EXHIBIT 10.1
PURCHASE AND SALE AGREEMENT
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THIS PURCHASE AND SALE AGREEMENT ( `AGREEMENT') EXECUTED THIS 11th DAY OF
JULY 2005, IS BY AND BETWEEN CHARTWELL INTERNATIONAL, INC. (CHARTWELL) , A
NEVADA CORPORATION WITH OFFICES AT 0000 XXXXX XXXXXX, XXXXX 000, XXXXXXXXXX,
XXXX XXXXXXXX 00000 ( `BUYER') AND RAILWAY & INDUSTRIAL SERVICES, INC) WITH
OFFICES AT 0000 XXXXX XXXXXX XXXXXX XXXXXX, XXXXXXXX 000000 ( `SELLER').
WHEREAS, BUYER DESIRES TO PURCHASE NINETY-FIVE (95) RETROFITTED RAILCARS
FROM SELLER AND SELLER DESIRES TO SELL TO BUYER SAID RAILCARS.
NOW, THEREFORE, SELLER AND BUYER ENTER INTO THIS AGREEMENT SUBJECT TO THE
FOLLOWING TERMS AND CONDITIONS.
GOODS TO BE SOLD
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SELLER SHALL DELIVER TO BUYER, FOT, EJ&E RAILROAD, NINETY-FIVE RAILCARS (
95) WHICH HAVE BEEN RETROFITTED IN ACCORDANCE WITH MODIFICATIONS APPROVED BY THE
ASSOCIATION OF AMERICAN RAILROADS (`AAR') IN DOCKET # CC209-153 AND DETAILED IN
(1) `F89E CAR CONVERSION TO 100 TON URBAN ORE CONTAINER HAULING' DATED MARCH 7,
1991 , AND ADDITIONAL MODIFICATIONS CONTAINED IN (2) `CLASSICAL STRESS ANALYSIS
TO CONVERT AN 89'0" FLAT CAR TO 263,000LB " DATED NOVEMBER 11, 1991 AND RELATED
DRAWINGS PREPARED BY XXXXX XXXXXXX & ASSOCIATES DATED JANUARY 16, 1997, PAGES
1-5 AND DRAWINGS 9708-00( 2 SHEETS)& 9708-002 AND OTHER RELATED DRAWINGS,
CALCULATIONS AND ANALYSES AS DEVELOPED BY SELLER TO PRODUCE A RAILCAR WITH A
GROSS RAIL LOAD OF 268,000#.
PURCHASE PRICE
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BUYER SHALL PAY SELLER FORTY-THREE THOUSAND, ($43,000) PER RAILCAR FOR ITS
CONVERSION EFFORT IN COMPLYING WITH THE SPECIFICATIONS CITED ABOVE INCLUDING
COMPENSATING THE SELLER FOR ITS PURCHASE OF THE CARS TO BE MODIFIED. TOTAL
CONTRACT PRICE IS FOUR MILLION, EIGHTY-FIVE THOUSAND DOLLARS ($4,085,000).
PAYMENT TERMS
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1. CONTEMPORANEOUS WITH THE EXECUTION OF THIS AGREEMENT, BUYER SHALL PAY TO
SELLER THE SUM OF ONE MILLION FOUR HUNDRED AND TWENTY-FIVE THOUSAND.
($1,425,000). THIS SUM IS A DEPOSIT AND IS SUBJECT TO THE TERMS OF A SEPARATE
PURCHASE MONEY SECURITY AGREEMENT . SELLER ACKNOWLEDGES THAT BUYER HAS A
$1,425,000 SECURITY INTEREST IN RAILCARS AND WORK-IN-PROCESS INVENTORY
MATERIALS.
