Exhibit 10.7
AGREEMENT
THIS AGREEMENT is made this 20 day of JULY, 1998, between WORLD'S BEST
RATED CIGAR COMPANY, a Florida corporation ("Buyer"), whose address is 0000 X.X.
000'xx. Xxxxxx, Xxxxx Xxxxx Xxxxx, Xxxxxxx 00000, and TABACOS DE ORIENTE
("SELLER"), whose address is (Illegible), Honduras.
W I T N E S S E T H:
WHEREAS, Seller has agreed to manufacture and sell cigars to Buyer
("Cigars") in accordance with the Buyer"s requirements as set forth by Buyer
from time to time.
NOW, THEREFORE, in consideration of the sum of Ten ($10.00) Dollars 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 of hereof. Payment shall be in U.S. Dollars
uniess 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 or Seller to cancel this Agreement upon at
least (60) days prior By written notice at any time and for 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 leave 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.
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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 the Seller to any other party.
o The parchment wrapping for the Cigars shall be of such quality
as Buyer shall 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 the Cigars are available for Buyer's
orders, as and when placed by Buyer, Seller agrees to keep available in its
inventory at all times tobacco in sufficient amounts to make 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 whether the order is placed, Buyer shall pay to Seller
fifty percent (50%) of the amount due for that order;
B. Fifty percent (50%) of the amount of the order shall be due
and payable at the time of shipping by Seller.
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's cost. If not immediately replaced, any monies previously paid for
non-conforming Cigars shall be promptly reimbursed to Buyer. Buyer has the right
to employ and place in the factory of Seller, at all times, A supervisor to
inspect all cigars prior to packaging and to classify the same as acceptable or
non-acceptable, Before shipment of the Cigars.
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,
F.O.B. Managua or F.O.B. Tegucigalpa, depending on Country of origin. 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 export taxes,
if any, pertaining to the Cigars.
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 from time to time.
11. INFORMATION ON OTHER MANUFACTURERS. To the extent legally
permitted, Seller agrees to provide Buyer with information on other purchasers
from SELLER.
12. OPTION TO PURCHASE. Buyer is hereby granted a 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.
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, nor to bind the other party in any manner whatsoever.
15. ARBITRATION DISPUTES. Any dispute, controversy or breach arising
out of or related 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. Judgement may be entered on the arbitrator's decision in any court
having jurisdiction, and the parties irrevocably consent to the jurisdiction of
the Florida courts for this purpose. In such arbitration, the parties waive
personal service of any process or other papers and agree that service thereof
may be made in accordance with the notice provisions of this Agreement. The
non-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 change, 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 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 parts 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 XXXXXXXXX BY: /s/ XXXXX XXXXX
--------------------------- ----------------------------------------
XXXXXX XXXXXXXXX XXXXX XXXXX
President
/s/ XXXXXXXXX XXXXX
---------------------------
XXXXXXXXX XXXXX
SELLER: /s/ DIRECTOR TABACOS DE ORIENTE
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TABACOS DE ORIENTE
/s/ XXXXXX XXXXX BY: /s/ XXXXXXXX XXXXX
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XXXXXX XXXXX XXXXXXXX XXXXX
EXHIBITS:
A - Type of Cigar and Pricing
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PROGRAMA "A"
PRECIOS DE LOS CIGARROS
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NOMBRE TAMANO PRECIO
------ ------ ------
Robusto 50x5 ***
Corona 42x6 ***
Xxxxxxxxx 50x7 ***
Corona Grande 44x7 ***
Presidente 52x8 ***
Torpedo 52x6 1/2 ***
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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.
