
arrange for assumption of all obligations for the T1 line
provided by Frontier Telecommunications to the Sunrise
Premises.
e. Following the Closing ARS will indemnify Quintel against any
claim and hold Quintel harmless from any liability, cost or
expense arising in connection with the items referred to in
Sections 5(b) and (d) above.
10
<PAGE> 11
8. MEDIA PURCHASES
a. ARS' obligation to pay Quintel a three percent (3%) commission
on media purchases shall terminate as of the later of June 1,
1999 or the Closing, and such commissions shall be paid within
fifteen (15) days after the Closing.
b. Quintel agrees that neither ARS, nor PRN, nor any affiliate
thereof has any responsibility of any kind, nor any financial
obligation with respect to, Quintel production fees incurred
prior to the date hereof except for the following amounts
which will be paid at or prior to the Closing:
i. $30,000.00 for production costs for May 1999;
ii. the amount due to Quintel as of the Closing Date for
per-inquiry media costs not fully used with the media
outlets supplying such services (which amount is
approximately $82,000.00 as of the date hereof).
c. At or prior to the Closing, Quintel will pay the balance due,
if any, to the media outlets which supplied per-inquiry media
services to Quintel which have a balance due from Quintel.
d. Prior to the Closing, Quintel shall have completed an audit to
its satisfaction of all media credits due to Quintel arising
out of media purchased by Quintel Media for Quintel and ARS
and their respective Affiliates.
e. Effective upon the Closing, ARS will, if requested to do so by
Quintel (at its sole option) purchase media for Quintel
unrelated to "stand-alone" 900 Pay-Per-Call Psychic Services.
In consideration for such services, Quintel shall pay to ARS a
three percent (3%) commission on all national cable, half-hour
and local media purchases. Quintel shall not be obligated to
pay any commission on syndicated media purchased by ARS. The
provisions of this paragraph shall terminate, however, if
after January 17, 2001 (i) all or substantially all of
Quintel's assets or shares of stock are acquired by a third
party unrelated to either Quintel, ARS or their respective
Affiliates, or (ii) ARS ceases to conduct business and its
business is not continued by one of its Affiliates.
f. Notwithstanding anything to the contrary contained in this
Agreement, Quintel shall be entitled at its option to retain
up to fifty percent (50%) of the volume of national cable and
syndicated media advertising currently arranged by for Quintel
and ARS by Quintel Media. Upon the expiration of the current
contracts for such advertising, Quintel may at its option
renew up to fifty percent (50%) portion of such advertising in
its own name. All syndicated advertising not currently
contracted for in Quintel's name will be assumed by ARS, and
following the Closing, until January 17, 2001 Quintel will
have the right but not the obligation
11
<PAGE> 12
to be provided, on thirty (30) days prior notice, with up to
fifty percent (50%) of all such syndicated advertising so
assumed by ARS or arranged by ARS after the Closing; all such
syndicated advertising which as of January 17, 2001 Quintel
has elected to take may continue to be used by Quintel
thereafter.
i. Concurrently with the execution of this Agreement,
ARS will provide Quintel with the following
information, which it represents is true and correct
to the best of its knowledge, information and belief:
(1) a list of all local stations, national cable
networks, syndicators and other companies
for which Quintel Media has made media
arrangements for ARS, or with which ARS has
made such arrangements itself within the
last three (3) months;
(2) a list of all personal contacts (names and
telephone numbers) at each of the entities
referred to in subclause (1) above;
(3) a list of all media with which Quintel Media
has made "per inquiry" media arrangements;
(4) if possible, after using its best efforts to
do so, provide Quintel with the total net
amount spent with each of the entities
referred to in subclause (1) above, and the
total billable minutes generated in the
order of most to least profitable.
g. Following the Closing, ARS and its Affiliates will provide
Quintel upon request with access to all historical data in
Quintel Media's files (including data which is in written form
or embodied in computer databases or software), which ARS
shall not dispose of without ten (10) days prior written
notice to Quintel.
9. PRODUCTION OF COMMERCIALS
a. Effective upon the Closing, ARS will, if requested to do so by
Quintel (at its sole option) produce commercials for Quintel
or its Affiliates which are unrelated to "stand-alone" 900
Pay-Per-Call Psychic Services, at ARS' net cost for such
production. "Net cost" shall mean direct, out-of-pocket
expenses incurred by ARS for such production, not including
overhead or general administrative expenses. The provisions of
this paragraph shall terminate, however, if after January 17,
2001 (i) all or substantially all of Quintel's assets or
shares of stock are acquired by a third party unrelated to
either Quintel, ARS or their respective Affiliates, or (II)
ARS ceases to conduct business and its business is not
continued by one of its Affiliates.
b. Quintel shall give ARS not less than four (4) weeks notice of
Quintel's request for ARS's production of any commercials for
Quintel, and ARS will provide Quintel with a script and budget
for approval by Quintel within one (1) week after
12
<PAGE> 13
receipt of notice of request for production. ARS agrees to use
its best efforts to complete production of such commercials
within three (3) weeks of budget and script approval by
Quintel.
10. UTILIZATION OF QUINTEL PERSONNEL
a. Quintel agrees to make Ollie Ayres reasonably available to ARS
to train a new MIS Director for ARS for a reasonable period
following the Closing. The selection, performance and
qualifications of such new MIS director shall be the sole
responsibility of ARS.
b. Quintel agrees to train Jeff Breidbord in all of Quintel's
direct mail and marketing techniques related to 900
Pay-Per-Call Psychic Services for a reasonable period
following the Closing.
11. DIRECT MAIL AND TELEMARKETING BUSINESS
a. Following the Closing, Quintel shall deliver to ARS samples of
all Quintel direct mail marketing materials, including
scripts, and all mailing and transaction records for the
period from March 1, 1999 through May 31, 1999 related to
Quintel's "stand-alone" 900 Pay-Per-Call Psychic Services.
b. Following the Closing, Quintel shall provide ARS personnel
with access to all outside marketing lists and all cost
schedules relating to Quintel's "stand-alone" 900 Pay-Per-Call
Psychic Services.
c. Following the Closing, Quintel will introduce designated ARS
personnel to all Quintel direct mail and telemarketing
vendors.
12. URL TAGS
a. During the period from the Closing and ending January 17,
2001, ARS will insert into all 28.5 minute infomercials two
(2) minutes of commercials (or if the standard format of
infomercials changes to be less or greater than 28.5 minutes,
then at the rate of one (1) minute for every 14.25 minute
segment of infomercial), for designated Quintel or its
Affiliates' websites or any other non-direct response offers
designated by Quintel, at no cost to Quintel.
b. Following the Closing, Quintel shall have the right, at any
time, to purchase from ARS website tags on all 30 and 60
second video commercials produced by ARS
13
<PAGE> 14
or its Affiliates for a purchase price of $30,000 per month.
Quintel may purchase such tags on a month-to-month basis.
13. TERMINATION OF PRIOR AGREEMENTS
a. In consideration of the mutual covenants and agreements
contained herein, the parties hereby agree that each of the
following previously executed agreements shall terminate in
their entirety, and be of no further force and effect, as of
the Closing, except as otherwise provided in Section 2 of this
Agreement:
i. Letter of Intent among Quintel, PRN and Calling Card
Co., Inc. ("CCC"), dated January 17, 1996;
ii. Amended and Restated Psychic Readers Network Live
Operator Service Agreement, dated September 10, 1996
("Live Operator Service Agreement") and the Rider to
the Live Operator Service Agreement; and
iii. Employment Agreement by and between CCC and Steven
Feder, dated September 10, 1996;
iv. Agreements regarding the "${Confidential Portion
Omitted and Filed Separately with the Commission}
guaranteed payout telephone numbers dated December 7,
1998, March 11, 1999 and March 24, 1999 (the
"Guaranteed Payout Agreements").
b. Following the Closing, neither ARS nor Feder shall represent
in any way, directly or indirectly, that he or it is an agent,
employee, consultant to or otherwise a representative of
Quintel or its Affiliates, except in connection with acting as
an agent for media purchases or the production of commercials
in accordance with Sections 6 and 7 of this Agreement.
14. CONDITIONS TO CLOSING.
a. It shall be a condition to Quintel's obligations under this
Agreement that each of the following conditions shall have
first been satisfied, any one or more of which may be waived
by Quintel in its discretion:
(1) Quintel's Board of Directors shall have
approved the consummation of this Agreement;
(2) no action or proceedings shall have been
instituted or, to the knowledge, information
and belief of Quintel, shall have been
threatened before a court or other
government body or by any
14
<PAGE> 15
public authority to restrain or prohibit any
of the transactions contemplated by this
Agreement or the Other Agreements, and an
authorized officer of Quintel shall have
delivered to ARS a certificate, dated the
Closing Date, to such effect;
(3) the representations made by ARS in this
Agreement shall be true and correct in all
material respects as of the date hereof and
the Closing Date, and ARS shall deliver to
Quintel at the Closing a certificate, dated
the Closing Date, to such effect.
15. MISCELLANEOUS.
a. ARS may not assign its rights and obligations under this
Agreement without the consent of Quintel.
b. ARS represents and warrants to Quintel that ARS is a
corporation, duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation,
and has the corporate power and authority to execute and
deliver this Agreement, to consummate the transactions hereby
contemplated, and to take all other actions required to be
taken by it pursuant to the provisions hereof, and is not
subject to, or a party to, any contract, agreement,
instrument, order, judgment or decree, or any other
restriction of any kind or character, which would prevent its
entry into the performance under this Agreement, and no
consent of or other action by or notice to any third party is
required in connection with ARS' entering into and performing
under this Agreement.
c. Any notice or other communications required or permitted
hereunder shall be in writing and shall be deemed effective
(a) upon personal delivery, if delivered by hand and followed
by notice by mail or facsimile transmission; (b) one day after
the date of delivery by Federal Express or other nationally
recognized courier service, if delivered by priority overnight
delivery between any two points within the United States; or
(c) five days after deposit in the mails, if mailed by
certified or registered mail (return receipt requested)
between any two points within the United States, and in each
case of mailing, postage prepaid, addressed to a party at its
address first set forth above, or such other address as shall
be furnished in writing by like notice by any such party.
d. No waiver by a party of any breach of this Agreement by the
other shall be deemed to be a waiver of any preceding or
subsequent breach.
e. This Agreement contains the entire understanding of the
parties hereto with respect to the subject matter contained
herein.
