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EXHIBIT 10.7
ACKNOWLEDGEMENT
AGREEMENT (this "Agreement") is entered into as of August 31, 1999 by
and between The MacManus Group, Inc., a Delaware corporation ("MacManus"), and
Novo MediaGroup, Inc., a California corporation ("Novo").
WHEREAS, MacManus and Novo are parties to a certain Exchange Agreement
dated the date hereof, and certain other transactions, whereby among other
things Novo will become the owner of all of the outstanding capital stock of
Blue Marble Advanced Communications Group, Ltd., a Delaware corporation ("Blue
Marble"), and MacManus will become the owner of certain of the outstanding
capital stock of Novo; and
WHEREAS, the parties wish to acknowledge certain understandings between
them relating to the transactions contemplated by the Exchange Agreement
referred to above.
Accordingly, the parties agree as follows:
1. PREFERRED PROVIDER. It is the intention of the parties hereto that
Novo shall be a preferred provider of Internet professional services to
MacManus' operating companies and their clients, such that MacManus will seek
where appropriate to provide introductions and recommendations that Novo be a
provider of Internet professional services to its affiliated companies and their
clients, with the understanding that the respective MacManus affiliated
companies and their clients shall have the ability to make independent decisions
regarding their use of the services of Novo. In turn, it is the intention of the
parties that Novo will cooperate with MacManus' affiliated companies and make
available to their clients the full range of Internet professional services
capabilities and services offered by Novo. In connection therewith, it is
intended that Novo will participate in new business presentations with MacManus
companies. The parties mutually agree to use their reasonable efforts to
position Novo and take all other reasonable action as may be necessary to
resolve any client conflicts in a manner as will enable Novo to handle the
client accounts of MacManus' affiliated companies.
2. CLIENT CONFLICT POLICIES. Novo agrees that at all times that MacManus
owns at least 1% of the outstanding voting capital stock of Novo, it will abide
by the specific client conflict of interest policies maintained by the following
clients of the MacManus group of companies: Coca-Cola, General Motors and
Procter & Gamble. Notwithstanding the foregoing, Novo will not be required by
MacManus to resign Toyota as a client. Novo also agrees to use its reasonable
efforts to abide by any client conflict policies of other MacManus clients which
are applicable to Novo. MacManus will use its reasonable efforts to position
Novo and its client relationships so as to avoid their being viewed as
conflicts, where possible.
3. NON-SOLICITATION OF BLUE MARBLE CLIENTS. For a period of at least two
years from the date of this Agreement, MacManus shall not, and shall cause its
subsidiary companies not to, solicit any of the specific client brand or product
assignments for
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which Blue Marble currently is providing Internet professional services as of
the date of this Agreement, for the purpose of causing such client to transfer
such assignment(s) from Novo to any other MacManus business unit which may then
be providing Internet professional services directly in competition with Novo;
but subject in all cases to the ability of clients to make independent decisions
regarding their use of the services of Novo, and subject to Novo continuing to
perform services for such clients in a manner which satisfies the standards and
expectations of such clients.
4. BUDGET APPROVAL PROCESS. The parties acknowledge that prior to the
commencement of each fiscal year of Novo, an annual operating budget for Novo
shall be prepared, which budget will be consistent with the general strategic
direction of Novo, and set forth in sufficient detail all significant items of
income and expense. Such operating budget, and any material deviations
therefrom, will be presented to the Board of Directors of Novo for its review
and approval, which process will include a review of all significant financial
items of Novo, including compensation and incentive packages for senior
management of Novo, employment contracts, capital expenditures and borrowings or
other financing arrangements.
5. MISCELLANEOUS:
5.1 AMENDMENT; WAIVER. This Agreement may not be modified, amended,
supplemented, canceled, or discharged, except by written instrument executed by
all parties. No failure to exercise, and no delay in exercising, any right,
power or privilege under this Agreement shall operate as a waiver, nor shall any
single or partial exercise of any right, power or privilege hereunder preclude
the exercise of any other right, power or privilege. No waiver of any breach of
any provision shall be deemed to be a waiver of any preceding or succeeding
breach of the same or any other provision, nor shall any waiver be implied from
any course of dealing between the parties. No extension of time for performance
of any obligations or other acts hereunder or under any other agreement shall be
deemed to be an extension of the time for performance of any other obligations
or any other acts.
5.2 NOTICES. All notices, requests, demands, claims, and other
communications hereunder shall be in writing and shall be deemed given if
delivered by certified or registered mail (first class postage pre-paid),
guaranteed overnight delivery or facsimile transmission if such transmission is
confirmed by delivery by certified or registered mail (first class postage
pre-paid) or guaranteed overnight delivery, to the following addresses and
telecopy numbers (or to such other addresses or telecopy numbers which any party
shall designate in writing to the other parties):
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(a) if to Novo to:
Novo MediaGroup, Inc.
222 Sutter Street
San Francisco, CA 94108
Attn: Chief Financial Officer
Telecopy: (415) 646-7001
with a copy to:
Britton Silberman & Cervantez LLP
461 Second Street, Suite 332
San Francisco, CA 94107
Attn: Tbomas J. Cervantez, Esq.
Telecopy: (415) 538-9000
(b) if to MacManus to:
The MacManus Group, Inc
1675 Broadway
New York, NY 100 10019
Attn: Craig D. Brown
Telecopy: (212) 468-3085
with a copy to:
Davis & Gilbert LLP
1740 Broadway
New York, NY 10019
Attention: Lewis A. Rubin, Esq.
Telecopy: (212) 468-4888
5.3 PREVAILING PARTY. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
5.4 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one and the same instrument.
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5.5 GOVERNING LAW. Interpretation. This Agreement shall be construed in
accordance with and governed for all purposes by the laws of the State of
California applicable to contacts executed and to be wholly performed with
such state.
The MacManus Group, Inc.
By /S/ DAVID WINCLECHTER
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Novo MediaGroup, Inc.
By /S/ KELLY RODRIQUES
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