Exhibit 10.26
PURCHASE AND SALE AGREEMENT
PURCHASE AND SALE AGREEMENT dated February 7, 2001, entered into between
Rafytek, S.A. de C.V. (the "Seller"), herein represented by Xx. Xxxxxxxx
Xxxxxxxxx Xxxxx and Xxxxxxxx Xxxxx Xxxxxx (the "Purchaser"), pursuant to
the following representations and clauses. Terms used with initial capital
letters in this Agreement are terms defined elsewhere in this Agreement,
such terms shall have the meaning as so defined, both when used in singular
or plural.
REPRESENTATIONS AND WARRANTIES
I. Seller represents and warrants that:
(a) It is a corporation duly organized and validly existing pursuant to the
laws of the United Mexican States ("Mexico") Mexico, as evidenced by public
deed No. 9,428, dated October 27, 1968, granted before Xxxxxx Xxxxxxxx
Gardtuno, Notary Public No. 84 of Mexico City, Federal District, registered
in the Public Registry of Property and Commerce of Merida, Yucatan, under
No. 4,374, first instrument ("xxxxxxx"), page 393, Volume 62, Book Third,
Second Auxiliary.
(b) By means of special, power-of-attorney, its representative Xx. Xxxxxxxx
Xxxxxxxxx Xxxxx, is duly authorized to execute and deliver this Agreement
as evidenced by public deed No. 60,130, dated February 2, 2001, granted
before Xx. Xxxxxx Xxxxxxx Xxxxxx, Notary Public No. 19 of Mexico City,
Federal District, which authority has not been revoked or otherwise
limited.
(c) It is the legitimate owner of and has marketable title to the land
located at Av. San Xxxxxx Xxxxxx Xx. 000, Xxxxxx Xxxxxxxxxx Xxxxxxxx
Xxxxxxxxxxxxx, Xxxxxx de Mexico and of the manufacturing facility and
buildings built thereon which are fully described in Schedule 1 to this
Agreement (such land, manufacturing facility and buildings, collectively
referred to herein as, the "Property"), as evidenced by the public deeds
attached hereto forming part of Schedule 1. The Property is free and clear
of any liens whatsoever and except for taxes and services payable for the
current year, is current in the payment of property (impuesto predial) tax
and public services contributions.
Outstanding property tax and public services contributions payable in
connection with the Property will be adjusted to the Closing Date with any
excess/shortfall being paid and/or refunded as appropriate between the
Buyer and the Seller.
(d) It is the legitimate owner of and has marketable title to the
machinery, equipment, fixtures and assets (the "Assets") more fully
described in Schedule 2 hereto, used by the Seller in its plant at Xxxxxxxx
Tianguistenco to manufacture flat woven polypropylene fabrics and valve
bags (the "Business"). All such personal property is being sold as is and
is free and clear of any liens whatsoever.
(e) Schedule 3 hereto sets forth the name, title, daily wage and hire date
of each hourly employee who works for the Seller ("Employee") and who in
terms hereof will be transferred to the Purchaser. Schedule 3 may include
salaried employees that the Purchaser wants to retain and has identified to
the Seller. An hourly employee is an employee who is typically assigned to
handle, convert, test or ship materials or repair or maintain equipment or
machinery.
Employee(s), for purposes of this Agreement will only include any employee
working at the Xxxxxxxx Tianguistenco plant and at the offices of the
Seller who have expressed their willingness to be transferred to the
Purchaser. For those employees wishing to be transferred to the Purchaser,
the Seller will not be responsible for any severance payments.
(f) It is the legitimate owner of the raw material, work in process and
finished goods inventory listed in Schedule 4 (the "Purchased Inventory")
and that this Purchased Inventory will be transferred and sold to the
Purchaser on Closing Date at the value shown on Schedule 4 (the "Inventory
Value").
The Purchased Inventory will consist principally of resin inventory and of
raw material inventory for the valve bag line and of finished goods
inventory and raw materials for leno fabrics. The Purchased Inventory
quantity will be determined by way of a physical inventory adjustment on
the day prior to the Closing Date. As mentioned above, the values per
inventory unit will be those shown on Schedule 4.
Inventory other than resin inventory, finished goods and raw materials for
leno fabrics, and raw material inventory for the valve bag line is not sold
hereunder and constitutes the "Non-Purchased Inventory". On the Closing
Date it is expected that there will be some Non-Purchased Inventory title
to which shall be retained by the Seller. The Purchaser agrees to let the
goods conforming the Non-Purchased Inventory be transferred to another at
the Sellers' facilities within two months of the Closing Date. The
Purchaser will help facilitate this transfer of Non-Purchased Inventory at
no cost.