2. THE BALANCE OF THE CONTRACT PRICE, TWO MILLION SIX HUNDRED AND SIXTY
THOUSAND DOLLARS ($2,660,000) SHALL BE PAID IN NINETY-FIVE (95) INSTALLMENTS OF
TWENTY-EIGHTY THOUSAND DOLLARS ($28,000) PER RAILCAR WHICH HAS BEEN INSPECTED
AND ACCEPTED BY BUYERS'S ENGINEERING CONSULTANT. EACH INSTALLMENT PAYMENT SHALL
BE DUE FOR EACH ACCEPTED RAILCAR ON THE FOLLOWING FRIDAY AFTER EACH RAILCAR
ACCEPTANCE.
3. IN ORDER TO PROTECT BUYER FOR ADVANCE PAYMENTS MADE HEREUNDER, SELLER
SHALL EXECUTE A SECURITY AGREEMENT IN FAVOR OF BUYER
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GRANTING A SECURITY INTEREST IN ALL RAILCARS PURCHASED BY SELLER IN FURTHERANCE
OF THIS AGREEMENT. SELLER SHALL ALSO EXECUTE ANY ADDITIONAL DOCUMENTS REASONABLY
NECESSARY TO ALLOW PURCHASER TO PERFECT SAID SECURITY INTEREST.
DELIVERIES
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SELLER SHALL COMPLETE THE RETROFITTING OF ONE SAMPLE RAILCAR WITHIN THIRTY
( 30) DAYS FROM THE DATE BUYER HAS DELIVERED A SIGNED COPY OF THIS AGREEMENT TO
SELLER. WHEN RETROFITTING OF A RAILCAR IS COMPLETED, SELLER SHALL REQUEST `AAR'
TO INSPECT AND APPROVE SAME. COMMENCING 21 DAYS AFTER AAR HAS APPROVED THE
RETROFITTING, SELLER SHALL COMPLETE AND TENDER TO BUYER FOR INSPECTION AND
DELIVERY, AN AVERAGE OF FIVE ( 5) RAILCARS PER WEEK UNTIL THE TOTAL NINETY-FIVE
( 95) RAILCARS HAVE BEEN DELIVERED.
WORKING PLANS AND DRAWINGS
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SELLER SHALL DELIVER TO BUYER A COMPLETE XXXX OF MATERIAL, JOB AND PROCESS
WORK STATEMENTS AND QUALITY CONTROL MEASUREMENTS. ALL DOCUMENTS MUST REFERENCE
SPECIFICATIONS AS DETAILED IN `GOODS TO BE SOLD' ABOVE.
INSPECTION AND ACCEPTANCE
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PRIOR TO ACCEPTANCE AND TRANSFER OF TITLE, BUYER SHALL INSPECT EACH RAILCAR
AT SELLER'S PLANT TO VERIFY THAT EACH CAR HAS BEEN RETROFITTED IN ACCORDANCE
WITH THE SPECIFICATIONS AND COMPLIES WITH THE TERMS AND CONDITIONS OF THIS
AGREEMENT.
INSPECTIONS OF EACH CAR MAY BE MADE BY BUYER WITHIN FIVE (5) BUSINESS DAYS
AFTER SELLER GIVES BUYER NOTICE THAT THE REQUIRED RETROFITTING HAS BEEN
COMPLETED. EACH RAILCAR SHALL BE DEEMED ACCEPTED BY BUYER AS OF THE END OF SAID
5-DAY PERIOD UNLESS IT HAS GIVEN SELLER NOTICE WITHIN SAID 5-DAY PERIOD
SPECIFYING IN DETAIL THE DEFECTS IN THE REQUIRED WORK FOR ANY TENDERED RAILCAR.
IF SUCH NOTICE OF DEFECTS IS GIVEN, SELLER SHALL, WITHIN A REASONABLE TIME
THEREAFTER, CORRECT SUCH DEFECTS AND SO NOTIFY BUYER, FOLLOWING RECEIPT OF WHICH
BUYER SHALL HAVE FIVE ( 5) BUSINESS DAYS TO REINSPECT THE RAILCARS AND THE ABOVE
PROVISIONS REGARDING NOTICE OF DEFECTS AND ACCEPTANCE BY BUYER SHALL APPLY TO
THE RAILCARS SUBJECT TO RE-INSPECTION. NOTWITHSTANDING THE FOREGOING, ANY
DISPUTES REGARDING ALLEGED DEFECTS CLAIMED BY BUYER SHALL BE SUBJECT TO
ARBITRATION AS HEREAFTER PROVIDED. ALL NOTICES REQUIRED UNDER THIS PARAGRAPH MAY
BE GIVEN EITHER ORALLY OR IN WRITING.