15
<PAGE> 16
f. Each party hereto intends that this Agreement shall not
benefit or create any right or cause of action in or on behalf
of any person other than the parties hereto and the other
persons executing this Agreement.
g. This Agreement may not be changed orally, but only by an
agreement in writing signed by the party or parties to be
charged thereby.
h. 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 13(c)
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.
i. This agreement does not constitute a joint venture or
partnership by the parties, and each party is entering into
this Agreement as a principal and not as an agent of the
other.
j. This Agreement is intended to be performed in accordance with,
and only to the extent permitted by, all applicable laws,
ordinances, rules and regulations. In case any one or more of
the provisions contained in this Agreement or any application
thereof shall be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the
remaining provisions contained herein and any other
application thereof shall not in any way be affected or
impaired thereby, and the extent of such invalidity or
unenforceability shall not be deemed to destroy the basis of
the bargain among the parties as expressed herein, and the
remainder of this Agreement and the application of such
provision to other Persons or circumstances shall not be
affected thereby, but rather shall be enforced to the greatest
extent permitted by law.
k. The section headings appearing in this Agreement are for
convenience of reference only and are not intended, to any
extent or for any purpose, to limit or define the text of any
section.
16
<PAGE> 17
l. This Agreement may be executed in several counterparts and all
counterparts so executed shall constitute one agreement
binding on all the parties hereto, notwithstanding that all
the parties are not signatory to the original or the same
counterpart.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
QUINTEL COMMUNICATIONS, INC.
By: /s/ Jeffrey L. Schwartz
----------------------------
Jeffrey L. Schwartz
ACCESS RESOURCE SERVICES, INC.
By: /s/ Steven L. Feder
----------------------------
Steven L. Feder
Steven L. Feder executes this Agreement in his
individual capacity with respect to the
following sections of the foregoing agreement:
Sections 2(f), 5(a)(i), 5(b)(ii), 11(a)(iii), 11(b):
/s/ Steven L. Feder
- -------------------------------
Steven L. Feder, individually
17
<PAGE> 18
SCHEDULE A
TAG TELEPHONE NUMBERS
{Confidential Portion Omitted and Filed Separately with the Commission}
18
<PAGE> 19
SCHEDULE B
GUARANTEED PAYOUT 900 TELEPHONE NUMBERS
AS TO WHICH ${Confidential Portion Omitted and
Filed Separately with the Commission}
PER MINUTE WILL BE PAID TO QUINTEL
PURSUANT TO SECTION 1(e)(i)(2)
{Confidential Portion Omitted and Filed Separately with the Commission}
19
<PAGE> 20
SCHEDULE C
QUINTEL MEDIA EMPLOYEES
Media Buying Department
Scott Routson
Darice Lang
Robert Hulson
Arron Holander
Jeffrey Bowman
Lisa Sheller
Mindy Karp
Sheri True
Marcelle Haccoun
Ludwig Ortiz
Michael Held
Rohan Wallace
Paul Blake
Diane Jones
Mitchael Autrey
David Dehaen
Shawna Hitchman
Accounting/Bookkeeping Department
Sherri Kaminsky
Shellete Miller Reception
20
<PAGE> 21
SCHEDULE D
QUINTEL MEDIA EXPENSES
<TABLE>
<CAPTION>
===============================================================================================
Contract in
Name of NL, Estimated
LC Prior to Monthly
Vendor Close Description Outlay
===============================================================================================
<S> <C> <C> <C>
Authentic Business Systems yes Operating lease on office copier $ 250.00
- -----------------------------------------------------------------------------------------------
AT&T Wireless yes Production Department cellular telephone $ 160.00
- -----------------------------------------------------------------------------------------------
MobileComm yes Production Department beeper $ 125.00
- -----------------------------------------------------------------------------------------------
Glenns Greenery yes Office plant maintenance $ 446.00
- -----------------------------------------------------------------------------------------------
Zephyrhills yes Water cooler $ 125.00
- -----------------------------------------------------------------------------------------------
IBM yes Service and support contract $ 75.00
- -----------------------------------------------------------------------------------------------
Sunrise Storage yes Office record archives $ 182.00
- -----------------------------------------------------------------------------------------------
Elona yes Office cleaning $ 340.00
- -----------------------------------------------------------------------------------------------
Newcourt Leasing yes Office copier $ 696.00
===============================================================================================
</TABLE>
All information on the above list of expenses was supplied by ARS and there is
no representation by Quintel that it is accurate or complete.
21
<PAGE> 1
EXHIBIT 2.1.2
1
<PAGE> 2
AMENDMENT NO. 1 TO AGREEMENT REGARDING 900 PAY-PER-CALL
PSYCHIC SERVICES
AMENDMENT NO. 1 dated May 27, 1999 amending an Agreement dated May 27,
1999 by and between QUINTEL COMMUNICATIONS, INC., a corporation organized under
the laws of Delaware with offices at One Blue Hill Plaza, Fifth Floor, Pearl
River, New York 10965 (hereafter referred to as "QUINTEL"), and ACCESS RESOURCE
SERVICES, INC., a Florida corporation with offices at 2455 E. Sunrise Boulevard,
Fort Lauderdale, Florida 33304 (hereafter referred to as "ARS").
RECITALS:
A. ARS and Quintel entered into an agreement dated May 27, 1999 entitled
"Agreement Regarding 900 Pay-per-call Psychic Services" (the "900
Agreement") which they have agreed to amend as set forth herein.
NOW, THEREFORE, for good and valuable consideration, receipt of which
is acknowledged by the parties, it is hereby agreed as follows:
1. The payment obligations referred to in the following sections of the
900 Agreement are referred to as the "Payment Obligations":
i. The Club Royalties referred to in Section 1(h);
ii. The royalties referred to in Sections 2(a, 2(b) and
2(c);
iii. the balance of the Purchase Price due under Section
5(c)(i).
ARS hereby grants Quintel a security interest in its accounts
receivable (the "Collateral"), and any proceeds thereof, as security
for the Payment Obligations, pursuant to the provisions of the Uniform
Commercial Code of Florida (the "UCC"), which security interest shall
be further evidenced by a security agreement between ARS and Quintel
executed concurrently herewith, and ARS agrees to execute and file at
its expense all financing statements necessary to give Quintel a
perfected security interest subordinate to no other security interest
other than a security interest in the Collateral granted by ARS to West
Interactive Services, Inc. ("West"). The Collateral shall constitute
security for the payment as and when due of the Payment Obligations.
ARS represents and warrants to Quintel that it has not granted a
security interest in any of its assets to any person or entity other
than West.
2. Except as amended by this Amendment No. 1, the 900 Agreement remains in
full force and effect.
2
<PAGE> 3
3. This Amendment No. 1 may be executed in several counterparts and all
counterparts so executed shall constitute one agreement binding on all
the parties hereto, notwithstanding that all the parties are not
signatory to the original or the same counterpart.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
QUINTEL COMMUNICATIONS, INC.
By: /s/ Jeffrey L. Schwartz
-------------------------------
Jeffrey L. Schwartz
ACCESS RESOURCE SERVICES, INC.
By: /s/ Steven L. Feder
-------------------------------
Steven L. Feder
Approved:
/s/ Steven L. Feder
-------------------------------
Steven L. Feder
3
<PAGE> 1
EXHIBIT 2.2.1
- 1 -
<PAGE> 2
AMENDMENT NO. 1 TO NON-COMPETITION AND RIGHT OF FIRST REFUSAL
AGREEMENT, dated September 10, 1996 by and between QUINTEL COMMUNICATIONS,
INC., a Delaware corporation ("Quintel") and STEVEN L. FEDER ("Obligor").
R E C I T A L S:
A. Quintel 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 Quintel in connection with the acquisition by Quintel's
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").
B. Quintel 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 Quintel's 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 Quintel's 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 Quintel, directly or indirectly, engage in any business activity competitive
with the business conducted by Quintel or any of its subsidiaries or affiliates,
including New Lauderdale, during the Restrictive Period (Quintel and its
subsidiaries and affiliates are collectively referred to as the "Company"). The
term "affiliate" shall mean any entity or venture in which Quintel 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 -
<PAGE> 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, Quintel will be paid by ARS or PRN, as the case may be, a
royalty of 20% of the gross billings to club members during the period
commencing on the Closing Date and ending January 17, 2001. Such royalties to
Quintel 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 Quintel.
d. As used herein, the term "customer" shall mean (i) anyone who is a
customer of Quintel at the time of the alleged prohibited conduct; (ii) anyone
who was a customer of Quintel at any time during the two year period immediately
preceding the alleged prohibited conduct; (iii) any prospective customers to
whom Quintel had made a presentation (or similar offering of services) within a
period of 360 days immediately preceding the alleged
- 3 -
<PAGE> 4
prohibited conduct; and (iv) any customer for which Quintel 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 Quintel 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 Quintel. 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 Quintel.
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 Quintel, and are given as an integral part of certain transactions
of even date herewith between Quintel 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 Quintel
Communications, Inc., One Blue Hill Plaza, Pearl River, NY 10956, attn: Jeffrey
Schwartz (fax: 914-620-1885), and
- 4 -
<PAGE> 5
if to the Obligor, at 2455 East Sunrise Boulevard, Ft. Lauderdale, Florida (fax:
954-563-5464), 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 Quintel until it has been approved by Quintel's Board of Directors,
and upon and after such Board approval by Quintel's execution and delivery of an
instrument to Obligor certifying that such approval has been obtained and that
Quintel 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 Quintel and the Obligor.
- 5 -
<PAGE> 6
11. This Agreement, as amended by this Amendment No. 1, constitutes the
complete and exclusive statement of the agreement between Quintel 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
Quintel and the Obligor with respect to the subject matter hereof.
Dated: May , 1999
QUINTEL COMMUNICATIONS, INC.
By: /s/ Jeffrey L. Schwartz
--------------------------------------
Name: Jeffrey L. Schwartz
Title: Chairman and CEO
OBLIGOR:
/s/ Steven L. Feder
- ------------------------------------------
Steven L. Feder
The undersigned agree to the provisions of Section 1 of the within Agreement:
PSYCHIC READERS NETWORK, INC.
By: /s/ Steven L. Feder
--------------------------------------
Name: Steven L. Feder
Title: CEO
ACCESS RESOURCE SERVICES, INC.
