Document:

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                                                                    EXHIBIT 10.3

                              CONSULTING AGREEMENT

         This CONSULTING AGREEMENT (the "Agreement") is entered into as of the
_____ day of October 2000 between ARIES EQUITY CORP., a New York corporation
(the "Consultant") and PET QUARTERS, INC., an Arkansas corporation (the
"Company").

                                   WITNESSETH:

         WHEREAS, the Company desires to engage the Consultant and the
Consultant desires to be engaged by the Company pursuant to the terms and
conditions hereinafter set forth;

         NOW, THEREFORE, in consideration of the foregoing and the mutual
promises and covenants herein contained, the parties agree as follows:

         1.       Engagement. The Company hereby engages the Consultant to
                  advise the Company on a range of corporate financial and
                  associated matters which may be undertaken by the Company
                  (collectively, the "Services.") The Services shall be rendered
                  only upon the request of the Company and shall consist SOLELY
                  of the following:

                  a.       Analyze and assess for the Company alternatives for
                           raising capital, including the use of private and
                           public offerings of the securities of the Company;

                  b.       Establishing relationships with securities
                           broker-dealers and institutional investors for the
                           purposes of obtaining capital through transactions
                           not involving a public offering;

                  c.       Providing the Company with recommendations, review of
                           documents and other advice relating to selection and
                           potential engagement of underwriters, market makers,
                           legal counsel and accountants;

                  d.       Advise the Company with respect to shareholder
                           relations;

                  e.       Identify opportunities for the Company involving a
                           business combination with an appropriate merger or
                           acquisition candidate;

                  f.       General consulting advice for marketing,
                           reorganization and restructuring.

         2.       Performance.

                  a.       The Consultant will use its best efforts to furnish
                           the Services to the Company on a timely basis.

                  b.       It is understood and agreed that the Services do not
                           include the provision by Consultant of public
                           relations services, advertising services, accounting
                           or auditing services, legal services or services in
                           connection with acting as an underwriter, broker,
                           dealer investment banker, market maker as to the

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                           securities of the Company. In this connection, it is
                           further understood and agreed that the Services do
                           not require or contemplate that the Consultant will
                           raise any capital for or on behalf of the Company.

                  c.       The Consultant shall render the services from any
                           location chosen by the Consultant.

                  d.       The Consultant shall be required to devote only such
                           time as the Consultant deems reasonably necessary, in
                           the Consultant's sole discretion, to render the
                           Services. Notwithstanding the foregoing, the
                           Consultant shall not be required to devote more than
                           35 hours in any consecutive thirty-day period in
                           rendering the Services.

3.       Information.

                  a.       In order for the Consultant to furnish the Services,
                           the Company will, as requested by the Consultant,
                           furnish the Consultant with all information
                           concerning the Company which Consultant reasonably
                           deems appropriate in such form as the Consultant may
                           require, will provide Consultant with access to the
                           officers, directors, accountants, counsel and other
                           advisors of the Company and will cause the
                           accountants for the Company to timely prepare and
                           furnish to the Consultant such financial statements
                           of the Company as may be reasonably requested by the
                           Consultant (collectively the "Due Diligence
                           Information").

                  b.       The Company hereby represents and warrants to the
                           Consultant that all Due Diligence Information will be
                           true and accurate in all material respects and will
                           not contain any untrue statement or material fact and
                           will not omit to state a material fact necessary in
                           order to make all or any part of the Due Diligence
                           Information not misleading in light of the
                           circumstances under which such Due Diligence
                           Information is provided.

                  c.       The Company acknowledges and agrees that the
                           Consultant will be using and relying upon the Due
                           Diligence Information supplied by the Company and its
                           officers, directors, agents or other designated
                           parties as well as any information concerning the
                           Company which is publicly available without any
                           independent investigation or verification thereof and
                           without any independent appraisal thereof by the
                           Consultant.

                  d.       The Consultant recognizes and accepts that some Due
                           Diligence Information may not have been publicly
                           disseminated and the wrongful use or distribution of
                           such information may be a violation of the antifraud
                           provisions of the federal securities laws.

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         4.       Service Term. Except as otherwise provided herein, the
                  Consultant shall be obligated to render the Services for a
                  period of one year from the date hereof (the "Service Term").

         5.       Suspension of Services and Termination. The Consultant shall
                  not be required to render any of the Services during the
                  Service Term during any time that the Company has breached any
                  of its obligations under this Agreement. Any such breach shall
                  not relieve the Company of any of its obligations under this
                  Agreement, including, but not limited to, its obligation to
                  pay the Compensation to the Consultant.

