EARNOUT
AGREEMENT
This
Earnout Agreement (“Agreement”) is entered into this 29th day of September,
2008, by and between theglobe.com, Inc., a Delaware corporation (“Parent”), and
Tralliance Registry Management Company, LLC, a Florida limited liability company
(“Buyer”).
RECITALS
A.
Parent
originally planned to sell all of the assets of its wholly-owned subsidiary
Tralliance Corporation, a New York corporation (“Tralliance”) (the “Assets”), to
The Registry Management Company, LLC, a Florida limited liability company
(“Registry”), pursuant to a Purchase Agreement dated as of June 10, 2008, by and
among Tralliance, the Parent and Buyer (the “Purchase Agreement”). Defined terms
used herein and not otherwise defined herein shall have the meanings ascribed
to
such terms in the Purchase Agreement.
B.
Buyer
is
a wholly-owned subsidiary of Registry.
C.
Registry
has assigned all of its right, title and interest in and to the Purchased Assets
to Buyer and Buyer has agreed to assume all of the obligations and liabilities
relating to this Agreement.
D.
The
Purchase Agreement provides that a portion of the purchase price will be
calculated and paid as an earnout based upon the Net Revenues (as hereinafter
defined) generated by the Buyer over the Term (hereinafter
defined).
E.
Parent
and Buyer have agreed that determination and payment of the earnout contemplated
by the Purchase Agreement shall be made in accordance with the terms of this
Agreement.
Now,
therefore, in consideration of the premises and of the respective covenants
and
provisions herein contained, Parent and Buyer agree as follows:
ARTICLE
I
DEFINITIONS
1.1
Business
shall
have the meaning of such term as set forth in the Purchase
Agreement.
1.2
Cumulative
Minimum Payment Amount
shall
mean the sum of Two Million One Hundred Seventy Five Thousand Dollars
($2,175,000), plus an amount equal to the number of effective days in the final
Earnout Period divided by 365 multiplied by Four Hundred Fifty Thousand Dollars
($450,000).
1.3
Earnout
Amount
means
with respect to any particular time period, an amount equal to ten percent
(10.0%) of the Net Revenues of the Buyer for such period.
1.4
Earnout
Period
shall
mean the one year period commencing on the Closing Date and all succeeding
one
year periods thereafter (or portion thereof with respect to the last such year)
during the Term.
1.5
Fiscal
Quarter
shall
mean the calendar quarters ending on March 31, June 30, September 30 and
December 31.
1.6
Net
Revenue
shall
have the meaning set forth in Section 3.1 below with respect to the Company
and
any subsidiary thereof.
1.7
Term
shall
mean the period commencing on the date hereof and continuing until the close
of
business on May 5, 2015.
ARTICLE
II
EARNOUT
PAYMENT
2.1
Minimum
Earnout Payments.
The
minimum Earnout Amount that shall be paid to the Parent with respect to the
initial Earnout Period shall be Three Hundred Thousand Dollars ($300,000).
Thereafter, the minimum Earnout Amount that shall be paid to the Parent shall
increase by $25,000 in each subsequent Earnout Period until the end of the
Term,
with the minimum Earnout Amount for the last Earnout Period prorated based
upon
the effective number of days in that period. The minimum aggregate Earnout
Payments that shall be paid to the Parent over the Term shall be equal to the
Cumulative Minimum Payment Amount. Within ten (10) Business Days following
the
end of each Fiscal Quarter during the Term, Buyer shall pay to the Parent an
amount equal to twenty-five percent (25%) of the minimum Earnout Amount due
for
that Earnout Period, except that the quarterly payments due during the final
Earnout Period shall be equal to thirty three and one-third percent (33
1/3
rd
%)
of the
minimum Earnout Amount due for such final Earnout Period.
2.2
Yearly
Earnout Payments
.
As
further provided in Section 3.2(a) below, within twenty (20) Business Days
following the end of each Earnout Period (or May 5, 2015 with respect to the
last such Earnout Period) during the Term, Buyer shall pay to Parent an amount
equal to the excess, if any, of the Net Revenue of the Buyer for such period
multiplied by ten percent (10.0%) (the “Yearly Earnout Payment”) over the sum of
all Minimum Earnout payments made and attributable to such Earnout
Period.
2.3
Interest
.
Unless
such payment is not timely made,
Parent
shall not be entitled to any interest on any payments under this Agreement.
