EXHIBIT 10.6
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Contract No. TA2004-009: Personal Computing Environment
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This SUPPLY CONTRACT is made on this 16th day of August, 2004, by and between:
TRUE CORPORATION PUBLIC COMPANY LIMITED, a company incorporated under the laws
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of Thailand with its registered office at True Tower, 18 Ratchadaphisek Road,
Khwaeng Huai Khwang, Khet Huai Khwang, Bangkok 10310, Thailand (hereinafter
referred to as "TRUE"), and
P--CE COMPUTERS, INC., a company incorporated under the laws of Nevada, with its
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principal office at 45630 Citrus Avenue, Suite E, Indio, California 92201-3401,
USA (hereinafter referred to as "Contractor").
TRUE and Contractor have agreed as follows:
1. Interpretation
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(A) In this Contract these words, and their cognitive words, have the
following meanings:
"Acceptance" means acceptance of the Deliverable with the features as required
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by TRUE as stated in this Contract and the completion of the Acceptance tests
per the procedures set forth in Appendix 8;
"Acceptance Date" means 1st October, 2004, the date by which the Deliverable is
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required to be Delivered and achieved Acceptance;
"Contract" means the written agreements concluded between TRUE and Contractor in
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relation to the supply of the Deliverable, comprising this Contract and
including its appendices and any related purchase orders;
"Contract Price" means the total price payable by TRUE to Contractor for the
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performance by Contractor of its obligations under this Contract, which shall in
no event exceed US Dollars One Hundred Five Thousand Eight Hundred Seventy Five
(US$105,875), as evidenced by the Unit Prices and as further described in Clause
16 (Contract Price);
"Delivery" or "Deliver" means the delivery by Contractor of the Deliverable,
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Cost, Insurance & Freight (CIF) Bangkok, Thailand, INCOTERMS 2000;
"Deliverable" means the work to be performed and the matter to be provided by
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Contractor under this Contract, further described in the Specifications and/or
listed in Appendix 4;
"Frame" means the PCE computing and entertainment platform of the Deliverable,
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excluding the seat, monitor, sound system and computer and computer accessories;
"Letter of Credit" means the bank documentary irrevocable letter of credit to be
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procured by TRUE for the benefit of Contractor which may be fully drawn against
upon proper presentment of a bill of lading, a commercial invoice and a
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certificate of origin with respect to the Frames for which TRUE has issued a
purchase order to Contractor;
"Proprietary Rights" means all existing and future rights to inventions,
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patents, designs, trade marks, service marks, copyrights and other like rights,
registered and unregistered, and any applications for any of the foregoing,
together with all trade secrets, know how, rights to confidence and other
intellectual or industrial property rights anywhere in the world;
"Prototype Units" means the three (3) units of the PCE computing and
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entertainment platform of the Deliverable which have been Delivered and Accepted
prior to the date of this Contract;
"Specifications" means the detailed technical specifications for the
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Deliverable, being those contained or referred to in Appendix 7, as the same may
be amended from time to time in accordance with this Contract; and
"Unit Prices" means the item prices for, as the case may be, the supply of the
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Deliverable as specified in Appendix 4 and as further described in Clause 16.
(B) This document shall, unless expressly provided otherwise in writing, have
priority over all other documents forming part of this Contract.
2. General Obligations of Contractor
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(A) Contractor shall supply the Deliverable, install the Deliverable at the
specific location specified by TRUE, and provide on-site installation and
assembly training in accordance with this Contract, in a timely manner to
meet the Acceptance Date. Accordingly, all risks in relation to such
supply, other than those that TRUE has in this Contract expressly agreed
to bear, shall be borne by Contractor. For the avoidance of doubt, TRUE
acknowledges that the Prototype Units have already been Delivered,
assembled and installed according to schedule.
(B) Intentionally omitted.
