Exhibit 10.10
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ARTICLE XXXIX AGREEMENT FOR SALE OF MANUFACTURED GOODS
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THIS AGREEMENT (this "Agreement") is entered into on October 18, 2000,
between:
AZTEC COMPONENTS, INC., a corporation incorporated under the laws of
the State of California, with business offices at 00 Xxxxxxxx Xxxxx 000, Xxxxx
Xxxxx, XX 00000 (the "Seller")
and
GLOBUS WIRELESS, LTD., a corporation incorporated under the laws of
the State of Nevada, having registered offices at 220 - 0000 Xxxxxxxxx Xxxxx,
Xxxx, XX 00000, and business offices at 0000 Xxxx Xxxxx, Xxxxxxx, X.X. X0X 0X0
(the "Buyer")
W H E R E A S:
1. The Seller carries on the business of the distribution of a variety of
wireless and electronic devices, including the distribution of analog
wireless phones manufactured and supplied to the Seller under an OEM
distribution supply agreement with Motorola USA (the "Product"), for
supply to international wireless industry markets;
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2. The Buyer carries on the business of wireless devices product
distribution, for supply to wireless industry carriers, distributors
and dealers, both domestically and internationally;
3. The Buyer requires the supply of the Product to meet its requirements
for distribution to its clients, as served by the Buyer's wireless
devices product distribution group, and the Seller requires the
Buyer's expertise and distribution networks, to fulfill its OEM
distribution supply agreement with Motorola USA; and
4. The Buyer wishes to purchase from the Seller, and the Seller wishes to
sell the Product now owned and/or contracted for with Motorola USA to
the Buyer, for the consideration and on and subject to the terms and
conditions contained in this Agreement.
IN CONSIDERATION of the mutual covenants and agreements contained in
this Agreement, it is agreed by and between the parties as follows:
1. Agreement to Buy and to Sell
The Buyer agrees to purchase the Product from the Seller to meet its
requirements during the term of this Agreement, and the Seller agrees to sell
the Product to the Buyer to meet those requirements, on the terms and in the
manner set forth in this Agreement. For this purpose, it is understood and
agreed that the Buyer's requirements for the Product to be supplied shall be
730,000 Motorola analog phone devices during the term of this Agreement, as
described further below.
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2. Purchase Price
The Buyer agrees to pay to the Seller, for the supply of the Product,
the amounts as follow:
a) The amount of $125.00 for each Motorola Vader V-3620 Handset boxed
unit, for 110,000 units, to be available to the Buyer on the following
tentative schedule:
o December 15, 2000 - 26,000 units
o January 19, 2001 - 28,000 units
o February 9, 2001 - 28,000 units
o March 9, 2001 - 28,000 units
b) The amount of $42.66 for each Motorola Profile-300 Handset boxed unit,
for 340,000 units, now available to Buyer, and
c) The amount of $42.66 for each Motorola DPC-650 Handset boxed unit, for
280,000 units, now available to Buyer.
The Buyer agrees that regardless of the number of units of Product
that it purchases from Seller during the term of this Agreement, it will
purchase from Seller a total of 730,000 units as listed above at the purchase
prices listed above by the Termination Date as defined below. The aggregate
purchase price for the 730,000 units is $40,199,200 (the "Purchase Price").
The Seller agrees that a $6.61 sell-thru credit to be tendered by
Motorola to Seller on every Profile-300 or DPC-650 purchased, for an aggregate
amount of $4,098,200 sell-thru credit, shall, upon receipt by the Seller, be
forwarded on to an Escrow Account in favor of the Buyer and the Seller, to be
distributed in equal amounts to the Buyer and Seller in full upon the purchase
by Buyer from Seller of, and payment by Buyer to Seller for, a total of 730,000
units of the Product as set forth above, but no later than October 31, 2001 (the
"Termination Date") assuming all other terms and conditions in this Agreement
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are met. If at the time that distribution of the amounts in the Escrow Account
are scheduled to be made, Buyer is delinquent in scheduled payments due and
owing to Seller, no distribution to Buyer will occur, until such time as amounts
owing to Seller are delivered to Seller. In no event shall the amounts in the
Escrow Account be distributed to Buyer if Buyer has not purchased and paid for a
total of 730,000 units of Product from Seller. If Buyer has not fulfilled the
requirement to purchase and pay for the total of 730,000 units by October 31,
2001, then Seller shall receive the entire amount of the sell-thru credits in
the Escrow Account. The Escrow Account shall be governed by a separate Escrow
Agreement between Seller and Buyer and is attached hereto as Schedule "A".
