Agreement - Promotion and Display Technology Ltd. and theglobe.com Inc.
AGREEMENT
Made and signed this 7t' day of August, 2003
BETWEEN: Promotion and Display Technology Ltd.
A Company Organized under the Laws of the United Kingdom
("PDT")
Of the First Part
AND: TheGlobe.com Inc.
A Company Organized under the Laws of Florida
("TG")
Of the Second Part
Sale-Purchase Undertaking
1. PDT hereby agrees to sell to TG, and TG hereby agrees to purchase from
PDT, Model V652M voiceglo branded USB handsets (the "Units"), with VoIP
Voice chipset; ringer and proximity hook switch included; keyboard
functionality and ability to upgrade firmware over USB; cutter guide; and
further in accordance with certain requirements of TG (the "TG
Requirements") and with the terms and conditions set out in this
Agreement.
TG Requirements
2. On or before August 15, 2003 (unless otherwise indicated), TG will notify
PDT of the details of the TG Requirements and provide all the
documentation and information required with respect thereto. The TG
Requirements will relate only to the following subjects and be subject to
the following conditions:
(a) Color of LED, side panels and body of Units. TG will choose from
among blue, red, green, orange/yellow or white, and will provide the
pantone reference for the side rubber grip colors and main body
color. The choice of color will not affect the price, except in the
case of white LEDs, which will cost an additional US$[___*___] per
Unit. TG may change the color requirement with each Purchase Order,
provided that in any particular Purchase Order, TG orders no fewer
than [___*___] Units of each chosen color.
(b) Branding of Units and position to be printed; TG will provide a high
resolution file in any common PC format.
1
<PAGE>
(c) Indication on a line drawing of all key markings.
(d) Underneath sticker artwork, based on a PDT proposal submitted to TG
for its approval. (e) Serial number format (if TG requires something
other than PDT's standard format).
(f) Instruction manual artwork in PDF or word format.
(g) If TG wishes to have a CD with software included with each Unit, it
will also provide (by the date above) a master disk and artwork for
the CD; this will then be charged by PDT to TG at cost.
(h) If TG wishes to have PDT provide gift box packaging for the Units,
it will also provide PDT with artwork and any and all other
documents and information with respect thereto;.
Number of Units to be Purchased/Price/Purchase Orders and Forecasts
3. TG undertakes to purchase from PDT no fewer than [___*___] Units during
the period beginning on the date of this Agreement and ending on December
31, 2004 (the "Agreement Term"). TG may, but shall not be obligated to,
purchase more than [___*___] Units during the Agreement Period, and should
it desire to do so, the terms and conditions of this Agreement shall apply
to those additional Units as well.
4. The price of the Units ordered during the Agreement Term will be as
follows:
First 75,000 Units Ordered US$[___*___]
Next 75,000 Units Ordered (75,001-150,000) US$[___*___]
Next 100,000 Units Ordered (150,001-250,000) US$[___*___]
Next 100,000 Units Ordered (250,001-350,000) US$[___*___]
Next 150,000 Units Ordered (350,001-500,000) US$[___*___]
All Additional Orders of Units (500,001 and up) US$[___*___]
5. The prices above, and any other amounts payable by TG to PDT, are net of
all taxes of any kind, and of any withholding. Should such taxes or
charges be imposed by any authority, they will be borne by TG.
6. The prices above are FOB Hong Kong. TG will be responsible at its own
expense for all shipping and freight from the FOB point.
7. Further to the undertakings of TG above and without derogation there from,
TG will issue to PDT, on the last day of each month, beginning on July 31,
2003 and ending December 31, 2004, written purchase orders ("Purchase
2
<PAGE>
Orders"). In the Purchase Orders during the period from July 31, 2003
through December 31, 2003, TG will order no fewer than a total of
[___*___] Units. Similarly, in the Purchase Orders issued during each
quarter of 2004, TG will order no less than a total of [___*___] Units.
