FILED: SUFFOLK COUNTY CLERK 11/30/ :45 PM INDEX NO /2015 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 11/30/2015

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1 FILED: SUFFOLK COUNTY CLERK 11/30/ :45 PM INDEX NO /2015 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 11/30/2015 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF SUFFOLK U.S. NONWOVENS CORP. -against- SLEEK SENSATION LTD., Plaintiff, X Index No. Filed: SUMMONS Plaintiffs designate Suffolk County as the place of trial Defendant. TO THE ABOVE NAMED DEFENDANT: X The basis of the venue is Plaintiffs address: 100 Emjay Blvd. Brentwood, New York TO THE ABOVE NAMED DEFENDANT: YOU ARE HEREBY SUMMONED to answer the complaint in this action and to serve a copy of your answer, or, if the complaint is not served with this summons, to serve a notice of appearance on the plaintiff's attorney within twenty (20) days after the service of this summons, exclusive of the day of service (or within thirty (30) days after the service is complete if this summons is not personally delivered to you within the State of New York); and in case of your failure to appear or answer, judgment will be taken against you by default for the relief demanded in the complaint. Dated: East Meadow, New York November 30, 2015 Attorneys for Plaintiff 90 Merrick Avenue - 9th Floor East Meadow, New York (516)

2 Defendant's Address: Sleek Sensation Ltd th Street Brooklyn new York 11219

3 1SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF SUFFOLK U.S. NONWOVENS CORP., -against- SLEEK SENSATION LTD., Plaintiff, Defendant. X X Index No. VERIFIED COMPLAINT Plaintiff, U.S. Nonwovens Corp. ("Plaintiff" or "US Nonwovens"), by its attorneys, Certilman Balin Adler & Hyman, LLP, as and for its complaint against Defendant Sleek Sensation Ltd. ("Defendant" or "Sleek"), alleges as follows: 1. Plaintiff U.S. Nonwovens is a domestic corporation existing pursuant to and by virtue of the laws of the State of New York. U.S. Nonwovens resides in Suffolk County with a principal place of business at 100 Emjay Boulevard, Brentwood, New York Upon information and belief. Defendant Sleek is a domestic corporation existing pursuant to and by virtue of the laws of the State of New York. Sleek resides in Kings County, with a principal place of business at th Street, Brooklyn, New York This Court has jurisdiction as the subject contract was entered into in New York State and provides that all disputes will be brought in the court located in the State of New York, and the parties to this action reside in New York State. 4. Venue in Suffolk County is proper based upon the residence of Plaintiff

4 Factual Background 5. Plaintiff U.S. Nonwovens produces nonwoven products including rolls for sanitary disposables, apparel interlining and embroidery backing, filtration, acoustical wrappings, geotextiles, soap pads, and wipes for sale to contractual customers, retailers, and distributors. Among the products that U.S. Nonwovens manufacturers are those commonly referred to as "baby wipes", "wet wipes" and "disinfectant wipes" 6. U.S. Nonwovens is part of the personal and home care industries, which is high volume in nature, insofar as very high production rates and efficiency are required to maintain a competitive position in the industry. 7. Sleek is a wholesale distributor of wet wipes and moist tissue towel wipes. Sleek offers products that are certified Kosher. 8. In or around August 2012, Sleek approached US Nonwovens about being its exclusive supplier of its wipes products. 9. Sleek represented to US Nonwovens that it would purchase approximately $800, worth of product from US Nonwovens per year if US Nonwovens would agree to be its exclusive supplier and agree to provide products at a reduced price. 10. In a contract dated August 3, 2012, the parties entered into a binding agreement whereby, among other things, US Nonwovens agreed to be the exclusive supplier of Sleek's Kosher wipes products at a reduced price from its usual price ("Contract", annexed hereto as Exhibit 1.) 2