UPON ACCEPTANCE BUYER SHALL ADVISE SELLER WHERE THE RAILCARS SHOULD BE SENT
AND SELLER SHALL ADVISE THE EJ&E RAILROAD TO PICK UP THE ACCEPTED RAILCARS AND
WHERE TO DELIVER THEM FOR BUYER. IF BUYER FAILS TO GIVE SELLER DELIVERY
INSTRUCTIONS FOR ANY ACCEPTED RAILCAR AT THE TIME OF ACCEPTANCE IT SHALL, FOR
EACH ACCEPTED RAILCAR REMAINING ON SELLER'S PREMISES, PAY SELLER $15.00 PER DAY
UNTIL SUCH INSTRUCTIONS ARE GIVEN.
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DEFAULT
IF BUYER DEFAULTS IN THE PAYMENT OF ANY INSTALLMENT WHEN DUE (1) SELLER
SHALL NOT BE REQUIRED TO TENDER OR DELIVER ANY RAILCARS TO BUYER UNTIL ALL SUCH
DEFAULTS ARE CURED, AND (2) THE TIME FOR DELIVERY OF RAILCARS TO BUYER SHALL BE
EXTENDED BY THE PERIOD OF SUCH DEFAULT.
RISK OF LOSS OR DAMAGE
----------------------
SELLER SHALL BEAR THE RISK OF LOSS OR DAMAGE TO THE RAILCARS PRIOR TO THE
ACCEPTANCE OF EACH RAILCAR BY THE BUYER.
WARRANTIES OF SELLER
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1. ALL RAILCARS DELIVERED BY SELLER HEREUNDER SHALL BE DETAILED IN UMLER,
APPROVED FOR FULL INTERCHANGE SERVICE, ACCURATELY STENCILED AND EDI TAGGED.
2. SELLER WARRANTS ALL CAR COMPONENTS AGAINST DEFECTS IN MATERIAL AND/OR
WORKMANSHIP FOR A PERIOD OF TWO (2) YEARS FROM THE DATE EACH CAR IS ACCEPTED OR
DEEMED ACCEPTED BY PURCHASER, AS PROVIDED ABOVE, EXCLUDING DAMAGE OR DEFECTS
CAUSED BY ORDINARY WEAR AND TEAR UNDER NORMAL USAGE, NORMAL TRAIN ACTIONS,
IMPROPER OR INSUFFICIENT MAINTENANCE, IMPROPER OPERATIONS OR ABUSE.
THIS WARRANTY SHALL APPLY ONLY TO SUCH DEFECTS OF WHICH SELLER RECEIVES
WRITTEN NOTICE WITHIN SAID 2-YEAR PERIOD. SELLER MAKES NO OTHER REPRESENTATIONS
OR WARRANTIES, EITHER EXPRESSED OR IMPLIED, WITH REPECT TO THE RAILCARS SOLD TO
PURCHASER AND SPECIFICALLY DISCLAIMS ANY WARRANTIES AS TO MERCHANTABILITY OR
FITNESS FOR ANY PARTICULAR PURPOSE AND IN NO EVENT SHALL SELLER BE LIABLE FOR
ANY SPECIAL RELIANCE, INCIDENTAL, CONSEQUENTIAL OR OTHER LOSSES OR DAMAGES
INCLUDING, WITHOUT LIMITATION, LOSS OF REVENUE OR PROFITS, LOSS OF OR DAMAGE TO
BUSINESS OR LOSS DUE TO CLAIMS OF THIRD PARTIES, ARISING OUT OF OR RESULTING
FROM THIS AGREEMENT.