8. TG may issue Purchase Orders during a given month (not just on its last
day), but in that event, the Purchase Order will deemed issued on the last
day of the month in which it was issued.
9. Each Purchase Order will be for a minimum of [___*___] and up to [___*___]
Units with a fourteen (14) day delivery time However, subject to its
satisfaction of the provisions of this Agreement, TG may decline to issue
a Purchase Order for any Units during a given month, including on its last
day.
10. TG may order Units in excess of the quantities required above, provided
that in no month will it issue Purchase Orders for more than [___*___]
Units.
11. In addition to the above, on the last day of each month during the
Agreement Term, TG will provide PDT with a written rolling forecast (the
"Forecast"). The Forecast will describe the number of Units, which TG
expects to order at the end of each of the following two months. For
example, the Forecast of November 30, 2003 will describe the quantities TG
expects to order in the Purchase Orders to be issued on December 31, 2003
and January 31, 2004. It is noted, to avoid doubt, that TG will be
obligated to issue a Forecast on the last day of each month, even if it
does not also issue a Purchase Order on that day.
12. TG will be obligated to issue Purchase Orders for the dates referred to in
the Forecasts that accord with the Forecasts, subject to a deviation of
25% (whether up or down) in the quantities forecast.
13. All Purchase Orders and Forecasts will be sent by TG via facsimile to
PDT's then current facsimile number. TG will also send all Forecasts by
e-mail. TG will call PDT within two business days of the transmission of
each Purchase Order and Forecast to confirm that they were received. A
purchase order becomes valid on payment of 50% of the value contained in
such purchase order being received by PDT.
14. For every [___*___] Units purchased by TG for which PDT has collected
payment, PDT will pay TG a rebate in the amount of US$[___*___]. The
rebate will be paid within thirty days after PDT has collected the payment
for the said [___*___] Units.
TG undertakes to hold in strictest confidence and not to disclose in any
way, either directly or indirectly, to any third party, the prices of the
Units as set out in this Agreement. TG will take all measures necessary to
ensure that no person other than an employee of TG will have access to the
3
<PAGE>
pricing information, to minimize the number of its employees who will have
such access, and to ensure that all such employees will adhere to this
confidentiality provision. "TG is fully aware of the sensitivity of this
information and is also aware of the very significant damage to PDT which
could result from a breach of this clause and TG would be liable to fully
compensate PDT for all such damage."
Standby Letter of Credit
15. Together with each Purchase Order, TG will transmit to PDT, via facsimile
to PDT's then current facsimile number, a copy of a transferable
irrevocable Standby Letter of Credit ("Standby Letter of Credit") issued
by a bank selected by TG and approved by PDT, in the amount of 50% of the
payment that TG will be obligated to pay PDT pursuant to the Purchase
Order. In addition, TG will cause the original of the Standby Letter of
Credit to be delivered to PDT, at its office in the United Kingdom, no
later than three business days after the transmission of the Purchase
Order.
16. With respect to the Purchase Orders each Standby Letter of Credit will
provide for payment to PDT immediately upon presentment of the Standby
Letter of Credit by PDT. However, TG will forward payment to PDT within 5
days of shipment and the Standby letter of credit will only be called upon
by PDT in the event of TG not complying with these payment terms
17. Each Standby Letter of Credit will, by its terms, remain in effect until
at least 180 days from the date of the Purchase Order to which it relates.
18. Each Standby Letter of Credit will be in the form attached to this
Agreement as an integral part hereof, and accord with the provisions of
this Agreement with respect to the Standby Letters of Credit. The terms of
this Standby Letter of Credit are attached at the end of this contract in
the Appendix.
19. Each Standby Letter of Credit will include a clause whereby the right of
PDT to realize the Standby Letter of Credit to collect its amount will be
conditioned on PDT's presenting, together with the Standby Letter of
Credit, a document which, on its face, appears to be a declaration by PDT
4
<PAGE>
that the goods as to which the Standby Letter of Credit constitutes
payment have been inspected by McRink Surveyors (BVI) Limited ("McRink
20. Except as provided above, realization of each Standby Letter of Credit
shall, by its terms, be unconditional.