(C) Contractor shall ensure that the Deliverable:
(i) accords strictly and complies in all respects with all the
provisions and requirements of this Contract;
(ii) will in all respects be fit for the purposes described and will
perform in accordance with the Specifications;
(iii) to the extent any standard is not specified in this Contract or
has not been agreed, it shall comply with internationally
recognized standards of best practice/design;
(iv) will be in compliance with all applicable laws and regulations;
and
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(v) shall proceed in accordance with the scope of works,
responsibility matrix and implementation plan as set forth in
Appendix 6.
(D) Without prejudice to any other remedy available to TRUE by reason of a
breach by Contractor under this Contract, Contractor shall indemnify TRUE
against all losses, damages and expenses suffered by TRUE in respect of
the Deliverable, or any claim that such a breach has occurred. Except as
may be specifically provided herein, Contractor shall not be liable for
indirect, incidental, special or consequential damages, including loss of
profit, investment, goodwill or cost of capital.
(E) Any other agreement notwithstanding, Contractor hereby guarantees that
the Contract Price for the Deliverable shall include all costs and
expenses arising from the supply of the Deliverable (CIF Bangkok),
training and other costs and expenses incurred in complying with this
Contract. TRUE shall not be obligated to pay more for the Deliverable
than the Contract Price.
(F) Intentionally omitted.
3. Purchase Order and e-Procurement
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(A) Upon the later of (i) five (5) business days after the execution of this
Contract and (ii) Contractor complying with Clause 23(A), TRUE shall
issue a purchase order with respect to the Deliverable.
(B) Contractor agrees, without any conditions, to follow a process of
electronic procurement (e-procurement) instructed by TRUE without any
additional charge to TRUE. Failure to follow the e-procurement process
shall give TRUE the right, at its sole discretion, to deduct from any
money owed to Contractor or to claim against any bond a sum equal to the
e-procurement fee that would have been owing had the e-procurement
process been followed as required, without any liability to TRUE or the
e-procurement vendor for such money so deducted or claimed, or to cancel
any issued purchase order without any compensation for any loss or
damage, both direct and/or indirect, that may be incurred by Contractor.
4. Intentionally Omitted
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5. Representations and Warranties
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Contractor represents and warrants to TRUE that:
(i) it has all requisite rights in respect of the Deliverable, such
that it shall be transferred to TRUE free of any restriction or
encumbrance;
(ii) the standard of performance, skill and care used in the
undertaking by it of the supply of the Deliverable shall be of a
standard to be expected of an entity expert in the undertaking of
projects comparable to the Deliverable;
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(iii) only good quality materials and good, careful workmanship have
been used in connection with the production of the Deliverable;
and
(iv) when Accepted, the Deliverable will be capable of operating in
accordance with the operating instructions and performance
criteria, without risk and danger to the general public or persons
operating it and without any pollution or hazardous emission.
6. Indemnity
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(A) Contractor shall defend, indemnify and hold harmless TRUE (including its
subsidiaries, affiliates and customers) against any and all claims,
demands and actions (a "Claim") alleged upon Contractor's breach or tort
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under any infringement of any Proprietary Right in connection with this
Contract.
(B) If, as a result of a Claim, TRUE becomes enjoined from using the
Deliverable or any part thereof, Contractor shall, in order of the
following (i) procure for TRUE full rights to use the Deliverable, (ii)
provide a replacement Deliverable that is non-infringing and meets not
less than the same functional specifications as the Deliverable, or (iii)
if acceptable to TRUE, refund in full the Contract Price paid, without
any deduction whatsoever.
7. Deliverable, Title and Care of the Deliverable
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(A) All items of the Deliverable shall be packed by Contractor bearing a
label showing the quantity and description of its contents and referring
to this Contract.
(B) Title to the Deliverable shall be transferred upon Acceptance to TRUE
free and clear of any charge, lien or other condition or encumbrance
whatsoever.
8. Inspection and Acceptance
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(A) Any part of the Frame at any time found to be defective or inferior to or
differing in form or material from the requirements of this Contract
shall be replaced or rectified promptly at Contractor's expense.