Any
minimum Earnout Amount or Yearly Earnout Payment that is not made on a timely
basis shall bear interest at the rate of one percent (1%) per month from the
date due until paid in full.
2.4
Right
to Operate the Business.
The
Parent acknowledges that following the Closing of the Purchase Agreement Buyer
will have the right to operate the Business of the Buyer in a manner that Buyer
deems appropriate in Buyer’s sole discretion, but subject to the provisions of
Section 2.5 hereof. Notwithstanding the foregoing, at all times during the
Term,
the Buyer shall diligently proceed with commercially reasonable efforts to
develop and market the Business.
2.5
Segregation
of Business within the Buyer.
The
Parties acknowledge and agree that the earn-out calculations under this
Agreement assume that the Buyer acts as a single purpose entity and continues
to
operate the Business of the Seller solely within the Buyer. During the Term,
the
Buyer covenants that it will only own and operate the Business (together will
such other business as is related or incidental thereto) through the Buyer
or a
subsidiary thereof, or will implement appropriate procedures to accurately
track
Net Revenues as contemplated by this Agreement, which procedures will be subject
to the approval of Parent which consent will not be unreasonably withheld.
ARTICLE
III
COMPUTATION
OF NET REVENUE; PAYMENT
3.1
Manner
of Computation.
For
purposes of this Agreement, “Net Revenue” for any period shall mean the total
cash received by the Buyer and its subsidiaries related to registrations of
“.travel” domain names, net of third-party registry operator fees, if
applicable, and exclusive of any cash received from a Bulk Purchase Program.
“Bulk Purchase Program” means any agreement or program of Buyer or its
subsidiaries pursuant to which a single purchaser or affiliated group of
purchasers registers or renews more than twenty five thousand (25,000) “.travel”
domain names.
3.2
Time
of Determination and Payment
(a)
Within
twenty (20) Business Days after the end of each Earnout Period during the Term,
the Buyer shall provide the Parent a complete and accurate statement of its
Net
Revenues for such Earnout Period (the “Earnout Statements”). Each Earnout
Statement shall be certified as accurate by an officer of the Buyer and shall
be
accompanied by payment of the amounts shown as due on such Earnout Statement.
All payments made hereunder shall be in United States currency drawn on a United
States bank, unless otherwise specifically agreed upon by the parties.
(b)
The
Buyer
shall retain records relating to all of its Net Revenue and its Earnout
Statements for at least one (1) year after the expiration or termination of
this
Agreement. Parent, directly or through its representative, shall be entitled
to
inspect the Buyer's books and records relating to said Net Revenue and Earnout
Statements for purposes of verifying the accuracy of the Earnout Statements
delivered to it pursuant to 3.2(a) of this Agreement.
(c)
Such
inspection and access will be available to Parent upon not less than five (5)
days written notice to the Buyer, not more than once each calendar year of
the
Term, during normal business hours, and once a year for one (1) year after
the
expiration or termination of this Agreement. Should such inspection reveal
with
reasonable certainty a discrepancy in reporting and payment of amounts due
to
the Parent’s detriment, then the Buyer shall promptly pay to the Parent the
amount of such discrepancy. In addition, if the discrepancy in reporting and
payment is the greater of (i) five percent (5%) and (ii) twenty thousand dollar
($20,000) over the course of any consecutive four quarters, Buyer shall also
pay
to Parent the reasonable and necessary costs of such inspection plus interest
on
the amount due from the date that it should have been paid until the date of
actual payment at the rate of twelve percent (12%) per annum.
ARTICLE
IV
MISCELLANEOUS
4.1
Benefit
of Parties and Assignment.
All of
the terms and provisions of this Agreement shall be binding upon and inure
to
the benefit of the parties and their respective permitted successors and
assigns. This Agreement shall not be assignable by either party without the
prior written consent of the other party.
4.2
Entire
Agreement
.
This
Agreement contains the entire understanding of the parties with respect to
the
subject matter hereof and supersedes all prior agreements and understandings
between the parties with respect thereto.
4.3
Counterparts
.
This
Agreement may be executed simultaneously in two or more counterparts, each
of
which shall be deemed an original, but all of which together shall constitute
one and the same instruments.
4.4
Notices
.
Any
notice required or permitted to be given hereunder shall be given in accordance
with Section 11.1 of the Purchase Agreement.