By: /s/ Steven Feder
--------------------------------------
Name: Steven Feder
Title: CEO
- 6 -
<PAGE> 1
EXHIBIT 2.2.2
- 1 -
<PAGE> 2
AMENDMENT NO. 1 TO NON-COMPETITION AND RIGHT OF FIRST REFUSAL AGREEMENT, dated
September 10, 1996 by and between QUINTEL COMMUNICATIONS, INC., a Delaware
corporation ("Quintel") and PETER STOLZ ("Obligor").
R E C I T A L S:
A. Quintel 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 Quintel in connection with the acquisition by Quintel's
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").
B. Quintel 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 Quintel's 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 Quintel's 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 Quintel, directly or indirectly, engage in any business activity competitive
with the business conducted by Quintel or any of its subsidiaries or affiliates,
including New Lauderdale, during the Restrictive Period (Quintel and its
subsidiaries and affiliates are collectively referred to as the "Company"). The
term "affiliate" shall mean any entity or venture in which Quintel 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
- 2 -
<PAGE> 3
marketing and sale of those products and services on the internet with which the
Company is 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, Quintel will be paid by ARS or PRN, as the case may be, a
royalty of 20% of the gross billings to club members during the period
commencing on the Closing Date and ending January 17, 2001. Such royalties to
Quintel 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 Quintel.
d. As used herein, the term "customer" shall mean (i) anyone
who is a customer of Quintel at the time of the alleged prohibited conduct; (ii)
anyone who was a customer of Quintel at any time during the two year period
immediately preceding the alleged prohibited conduct; (iii) any prospective
customers to whom Quintel had made a presentation
- 3 -
<PAGE> 4
(or similar offering of services) within a period of 360 days immediately
preceding the alleged prohibited conduct; and (iv) any customer for which
Quintel 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 Quintel 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 Quintel. 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 Quintel.
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 Quintel, and are given as an integral part of certain transactions
of even date herewith between Quintel 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
- 4 -
<PAGE> 5
same day by postage-paid first-class mail, if to the Company, at Quintel
Communications, Inc., One Blue Hill Plaza, Pearl River, NY 10956, attn: Jeffrey
Schwartz (fax: 914-620-1885), and 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 Quintel until it has been approved by Quintel's Board of Directors,
and upon and after such Board approval by Quintel's execution and delivery of an
instrument to Obligor certifying that such approval has been obtained and that
Quintel 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.
- 5 -
<PAGE> 6
10. This Agreement may not be changed orally, but only by an agreement
in writing signed by Quintel and the Obligor.
11. This Agreement, as amended by this Amendment No. 1, constitutes the
complete and exclusive statement of the agreement between Quintel 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
Quintel and the Obligor with respect to the subject matter hereof.
Dated: May --------- , 1999
QUINTEL COMMUNICATIONS, INC.
By: /s/ Jeffrey L. Schwartz
--------------------------------------
Name: Jeffrey L. Schwartz
Title: Chairman and CEO
OBLIGOR:
/s/ Peter Stolz
- -------------------------------------------
Peter Stolz
The undersigned agree to the provisions of Section 1 of the within Agreement:
PSYCHIC READERS NETWORK, INC.
By: /s/ Steven L. Feder
--------------------------------------
Name: Steven L. Feder
Title: CEO
ACCESS RESOURCE SERVICES, INC.
By: /s/ Peter Stolz
--------------------------------------
Name: Peter Stolz
Title: President
- 6 -
<PAGE> 1
EXHIBIT 2.2.3
- 1 -
<PAGE> 2
AMENDMENT NO. 1 TO NON-COMPETITION AND RIGHT OF FIRST REFUSAL
AGREEMENT, dated September 10, 1996 by and between QUINTEL COMMUNICATIONS,
INC., a Delaware corporation ("Quintel") and THOMAS H. LINDSEY ("Obligor").
R E C I T A L S:
A. Quintel 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 Quintel in connection with the acquisition by Quintel's
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").
B. Quintel 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 Quintel's 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 Quintel's 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 Quintel, directly or indirectly, engage in any business activity competitive
with the business conducted by Quintel or any of its subsidiaries or affiliates,
including New Lauderdale, during the Restrictive Period (Quintel and its
subsidiaries and affiliates are collectively referred to as the "Company"). The
term "affiliate" shall mean any entity or venture in which Quintel 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 -
<PAGE> 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, Quintel will be paid by ARS or PRN, as the case may be, a
royalty of 20% of the gross billings to club members during the period
commencing on the Closing Date and ending January 17, 2001. Such royalties to
Quintel 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 Quintel.
d. As used herein, the term "customer" shall mean (i) anyone
who is a customer of Quintel at the time of the alleged prohibited conduct; (ii)
anyone who was a customer of Quintel at any time during the two year period
immediately preceding the alleged prohibited conduct; (iii) any prospective
customers to whom Quintel had made a presentation (or similar offering of
services) within a period of 360 days immediately preceding the alleged
- 3 -
<PAGE> 4
prohibited conduct; and (iv) any customer for which Quintel 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 Quintel 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 Quintel. 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 Quintel.
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 Quintel, and are given as an integral part of certain transactions
of even date herewith between Quintel 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 Quintel
Communications, Inc., One Blue Hill Plaza, Pearl River, NY 10956, attn: Jeffrey
Schwartz (fax: 914-620-1885), and
- 4 -
<PAGE> 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 Quintel until it has been approved by Quintel's Board of Directors,
and upon and after such Board approval by Quintel's execution and delivery of an
instrument to Obligor certifying that such approval has been obtained and that
Quintel 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 Quintel and the Obligor.
- 5 -
<PAGE> 6
11. This Agreement, as amended by this Amendment No. 1, constitutes the
complete and exclusive statement of the agreement between Quintel 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
Quintel and the Obligor with respect to the subject matter hereof.
Dated: May , 1999
QUINTEL COMMUNICATIONS, INC.
By: /s/ Jeffrey L. Schwartz
--------------------------------------
Name: Jeffrey L. Schwartz
Title: Chairman and CEO
OBLIGOR:
/s/ Thomas H. Lindsey
- ------------------------------------------
Thomas H. Lindsey
The undersigned agree to the provisions of Section 1 of the within Agreement:
PSYCHIC READERS NETWORK, INC.
By: /s/ Steven L. Feder
--------------------------------------
Name: Steven L. Feder
Title: CEO
ACCESS RESOURCE SERVICES, INC.
By: /s/ Steven L. Feder
--------------------------------------
Name: Steven L. Feder
Title: CEO
- 6 -
<PAGE> 1
EXHIBIT 2.3.1
1
<PAGE> 2
REDEMPTION AGREEMENT
QUINTEL COMMUNICATIONS, INC., a Delaware corporation with its principal
offices at One Blue Hill Plaza, Fifth Floor, P.O. Box 1665, Pearl River, NY
10965 (the "COMPANY"), and DEFER LIMITED PARTNERSHIP, a Nevada limited
partnership with its address at P.O. Box 50401, Henderson, Nevada 89016 (the
"SELLER"), and STEVEN L. FEDER, an individual with his address at 2455 E.
Sunrise Boulevard, Fort Lauderdale, Florida 33404 ( "FEDER"), hereby agree as
follows:
1. SALE AND PURCHASE OF SHARES.
a. Subject to the approval by the Company's Board of Directors of
this Agreement, the Company agrees to purchase from the
Seller, on the terms and conditions set forth in this
Redemption Agreement (the "AGREEMENT"), 700,000 shares (the
"SHARES") of the Company's common stock, par value $.001 per
share, (the "COMMON STOCK") held of record by the Seller. It
is expressly acknowledged by the Seller and Feder 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.
b. On the Closing Date (defined below), the Seller shall deliver
the Shares to the Company duly endorsed or with stock powers
duly executed in form for transfer with all applicable tax or
revenue stamps affixed or paid for, in consideration of, and
against payment by, the Company of Nine Hundred Forty-Five
Thousand ($945,000) Dollars, by wire transfer to an account
designated by the Seller.
c. The closing of the sale and purchase of the Shares shall take
place on the date (the "CLOSING DATE") which is five (5)
business days after the satisfaction of the conditions set
forth in Section 4 below, at such time and place as shall be
mutually agreed.
2
<PAGE> 3
2. CERTAIN REPRESENTATIONS OF THE SELLER.
The Seller and Feder hereby jointly and severally represents and
warrants to the Company, its officers and directors, the following:
a. The Seller is the sole beneficial owner of the Shares, free
and clear of all liens, pledges, liabilities, claims and
encumbrances (except for the obligations of Seller under the
lock-up agreement referred to in Section 3 of this Agreement).
b. The Seller and Feder have each read carefully and understand
this Agreement and has consulted their own attorneys,
accountants and tax and financial advisors with respect to the
transaction contemplated hereby.
c. The Company has made available to the Seller, Feder and their
counsel, or their designated representatives, during the
course of this transaction and prior to the sale of any of the
securities referred to herein, the opportunity to ask
questions of and receive answers from the officers and
directors of the Company concerning the terms and conditions
of the sale or otherwise relating to the financial data and
business of the Company, to the extent that the Company or its
officers and directors possess such information or can
acquire it without unreasonable effort or expense. Feder also
acknowledges that he was a director of the Company from
September 10, 1996 until January 15, 1999 and had access to
extensive information concerning the Company and its business,
operations, financial condition, plans, prospects and affairs.
d. Seller and Feder acknowledge that they are each aware that the
Company is seeking to further develop its current lines of
business involving telecommunications sales and services,
including internet telephony, and to expand into new lines of
business, including but not limited to the marketing and sale
on the internet of telecommunications and other products and
services (including "on-line" securities trading and
investment banking). Seller and Feder acknowledge that this
Agreement is entered into by the Company without the Company
having made any representation or warranty, express or
implied, with respect to any matter or thing whatsoever.
Seller and Feder each hereby waives any claim and releases the
Company and its officers, directors, employees and agents from
any claim that it or he or any person controlled by,
controlling or under common control with either of them (an
"Affiliate") has, may have or could have against the Company
or any of its officers, directors, employees or agents
regarding the amount or nature of the consideration paid by
the Company for the Shares and any other consideration
delivered by the Company to Seller or Feder or any of their
Affiliates in connection with this Agreement or any other
agreements, including, but not limited to, any claim based
upon or arising out of any allegation that the Company failed
to inform Seller or Feder about, failed to provide Seller or
Feder with accurate or complete information regarding, or
3
<PAGE> 4
provided Seller or Feder with misleading information
concerning the Company's business and affairs, financial
condition, prospects, plans, work in process, opportunities or
any other matter or thing concerning the Company.
e. The Seller and Feder each has such knowledge and experience in
financial and business matters that each is capable of
evaluating the merits and risks of the sale of the Shares.