All amounts shall be F.O.B. Motorola USA operations in Champaign,
Michigan, with the Buyer to assume all responsibility for all shipments and
related costs, and excluding any applicable taxes assessed on the sale of the
Product supplied to the Buyer. To assist Buyer in its sales and accounting
efforts Seller will pass on to Buyer any and all written documentation it may
receive concerning the Product and the OEM manufacturer of the Product,
including packing slips, invoices, dealer contracts, etc.
3. Payment of Purchase Price; Security
a) The Seller shall invoice the Buyer for each shipment of the
Product and upon approval of the invoice by the Buyer, the
Buyer shall make payment to the Seller not later than twenty
(20) days following receipt of the invoice. In the event the
invoice is not paid within such twenty (20) day period, all
overdue amounts shall collect interest at the rate of two
percent (2%) per month.
b) The Seller agrees to extend to the Buyer payment terms of $3
million Net 20 days from invoice date, and Buyer agrees to
provide the following security:
(i) Corporate Acknowledgment & Guaranty of Buyer
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The Buyer shall deliver to the Seller a corporate
guaranty in the form attached as Schedule "B" pursuant to
which Buyer shall guarantee payment, under the terms of this
Agreement, of the Purchase Price and any interest.
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(ii) Secured Convertible Promissory Note
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Buyer shall execute a Secured Convertible
Promissory Note in favor of the Seller for an amount of up
to $5,000,000, in the form attached as Schedule "C". Such
Note shall be exercisable by Seller after thirty days
written notice given to Buyer of delinquency in accounts due
to Seller, in accordance with the terms and provisions of
the Note. Payment under the Note shall not relieve Buyer of
any remaining obligations to make payments to Seller
pursuant to this Agreement.
(iii) Security Interest in the Product
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Buyer grants to Seller a Security Interest in the
Product and in and to all shipping documents, warehouse
receipts, policies or certificates of insurance and any
other documents accompanying or relative to the Product and
in and to the proceeds of each and all of the foregoing,
until such time as all the obligations of the Buyer at any
time existing under or with reference to this Agreement have
been fully paid and discharged, all as security for such
obligations and liabilities. The Security Interest is
subject to the terms and conditions of that certain Security
Agreement by and between Buyer and Seller, dated of even
date herewith, which is attached hereto as Schedule "D".
4. Term of Agreement and Termination
The term of this Agreement shall commence on the date of execution and
shall terminate upon the date that Buyer purchases from and pays Seller for all
730,000 Motorola Handset box units described herein, but no later than October
31, 2001. This Agreement may be extended by mutual consent of the parties.
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Additionally, either party may immediately terminate this agreement
without liability to the other party on the happening of any of the following
events or any other comparable event:
i. insolvency of a party;
ii. filing of a voluntary petition and bankruptcy by a party;
iii. filing of any involuntary petition and bankruptcy against a party;
iv. appointment of a receiver or trustee for a party, or
v. execution of an assignment for the benefit of creditors by a party,
provided that the petition, appointment or assignment is not vacated
or nullified within fifteen days of that event.
Termination shall not relieve either party of any obligations owed to the
other party pursuant to this Agreement regarding Product already delivered.
5. Construction of Product
The Product shall be constructed in a good and workmanlike manner in
accordance with the specifications for each of the three models as set forth in
Schedule "E" and according to the varieties set out in Item 2 above.