5 11. The Contract was executed on behalf of Sleek by Joseph Jakebovits, Vice President. Mr. Jakebovits is the son-in-law of the owner of Sleek, Mr. Saul Hirsch. 12. Under the Contract, Sleek agreed for a period of seven (7) years to purchase all of its "Products" exclusively from US Nonwovens. 13. The Contract stated: The Purchaser [Sleek] agrees to purchase all of its requirements for Products exclusively from Supplier [US Nonwovens] and not from any third party. Purchase will be free to order the amount of Products it needs, as long as the order are made within the ordinary course of business. (Exhibit A ^4(a)(c) 14. The "Products" that were the subject of the Contract were listed as "Any and All Current and Future Moist & Dry Wipes of any sort, such as Baby Wipes, Toddler Wipes, under any current or future brands." (Exhibit 1, Exhibit A) 15. US Nonwovens was obligated to supply all of Sleek's "reasonable requirements for Products at a price mutually agreed upon by both parties and set forth on each Purchase Order and in the event the Purchase Order does not set forth a price for the Products ordered, at a reasonable market price at the time of delivery." (Exhibit 1,115(a).) 16. The Products delivered by US Nonwovens were required to be "manufactured and packaged by Supplier in accordance with the specifications set forth by the Supplier and attached to each Purchase Order." (Exhibit 1, l}5(b).) 17. In September 2012, US Nonwovens and Sleek amended the Contract to more specifically set forth the Products that were the subject of the Agreement, the 3

6 specifications, and the prices that would be charged for the Products. The Exhibit A to the Contract now listed nine (9) specific Products that were the subject of the Contract. The Unit Prices set forth in Exhibit A reflected a reduced rate for the Products ordered within the first six (6) months of the Contract, a second reduced rate for the Products ordered in months seven (7) through nine (9) of the Contract. 18. In the first year of the Contract, Sleek ordered approximately $200, worth of Products from US Nonwovens under the Contract. 19. US Nonwovens duly performed under the Contract and timely delivered to Sleek the Products ordered. 20. In order to fulfill Sleek's orders, US Nonwovens was required to produce finished goods that contained Sleek's custom art, brand and labels. 21. In February 2014, US Nonwovens learned that Sleek, in breach of the Contract, had ordered Products from other industry sources. 22. US Nonwovens and Sleek met on February 26, At this meeting, US Nonwovens informed Sleek that they had breached the Contract by purchasing Products from another supplier. US Nonwovens agreed to forebear on bringing litigation against Sleek for its breach of the Contract if Sleek would sign a two-extension to the Contract and cease its breach of the Contract by agreeing to make no further orders with suppliers other than US Nonwovens. 23. At this meeting. Sleek admitting to buying Products from suppliers in breach of the Contract. 4

7 24. US Nonwovens also informed Sleek that it had learned that Sleek had been incorrectly charged the six-month discounted price for orders placed after the sixmonth discount period. As a result. Sleek owed US Nonwovens $9, Sleek agreed to pay US Nonwovens that $9, due. Sleek further agreed that it would no longer purchase Product in breach of the Agreement and would fulfill its obligations to purchase all Products from US Nonwovens. 26. Over the ensuing months, by the end of 2014 Sleek had ordered an additional $100, in Products from US Nonwoven. 27. Sleek failed to timely pay for the additional Product, as well as the moneys past due. 28. For instance, in June 2014, Sleek's check payable to US Nonwovens was returned for insufficient funds. 29. By late 2014, after many months of seeking payment. Sleek still owed US Nonwovens over $50, In November 2014, Sleek finally paid approximately $19,000 of the amounts due to US Nonwovens, but still owed nearly $17, After numerous demands for payment, Sleek continued to refuse to pay the outstanding balances due to US Nonwovens of $16, In early 2015, US Nonwovens learned that Sleek had continued to purchase Product from suppliers in breach of the Contract in 2014, contrary to its representations, and throughout

8 33. Upon information and belief, Mr. Jakebovitz left the employ of Sleek over a dispute with Mr. Hirsch based on Sleek's refusal to comply with its contractual obligations to US Nonwovens under the Contract. 34. Mr. Jakebovits started a new company that orders its product from US Nonwovens. 35. At no time did Sleek submit a demand letter to US Nonwovens claiming that US Nonwovens had breached the contract or was required to cure a defect in its performance of the contract. 36. Sleek has not made any demands for Product from US Nonwovens since Sleek has failed to demand from US Nonwovens that it fulfill all of its requirements for Product that occur in good faith. 38. Sleek has failed to use its best efforts to promote the sale of the Products that US Nonwovens is required to supply Sleek under the Contract. 39. Sleek acted in bad faith when it failed to perform the Contract by failing to abide by the exclusivity terms of the Contract and failure to demand that US Nonwoven supply all its reasonable demands for the Products. 40. US Nonwovens has expended substantial funds on finished goods that contained Sleek's custom art, brand and labels that have not been purchased by Sleek. 6

