EXHIBIT 2.2(b)
COMMERCIAL AGREEMENT
The Purpose of this Agreement by and between Compania Industrial xx Xxxxxx, X.X.
de C.V. ("Xxxxxx") and Cone Xxxxx Corporation ("Cone") is to (i) terminate and
supersede the prior Commercial Agreement dated as of June 25, 1993, and (ii) to
set forth the terms under which products produced by Parras Cone de Mexico, S.A.
de C.V. ("JV") will be sold and distributed.
Based on the above, Xxxxxx, Cone and JV agree as follows:
1. Parras, Cone, and JV release each other from any and all claims in
connection with the Commercial Agreement entered into between the
parties dated as of June 25, 1993. Xxxxxx and Cone will sell their
respective products unrestrictedly worldwide.
2. Except as provided for in paragraphs 3 and 6 below, Cone shall be the
exclusive seller and distributor of JV products. In consideration for
the marketing rights for the JV, Cone will pay Xxxxxx a marketing
rights fee of 3.5% (three and one-half percent) of the net customer
sales of JV product. This payment will be payable on a monthly basis
the 25th day of the second month following the month the calculation is
based upon.
3. In the event of an expansion of the JV beyond its present capacity,
Xxxxxx and Cone will modify this commercial agreement to address the
additional capacities available for sale. At such time up to 50% of
such expansion will be made available to Xxxxxx for its strategic
customers.
4. In situations that Cone invoices the customer, the price that the JV
invoices Cone will be the estimated customer selling price for that
style for the quarter less a service fee of 12% (twelve percent). In
consideration of differential borrowing rates between the U.S. and
Mexico, the JV will invoice Cone on 50-day terms with a discount in the
selling price equivalent to 15 days interest at 8% (eight percent).
Said service fee will cover all expenses such as selling costs, the
marketing rights fee, product improvement, logistics, production
programming, etc. Each quarter Cone shall submit a schedule to the JV
showing actual prices. Any adjustment of the actual xxxxxxxx from JV to
Cone will be made 45 days following the end of the quarter with a debit
or credit memo to be issued by the JV for the difference between
estimated customer selling prices and actual prices. Xxxxxx shall be
entitled at any time to review and/or audit sales of JV products
effected through Cone. For purposes of this paragraph net sales shall
be after deductions of amounts representing: credits by JV for returned
or defective merchandise; allowances to customers, trade and other
discounts; sales, excise, value added and similar taxes levied upon
sales.
5. In situations that the XX xxxxx the actual customer due to value added
tax considerations, Cone will be paid by JV a service fee of 12%
(twelve percent) of the net sales of JV for such customers. Said
service fee will cover all expenses such as selling costs, the
marketing rights fee, product improvement, logistics, production
programming, etc. The payment of the service fee by the JV will be
payable on a monthly
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basis the 25th day of the second month following the month the
calculation is based upon. For purposes of this paragraph net sales
shall be after deductions of amounts representing: credits by JV for
returned or defective merchandise; allowances to customers, trade and
other discounts; sales, excise, value added and similar taxes levied
upon sales. Cone will be responsible for credit losses to these
customers.
6. From time to time due to imbalances in the marketplace vis a vis Cone's
traditional customer base versus Xxxxxx' traditional customer base,
Cone may offer a portion of the production from the JV to Xxxxxx. In
such situation the JV will invoice goods to Xxxxxx in accordance with
paragraph 4 except that Xxxxxx will be responsible for credit losses to
these customers. Cone will not include such sales by Xxxxxx in the
calculation of the marketing rights fee for that period.
7. Any dispute relating to this agreement shall be finally settled by
arbitration under the Rules of Arbitration of the International Chamber
of Commerce in effect on the date hereof. This agreement shall be
arbitrated in and governed and construed in accordance with the laws of
the state of New York.
8. Xxxxxx and Cone agree to honor each other's trademarks and trade names
and grant to JV a non-exclusive non-assignable right to use the Xxxxxx
and Cone names as a composite.
9. Unless earlier terminated by mutual consent, this Agreement shall be
reviewed upon the second (2d) anniversary of the date hereof, and any
changes will be mutually agreed by the parties.
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IN WITNESS WHEREOF, the parties have caused their duly appointed representatives
to execute this Agreement effective as of July 1, 1999.
COMPANIA INDUSTRIAL XX XXXXXX, X.X. DE C.V.
By: /s/ Xxxxxxx Xxxxxx Xxxxxx
Name: Xxxxxxx Xxxxxx Xxxxxx
Title: Xxx.Xxxxxxxxx Officer
PARRAS CONE DE MEXICO, S.A. DE C.V.
By: /s/ Xxxxxxx Xxxxx
Name: Xxxxxxx Xxxxx
Title: Operations Director
CONE XXXXX CORPORATION
By: /s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: Executive Vice President and Chief Financial Officer
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