AGREEMENT
THIS AGREEMENT (THE "AGREEMENT"), ENTERED INTO AS OF THIS 7TH day of
July, 1999, by and between International Smart Sourcing, Inc., a Delaware
corporation with its principal place of business at 320 Broad Hollow Road,
Farmingdale, New York 11735 (the "Company"), and Azurel Ltd., a Delaware
corporation with its principal place of business at 509 Madison Avenue, New
York, New York 10022 (together with its subsidiaries and affiliates, "Azurel").
WHEREAS, Azurel desires to engage the Company to be the exclusive
supplier of any and all products imported to the United States by or on behalf
of Azurel (the "Imported Products"), and the Company desires to be the exclusive
supplier of such Imported Products.
NOW, THEREFORE, in consideration of the mutual agreements and covenants
obtained herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, it is mutually agreed by and among
the Parties as follows:
1. TERM.
The term of this Agreement shall commence as of the date first
written above and shall end on December 31, 2003 (said period is hereinafter
referred to as the "Term").
2. SERVICES.
(a) The Company agrees to provide the Imported Products to
Azurel, and Azurel agrees to purchase the Imported Products exclusively from the
Company during the Term of this Agreement.
(b) In the event that any tooling is required in connection
with the manufacture and supply of the Imported Products (the "Tooling"), Azurel
will participate in the design and pay all expenses associated with the design
and production of such Tooling. The Tooling will be the property of Azurel and
will be used only for the manufacture of the Imported Products, their components
or other goods manufactured for Azurel by the Company, its subsidiaries and
affiliates.
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3. DELIVERY AND PAYMENT.
(a) The Company shall deliver promptly to Azurel, or such
third party designee as Azurel shall specify to the Company in writing, all
Imported Products to be provided by the Company hereunder.
(b) Azurel shall pay to the Company, prior to production, the
cost of any materials required in connection with the manufacture of the
Imported Products, and shall pay for all finished Imported Products in full upon
delivery by the Company F.O.B. any United States port of entry.
4. WARRANTIES.
(a) The Company warrants that, when delivered in accordance
with this Agreement, the Imported Products will conform to: (i) any affirmation
of fact or promise made by the Company that specifically relates to the Imported
Products delivered; (ii) any description of the Imported Products provided by
the Company prior to the delivery thereof; and (iii) any sample or model
exhibited by the Company prior to delivery as a true sample or model of the
Imported Products to be delivered.
(b) With the exception of any promissory note executed in
accordance with paragraph 6(a) below and the Warrants, as hereinafter defined,
this Agreement is intended to be the complete and exclusive statement of the
understanding between the parties with respect to the subject matter hereof. The
Company makes no warranties, express or implied, other than those specifically
stated herein.
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(c) THE COMPANY AND AZUREL AGREE THAT ANY AND ALL IMPLIED
WARRANTIES ARE HEREBY EXCLUDED. THE COMPANY IN NO WAY WARRANTS THE
MERCHANTABILITY OF THE IMPORTED PRODUCTS OR ANY COMPONENT PART THEREOF, OR THEIR
FITNESS FOR THE PARTICULAR PURPOSE FOR WHICH THEY WERE INTENDED.
5. EXCLUSIVITY.
During the Term of this Agreement, the Company shall supply
the Imported Products exclusively to Azurel, and Azurel shall purchase
exclusively from the Company all of Azurel's Imported Product requirements. The
Company shall not provide the Imported Products to and Azurel shall not purchase
the Imported Products from any other party during the Term. However, nothing
contained herein shall be construed as to restrict the Company from providing
other products and services, similar in nature to those to be contemplated by
this Agreement, to third parties not competitive in Azurel's market.
6. COVENANTS OF THE PARTIES.
(A) LOAN TO AZUREL. The Company will advance to Azurel,
immediately upon execution of the Agreement and upon dates agreed to by Azurel
and the Company, up to the sum of $500,000 to be used by Azurel to pay for
purchases of the Imported Products from the current suppliers of Azurel (the
"Credit"). Each advance of the Credit will be evidenced by a NonNegotiable
Promissory Note on the terms and in the form attached hereto as Exhibit A.
