Unassociated Document


    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
      1/3rd%)
      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.

     

    
      
        
        

      

      
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    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. 

     

    
      
        
        

      

      
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    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.

     

    
      
        
        

      

      
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    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. 

    


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    IN
      WITNESS WHEREOF, the parties have hereunto caused this Agreement to be executed
      in multiple original counterparts as of the date set forth above. 

    

      
        	
                PARENT:

              
	 
	
                theglobe.com,
                  inc.

              
	 	 
	
                By:

              	 /s/
                Edward A. Cespedes


      

      
        
          	
                  Print Name:

                	
                     
                    Edward A. Cespedes

                


        

        
          	
                  Title:

                	
                                 
                    President

                


        

      

       

      
        	
                BUYER:

              
	 
	
                Tralliance
                  Registry Management Company, LLC

              
	 	 
	
                By:
                  

              	
                Michael
                  S. Egan

              


      

      
        	
                Print Name:

              	
                 
                    Manager

              


      

    

     

    
      
        
        

      

      
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