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6. Examination and Acceptance of Product by Buyer
The Buyer, having already inspected the goods to be supplied by the
Seller, shall whenever possible, inform the Seller, by the fifth (5th) day of
each and every month and/or on a regular basis, what quantity of the Product it
requires to be delivered and where delivery shall be made. Buyer agrees to
provide Purchase Orders (Schedule "F"), in favor of Seller for each requested
delivery of Product. Once the Product has been received by the Buyer, or Buyer's
client if direct shipped, the Buyer shall be entitled to examine it and within
three days of the date of examination, to reject any of the Product which does
not conform to the specifications set forth in Schedule "E" or which is
defective in materials or workmanship. At the end of the period of three days,
the Buyer shall be treated as having accepted the Product which has not been
rejected.
7. Non-Conforming Product
If any of the Product which is the subject of this Agreement is
rejected because of failure to conform to the specifications set forth in
Schedule "E", or because of a defect in workmanship or materials, the Seller
shall replace those items with others which comply with the specifications and
conform in workmanship and materials as set forth in Schedule "E" within thirty
(30) days of notification thereof by Buyer.
8. Shipping and Billing
The Seller will include on bills of lading or other shipping receipts
correct classification and identification of the Product shipped in accordance
with the Buyer's instructions. The marks on each package and identification of
the Product on packing slips, bills of lading and invoices shall be sufficient
to enable the Buyer to easily identify the Product purchased. The Seller further
agrees to promptly render, after delivery of the Product, correct and complete
invoices to the Buyer, and to accept payment by cheque or, at the Seller's
discretion, by other cash equivalent (including electronic transfer of funds).
All invoices shall be paid not later than twenty (20) days following receipt of
the invoice.
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9. Warranty
The Seller expressly warrants that the Product covered by this
Agreement will conform to the specifications set forth in Schedule "E", and any
samples or descriptions furnished to the Buyer, and will be merchantable, of
good material and workmanship and free from defect. In addition, the Seller
acknowledges that the Seller knows of the Buyer's intended use and expressly
warrants that all the Product covered by this agreement which has been
manufactured by Motorola USA and offered exclusively to the Seller, based on the
Buyer's stated use, will be fit and sufficient for the particular purposes
intended by the Buyer. Seller agrees to flow through to the Buyer, Motorola
USA's standard One (1) Year Warranty for all Product, and Buyer accepts such
warranty coverage.
10. Advertising
The Seller shall not, without first obtaining the written consent of
the Buyer, in any manner, advertise or publish the fact that the Seller has
contracted to furnish the Buyer with the Product ordered, or use any trademarks
or trade names of the Buyer in the Seller's advertising or promotional
materials. In the event of the Seller's breach of this provision, the Buyer
shall have the right to cancel the undelivered portion of any of the Product
covered by this Agreement and shall not be required to make further payments
except for conforming Product delivered prior to cancellation.
11. Government Compliance
The Seller and Buyer individually agree to comply with all applicable
federal and state laws, orders, rules and regulations and ordinances which may
be applicable to the Seller's or Buyer's performances or their respective
obligations under this Agreement.
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12. Force Majeure
Any delay or failure of either party to perform its obligations under
this Agreement shall be excused if, and to the extent, that the delay or failure
is caused by an event or occurrence beyond the reasonable control of the party
and without its fault or negligence, such as, by way of example and not by way
of limitation, acts of God, action by any governmental authority (whether valid
or invalid), fires, floods, wind storms, explosions, riots, natural disasters,
wars, sabotage, labour problems (including lock-outs, strikes and slow-downs),
earthquakes, inability to obtain power, material, labour, equipment or
transportation, or court injunction or order; provided that written notice of
delay (including the anticipated duration of the delay) shall be given by the
affected party to the other party within ten days. During the period of delay or
failure to perform by the Seller, the Buyer, at its option, may purchase the
Product from other sources and reduce its obligation to purchase minimum
quantities of the Product from the Seller by the quantities purchased from other
sources, without liability to the Seller, or have the Seller provide the Product
from other sources in quantities and at times requested by the Buyer and at the
price set forth in this Agreement.
13. Cancellation for Breach
Failure of the Seller to deliver the Product to the Buyer or of the
Buyer to pay for the Product on the due date for payment, shall entitle the
other party in each case to treat this Agreement as repudiated, but without
prejudice to any rights accruing or due to either party at that date.