(B) GRANT OF WARRANTS. Azurel will deliver to the Company,
immediately upon execution of the Agreement, a duly executed Warrant Certificate
registered in the name of the Company, giving the Company the right to purchase
100,000 shares of common stock of Azurel
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registered under the Securities Act of 1933, as amended, at the purchase price
of $1.50 per share, until the expiration of the Warrant on December 31, 2004
(the "Warrants").
(C) INSURANCE. Azurel shall maintain in full force and effect,
throughout the Term, adequate products liability insurance coverage for the
Imported Products.
7. REMEDIES.
(a) If Azurel fails to make payment for goods delivered or
services rendered as provided in Section 3 of this Agreement, the Company shall
have, in addition to any remedy or remedies set forth below, the right to
rescind and cancel this contract or, at its option, to defer further deliveries
until all goods delivered have been paid for.
(b) In addition to the remedies set forth in paragraph (a)
above, if Azurel breaches, or threatens to commit a breach of, any of the
provisions contained herein, the Company shall have the following rights and
remedies (upon compliance with any necessary prerequisites imposed by law for
the availability of such remedies), each of the rights and remedies being
independent of the other and severally enforceable, and all of the rights and
remedies being in addition to, and not in lieu of, any other rights and remedies
available to the Company at law or in equity. The termination of the Term of
this Agreement as specified herein shall not terminate any liability arising out
of conduct prior to the actual date of termination:
(i) The right and remedy to have the Agreement
specifically enforced by any court having equity jurisdiction, including,
without limitation, the right to have restraining orders and injunctions
(preliminary, mandatory, temporary and permanent) entered against Azurel
preventing violations of such provisions, threatened or actual, and whether or
not then continuing,
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it being acknowledged and agreed that any such breach will cause irreparable
injury to the Company and that money damages will not provide an adequate remedy
to the Company;
(ii) The right and remedy to require Azurel to
account for and pay over to the Company all compensation, profits, monies,
accruals, increments or other benefits derived or received by it primarily as
the result of any transactions constituting a breach of the Agreement. Azurel
shall promptly account for and pay over such sums to the Company; and
(iii) The right and remedy to declare repayment of
the Credit immediately due and payable.
8. TERMINATION OF THE AGREEMENT.
This Agreement shall terminate upon expiration of the Term,
unless sooner terminated by a written instrument signed by both the Company and
Azurel.
9. ARBITRATION.
Any controversy or claim arising out of, or relating to this
Agreement, or its breach, shall be settled by arbitration in accordance with the
then governing rules of the American Arbitration Association in the City of New
York. Judgment upon the award rendered may be entered and enforced in any court
of competent jurisdiction.
10. WAIVERS AND AMENDMENTS.
This Agreement and any of the terms contained herein may not
be amended, superseded, canceled, renewed, extended or waived, except by a
written instrument signed by the parties or, in the case of a waiver, by the
party waiving compliance. No delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any waiver on the part of any party of any such right, power or privilege,
preclude any other or
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further exercise thereof or the exercise of any other such right, power or
privilege. The failure of either party to insist upon performance of any terms
or conditions of the Agreement shall not be construed as a waiver of future
performance of any such term, covenant or condition, and the obligations of
either party with respect thereto shall continue in full force and effect.
11. GOVERNING LAW.
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to the
principles of conflicts of laws.
12. NO PARTNERSHIP OR AGENCY.
It is expressly agreed that the parties to this Agreement are
not partners, joint venturers, principals or agents to each other. The Company
is an independent contractor and Azurel may not in any way control the manner in
which the Company performs its obligations under this Agreement.
13. ASSIGNMENT.
This Agreement, and the Parties' rights and obligations
hereunder, may not be assigned by either Party except upon the prior written
consent of the other Party. Any purported assignment in violation hereof shall
be null and void.
14. ENTIRE AGREEMENT.
This Agreement, and any supplement or amendment hereto and any
agreements, instruments or documents delivered or to be delivered in connection
herewith, constitute the entire agreement and understanding between the Company
and Azurel concerning the subject matter hereof and thereof. As such, this
Agreement supersedes the certain untitled Agreement entered into by the Parties
on July 7, 1999, as well as all other prior or contemporaneous agreements,
understandings, negotiations and discussions, representations, warranties,
commitments, offers, contracts, whether written or oral, all of which are merged
into this Agreement. The Company and Azurel agree that neither party shall be
bound by anything not expressed herein, nor shall this Agreement be modified
orally.