4.5
Waiver
of Compliance
The
party for whose benefit a warranty, representation, covenant or condition is
intended may, in writing, waive any inaccuracies in the warranties,
representations, covenants or conditions contained in this Agreement or waive
compliance with any of the foregoing and so waive performance of any of the
obligations of the other party hereto and any defaults hereunder, provided,
however, that such waiver shall not affect or impair the waiving party’s rights
in respect to any other warranty, representation, covenant, condition or default
hereunder.
4.6
Index
and Captions
The
captions of the Articles and Sections of this Agreement are solely for
convenient reference and shall not be deemed to affect the meaning or
interpretation of any Article or Section hereof.
4.7
Governing
Law; Venue
.
This
Agreement will be governed by and construed under the laws of the State of
Florida without regard to conflicts of laws principles that would require the
application of any other law. Each of the parties irrevocably and
unconditionally (a) agrees that any suit, action or legal proceeding arising
out
of or relating to this Agreement may be brought in the courts of record of
the
State of Florida in Broward County or the court of the United States, Southern
District of Florida; (b) consents to the jurisdiction of each such court in
any
suit, action or proceeding; (c) waives any objection which it may have to the
laying of the venue of any such suit, action or proceeding in any of such
courts; and (d) agrees that service of any court paper may be effected on such
party by mail, as provided in this Agreement, or in such other manner as may
be
provided under applicable laws or court rules in said state.
[Signatures
appear on the next page]
IN
WITNESS WHEREOF, the parties have hereunto caused this Agreement to be executed
in multiple original counterparts as of the date set forth above.
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PARENT:
|
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theglobe.com,
inc.
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By:
|
/s/
Edward A. Cespedes
|
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Print Name:
|
Edward A. Cespedes
|
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BUYER:
|
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Tralliance
Registry Management Company, LLC
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Michael
S. Egan
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MASTER
SERVICES AGREEMENT
between
DANCING
BEAR INVESTMENTS, INC.
and
THEGLOBE.COM,
INC.
September
29, 2008
MASTER
SERVICES AGREEMENT
THIS
MASTER SERVICES AGREEMENT
(the
“Agreement”) dated this 29th day of September, 2008 (“Effective Date”), is
between Dancing Bear Investments, Inc., a Florida corporation (the “Provider”)
and theglobe.com, inc., a Delaware corporation (the “Company”). Capitalized
terms used herein and not otherwise defined shall have the meanings ascribed
to
such terms in Article XII hereof.
WHEREAS
,
the
Company has sold substantially all of its assets and, consequently, no longer
has any full-time employees, but intends to continue to remain a “public
company” and comply with its reporting obligations under the Securities Exchange
Act of 1934, as amended; and
WHEREAS
,
the
directors of the Company have requested that the Provider perform certain of
the
Services for the Company previously provided by its employees pursuant to the
terms of this Agreement; and
WHEREAS
,
the
Provider has agreed to provide or cause its affiliates to provide the Services
on the terms and conditions set forth in this Agreement.
NOW,
THEREFORE
,
in
consideration of the foregoing and subject to the terms, conditions, covenants
and provisions of this Agreement, the parties mutually covenant and agree as
follows:
ARTICLE
I
SERVICES
PROVIDED
Section
1.1.
SERVICES
GENERALLY.
Except
as
otherwise provided herein, for the term determined pursuant to Article II
hereof, the Provider shall provide or cause to be provided to the Company the
service(s) described in the Services Schedule attached hereto, which schedule
constitutes part of this Agreement. Each service described on the Services
Schedule shall be referred to herein as a “Service.” Collectively, all the
services described on the Services Schedule (including Additional Services)
shall be referred to herein as “Services.” All Services shall be subject to the
direction of the Company’s Board of Directors and executive
officers.
Section
1.2.
SERVICE
BOUNDARIES.
Except
as
provided in the Services Schedule for a specific Service, the Provider shall
provide or cause to be provided the Services to the same extent and at the
same
level (adjusted for the diminution or cessation of the Company’s operations) as
such Services were being provided to the Company immediately prior to the
Effective Date.
Section
1.3.
IMPRACTICABILITY.
The
Provider shall not be required to provide any Service to the extent the
performance of such Service becomes commercially impracticable as a result
of a
cause or causes outside its reasonable control (“Impracticable” or
Impracticability”), including, without limitation, to the extent the performance
of such Services would require it to violate any applicable laws, rules or
regulations or would result in the breach of any applicable contract; provided,
that the Provider shall provide prompt written notice of its intended cessation
of any Service for Impracticability; and provided, further, that no Service
shall be terminated with less than sixty (60) days prior written notice unless
a
shorter period of notice is required by applicable laws or
regulations.
