Exhibit 10.6
AGREEMENT
THIS AGREEMENT is made this 12 day of July, 1998, between WORLD'S BEST
RATED CIGAR COMPANY, a Florida corporation ("Buyer"), whose address is 0000 X.X.
000xx Xxxxxx, Xxxxx Xxxxx Xxxxx, Xxxxxxx 00000, and TABACELERA PANAMERICANA Y
DEL CARIBE SA ("Seller"), whose address is HOTEL EL MESON 1C. AL ESTE ESTELI
NIC. CENTRO AMERICA.
WITNESSETH:
WHEREAS, Seller has agreed to manufacture and sell cigars to Buyer
("Cigars") in accordance with Buyer's requirements as set forth by Buyer from
time to time.
NOW, THEREFORE, in consideration of the sum of Ten ($10.00) Dollars,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. RECITALS OF FACTS. The foregoing recitals of facts are true
and correct and are hereby incorporated into this Agreement.
2. REQUIREMENTS. Seller agrees to manufacture and sell Cigars to
Buyer based on Buyer's stated purchase requirements from time to time. All
Cigars shall be manufactured and sold in accordance with the standards and
specifications set forth herein and shall be of the highest quality.
3. TYPE OF CIGARS; PRICING. The type of Cigar and the price to be
charged by Seller to Buyer for each type of Cigar is set forth on Schedule "A"
attached hereto and made a part hereof. Payment shall be in U.S. Dollars unless
otherwise agreed to by Buyer and Seller.
4. TERM. The term of this Agreement shall be for a period of ten
(10) years, subject to the right of Buyer to cancel this Agreement upon at least
sixty (60) days prior written notice to Seller at any time and for any reason
(or no reason).
5. QUALITY AND SPECIFICATIONS. Seller has agreed to deliver
Cigars meeting the following minimum quality standards and specifications:
o All Cigars shall use long leaf tobacco.
o All Cigars shall be hand rolled.
o All Cigars shall be of the highest quality tobacco and shall
be of no lesser quality than the highest premium grade
offered by Seller to any other party.
o The filler used in the Cigars shall be of the highest premium
grade and shall be of no lesser quality than the highest
premium grade offered by Seller to any other party.
o The parchment wrapping for the Cigars shall be of such
quality as Buyer shall direct.
o Seller will label the Cigars with such labeling as Buyer may
direct.
o Cigars shall be individually packaged by the Seller in
cellophane and properly packaged and boxed for shipping.
6. INVENTORY. So as to ensure that Cigars are available for
Buyer's orders, as and when placed by Buyer, Seller agrees to keep available in
its in inventory at all times at least 200,000 of each of the Cigars listed on
Schedule A attached hereto. All inventory shall be kept in a properly regulated
humidor.
7. PAYMENT TERMS. Payment for each order shall be as follows:
A. As and when the order is placed, Buyer shall pay to Seller
twenty-five percent (25%) of the amount due for the order;
B. Fifty percent (50%) of the amount of the order shall be due
and payable at the time of shipping by Seller; and
C. The remaining twenty-five percent (255) of the order shall be
due upon receipt of the Cigar order by Buyer.
It is understood that Seller shall have no right to retain payment for any
Cigars which do not meet the minimum standards and specifications set forth
herein and, upon demand, any non-conforming Cigars shall be immediately replaced
by Seller at Seller's cost, with Seller fully responsible for all costs
associated with shipping and delivery of same to Buyer. If not immediately
replaced, any monies previously paid for non-conforming Cigars shall be promptly
reimbursed to Buyer. Buyer reserves the right to declare Cigars as
non-conforming at any time, and neither acceptance of possession by Buyer or
prior payment by Buyer shall be deemed to restrict Buyer's rights in this
respect.
8. SHIPPING: RISK OF LOSS. Seller shall be responsible for
delivery and cost of expense of delivery of the Cigars to a shipper designated
by Buyer. From and after delivery of the Cigars to the shipper, Buyer bears the
risk of loss.
9. CUSTOMS. Buyer shall be responsible to pay customs and import
and export taxes, if any, pertaining to the Cigars.
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10. TIMING OF DELIVERY. All orders shall be fulfilled by Seller
and delivered for shipping to buyer no later than thirty (30) days of the date
that an order is placed. All Cigars used by Seller from its inventory to fulfill
any order shall be of the same quality and standards set forth above. Buyer
shall have the first right of access to any such inventory maintained by Seller
if necessary to satisfy Buyer's purchasing requirements form time to time.
11. INFORMATION ON OTHER MANUFACTURERS. To the extent legally
permitted, Seller agrees to provide Buyer with information on other purchasers
form Seller.
12. OPTION TO PURCHASE. Buyer is hereby granted an Option to
Purchase the plantation and/or Cigar factory of Seller. The parties agree to
enter into good faith negotiations in order to establish the terms of said
option to purchase. The Option to Purchase, once agreed to, shall be documented
in a form reasonably satisfactory to Buyer.