3. TERMINATION OF LOCK-UP AGREEMENT.
Effective with the Closing, the Company agrees that the provisions of
Sections 3.2, 3.3 and 3.4 of that certain Agreement among the Company, Calling
Card Co., Inc. and Psychic Readers Network, Inc., dated as of January 17, 1996,
providing, among other things, for Quintel's acquisition from Psychic Readers
Network, Inc. of its interest in New Lauderdale, L.C., shall be deemed
terminated in their entirety and shall have no further force and effect.
4. CONDITIONS TO CLOSING.
a. It shall be a condition to the Company's obligation to close
the purchase of the Shares from the Seller that each of the
following conditions shall have first been satisfied, any one
or more of which may be waived by the Company in its
discretion:
i. the Company's Board of Directors shall have approved
the purchase of the Shares and this Agreement;
ii. no action or proceedings shall have been instituted
or, to the knowledge, information and belief of the
Company, shall have been threatened before a court or
other government body or by any public authority to
restrain or prohibit any of the transactions
contemplated by this Agreement and an authorized
officer of the Company shall have delivered to the
Seller a certificate, dated the Closing Date, to such
effect;
iii. the representations made by the Seller in this
Agreement shall be true and correct in all material
respects as of the date hereof and the Closing Date,
and Seller shall deliver to the Company at the
Closing a certificate, dated the Closing Date, to
such effect.
b. It shall be a condition to the Seller's obligation to close
the sale of the Shares to the Company that each of the
following conditions shall have first been satisfied, any one
or more of which may be waived by the Seller in his
discretion:
i. the Company's Board of Directors shall have approved
the purchase of the Shares and the consummation of
this Agreement;
4
<PAGE> 5
ii. no action or proceedings shall have been instituted
or, to the knowledge, information and belief of
Seller, shall have been threatened before a court or
other government body or by any public authority to
restrain or prohibit any of the transactions
contemplated by this Agreement, and the Seller shall
have delivered to the Company at the closing a
certificate, dated the Closing Date, to such effect.
5. NO ASSIGNMENT.
This Agreement is not transferable or assignable by the Seller.
6. GENERAL.
a. This Agreement shall be binding upon the Seller and the
Company and their respective representatives, successors, and
permitted assigns.
b. 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(e)
below, 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.
c. All covenants, agreements, representations and warranties made
herein or otherwise made in writing by any party pursuant
hereto shall survive the execution and delivery of this
Agreement and the consummation of the transactions
contemplated hereby.
d. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
e. 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
5
<PAGE> 6
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
Quintel Communications, Inc., One Blue Hill Plaza, Pearl
River, NY 10956, attn: Jeffrey Schwartz (fax: 914-620-1885),
and if to the Seller, c/o Steven L. Feder, 2455 East Sunrise
Boulevard, Ft. Lauderdale, Florida (fax: 954-563-5464), or at
such other address as each such party furnishes by notice
given in accordance with this Section 6(e).
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the day of May, 1999.
QUINTEL COMMUNICATIONS, INC.
By: /s/ Jeffrey L. Schwartz
--------------------------------------
Name: Jeffrey L. Schwartz
Title: Chairman and CEO
DEFER LIMITED PARTNERSHIP
By: DEFER, INC. its general partner
By: /s/ Steven L. Feder
--------------------------------------
Name: Steven L. Feder
Title: President
/s/ Steven L. Feder
- ------------------------------------------
Steven L. Feder, individually
6
<PAGE> 1
EXHIBIT 2.3.2
<PAGE> 2
REDEMPTION AGREEMENT
QUINTEL COMMUNICATIONS, INC., a Delaware corporation with its principal
offices at One Blue Hill Plaza, Fifth Floor, P.O. Box 1665, Pearl River, NY
10965 (the "COMPANY"), and P. STOLZ FAMILY PARTNERSHIP, L.P., a Colorado limited
partnership (the "SELLER"), and PETER STOLZ, an individual, both located at
{Confidential Portion Omitted and Filed Separately with the Commission}
("STOLZ"), hereby agree as follows:
1. SALE AND PURCHASE OF SHARES.
a. Subject to the approval by the Company's Board of Directors of
this Agreement, the Company agrees to purchase from the
Seller, on the terms and conditions set forth in this
Redemption Agreement (the "AGREEMENT"), 300,000 shares (the
"SHARES") of the Company's common stock, par value $.001 per
share, (the "COMMON STOCK") held of record by the Seller. It
is expressly acknowledged by the Seller and Stolz 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.
b. On the Closing Date (defined below), the Seller shall deliver
the Shares to the Company duly endorsed or with stock powers
duly executed in form for transfer with all applicable tax or
revenue stamps affixed or paid for, in consideration of, and
against payment by, the Company of Four Hundred-Five Thousand
($405,000) Dollars, by wire transfer to an account designated
by the Seller.
c. The closing of the sale and purchase of the Shares shall take
place on the date (the "CLOSING DATE") which is five (5)
business days after the satisfaction of the conditions set
forth in Section 4 below, at such time and place as shall be
mutually agreed.
2
<PAGE> 3
2. CERTAIN REPRESENTATIONS OF THE SELLER.
The Seller and Stolz hereby jointly and severally represents and
warrants to the Company, its officers and directors, the following:
a. The Seller is the sole beneficial owner of the Shares, free
and clear of all liens, pledges, liabilities, claims and
encumbrances (except for the obligations of Seller under the
lock-up agreement referred to in Section 3 of this Agreement).
b. The Seller and Stolz have each read carefully and understand
this Agreement and has consulted their own attorneys,
accountants and tax and financial advisors with respect to the
transaction contemplated hereby.
c. The Company has made available to the Seller, Stolz and their
counsel, or their designated representatives, during the
course of this transaction and prior to the sale of any of the
securities referred to herein, the opportunity to ask
questions of and receive answers from the officers and
directors of the Company concerning the terms and conditions
of the sale or otherwise relating to the financial data and
business of the Company, to the extent that the Company or its
officers and directors possess such information or can
acquire it without unreasonable effort or expense.
d. Seller and Stolz acknowledge that they are each aware that the
Company is seeking to further develop its current lines of
business involving telecommunications sales and services,
including internet telephony, and to expand into new lines of
business, including but not limited to the marketing and sale
on the internet of telecommunications and other products and
services (including "on-line" securities trading and
investment banking). Seller and Stolz acknowledge that this
Agreement is entered into by the Company without the Company
having made any representation or warranty, express or
implied, with respect to any matter or thing whatsoever.
Seller and Stolz each hereby waives any claim and releases the
Company and its officers, directors, employees and agents from
any claim that it or he or any person controlled by,
controlling or under common control with either of them (an
"Affiliate") has, may have or could have against the Company
or any of its officers, directors, employees or agents
regarding the amount or nature of the consideration paid by
the Company for the Shares and any other consideration
delivered by the Company to Seller or Stolz or any of their
Affiliates in connection with this Agreement or any other
agreements, including, but not limited to, any claim based
upon or arising out of any allegation that the Company failed
to inform Seller or Stolz about, failed to provide Seller or
Stolz with accurate or complete information regarding, or
provided Seller or Stolz with misleading information
concerning the Company's business and affairs, financial
condition, prospects, plans, work in process, opportunities or
any other matter or thing concerning the Company.
3
<PAGE> 4
e. The Seller and Stolz each has such knowledge and experience in
financial and business matters that each is capable of
evaluating the merits and risks of the sale of the Shares.
3. TERMINATION OF LOCK-UP AGREEMENT.
Effective with the Closing, the Company agrees that the provisions of
Sections 3.2, 3.3 and 3.4 of that certain Agreement among the Company, Calling
Card Co., Inc. and Psychic Readers Network, Inc., dated as of January 17, 1996,
providing, among other things, for Quintel's acquisition from Psychic Readers
Network, Inc. of its interest in New Lauderdale, L.C., shall be deemed
terminated in their entirety and shall have no further force and effect.
4. CONDITIONS TO CLOSING.
a. It shall be a condition to the Company's obligation to close
the purchase of the Shares from the Seller that each of the
following conditions shall have first been satisfied, any one
or more of which may be waived by the Company in its
discretion:
i. the Company's Board of Directors shall have approved
the purchase of the Shares and this Agreement;
ii. no action or proceedings shall have been instituted
or, to the knowledge, information and belief of the
Company, shall have been threatened before a court or
other government body or by any public authority to
restrain or prohibit any of the transactions
contemplated by this Agreement and an authorized
officer of the Company shall have delivered to the
Seller a certificate, dated the Closing Date, to such
effect;
iii. the representations made by the Seller in this
Agreement shall be true and correct in all material
respects as of the date hereof and the Closing Date,
and Seller shall deliver to the Company at the
Closing a certificate, dated the Closing Date, to
such effect.
b. It shall be a condition to the Seller's obligation to close
the sale of the Shares to the Company that each of the
following conditions shall have first been satisfied, any one
or more of which may be waived by the Seller in his
discretion:
i. the Company's Board of Directors shall have approved
the purchase of the Shares and the consummation of
this Agreement;
ii. no action or proceedings shall have been instituted
or, to the knowledge, information and belief of
Seller, shall have been threatened before a court or
other government body or by any public authority to
restrain or
4
<PAGE> 5
prohibit any of the transactions contemplated by this
Agreement, and the Seller shall have delivered to the
Company at the closing a certificate, dated the
Closing Date, to such effect.
5. NO ASSIGNMENT.
This Agreement is not transferable or assignable by the Seller.
6. GENERAL.
a. This Agreement shall be binding upon the Seller and the
Company and their respective representatives, successors, and
permitted assigns.
b. 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(e)
below, 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.
c. All covenants, agreements, representations and warranties made
herein or otherwise made in writing by any party pursuant
hereto shall survive the execution and delivery of this
Agreement and the consummation of the transactions
contemplated hereby.
d. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
e. 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-
5
<PAGE> 6
paid first-class mail, if to the Company, at Quintel
Communications, Inc., One Blue Hill Plaza, Pearl River, NY
10956, attn: Jeffrey Schwartz (fax: 914-620- 1885), and if to
the Seller or Peter Stolz, 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(e).
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the day of May, 1999.
QUINTEL COMMUNICATIONS, INC.