(B) If Contractor fails to remedy any rejected item of the Frame within such
period of time as TRUE shall consider reasonable, TRUE may remedy the
rejected item and recover from Contractor any cost incurred in so doing.
(C) Failure to pass the Acceptance tests, which failure cannot be recovered
and remedied by Contractor within forty-five (45) days, including any
extension of time granted by TRUE, if any, shall entitle TRUE to require
Contractor to reimburse TRUE for all payments made to Contractor, within
fifteen (15) days from the date of TRUE's notice, in the full amount
requested without any reduction or offset. Contractor shall remove any
equipment and material at its own cost, within a reasonable period of
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time from the date of TRUE's notice and Contractor shall have no claim
against TRUE for any loss or damages related to the cancellation of the
Deliverable.
9. Defects and Technical Support
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(A) If at any time there shall be any defect in any Frame which Contractor
cannot demonstrate to have been attributable to some cause other than its
own failure to comply with this Contract, at its own cost Contractor
shall promptly remedy the same.
(B) In regard to Deliverables, other than the Frame, Contractor shall pass
through to TRUE all rights and benefits of the warranties, if any,
provided by the manufacturers and distributors of said Deliverables and
provide TRUE with all reasonable assistance in making and substantiating
any warranty claim there under with respect to said Deliverables.
10. Intentionally Omitted
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11. Insurance
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(A) Contractor shall take out and maintain insurance in relation to the
Deliverable as set forth below. Contractor shall provide to TRUE all
certificates of insurance and, upon request by TRUE, copies of all
insurance policies.
(B) Contractor shall comply with all terms and conditions of the policies
that it is required to maintain under this Contract and with all
requirements of insurers in connection with the settlement of claims, the
recovery of losses and the prevention of accidents. Contractor shall bear
the cost of all excesses, deductibles, exclusions or limitations applying
under such insurance.
(C) If Contractor fails to maintain the insurance required, then TRUE may
procure and maintain any such insurance, pay the requisite premiums and
deduct the amount paid from any monies due Contractor, or recover the
same as a debt from Contractor.
(D) Contractor shall maintain the following insurance coverage for the period
through Acceptance, except as stated otherwise:
(i) public and product liability insurance, continuing for not less
than five (5) years from the date of this Contract, with an
available limit of not less than Thai Baht Forty Million
(B40,000,000) per occurrence for bodily injury and property
damage; and
(ii) property all risks insurance which shall cover but not limited to
all losses or damage regardless of cause covering loss of or
damage (including during transit) to the Deliverable until
Acceptance.
12. Intentionally Omitted
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13. Intentionally Omitted
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14. Intentionally Omitted
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15. Contract Price and Unit Prices
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(A) Subject to Contractor having complied with its obligations under this
Contract, TRUE shall pay the Contract Price..
(B) Intentionally omitted.
(C) The amount actually payable to Contractor pursuant to sub-clause (A)
shall be the amount found by multiplying the quantities of items of the
Deliverable, which have been Delivered and Accepted by TRUE, evidenced by
the Unit Prices of such items as shown in Appendix 4.
16. Payment Terms
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Subject to Contractor having complied with its obligations under this Contract
and delivered invoices in respect of the purchase orders, TRUE shall:
(i) on the issuance date of the purchase order, issue to Contractor a
Letter of Credit equal to forty percent (40%) of the purchase
order;
(ii) within thirty (30) days after the date of Acceptance, pay
Contractor fifty percent (50%) of the purchase order; and
(iii) within thirty (30) days after twelve (12) months from the date of
Acceptance, pay Contractor ten percent (10%) of the purchase
order.
Provided, however, that the foregoing notwithstanding, within fifteen (15) days
of the date of issuance of the purchase order TRUE shall pay Contractor US
Dollars Eleven Thousand Four Hundred Thirty-Four and 50/100 (US$11,434.50) with
respect to three (3) Prototype Units that have already been Delivered to and
Accepted by TRUE and that sub-clauses (i) and (ii) shall not be applicable to
the price of and payment for the Prototype Units.