Section
1.4.
ADDITIONAL
SERVICES.
From
time to time after the Effective Date, the Company may request that the Provider
provide services in addition to the Services provided in the Services Schedule
(“Additional Services”). The Company shall so notify the Provider in writing and
the Company will negotiate in good faith any additional charge relating to
the
provision of Additional Services, with a view towards the provision of such
Additional Services; provided, however, that nothing in this Section 1.4 shall
create the obligation for the Provider to provide any such Additional
Services.
ARTICLE
II
TERM
The
term
of this Agreement shall commence on the Effective Date and shall remain in
effect for one year (the “Expiration Date”), unless earlier terminated under
Article V or as otherwise provided in the Services Schedule or extended in
whole
or in part for an additional one-year period. The parties may agree on an
earlier expiration date with respect to a specific Service by specifying such
date on the Services Schedule.
ARTICLE
III
COMPENSATION
Section
3.1.
CHARGES
FOR SERVICES.
As
consideration for the Services, the Company will pay the fees indicated on
the
Services Schedule which shall be equal to twenty thousand dollars ($20,000)
per
month ($240,000 per annum). Such fees may be amended from time to time with
the
mutual consent of the parties. Except as set forth in Article X hereof, the
Company and the Provider shall each be responsible for their own internal fees,
costs and expenses (e.g., salaries of personnel) incurred in connection with
the
provision of Services under this Agreement.
Section
3.2.
PAYMENT
TERMS.
The
Provider shall bill the Company on a monthly basis for amounts owed under and
incurred hereunder during the prior month. The Company shall pay the Provider
for all Services provided hereunder within thirty (30) days after receipt of
an
invoice therefore.
Section
3.3.
PRICING
ADJUSTMENTS.
In
the
event of an adjustment relating to the pricing of any or all Services provided
pursuant to this Agreement in which it is determined by a Taxing Authority
that
any of the charges, individually or in combination, did not result in an
arm’s-length payment, then the parties, including any Provider subcontractor
providing Services hereunder, may make adjustments to the charges in question
for such period but only to the extent necessary to achieve arm’s-length
pricing. Any adjustment made pursuant to this Section 3.3 at any time during
the
term of this Agreement or after termination of this Agreement shall be reflected
in the parties’ books and records, and the resulting underpayment or overpayment
shall create, respectively, an obligation to be paid in the manner specified
in
Section 3.2, or shall create a credit against amounts owed under this
Agreement.
ARTICLE
IV
STANDARD
OF CARE; GENERAL OBLIGATIONS
Section
4.1.
STANDARD
OF CARE: PROVIDER.
Subject
to the terms and conditions of this Agreement, the Provider shall use
commercially reasonable efforts to maintain sufficient resources to perform
its
obligations hereunder. The Provider shall use all reasonable efforts to provide
the Services in accordance with the policies, procedures and practices in effect
before the Effective Date and shall exercise the same care and skill as it
exercises in performing the same or similar services for itself, with priority
equal to that provided to its own businesses or those of any of its affiliates,
Subsidiaries or divisions.
Section
4.2.
STANDARD
OF CARE: COMPANY.
The
Company shall use commercially reasonable efforts, in connection with receiving
Services, to follow the policies, procedures and practices in effect before
the
Effective Date, including (a) providing information and documentation sufficient
to enable the performance of the Services as they were performed before the
Effective Date and (b) making available, as reasonably requested by the
Provider, sufficient resources and timely decisions, approvals and acceptances
so that the Provider may perform its obligations in a timely and expeditious
manner.
Section
4.3.
RESPONSIBILITY
FOR ERRORS; DELAYS.
The
Provider’s sole responsibility to the Company:
(b)
for
failure to deliver any Service because of Impracticability, shall be to use
commercially reasonable efforts to make the Services available within the time
frame set forth in Section 1.3.
Section
4.4.
GOOD
FAITH COOPERATION; CONSENTS.
The
parties will use good faith efforts to cooperate with each other in all matters
relating to the provision and receipt of Services. Such cooperation shall
include exchanging information, performing adjustments, and obtaining all third
party consents, licenses, sublicenses or approvals necessary to permit each
party to perform its obligations hereunder. The reasonable costs of obtaining
such third party consents, licenses, sublicenses or approvals shall be borne
by
the Company. The parties will maintain, in accordance with each of their
standard document retention procedures, documentation supporting the information
relevant to cost calculations and cooperate with each other in making such
information available as needed in the event of a Tax Audit.