14. Relationship of Parties
The Seller and the Buyer are independent contracting parties and
nothing in this Agreement shall make either party the agent or legal
representative of the other for any purpose whatsoever, nor shall it grant
either party any authority to assume or to create any obligation on behalf of or
in the name of the other.
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15. Non-Assignment
The Seller may not assign or delegate its obligations under this
Agreement without the Buyer's prior written consent, such consent not to be
unreasonably withheld. This Agreement shall inure to the benefit of and be
binding on the parties and their respective heirs, executors, administrators,
personal representatives, successors and permitted assigns.
16. Governing Law
This agreement is to be construed according to the laws of the State
of California.
17. Time
Time shall be of the essence.
18. Severability
If any term of this Agreement is invalid or unenforceable under any
statute, regulation, ordinance, order or other rule of law, that term shall be
deemed modified or deleted, but only to the extent necessary to comply with the
statute, regulation, ordinance, order or rule, and the remaining provisions of
this Agreement shall remain in full force and effect.
19. No Implied Waiver
The failure of either party at any time to require performance by the
other party of any provision of this Agreement shall in no way affect the right
to require performance at any time thereafter, nor shall the waiver of either
party of a breach of any provision of this Agreement constitute a waiver of any
succeeding breach of the same or any other provision.
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20. Notice
Any notice or other writing required or permitted to be given under
this Agreement or for the purposes of it to any party, shall be sufficiently
given if delivered personally, or if sent by prepaid registered mail or if
transmitted by electronic communication to that party.
a) in the case of a notice to the Buyer at 0000 Xxxx Xxxxx, Xxxxxxx,
Xxxxxxx Xxxxxxxx X0X 0X0,
fax: 000-000-0000, and
b) in the case of a notice to the Seller at 00 Xxxxxxxx Xxxxx 000, Xxxxx
Xxxxx, Xxxxxxxxxx 00000,
fax: 000-000-0000,
c) or at any other address as the party to whom the writing is to be
given shall have last notified the other party.
Any notice delivered to the party to whom it is addressed shall be
deemed to have been given and received on the day it is delivered at that
address, provided that if that day is not a business day then the notice shall
be deemed to have been given and received on the first business day next
following that day. Any notice mailed shall be deemed to have been given and
received on the third business day next following the date of its mailing. Any
notice transmitted by electronic communication shall be deemed given and
received on the first business day after its transmission.
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21. Entire Agreement
This Agreement, together with the attachments, documents or schedules
specifically referenced in the Agreement, constitutes the entire agreement
between the Seller and the Buyer with respect to the matter contained herein and
supersedes all prior oral or written representations and agreements. This
Agreement may only be modified by a written agreement duly executed by the
Seller and Buyer.
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IN WITNESS WHEREOF the parties have executed this agreement on the date
first written.
SIGNED, SEALED AND DELIVERED in the presence of:
AZTEC COMPONENTS, INC ("Seller")
Per:
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GLOBUS WIRELESS LTD. ("Buyer")
Per:
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SCHEDULE "A"
ESCROW AGREEMENT
(see next pages)
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SCHEDULE "B"
CORPORATE ACKNOWLEDGMENT & GUARANTY
1. The Board of Directors and Officers for Globus Wireless, Ltd., a Nevada
corporation (the "Company"), hereby acknowledge that the Company will be
receiving up to $3,000,000 credit on terms of net 20 from Aztec Components Inc.,
a California corporation (the "Lender") pursuant to the terms of that certain
Agreement for Sale of Manufactured Goods entered into between the Company and
the Lender on even date herewith (the "Agreement"), such credit allowing for the
Lender to supply the Company and the Company to distribute certain Motorola USA
analog handset units throughout the Company's distribution networks. All
capitalized terms used and not defined herein are as defined in the Agreement.
2. The Company does hereby guarantee to the Lender full payment in lawful
money of the United States of America for all Product supplied by Lender to the
Company, whether recovery upon such indebtedness may be or hereafter become
barred by any statute of limitations, or whether such indebtedness may be or
hereafter becomes otherwise unenforceable, and pledges to forthwith fulfill any
obligations to Lender pursuant to the terms and conditions of the Agreement.