13. DEFAULTS AND REMEDIES. In the event of default by either party
hereunder, the parties hereto shall have all rights and remedies available under
law, by statute or otherwise, subject to the arbitration provision set forth
below. Prior to declaring any party in default, the non-defaulting party shall
provide the defaulting party with written notice of default with no less than 10
days to cure the default. In addition to all other remedies available to Buyer,
if Seller fails to meet the requirements specified by buyer for any cigar order,
or if the Seller otherwise fails to perform any other provision of this
agreement, then buyer may make or procure, upon such terms and in such manner as
buyer deems appropriate, Cigars meeting Buyer's specifications through another
party. In such event, Seller shall be liable to buyer for all reasonable costs
caused by such failure which Buyer incurs during the time Buyer is without its
Cigars and for any excess costs of Cigars above the price as stated herein.
14. LIMIT OF AUTHORITY. Both parties are independent contractors
and this Agreement does not constitute either party as the legal representative
of the other for any purpose whatsoever. Neither party has authority to assume
or create any obligation whatsoever, express or implied, on behalf of or in the
name of the other party in any manner whatsoever.
15. ARBITRATION OF DISPUTES. Any dispute, controversy or breach
arising out of or relating to this Agreement, shall be settled by arbitration to
be held in the City of Miami, Dade County Florida before a single arbitrator in
accordance with the rules then in effect of the American Arbitration Association
or any successor thereto. The arbitrator may impose damages, grant injunctions
or grant other relief in such dispute or controversy. The decision of the
arbitrator shall be final, conclusive, and binding on the parties to the
arbitration. Judgment may be entered on the arbitrator's decision in any court
having jurisdiction of the Florida courts for this purpose. In such arbitration,
the parties waive personal service of any process of other papers and agree that
service thereof may be made in accordance with the notice provisions of this
Agreement. The non-prevailing party in such arbitration shall pay all of the
reasonable attorneys' fees and costs of the prevailing party, including any
appeal thereof, with the proviso, however, that each party shall pay one-half of
the fees separately charged by the arbitrator.
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16. GOVERNING LAW. This Agreement shall be governed by enforced
and construed in accordance with the laws of the State of Florida.
17. MISCELLANEOUS. This Agreement and the terms and provisions
hereof may only be changed, waived or discharged by an instrument in writing
signed by the parties hereto. This Agreement embodies the entire agreement and
understanding between the parties hereto and supersedes all prior agreements and
understandings relating to the subject matter hereof and no party hereto has
made any representation or warranty or covenant in connection with the matters
set forth herein except as expressly stated herein. All the terms of this
Agreement shall be binding upon the respective personal representatives,
successors and assigns of the parties hereto and shall inure to the benefit of
and be enforceable by the parties hereto, and their respective personal
representatives, successors and assigns. This Agreement shall be construed
without regard to any presumption or other rule requiring construction against
the party causing this Agreement to be drafted. This Agreement may be executed
in counterparts, each of which shall be deemed an original, but all of which
together shall be deemed to be one agreement. If, for any reason, any provision
of this Agreement is held invalid, such invalidity shall not affect any other
provision of this Agreement, and the Agreement shall otherwise remain in full
force and effect.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
In the presence of: BUYER:
WORLD'S BEST RATED CIGAR COMPANY,
A Florida corporation
/s/ XXXXXX X. XXXXXXXXX By:/s/ XXXXX XXXXX
-------------------------- --------------------------
Xxxxxx X. Xxxxxxxxx Xxxxx Xxxxx, President
/s/ XXXXXXXXX XXXXX SELLER:
--------------------------
Xxxxxxxxx Xxxxx /s/ TAPACASA
--------------------------------------
/s/ XXXXXX XXXXX
-------------------------- By: /s/ XXXXX XXXXX, GERENTE PRES.
Xxxxxx Xxxxx -----------------------------------
Xxxxx Xxxxx, Gerente Pres.
/s/ XXXXX XXXXX XXXXXX
--------------------------
Xxxxx Xxxxx Xxxxxx
EXHIBITS:
A- Type of Cigar and Pricing
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PROGRAMA "A"
PRECIOS DE LOS CIGARROS
NOMBRE TAMANO PRECIO
------ ------ ------
# 1 Robusto (5 x 50 ) ****
# 2 Panetela esp. (38 x 6 ) ****
# 3 Toro (6 x 50 ) ****
# 4 Torpedo (6.5 x 54) ****
# 5 Xxxxxxxxx (7 x 48 ) ****
# 6 Presidente (52 x 7.5) ****
100% cuban seede, long filler,
hand made Cigars.
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* Confidential portions of this Exhibit have been omitted and filed separately
with the Commission pursuant to a request for Confidential Treatment.