         6.       Compensation.

                  a.       In consideration of the Services that the Consultant
                           is obligated to provide to the Company pursuant
                           hereto, the Company shall pay the following
                           non-refundable compensation (collectively, the
                           "Compensation") to the Consultant:

                           (1)      Warrants to purchase up to 50,000 shares of
                                    the Company's common stock at a price of
                                    $.65 per share, subject to adjustment as set
                                    forth in the Warrants, upon the execution of
                                    this Consulting Agreement;

                           (2)      Warrants to purchase up to 20,000 shares of
                                    the Company's common stock at a price of
                                    $.65 per share, subject to adjustment as set
                                    forth in the Warrants, at such time, as any,
                                    as the lowest offer for a share of the
                                    Company's common stock in any public market
                                    therefor is at least $1.00 for three
                                    consecutive trading days within one year
                                    from the date of this Consulting Agreement;

                           (3)      Warrants to purchase up to 20,000 shares of
                                    the Company's common stock at a price of
                                    $.65 per share, subject to adjustment as set
                                    forth in the Warrants, at such time, as any,
                                    as the lowest offer for a share of the
                                    Company's common stock in any public market
                                    therefor is at least $1.25 for three
                                    consecutive trading days within one year
                                    from the date of this Consulting Agreement;

                           (4)      Warrants to purchase up to 20,000 shares of
                                    the Company's common stock at a price of
                                    $.65 per share, subject to adjustment as set
                                    forth in the Warrants, at such time, as any,
                                    as the lowest offer for a share of the
                                    Company's common stock in any public market
                                    therefor is at least $1.50 for three
                                    consecutive trading days within one year
                                    from the date of this Consulting Agreement;

                           (5)      Warrants to purchase up to 7,500 shares of
                                    the Company's common stock at a price of
                                    $.65 per share, subject to adjustment as set
                                    forth in the Warrants, as such time, as any,
                                    as each $100,000 of capital is

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                                    obtained by the Company in one or more
                                    transactions which are intended to not
                                    involve a public offering as a result,
                                    directly or indirectly, of an introduction
                                    by the Consultant within two years from the
                                    date of this Consulting Agreement; and

                           (6)      cash payments of 5% of each $100,000 of
                                    capital obtained by the Company as described
                                    in subparagraph 6.a.(5) above within two
                                    business days after such capital is received
                                    by the Company.

                  b.       For purposes of this Paragraph 6, capital shall
                           include, but not be limited to, proceeds received or
                           receivable by the Company or any subsidiary thereof
                           in connection with the issuance of any debt or equity
                           security or other instrument.

                  c.       All Warrants to be issued pursuant to this Paragraph
                           6 (the "Warrants") shall be exercisable during the
                           period of five years subsequent to the date of its
                           issuance and shall be in the form set forth in
                           Exhibit A hereto.

                  d.       For purposes of this Paragraph 6, the lowest offer
                           for a share of the Company's common stock in any
                           public market shall be adjusted in the same manner as
                           is the exercise price of the Warrants as set forth in
                           Exhibit A.

         6.       Expenses. The Company shall promptly reimburse the Consultant
                  for all expenses pre-approved in writing and incurred by the
                  Consultant in connection with the Services upon presentation
                  of corresponding receipts or other documentation to support
                  such expenses, provided, however, that the Company will allow
                  Consultant to submit and shall reimburse a maximum monthly
                  aggregate sum of $250 for incidental expenses incurred without
                  prior written consent of the Company as long as such expenses
                  are reasonable and incurred by the Consultant in connection
                  with the Services provided to the Company and no other entity
                  or client of Consultant.

         7.       Public Disclosure. Any reference to the Consultant or any
                  advice, information or other matter pertaining to the Services
                  shall not be publicly disclosed or made available to any third
                  parties without the prior written consent of the Consultant,
                  unless such disclosure is required by law.

         8.       Indemnification.

                  a.       The Company hereby agrees to indemnify, defend and
                           hold harmless the Consultant, its affiliates,
                           directors, officers, partners, agents and employees
                           and each other person, if any, controlling the
                           Consultant or any of its affiliates (collectively,
                           the "Consultant Indemnified Parties"), to the full
                           extent lawful, from and against any and all demands,
                           claims, actions or causes of action, assessments,
                           losses, damages, liabilities, costs and expenses,
                           including, without limitation, interest, penalties
                           and attorneys' fees and expenses asserted against,
                           imposed upon or incurred by the Consultant
                           Indemnified Parties

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                           resulting from or by reason of a breach of any
                           representation, warranty or covenant contained herein
                           or as a result of any action improperly taken or
                           omitted to be taken as required hereby by the
                           Company, its agents or employees.

                  b.       The Consultant hereby agrees to indemnify, defend and
                           hold harmless the Company, its affiliates, directors,
                           officers, partners, agents and employees and each
                           other person, if any, controlling the Company or any
                           of its affiliates (collectively, the "Company
                           Indemnified Parties"), to the full extent lawful,
                           from and against any and all demands, claims, actions
                           or causes of action, assessments, losses, damages,
                           liabilities, costs and expenses, including, without
                           limitation, interest, penalties and attorneys' fees
                           and expenses asserted against, imposed upon or
                           incurred by the Company Indemnified Parties resulting
                           from or by reason of a breach of any representation,
                           warranty or covenant contained herein or as a result
                           of any action improperly taken or omitted to be taken
                           as required hereby by the Consultant, its agents,
                           assigns or employees. The aggregate liability of the
                           Consultant with respect to such indemnification shall
                           be limited to the total Compensation of the
                           Consultant under this Agreement which has then been
                           paid to the Consultant, its agents, assigns or
                           employees whether in the form of cash, Warrant, or
                           the profits derived by the Consultant through the
                           sale of such Warrants and whether such Compensation
                           is actually received by warrant or assigned to a
                           third party by Consultant in accordance with
                           paragraph 16 hereof.