Section
4.5
ALTERNATIVES.
If
the
Provider reasonably believes it is unable to provide any Service because of
a
failure to obtain necessary consents, licenses, sublicenses or approvals
pursuant to Section 4.4 or because of Impracticability, the parties shall
cooperate to determine the best alternative approach. Until such alternative
approach is found or the problem is otherwise resolved to the satisfaction
of
the parties, the Provider shall use commercially reasonable efforts, subject
to
Section 1.3, to continue providing the Service.
ARTICLE
V
TERMINATION
Section
5.1.
GENERALLY.
(a)
Except
as otherwise specifically provided in the Services Schedule, this Agreement
will
automatically terminate with respect to all Services on the date specified
herein; provided, however, that the term of this Agreement may be extended
by
the mutual agreement of the parties in writing for a specified period beyond
such date, either in whole or with respect or one or more of the Services.
(b)
The
Company may terminate this Agreement, either with respect to all or with respect
to any one or more of the Services or portions of the Services provided to
the
Company hereunder, for any reason or for no reason, at any time upon sixty
(60)
days prior written notice to the Provider; provided, however, that once
terminated, any such Service may be reinstituted only with the Provider’s
consent.
(c)
Either
party may terminate this Agreement with respect to a specific Service if the
other party materially breaches a material provision with regard to that
particular Service and does not cure such breach (or does not take reasonable
steps required under the circumstances to cure such breach going forward) within
thirty (30) days after being given notice of the breach; provided, however,
that
if such breach relates to a good faith dispute by the non-terminating party,
the
non-terminating party may request that the parties engage in a dispute
resolution negotiation as specified in Article XI below prior to termination
for
breach.
(d)
This
Agreement may be terminated at any time prior to the Effective Date by the
Provider and, if so terminated, all transactions taken in connection therewith
shall be void. In the event of termination pursuant to this Section 5.1(d),
no
party shall have any liability of any kind to the other party.
Section
5.2.
SURVIVAL.
The
following obligations shall survive the termination of this Agreement: (a)
for
the period set forth therein, the obligations of each party under Articles
IV
and VIII and (b) the Provider’s right to receive the compensation for the
Services provided through the date of termination. Notwithstanding the
foregoing, in the event of any termination with respect to one or more, but
less
than all Services, this Agreement shall continue in full force and effect with
respect to any Services not terminated hereby.
Section
5.3
USER IDS; PASSWORDS.
The
parties shall use good faith efforts at the termination or expiration of this
Agreement or any specific Service hereto to ensure that all applicable user
IDs
and passwords are canceled.
ARTICLE
VI
RELATIONSHIP
BETWEEN THE PARTIES
The
relationship between the parties established under this Agreement is that of
independent contractors and neither party is an employee, agent, partner, or
joint venturer of or with the other. The Provider will be solely responsible
for
any employment-related taxes, insurance premiums or other employment benefits
with respect to its personnel’s performance of Services under this Agreement.
The Company agrees to grant the Provider’s personnel access to locations,
systems and information (subject to the provisions of confidentiality in Article
VIII below) as necessary for the Provider to perform its obligations hereunder.
The Provider agrees to cause its personnel to obey any and all security
regulations and other policies of the Company.
ARTICLE
VII
SUBCONTRACTORS
The
Provider may engage a Subcontractor to perform all or any portion of the
Provider’s duties under this Agreement, provided that any such Subcontractor
agrees in writing to be bound by confidentiality obligations at least as
protective as the terms of Article VIII regarding confidentiality below, and
provided further that the Provider remains responsible for the performance
of
such Subcontractor.