The Contract Price as specified in sub-clause (ii) and (iii) shall be paid by
TRUE by telegraphic transfer remittance to Contractor's account at a bank
designated by Contractor, in US Dollars.
17. Intentionally Omitted
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18. Assignment
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(A) TRUE may, at its absolute discretion, assign all or any part of its
interest under this Contract or any agreement entered into in connection
with this Contract to any person.
(B) Contractor shall, if requested by TRUE, enter into an agreement or
agreements with or for the benefit of such persons in which Contractor,
without limitation, acknowledges receipt of notice of assignment of
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TRUE's interest and agrees that it will continue to comply with its
obligations hereunder, provided that all payments are made to Contractor
as they fall due and payable.
19. Default
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(A) The parties hereto agree that if any party hereto is in default with
respect to any of the provisions of this Contract (herein called the
"Defaulting Party"), the non-defaulting party (herein called the
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"Non-Defaulting Party") shall give notice to the Defaulting Party
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designating such default, and within ten (10) calendar days after its
receipt of such notice, the Defaulting Party shall either:
(i) cure such default; or
(ii) give the Non-Defaulting Party notice that it denies that such
default has occurred and that it is submitting the question to
arbitration as herein provided.
(B) If arbitration is sought, a party shall not be deemed in default until
the matter shall have been determined finally by appropriate arbitration
under the provisions of Clause 21 hereinbelow.
(C) If:
(i) the default is not so cured; or
(ii) arbitration is not so sought; or
(iii) the Defaulting Party is found in arbitration proceedings to be in
default,
the Non-Defaulting Party may, by written notice given to the Defaulting
Party at any time while the default continues, terminate the interest of
the Defaulting Party in and to this Contract.
20. Choice of Governing Law
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This Contract shall be governed by and construed in accordance with the laws of
Thailand. The language of this Contract is the English language, which shall be
the ruling language in which this Contract shall be interpreted.
21. Arbitration
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Any dispute arising under this Contract shall be arbitrated at the Singapore
International Arbitration Centre, in accordance with the rules thereof enforced
at the time of submitting the dispute, provided that the making of any reference
under this sub-clause shall not entitle either party to cease to perform any
obligations under this Contract which are unperformed at the time of the
reference.
22. Notices
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(A) Any communication given or made under or in connection with the matters
contemplated by this Contract shall be in writing addressed:
(i) if to TRUE, to the registered office address of TRUE set forth in
the preamble of this Contract, to the attention of "Khun Noppadol
Dej-Udom, Director & General Manager Broadband & Internet", with a
copy to the attention of "Associate General Counsel, Supplier
Management Department"; and
(ii) if to Contractor, to the principal office address of Contractor
set forth in the preamble of this Contract, to the attention of
"Allan J. Quattrin, President/CEO".
(B) Any such communication shall be deemed to have been duly given: (i) if
sent by personal delivery, upon delivery at the address of the relevant
party; and (ii) if sent by post, fourteen (14) business days after
posting.
23. Miscellaneous
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(A) Contractor undertakes to deliver to TRUE, within seven (7) business days
from the date of this Contract, evidence satisfactory to TRUE of
authorization for (i) the entering into this Contract, and (ii) the
person signing this Contract to execute it on Contractor's behalf.
(B) This Contract shall be effective and binding on TRUE and Contractor on
the signing date and shall continue to be in effect until all the
obligations of parties have been fully discharged.
(C) This Contract may be executed in any number of counterparts, and by the
parties on separate counterparts, each of which shall constitute an
original, but all the counterparts shall together constitute only one and
the same instrument.
(D) This Contract shall constitute the whole and only agreement between the
parties relating to the Deliverable and shall supersede and extinguish
any prior drafts, agreements, undertakings, representations, warranties
and arrangements of any nature whatsoever, whether or not in writing.
This Contract may only be varied in writing signed by both parties.