                  c.       No party shall be liable to indemnify any other party
                           to the extent that demands, claims, actions or causes
                           of action, assessments, losses, damages, liabilities,
                           costs or expenses against the liable party resulted
                           from bad faith, misrepresentation, omission,
                           negligence or disregard of duty, or breach of any
                           applicable foreign, federal or state laws concerning
                           the sales, marketing, trading, promotion or
                           registration of securities by such party, its agents,
                           assigns or employees.

                  d.       The rights of indemnification as set forth in this
                           Paragraph 8 shall be in addition to any rights that
                           the Consultant Indemnified Parties or Company
                           Indemnified Parties or any other person entitled to
                           indemnification may have in law or otherwise,
                           including but not limited to, any right to
                           contribution, provided, however, in no event shall
                           the Consultant be liable or responsible for any
                           amount in excess of the Compensation actually paid to
                           the Consultant, its agents, assigns or employees
                           whether in the form of cash, Warrant, or the profits
                           derived by the Consultant through the sale of such
                           Warrants and whether such Compensation is actually
                           received by warrant or assigned to a third party by
                           Consultant in accordance with paragraph 16 hereof.

                  e.       Any party seeking indemnification ("Indemnitee")
                           shall notify the other party ("Indemnitor") of any
                           claim against Indemnitee within 15 days after it has
                           notice of such claim, but failure to notify
                           Indemnitor shall in no case prejudice

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                           the rights of Indemnitee under this Agreement unless
                           Indemnitor shall be prejudiced by such failure and
                           then only to the extent of such prejudice. Should
                           Indemnitor fail to discharge or undertake to defend
                           Indemnitee against such liability (with counsel
                           reasonably approved by Indemnitee), within 10 days
                           after Indemnitee gives Indemnitor written notice of
                           the same, then Indemnitee may settle such claim, and
                           Indemnitor's liability to Indemnitee shall be
                           conclusively established by such settlement, the
                           amount of such liability to include both the
                           settlement consideration and the reasonable costs and
                           expenses, including attorney's fees, incurred by
                           Indemnitee in effecting such settlement. Indemnitee
                           shall have the right to employ its own counsel in any
                           such case, but the fees and expenses of such counsel
                           shall be at the expense of Indemnitee unless: (a) the
                           employment of such counsel and the fees payable
                           thereto shall have been authorized in writing by
                           Indemnitor in connection with the defense of such
                           action, (b) Indemnitor shall not have employed
                           counsel to direct the defense of such action, or (c)
                           Indemnitee shall have reasonably concluded that there
                           may be defenses available to it which are different
                           from or additional to those available to Indemnitor
                           which results in a conflict of interest (in which
                           case Indemnitor shall not have the right to direct
                           the defense of such action or of Indemnitee), in any
                           of which events such fees and expenses shall be borne
                           by Indemnitor.

         10.      Status of Consultant. The Consultant shall be deemed to be an
                  independent contractor. The Consultant shall have no authority
                  to, and shall not, bind the Company to any agreement or
                  obligation with a third party. Nothing in this Agreement shall
                  be construed to constitute the parties hereto as partners or
                  joint venturers with each other.

         11.      Other Activities of Consultant Indemnified Parties. The
                  Company recognizes and accepts the fact that the Consultant
                  Indemnified Parties now render, and in all probability will
                  continue to render, services which are substantially similar
                  to the Services to other parties, some of which may conduct
                  business and have activities similar to those of the Company.
                  The Company specifically authorizes the Consultant Indemnified
                  Parties to continue with such activities.

         12.      Other Agreements and Understandings. If the Company, following
                  the issuance of any Warrants to Consultant pursuant to this
                  Agreement, at any time registers its shares of common stock
                  for sale or resale under the Securities Act of 1933 or the
                  Arkansas Securities Act (collectively or individually the
                  "Securities Act(s)") in connection with an underwritten public
                  offering, the Company shall cause the Company's shares
                  underlying the issued Warrants to be registered under the
                  applicable Securities Act as part of such registration of the
                  underwritten public offering. The cost of all such
                  registrations shall be borne by the Company except for fees
                  and disbursements of special counsel or consultants retained
                  by the Consultant and underwriters or brokers discounts
                  applicable to the securities. If the managing underwriter
                  shall advise the Company and the Consultant in writing that
                  the inclusion in any registration pursuant hereto of some or
                  all of the shares sought to be registered

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                  creates a substantial risk that the proceeds or price per
                  unit, which the sellers of securities covered by such
                  registration will derive from the sale of such securities
                  pursuant to such registration, will be reduced or that the
                  number of securities to be registered (including those sought
                  to be registered by the Company and those sought to be
                  registered by the Consultant is too large a number to be
                  reasonably sold, then the number of shares sought to be
                  registered by the Consultant shall be reduced to the extent
                  necessary to reduce the number of securities to be registered
                  to the number recommended by the managing underwriter. In no
                  instance shall the Company be required to reduce the number of
                  shares of common stock it seeks to register to enable shares
                  underlying the Warrants.