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15. COUNTERPARTS.
This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute one and
the same instrument.
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the parties hereto as of the date first written above.
International Smart Sourcing, Inc.
BY:
Andrew Franzone, President
Azurel Ltd.
BY:
Name:
Title:
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EXHIBIT A
AZUREL LTD.
NON-NEGOTIABLE PROMISSORY NOTE
$_______ ______, 1999
New York, New York
FOR VALUE RECEIVED, the undersigned, AZUREL LTD., a Delaware corporation
("Azurel"), promises to pay to the order of INTERNATIONAL SMART SOURCING, INC.,
or assigns (the "Holder"), the principal amount of
_______________________________ Dollars ($_______), together with interest from
the date of this Note on the unpaid principal outstanding under this Note at a
rate of eight percent (8%) per annum.
SCHEDULE OF PAYMENTS. The principal amount outstanding hereunder shall be
due and payable in four (4) equal installments as postmarked on October 15,
1999, October 25, 1999, November 5, 1999 and November 15, 1999 (each of such
dates, a "Payment Date"). All accrued, unpaid interest on the then outstanding
principal amount hereunder shall be paid on each Payment Date.
PAYMENT. Payments and any prepayments hereunder shall be made to the
Holder by mail addressed to the Holder at 320 Broad Hollow Road, Farmingdale,
New York 11735, or such other address as the Holder may hereafter specify in
writing. Final payment in full of all outstanding principal of, and accrued
unpaid interest on, this Note shall be made at the Principal Office of the
Holder upon presentation and surrender of this Note.
PREPAYMENTS. The undersigned may voluntarily prepay this Note, in whole or
in part, at any time without penalty or premium.
DEFAULT. In the event that Azurel defaults on its obligations under this
Note as a result of its failure to make any required payment as and when the
same becomes due hereunder (an "Event of Default"), interest shall accrue on all
outstanding principal and accrued interest at a default interest rate of twenty
percent (20%) per annum until such time as all outstanding amounts have been
paid and satisfied in full by Azurel.
ACCELERATION. Upon the occurrence of an Event of Default, the Holder shall
be entitled to declare this Note immediately due and payable, together with any
accrued interest and default interest owing at such time.
WAIVERS. No delay by the Holder in the exercise of any right or remedy
shall operate as a waiver of that right or remedy. No single or partial exercise
by the Holder of any right or remedy shall preclude any other or future exercise
of that right or remedy or the exercise of any other right or remedy. No waiver
by the Holder or any default or of any provision of this Note shall be effective
unless in writing and signed by the Holder. No waiver of any right or remedy on
one occasional shall be a waiver of that right or remedy on any future occasion.
The undersigned and every endorser and guarantor of this Note waive demand
for payment, presentment, notice of dishonor, and protest of this Note and
consent to any extension or postponement of time of its payment, to any
substitution, exchange, or release of all or any part of any security, if any,
given to secure this Note, to the addition of any party to this Note, and to the
release, discharge, waiver, modification, or suspension of any rights and
remedies against any person who may be liable for the indebtedness evidenced by
this Note.
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COLLECTION COSTS. Azurel will pay all costs and expenses of collection,
including reasonable attorneys' fees, incurred or paid by the Holder in
enforcing this Note or the obligations evidenced hereby, to the extent permitted
by applicable law.
APPLICABLE LAW. This Note and the rights and obligations of the parties
under it shall be governed by and interpreted in accordance with the laws of the
State of New York, without giving effect to principles of conflicts of laws. If
any provision of this Note is held to be invalid or unenforceable by a court of
competent jurisdiction, the other provisions of this Note shall remain in full
force and effect.
IN WITNESS WHEREOF, this Note has been duly executed and delivered by
Azurel as of the date first written above.
AZUREL LTD.
BY:
NAME:
TITLE:
AGREED AND ACCEPTED
this ___ day of ____, 1999
INTERNATIONAL SMART SOURCING, INC.
BY:
NAME:
TITLE:
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