(g) Schedule 5 sets forth the Employee Replacement (Patron Substituto)
Agreement.
(h) Schedule 6 shows the purchase order with Steel Heddle for Leno Parts.
(i) It has the power and authority to enter into this Agreement and
requires no corporate or governmental authorization and approval other.
than those it has already obtained, to enter into this Agreement and to
perform its obligations hereunder.
(j) The entering into this Agreement and the performance of its obligations
hereunder does not contravene or result in any breach of (i) its estatutos
sociales, (ii) any applicable law, rule or order, or (iii) any agreement of
any nature whatsoever to which the Seller may be a party, or any order, or
authorization of any nature binding upon it.
(k) This Agreement constitutes a legal, valid and binding obligation of the
Seller, enforceable against it in accordance with its terms.
II. Purchaser represents and warrants that:
(a) He is a resident of Mexico with sufficient legal capacity to enter into
this Agreement and comply with his obligations hereunder.
(b) He is married under the regime of separate assets and does not require
the consent of his spouse to enter into this Agreement nor does it require
the consent or authorization of any individual, corporation or authority
whatsoever, to enter into and comply with this Agreement.
(c) He has inspected the Property, the Assets, the Leno Parts and the
Purchased Inventory and is fully aware of their conditions and accepts each
of them as is.
(d) The execution, delivery and compliance by him of this Agreement will
not violate, conflict with or result in a breach of nor will it result in
default under, applicable law or any agreement to which he is a party, or
by which he, his properties or assets may be bound, will violate any order,
rule, regulation, injunction, decree, judgment, statute, law or ruling of
any court, administrative agency or governmental agency applicable to the
Purchaser, any of his properties or assets.
(e) He has full power and authority to enter into, and perform his
obligations hereunder, which constitute his valid and binding obligation.
NOW, THEREFORE, THE PARTIES AGREE TO THE FOLLOWING:
CLAUSES
First. Sale. Subject to the terms end conditions set forth herein, Seller
hereby sells to Purchaser and Purchaser agrees to purchase, free of any
lien, encumbrance, ownership limitation or charge of any nature whatsoever,
the Property, the Assets, the Purchased Inventory and Leno Parts as such
terms have been defined herein and are fully described in Schedules 1, 2, 4
and 6 to this Agreement.
Second. Price. Purchaser and Seller hereby agree that the total purchase
price to be paid by Purchaser for the Property and the Assets shall be the
amount of US$1,900,000.00 (One Million Nine Hundred Dollars of the United
States of America 00/100) (the "Property and Assets Purchase Price") plus
the Value Added Tax applicable to the
constructions and the Assets; in addition, the Purchaser shall pay to the
Seller (i) as purchase price for the Purchased Inventory (the "Inventory
Purchase Price") the Inventory Value as noted on Schedule 4 times the
inventory quantity as determined by a physical
inventory count on the day prior to the Closing Date plus Value Added Tax;
and (ii) U.S.$51,517.60 as purchase price for the Leno Parts (the "Leno
Parts Purchase Price").
USA
Fed Wire ABA: 111 000 012
Beneficiary Account: 0000-000-000
Rafytek, S.A. de C.V
or to any other bank account as designated by the Seller in writing and
will be made in U.S. Dollars.
In the event the land on which the Property is located is valued by the
appraisal to be obtained by the Purchaser for the public deed pursuant to
Clause Fourth hereof, at a different value than U.S.$200,000.00 or its
equivalent in Mexican Pesos, and therefore the VAT on the Property is
different from that set forth in this Agreement, the parties agree to pay
or reimburse the difference before execution of the public deed for the
transfer of the Property.
Fourth. Transfer of Title and Related Provisions. Beneficial ownership,
possession and risk in respect of the Property, Assets, Purchased Inventory
and Leno Parts as is, shall, pass to the Purchaser as of and with effect
from the Closing Date.
Upon receipt by seller of the full amount of the Purchase Price as herein
provided, title to the Property, Assets, Leno Parts and the Purchased
Inventory shall be irrevocably and unconditionally transferred to Purchaser
free and clear of any and all liens, charges, encumbrances or other
limitations of domain.
Within thirty days from the Closing Date, conveyance of title to the
Property shall be formalized before a notary public elected by the
Purchaser. All fees, and expenses related to the formalization of the
Property conveyance shall be the responsibility of the Purchaser, including
registration rights.