9 AS AND FOR A FIRST CAUSE OF ACTION (Breach of Contract) 41. Plaintiff repeats, reiterates and realleges each and every allegation contained in paragraph 1 through 40 above as if fully set forth at length herein. 42. On August 3, 2012, US Nonwovens and Sleek entered into the duly executed exclusive Contract. 43. Under the Contract, Sleek was required to purchase all its requirements for Products exclusively from US Nonwovens. The prices for the Products were agreed upon, as well as the specifications for the Products. 44. At all times, US Nonwovens performed its obligations under the exclusive Contract by delivering to Sleek all requested Product in accordance with the Product specifications. 45. Since September 2014, Sleek has not ordered any Product from US Nonwovens. Instead, Sleek has been meeting all of its requirements by purchasing its Products from other supplier(s). 46. Sleek's purchase of Product from suppliers other than US Nonwovens is in breach of the exclusive Contract. 47. Accordingly, US Nonwovens has been damaged in an amount not less than $2 million ($2,000,000.00) in actual and consequential damages, plus interest, costs and fees. 7

10 AS AND FOR A SECOND CAUSE OF ACTION (Breach of Contract) 48. Plaintiff repeats, reiterates and realleges each and every allegation contained in paragraph 1 through 47 above as if fully set forth at length herein. 49. Under the exclusive Contract, Sleek was obligated to pay US Nonwovens the prices specified in the Contract. Product. 50. Since entering into the Contract, Sleek has ordered nearly $340, of 51. US Nonwovens has at all times delivered all Product ordered by Sleek under the Contract. 52. In breach of the Contract, Sleek failed to for $16, due and owing to US Nonwovens for Product delivered to Sleek. 53. US Nonwovens has repeatedly demanded payment from Sleek. Sleek has refused all such demands. 54. Accordingly, US Nonwovens has been damaged in an amount not less than $16,521.28, plus pre-judgment interest, costs and fees. AS AND FOR A THIRD CAUSE OF ACTION (Injunctive Relief) 55. Plaintiff repeats, reiterates and realleges each and every allegation contained in paragraph 1 through 54 above as if fully set forth at length herein. 56. The exclusive Contract provides that in the event US Nonwovens determines that Sleek has violated or is about to violate the Contract, US Nonwovens shall have the right to injunctive relief to restrain and prohibit such violation. 8

11 57. Sleek has violated the Contract. 58. Plaintiff lacks an adequate remedy at law. 59. Plaintiff is entitled to a permanent injunction requiring Sleek's compliance with the exclusive Contract. WHEREFORE, Plaintiff respectfully demands judgment s follows: (a) on the First Cause of Action compensatory damages, in an amount to be determined at trial, but not less than $2,000,000.00, with attorneys' fees and costs, and such other relief as this Court may deem proper; (b) on the Second Cause of Action compensatory damages, in an amount to be determined at trial, but not less than $16,521.28, plus pre-judgment interest, costs and fees, and such other relief as this Court may deem proper; (c) on the Third Cause of Action granting a permanent injunction requiring Sleek's compliance with the exclusive Contract; and (d) granting Plaintiff such other, further, and different relief as to the Court deems just, equitable and proper. Dated: East Meadow, New York November 30, 2015 w/ J 90 Merrick Avenue - 9th Floor East Meadow, New York (516)

12 STATE OF NEW YORK ) ) ss.: COUNTY OF SUFFOLK ) SHERVIN ZADE, being duly sworn, deposes and says: 1. I am the Chief Executive Officer of the Plaintiff in the within action have read the foregoing VERIFIED CO.MPLA1NT and know the contents thereof; the same is true to my own knowledge, except as to the matters therein stated to be alleged upon information and belief, and as to those matters I believe them to be true. The grounds of my belief as to all matters not stated upon my own knowledge are as follows: books, records, papers, and documents of the Plaintiff, a corporation. Sworn to before me this W3 day of November, 2015 SHERVIjfZADE Notary Public VINCENT MAHER Notary Public, Stat of New York No. 01MA Qualified in Nassau County Commission Expires April 29,20\$