ARTICLE
VIII
CONFIDENTIALITY
(a)
The
Provider agrees to hold and shall cause its officers, employees, agents,
consultants and advisors to hold, in strict confidence and not to disclose
or
release without the prior written consent of the Company, any and all
Confidential Information (as defined herein) concerning the Company or any
of
its Subsidiaries; PROVIDED, that the Provider may disclose or may permit
disclosure of, Confidential Information (i) to its auditors, attorneys,
financial advisors, and other appropriate consultants and advisors who have
a
need to know such information and are informed of their obligation to hold
such
information confidential to the same extent as is applicable to the parties
hereto and in respect of whose failure to comply with such obligations, the
Provider will be responsible or (ii) if the Provider or its Subsidiaries is
compelled to disclose any such Confidential Information by judicial or
administrative process or, in the opinion of independent legal counsel, by
other
requirements of law. Notwithstanding the foregoing, in the event that any demand
or request for disclosure of Confidential Information is made pursuant to clause
(ii) above, the Provider shall promptly notify the Company of the existence
of
such request or demand and shall provide the Company a reasonable opportunity
to
seek an appropriate protective order or other remedy which both parties will
cooperate in obtaining. In the event that such appropriate protective order
or
other remedy is not obtained, the Provider shall furnish, or cause to be
furnished, only that portion of the Confidential Information that is legally
required to be disclosed. As used in this Agreement, “Confidential Information”
shall mean non-public information concerning the Company or any Subsidiary
which, prior to or following the Effective Date, has been disclosed by the
Company or otherwise has come into the possession of the Provider in connection
with the rendering of Services to the Company, but shall not include information
(i) which was known by the Provider from a source other than the Company or
one
of its officers, directors or agents (including information learned prior to
the
date hereof from the Company or any such officer, director or agent); (ii)
generally known to the public (other than as a result of a breach by Provider
of
its obligations of confidence hereunder); or (iii) which becomes lawfully
available to Provider from a third party unless the source was, to Provider’s
knowledge after reasonable inquiry, bound by a confidentiality agreement or
similar obligation of confidence to the Company.
(b)
Notwithstanding anything to the contrary set forth herein, the Provider shall
be
deemed to have satisfied its obligations hereunder with respect to Confidential
Information if it exercises the same degree of care (but no less than a
reasonable degree of care) as it takes to preserve confidentiality of its own
similar information. Confidential Information of the Company and/or its
Subsidiaries in the possession of and used by the Provider as of the Effective
Date may continue to be used by such Person in possession of the Confidential
Information in and only in the delivery of Services hereunder, and may be used
only so long as the Confidential Information is maintained in strict confidence
and not disclosed in violation of this Article VIII. Such continued right to
use
the Confidential Information may not be transferred to any third party without
the Company’s prior written consent.
ARTICLE
IX
LIMITATION
OF LIABILITY
Section
9.1.
PROVIDER’S
LIABILITY.
The
Provider shall be liable for any claims, liabilities, damages, losses, costs,
expenses (including, but not limited to, settlements, judgments, court costs
and
reasonable attorneys’ fees), fines and penalties (collectively, “Claims”), loss
or damage of any nature in providing or failing to provide the Services to
the
Company arising as a result of the Provider’s gross negligence or willful
misconduct; provided, however, that the Provider shall not be liable for those
Claims or portion of Claims that were the direct result of the Company’s gross
negligence, willful misconduct or the Company’s failure to meet its obligations
or responsibilities under this Agreement.
Section
9.2.
LIMITATION
OF LIABILITY.
Notwithstanding
anything to the contrary in this Agreement or at law or in equity, neither
party
shall be liable to the other for punitive, special, indirect, incidental or
consequential damages however caused, under any theory of liability, arising
from or relating to any claim made under this Agreement or regarding the
provision of or the failure to provide the services. The Provider shall have
no
liability of any kind or nature whatsoever for the Provider’s ceasing to provide
(or have a third party provide) any service after the expiration date or other
termination pursuant to this Agreement.
ARTICLE
X
TRANSITIONAL
EMPLOYMENT PERIOD
The
parties acknowledge that there will be a transitional period commencing on
the
date hereof and ending on January 1, 2009 (the “Transitional Period”), whereby
the existing employees of the Company and its Subsidiaries will be retained
by
the Company and such subsidiaries. During the Transitional Period, the Employees
may work on the activities of the Company and its Subsidiaries (including
providing the Services), as well as, such other matters (and for such other
entities) as the Provider may direct from time to time. During the Transitional
Period, Provider will be responsible for, and will advance to the Company before
such amounts are due to (or for the benefit of) the Employees, the actual cost
of all Employee salaries, benefits (inclusive of all benefit plans maintained
and continued by the Company) and expenses. Except to the extent the same is
covered by any applicable insurance policy maintained by the Company, the
Provider shall be responsible for, and shall hold the Company and its
Subsidiaries harmless for, any employment related Claims that may arise relating
to the Transitional Period, without regard to the limitations set forth in
Article IX hereof.
ARTICLE
XI
FORCE
MAJEURE
Each
party will be excused for any failure or delay in performing any of its
obligations under this Agreement for services rendered, if such failure or
delay
is caused by Force Majeure. “Force Majeure” means any act of God or the public
enemy, any accident, explosion, fire, storm, hurricane, earthquake, flood,
or
any other circumstance or event beyond the reasonable control of the party
relying upon such circumstance or event.