On the Closing Date, the Purchaser shall, deliver to the Seller a letter
stating that he has received the Property, Assets, Leno Parts and the
Purchased Inventory as is, to his full satisfaction and that except as
provided in Clause Fifth hereof, he reserves no right of claim against the
Seller in connection hereunder, the Property, Assets, Leno Parts and the
Purchased Inventory.
The parties shall cooperate in good faith in all respects regarding this
Agreement and shall execute and deliver all necessary documents in order to
formalize the transactions contemplated hereunder.
Fifth. Warranty of Title. Seller guarantees title to Purchaser (respondera
del saneamiento para el caso de eviccion) and agrees to indemnify, defend
and hold harmless Purchaser, his successors and assigns in the event of
eviction of the Property (saneamiento para el caso de eviccion), in terms
of Article 1743 of the Civil Code.
As the Purchaser is aware of the conditions of the Property, Assets, Leno
Parts and the Purchased Inventory and has done all investigations at his
satisfaction, Purchaser hereby waives any indemnification from Seller in
respect of any hidden defects that the Property, Assets, Leno Parts and the
Purchased Inventory may now or hereafter have.
Sixth. Transfer of Employees and Employer Replacement. The Parties
recognize that prior to the execution hereof, the Employees of the Seller
were notified by the Purchaser of his intention to buy the Property,
Assets, Leno Parts and the Purchased Inventory, and those Employees listed
in Schedule 3 hereto (collectively the "Transferred Employees"), to the
best knowledge of the Seller, have stated their willingness to become
employees of the Purchaser.
As a consequence, simultaneously with the execution of this Agreement, the
parties execute an Employer Replacement (Patron Substituto) Agreement to be
effective on the Closing Date in the terms and conditions of Schedule 5
hereto, and the Purchaser agrees to enter into the corresponding
arrangements with each one of the Transferred Employees.
Effective as of the Closing Date therefore, Transferred Employees shall
cease to be employees of the Seller, no further labor relationship will
subsist between the Seller and such Transferred Employees and any and all
current and future liabilities of the Seller with respect to any such
Transferred Employees shall become the liability of the Purchaser. The
Purchaser undertakes to obtain from each Transferred Employee a letter of
acknowledgement of transfer to the patron sustituto and to deliver an
original thereof to the Seller, within 10 days after the Closing Date.
Neither this Agreement nor the consummation of the transactions
contemplated hereby will entitle any of the Transferred Employees to any
severance benefits. To the extent the Purchaser hires any employees from
the Xxxxxxxx Tianguistenco facility not listed in Schedule 3, any severance
payment payable to them will be reimbursed to the Seller by the Purchaser.
Purchaser shall defend and hold harmless the Seller, its directors,
shareholders and officers from any liability related to any Transferred
Employee after the Closing Date.
This provision also specifically covers any future severance costs paid to
the Transferred Employees subsequent to the Closing Date.
Seventh. No-Shop Agreement. Purchaser hereby agrees that after the Deposit
Date, he will refrain from contacting or making any kind of labor offer to
any of the employees of the Seller which (i) are not currently employed by
the Business, (ii) have chosen to continue working for the Seller, or (iii)
are working for the Seller in its other plants.
Eighth. Non-Compete Agreement. Purchaser hereby acknowledges that the
Flexible Intermediate Bulk Container Fabric ("FIBC Fabric") and Flexible
Intermediate Bulk Container Bag ("FIBC Bag") business is a core business of
the Seller, which the Seller is not selling to the Purchaser but will
continue to be the Seller's core business. The Assets and Purchased
Inventory being acquired by the Purchaser hereunder will be used by the
Purchaser for the production of other fabrics and finished products which
do not fall within the FIBC Fabric and FIBC Bag business, and the Seller is
entering into this Agreement based upon the understanding that the
Purchaser is not and will not get involved in the FIBC Fabric and FIBC Bag
business. Therefore, the parties agree to this non-compete provision as an
essential element of this Purchase and Sale Agreement.
Purchaser hereby agrees that after the Deposit Date and for a term of three
(3) years after the Closing Date, Purchaser will refrain, either
individually, in association or in conjunction with any person or persons,
firm, association, syndicate, company or corporation as principal, agent,
director, officer, employee, investor or in any other manner whatsoever,
directly or indirectly, carry on, be engaged in, be interested in, or be
concerned with, a business which is competitive with the FIBC Fabric or
FIBC Bag business of the Seller as at the relevant date within the United
Mexican States, the United States of America or Canada. In the event the
Purchaser breaches such an obligation, he will pay to the Seller a penalty
fee of U.S.$20,000.00 (Twenty thousand United States Dollars 00/100) for
each violation.
