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PROMISE TO ENTER INTO A PURCHASE AND SALE AGREEMENT

Real Estate Purchase and Sale Agreement

PROMISE TO ENTER INTO A PURCHASE AND SALE AGREEMENT | Document Parties: KEY TRONIC CORP | Todenko México S. A. | Mr. Hironobu Yagawa You are currently viewing:
This Real Estate Purchase and Sale Agreement involves

KEY TRONIC CORP | Todenko México S. A. | Mr. Hironobu Yagawa

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Title: PROMISE TO ENTER INTO A PURCHASE AND SALE AGREEMENT
Date: 10/12/2006
Industry: Computer Peripherals     Law Firm: BAKER MCKENZIE ABOGADOS, S.C.    

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EXHIBIT 10.1

THIS PROMISE TO ENTER INTO A PURCHASE AND SALE AGREEMENT (the “Contract”) is entered into by and between Todenko México S. A. de C.V. represented herein by Mr. Hironobu Yagawa in his capacity as general attorney in fact (hereinafter referred to as the “Future Seller”), and Key Tronic Juarez S.A. de C.V represented herein by its General Director, Mr. Efren Pérez (hereinafter referred to as the “Future Buyer”), pursuant to the following Recitals and Clauses:

RECITALS

 

 

I.

The Future Seller through its legal representative, hereby declares that:

 

 

A.

It is the fee simple and unrestricted owner of the Property (as such term is hereinafter defined), located at the south east corner of the intersection between Tomas Becket street and Mayas street in the Fernandez Industrial Park, in Ciudad Juarez, Chihuahua, which location, metes and bounds are attached to this Contract and made a part hereof as Exhibit “A” .

 

 

B.

The Property was acquired through the execution of public deed No. 30,763 dated October 28, 2002 issued by Mr. Ruben Aguirre Duarte, Notary Public number 16 acting as associate under the protocol of Mr. Alejandro Victor Gonzalez Bernal Notary Public number 19 in and for Ciudad Juarez, Chihuahua. Such public instrument was recorded with the Public Registry of Property of Ciudad Juarez, Chihuahua, under numbers 41 and 42, page 41 and 42, Book 3,296 which is attached to this contract and made a part hereof as Exhibit “B” .

 

 

C.

Its principal and he have the necessary authority to execute this Contract, same which have not been limited or revoked in any way, as evidenced in the document that is attached hereto and made a part hereof as Exhibit “A” .

 

 

D.

That except for certain lease agreement entered into by and between Future Seller as landlord and the company Productos de Consumo Electrónico Philips, S.A. de C.V. (hereinafter “Philips”) as tenant (the “Lease”) attached hereto as Exhibit “C” , the Property is free from all tenancies, easements or other occupancies.

 

 

E.

That by virtue of this Contract, its principal wishes and promises to convey title over the Property in favor of the Future Buyer subject to the terms and conditions hereinafter mentioned.

 

 

II.

The Future Buyer states that:

 

 

A.

It is a company incorporated pursuant to the laws of the Mexican Republic, as evidenced through public deed number 3,847 executed on September 19, 1983 before Mr. Aureliano González Baz, Notary Public number 1, for the Bravos District, in Ciudad Juárez, Chihuahua. Such public deed was registered in the Public Registry of Property and Commerce under number 131, page 57, Book 256. A copy of this public deed is attached to this Contract and made part hereof as Exhibit “D” .

 

 

B.

It wishes and promises to acquire title over the Property on an “as is” basis, subject to the conditions herein contained.

 

 

C.

Its principal and he have the necessary authority to execute this Contract, same which has not been limited nor revoked in any way, as evidenced in the document that is attached hereto and made a part hereof as Exhibit “E” .

 

 

III.

Both parties state that in the execution herein, there has been no error, violence, bad faith nor duress amongst them.


HAVING STATED THE ABOVE THE PARTIES AGREE ON THE FOLLOWING:

CLAUSES

FIRST . The following definitions will apply to this Contract. Whenever the singular is used herein, when required by the context, the same shall include the plural, and the masculine gender shall include the feminine and neutral genders and vice versa:

 

 

1.