ARTICLE
XII
MISCELLANEOUS
Section
12.1.
ENTIRE
AGREEMENT.
This
Agreement and the Exhibits and Schedules referenced or attached hereto
constitute the entire agreement between the parties with respect to the subject
matter hereof and thereof and shall supersede all prior written and oral and
all
contemporaneous oral agreements and understandings with respect to the subject
matter hereof and thereof.
Section
12.2.
GOVERNING
LAW AND JURISDICTION.
This
Agreement shall be construed in accordance with, and all disputes hereunder
shall be governed by, the laws of the State of Florida, excluding its conflict
of law rules. The parties agree that the Circuit Court of Broward County,
Florida and/or the United States District Court for the Southern District of
Florida shall have exclusive jurisdiction over all actions between the parties
under this Agreement.
Section
12.3.
DESCRIPTIVE
HEADINGS.
The
headings contained in this Agreement, in any Exhibit or Schedule hereto are
for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Any capitalized term used in any Exhibit
or
Schedule but not otherwise defined therein, shall have the meaning assigned
to
such term in this Agreement. When a reference is made in this Agreement to
an
Article or a Section, Exhibit or Schedule, such reference shall be to an Article
or Section of, or an Exhibit or Schedule to, this Agreement unless otherwise
indicated.
Section
12.4.
NOTICES.
Notices,
offers, requests or other communications required or permitted to be given
by
either party pursuant to the terms of this Agreement shall be given in writing
to the respective parties to the following addresses or facsimile
numbers:
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If
to the Provider:
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Dancing
Bear Investments, Inc.
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110
E. Broward Boulevard, Suite 1400
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Ft.
Lauderdale, Florida 33301
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Attention:
Michael S. Egan
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Facsimile
No.: (954) 769-5930
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If
to the Company:
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theglobe.com,
inc.
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110
E. Broward Boulevard, Suite 1400
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Ft.
Lauderdale, Florida 33301
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Attention:
Edward A. Cespedes
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Facsimile
No.: (954) 769-5930
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or
to
such other address or facsimile number as the party to whom notice is given
may
have previously furnished to the other in writing as provided herein. Any notice
involving non-performance, termination, or renewal shall be sent by hand
delivery, recognized overnight courier or, within the United States, may also
be
sent via certified mail, return receipt requested. All other notices may also
be
sent by facsimile, confirmed by first class mail. All notices shall be deemed
to
have been given when received, if hand delivered; when transmitted, if
transmitted by facsimile or similar electronic transmission method; one working
day after it is sent, if sent by recognized overnight courier; and three days
after it is postmarked, if mailed first class mail or certified mail, return
receipt requested, with postage prepaid.
Section
12.5.
SEVERABILITY.
If
any
term or other provision of this Agreement is determined by a court,
administrative agency or arbitrator to be invalid, illegal or incapable of
being
enforced by any rule of law or public policy, all other conditions and
provisions of this Agreement will nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
is
not affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that transactions contemplated
hereby are fulfilled to the fullest extent possible.
Section
12.6.
FAILURE
OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
If
any
term or other provision of this Agreement or the Exhibits or Schedules attached
hereto is determined by a court, administrative agency or arbitrator to be
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance
of
the transactions contemplated hereby is not affected in any manner materially
adverse to either party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner
to
the end that transactions contemplated hereby are fulfilled to the fullest
extent possible.
Section
12.7.
AMENDMENT.
No
change or amendment will be made to this Agreement except by an instrument
in
writing signed on behalf of each of the parties to such agreement.
ARTICLE
XIII
DEFINITIONS
For
the
purpose of this Agreement, the following capitalized terms shall have the
following meanings:
Section
13.1.
EXPIRATION
DATE.
“Expiration
Date” shall have the meaning set forth in Article II.
Section
13.2.
IMPRACTICABLE
or IMPRACTICABILITY.
“Impracticable”
and “Impracticability” shall have the meanings set forth in Section
1.3.
Section
13.3.
PERSON.
“Person”
means an individual, a partnership, a corporation a limited liability company,
an association, a joint stock company, a trust, a joint venture, an
unincorporated organization or a governmental entity or any department, agency
or political subdivision thereof.
Section
13.4.
SERVICE(S).