         13.      Miscellaneous.

                  a.       Benefit. This Agreement shall inure to the benefit of
                           the parties thereto and their respective successors
                           and assigns.

                  b.       Entire Agreement. This Agreement contains the entire
                           understanding of the parties hereto in respect of the
                           subject matter contained herein. There are no
                           representations, warranties, promises, covenants or
                           undertakings other than those expressly set forth
                           herein. This Agreement supersedes all prior
                           agreements, whether written or oral, between the
                           parties with respect to the subject matter hereof.
                           This Agreement may be amended only by a written
                           agreement duly executed by the parties hereto. Any
                           condition to a particular party's obligations
                           hereunder may be waived in writing by such party.

                  c.       Headings. The headings contained in this Agreement
                           have been inserted for convenience and reference
                           purposes only and shall not affect the meaning or
                           interpretation hereof in any manner whatsoever.

                  d.       Separability. If any of the terms, provisions or
                           conditions contained in this Agreement shall be
                           declared to be invalid or void in any judicial
                           proceeding, this Agreement shall be honored and
                           enforced to the extent of its validity, and those
                           provisions not declared invalid shall remain in full
                           force and effect.

                  e.       Notices. All notices, requests, demands and other
                           communications required or permitted to be given
                           hereunder shall be deemed given when received by the
                           parties at the addresses below or to such other
                           address, or the attention of such other party, as the
                           parties shall advise the other by notice given in
                           conformity herewith.

                           If to the Company:         Pet Quarters, Inc.
                                                      720 E. Front Street
                                                      Lonoke, Arkansas 72086
                                                      Attn: Steve Dempsey

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                           If to the Consultant:      Aries Equity Corp.
                                                      3942 Jane Lane
                                                      Oceanside, NY 11572
                                                      Attn.: D. Robert Albi, CEO

                           or to such other address, or the attention of such
                           other party, as the parties shall advise the other by
                           notice given in conformity herewith.

         14.      Governing Law. This Agreement shall be governed by, construed
                  and enforced in accordance with the laws of the State of New
                  York without giving effect to conflicts of law.

         15.      Counterparts. This Agreement may be executed in counterparts
                  each of which shall be deemed an original and all of which
                  together shall constitute one and the same agreement.

         16.      Assignments. This Agreement may not be assigned by either
                  party except that the Consultant may assign its right to
                  Compensation under this Agreement, but not its
                  responsibilities, obligations, duties and liabilities, to D.
                  Robert Albi or any other entity then controlled by D. Robert
                  Albi, and upon such assignment, the assignee shall assume the
                  same responsibilities, obligations, duties and liabilities as
                  Consultant has under this Agreement.

         17.      Facsimile Signatures. Facsimile signatures on counterparts of
                  this Agreement are hereby authorized and shall be acknowledged
                  as if such facsimile signatures were an original execution,
                  and this agreement shall be deemed as executed when an
                  executed facsimile hereof is transmitted by a party to any
                  other party.

         18.      Arbitration. Any dispute controversy, difference or claim
                  arising between the parties out of, relating to or in
                  connection with this Agreement, shall be settled by
                  arbitration in accordance with the applicable rules of the
                  American Arbitration Association then in effect. Any
                  arbitration hearing shall be held in Nassau County, New York.
                  This agreement to arbitrate shall be specifically enforceable.
                  The award of the arbitrator(s) shall be final and binding, on
                  the parties and judgment upon any such award shall be
                  enforceable by the prevailing party before the courts of
                  competent jurisdiction of the non-prevailing party's domicile.
                  This provision shall survive the termination of this
                  Agreement. In the event one of the parties gives the other
                  parties notice of arbitration, the parties shall agree upon
                  the arbitrator within thirty days from the date of such
                  notice, and if they fail to do so, the arbitrator shall be
                  selected by the American Arbitration Association. The
                  reasonable compensation and expenses of the arbitration shall
                  be shared equally by the parties. In each instance, the
                  decision of the arbitrator shall be final and binding.

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              IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.

ARIES EQUITY CORP.                     PET QUARTERS, INC.

By:                                    By:
   -------------------------------        --------------------------------
   D. Robert Albi, President              Steve Dempsey, CEO

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                                                                    EXHIBIT 10.1

                                  EMPLOYMENT AGREEMENT, dated as of
                                  September 1, 2000, by and between SOURCE
                                  MEDIA, INC., a Delaware corporation (the
                                  "Company"), and F. PAUL TIGH (the "Employee").

