DISTRIBUTION AGREEMENT
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This Agreement made on October 9, 2001 by and between
AquaCell Technologies, Inc., a Delaware corporation having its
main office at 00000 Xxxxxxxxx Xxxxxx, Xxxxxx Xxxxxxxxx, XX 00000
(hereinafter "AquaCell") and Xxxxxxx Water Technologies, Inc., a
company organized and existing under the laws of Nevada
(hereinafter "Dealer" or "Xxxxxxx").
W I T N E S S E T H
In consideration of the mutual covenants and agreements
herein contained, AquaCell and Xxxxxxx agree as follows:
1. Appointment; Territory. AquaCell hereby authorizes
Xxxxxxx to act as AquaCell's exclusive distributor in the
territory set forth on Exhibit "A" (hereinafter the "territory"),
with respect to AquaCell products (hereinafter the "product" or
"products").
2. Limitations on Appointment. Without AquaCell's prior
written consent, Xxxxxxx shall neither solicit orders for the
sale of products outside of the territory, nor engage in the
solicitation of orders for the sale of items to customers located
within the territory on the following orders generated by:
(a) Roto-Rooter pursuant to separate agreement;
(b) Global Water-Aquacell in connection with its
Government Services Administration contract;
(c) Global Water-Aquacell to its current customers;
and
(d) AquaCell Media.
3. AquaCell's Duties. Subject to all other terms,
provisions and conditions hereof, AquaCell will:
(a) Sell all products required to be sold to Dealer at
the prices set forth on Exhibit "B".
(b) Furnish Dealer with such manuals, parts, catalogs,
price lists, technical data and sales assistance as AquaCell in
its sole discretion, shall deem appropriate. AquaCell's consent
to furnish such items pursuant to Dealer's reasonable requests,
shall not be unreasonably withheld.
4. Dealer's Duties. Subject to all other terms,
provisions and conditions hereof, Dealer will:
(a) Sell the products within the territory in
accordance with the terms and conditions hereof and/or enter into
as many Sub-dealer Agreements for the product as Dealer and
AquaCell deem proper and adequate to cover the territory.
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(b) Pay in full, on a net thirty (30) day basis, all
of AquaCell's invoices for products that AquaCell ships for
Dealer pursuant to Dealer's orders. All shipments shall be made
F.O.B. AquaCell's place of business.
(c) Return to AquaCell upon its request, all materials
AquaCell furnishes pursuant to Paragraph 3(c) hereof, it being
understood that the same shall remain AquaCell's property.
(d) Send to AquaCell, at the end of each month, a copy
of all Dealer invoices for AquaCell products sold during such
month.
5. AquaCell's Warranty. AquaCell makes no warranty or
representation with respect to any of the products, except those,
if any, made under its standard warranty. A copy of such
warranty is annexed hereto as Exhibit "C", and made a part hereof
as though set forth at length herein. AquaCell reserves the
right to amend such warranty from time to time, and Dealer shall
not in any manner make any representations intended to alter or
amend said warranty. The rights and obligations of each of the
parties with respect to said warranty are as follows:
(a) Pursuant to written instructions from AquaCell,
Dealer shall deliver a copy of the applicable warranty to every
purchaser of the products from Dealer.
(b) AquaCell will furnish Dealer with a replacement
and Dealer shall then replace any of the products which shall be
defective in material or workmanship. If any customer makes a
claim under a warranty other than the latest applicable warranty
with respect to which AquaCell has notified Dealer, Dealer shall
promptly refer such claim to AquaCell before taking any other
action with regard thereto.
6. Term. This Agreement shall remain in effect for a
period of five (5) years from the date hereof, and thereafter it
shall be extended automatically on a year-to-year basis subject
to the termination rights set forth below:
(a) Either party may cancel and terminate this
Agreement at the end of the initial five (5) year term or at the
end of any renewal term by giving at least ninety (90) days'
written notice thereof prior to the termination date of the
Agreement.
7. Noncompetition; Confidential Information. For so long
as this Agreement shall remain in effect and for a period one
year thereafter:
(a) Dealer shall not, directly or indirectly, be
involved as owner, partner, shareholder, joint venturer,
director, employee, or otherwise, in the conduct of any business
that competes with AquaCell in the territory.