By: /s/ Jeffrey L. Schwartz
----------------------------------------
Name: Jeffrey L. Schwartz
Title: Chairman and CEO
P. STOLZ FAMILY PARTNERSHIP L.P.
By: /s/ Peter Stolz
----------------------------------------
Peter Stolz, General Partner
/s/ Peter Stolz
- --------------------------------------------
Peter Stolz, individually
6
<PAGE> 1
EXHIBIT 2.3.3
<PAGE> 2
REDEMPTION AGREEMENT
QUINTEL COMMUNICATIONS, INC., a Delaware corporation with its principal
offices at One Blue Hill Plaza, Fifth Floor, P.O. Box 1665, Pearl River, NY
10965 (the "COMPANY"), and MASLIN LIMITED PARTNERSHIP, a Nevada limited
partnership with its address at P.O. Box 50401, Henderson, Nevada 89016 (the
"SELLER"), and THOMAS H. LINDSEY, an individual with his address at
{Confidential Portion Omitted and Filed Separately with the Commission}
("LINDSEY"), hereby agree as follows:
1. SALE AND PURCHASE OF SHARES.
a. Subject to the approval by the Company's Board of Directors of
this Agreement, the Company agrees to purchase from the
Seller, on the terms and conditions set forth in this
Redemption Agreement (the "AGREEMENT"), 300,000 shares (the
"SHARES") of the Company's common stock, par value $.001 per
share, (the "COMMON STOCK") held of record by the Seller. It
is expressly acknowledged by the Seller and Lindsey 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.
b. On the Closing Date (defined below), the Seller shall deliver
the Shares to the Company duly endorsed or with stock powers
duly executed in form for transfer with all applicable tax or
revenue stamps affixed or paid for, in consideration of, and
against payment by, the Company of Four Hundred and Five
Thousand ($405,000.00) Dollars, by wire transfer to an account
designated by the Seller.
c. The closing of the sale and purchase of the Shares shall take
place on the date (the "CLOSING DATE") which is five (5)
business days after the satisfaction of the conditions set
forth in Section 4 below, at such time and place as shall be
mutually agreed.
2
<PAGE> 3
2. CERTAIN REPRESENTATIONS OF THE SELLER.
The Seller and Lindsey hereby jointly and severally represents and
warrants to the Company, its officers and directors, the following:
a. The Seller is the sole beneficial owner of the Shares, free
and clear of all liens, pledges, liabilities, claims and
encumbrances (except for the obligations of Seller under the
lock-up agreement referred to in Section 3 of this Agreement).
b. The Seller and Lindsey have each read carefully and understand
this Agreement and has consulted their own attorneys,
accountants and tax and financial advisors with respect to the
transaction contemplated hereby.
c. The Company has made available to the Seller, Lindsey and
their counsel, or their designated representatives, during the
course of this transaction and prior to the sale of any of the
securities referred to herein, the opportunity to ask
questions of and receive answers from the officers and
directors of the Company concerning the terms and conditions
of the sale or otherwise relating to the financial data and
business of the Company, to the extent that the Company or its
officers and directors possess such information or can acquire
it without unreasonable effort or expense. Lindsey also
acknowledges that he has had access to extensive information
concerning the Company and its business, operations, financial
condition, plans, prospects and affairs.
d. Seller and Lindsey acknowledge that they are each aware that
the Company is seeking to further develop its current lines of
business involving telecommunications sales and services,
including internet telephony, and to expand into new lines of
business, including but not limited to the marketing and sale
on the internet of telecommunications and other products and
services (including "on-line" securities trading and
investment banking). Seller and Lindsey acknowledge that this
Agreement is entered into by the Company without the Company
having made any representation or warranty, express or
implied, with respect to any matter or thing whatsoever.
Seller and Lindsey each hereby waives any claim and releases
the Company and its officers, directors, employees and agents
from any claim that it or he or any person controlled by,
controlling or under common control with either of them (an
"Affiliate") has, may have or could have against the Company
or any of its officers, directors, employees or agents
regarding the amount or nature of the consideration paid by
the Company for the Shares and any other consideration
delivered by the Company to Seller or Lindsey or any of their
Affiliates in connection with this Agreement or any other
agreements, including, but not limited to, any claim based
upon or arising out of any allegation that the Company failed
to inform Seller or Lindsey about, failed to provide Seller or
Lindsey with accurate or complete information regarding, or
provided Seller or Lindsey with misleading information
concerning the
3
<PAGE> 4
Company's business and affairs, financial condition,
prospects, plans, work in process, opportunities or any other
matter or thing concerning the Company.
e. The Seller and Lindsey each has such knowledge and experience
in financial and business matters that each is capable of
evaluating the merits and risks of the sale of the Shares.
3. TERMINATION OF LOCK-UP AGREEMENT.
Effective with the Closing, the Company agrees that the provisions of
Sections 3.2, 3.3 and 3.4 of that certain Agreement among the Company, Calling
Card Co., Inc. and Psychic Readers Network, Inc., dated as of January 17, 1996,
providing, among other things, for Quintel's acquisition from Psychic Readers
Network, Inc. of its interest in New Lauderdale, L.C., shall be deemed
terminated in their entirety and shall have no further force and effect.
4. CONDITIONS TO CLOSING.
a. It shall be a condition to the Company's obligation to close
the purchase of the Shares from the Seller that each of the
following conditions shall have first been satisfied, any one
or more of which may be waived by the Company in its
discretion:
i. the Company's Board of Directors shall have approved
the purchase of the Shares and this Agreement;
ii. no action or proceedings shall have been instituted
or, to the knowledge, information and belief of the
Company, shall have been threatened before a court or
other government body or by any public authority to
restrain or prohibit any of the transactions
contemplated by this Agreement and an authorized
officer of the Company shall have delivered to the
Seller a certificate, dated the Closing Date, to such
effect;
iii. the representations made by the Seller in this
Agreement shall be true and correct in all material
respects as of the date hereof and the Closing Date,
and Seller shall deliver to the Company at the
Closing a certificate, dated the Closing Date, to
such effect.
b. It shall be a condition to the Seller's obligation to close
the sale of the Shares to the Company that each of the
following conditions shall have first been satisfied, any one
or more of which may be waived by the Seller in his
discretion:
i. the Company's Board of Directors shall have approved
the purchase of the Shares and the consummation of
this Agreement;
4
<PAGE> 5
ii. no action or proceedings shall have been instituted
or, to the knowledge, information and belief of
Seller, shall have been threatened before a court or
other government body or by any public authority to
restrain or prohibit any of the transactions
contemplated by this Agreement, and the Seller shall
have delivered to the Company at the closing a
certificate, dated the Closing Date, to such effect.
5. NO ASSIGNMENT.
This Agreement is not transferable or assignable by the Seller.
6. GENERAL.
a. This Agreement shall be binding upon the Seller and the
Company and their respective representatives, successors, and
permitted assigns.
b. 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(e)
below, 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.
c. All covenants, agreements, representations and warranties made
herein or otherwise made in writing by any party pursuant
hereto shall survive the execution and delivery of this
Agreement and the consummation of the transactions
contemplated hereby.
d. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
e. 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
5
<PAGE> 6
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
Quintel Communications, Inc., One Blue Hill Plaza, Pearl
River, NY 10956, attn: Jeffrey Schwartz (fax: 914-620- 1885),
and if to the Seller, c/o Thomas H. Lindsey, 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(e).
IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of the _______ day of May, 1999.
QUINTEL COMMUNICATIONS, INC.
By: /s/ Jeffrey L. Schwartz
___________________________________
Name: Jeffrey L. Schwartz
Title: Chairman and CEO
MASLIN LIMITED PARTNERSHIP
By: MASLIN, INC. its general partner
By: /s/ Thomas H. Lindsey
___________________________________
Name: Thomas H. Lindsey
Title: President
/s/ Thomas H. Lindsey
___________________________________
Thomas H. Lindsey, individually
6
<PAGE> 1
EXHIBIT 2.4
1
<PAGE> 2
INDEMNIFICATION AGREEMENT
AGREEMENT entered into as of the day of May, 1999 by and between QUINTEL
COMMUNICATIONS, INC., a corporation organized under the laws of Delaware with
offices at One Blue Hill Plaza, Fifth Floor, Pearl River, New York 10965
(hereafter referred to as "QUINTEL"), STEVEN L. FEDER, an individual with his
address at 2455 E. Sunrise Boulevard, Fort Lauderdale, Florida 33304 ("Feder"),
DEFER LIMITED PARTNERSHIP, a Nevada limited partnership with its address at P.O.
Box 5041, Henderson, Nevada 89016 ("Defer"), THOMAS H. LINDSEY, an individual
with his address at {Confidential Portion Omitted and Filed Separately with the
Commission} ("Lindsey"), MASLIN LIMITED PARTNERSHIP, a Nevada limited
partnership with its address at P.O. Box 5041, Henderson, Nevada 89016 (
"Maslin"), PETER STOLZ, an individual with his address at {Confidential Portion
Omitted and Filed Separately with the Commission} ("Stolz"), P. STOLZ FAMILY
PARTNERSHIP LP a Colorado limited partnership located at {Confidential Portion
Omitted and Filed Separately with the Commission} ("Stolz LP"), and ACCESS
RESOURCE SERVICES, INC., a Florida corporation with offices at 2455 E. Sunrise
Boulevard, Fort Lauderdale, Florida 33304 (hereafter referred to as "ARS").
Feder, Defer, Lindsey, Maslin, Stolz and Pstolz LP are sometimes collectively
referred to as the "Selling Principals".
RECITALS:
A. Concurrently with the execution and delivery of this Agreement, Quintel
and each of Defer, Maslin, and Stolz LP have entered into agreements
("the Redemption Agreements") providing for Quintel's purchase from
them of an aggregate of ________________ shares of Quintel's common
stock (the "Shares"); and Quintel and each of Feder, Lindsey and Stolz
have entered into agreements amending certain Non-Competition and Right
of First Refusal Agreements dated September 10, 1996 (the
"Amendments"), and Quintel and ARS have entered into an agreement
providing for, among other things, restrictions on Quintel's conduct of
certain "900" pay-per-call psychic services telephone number business
described therein (the "ARS Agreement"). The Redemption Agreements, the
Amendments and the ARS Agreement are collectively referred to as the
"Main Agreements".
B. The Selling Principals and Quintel have agreed to enter into this
Agreement for good and valuable consideration, receipt of which is
hereby acknowledged.
NOW, THEREFORE, for good and valuable consideration, receipt of which is
acknowledged by the parties, it is hereby agreed as follows:
3. CAPITALIZED TERMS.
Unless otherwise defined in this Agreement, capitalized terms are used
with the meanings
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ascribed thereto in the Main Agreements.