         The Company desires to engage Employee to perform services for the
Company, and Employee desires to perform such services, on the terms and
conditions set forth below:

         NOW, THEREFORE, the parties agree as follows:

         1. EMPLOYMENT. The Company hereby employs Employee as its Chief
Financial Officer and Treasurer, and Employee hereby accepts such employment,
upon the terms and conditions hereinafter set forth.

         2. TERM. The term of employment of Employee pursuant to this Agreement
shall commence as of the date hereof and shall continue indefinitely until this
Agreement is terminated in accordance with Section 7.

         3. DUTIES AND SERVICES. Employee shall devote substantially his full
time and best efforts to the business and affairs of the Company, and perform,
in a competent manner, such executive and managerial functions and duties
commensurate with his position as Chief Financial Officer of the Company, as the
President of the Company may reasonably prescribe from time to time. Employee
shall report directly to the President of the Company.

         4. COMPENSATION. For all services to be rendered by Employee hereunder,
the Company shall pay Employee an annual base salary of $185,000. The Company
shall pay Employee's salary in accordance with the Company's standard payroll
practices as in effect from time to time, with appropriate deductions required
by applicable laws, rules and regulations.

         5. EXPENSES. The Company shall reimburse Employee for all reasonable,
ordinary and necessary expenses incurred on behalf of the Company by Employee.
Employee shall submit to the Company an expense report and receipts or other
verification of expenses to be reimbursed in accordance with the Company's
standard policies.

         6. BENEFITS. Employee shall be entitled to such insurance and
retirement plan benefits as are generally available to other senior management
employees of the Company, pursuant to Company policy in effect from time to
time, such as health insurance, disability and life insurance, and the right to
participate in any retirement plans maintained by the Company.

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         7. TERMINATION PROVISIONS.

            A. TERMINATION FOR CAUSE. The Company, on two days' prior written
notice, may terminate the employment of Employee for any of the following
reasons (for "cause"), without the payment of any compensation to Employee,
except accrued salary due for the period prior to the date of termination of
employment:

               (i)  Employee shall be convicted of a felony or any crime
involving an act of dishonesty, such as embezzlement, theft or larceny;

               (ii) Commission of theft from or fraud against the Company or any
willful misconduct by the Employee that is materially injurious to the financial
condition or business reputation of the Company, including by reason of material
breach by the Employee of the provisions of this Agreement; and

               (iii) Willful and continued failure by the Employee to
substantially perform his duties hereunder after a written demand for such
performance is delivered to the Employee by the Chief Executive Officer of the
Company.

            B. TERMINATION BY THE COMPANY OTHER THAN FOR CAUSE OR DEATH. The
Company, on two days' prior written notice, may terminate the employment of the
Employee without cause, and Employee, on two days' prior written notice, may
resign his employment, and in either case the Company shall pay Employee his
accrued salary for the period prior to the date of termination of employment.

               (i) If the employment of Employee is terminated by the Company
other than for cause or death, or if Employee resigns from his employment,
subject to Employee's execution and delivery to the Company of a release
substantially in the form of Exhibit A hereto (the "Release"), the Company shall
pay to Employee, as severance, Employee's base salary for six months after the
date of termination, in accordance with the Company's standard payroll
practices.

               (ii) If the employment of Employee is terminated by the Company
other than for cause or death, or if Employee resigns from his employment,
subject to Employee's execution and delivery to the Company of the Release, the
Company will continue life, medical, dental and disability coverage
substantially identical to the coverage maintained by the Company for Employee
and his dependents prior to termination of his employment, except to the extent
such coverage may be changed in its application to all Company employees on a
nondiscriminatory basis. Such coverage shall continue for six (6) months after
the termination of Employee's employment and shall cease if Employee becomes
eligible for such insurance through other employment prior to the end of such
six (6) month period.

               (iii) If the employment of Employee is terminated by the Company
other than for cause or death, or if Employee resigns from his employment,
subject to Employee's execution and delivery to the Company of the Release, the
options for stock of the Company held by

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the Employee which are not currently exercisable ("Unvested Options") shall
become exercisable on the date the Release becomes effective as provided
therein. The Unvested Options, upon becoming exercisable, and any and all
options for stock of the Company which Employee holds and which are currently
exercisable at the time Employee's employment is terminated, may be exercised at
any time prior to the earlier to occur of (a) the third anniversary of the
termination of Employee's employment hereunder or (b) the date such option would
have expired had Employee's employment not been terminated.

            C. TERMINATION ON ACCOUNT OF DEATH.  In the event of the death of
Employee, the Company shall pay the estate of the Employee or his legal
representative the accrued salary due for the period prior to the date of
Employee's death. This paragraph 7C shall not be deemed to affect any stock
option agreements in effect between the Company and Employee.

