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
administr
|
|