(E) Each party acknowledges that in entering into this Contract it is not
relying upon any representation, warranty, promise or assurance made or
given by any other party or any other person, whether or not in writing,
at any time prior to the execution of this Contract, which is not
expressly set out herein.
(F) If, at any time, any provision of this Contract is or becomes illegal,
invalid or unenforceable in any respect under the law of any
jurisdiction, neither the legality, validity or enforceability of any
other provisions of this Contract nor the legality, validity or
enforceability under the law of any other jurisdiction will in any way be
affected or impaired.
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(G) Intentionally omitted.
(H) All information received by a party in connection with this Contract from
or about the other party shall be strictly confidential and shall not be
used or communicated to any person otherwise than is required in the
performance of, or as may be otherwise permitted by, this Contract or
required by a government authority.
24. Force Majeure
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Neither party shall be responsible or considered in breach of this Contract for
any delay or failure in the performance of any of its obligations to the extent
that such failure or delay is caused by the following events, so long as said
event is of a catastrophic nature: acts of God, fires, explosions, labor
disputes, accidents or civil disturbances beyond its reasonable control. The
non-performing party shall, however, provide notice of such cause preventing or
delaying performance, shall resume its performance as soon as practicable and
shall use all reasonable efforts to avoid and to mitigate harm to the other
party resulting from such failure or inability to perform. The other party may
terminate this Contract upon notice if such non-performance continues for a
period of thirty (30) days.
25. Intentionally Omitted
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26. Connected Transaction Warranty
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Contractor warrants that the transaction of this Contract is not a "Connected
Transaction" pursuant to the Regulations of the Stock Exchange of Thailand.1
The parties have caused this Contract to be executed on the date first written
above.
TRUE CORPORATION PUBLIC COMPANY LIMITED
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By /s/ Athueck Asvanund By /s/ Vichaow Rakphongphairoj
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Athueck Asvanund Vichaow Rakphongphairoj
Vice Chairman and Managing Director and
Group General Counsel Chief Operating Officer
Witness: /s/ Noppadol Dej-Udom
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Noppadol Dej-Udom
Director & General Manager
Broadband & Internet
PERSONAL COMPUTING ENVIRONMENTS
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By /s/ Allan Quattrin
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Allan J. Quattrin, CEO and
President
Witness: /s/ Mike Shannon
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Michael Shannon
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1 "Connected Transaction" means any transaction between TRUE or TRUE's
subsidiaries and persons who may have a conflict. Persons who may have a
conflict means the following persons:
(a) management of TRUE,
(b) a major shareholder of TRUE,
(c) a person who has controlling power of TRUE,
(d) a person related by blood, marriage or registration under laws to the
persons under (a), (b) or (c), namely fathers, mothers, spouses or other
close relatives,
(e) any juristic person in which the persons under (a), (b) or (d) hold
shares or have the power to control or any other material interest,
either directly or indirectly, or
(f) a person whose nomination as or attainment of (a) or (c), respectively,
is imminent.
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APPENDIX 1
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APPENDIX 2
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APPENDIX 3
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APPENDIX 4
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LIST OF THE DELIVERABLE, UNIT PRICES, LIST OF SPARE PARTS
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AND PRICE SUMMARY
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PC As specified Appendix 7
PRICE per PC $1,020.00
QUANTITY 25
PC Total $25,500.00
VDT 17" TFT-LCD VD
PRICE $550.00
QUANTITY 50
VDT Total $27,500.00
SURROUND SOUND Micro labs D222 5.1 @ 60watts
PRICE $105.00
QUANTITY 25
Total $2,625.00
PCE with Humanscale
Freedom Chair- Red
PRICE $2,010.00
QUANTITY 25
TOTAL: $50,250
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Total for fully configured
PCE 25 @ $4,235 per PCE $105,875.00
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APPENDIX 5
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APPENDIX 6
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SCOPE OF WORKS, RESPONSIBILITY MATRIX AND
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IMPLEMENTATION PLAN
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Scope of Works:
Reception and Assembly location - TRUE
Reception Inventory Check -Contractor & TRUE
Assembly of units - Contractor & TRUE Trainee's
Integration of technologies - Contractor & TRUE Trainee's
Local delivery of Units - TRUE & Contractor
Reception and Assembly location is suggested to be an open space to allow for
rapid assembly. This implementation plan shall be no longer than 10 days in
length.