         8. NONDISPARAGEMENT; COOPERATION IN LITIGATION. If Employee's
employment is terminated, Employee will not make any statements, public or
otherwise, relating to the Company or its affiliates, including, without
limitation, to the financial press and financial analysts or by means of
electronic communication (i.e., over the Internet or similar media for
communication), other than to state that Employee has resigned from the Company;
and Employee will not engage in any conduct or make any statements which are
critical of the Company or its affiliates. Employee will cooperate fully and
assist the Company to the best of Employee's abilities in connection with any
pending or subsequent legal matter or proceedings involving, directly or
indirectly, Employee's role or actions as an officer or employee of the Company.

         9. NON-COMPETITION AND SECRECY.

            A. NO INTERFERENCE. For the period ending twelve (12) months after
the termination of the Employee's employment, Employee shall not, whether for
his own account or for the account of any other individual, partnership, firm,
corporation or other business organization (other than the Company and its
affiliates), intentionally solicit, endeavor to entice away from the Company or
its affiliates, or otherwise interfere with the relationship of Company or any
of its affiliates with, any person who is employed by the Company or its
affiliates at the time of the termination of Employee's employment and Employee
will not interfere with the relationship of the Company or any of its affiliates
with any individual, partnership, firm, corporation or other business
organization with which the Company or its affiliates had any relationship while
Employee was employed by the Company.

            B. SECRECY. Employee recognizes that the services to be performed by
him hereunder are special, unique and extraordinary in that, by reason of his
employment hereunder, he may acquire confidential information and trade secrets
concerning the operation of the Company or any affiliate thereof, the use or
disclosure of which could cause the Company substantial loss and damages which
could not be readily calculated and for which no remedy at law would be
adequate. Accordingly, Employee covenants and agrees with the Company that he
will not at any time, except in performance of Employee's obligations to the
Company hereunder or with the prior written consent of the Company, directly or
indirectly, disclose any secret or confidential information that he

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may learn or has learned by reason of his association with the Company. The term
"confidential information" includes, without limitation, information not
previously disclosed to the public or to the trade with respect to the products,
facilities, applications and methods, trade secrets and other intellectual
property, systems, procedures, manuals, confidential reports, product price
lists, customer lists, technical information, financial information (including
the revenues, costs or profits associated with any of its products), business
plans, prospects or opportunities but shall exclude any information already in
the public domain. Notwithstanding anything to the contrary herein contained,
Employee's obligation to maintain the secrecy and confidentiality of the
confidential information under this Section 9 shall not apply to any such
confidential information which is disclosed through any means other than as a
result of any act by Employee constituting a breach of this Agreement or which
is required to be disclosed under applicable law.

             C. EXCLUSIVE PROPERTY. Employee hereby agrees to keep all such
records in connection with Employee's employment as the Company may from time to
time direct, and all such records shall be the sole and exclusive property of
the Company. Upon termination of Employee's employment, Employee shall return to
the Company all confidential and/or proprietary information that exists in
written or other physical form (and all copies thereof) under Employee's
control.

             D. INJUNCTIVE RELIEF. Without intending to limit the remedies
available to the Company, Employee acknowledges that a breach of any of the
covenants contained in this Section 9 may result in material irreparable injury
to the Company for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the event
of such a breach or threat thereof, the Company shall be entitled to seek to
obtain a temporary restraining order and/or a preliminary injunction restraining
Employee from engaging in activities prohibited by this Section 9 or such other
relief as may be required to specifically enforce any of the covenants in this
Section 9.

         10. COMPANY'S REPRESENTATION. The Company represents that the person
signing this Agreement on its behalf is fully authorized to execute this
Agreement on behalf of the Company.

         11. SECTION HEADINGS. The titles to the Sections of this Agreement are
solely for the convenience of the parties and shall not be used to explain,
modify, simplify, or aid in the interpretations of the provisions of this
Agreement.

                                      -4-
<PAGE>   5
         12. NOTICES. All notices, demands and requests provided or permitted to
be given pursuant to this Agreement, shall be given in writing, sent by
certified mail, return receipt requested, and addressed as follows or to such
other address so designated in the appropriate manner by the parties. All
notices shall be deemed effective when mailed.

                  Company:          Source Media, Inc.
                                    5400 LBJ Parkway
                                    Suite 680
                                    Dallas, Texas 75240
                                    Attention: Stephen W. Palley

                                    With a copy to:

                                    Robert L. Winikoff, Esq.
                                    Sonnenschein Nath & Rosenthal
                                    1221 Avenue of the Americas
                                    New York, New York   10020

                  Employee:         F. Paul Tigh
                                    1608 Old Course Drive
                                    Plano, Texas 75093

         13. ASSIGNMENT AND ASSUMPTION. The rights of each party under this
Agreement are personal to that party and may not be assigned, delegated or
transferred to any other person, firm, corporation, or other entity without the
prior written consent of the other party, except that the Company may transfer
its rights under this Agreement to any Affiliate or other entity which succeeds,
by contract or operation of law, to all or substantially all of the business of
the Company and agrees in writing to assume the Company's obligations under this
Agreement.