“Building” shall mean the industrial facility built on the Property, with a surface area of approximately 65535 square feet (6,181.32 square meters).

 

 

2.

“Deposit” Shall mean the amount of US$15,000.00 dollars to be delivered by the Future Buyer to the Escrow Agent at the time of the execution of this Contract. This is a non-refundable deposit and shall be kept by Future Seller as liquidated damages ( pena convencional ) in the event the Purchase and Sale Agreement is not consummated at Closing for causes attributable to Future Buyer, unless the Conditions Precedent described in Clause Fourth herein are not met and the parties are thereafter unable to complete the transaction contemplated herein.

 

 

3.

“Due Diligence Period ” shall mean the term of 45 calendar days, starting from the date of execution of this Contract, that the Future Buyer has to conduct its due diligence on the Property, which shall include but not be limited to environmental, legal, technical, and public utility studies of the Property.

 

 

4.

“Environmental Laws” shall mean any applicable regulation, rule, or ordinance by any authorized environmental protection authority of Mexico, whether federal, state or local, including, without limitation, the General Law of Ecological Equilibrium and Environmental Protection, its Regulations and the applicable Mexican Official Standards.

 

 

5.

“Escrow Agent” Shall mean Stewart Title Guaranty Company in Houston, Texas, as the Escrow Agent appointed by agreement of both parties.

 

 

6.

“Hazardous Materials” shall mean any hazardous or toxic substances, chemicals, wastes or other materials regulated under any applicable Environmental Laws, including without limitation, PCB contaminated electrical equipment, asbestos, petroleum products and underground tanks, or otherwise known to be harmful to persons, property or natural resources.

 

 

7.

“Land” shall mean the tract of land with a total surface area of approximately 254,094.15 square feet, (23,605.48 square meters), located at the south east corner of the intersection between Tomas Becket street and Mayas street in Ciudad Juarez, Chihuahua

 

 

8.

“Property” shall mean the Land and Building, which location, metes and bounds are attached to this Contract and made a part hereof as Exhibit “A” .

 

 

9.

“Purchase and Sale Agreement” shall mean the public deed issued by a Mexican Notary Public selected by the Future Buyer, which contains the formalization of the respective purchase and sale agreement that transfers the Property from the Future Seller to the Future Buyer, and which terms and conditions shall be consistent with this Contract.

 

 

10.

“Restrictions” shall mean any and all liens, encroachments, easements, claims, encumbrances, title defects and/or limitations of use, possession or domain of any type or nature that affect the Property, including claims of right to possession by any third parties.

 

 

11.

“Term for Closing” Shall mean the sixty (60) calendar days following the date of the execution of this Contract (or a shorter term as may agreed between the parties), broken down as follows: forty five (45) calendar days during which the Future Buyer will conduct the


 

due diligence on the Property, plus fifteen (15) additional calendar days to effectuate the execution of the Purchase and Sale Agreement (the “Closing”), with the understanding that such additional fifteen (15) days shall only apply if Future Buyer has elected to conduct the Closing. Both parties agree that the Property will be off the market and the Future Seller will not make any attempt to sell, lease or transfer the same, or negotiate or accept any other offers for sale, lease or transfer of the Property during the Term for Closing.

SECOND . The Future Seller hereby promises and agrees to enter into the Purchase and Sale Agreement through which the Future Seller shall transfer the Property to the Future Buyer free and clear of any Restrictions and the Future Buyer promises and agrees to acquire the Property “as is”, “ad corpus” and with all its faults, through the execution of the Purchase and Sale Agreement provided that the terms and conditions identified herein have been fulfilled, complied with, or waived. !

The parties hereby agree that Future Seller shall prepare and complete no later than 15 calendar days after the execution of this Contract, a list for the items described under certain document which will form part of this Contract as Exhibit “F”. This Exhibit “F” will clearly identify all fixtures, systems and improvements of the Property which are not included in this transaction. All personal property and personal belongings of the Future Seller, including its machinery, equipment and furniture which are not necessary for the proper operation of the Building, and/or the Property will be removed by Future Seller before Closing and are not part of this transaction.