(b) Dealer shall not solicit business from any of
AquaCell's customers, except on behalf and for the benefit of
AquaCell nor shall Dealer solicit any of Aquacell's employees or
other sales representatives for the purpose of being employed by
Dealer or by any party in which Dealer is an owner or employee.
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(c) Dealer acknowledges that certain information of
AquaCell, such as AquaCell's sales manuals, price lists, customer
lists and similar materials, are AquaCell's trade secrets and
shall be and remain AquaCell's sole and exclusive confidential
property. Dealer shall not disclose any such information to
others. Dealer shall not use such confidential information in
any way except in furtherance of its services on AquaCell's
behalf.
(d) Dealer acknowledges that in the event of its
breach, or threatened breach, of any of the provisions of
Paragraphs 7(a), (b) and (c) hereof, AquaCell's remedy at law
would be inadequate, and that the damages flowing from such
breach would not be readily susceptible of being measured in
monetary terms. Accordingly, upon Dealer's violation or
threatened violation of any of the foregoing provisions, AquaCell
shall be entitled to immediate injunctive relief and may obtain a
temporary order restraining any threatened or further breach.
8. Assignment. This Agreement is not assignable by either
party without the prior written consent of the other.
9. Dealer Status. Nothing in this Agreement shall be
construed in such a manner as to constitute Dealer the agent or
legal representative of AquaCell for any purpose whatsoever.
Dealer shall have no authority whatsoever, whether express or
implied, to assume, create or incur any obligation or liability
whatsoever on behalf or in the name of AquaCell, or to bind
AquaCell in any manner whatsoever. AquaCell shall not be liable
for any damages, loss, cost, or expense whatsoever, including
incidental or consequential damages, resulting from any sale,
service, repair or replacement performed by Dealer, except to the
extent expressly provided herein with respect to AquaCell's
warranty.
10. Shares to be Acquired. Xxxxxxx will sell to AquaCell
fifteen percent (15%) of its issued and outstanding common stock
in exchange for AquaCell stock as follows:
(a) That number of shares of AquaCell common stock
equal to $1,500,000 calculated by taking the average closing
price of AquaCell common stock on the five (5) business days
immediately preceding the execution of the Letter of Intent as
the denominator and $1,500,000 as the numerator.
11. Warrants. Upon closing, AquaCell will issue to Xxxxxxx
300,000 common stock purchase warrants exercisable over a five
(5) year period as follows:
(a) 100,000 warrants exercisable @ $5.00 per share;
(b) 100,000 warrants exercisable @ $6.00 per share; and
(c) 100,000 warrants exercisable @ $7.00 per share.
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All warrants will be immediately exercisable, will
contain demand registration rights after one (1) year and piggy-
back registration rights subject to underwriter's approval and
may be redeemed by AquaCell upon certain conditions.
12. Initial Order. Upon execution of this Agreement,
Xxxxxxx shall place an initial order with Global Water-Aquacell
in the amount of $250,000. Payment terms for this initial order
shall be agreed by AquaCell and Dealer, based on a reasonable
manufacturing and shipping schedule, irrespective of paragraph
4(b) of this Agreement.
13. Entire Agreement. This Agreement supercedes any and
all prior agreements between AquaCell and Dealer with regard to
the matters herein contained, and constitutes the entire
Agreement between the parties hereto with regard to such matters.
Neither this Agreement nor any of the provisions, terms or
conditions hereof may be waived, altered, abridged, modified or
amended, except in writing, and signed by the party against whom
the enforcement thereof is sought.
IN WITNESS WHEREOF, this Agreement has been executed as of
the date first above written.
AquaCell Technologies, Inc.
/s/ Xxxxx X. Xxxxxx
By:_______________________________
Xxxxx X. Xxxxxx,
Chief Executive Officer
Xxxxxxx Water Technologies, Inc.
/s/ Xxxx Xxxxxxx, Xx.
By:_______________________________
Xxxx Xxxxxxx, Xx.,
Chairman and
Chief Executive Officer
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Xxxxxxx "X"
Xxxxxxxxx
Xxxxxx Xxxxxx
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Exhibit "B"
Model Price
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Purific Water Cooler Model 500 $725
Purific Water Cooler Model 300 $575
Purific Water Cooler Model 100 $425
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Exhibit "C"
[Insert standard warranty language]
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