3. THE OBLIGATIONS OF SELLER PURSUANT TO ITS WARRANTIES HEREUNDER SHALL BE
LIMITED TO AN OBLIGATION TO REPAIR OR REPLACE ANY DEFECTIVE RAILCARS OR ANY
RAILCARS WHICH ARE NOT APPROVED BY AAR FOR FULL INTERCHANGE SERVICE.
FORCE MAJEURE
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SELLER SHALL NOT BE RESPONSIBLE FOR ANY DELAYS IN PERFORMING ANY OF ITS
OBLIGATIONS UNDER THIS AGREEMENT THAT ARE INCURRED DUE TO CIRCUMSTANCES BEYOND
ITS REASONABLE CONTROL, INCLUDING, BUT NOT LIMITED TO, FAILURE TO OBTAIN ALL
PURCHASED RAILCARS ON A TIMELY BASIS, A LACK OF ACCEPTABLE RAILCARS FOR
MODIFICATION, SHORTAGES OF OR INABILITY OF SELLER TO OBTAIN LABOR OR MATERIALS,
BOYCOTTS, ACTS OF GOD, INABILITY TO OBTAIN REQUIRED PERMITS OR LICENSES, FIRE,
FLOODS, STRIKES, LOCKOUTS OR OTHER LABOR DISPUTES OR DIFFICULTIES, ACTS OF CIVIL
OR MILITARY AUTHORITY ( E.G. COURTS OR ADMINISTRATIVE AGENCIES) WAR, RIOT OR
INSURRECTION.
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DISPUTES
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ANY CONTROVERSY, DISPUTE OR CLAIM ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ITS BREACH SHALL BE SETTLED BY BINDING ARBITRATION IN ACCORDANCE
WITH THE RULES OF THE AMERICAN ARBITRATION ASSOCIATION IN HEARINGS CONDUCTED IN
CHICAGO, IL BEFORE A PANEL OF THREE (3) ARBITRATORS, AND JUDGEMENT UPON THE
AWARD RENDERED BY THE ARBITRATORS MAY BE ENTERED IN A FEDERAL DISTRICT COURT IN
ILLINOIS, OR IN THE CIRCUIT COURT OF WILL COUNTY, ILLINOIS LOCATED IN JOLIET,
ILLINOIS OR IN THE CIRCUIT COURT OF XXXX COUNTY, LOCATED IN CHICAGO, ILLINOIS.
BUYER AGREES THAT, FOR PURPOSES OF THE PRECEDING SENTENCE, IT IS SUBJECT TO AND
HEREBY SUBMITS TO THE JURISDICTION OF SUCH FEDERAL AND STATE OF ILLINOIS COURTS
AND WAIVES ANY RIGHT IT MAY HAVE TO CONTEST SUCH JURISDICTION OVER IT IN ANY
COURT PROCEEDINGS BROUGHT PURSUANT TO THIS AGREEMENT.
NOTICES
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EXCEPT NOTICES EXPRESSLY PERMITTED TO BE GIVEN ORALLY, ALL NOTICES UNDER
THIS AGREEMENT SHALL BE IN WRITING AND SHALL BE ( i) HAND-DELIVERED, (ii) SENT
BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, (iii) SENT BY A NATIONALLY
RECOGNIZED OVERNIGHT COURIER, ADDRESSED AS FOLLOWS:
IF TO SELLER: XXX XXXXXXX
EXECUTIVE VICE PRESIDENT
RAILWAY & INDUSTRIAL SERVICES, INC.
0000 X. XXXXXX XXXXXX
XXXXXX, XX 000000
IF TO BUYER: XXXX XXXXXXX
CHAIRMAN
CHARTWELL INTERNATIONAL, INC.
0000 XXXXX XXXXXX, XXXXX 000
XXXXXXXXXX, XX 00000
WITH COPY TO: XXXXX X. XXXXX, ESQ.