Future Seller and Future Buyer hereby agree that transfer of the Property will take place no later than 15 (fifteen) calendar days following to the expiration of the Due Diligence Period (the “Closing Date”), through the execution of the Purchase and Sale Agreement, same which will fundamentally reflect the terms and conditions of this Contract and the standard terms and conditions applicable to this type of transactions as agreed by the parties.

Since Future Buyer will be performing its own exhaustive investigation during the Due Diligence Period, Future Buyer agrees to acquire the Property in its “as is, where is, and with all faults” current condition, status, and state of repair, except as otherwise provided in this Contract. The Future Buyer hereby waives any right, legal action or claim of any kind or nature to which it may be entitled to in connection with the condition, status and state of repair of the Property, including its structural and mechanical condition, and the existing utilities serving the Property (except as otherwise provided in this Contract).

Since the Future Buyer will be acquiring the Property “ad corpus”, the parties agree that the Future Buyer will bear any cost resulting from any difference between the actual physical area of the Property and the one stated in the Property’s deed of title, as well as any profit in the event that excess Land exists. The Future Buyer hereby waives any right, legal action or claim of any kind or nature to which it may be entitled to in connection with any such difference in the area of the Property, and the Future Seller hereby waives any right, legal action or claim of any kind or nature to which it may be entitled to in connection with any such excess in the area of the Property.

The transfer of the Property from the Future Seller to the Future Buyer shall occur on or before the expiration of the Term of Closing, subject to and upon satisfaction of the conditions provided herein. The transfer of the Property shall be effected through the execution of the Purchase and Sale Agreement before a Mexican Notary Public selected by the Future Buyer. The parties agree to timely deliver to the elected Notary Public all information and documents required for execution of the Purchase and Sale Agreement referred to herein. The possession of the Property will be delivered to the Future Buyer at Closing.

THIRD . The Future Seller represents and warrants to the Future Buyer, as of the date of execution of this Contract and as of Closing, the following:

 

(a)

Authority . Future Seller has the power and ability to transfer the Property to the Future Buyer, same power and authority which is unrestricted and uncompromised. Future Seller has full legal right, power and authority to execute and fully perform its obligations under this Contract and to convey the Property to the Future Buyer, without the need for any further action or permit, and pursuant to the execution of this Contract by Future Seller. The individual executing this


 

Contract and other documents required hereunder on behalf of Future Seller is the duly designated attorney-in-fact of Future Seller and is authorized to do so.

 

(b)

Title. Future Seller is the unrestricted owner, and except for the Lease, has legal and physical possession of the Property. In the Purchase and Sale Agreement, Future Seller shall covenant and agree to indemnify, protect, hold harmless and defend the Future Buyer from and against all defects in the title to the Property, including against any rights of third parties to possession.

 

(c)

No Encumbrances, Title Defects or Past-Due Taxes. To the best of its knowledge, the Property is free from any Restrictions, and there are no outstanding payments of federal, state or municipal taxes due. To the best of its knowledge, there are no charges of any type currently pending of payment in connection with the Property. The Property will be conveyed to Future Buyer with all existing easements to its property line for access, water, sewer, storm drainage, electricity, telephone service, natural gas and any other currently existing utilities. Future Seller hereby declares that it has paid all connection fees for all public utilities supply capacities described under section (f) of this Clause Third herein.

 

(d)

Zoning and Environmental Compliance with Laws. As evidenced by the use of land permit issued by the local Municipal Authorities, copy of which is attached hereto as Exhibit “G” , and by the Abandonment Site Certificate attached hereto as Exhibit “H” , the Property is zoned for industrial purposes and has complied with all applicable Environmental Laws.

 

(e)

No Pending Litigation. There is no litigation pending pursuant to which Future Seller has been served or has otherwise been given notice or become aware of its existence, and, there is no litigation threatened nor is there any pending or threatened governmental or administ


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