4. INDEMNIFICATION BY QUINTEL UNDER THE REDEMPTION AGREEMENTS.
If the closing under the Redemption Agreements (the "Closing") takes
place, Quintel shall indemnify, defend and hold harmless the Selling Principals
and ARS and their respective shareholders, general partners, limited partners,
directors and officers, as the case may be against any and all damages, losses,
claims, liabilities, charges, suits, penalties, costs and expenses, including
court costs, attorneys' fees and expenses and other costs of collection
(collectively, "LOSS" or "LOSSES"), which the Selling Principals personally or
ARS, or their respective shareholders, general partners, limited partners,
directors and officers, as the case may be, sustain, or to which any of them may
be subjected, arising out of or attributable to any actions brought against the
Selling Principals or ARS, or their respective shareholders, general partners,
limited partners, directors and officers, following the Closing by third parties
alleging a violation by the members of Quintel's Board of Directors of their
duty to Quintel in approving Quintel's purchase of the Selling Principals'
shares of Quintel common stock pursuant to the Redemption Agreements or
Quintel's entry into this Agreement and the Amendments on the basis that the
transactions were not fair to Quintel. Quintel shall have no obligation to
indemnify the Selling Principal, ARS or their respective shareholders, general
partners, limited partners, directors and officers with respect to any Loss
described in this Section 2, and shall have the right to suspend the defense of
any Claim for which Quintel would otherwise have been liable to indemnify the
Selling Principals, ARS or their respective shareholders, general partners,
limited partners, directors and officers under the provisions of this Section 2:
(1) in the event of any default by any of the
Selling Principals or ARS in the performance
of any of their obligations under the Main
Agreements;
(2) in the event that any representation made by
any of the Selling Principals or ARS in any
of the Main Agreements is untrue in any
material respect;
(3) in the event that any of the Selling
Principals makes a claim against Quintel or
any of its officers, directors, employees or
agents which was waived or released under
the provisions of the Redemption Agreements;
(4) if any Claim arises out of or in connection
with any misrepresentation, act of
wrongdoing, malfeasance or misfeasance by
any of the Selling Principals or ARS, or
arises out of any failure to act by any of
the Selling Principals or ARS which breaches
an obligation owed by any of the Selling
Principals or ARS to Quintel or any third
party asserting such Claim;
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(5) if the Loss arises out of a judgment
rescinding the sale of the Shares by any of
the Selling Principals to Quintel or the
transactions described in the Main
Agreements or a money judgment based on a
finding that the consideration paid to
Quintel in connection with the Main
Agreements was inadequate.
5. INDEMNIFICATION BY ARS UNDER THE ARS AGREEMENT.
If the Closing occurs and Quintel and ARS consummate the ARS Agreement,
ARS shall indemnify, defend and hold harmless Quintel, its officers, directors,
employees and agents against any and all Losses which any of them may sustain,
or to which any of them may be subjected following the Closing, arising out of
or attributable to any actions brought against any of them arising out of:
i. ARS's conduct of its business after the Closing Date,
including its offering of 900 Pay-Per-Call Psychic
Services;
ii. the Sunrise Lease obligations assumed by ARS pursuant
to this Agreement;
iii. any matter regarding the Quintel Media Employees
arising from an event occurring after the Closing;
and
iv. the Quintel Media Expenses assumed by ARS.
6. NOTICE AND RESOLUTION OF INDEMNITY CLAIMS.
a. A party entitled to indemnification under this Agreement shall
be referred to hereafter as an "Indemnified Party" and a party
obligated to provide indemnification shall be referred to
hereafter as an "Indemnifying Party". If at any time an
Indemnified Party shall claim indemnification from an
Indemnifying Party for any Loss or, in the reasonable judgment
of the Indemnified Party, for what, in the future, may result
in a Loss ("ANTICIPATED LOSS") due to the filing, at or before
the time of such claim, of an action, claim or suit with an
arbitrator, mediator, court or other governmental entity as to
which the Indemnified Party is entitled to indemnification
under this Agreement ("CLAIM"), then the Indemnified Party
shall promptly send written notice of the same (a "NOTICE OF
CLAIM") to the Indemnifying Party describing such Claim in
reasonable detail. A Notice of Claim shall specify the basis
for such Claim supported by relevant information and
documentation.
b. If the Indemnifying Party shall allege that the Indemnified
Party is not entitled to indemnification with respect to such
Claim, it shall give written notice of such
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objection (a "NOTICE OF OBJECTION") to the Indemnified Party
within 15 business days after receipt by the Indemnifying
Party of the Notice of Claim, specifying the basis of the
objections. If the Indemnifying Party does not give a Notice
of Objection within such 15 business days, or shall have
agreed to pay such Claim in whole or in part within such 15
business-day period, the Indemnifying Party shall thereupon be
liable for the payment of all Losses relating to such Claim,
except as otherwise provided in Section 2 herein.
c. In the event that the Indemnified Party shall have timely
given a Notice of Objection in whole or in part to any Notice
of Claim, during the 20-day period following that date, the
Indemnified Party and the Indemnifying Party shall privately
attempt to resolve the Claim. If the Indemnified Party and the
Indemnifying Party shall have failed to resolve or compromise
or agree to postpone resolution of the Claim within such
20-day period, then the Claim shall be settled by arbitration
in New York, New York if the party initiating the arbitration
is ARS or any of the Selling Principals and in Fort
Lauderdale, Florida if the party initiating the arbitration is
Quintel (the place in which the arbitration is to be held
shall be referred to as the "Arbitration Venue"), as
determined by the three arbitrators referred to in Paragraph
4(d) below, in accordance with the rules of the American
Arbitration Association and the procedures set forth below.
d. Each of (A) the Indemnified Party and (B) the Indemnifying
Party shall appoint one arbitrator, and the two arbitrators so
appointed shall then together appoint a third arbitrator
("neutral arbitrator") from a list of persons supplied by the
American Arbitration Association in the Arbitration Venue. If
one party shall fail to appoint the arbitrator to be appointed
by it within 15 days after the end of the 20-day period
provided for in Section 4(c) above, the arbitrator appointed
by the other party shall select from a list of persons
supplied by the American Arbitration Association a person who
shall serve as the single neutral arbitrator for purposes of
the arbitration. If each party shall have appointed one
arbitrator, but such designees cannot agree on the person to
act as the neutral arbitrator within a period of 15 days after
the appointment of the second arbitrator, then either party
may apply to the American Arbitration Association in the
Arbitration Venue, which shall appoint a neutral arbitrator.
The arbitrators shall conduct the arbitration with all
reasonable dispatch in accordance with the rules of the
American Arbitration Association, provided, however, that the
parties to such arbitration shall take such action and execute
such instruments as shall be necessary to cause the rules of
civil procedure of the state in which the Arbitration Venue is
located pertaining to pre-trial discovery to be applicable in
respect of such proceeding. The arbitrators shall render a
written award (the "AWARD") which shall be delivered to the
Indemnified Party and the Indemnifying Party. An Award
hereunder may be used as a basis for the entry of judgment in
any jurisdiction. In the event the parties have submitted a
Claim for an Anticipated Loss to arbitration under this
Section 4 then the arbitrators may, in their sole discretion,
postpone resolution of the Claim until the time which they
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have determined, in their sole discretion, to be the time when
such Anticipated Loss shall have occurred or passed.
e. Prior to making the Award, the arbitrators shall direct the
Indemnified Party and the Indemnifying Party to submit
statements describing any element of Loss or Anticipated Loss
as to which a Claim is made that is attributable to attorneys'
fees, disbursements, and any similar costs incident to such
Loss or Anticipated Loss, supported by affidavits showing that
such costs actually have been or are likely to be incurred,
and all such attorneys' fees, disbursements and other costs
shall be apportioned as determined by the arbitrators. All
fees of the arbitrator and administrative expenses of the
American Arbitration Association shall be treated as costs for
purposes of this Section 4. As a part of each Award made
pursuant to this Agreement, the arbitrators shall allow
interest thereon (other than on the portion of the Award
representing attorneys' fees, disbursements and costs) from
the date of the Loss or the date the Anticipated Loss becomes
a Loss to the date of payment at the rate of 10% per annum.
f. The Award shall be a conclusive determination of the matter
and shall be binding upon the Indemnified Party and the
Indemnifying Party, and shall not be contested by either of
them. The Indemnifying Party shall satisfy its obligations to
pay an Award in cash.
g. If the subject of a Claim involves a third-party claim which
has not yet been determined, the arbitrators may in their
discretion make a separate determination solely as to whether
the third-party claim is one for which indemnification may be
had or may defer a determination as to whether indemnification
may be had pending the further development of information as
to the nature of the third-party claim. If the arbitrators
determine that the third-party claim is not subject to
indemnification, they shall set forth the basis of his
decision in detail, which decision shall be deemed to be an
"Award" hereunder.
h. If the Indemnified Party requests that the Indemnifying Party
defend it against a Claim involving an Anticipated Loss, then
the Indemnifying Party may, at its option, assume the defense
of the Indemnified Party against such Claim (including the
employment of counsel, who shall be counsel satisfactory to
the Indemnified Party,) and the payment of expenses. If the
Indemnified Party does not request the Indemnifying Party to
defend it against such Claim or the Indemnifying Party fails
to assume the defense of such Claim within a reasonable time
after having been requested by the Indemnified Party to assume
the defense, then the Indemnified Party shall have the right
to defend himself in any such action and, if appropriate under
Section 4(a) above, be indemnified for his costs and fees of
defense by the Indemnifying Party. The Indemnified Party, at
its own cost, may employ separate counsel to assert, based on
an opinion of counsel to the Indemnified Party, one or more
legal defenses available to it which are different from or
additional to those available to such Indemnifying Party; the
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Indemnifying Party shall not have the right to direct the
defense of such action on behalf of the Indemnified Party in
respect of such different or additional defenses. The
Indemnifying Party shall not be liable to indemnify the
Indemnified Party for any settlement of any such action or
claim effected without the consent of the Indemnifying Party,
but if settled with the written consent of the Indemnifying
Party, or if there be a final judgment for the plaintiff in
any such action, the Indemnifying Party shall indemnify and
hold harmless the Indemnified Party from and against any Loss
by reason of such settlement or judgment and the Indemnifying
Party shall thereupon be liable for the payment of such Loss.