         14. GOVERNING LAW. This Agreement shall be governed by, construed and
enforced in accordance with the laws of the State of New York without giving
effect to the conflicts of law principles of the laws of said state. The parties
agree that any cause of action for breach of this Agreement shall be brought in
any state or federal court located in New York, New York and each party waives
the defense of an inconvenient forum.

         15. ENTIRE AGREEMENT. This Agreement shall constitute the entire
agreement between the parties and any prior written or oral understanding or
representation of any kind, or any oral communications shall not be binding upon
either party except to the extent incorporated in this Agreement. This Agreement
supersedes any and all prior agreements between the parties.

         16. MODIFICATION OF AGREEMENT. This Agreement can be modified only in
writing and shall be binding only if executed with and under the same formality
by the parties hereto or their duly authorized representatives.

                                      -5-
<PAGE>   6
         17. NO WAIVER. The failure of either party to this Agreement to insist
upon the performance of any of the terms and conditions of this Agreement, or
the waiver of any breach of any of the terms and conditions of this Agreement,
shall not be construed as thereafter waiving any such terms and conditions, but
each same shall continue and remain in full force and effect as if no such
forbearance or waiver had occurred.

         18. EFFECT OF PARTIAL INVALIDITY. The invalidity or unenforceability of
any provision or covenant of this Agreement shall not be deemed to affect the
validity or enforceability of any other provision or covenant. In the event that
any provision or covenant of this Agreement is held invalid or unenforceable,
the same shall be deemed automatically modified to the minimum extent necessary
to make such provision or covenant enforceable and the parties agree that the
remaining provisions shall be deemed to be and to remain in full force and
effect.

         19. COUNTERPARTS. This Agreement may be executed in counterparts and
all counterparts so executed shall constitute one and the same agreement.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.

                                       SOURCE MEDIA, INC.

                                       By: /s/ Stephen W. Palley
                                           -------------------------------------
                                           Stephen W. Palley,
                                           President and Chief Executive Officer

                                       /s/ F. Paul Tigh
                                       -----------------------------------------
                                       F. PAUL TIGH

                                      -6-
<PAGE>   7
                                                                       EXHIBIT A

                                     RELEASE

         1. In consideration of the payments and benefits to be granted to you
pursuant to the Employment Agreement dated as of September 1, 2000 (the
"Employment Agreement") between you and Source Media, Inc. (the "Company"), you
agree, on your own behalf and on behalf of your heirs, executors,
administrators, attorneys, representatives, successors and assigns to hereby
waive, release and forever discharge all claims, demands, causes of action,
obligations, promises, covenants, agreements, suits, actions, damages or
expenses in law or in equity (including attorney's fees) of any kind whatsoever,
whether known or unknown, which you ever had or now have against the Company,
its former, current and/or future directors, officers, employees, agents,
subsidiaries, affiliates, members, trustees, parents, fiduciaries of any
employee benefit plan or policy of the Company and other representatives by
reason of any actual or alleged act, omission, transaction, practice, conduct,
occurrence, or other matter up to and including the date you execute this
Release relating in any way to your employment at or termination of employment
from the Company. You understand that in executing this Release you are or may
be giving up rights to all possible legal claims and theories of recovery,
including, but not limited to, any claim for equitable relief or recovery of
punitive, compensatory, or other damages or monies, any intentional or
unintentional tort; the violation of any express or implied contract or any
public policy; the violation of any common law or any federal, state, or local
fair employment laws, or other employee relation statutes and executive orders;
and all claims for alleged discrimination based upon age, race, color, sex,
marital status, religion, national origin, pregnancy, handicap, disability or
retaliation, including any claim, asserted or unasserted, which could arise
under Title VII of the Civil Rights Act of 1964, as amended; the Civil Rights
Act of 1966; the Age Discrimination in Employment Act of 1967; the Older
Workers' Benefit Protection Act of 1990; the Americans with Disabilities Act of
1990; the Texas Human Rights Commission Act; the Family and Medical Leave Act of
1993; the Fair Labor Standards Act; the Equal Pay Act; the Employee Retirement
Income Security Act of 1974; the Civil Rights Act of 1991; 42 U.S.C. Sec. 1981;
defamation; intentional infliction of emotional distress; injury to reputation;
pain and suffering; or any other federal, state, or local law or regulation; or
any right under any Company welfare or stock plans, with the exception of any
breach of the terms of this Release. By executing this Release, you agree that
it shall discharge the Company to the maximum extent permitted by law. However,
nothing herein shall be deemed to waive any rights to benefits under the
Employment Agreement or any Company plan in which you are vested as of the
effective date of this Release.

         2. In consideration of the benefits provided to you as described in the
Employment Agreement, you also agree and acknowledge that this Release
constitutes a knowing and voluntary waiver of all rights or claims you have or
may have had against the Company arising under the Age Discrimination in
Employment Act of 1967, as amended ("ADEA"), including, but not limited to, all
claims of age discrimination in employment and all claims of retaliation in
violation of the ADEA.