Delivery
21. PDT will deliver the Units ordered in a Purchase Order or Purchase Orders
made in a given month, to the delivery point in Hong Kong, within 30 days
after the later of (a) the last day of that month and (b) its receipt of
the original of the Standby Letter of Credit with respect to the said
Purchase Order or Orders in accordance with the terms of Paragraph 16 of
this Agreement. However, if the Purchase Order or Purchase Orders made in
a given month are for more than 100,000 Units, then PDT will deliver the
Units, to the delivery point in Hong Kong, within 60 days after the later
of (a) the last day of that month and (b) its receipt of the original of
the Standby Letter of Credit with respect to the said Purchase Order or
Orders in accordance with the terms of Paragraph 16 of this Agreement.
Defective Units
22. PDT will be responsible to replace any Units that do not remain in good
working order ("Defective Units") for a period of 18 months from the date
of the manufacture of the Units, provided that the given Unit was handled
and used in a customary and ordinary manner. Whenever, during the relevant
period, such a defect is discovered, TG will promptly notify PDT. TG will
collect such defective Units and, upon collection of 100 such Units, PDT
will be given a reasonable opportunity to examine (or have someone on its
behalf) examining the Units. On each occasion that TG has in fact
collected 100 Defective Units for which PDT is responsible, it will (after
PDT has been given the opportunity for examination) dispose of the
Defective Units, and PDT will then replace the Defective Units (the
"Replacement Units"). The Replacement Units will be included together with
the next delivery of Units to be made by PDT to TG with which it is
reasonably possible to include such Replacement Units.
23. Except for the provision above, PDT provides no warranty, express or
implied, with respect to the Units, including without limitation implied
warranties of merchantability and fitness for a particular purpose.
24. In addition, except for its obligation above with respect to Replacement
Units, PDT shall not be liable to TG for any remedies or other damages as
a result of any Defective Units. Without derogating from this provision,
it is expressly provided that PDT will not be liable to TG for any
5
<PAGE>
special, incidental or consequential damages (including, but not limited
to, lost profits).
Infringement
25. Should a claim be made that the manufacture, use, maintenance, sale or
other disposition of the Units infringes or otherwise violates any patent,
copyright, trademark, trade secret, or proprietary or other information of
any third party, PDT will promptly investigate and defend that claim, and
will indemnify TG for any judgment entered against TG resulting from such
a claim; this, on the condition that TG gives PDT prompt notice of any
such claim (assuming the claim is asserted to TG), provides PDT with all
information and assistance as PDT may require in order to investigate and
defend the claim, and gives PDT the authority necessary to settle or
defend the claim as it sees fit. This indemnification will not apply if
the claim arises out of the incorporation of the TG Requirements in the
Units, nor will it apply if TG or some other party modified or altered the
Units, or combined them with some other product or device, in a manner not
approved by PDT.
26. Should a claim be made that the manufacture, use, maintenance, sale or
other disposition of the Units, by virtue of the incorporation therein of
the TG Requirements, infringes or otherwise violates any patent,
copyright, trademark, trade secret, or proprietary or other information of
any third party, TG will promptly investigate and defend that claim, and
will indemnify PDT for any judgment entered against PDT resulting from
such a claim; this, on the condition that PDT gives TG prompt notice of
any such claim (assuming the claim is asserted to PDT), provides TG with
all information and assistance as TG may require in order to investigate
and defend the claim, and gives TG the authority necessary to settle or
defend the claim as it sees fit.
Breach/Force Majeure/Termination
27. If either party breaches a material obligation of this Agreement, and such
breach is not cured within 30 days after receipt of notice from the
non-breaching party, then the non-breaching party may terminate this
Agreement.