7. MISCELLANEOUS.
a. No party to this Agreement may assign its or his rights and
obligations under this Agreement without the consent of the
other parties.
b. Each of Defer, Maslin and Stolz LP represents and warrants to
Quintel that it is a limited partnership, duly organized,
validly existing and in good standing under the laws of its
jurisdiction of formation, and has the power and authority to
execute and deliver this Agreement, to consummate the
transactions hereby contemplated, and to take all other
actions required to be taken by it pursuant to the provisions
hereof; that the corporation (in the case of Defer and Maslin)
executing this Agreement on its behalf is its sole general
partner, is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of
incorporation; and that the person executing this Agreement on
behalf of such general partner is its duly elected officer and
has been duly authorized to execute and deliver this Agreement
and the Redemption Agreement which it has executed on behalf
of a Selling Principal, and in the case of Stolz LP, that
Peter Stolz is its sole general partner and has the power and
authority on behalf of Stolz LP to execute and deliver this
Agreement and the Redemption Agreement which he has executed
on behalf of Stolz LP.
c. Each of Feder and Lindsey represents and warrants to Quintel
that he is the sole shareholder and director of the corporate
general partner of, respectively, Defer and Maslin.
d. Each of the Selling Principals represents and warrants to
Quintel that he or it, as the case may be, is not subject to,
or a party to, any contract, agreement, instrument, order,
judgment or decree, or any other restriction of any kind or
character, which would prevent its entry into or performance
under this Agreement, and no consent of or other action by or
notice to any third party is required in connection with any
such Selling Principal's entering into and performing under
this Agreement.
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e. ARS represents and warrants to Quintel that ARS is a
corporation, duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation,
and has the corporate power and authority to execute and
deliver this Agreement, to consummate the transactions hereby
contemplated, and to take all other actions required to be
taken by it pursuant to the provisions hereof, and is not
subject to, or a party to, any contract, agreement,
instrument, order, judgment or decree, or any other
restriction of any kind or character, which would prevent its
entry into the performance under this Agreement, and no
consent of or other action by or notice to any third party is
required in connection with ARS' entering into and performing
under this Agreement.
f. Quintel represents and warrants to the other parties to this
Agreement that Quintel is a corporation, duly organized,
validly existing and in good standing under the law of
Delaware, and upon the approval of the Main Agreements and
this Agreement by its Board of Directors, Quintel will have
the corporate power and authority to execute and deliver this
Agreement, to consummate the transactions hereby contemplated,
and to take all other actions required to be taken by it
pursuant to the provisions hereof, and is not subject to, or a
party to, any contract, agreement, instrument, order, judgment
or decree, or any other restriction of any kind or character,
which would prevent its entry into the performance under this
Agreement, and no consent of or other action by (other than
its Board of Directors) or notice to any third party is
required in connection with Quintel's entering into and
performing under this Agreement.
g. Any notice or other communications required or permitted
hereunder shall be in writing and shall be deemed effective
(a) upon personal delivery, if delivered by hand and followed
by notice by mail or facsimile transmission; (b) one day after
the date of delivery by Federal Express or other nationally
recognized courier service, if delivered by priority overnight
delivery between any two points within the United States; or
(c) five days after deposit in the mails, if mailed by
certified or registered mail (return receipt requested)
between any two points within the United States, and in each
case of mailing, postage prepaid, addressed to a party at its
address first set forth above, or such other address as shall
be furnished in writing by like notice by any such party.
h. No waiver by a party of any breach of this Agreement by the
other shall be deemed to be a waiver of any preceding or
subsequent breach.
i. This Agreement contains the entire understanding of the
parties hereto with respect to the subject matter contained
herein.
j. Each party hereto intends that this Agreement shall not
benefit or create any right or cause of action in or on behalf
of any person other than the parties hereto and the other
persons executing this Agreement.
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k. This Agreement may not be changed orally, but only by an
agreement in writing signed by the party or parties to be
charged thereby.
l. 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 5(e)
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.
m. This agreement does not constitute a joint venture or
partnership by the parties, and each party is entering into
this Agreement as a principal and not as an agent of the
other.
n. This Agreement is intended to be performed in accordance with,
and only to the extent permitted by, all applicable laws,
ordinances, rules and regulations. In case any one or more of
the provisions contained in this Agreement or any application
thereof shall be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the
remaining provisions contained herein and any other
application thereof shall not in any way be affected or
impaired thereby, and the extent of such invalidity or
unenforceability shall not be deemed to destroy the basis of
the bargain among the parties as expressed herein, and the
remainder of this Agreement and the application of such
provision to other Persons or circumstances shall not be
affected thereby, but rather shall be enforced to the greatest
extent permitted by law.
o. The section headings appearing in this Agreement are for
convenience of reference only and are not intended, to any
extent or for any purpose, to limit or define the text of any
section.
p. This Agreement may be executed in several counterparts and all
counterparts so executed shall constitute one agreement
binding on all the parties hereto, notwithstanding that all
the parties are not signatory to the original or the same
counterpart.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
QUINTEL COMMUNICATIONS, INC. ACCESS RESOURCE SERVICES, INC.
By: /s/ Jeffrey L. Schwartz By: /s/ Steven L. Feder
________________________________ _______________________________
Name: Jeffrey L. Schwartz Name: Steven L. Feder
Title: Chairman and CEO Title: CEO
DEFER LIMITED PARTNERSHIP
By: DEFER, INC. its general partner
By: /s/ Steven L. Feder /s/ Steven L. Feder
________________________________ ________________________________
Name: Steven L. Feder Steven L. Feder, individually
Title: President
MASLIN LIMITED PARTNERSHIP
By: MASLIN, INC. its general partner
By: /s/ Thomas H. Lindsey /s/ Thomas H. Lindsey
________________________________ ________________________________
Name: Thomas H. Lindsey Thomas H. Lindsey, individually
Title: President
P. STOLZ FAMILY PARTNERSHIP LP
By: /s/ Peter Stolz
________________________________
Peter Stolz, its general partner
/s/ Peter Stolz
________________________________
Peter Stolz, individually
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EXHIBIT 2.5
<PAGE> 2
SECURITY AGREEMENT
This SECURITY AGREEMENT ("Agreement") made and entered into as
of the 1st day of June, 1999, by Access Resource Services, Inc, a Florida
corporation, with its principal place of business at 2455 E. Sunrise Boulevard,
Ft. Lauderdale, Florida 33304 ("Debtor"); in favor of Quintel Communications,
Inc., a Delaware corporation, with its principal place of business at One Blue
Hill Plaza, Fifth Floor, Pearl River, New York 10965 ("Secured Party").
WITNESSETH:
WHEREAS, Debtor and Secured Party have entered into an
Agreement Regarding 900 Pay-Per-Call Psychic Services of even date herewith
(collectively, the "900 Agreement");
WHEREAS, pursuant to the 900 Agreement, Debtor has agreed to
make certain royalty payments to Secured Party (the "Royalty Payments");
WHEREAS, Debtor has entered into an agreement with West
Interactive Services, Inc. ("WIS") pursuant to which Debtor has instructed WIS
to pay directly to Secured Party all Royalty Payments;
WHEREAS, Debtor has granted a general security interest in all
of its accounts and general intangibles to WIS (the "WIS Security Interest");
WHEREAS, pursuant to the 900 Agreement, as amended, as
security for satisfaction of the Royalty Payments, and in consideration of the
financial accommodations and agreements therein contained, Debtor agreed to
grant to Secured Party a lien and security interest in its accounts receivable,
and any proceeds thereof,
NOW, THEREFORE, in consideration of the foregoing, Debtor and
Secured Parties hereby agree as follows:
1. Definitions. When used herein, the following capitalized
defined terms shall have the following respective meanings:
"Account Debtor" shall mean the party obligated on or under
any Account Receivable or obligated to make payment for any General Intangible
transferred to such party.
"Account Receivable" shall mean (a) any present or future
right of the Debtor to receive and collect payment for goods or services now or
hereafter rendered to an Account Debtor, whether or not it has been earned by
performance, (b) all present and future chattel paper and instruments acquired
by the Debtor drawn, made, issued or otherwise created in connection with any
transaction giving rise to an Account Receivable and any proceeds thereof, (c)
all present and future rights of the Debtor to proceeds of any insurance,
indemnity, warranty
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or guaranty with respect to any goods sold or leased or services rendered in a
transaction giving rise to an Account Receivable, (d) any present or future
right of the Debtor to receive and collect payment for General Intangibles now
or hereafter transferred to any Debtor, whether or not it has been earned by
performance, and (e) all present and future rights of the Debtor to claim for
damages arising out of a breach of or default under any contract, to terminate
any contract giving rise to any Account Receivable, to perform thereunder and to
compel performance and otherwise exercise all remedies thereunder.
"Collateral" shall mean all right, title and interest of the
Debtor in and to (i) any Account Receivable, and (ii) all proceeds, monies,
income, products and benefits attributable or accruing to the foregoing property
and which Debtor is or may hereafter become entitled to receive on account of
said property.
"Default" shall mean the occurrence of any one or more of the
following events: (a) the Debtor's failure to pay, when due, any amount payable
in respect of all or any portion of the Indebtedness; (b) the loss, theft,
destruction or encumbrance of, or substantial damage to, the Collateral or any
portion thereof or the making of any levy, seizure or attachment thereof or
therein; (c) the Debtor's failure to pay debts as and when due and payable, or
the making of any assignment by Debtor for the benefit of creditors; (d) the
commencement of any proceedings by or against Debtor under any insolvency,
bankruptcy or other debtor relief laws in any jurisdiction, including without
limitation any such proceedings seeking the liquidation, arrangement, or
reorganization of the Debtor under any bankruptcy or insolvency procedure, or
any formal or informal proceeding for the liquidation, dissolution or settlement
of claims by or against the Debtor; or (e) any application for the appointment
of a receiver for the assets of Debtor.
"General Intangibles" shall mean all personal property other
than goods, accounts, chattel paper, documents and instruments, now owned or
hereafter acquired by Debtor, such term having the broadest meaning attributable
to it under the Uniform Commercial Code or other applicable law, and including
without limitation all things in action, all contract rights, subscription
rights and all rights and interests of any nature or kind now owned or hereafter
acquired by Debtor in any partnership, venture or other business association or
entity.