                                      -1-
<PAGE>   8
         3. By executing this Release, you further agree that as part of your
complete, total and irrevocable release and discharge of the Company to the
fullest extent permitted by law, that you have not and will not institute any
complaint, claim, charge, lawsuit, administrative agency proceeding, grievance
or demand for arbitration in any forum, for damages, or assist or otherwise
participate willingly or voluntarily in any such claim, arbitration, suit,
action, investigation or other proceeding of any kind that relates to any matter
involving the Company and that occurred on or before the date you execute this
Release.

         4. You understand that any payments or benefits provided you under the
terms of this Release do not constitute any admission by the Company that it has
violated any law or legal obligation with respect to any aspect of your
employment or separation from the Company.

         5. You understand that by signing this Release, you do not waive any
rights or claims that may arise after the date you execute this Release.
(1)

         6. You agree and acknowledge that the consideration provided to you in
return for your entering into this Release is in addition to anything of value
to which you were and are already entitled.

         7. You hereby acknowledge that the Company has advised and urged you to
consult with an attorney prior to executing the Employment Agreement and this
Release.

         8. You represent that your actions and conduct while employed by the
Company were in good faith and within the scope of your duties and
responsibilities. Based on and subject to your representations, the Company
hereby releases you, your heirs, executors, administrators, successors and
assigns, from all claims, causes of action, lawsuits, demands, debtor liability
of any kind, asserted or unasserted, known or unknown, suspected or unsuspected,
which the Company may now or hereafter have against you from the beginning of
time to the date of this Release, arising out of or relating to your employment
with the Company with the exception of any claims arising from any acts of
intentional misconduct, recklessness, willful malfeasance or gross negligence by
you. The foregoing waivers shall not be deemed a waiver of any rights by the
Company to enforce the Employment Agreement or this Release.

         9. If a dispute concerning this letter agreement shall arise, such
dispute will be resolved by applying the laws of the State of New York without
regard to its conflict of law provisions, and any cause of action for breach of
this letter agreement shall be brought in any state or federal court located in
the State of New York, you having hereby waived any claim that this is not a
convenient forum. This Release and the Employment Agreement constitutes the
entire understanding between the parties with respect to the subject matter
thereof and no waiver or modification of the terms hereof shall be valid unless
in writing signed by the party to be charged and only to the extent therein set
forth. All prior agreements and understandings, whether written or oral, shall
be null and void and this Release may only be amended by a written document
executed by the parties hereto. Your rights and obligations hereunder are
personal in nature and this Release may not be assigned by you to any other
party.

                                      -2-
<PAGE>   9
         10. You have forty-five (45) days from your receipt of this Release in
which to consider executing it and in which to consult with your attorney
regarding the terms and effect of this Release. You may accept this Release and
execute it at any time within those forty-five (45) days. Once you have signed
this Release, you have seven (7) days to revoke it, and it will not become
effective or enforceable until the seven days revocation period has expired. If
you do not revoke this Release, it will become effective on the eighth (8th) day
after you sign it. In the event you wish to revoke this Release, you must do so
in writing by delivering the Notice of Revocation within seven (7) days to the
following address:

                           Stephen W. Palley
                           Chief Executive Officer
                           Source Media, Inc.
                           5400 LBJ Freeway, Suite 680
                           Dallas, Texas 75240

         If the foregoing confirms your understanding and agreement, please
countersign the enclosed copy of this Release in the presence of a Notary Public
and return it to:

                           Stephen W. Palley
                           Chief Executive Officer
                           Source Media, Inc.
                           5400 LBJ Freeway, Suite 680
                           Dallas, Texas 75240

Dated:  ___________________                          SOURCE MEDIA, INC.

                                                     By:
                                                        Stephen W. Palley
                                                        Chief Executive Officer

                                      -3-
<PAGE>   10
                              ACCEPTANCE OF RELEASE

         I acknowledge that I have carefully read this Release and understand
all its terms, including the full and final release of claims set forth above. I
further acknowledge that I have voluntarily entered into this Release, that I
have not relied upon any representation or statement, whether written or oral,
not set forth in this Release and that I have been encouraged and given the
opportunity to consult with an attorney regarding this Release. I also
acknowledge that I have been afforded forty-five (45) days to consider this
Release and that I have seven (7) days after signing this Release to revoke it
by delivering to the Company written Notice of Revocation at the following
address:

                           Stephen W. Palley
                           Chief Executive Officer
                           Source Media, Inc.
                           5400 LBJ Freeway, Suite 680
                           Dallas, Texas 75240

         By executing this Release, I agree to be bound by and comply with each
and every term of it appearing on the four (4) pages which comprise this
Release. Pursuant to the terms of this Release, therefore, and in consideration
of the benefits described in this Release, I hereby release and forever
discharge the Company from all potential claims as more fully described herein.

                                                   F. Paul Tigh

                                                   Date

         SUBSCRIBED AND SWORN TO before me on this _____ day of ____________,
____.

                                                   Notary Public

My Commission Expires:

                                      -4-

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