Reception of the Deliverable - upon receiving the Deliverable in Bangkok, a
check of inventory must be executed.
Assembly of units - a central location to assemble 22 units of the Deliverable
must be available. Contractor will provide a team of 1 individual to assemble 22
units and TRUE will supply 3 individuals to work with the Contractor's
individual to assemble, install and test the Deliverable. Furthermore, TRUE will
provide hotel accommodations to the Contractor's individual at no cost to the
Contractor or the Contractor's individual.
Local delivery of the Deliverable - To provide efficient and effective
implementation of the Deliverable into TRUE's desired locations, a delivery
vehicle must be arranged by TRUE. In North America, each unit of the Deliverable
uses a 1 Ton box truck. This delivery vehicle must have a ramp access to the
boxed cargo hold that is no less than 2'7 ft in width. The cargo hold must have
a height no less than 5'10 ft. This will allow for the units to be wheeled into
and from the delivery vehicle. The units can then be wheeled to their location
providing that individual locations have access similar to wheel chair access.
Local delivery of units is limited to number of locations and drive time in
Bangkok. It is suggested that a team of 2 persons deliver the Deliverable units
to locations.
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APPENDIX 7
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SPECIFICATIONS
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CPU Intel Celeron 2.4 GHz 533MHz
CPU COOLER BALL TYPE
MOTHERBOARD INTEL865G CHIPSET
MEMORY 512MB DDR PC2700 DDR333MHz
HARD DISK 40G HDD 7200RPM 2 MB Buffer
ODD 48X COMBO DRIVER
GRAPHIC CARD NVIDIA 5200 128 MB DDR
LAN CARD REALTEK 8101L
SOUND Onboard DSP 5.1
KEYBOARD wired black & extension
MOUSE wired black & extension
Web Camera D-Link C310 & extension
CASE CHASSIS Shuttle
POWER SUPPLY 300W PSU
MANUAL MANUAL CD TITLE
OS WINDOWS XP PRO
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APPENDIX 8
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PROCEDURES OF ACCEPTANCE TESTS
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ACCEPTANCE PROGRAM
i) Implementation Schedule
Refer to Appendix 6.
ii) Installation Plan
Network configuration and interconnection diagram
- - RJ 45 cable to rear panel of PC
Equipment layout
- - to True Corporation's specifications
Bay-faced layout
- - NA
List of installation material
- - PCE units will be completely installed with True Corporation applications in
assembly process
Detailed calculation of power consumption and heat dissipation
- - Each PCE unit as configured will consume between 300watts and 700 watts
depending on load
Equipment relocation plan
- - Equipment can be relocated by retracting stabilizers and wheeling units to
desired location
iii) Test Procedures (after the completion of installation)
Test Configuration as an integrated system
Each test shall include:
a) Structural physical test. (Manually testing of every bolt, and
mechanism)
b) Connection test. (Manually inspecting all data and power
connections)
c) Boot Test
d) VDT test (manually move windows between VDT's & adjust settings)
e) 5.1 Channel audio test (adjusting settings)
f) Network Management test
g) System Feature Test - (all applicable applications & adjustment)
h) Full load test - (minimum of 10 running applications)
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iv) Monitoring Period which is to be conducted by TRUE and is not an
acceptance test.
Daily Maintenance and Monitoring equal to TRUE's existing procedures for PC
equipment.
Weekly Maintenance on structural portions of apparatus for first four weeks up
to a maximum of 90 days in total.
v) Failure Report Form
Direct email to Failure Report rep. Boo@mypce.com
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APPENDIX 9
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APPENDIX 10
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APPENDIX 11
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