“Service(s)”
shall have the meaning set forth in Section 1.1.
Section
13.5.
SUBCONTRACTOR.
“Subcontractor”
means any individual, partnership, corporation, firm, association,
unincorporated organization, joint venture, trust or other entity engaged to
perform hereunder.
Section
13.6.
SUBSIDIARY.
“Subsidiary”
of any Person means a corporation or other organization whether incorporated
or
unincorporated of which at least a majority of the securities or interests
having by the terms thereof ordinary voting power to elect at least a majority
of the board of directors or others performing similar functions with respect
to
such corporation or other organization is directly or indirectly owned or
controlled by such Person or by any one or more of its Subsidiaries, or by
such
Person and one or more of its Subsidiaries; PROVIDED, HOWEVER, that no Person
that is not directly or indirectly wholly-owned by any other Person shall be
a
Subsidiary of such other Person unless such other Person controls, or has the
right, power or ability to control, that Person.
Section
13.7.
TAX
AND TAXES.
“Tax"
and
"Taxes" include all taxes, charges, fees, duties, levies, imposts, rates or
other assessments imposed by any federal, state, local or foreign Taxing
Authority, including, but not limited to, income, gross receipts, excise,
property, sales, use, license, capital stock, transfer, franchise, payroll,
withholding, social security, value added and other taxes, and any interest,
penalties or additions attributable thereto.
Section
13.8.
TAXING
AUTHORITY.
“Taxing
Authority" means any governmental authority or any subdivision, agency,
commission or authority thereof or any quasi-governmental or private body having
jurisdiction over the assessment, determination, collection or imposition of
any
Tax (including the IRS).
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IN
WITNESS WHEREOF, each of the parties has caused this Agreement to be executed
on
its behalf by its officers thereunto duly authorized on the day and year first
above written.
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By:
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/s/
Michael
S. Egan
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Name:
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Michael
S. Egan
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Title:
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President
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theglobe.com,
inc.
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By:
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/s/
Edward
A. Cespedes
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Edward
A. Cespedes
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Title:
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President
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SERVICES
SCHEDULE
The
services to be provided by the Provider to the Company under this Agreement
includes Services related to and for the benefit of the Company and all
wholly-owned Subsidiaries, as described below:
1.
Accounting
Function
Maintain
accounting books and records to properly record all accounting transactions
in
accordance with generally accepted accounting principles,
including:
a)
Maintenance
of general ledgers;
b)
Maintenance
of all subsidiary ledgers, including those related to accounts payable and
fixed
assets;
c)
Closing
of books on a monthly basis, including making all required accounting accruals
and adjustments; and
d)
Reconciling
all balance sheet accounts, including performing bank reconciliations for all
bank accounts, and performing fluctuation analysis for all significant balance
sheet and income statement accounts.
2.
Financial
Reporting Function
For
internal purposes, prepare consolidated balance sheets, statements of
operations, and cash flow statements, on a monthly basis. For external purposes,
file SEC reports (10-Q’s, 10-K’s, 8-K’s, etc.) on a timely basis. Manage and
coordinate the annual independent accountant’s audit and related quarterly
reviews.
3.
Accounts
Payable/Payroll Functions
Verify,
process and pay all vendor invoices and other required charges, including filing
of Form 1099’s at year-end. File all necessary payroll reports with the Internal
Revenue Service.
4.
Treasury/Financial
Planning Functions
Administer
and process payments under all debt agreements, including the existing Revolving
Loan Agreement. Negotiate new debt/equity agreements, as required. Collect
accounts receivables and make bank deposits. Prepare forecasts of operating
results and cash flows.
5.
Tax
Function
Coordinate
the preparation and filing of all required tax returns (income, franchise,
payroll, sales and use tax, etc.) and tax planning activities. Communicate
with
taxing authorities on all issues, including tax audits and requests for
information.
6.
Secretarial
Function
Perform
investor relations functions. Coordinate Board of Director and Shareholder
meetings, including recording of minutes of all meetings. Administer all Company
stock option plans.
7.
Risk
Management Function
Manage
all insurance programs in conjunction with agents and other Company
investors.
8.
Records
- Retention
Manage
and store all necessary corporate/accounting records; retrieve as
necessary.
9.
Legal
Function
Interface
with the Company’s outside general counsel on all required matters.
10.
General
Management
Perform
all general management activities, subject to the direction and request of
the
officers and/or directors of the Company as are necessary to assist them with
the management of the Company as a “shell corporation.”