Subsequent to the Closing Date, at the exclusive order of the Seller or any
affiliate or subsidiary thereof, the Purchaser may sell FIBC Fabric to the
Seller or to whomever the Seller may direct, at freely negotiated terms and
conditions. Such purchase by the Seller from the Purchaser will not consist
a breach on this Clause Eight.
Ninth. Indemnification. (a) Each of the parties hereto hereby agrees to
defend and hold harmless the other party (the "Indemnified Party"), its
shareholders, directors, officers, successors and assigns, from and against
any damages suffered or incurred, arising out of and/or resulting from any
inaccuracy, breach, default or misrepresentation of or by the other party
hereunder.
(a) The indemnification required by this Agreement shall be made when
reasonable and properly documented losses, damages, costs and expenses
(including without limitation, attorney's fees and expenses) or liabilities
are incurred. Any indemnities payable under this Agreement shall be limited
to the amount of direct or indirect damages sustained by the Indemnified
Party, net of any insurance proceeds, favorable tax effects or other
recovery actually received by such Indemnified Party but increased by any
Taxes arising out of any indemnity payment.
Tenth. Expenses. Each party hereto shall bear its own costs and expenses in
connection with the execution and delivery of this Agreement and the
transactions contemplated herein, including without limitation, its own
legal fees, accounting and other professional fees.
The Purchaser shall pay the fees of the appraiser referred to in Clause
Third hereof and the fees and expenses corresponding to the notarization of
the Property conveyance and the registration thereof.
Eleventh. Taxes. Each party will be responsible for the payment of the
taxes corresponding to it by virtue of this transaction. The Purchaser will
pay any transfer tax related to the acquisition of the Property and any
value added taxes provided for in this Agreement.
Twelfth. Notices. All notices or other communications required or permitted
to be given hereunder shall be in writing and shall be delivered by hand or
sent by telecopy or sent, postage prepaid, by registered or certified mail,
return receipt requested, or reputable courier service and shall be deemed
given when so delivered by hand or telecopied, or if mailed, seven days
after mailing (one Business Day in the case of overnight courier service),
as follows.
(i) if to Purchaser: Xxxxxxxx Xxxxx Xxxxxx
Xx. Xxxxxx Poniente No. 2031
Col. Union Popular
Xxxxxxx, Xxxxxxxxx
00000, Xxxxxx
Tel: (43) 164419
(ii) if to Seller: Rafytek, S.A. de C.V.
Att'n. Xxxxxxxx Xxxxxxxxx Xxxxx
Xxxxxx 0000-000
Xxxxxx, D.F.
Tel: (000) 000 0000
Fax: (000) 000 0000
With copy to: Consoltex (USA) Inc.
Att'n. Xxxx X. Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, X.X. 00000
X.X.X.
Tel. (000) 000 0000
Fax. (000) 000 0000
Thirteenth. Confidentiality. The Purchaser agrees that any information,
names, paper, figures, studies, production systems or any other information
related to the Seller's FIBC business, including, by way of illustration
and not by way of limitation, trade, business and technical matters,
confidential or private infuriation, business plans, commercial trade,
trade-names, trade-marks and technological secrets of Seller and its
affiliates or customers, shall be regarded as privileged and confidential
information and, therefore, the Purchaser shall refrain and cause all
persons related to it to refrain, from disclosing, disseminating or
revealing said information to any person. The Purchaser recognize that
disclosing said information may cause damages to the Seller and in the
event the Purchaser breaches such an obligation, he will pay to the Seller
a penalty fee of U.S.$20,000.00 (Twenty thousand United States Dollars
00/100) for each violation.
Fourteenth. Intellectual Property. Purchaser hereby acknowledges and agrees
that the trademarks such as Rafytek, Xxxx Xxx, Rafyton and others used by
the Seller are the exclusive property of the Seller and that the Purchaser
shall not be entitled to used any of these trademarks, commercial names and
other intellectual property.
Fifteenth. Interpretation; Headings; Schedules. The headings contained in
this Agreement or in any Schedule hereof are for reference purposes only
and shall not affect in any way the meaning or interpretation of this
Agreement. All Schedules attached hereto or referred to herein are hereby
incorporated by reference and are part of this Agreement as if set forth
herein.