"Indebtedness" shall mean (a) all liabilities and obligations
of Debtor to Secured Party relating to the Club Royalties referred to in Section
1(h) of the 900 Agreement, (b) the royalties referred to in Sections 2(a), 2(b)
and 2(c) of the 900 Agreement, and (c) the balance of the Purchase Price due
under Section 5(c)(i) of the 900 Agreement.
"Instruments" shall mean all instruments now owned or
hereafter acquired by Debtor, such term having the broadest meaning attributable
to it under the Uniform Commercial Code or other applicable law.
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"Permitted Lien" shall mean the first priority security
interest in the Debtor's accounts and general intangibles, and the proceeds
thereof, granted to WIS, as the same may be modified or amended form time to
time.
All capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the 900 Agreement.
2. Grant of Security Interest. As security for the
payment of the Indebtedness, the Debtor hereby grants, pledges and assigns to
the Secured Party a continuing security interest in the Collateral.
3. Perfection of Security Interest. The Debtor hereby
authorizes the Secured Party to file one or more financing or continuation
statements, and amendments thereto, relating to all or any part of the
Collateral, without the signature of the Debtor where permitted by applicable
law, and agrees itself to take all such other actions and to execute and deliver
and file or cause to be filed such financing statements, continuation
statements, and other documents, as the Secured Party may reasonably require in
order to establish and maintain a perfected, valid and continuing security
interest of the Secured Party in the Collateral.
4. Records; Information. The Debtor agrees to keep at
its principal place of business, as shown in the opening paragraph of this
Agreement, its records concerning the Collateral, which records shall be
sufficiently accurate to enable the Secured Party or its designee to determine
at any time the status thereof. The Debtor agrees promptly to furnish to the
Secured Party such information concerning the Debtor, the Collateral and any
Account Debtor as the Secured Party may reasonably request.
5. Representations and Warranties of the Debtor. The
Debtor represents and warrants that: (a) it is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation and is qualified to do business in all such jurisdictions in which
it is doing business, (b) the execution, delivery and performance of this
Agreement and the above pledge and assignment and grant of a security interest
in the Collateral to the Secured Party have been duly authorized and are not
contrary to or in violation of law, any order of a court or government agency,
the Debtor's certificate of incorporation or by-laws, or any other agreement,
instrument, or other document to which the Debtor is a party or by which the
Debtor or any of its assets may be bound, (c) this Agreement is the legal, valid
and binding obligation of the Debtor and, subject to the making of any filings
required pursuant to Section 3 hereof, creates a valid, enforceable and
perfected security interest in the Collateral, first and prior to any or all
other liens, claims, encumbrances or security interests except for the Permitted
Lien, and the Debtor is duly authorized to make all filings and take all other
actions necessary or desirable to perfect and to continue perfected such
security interest, (d) all of the Debtor's right, title and interest in and to
the Collateral is free and clear of all liens, claims, charges, pledges,
security interests and encumbrances, except for the security interests granted
to the Secured Party herein and the Permitted Lien, and (e) no consent of any
person or entity is required, except such as have been obtained in writing by
Debtor and delivered to Secured
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Party, in order to render this Agreement and the 900 Agreement fully enforceable
against the Debtor in accordance with their terms or to prevent the execution
and delivery of this Agreement and the 900 Agreement from violating the terms of
or giving rise to a default or event of default under any other agreement,
instrument or document to which the Debtor is a party or by which the Debtor or
any of its assets are bound.
6. Covenants.
(a) Affirmative Covenants. The Debtor shall (i)
perform and observe all the terms and provisions of any agreement for the
rendering of services or any other agreement, giving rise to an Account
Receivable to be performed or observed by it, maintain any such agreement in
full force and effect, enforce any such agreement in accordance with its terms,
and take all such action to such and as may be from time to time requested by
the Secured Party; (ii) at the Debtor's expense, furnish to the Secured Party
promptly upon receipt thereof copies of all notices, requests and other
documents received by the Debtor in connection with any Account Receivable, and
from time to time (x) furnish to the Secured Party such information and reports
regarding any Account Receivable as the Secured Party may reasonably request,
and (y) upon request of the Secured Party, make to any Account Debtor such
demand and request for information and reports or for such action as the Debtor
may be entitled to make in connection with any Account Receivable; (iii) at the
Debtor's expense, take such action as the Debtor or the Secured Party may deem
necessary or advisable to enforce collection of amounts due or to become due in
respect of any Account Receivable; (iv) take out and maintain in effect such
policies of insurance covering the Collateral as the Secured Party may
reasonably require; and (v) maintain and preserve the Collateral in good
condition and take all such action to such end as may be from time to time
requested by the Secured Party.
(b) Negative Covenants. The Debtor shall not
without the prior written consent of the Secured Party (i) sell, assign or
otherwise dispose of the Collateral, or (ii) create or suffer to exist any
security interest, financing statement, lien or other encumbrances upon or with
respect to the Collateral to secure indebtedness of any person or entity, except
for the security interest granted to the Secured Party hereunder and the
Permitted Lien.
7. Rights of the Secured Party upon Default. On and
after the occurrence of a Default by the Debtor, all the Indebtedness shall, at
the option of the Secured Party, become immediately due and payable, without
notice or demand. Subject to the rights of WIS under the WIS Security Interest,
the Secured Party may (a) enforce collection of any of the Collateral by suit or
any other lawful means available to the Secured Party, (b) surrender, release or
exchange all or any part of the Collateral, or compromise or extend or renew for
any period any indebtedness thereunder or evidenced thereby, (c) assert all
other rights of a secured party under the Uniform Commercial Code or other
applicable law, including, without limitation, the right to take possession of,
hold, collect, sell, lease or otherwise retain, liquidate or dispose of all or
any portion of the Collateral. The proceeds of any collection, liquidation or
other disposition of the Collateral shall be applied by the Secured Party first
to the payment of all expenses (including without limitation, all fees, taxes,
reasonable attorney's fees and legal expenses)
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incurred by the Secured Party in connection with retaking, holding, collecting,
or liquidating the Collateral. The balance of such proceeds, if any, shall, to
the extent permitted by law, be applied to the payment of the Indebtedness in
such order of application as the Secured Party may, in its sole discretion,
elect. In case of any deficiency, the Debtor shall, whether or not then due,
remain liable therefor. In addition to the foregoing, the Secured Party shall be
entitled to exercise any and all other rights and remedies provided to the
Secured Party under this Agreement, the 900 Agreement, and applicable law and
equity.
8. The Secured Party' Duties and Right to Perform. The
powers conferred on the Secured Party hereunder are solely to protect the
Secured Party' interest in the Collateral and shall not impose any duty upon it
to exercise any such powers. The Secured Party shall have no duty as to the
Collateral or as to the taking of any necessary steps to preserve rights against
prior Party or any other rights pertaining to the Collateral. If the Debtor
fails to perform any of its obligations hereunder, or under any agreement giving
use to or in connection with any Account Receivable, the Secured Party may
themselves perform, or cause the performance of, such agreement, and the
expenses of the Secured Party incurred in connection therewith shall be payable
by the Debtor.
9. Indemnity and Expenses. The Debtor agrees to
indemnify the Secured Party from and against any and all claims, losses and
liabilities arising out of or connected with this Agreement (including, without
limitation, enforcement of this Agreement), except claims, losses or liabilities
resulting solely from the Secured Party' gross negligence or wilful misconduct.
10. Security Interest Absolute. All rights of the Secured
Party hereunder, and all obligations of the Debtor hereunder, shall be absolute
and unconditional, irrespective of:
(a) any lack of validity or enforceability of
the Indebtedness or any agreement or instrument contemplated thereby;
(b) any change in the time, manner or place of
payment of, or in any other term of, all or any of the Indebtedness, or any
other amendment or waiver of or any consent to any departure from the terms of
the Indebtedness or any other agreements contemplated thereby;
(c) any exchange, release or non-perfection of
any other security interest, or any release or amendment or waiver of or consent
to departure from any guaranty, for all or any of the Indebtedness; or
(d) any other circumstance (other than payment
in full) which might otherwise constitute a defense available to, or a discharge
of, the Debtor in respect of the Indebtedness or in respect of this Agreement.
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11. Cumulative Security. Neither the execution and
delivery of this Agreement nor the taking hereafter of any security for payment
of the Indebtedness shall in any manner impair or affect any other security for
payment of the Indebtedness. All such present and future additional security is
to be considered as cumulative security.
12. Continuing Agreement. This is a continuing agreement
and the grant of a security interest hereunder shall remain in full force and
effect and all the rights, powers and remedies of Secured Party hereunder shall
continue to exist until the Indebtedness is paid in full as the same becomes due
and payable and until Secured Party, upon request of Debtor, has executed a
written termination statement, reassigned to Debtor without recourse the
Collateral and all rights conveyed hereby, and returned possession of the
Collateral to Debtor.
13 Notices. All notices, requests and other
communications to either party hereunder shall be in writing and shall be given
to such party at its address or telefax number set forth at the beginning of
this Agreement or such other address or telefax number of which such party may
hereafter give notice to the other. Each such notice, request or other
communication shall be effective (i) if given by telefax, upon transmission with
a machine-generated transmittal confirmation, (ii) if given by mail, 72 hours
after such communication is deposited in the United States mails with first
class postage prepaid, addressed as aforesaid, or (iii) if given by any other
means, when delivered at the address specified in this Section.
14. Remedy and Waiver. Secured Party may remedy any
Default without waiving the Default rendered, and may waive any Default without
waiving any prior or subsequent Default. No failure or delay by the Secured
Party in the exercise of any right or remedy under this Agreement or under the
Uniform Commercial Code or any applicable law shall operate as a waiver
hereunder or thereunder, and no partial exercise by the Secured Party of any
right or remedy of the Secured Party hereunder or thereunder shall preclude the
further exercise by the Secured Party of any other right or remedy hereunder or
thereunder.
15. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Florida.
16. Successors and Assigns. The rights and obligations of
the Party hereto shall be binding on and shall inure to the benefit of their
successors and assigns, except that in accordance with Section 6 of this
Agreement, the rights and obligations hereunder may not be assigned by Debtor.
17. Modification. This agreement or any provision hereof
may be modified or amended only by a written agreement signed by both Party
hereto.
18. Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, this Agreement has been duly executed as
of the day and year first above written.
DEBTOR
ACCESS RESOURCE SERVICES, INC.
By: /s/ Steven Feder
__________________________________
Name: Steven Feder
SECURED PARTY
QUINTEL COMMUNICATIONS, INC.
By: /s/ Jeffrey L. Schwartz
__________________________________
Jeffrey L. Schwartz
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