3. The Company does hereby acknowledge that it has agreed to provide
security for the Product transferred to it, and that such security is to remain
in place for the term of the Agreement. Attached as Schedule "C" that follows is
a Secured Convertible Promissory Note, approved by the Board of Directors, and
providing Lender with the right to receive up to $5,000,000 in common stock of
the Company in the event a default in payments is not rectified per the terms of
the Agreement and the Note. The Company does also hereby acknowledge that it has
agreed to provide security for the Product transferred to it as set forth in
that certain Security Agreement by and between the Company and the Lender which
is attached hereto as Schedule "D" and which provides the Lender with a security
interest in the Product and all proceeds thereof.
4. The Company agrees to pay reasonable attorney's fees and all other costs
and expenses which may be incurred by Lender in the enforcement of this
guaranty.
IN WITNESS WHEREOF, the undersigned has executed this Guaranty on October
18, 2000.
GLOBUS WIRELESS, LTD.
By: /s/
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Xxxxxxx X. Xxxxxx
Its: President, CEO and Chairman
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SCHEDULE "C"
SECURED CONVERTIBLE PROMISSORY NOTE
(see next pages)
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SCHEDULE "D"
SECURITY AGREEMENT
(see next pages)
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SCHEDULE "E"
SPECIFICATIONS OF PRODUCT
Motorola DPC-650 Handsets
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NAMPS analog cellular phone, with vibra call. Units are black, OEM
box, in master carton, units come with English manual, 110 volt A/C travel
charger, mid capacity NiMh battery.
Motorola Profile 300 Handsets
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NAMPS analog cellular phone. Units are charcoal xxxx, OEM box, in
master carton, units come with English manual, 110 volt A/C travel charger, mid
capacity NiMh battery.
Motorola Vader V-3620 Handsets
------------------------------
NAMPS analog cellular phone, with vibra call. Units are black, OEM
box, in master carton, units come with English manual, 110 volt A/C travel
charger, slim Lithium Ion battery and belt clip holster.
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SCHEDULE "F"
PURCHASE ORDER SAMPLE
Globus Wireless, Ltd.
Product Procurement Division
Registered Office: Ste. 220, 0000 Xxxxxxxxx Xxxxx, Xxxx, Xxxxxx, 00000, X.X.X.
Business and Canadian Research Center
0000 Xxxx Xxxxx
Xxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx, X0X 0X0
Telephone: (000) 000-0000 Facsimile: (000) 000-0000
PURCHASE ORDER
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Seller: Aztec Components, Buyer/Ship to: Globus Wireless, Xxxx to: Globus Wireless Ltd.
Inc. Ltd.
Ste. 150 - 39 Argonaut Attn: Accounts Department
Aliso Viejo CA 92656 c/o ODC Integrated Logistics
000 Xxxxxxx Xxxxx, Xxxxx XX 00000 0000 Xxxx Xxxxx, Xxxxxxx X.X.
Order Date: ____________
OR: Designated facility in Xxxxxxxx, X0X 0X0
Order No.: _____________ California or Florida, per
PO Phone: (000) 000-0000
Fax: (000) 000-0000
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SHIP ON TERMS: Payment Terms: Authorized Signature:
F.O.B. Motorola USA
operations at Champlain, IL. Net 20, $3.0 million _____________________________
Name: _______________________
----------------------------------------- ---------------------------------------------- ------------------------------
Aztec Components Inc. hereby agrees to sell and Globus Wireless, Ltd.
hereby agrees to buy the following Product on the terms and conditions as
detailed under their Agreement For Sale Of Manufactured Goods, dated October 18,
2000.
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Quantity Seller Part # & Description Shipping Date Unit Price* ($US) Total Cost ($US)
MOT Vader V3620 Handset Unit $125.00
MOT Profile-300 Handset Unit *$42.66
MOT DPC650 Handset Unit *$42.66
Currency: United States Dollars ($US) TOTAL $
* Unit Price exclusive of Sell-thru Credits
Seller to confirm and sign a copy of this Purchase Order and fax all pages to
Buyer at (000) 000-0000.
Seller to invoice Buyer for the Purchase Order on date of shipment, per terms of
Agreement
Accepted:____________________
Authorized Signatory of Seller This ___ day of __________, _______
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