XXXXXX ENG & XXXXXXXX
0000 XXXXXX XXXXXXX, XXXXX 000
XXXXXXXXXX, XX 00000
OR TO SUCH OTHER ADDRESS AS A PARTY MAY, FROM TIME TO TIME DESIGNATE BY NOTICE
TO OTHER, AS HEREIN PROVIDED.
ANY NOTICE HEREUNDER SHALL BE DEEMED TO HAVE BEEN GIVEN ON (1) THE DATE OF
DELIVERY IF HAND DELIVERED, (2) THE THIRD BUSINESS DAY FOLLOWING THE DATE OF
POST MARKING IF ADDRESSEE FAILS OR REFUSES TO RECEIPT FOR OR ACCEPT SERVICE BY
CERTIFIED MAIL WITH RETURN RECEIPT REQUESTED,(3) THE DATE OF EXECUTION OF THE
RECIPT IF BY CERTIFIED MAIL WITH RETURN RECEIPT REQUESTED, OR (4) THE NEXT
BUSINESS DAY AFTER TIMELY DEPOSIT WITH A NATIONALLY RECOGNIZED OVERNIGHT
COURIER. THE FAILURE OF THE ADDRESSEE TO ACCEPT ANY SUCH CERTIFIED MAIL SHALL
NOT CONSTITUTE A FAILURE TO GIVE OR RECEIVE PROPER NOTICE.
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NO THIRD PARTY BENEFICIARIES
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EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, THIS AGREEMENT SHALL NOT
CONFER ANY RIGHTS OR REMEDIES UPON ANY PERSON OTHER THAN THE PARTIES AND THEIR
RESPECTIVE SUCCESSORS AND PERMITTED ASSIGNS.
ENTIRE AGREEMENT
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THIS AGREEMENT (INCLUDING THE DOCUMENTS REFERRED TO HEREIN) CONSTITUTES THE
ENTIRE AGREEMENT AMONG THE PARTIES AND SUPERSEDES ANY PRIOR UNDERSTANDINGS,
AGREEMENTS, OR REPRESENTTATIONS BY OR AMONG THE PARTIES, WRITTEN OR ORAL, TO THE
EXTENT THEY RELATED IN ANY WAY TO THE SUBJECT MATTER CONTAINED IN THIS
AGREEMENT.
FURTHER ASSURANCES
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SELLER ACKNOWLEDGES THAT BUYER IS ACTING UPON SHORT NOTICE AND IN DUE
COURSE, AND FURTHER AGREES TO TAKE SUCH OTHER ACTIONS AND EXECUTE SUCH OTHER
DOCUMENTS AS MAY BE REQUIRED OR REQUESTED BY BUYER IN ORDER TO EFFECT THE
PARTIES INTENT HEREUNDER, INCLUDING SECURING BUYERS RIGHTS IN AND TO THE
RAILCARS.
COUNTERPARTS
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THIS AGREEMENT MAY BE EXECUTED IN ONE OR MORE COUNTERPARTS (INCLUDING BY
MEANS OF FACSIMILE) EACH OF WHICH WILL BE DEEMED AN ORIGINAL BUT ALL OF WHICH
TOGETHER WILL CONSTITUTE ONE AND THE SAME INSTRUMENT. THE SIGNATURE PAGE OF ANY
COUNTERPART MAY BE DETACHED THEREFROM WITHOUT IMPAIRING THE LEGAL EFFECT OF THE
SIGNATURE(S) THEREON PROVIDED SUCH SIGNATURE PAGE IS ATTACHED TO ANY OTHER
COUNTERPART IDENTICAL THERETO HAVING ADDITIONAL SIGNATURE PAGES EXECUTED BY THE
OTHER PARTIES.
`BUYER' `SELLER'
CHARTWELL INTERNATIONAL, INC. RAILWAY & INDUSTRIAL SERVICES, INC.
BY: /s/ Xxxx Xxxxxxx BY: /s/ Xxx Xxxxxxx
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IT'S Chairperson IT'S Ex. Vice President
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