28. The parties to this Agreement are exonerated from their responsibility to
fulfill all or part of their contractual obligations (other than for delay
in the payment of money due and payable hereunder) if these cannot be
fulfilled due to force majeure. Provided the circumstances of force
majeure last no longer than six months, the parties hereto shall observe
the terms and conditions of the Agreement, and the delivery times and
other relevant time-related conditions shall be extended by a period equal
to the duration of the force majeure contingencies. On expiry of this
period, either party will be entitled to withdraw from the Agreement and
terminate it. Force majeure contingencies are defined as events which
6
<PAGE>
cause a party to this Agreement to be unable substantially to perform its
obligations under the Agreement, which are beyond the party's reasonable
control and which occur without its fault or negligence; these include,
without limitation, war, hostilities, rebellion, acts of God, strikes and
failure of suppliers, subcontractors, and carriers to meet their
obligations to the party to this Agreement. In the event of the occurrence
of a force majeure contingency, the party affected by it will notify the
other party of its occurrence, in writing (via facsimile transmission)
within three business days of its occurrence, and will in the same manner
notify the other party of its cessation within three business days of its
cessation.
29. In the event of termination of this Agreement due to force majeure, all
financial obligations which had accrued but which were unpaid as of the
effective date of termination of this Agreement shall survive termination.
This includes, in the case where the force majeure does not prevent PDT
from delivering Units under then-outstanding Purchase Orders and
Forecasts, the obligation of TG to pay the amounts due under such Purchase
Orders and the amounts that would be due for 75% of the quantities
forecast in then-outstanding Forecasts if Purchase Orders had been issued
in accordance with such Forecasts. All other obligations which would have
accrued after the effective date of termination shall terminate.
30. It is noted, to avoid doubt, that in the event of a breach of this
Agreement by one of the parties, the non-breaching party shall entitled to
all remedies available under law t its further noted, to avoid doubt, that
where the non-breaching party has the right to terminate this Agreement by
virtue of a breach of the other party, the non-breaching party shall be
entitled, if it so desires, to demand instead specific performance and
enforcement of this Agreement.
Dispute Resolution/Governing Law/Jurisdiction
31. The laws of the United Kingdom shall apply to the interpretation,
application and enforcement of this Agreement. The courts of the United
Kingdom, located in London, England, shall share jurisdiction with the
state of Florid to adjudicate any matter brought before a court with
regard to this Agreement (subject to the arbitration provision below)
32. In the event of any dispute between the parties with regard to the
interpretation, application or enforcement of this Agreement, such dispute
shall be arbitrated under the Rules of Conciliation and Arbitration of the
International Chamber of Commerce (the "ICC Rules"). The arbitration shall
be conducted by an arbitrator to be agreed upon by the parties and, in the
absence of such agreement (or if one of the parties does not promptly
cooperate in appointing an arbitrator), by an arbitrator appointed in
accordance with the ICC Rules. The venue of the arbitration shall be in
London, England, United Kingdom. This Agreement also constitutes an
7
<PAGE>
arbitration agreement. To the extent that the ICC Rules, or the laws of
the United Kingdom themselves, permit the arbitrator to rule other than in
accordance with United Kingdom law, the arbitrator shall be permitted (but
not required) to so rule. 33. The arbitration provision above shall not
preclude either party to this Agreement from seeking injunctive relief in
a court of law.
Miscellaneous
34. Each party to this Agreement represents and warrants that any and all
actions necessary for the execution and implementation of this Agreement
pursuant to any applicable laws have been accomplished, including, without
limitation, the action of any shareholders or directors, that the
execution of this Agreement will not breach or be in conflict with any
other contract or agreement to which it is a party, and that this
Agreement has been validly executed by it.
35. Each party to this Agreement agrees that it shall act so as to implement,
to its full extent, the provisions of this Agreement and in all respects
use its best endeavors and take all such steps as may reasonably be within
its power so as to comply with and act in a manner contemplated by the
provisions of this Agreement and so as to implement to their full extent
the provisions of this Agreement, and to the extent, if any, which may be
permitted by law, shall cause its respective nominee, directors, agents
and employees, if any, to act accordingly.