Sixteenth. Entire Agreement. This Agreement contains the entire agreement
and understanding among the parties hereto with respect to the subject
matter hereof.
Seventeenth. Relocation of Equipment and Inventory. Subsequent to the
Closing Date, and for a maximum period of two months, thereafter, the
Seller and. its employees will be continuing the process of taking those
items of machinery, equipment, inventory and fixtures out of the Property
that are not listed in Schedules 2 and 4. The Purchaser and his employees
will assist and enable the Seller to complete this task as efficiently as
possible, all working together in good faith.
Eighteenth. On-going Operations by Seller the Xxxxxxxx Tianguistenco Plant.
For a two month period subsequent to the Closing Date, the Purchaser shall
allow the Seller to operate the coating line in the Xxxxxxxx Tianguistenco
plant and to ship finished goods. The Seller will be responsible to operate
the machinery, to ship finished goods and to pay for all direct costs. The
Purchaser will provide labor to operate the machine, to ship finished goods
and to move material, and to charge the Seller at the employees' daily wage
rate. At the Sellers option, Seller may provide employees to run and
supervise the coating line, to supervise and document shipments, and to
control inventory. These employees will be given unrestricted access to the
plant seven days per week, 24 hours per day.
Before the end of the two month period subsequent to the Closing Date, the
Seller will move the coating machine and the three external silos not
transferred to the Purchaser to another location. The Purchaser will enable
and assist the Seller in the transfer of the coating machine and three
external silos to the location of its choice and will in no way and under
no circumstance prevent this transfer of machinery from occurring.
Nineteenth. Arbitration.
(a) The parties shall use their respective best efforts to settle amicably
all disputes or differences concerning the interpretation, performance or
application of any provision of this Agreement. If any such dispute or
difference cannot be settled, however, each party shall have the right to
refer it to arbitration for final settlement without recourse to the
courts. This shall not include disputes concerning the validity and
application of this Arbitration Clause.
(b) All disputes arising in connection with this Agreement shall be finally
settled under the provisions of the Commercial Arbitration Rules of the
American Arbitration Association, by three arbitrators appointed in
accordance with said rules.
(c) The place of arbitration shall be Mexico, Federal District. The English
language shall be used throughout the arbitral proceedings, the awards and
other resolutions must be based on the provisions of this Agreement and
only if not provided for herein, they shall be based on Mexican law.
Twentieth. Product Liability. Liability for all goods and products shipped
on or prior to the Closing Date shall be the exclusive responsibility of
the Seller. Liability for all goods and products shipped after the Closing
Date shall apply exclusively to the Purchaser.
Twenty-first. Purchase of Leno Parts. The Seller, prior to listing the
Xxxxxxxx Tiaguistenco plant for sale, had placed orders from Steel Meddle
for the purchase of U.S.$51,5l7.60 of leno parts (the "Leno Parts"). The
Purchaser agrees to pay, on the Closing Date U.S.$51,517.60 to the Seller
and the Seller agrees to deliver, on the Closing Date, to the Purchaser the
Leno Parts order from Steel Heddle. The purchase order is shown in Schedule
6 hereto.
Twenty-second. Access to the Property prior to the Closing Date. Purchaser
may visit the Xxxxxxxx Tianguistenco plant between the Deposit Date and the
Closing Date during normal business hours for planning purposes. Requests
to visit should be made 24 hours in advance to Xxxxxxxx Xxxxxxx Xxxxxx or
his successor in functions. Representatives of the Purchaser shall not
direct or meet with employees without the presence and permission of
Xxxxxxxx Xxxxxxx Xxxxxx or his successor in functions. Seller will work to
accommodate the planning needs of the Purchaser during this period.
Twenty-third. Languages. This contract is executed in both English and
Spanish versions. In case of conflict, between both versions, the Spanish
version, shall govern.
Twenty-fourth. Applicable Law. The parties agree that this Agreement shall
be governed by and construed in accordance with the laws applicable in the
State of Mexico, Mexico.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.
THE SELLER THE PURCHASER
RAFYTEK, S.A. DE C.V.
By: /s/ Xxxxxxxx Xxxxxxxxx Xxxxx /s/ Xxxxxxxx Xxxxx Xxxxxx
--------------------------------- -----------------------------------
Name: Xxxxxxxx Xxxxxxxxx Xxxxx Xxxxxxxx Xxxxx Xxxxxx
Title: Attorney-in-fact