36. PDT and TG are contractors independent of one another. Nothing in this
Agreement is intended to or shall constitute either party as an agent,
legal representative, partner, joint venture, franchisee, employee, or
servant of the other for any purpose. Neither party shall make any
contract, agreement, warranty, or representation on behalf of the other
party, or incur any debt or other obligation in the other party's name, or
act in any manner which has the effect of making that party the apparent
agent of the other; and neither party shall assume liability for, or be
deemed liable as a result of, any such action by the other party. Neither
party shall be liable by reason of any act nor does omission of the other
party in the conduct of its business or for any resulting claim or
judgment, including without limitation those arising from oral or written
statements the other party makes in connection with its marketing efforts.
37. Neither party to this Agreement may assign any of its respective rights
and obligations under this Agreement without the express written consent
of the other party before that assignment. Any permitted assignment will
not relieve the assigning party of its outstanding financial obligations,
if any, incurred before the assignment.
8
<PAGE>
38. This Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors and permitted assigns.
39. This Agreement constitutes the entire Agreement between the parties
pertaining to the subject matter hereof and supersedes all prior
agreements, understandings, representations, negotiations and discussions,
whether oral or written, of the parties.
40. This Agreement may not be amended, altered or modified except by a written
instrument signed by the parties.
41. With regard to any power, remedy or right available to a party under this
Agreement, no waiver or extension of time shall be effective unless
executed in writing by the waiving party. No alteration, modification or
impairment of a term of this Agreement shall be implied by reason of any
previous waiver, extension of time, delay or omission in exercise or other
indulgence. Further, no waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provisions
(whether or not similar) nor shall such waiver constitute a continuing
waiver unless otherwise expressly provided.
42. Each term of this Agreement is severable. The validity, legality or
enforceability of the remainder of this Agreement shall not be affected
even if one or more of the provisions of this Agreement shall be held to
be invalid, illegal or unforcable in any respect.
43. The parties to this Agreement were free to choose to be represented by
counsel, if they so desired. There shall be no presumption that this
Agreement should be interperted against the party, which drafted it.
44. Each party to this Agreement shall bear its own costs of counsel and other
advisers incurred with regard to the negotiation of this Agreement.
45. The paragraph headings in this Agreement are inserted only as a matter of
convienence, and in no way define, limit, or extend or interpret the scope
of the Agreement or any particular paragraph.
46. This Agreement may be executed simultaniously in two or more counterparts,
each of which shall be deemed to be an original, but all of which together
shall constitute one and the same instrument.
9
<PAGE>
47. All notices and documents to be provided by one party to the other shall
be in writing and provided in accordance with the specific method
described in this Agreement with respect a particular notice or document
and, in the absence of any provision of a specific method, shall be sent
by facsimile transmission or registered mail or delivered by personal
service to such fax number or address as may be designated from time to
time by the relevant party and which shall initially be:
48. For PDT -
9th Floor
8 Exchange Quay
Salford Quays
Lancashire
M5 3EJ
United Kingdom
Fax No. +44 (0)161 874 501
10
<PAGE>
For TG -
by personal service to such fax number or address as may be designated
from time to time by the relevant party and which shall initially be:
48. For PDT -
9th Floor
8 Exchange Quay
Salford Quays
Lancashire
M5 3EJ
United Kingdom
Fax No. +44 (0)161 874 501
For TG -
TheGlobe.com
110 East Broward Blvd. Suite 1400
Fort Lauderdale, Florida 33301
U.S.A.
Fax 954-357-4654
and for any matters related to billing:
P.O. Box 029006
Fort Lauderdale, Florida 33302
U.S.A.
A notice or document sent by facsimile transmission shall not be deemed
to have been received by the party to which it was sent unless that
party has confirmed receipt in writing.
IN WITNESS WHEREOF THE PARTIES HEREUNTO PUT THEIR HANDS
/s/ David Holder /s/ James L. Magruder
------------------------ ------------------------
By: David Holder By: James L. Magruder
Title: Managing Director Title: Vice President
11